Legislature(2023 - 2024)ADAMS 519
05/05/2023 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB154 | |
| SB81 | |
| SB77 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 154 | TELECONFERENCED | |
| + | SB 81 | TELECONFERENCED | |
| + | SB 77 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
May 5, 2023
2:21 p.m.
2:21:20 PM
CALL TO ORDER
Co-Chair Foster called the House Finance Committee meeting
to order at 2:21 p.m.
MEMBERS PRESENT
Representative Bryce Edgmon, Co-Chair
Representative Neal Foster, Co-Chair
Representative DeLena Johnson, Co-Chair
Representative Mike Cronk
Representative Alyse Galvin
Representative Sara Hannan
Representative Dan Ortiz
Representative Will Stapp
Representative Frank Tomaszewski (via teleconference)
Representative Andy Josephson
MEMBERS ABSENT
Representative Julie Coulombe
ALSO PRESENT
Senator Elvi Gray-Jackson, Sponsor; Jessica Geary,
Executive Director, Legislative Affairs Agency; Senator
Forrest Dunbar, Sponsor.
PRESENT VIA TELECONFERENCE
Curtis Thayer, Executive Director, Alaska Energy Authority,
Department of Commerce Community and Economic Development;
Megan Wallace, Chief Counsel, Legislative Legal Services,
Juneau; Alliana Salanguit, Staff, Senator Dunbar; Akis
Gialopsos, Deputy Executive Director, Alaska Energy
Authority, Department of Commerce, Community and Economic
Development.
SUMMARY
HB 154 AK HOUSING FINANCE CORP: SUSTAIN ENERGY
HB 154 was HEARD and HELD in committee for
further consideration.
SB 81 OFFICE VICTIMS' RIGHTS: COMP, APPTMT
SB 81 was HEARD and HELD in committee for further
consideration.
SB 77 MUNI PROP TAX EXEMPTION/TAX BLIGHTED PROP
SB 81 was HEARD and HELD in committee for further
consideration.
Co-Chair Foster reviewed the meeting agenda.
HOUSE BILL NO. 154
"An Act relating to subsidiary corporations of the
Alaska Housing Finance Corporation; and establishing
the Alaska energy independence fund."
2:23:10 PM
AKIS GIALOPSOS, DEPUTY EXECUTIVE DIRECTOR, ALASKA HOUSING
FINANCE CORPORATION, DEPARTMENT OF COMMERCE, COMMUNITY AND
ECONOMIC DEVELOPMENT
2:24:08 PM
Mr. Gialopsos introduced the PowerPoint presentation" House
Bill 154: Alaska's Energy Independence Fund" dated May 5,
2023 (copy on file).
Mr. Gialopsos advanced to slide 4 titled Policy
Objectives.
Establishing the Alaska Energy Independence Fund
(AEIF) and a subsidiary corporation managing assets:
Helps Alaskans be more resilient, less energy
constrained with a stronger economy.
Furthers the Alaska State Energy Goal
Mr. Gialopsos explained that HB 154 had a three goal
objective. The first goal would allow the Alaska Housing
Finance Corporation (AHFC) to establish a subsidiary
corporation with the purpose of pursuing sustainable energy
development. The second goal authorized AHFC, working with
AEA to provide technical assistance to both the non-profit
and quasi-public entities that would pursue sustainable
energy development. The third goal established the Alaska
Energy Independence Fund (AEIF) to pursue historic federal
funding opportunities and work to aggregate capital with
existing financial institutions in the state. He compared
Alaskas economy to Hawaii and called it an island
economy in terms of energy generation. Therefore, he
believed that the state needed to take a multifaceted
approach to help communities depend less on fragile lines
of supply for its energy needs. He furthered that the
Alaska State Energy Policy, established in statute in 2010,
mandated that half of the state's energy generation would
be from renewable resources by 2050 and the bill supported
that goal.
2:27:07 PM
Mr. Gialopsos continued on slide 5 titled Policy
Objectives (continued):
AEIF could help spur energy innovation consistent with
Governor Dunleavy's administration objectives:
The Office of Energy Innovation (AO 340)
The Alaska Energy Security Task Force (AO 344)
AEIF would draw federal and private capital to assist
Alaska homes and businesses be more independent in
their energy choices.
