02/12/2009 03:30 PM Senate COMMUNITY & REGIONAL AFFAIRS

        SB  93-MUNICIPAL AIR QUALITY PROPERTY TAX CREDIT                                                                    
                                                                                                                                
3:34:06 PM                                                                                                                    
CHAIR OLSON announced the consideration of SB 93.                                                                               
                                                                                                                                
SENATOR PASKVAN, Sponsor  of SB 93, said the bill  is designed to                                                               
give municipalities  a tool to  improve air quality and  meet the                                                               
PM  2.5 EPA  standard.  The consequences  for non-compliance  are                                                               
very negative. He deferred questions  to Nadine Winters about the                                                               
Fairbanks North  Star Borough's  assessment of  the affordability                                                               
of potentially  granting tax credits.  There has  been discussion                                                               
about  potentially  losing  Eielson   Air  Force  Base  for  non-                                                               
compliance  and  he's  heard  about  losing  a  brigade  at  Fort                                                               
Wainwright. Clearly  the financial consequences to  the community                                                               
with  respect to  being out  of compliance  with the  PM 2.5  EPA                                                               
standards are significant.                                                                                                      
                                                                                                                                
3:36:40 PM                                                                                                                    
CHAIR OLSON asked  if there have already  been negative financial                                                               
consequences.                                                                                                                   
                                                                                                                                
SENATOR  PASKVAN replied  that  is his  understanding, and  those                                                               
will  continue if  there is  no effort  to come  into compliance.                                                               
"The federal  government has all  sorts of hammers that  they can                                                               
hit us with."                                                                                                                   
                                                                                                                                
CHAIR OLSON questioned how a  municipality could afford to give a                                                               
tax credit when budgets are shrinking and costs are rising.                                                                     
                                                                                                                                
3:37:45 PM                                                                                                                    
NADINE WINTERS, Presiding Officer,  Fairbanks North Star Borough,                                                               
said it  will be a  difficult tradeoff, but  in the long  term it                                                               
will  be  an  economic  development issue.  The  municipality  is                                                               
trying  to get  the  tools  to balance  the  needs of  individual                                                               
residents and  businesses with the overall  physical and economic                                                               
health of the community.                                                                                                        
                                                                                                                                
CHAIR OLSON asked  if she can confirm or deny  that Fairbanks has                                                               
lost  a  military  brigade because  on  non-compliance  with  the                                                               
particulate matter standard.                                                                                                    
                                                                                                                                
MS. WINTERS replied  it's more a matter of not  gaining a brigade                                                               
than having  lost one.  When there  was discussion  about brigade                                                               
placement, Fort Wainwright scored high  on all categories but air                                                               
quality.  "It's  my  understanding   that  that  impacted  that."                                                               
Several  years ago  Eielson Air  Force Base  came close  to being                                                               
closed  under  BRAC  (base  realignment and  closure).  It  is  a                                                               
concern that if  Fairbanks is a community  of non-attainment that                                                               
will  impact  the  stability  of  both bases.  They  are  a  huge                                                               
economic impact to the community.                                                                                               
                                                                                                                                
SENATOR THOMAS  asked about the  language in  lines 9 and  10. He                                                               
assumes that  granting the credit  for more than one  year allows                                                               
flexibility  and   potentially  less  immediate  impact   on  the                                                               
borough.                                                                                                                        
                                                                                                                                
3:40:40 PM                                                                                                                    
SENATOR PASKVAN  agreed; the  idea is to  give discretion  to the                                                               
municipality, which is where the financial impact is felt.                                                                      
                                                                                                                                
SENATOR THOMAS  referenced line 8  and asked if  the municipality                                                               
would develop a definition for improved air quality.                                                                            
                                                                                                                                
SENATOR  PASKVAN said  yes. The  examples of  how a  municipality                                                               
might define  improvement include:  1) reducing  fine particulate                                                               
emissions,  2) weatherizing  commercial  buildings  and homes  to                                                               
reduce fuel  consumption and 3) converting  to alternative energy                                                               
sources to reduce  carbon emissions. All three  would improve air                                                               
quality and hopefully bring Fairbanks within the EPA standards.                                                                 
                                                                                                                                
3:42:42 PM                                                                                                                    
CHAIR OLSON closed public testimony.                                                                                            
                                                                                                                                
SENATOR  THOMAS  moved  to  report  SB  93  from  committee  with                                                               
individual recommendations and attached  fiscal note. There being                                                               
no objection, it was so ordered.