Legislature(1995 - 1996)
02/27/1996 01:38 PM House FIN
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE BILL NO. 466
"An Act establishing the Adak Reuse Authority."
Co-Chair Hanley assigned HB 466 to a subcommittee consisting
of Co-Chair Foster as Chair and Representatives Kelly and
Grussendorf.
REPRESENTATIVE CARL MOSES, sponsor HB 466, spoke in support
of HB 466. He noted that HB 466 would establish an Adak
Reuse Authority to serve as the facilitating body for
conversion of the Naval Air Base to civilian use. He
observed that there is no local government on Adak Island.
The Authority would perform administrative functions
relative to the Reuse Plan. He observed that the objective
of the Navy is to vacate the Adak site earlier than January
1998. The legislation would allow the Governor to appoint a
7 member Authority. The Authority would develop and
implement a comprehensive Reuse Plan. The Authority would
be empowered to enter into contracts, operate enterprises,
receive grants, assets and other funds, disburse funds,
distribute assets and issue revenue bonds. An enterprise
development account would also be established.
Representative Moses asserted that in line with base closure
procedures nationwide that the Department of Defense makes
some funding available for economic redevelopment. He
emphasized that communities and municipalities in the area
are supportive. He noted that the Coast Guard, Corps of
Engineers, Navy and other groups wish to maintain a presence
on the Island. He noted that Adak has a world class
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airfield, two deep water port facilities and a modern tank
farm. He observed that there are approximately $2.3 billion
dollars in fixed and rolling assets currently on the Island.
Representative Martin asked if there will be a cost to the
State. Representative Moses stated that he hoped that there
will not be any cost to the State. He noted that there is
considerable federal money available for the transition.
Representative Martin questioned the State's responsibility
to provide services until the transition takes place.
Representative Mulder stated that there are a number of
federal agencies that are interested in maintaining a
presence in Adak. He stated that the income derived from
federal agencies would offset operation costs. He stressed
that the transitional phase will be the most difficult.
In response to a question by Representative Martin,
Representative Moses stated that the highest point on the
Island is 2,500 thousand feet. He added that the every twin
jet that flies from Anchorage overseas uses the airport as
an alternate landing site. He observed that closure of the
airport would effect these flights.
Representative Martin noted that earthquakes are common, but
that there are no glaciers on the Island. Representative
Moses noted that the base has geothermal potential.
Representative Parnell asked if the State's Bond Council has
issued a legal opinion on the validity of the scope being
given to the Authority. Representative Moses stated that he
did not know of any legal opinions. In response to a
question by Representative Parnell, Representative Moses
noted that there will be proceeds from investments. He
anticipated that federal transition money would be
available.
Representative Parnell asked what would happen to the
Authority's assets if the Authority went bankrupt.
Representative Moses noted that the Authority cannot
obligate the State. Representative Mulder suggested that
the project would be moth-balled if the Authority did not
succeed.
Representative Brown asked if bonds issued by the Authority
would obligate the State. Representative Moses reiterated
that the legislation clarifies that the State cannot be
obligated. Representative Brown noted that up to $4.0
million dollars in bonds could be issued. Representative
Carl stated that he did not anticipate that bonds to that
magnitude would be issued. He clarified that specified
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revenue bonds could be issued for additional projects.
Representative Brown asked if the Authority would stand in
the place of a local government. Representative Moses
recommended that within one year of the formation of a first
class city or borough that the Authority fold into the
municipality. He clarified that the Navy will donate
facilities to the State without any requirement for payment.
Representative Brown referred to page 9, (b).
Representative Moses explained that the Authority would not
have taxation powers. Representative Brown questioned if
the State would have the power to tax.
TIM BENINTENDI, STAFF, REPRESENTATIVE MOSES agreed that the
Authority would not have the power to tax. The sponsor
agreed to clarify the intent of (b) on page 9.
Representative Martin referred to Fort Richardson and the
issue of Native rights to surplus military property.
Representative Moses noted that Native groups can work
through the Interior Department to obtain surplus military
equipment. Representative Martin asked if Adak has been
classified as surplus property. Representative Moses
pointed out that Adak is in the process of going through
base closure procedures.
Representative Brown noted that the operating budget of the
Authority would be subject to provisions of the Executive
Budget Act. She asked the relationship of the revenue
stream from the use of facilities at Adak. She questioned
how these funds could be subject to the Executive Budget Act
if they are not state funds. She referred to problems with
the Sutton/Glenallen intertie. She observed that it is not
always clear what is financially sound. She expressed
concern that the State will be responsible for additional
debt. She asked how the State could escape liability if
decisions are made by state officers.
HB 466 was assigned to a subcommittee consisting of Co-Chair
Foster as Chair and Representatives Grussendorf and Kelly.
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