02/04/2014 08:00 AM House COMMUNITY & REGIONAL AFFAIRS

         HB 223-MUNI TAX EXEMPTION: MIL. FACILITY ZONE                                                                      
                                                                                                                                
8:07:30 AM                                                                                                                    
                                                                                                                                
CO-CHAIR LEDOUX announced  that the next order  of business would                                                               
be  HOUSE BILL  NO. 223,  "An Act  authorizing municipalities  to                                                               
exempt  or partially  exempt for  up to  10 years  property in  a                                                               
military  facility  zone  that   creates  or  supports  industry,                                                               
development, or educational or training opportunities."                                                                         
                                                                                                                                
8:07:39 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   STEVE   THOMPSON,  Alaska   State   Legislature,                                                               
speaking as sponsor of HB 223, provided the following statement:                                                                
                                                                                                                                
     HB  223   gives  permissive   authority  for   a  local                                                                    
     government to seek up to 10  years of a full or partial                                                                    
     property  tax exemption  in a  military facility  zone.                                                                    
     Military facility  zones were  established in  the 27th                                                                    
     Alaska  Legislature  with  House   Bill  316  and  they                                                                    
     designate areas  in close  proximity to  military bases                                                                    
     where industrial or  economic development will directly                                                                    
     enhance  the bases'  ability  to  fulfill its  mission.                                                                    
     Military  facility zones  are used  in other  states as                                                                    
     vehicles to  obtain and  administer funds  for business                                                                    
     development directly related to  a military facility by                                                                    
     expansion  of  infrastructure  that benefits  both  the                                                                    
     military and the civilian objectives.                                                                                      
                                                                                                                                
     House Bill  223 was drafted  after I was  approached by                                                                    
     the  Fairbanks North  Star  Borough,  who is  currently                                                                    
     working  on establishing  a military  facility zone  in                                                                    
     the  Interior.   The  needs of  each  community with  a                                                                    
     military facility  installation are  unique.   The bill                                                                    
     provides  broad  authority  for a  local  property  tax                                                                    
     exemption   in  a   military   facility   zone  to   be                                                                    
     specifically  defined by  the  individual community  to                                                                    
     provide the maximum benefits  to their installation and                                                                    
     to the region.                                                                                                             
                                                                                                                                
     The  military  industry  in  Fairbanks  contributes  30                                                                    
     percent of  the gross community product  and 38 percent                                                                    
     of  the  total  labor  dollars.   Therefore,  making  a                                                                    
     military  facility zone,  a military  base, one  of the                                                                    
     largest economic  drivers in  the Fairbanks  North Star                                                                    
     Borough.     The  borough  narrowly  escaped   a  [Base                                                                    
     Realignment and  Closure] BRAC  attempt of  Eielson Air                                                                    
     Force  Base back  in 2005  and recently,  there was  an                                                                    
     attempt and  we nearly lost  our F-16s off  of Eielson.                                                                    
     This  bill  will  expand on  the  financial  incentives                                                                    
     provided by  [House Bill] 316  and it is one  more tool                                                                    
     for a  local government  to create  better partnerships                                                                    
     with the military installations in their community.                                                                        
                                                                                                                                
     This provides  support to the  missions that  the armed                                                                    
     services  do;  it  enhances  the  economic  development                                                                    
     opportunities;  it   is  there  to  assist   in  making                                                                    
     Alaska's military  installations the best  value choice                                                                    
     for  expansion;  and  helps  defend  against  potential                                                                    
     negative   impacts  through   a  future   Defense  base                                                                    
     realignment closure process.                                                                                               
                                                                                                                                
                                                                                                                                
8:11:29 AM                                                                                                                    
                                                                                                                                
JIM   DODSON,    President,   Fairbanks    Economic   Development                                                               
Corporation, spoke in  favor of HB 223, which  coupled with House                                                               
Bill 316,  provides communities  the ability  to compete  for the                                                               
military industry.  The military  industry in Alaska accounts for                                                               
16  percent of  Alaska's economy  and 17  percent of  the state's                                                               
payroll.   In Fairbanks,  the military  industry accounts  for 30                                                               
percent  of  Fairbanks'  economy  and 38  percent  of  Fairbanks'                                                               
payroll.   Therefore,  the  military industry,  which  is a  very                                                               
competitive  industry, is  profitable  for  communities to  have.                                                               
This   legislation  allows   municipalities   to  recognize   the                                                               
aforementioned  and compete  for the  military industry  in their                                                               
municipality.    In closing,  Mr.  Dodson  urged the  committee's                                                               
support.                                                                                                                        
                                                                                                                                
8:13:06 AM                                                                                                                    
                                                                                                                                
CO-CHAIR LEDOUX, upon determining no  one else wished to testify,                                                               
closed public testimony.                                                                                                        
                                                                                                                                
8:13:57 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE OLSON remarked that HB 223 is good legislation.                                                                  
                                                                                                                                
8:14:33 AM                                                                                                                    
                                                                                                                                
The committee took a brief at-ease.                                                                                             
                                                                                                                                
8:14:54 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  NAGEAK moved  to report  HB 223  out of  committee with                                                               
individual  recommendations  and  the accompanying  fiscal  note.                                                               
There  being no  objection, HB  223 was  reported from  the House                                                               
Community and Regional Affairs Standing Committee.                                                                              
                                                                                                                                
8:15:13 AM                                                                                                                    
                                                                                                                                
The committee took an at-ease from 8:15 a.m. to 8:18 a.m.