Mr. Gialopsos reported that the bill aligned with the
broader policy initiated by the administration beginning
with the prior years Inaugural Sustainable Energy Summit
that would meet again at the end of the current month. He
mentioned the two Administrative Orders (AO) listed on the
slide and expounded that both orders recognized the need to
examine Alaskas energy supply in the geopolitical context
and develop significant resources to remain sustainable
during shocks to the system caused by world events. He
spoke to additional policy objectives of the bill. He
advanced to slide 6 titled Policy Objectives
(continued):
AEIF will help Alaska compete for historic federal
funding opportunities to improve the energy profile
for homes and businesses:
U.S. Environmental Protection Agency's Greenhouse
Gas Reduction Fund (GHGRF) grant opportunity from
a pool of $27 billion in available funding (no
Notice of Funding yet application period as early
as summer 2023)
Waivers from the Department of Energy for loan
guarantees if funded through a State Energy
Finance Institute (e.g., AEIF)
Stacked with time-limited energy tax credits.
Mr. Gialopsos recounted that a prior version of the
legislation [HB 170 - Energy Independence Program and Fund:
AIDEA, 2021] was introduced in the prior legislative
session. Subsequently, two significant pieces of
congressional law had been enacted, which included historic
funding opportunities for the state. In addition, several
federal agencies were allowed to enact tools that the state
had difficulty implementing in the past. He exemplified
loan guarantees from the Department of Energy. Through the
proposed subsidiary and fund the state could ensure that
proven renewable energy technologies would have access to
the loan guarantees for communities and individuals. In
addition, the federal government simultaneously extended
tax credits for businesses and individuals through 2032
that were meant to accompany the capitalization access that
the Greenhouse Gas Reduction Fund (GHGRF) had envisioned.
2:31:44 PM
Mr. Gialopsos continued on slide 7 titled Policy
Objectives Summary:
Policy Objectives of establishing the Alaska Energy
Independence Fund are:
Helping Alaskans be less dependent on expensive
energy sources for their homes and businesses.
Be competitive for once-in-a-generation federal
funding opportunities to leverage public and
private capital for energy projects.
Mr. Gialopsos quickly proceeded to slide 8 titled Role of
AHFC In Energy
Alaska Housing Finance Corporation has a long track
record of managing innovative programs to tackle
energy challenges for homeowners and communities.
Energy Efficiency Interest Rate Reduction:
AHFC offers interest rate reductions when financing
new or existing energy efficient homes, or when
borrowers make energy improvements to an existing
home.
Mr. Gialopsos elucidated that the slide was a summary of
other remarks given by Mr. Bryan Butcher, Chief Executive
Officer and Executive Director, Alaska Housing Finance
Corporation, Department of Revenue earlier in the session.
He noted that AHFC had a long running weatherization
program that incentivized energy efficiency through energy
efficiency interest rate reductions. The slide showed how
the corporation used financial instrumentation to provide
incentives to further energy goals.
Mr. Gialopsos discussed slide 9 titled Role of AHFC in
Energy (continued):
Renovation Loan Option:
Allows for improvements that increases a home's
value; increases the energy efficiency of a home;
incorporates universal design principles to age-
in-place while improving Alaska's aging housing
stock.
Since FY20 AHFC has financed 338 renovation loans
for just under $100M.
Mr. Gialopsos offered that the Renovation Loan program
infused real dollars to benefit the lives of Alaskans.
Mr. Gialopsos moved to slide 10 titled Role of AHFC In
Energy (continued):
Experiences meeting unique challenges:
AHFC has a tradition of working with sister agencies
and organizations, stepping up, and meeting needs of
Alaskans:
Standing up programs to help Alaskans in need:
Home Energy Rebate
Emergency Rental Assistance and Homeowner
Assistance
Standing up subsidiaries to meet policy needs of
Alaskans:
Alaska Corporation on Affordable Housing
Alaska Gasline Development Corporation (AGDC)
(originally a subsidiary of AHFC).
Mr. Gialopsos related that the slide intended to illustrate
AHFCs track record of creating especially purposed
financial vehicles through subsidiaries when meeting the
threshold of challenges set by policymakers. He exemplified
the instigation of the Home Energy Rebate Program that
began with a significant amount of capitalization via
General Funds (GF) along with a federal program that
distributed almost $500 million to improve the lives of
Alaskans. The program assisted homeowners achieve 30
percent more energy efficiency, translating into cost
savings. He noted that AHFC distributed Emergency Rental
Assistance and Homeowner Assistance that was implemented
with pandemic relief money. The corporation had stood up
several special purpose vehicles, such as the Alaska
Corporation on Affordable Housing, which had engaged in
successful senior and low income development projects in
Anchorage and Fairbanks with the goal of expanding into
other communities.
