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