02/26/2002 08:07 AM House CRA

HB 389-MUNI TAX EXEMPTION: DETERIORATED PROPERTY                                                                              
                                                                                                                                
CO-CHAIR MEYER announced  that the first order  of business would                                                               
be HOUSE BILL NO.  389, "An Act changing the date  of 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."                                                                                 
                                                                                                                                
Number 0110                                                                                                                     
                                                                                                                                
REPRESENTATIVE VIC  KOHRING, Alaska State  Legislature, testified                                                               
as the sponsor of HB 389.  He  noted that HB 389 is a reiteration                                                               
of legislation passed in 1998.   That 1998 legislation authorized                                                               
municipalities   to  provide   for   tax   exemptions  with   the                                                               
understanding  that the  exemptions  would  enable developers  to                                                               
renovate  deteriorated  properties.   One  such  property is  the                                                               
McKay Building,  which prompted the  1998 legislation.   The 1998                                                               
legislation will  expire in July  2002.  Therefore, HB  389 would                                                               
extend  the  expiration date  to  2005.   Representative  Kohring                                                               
pointed  out that  this legislation  applies to  any deteriorated                                                               
property,  within  a  municipality,  that  could  potentially  be                                                               
renovated.   He noted  that HB  389 could apply  to the  Knik Arm                                                               
Power Plant.                                                                                                                    
                                                                                                                                
Number 0322                                                                                                                     
                                                                                                                                
MARK MARLOW,  Businessman, requested the committee's  support for                                                               
HB 389.   He commented that he wasn't exactly  sure why there was                                                               
a sunset provision in the  original legislation.  He informed the                                                               
committee that although a law would  receive more use in an older                                                               
part of  the country, there  were many things built  during World                                                               
War II  that could possibly  be renovated.  Mr.  Marlow commented                                                               
that there  are a  few [buildings],  such as  the Knik  Arm Power                                                               
Plant,  for  which  he  would  like   to  be  able  to  use  this                                                               
legislation.    He explained  that  [he  is] putting  together  a                                                               
project with the Knik Arm Power  Plant in response to an RFP from                                                               
the U.S. Army who is seeking power for Fort Richardson.                                                                         
                                                                                                                                
Number 0581                                                                                                                     
                                                                                                                                
REPRESENTATIVE KERTTULA  inquired as  to whether the  sunset date                                                               
should be eliminated entirely.                                                                                                  
                                                                                                                                
MR. MARLOW indicated his agreement.                                                                                             
                                                                                                                                
REPRESENTATIVE KOHRING said that would be the best scenario.                                                                    
                                                                                                                                
Number 0619                                                                                                                     
                                                                                                                                
REPRESENTATIVE  HALCRO   recalled  that  three  years   ago  this                                                               
legislation was  HB [76],  which he  sponsored.   Originally, [HB
] didn't have  a sunset date.  However, [HB  76] was amended by                                                               
Senator  Halford  on the  Senate  floor.   Representative  Halcro                                                               
recalled that Senator Halford said  that he was concerned because                                                               
in some communities the largest  and oldest dilapidated buildings                                                               
were  owned  by  wealthy  people.    Therefore,  Senator  Halford                                                               
expressed  the need  to maintain  a check  and balance,  a sunset                                                               
date, in  order to  avoid abuse.   Representative  Halcro pointed                                                               
out  that the  original bill  clearly provided  authority to  the                                                               
local government  and would  have to move  through a  very public                                                               
process.  Therefore, he felt that any abuse would be spotted.                                                                   
                                                                                                                                
CO-CHAIR  MEYER  commented  that the  [Anchorage]  assembly  does                                                               
review  these [projects]  thoroughly,  and there  is much  public                                                               
scrutiny.                                                                                                                       
                                                                                                                                
MR. MARLOW  explained that the  local assembly would have  to, by                                                               
ordinance,  designate an  area that  a  dilapidated structure  is                                                               
within as a deteriorated area.   That would have to happen first.                                                               
After  that  step,  the developer  could  request  an  exemption,                                                               
referral, or blend  of the two.  Therefore,  there are safeguards                                                               
built into the legislation so as to prevent possible abuses.                                                                    
                                                                                                                                
REPRESENTATIVE  KERTTULA said  that  she would  leave  it to  the                                                               
sponsor  as  to  whether  he  wanted to  amend  the  bill.    She                                                               
mentioned the  possibility that the  sponsor may want  to discuss                                                               
the amendment with Senator Halford before seeking its adoption.                                                                 
                                                                                                                                
REPRESENTATIVE KOHRING  recommended amending  HB 389  by deleting                                                               
the sunset date entirely.                                                                                                       
                                                                                                                                
Number 0876                                                                                                                     
                                                                                                                                
REPRESENTATIVE  HALCRO   moved  that  the  committee   adopt  the                                                               
following amendment:                                                                                                            
                                                                                                                                
     Page 1, line 6,                                                                                                            
     Delete the entire sentence.                                                                                                
                                                                                                                                
There being no objection, the amendment was adopted.                                                                            
                                                                                                                                
Number 0962                                                                                                                     
                                                                                                                                
REPRESENTATIVE SCALZI moved to report  HB 389 [as amended] out of                                                               
committee  with individual  recommendations and  the accompanying                                                               
fiscal  notes.   There  being  no  objection, CSHB  389(CRA)  was                                                               
reported from  the House Community and  Regional Affairs Standing                                                               
Committee.                                                                                                                      
                                                                                                                                
REPRESENTATIVE  KERTTULA  said  that although  the  drafter  will                                                               
probably understand, she  clarified:  "It will  show the language                                                               
in the  statute being deleted,  we're not actually  deleting that                                                               
line."                                                                                                                          
                                                                                                                                
The committee took a brief at-ease from 8:23 a.m. to 8:24 a.m.