SENATE BILL NO. 226                                                                                                           
                                                                                                                                
     "An Act relating to the  purchase by the Alaska Housing                                                                    
     Finance  Corporation of  an  office  building in  Nome;                                                                    
     approving  the issuance  of bonds  for the  purchase of                                                                    
     the   office  building;   providing   notice  of,   and                                                                    
     authorizing  the  commissioner   of  administration  to                                                                    
     enter into, a lease-purchase  agreement with the Alaska                                                                    
     Housing  Finance Corporation  for the  office building;                                                                    
     and providing for an effective date."                                                                                      
                                                                                                                                
10:02:17 AM                                                                                                                   
                                                                                                                                
Co-Chair  Hoffman  MOVED  to ADOPT  the  proposed  committee                                                                    
substitute  for SB  226, Work  Draft 27-LS1448\B  (Bannister                                                                    
3/30/12).   Co-Chair  Stedman   OBJECTED   for  purpose   of                                                                    
discussion.                                                                                                                     
                                                                                                                                
Senator  Olson stated  that SB  226 addressed  the immediate                                                                    
need  for a  state  office  space in  Nome.  This was  first                                                                    
recognized in  2008. Due to  the current seriousness  of the                                                                    
need, the governor had proposed  $10 million to continue the                                                                    
process. However,  the momentum  had stalled because  of the                                                                    
question  of   the  location  and  square   footage  of  the                                                                    
building.                                                                                                                       
                                                                                                                                
DAVID SCOTT,  STAFF, SENATOR DONNIE  OLSEN, stated  that the                                                                    
bill  directed  the  Alaska Housing  Corporation  (AHFC)  to                                                                    
finance, with bond proceeds, the  purchase of a state office                                                                    
building  in Nome.  It also  directed  DOA to  enter into  a                                                                    
lease-purchase  agreement with  AHFC for  the building.  The                                                                    
Nome  State Office  Building was  built in  1974, and  there                                                                    
were numerous engineering  reports from as far  back as 1994                                                                    
noting  corrosion  damage  to   the  southern  side  of  the                                                                    
building.  In  1997,  there  was  a  subsequent  engineering                                                                    
report, which  pointed out structural integrity  issues with                                                                    
corrosion of the steel columns.                                                                                                 
                                                                                                                                
Co-Chair  Stedman  REMOVED  his OBJECTION.  There  being  NO                                                                    
further OBJECTION, Work Draft 27-LS1448\B was ADOPTED.                                                                          
                                                                                                                                
Mr. Scott  stated that  the mechanical  systems in  the Nome                                                                    
State  Office  Building  were part  of  the  original,  1974                                                                    
system.                                                                                                                         
                                                                                                                                
10:05:04 AM                                                                                                                   
                                                                                                                                
Co-Chair Stedman  pointed out  one fiscal  note from  DOA in                                                                    
the amount  of $3.310  million for the  operating cost  of a                                                                    
new building;  and one  fiscal note  from the  Department of                                                                    
Revenue  (DOR)  on  behalf  of AHFC  in  the  amount  $2.927                                                                    
million   for  the   annual  rental   obligation  and   AHFC                                                                    
administrative costs.                                                                                                           
                                                                                                                                
DOUG WOOLIVER, DEPUTY  ADMINISTRATIVE DIRECTOR, ALASKA COURT                                                                    
SYSTEM, testified  in support of  SB 226 and  explained that                                                                    
the courthouse  in Nome  was old  and inadequate.  He stated                                                                    
that  the Court  System was  interested in  being part  of a                                                                    
joint  state office  building in  Nome, and  that this  bill                                                                    
would provide that opportunity.                                                                                                 
                                                                                                                                
Senator Olson  clarified that the  State currently  leased a                                                                    
court space  in the existing  federal building in  Nome that                                                                    
was built in the 1940s.                                                                                                         
                                                                                                                                
DENISE   MICHELS,   MAYOR,   CITY   OF   NOME,   NOME   (via                                                                    
teleconference), expressed support of SB  226. She felt that                                                                    
the   current  state   office  building   was  deteriorating                                                                    
rapidly. She stressed the need  for increased space, and the                                                                    
need  for  meeting  the   current  security  and  technology                                                                    
standards.  She stressed  that the  location desired  by the                                                                    
City of Nome  was on the north side of  Front Street, out of                                                                    
the flood zone. She declared  that the location proposal was                                                                    
"in line"  with the city's  comp plan, and was  supported by                                                                    
resolution from  the Nome Chamber of  Commerce. The proposed                                                                    
location  would continue  to provide  effective delivery  of                                                                    
services.                                                                                                                       
                                                                                                                                
Senator  Olson   pointed  out   that  the   legislation  was                                                                    
patterned  after  the  government relationship  outlined  SB                                                                    
317,  which was  the expeditious  building of  the Anchorage                                                                    
Parking Garage.                                                                                                                 
                                                                                                                                
SB  226  was  HEARD  and   HELD  in  committee  for  further                                                                    
consideration.