Co-Chair Foster recognized that Representative Josephson
had joined the meeting.
2:37:37 PM
CURTIS THAYER, EXECUTIVE DIRECTOR, ALASKA ENERGY AUTHORITY,
DEPARTMENT OF COMMERCE COMMUNITY AND ECONOMIC DEVELOPMENT,
(via teleconference), introduced himself and highlighted
slide 11 titled ABOUT AEA:
AEA's mission is to reduce the cost of energy in
Alaska. To achieve this mission, AEA strives to
diversify Alaska's energy portfolio increasing
resiliency, reliability, and redundancy.
Mr. Thayer and provided additional information about the
Alaska Energy Authority (AEA). He explained that the AEA
was a public corporation established by the legislature
with a board of directors. He relayed the mission of AEA.
The authority had 6 primary focused areas:
Railbelt Energy, AEA owns the Bradley Lake
Hydroelectric Project, the Alaska Intertie, and the
Sterling to Quartz Creek Transmission Line all of
which benefit Railbelt consumers by reducing the cost
of power.
Power Cost Equalization (PCE) PCE reduces the cost of
electricity by leveling the rate between the railbelt
and rural Alaska for rural residential customers and
community facilities, which helps ensure the
sustainability of centralized power. The fund totaled
$1 billion and funded 193 communities.
Rural Energy AEA constructs bulk fuel tank farms,
diesel powerhouses, and electrical distribution grids
in rural villages. AEA supports the operation of these
facilities through circuit rider and emergency
response programs.
Renewable Energy and Energy Efficiency, AEA provides
funding, technical assistance, and analysis on
alternative energy technologies to benefit Alaskans.
These include biomass, hydro, solar, wind, nuclear and
others.
Grants and Loans, AEA provides loans to local
utilities, local governments, and independent power
producers for the construction or upgrade of power
generation and other energy facilities.
Energy Planning In collaboration with local and
regional partners, AEA provides economic and
engineering analysis to plan the development of cost-
effective energy infrastructure.
Mr. Thayer remarked that under renewable energy and
efficiency AEA offered grants and programs and funded 38
projects through the Renewable Energy Fund (REF), 27 more
were pending. The authority had found that many of the
projects just needed a bit of extra funding that the state
and federal governments was unable to provide. The funding
through REF had jump started some of the projects. He added
that the Power Project Fund would be complimentary to the
proposed program in HB 154. In addition, AEA provided
energy planning and collaboration. He addressed slide 12
titled AEA Active Projects and Services that depicted
AEAs footprint in the state. The proposed energy fund
authorized AEA to provide its infrastructure expertise,
analysis, and technical support for sustainable
development. He summarized that the corporation would be
the bankers and AEA would provide the technical expertise
to move the project forward in order to obtain the federal
funding and advance the state's renewable goals.
2:41:27 PM
Representative Hannan asked if AEA had a copy of slide 12
on their website. She wanted to look at it in further
detail. Mr. Thayer answered yes and no. The slide was
prepared for the presentation however everything could be
found on the internet and was identifiable on the website.
He offered to provide additional information if necessary.
2:42:24 PM
Representative Galvin thought the proposal seemed like a
tremendous opportunity. She asked if the program would be
limited or whether it applied to all the types of projects
listed on slide 12. Mr. Thayer responded that AEAs
projects were limited by the size of the project and who
was eligible to apply such as, communities and independent
power producers but not necessarily by individuals. The new
fund included individuals. He added that as far as the
qualifications, AEA was still awaiting guidance from the
federal Environmental Protection Agency (EPA). However, it
appeared that the majority of AEA projects would qualify
for the new funding.
2:44:55 PM
Mr. Gialopsos continued on slide 13 titled House Bill 154:
Overview:
House Bill 154 (and Senate Bill 125) proposes two
actions for the Legislature's consideration:
Empowers AHFC to work with AEA on developing
sustainable energy development through several tools,
including establishing non-profit subsidiary
corporations.
Establishes the Alaska Energy Independence Fund (AEIF)
with the intent to be managed by AHFC's non-profit
subsidiary corporation. The fund is capitalized with
General Funds initially and federal receipt authority.
Mr. Gialopsos reiterated the goals of the legislation.
