Legislature(1997 - 1998)

03/10/1997 01:35 PM CRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
  CHAIRMAN MACKIE  brought SB 34 before the committee as the first             
 order of business.                                                            
          SB 34 DOT MAINTENANCE FACILITY AT SOLDOTNA                         
  SENATOR TORGERSON , prime sponsor of SB 34, explained the                    
 legislation was introduced to facilitate the moving of the                    
 Department of Transportation & Public Facilities maintenance                  
 facility off of the Kenai River in downtown Soldotna to a location            
 that is off the river and away from any possibility of                        
 contaminating the Kenai River.  He added that this project has been           
 around for many years and has had the support of a lot of                     
 administrations, but it has never been put on any of their project            
 SB 34 authorizes the City of Soldotna to sell revenue bonds and to            
 enter into a lease-purchase agreement with the state of Alaska so             
 that it can finance and build a new maintenance facility on a new             
 Senator Torgerson pointed out there are changes that need to be               
 made to the legislation in the financing structure as well as to              
 the fiscal note.  He said he hoped the committee would take up just           
 the issue of whether or not to move the bill out of committee and             
 then the financial portion of it could be handled in the Finance              
 Number 050                                                                    
  SENATOR PHILLIPS  asked if there was any potential opposition to the         
 legislation other than by DOT.   SENATOR TORGERSON  replied there             
 wasn't; everybody wants to see the facility moved out of downtown             
 Soldotna because it is a contaminated site and it is leaking                  
 hydrocarbons into the river.                                                  
 Responding to questions from Chairman Mackie,  SENATOR TORGERSON              
 explained that the City of Soldotna would finance and build the               
 facility and enter into a lease-purchase agreement with DOT, so the           
 state would eventually be the owner of the facility.  He also                 
 clarified it would be built on borough land, but if the state or              
 city was to be required to own the property for State Bond                    
 Committee then the land could be transferred to either the state or           
 the city.  He added that the is borough ready to do whatever is               
 necessary to make the land available for the site.                            
 Number 097                                                                    
  SENATOR DONLEY  asked if the state owns the land where the facility          
 is now located, and if there is any plan for the use of that land             
 after the facility moves.   SENATOR TORGERSON  acknowledged that the          
 state owns the land, and future use of the land depends on whether            
 it is cleaned up and to what specifications the hydrocarbons are              
 cleaned up.   The City of Soldotna has a great deal of interest in            
 the land to make it a greenbelt or park, etc., but they are afraid            
 of the underlying liability that would come from a piece of                   
 property if additional cleanup was required.                                  
 Number 120                                                                    
  CHAIRMAN MACKIE  noted that a new fiscal note had been received from         
 the Department of Revenue as well as a suggested committee                    
 substitute.   SENATOR TORGERSON  said he had just received the                
 committee substitute and that he doesn't agree with much of it.  He           
 added that if a committee substitute is to come before the                    
 committee, he would rather it be something that he'd generate.                
 Number 140                                                                    
  FORREST BROWNE , Debt Manager, Treasury Division, Department of              
 Revenue, said the department suggests the sponsor and the committee           
 consider a somewhat less restrictive statement as it has to do with           
 the financing.  The bill, as written, indicated that the lease-               
 financing be through the city.  The department has found in the               
 past that if the State Bond Committee has some flexibility in these           
 financings, they can effect some cost savings.  If the bill was               
 less restrictive and it specify who the issuer would be, they may             
 be able to effect some cost savings by packaging some of these                
 smaller financings when they go to market.  The department                    
 recommends making it a fairly generic approval, set a limit on the            
 project cost and what the annual and the total lease payments would           
 be, but perhaps give the State Bond Committee the option to package           
 it in the most cost-effective manner.                                         
 Number 185                                                                    
  CHAIRMAN MACKIE  asked if the draft committee substitute with                
 Senator Torgerson's name on it was prepared by the department.   MR.          
 BROWNE  acknowledged that the department's legal counsel prepared it          
 strictly as a draft.  He also apologized that the department had              
 not discussed their suggested committee substitute with the sponsor           
 prior to the hearing, but he assured the Chairman that that they              
 would do so.                                                                  
  CHAIRMAN MACKIE  asked if the Department of Revenue supports the             
 legislation.   MR. BROWNE  responded that   the project is doable in          
 terms of the financing, but they don't have that much familiarity             
 with the project itself.                                                      
 Number 225                                                                    
 SAM KITO , Special Assistant to Commissioner Perkins, Department of           
 Transportation & Public Facilities, voiced the department's strong            
 support for SB 34 and their interest in continuing to work with the           
 sponsor in an effort to refine some of the financing aspects of the           
 legislation.  He said the department is very interested in                    
 relocating the maintenance station to a new location.                         
 There being no further testimony on SB 34,  CHAIRMAN MACKIE  asked            
 for the pleasure of the committee.                                            
  SENATOR WILKEN  moved SB 34 and the accompanying fiscal notes be             
 passed out of committee with individual recommendations.  Hearing             
 no objection,                                                                 
 it was so ordered.                                                            

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