Legislature(1997 - 1998)
03/10/1997 01:35 PM Senate CRA
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ 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
lists.
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
site.
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
Committee.
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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