04/08/2002 04:21 PM Senate FIN

                                                                                                                                
     CS FOR HOUSE BILL NO. 389(CRA)                                                                                             
     "An  Act  eliminating   the  delayed  repeal   of  a  provision                                                            
     authorizing   an exemption   from  and  deferral  of  municipal                                                            
     property  taxes on certain types of deteriorated  property; and                                                            
     providing for an effective date."                                                                                          
                                                                                                                                
                                                                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
REPRESENTATIVE VIC KOHRING,  sponsor, testified the bill modifies AS                                                            
29.45.050, which allows  municipalities to exempt certain properties                                                            
from  property taxes.  He  exampled  historical sites  and  property                                                            
owned by non-profit organizations.  He noted deteriorated properties                                                            
are also addressed in this legislation.                                                                                         
                                                                                                                                
Representative  Kohring reminded  the Committee  of the legislation                                                             
that created  this statute  in 1998, which  would expire on  July 1,                                                            
2002.  This bill,  he stated,  eliminates  the sunset  provision  in                                                            
current statute.                                                                                                                
                                                                                                                                
Representative  Kohring   informed  that  the  House  Community  and                                                            
Regional  Affairs   Committee  decided   to  eliminate  the   sunset                                                            
provision  rather than  extend the  date because  the standards  and                                                            
safeguards  contained in the statute  are adequate to prevent  abuse                                                            
of the  tax exemption. He  gave as an example  the requirement  that                                                            
before property  could receive this exemption, it  must meet certain                                                            
safety requirements established by the local municipality.                                                                      
                                                                                                                                
Representative  Kohring noted  the long vacant  and decrepit  McCabe                                                            
building located  in the Ship Creek  area of downtown Anchorage  and                                                            
detailed efforts to renovate  the building to operate as a hotel. He                                                            
relayed that because  of the national events of September  11, 2001,                                                            
financing  has  been more  difficult  to  secure. He  remarked  this                                                            
legislation would assist the financing process.                                                                                 
                                                                                                                                
Senator  Leman reiterated  statements  he  made when  this bill  was                                                            
heard in the Senate  Labor and Commerce Committee  that he supported                                                            
the original legislation,  which expanded the expiration date rather                                                            
than repeal it.  However, because amending the bill  would require a                                                            
title change, he would not propose reinstating a sunset date.                                                                   
                                                                                                                                
Representative Kohring voiced appreciation.                                                                                     
                                                                                                                                
Senator  Olson asked  if  there were  other  "major  pieces of  real                                                            
estate" that  would be impacted either  positively or negatively  by                                                            
this legislation.                                                                                                               
                                                                                                                                
Representative Kohring  listed the Knik Power Plant located on First                                                            
Avenue in Anchorage and a vacant dairy in downtown Palmer.                                                                      
                                                                                                                                
Senator Leman  clarified for Senator  Green this statute  applies to                                                            
buildings at least 15 years of age.                                                                                             
                                                                                                                                
Senator  Leman offered  a  motion to  report  CS HB  389 (CRA)  from                                                            
Committee with accompanying  zero fiscal note from the Department of                                                            
Community and Economic Development.                                                                                             
                                                                                                                                
There was no objection and the bill MOVED from Committee.