Mr. Gialopsos concluded his presentation on slide 14 titled
House Bill 154: Proposed Policy Implementation Process:"
1. Legislation creating the Alaska Energy Independence
Fund (AEIF) & empowering AHFC to create a non-profit
subsidiary passes and is enacted.
2. The AHFC Board of Directors, in consultation with
legal counsel, creates a non-profit subsidiary
corporation to manage the AEIF. That creation
includes bylaws and initial regulations by AHFC for
the non-profit subsidiary.
3. The created non-profit subsidiary acquires relevant
staff and works with the Alaska Energy Authority and
AHFC on crafting the sustainable energy development
programs articulated in House Bill 154.
4. The created non-profit subsidiary pursues federal
funding opportunities and establishes relationships
with financial institutions to begin capital
aggregation.
Mr. Gialopsos delineated that the bill was amended in a
prior committee with an immediate effective date therefore,
the effective date would be the same as the enactment date.
The bylaws would provide the assurance that the subsidiary
would not have recourse on the parent corporation or the
mortgages and bonds that were securitized through the
parent corporation. He pointed out that step 3 included
establishing the funding opportunities. Finally, the
programs that would be developed would be dependent upon
the size and success of the amount of capitalization.
2:49:34 PM
Co-Chair Edgmon commented that he thought the legislation
was important. He understood that the bill was tied to
federal grant money and Infrastructure Investment and Jobs
Act (IIJA) money. He asked why the bill was not put forward
at an earlier time in the session.
Co-Chair Foster noted that there was a hearing request
dated March 19, 2023, however, the governor had around 16
bills in the committee and many other bill sponsors had
relayed that their bill was important. He had attempted to
balance all bill hearing requests.
Mr. Gialopsos responded that the legislation was introduced
at a relatively later date because of the need to evaluate
the language of the Inflation Reduction Act that was still
lacking specific guidance from federal agencies, most
notably, the EPA. Additionally, the bill had to be drafted
differently than the prior bill due to the inclusion of new
provisions concerning AHFC.
2:53:02 PM
Co-Chair Edgmon commented that he did not want to undercut
the significance of the bill. He understood that there were
valid reasons for the later introduction of the bill.
Co-Chair Foster noted that the hearing request was
submitted on April 24, 2023.
2:54:14 PM
Representative Hannan asked whether the bill was the only
green bank bill and if that there was not another bill
introduced earlier in the session. Mr. Gialopsos responded
in the affirmative. The bill was the only piece of
legislation that authorized a green bank to be implemented
in state law. Representative Hannan asked if it was the
only bill introduced, not just by the administration bill.
She presumed that it was the only green bank legislation.
Co-Chair Foster responded that Representative Hannan was
correct to his knowledge. He added that he had received
emails regarding adopting green bank legislation.
2:56:27 PM
Representative Josephson recalled that the prior bill
included a commission and there was a dispute over who
would be on the commission. Another version required that a
certain amount of funding went to rural Alaska. He asked
for a discussion on the transition away from a commission
model. He assumed that the decision making authority would
be up to the AHFC board. He asked if he was correct. Mr.
Gialopsos responded that the distinction between the
previous legislation and a prior version in 2022 was the
prior version included an advisory board that would have
advised the parent company on how to administer the fund.
He remembered that the previous bill tried to apportion
elements of the portfolio between urban and rural Alaska.
Regarding HB 154, the corporation was proposing very broad
measures for a few reasons. He detailed that the new
federal funding had explicit funding opportunities, but the
details were still opaque. Therefore, the construct of
the subsidiary corporation was designed to be flexible
enough to pursue the funding opportunities. The request was
to maintain the tools to be responsive to the sometimes
changing guidance from the federal agencies. He asked
Representative Josephson repeated the second part of his
inquiry. Representative Josephson asked rather than having
an advisory commission, would the decision making occur
within the AHFC board. Mr. Gialopsos responded that the
subsidiary would be administered by the corporation's board
of directors, which aligned with AHFCs other subsidiaries,
most notably the Alaska Corporation for Affordable Housing.
He elaborated that the structure ensured that the
subsidiarys corporate governance procedures, methods, and
actions were aligned with the public purpose and that the
technical expertise offered through AHFC were aligned as
well.
3:00:44 PM
Representative Ortiz referred to the AEA active project
list on slide 12 and wondered what the source of funding
was for the wide variety of projects listed.
Mr. Thayer responded that it represented AEAs current
active projects. He delineated that there were about 193
communities that were PCE related, 197 communities had
mainly powerhouse, bulk fuel, and electrical emergencies.
Currently, there were over 50 renewable projects through
the REF and he hoped to have 27 more in FY 24. There were
over 100 projects in the REF program; 50 were currently
active. He added that there were 18 active loans across the
state in the Power Project Fund (PPF) in addition to
technical support and owned assets by AEA. He noted that
AEA provided technical advice on renewable projects. He
exemplified the following projects: two solar projects in
Willow and Houston that were funded by AEA; the 95 percent
renewable project on Prince of Wales Island in Southeast
Alaska was funded through a $25 million AEA loan; and $45
million in the Kodiak Pillar Mountain Project. He offered
to provide a breakdown of each individual project.
3:03:44 PM
Representative Hannan understood that the AEIF fund would
be administered through the AHFC board. She asked how the
membership of the AHFC board worked and wondered if it
would not be prudent to add some specialty members to
provide expertise on green bank issues, since AHFCs
mission was not the same. She wanted to ensure that it
would not just function as a "rubber stamp" entity. She
asked for a description of AHFCs board makeup and how the
board members would also serve as an oversight entity for
the fund.
Mr. Thayer responded that AEA's role would be more
supportive and technical and deferred the answer to Mr.
Gialopsos.
Mr. Gialopsos responded that the current configuration of
the board and the description of the seats included an
individual who had expertise on energy and homebuilding, a
member with expertise in finance, an individual expert on
rural housing, and an individual who had a background in
working with seniors and senior housing, which all spoke to
the mission of the corporation. He noted that it was the
same configuration for other energy programs. He spoke to
the Alaska Gasline Development Corporation (AGDC) that
initially was under the AHFC umbrella. He recounted that
ultimately, the legislature had decoupled the two
corporations from one another and stood it up on its own.
He offered that the subsidiary established in the bill
would be a similar in intent, with the first step in
implementing the subsidiary corporation was to ensure its
managerial, personnel, and financial culture was robust and
in the public interest and eventually allow it to become a
separate entity.
3:07:58 PM
Representative Hannan asked if the administration
considered creating an independent board for the
subsidiary. She understood the maturation process for the
AGDC because it was the states in-house project. She was
contemplating whether there should be an independent board
for the subsidiary within the corporation that was not the
same governing board as AHFCs whose focus was on housing.
Mr. Gialopsos replied that many scenarios on governance
procedures were contemplated. The AHFC board would
implement elements of IIJA like the new weatherization
program that was meant to mirror the existing program. He
informed the committee that the board would work with the
Denali Commission and AEA. He believed that the current
board had much experience utilizing significant federal
funding opportunities from prior years. It was deemed that
the highest and best use of the board was to hire the
appropriate personnel for the subsidiary to secure the
funding opportunities and meet the demands of the new
federal regulations, which a whole new board may have
difficulty doing. In addition, time was of the essence; the
EPA had been mandated to disperse $20 million in funds by
September 2024. He communicated that creating, finding, and
vetting new board members in addition to the board needing
to hire new staff elongated the timeframe to an extent that
the state may not be able to submit its application to
federal agencies in time even though there may be
reasonable policy implications for creating a new board.
3:11:54 PM
Co-Chair Foster would look into any desire to expedite the
bills committee process.
Mr. Thayer thanked the committee for its time.
HB 154 was HEARD and HELD in committee for further
consideration.
SENATE BILL NO. 81
"An Act relating to the office of victims' rights; and
providing for an effective date."
3:12:59 PM
SENATOR ELVI GRAY-JACKSON, SPONSOR, relayed that the bill
was introduced by the Senate Rules Committee at the request
of the Legislative Council and as chair of the committee it
was her honor to carry the bill. She spoke to the reason
for the bill and read from a prepared statement:
In the Thirty-Second Legislature, legislation was
passed that created a new salary schedule for state
attorneys, which inadvertently excluded the four
attorneys in the Office of Victims' Rights or OVR,
as it is known.
For your convenience, I have included an excerpt from
the minutes of the August 18, 2022, meeting of the
Legislative Council in your bill packet. The
discussion during that Leg Council meeting describes
the reason this bill is necessary.
To summarize those minutes, as a temporary solution to
the problem, Legislative Council unanimously approved
paying OVR attorneys according to the new salary
schedule, created by last year's HB 226, and funded
the increase with a one-time transfer for fiscal year
2023; however, the legislation before you today is
required to place the OVR attorneys on the state
attorney salary schedule permanently.
Senator Gray Jackson continued by explaining the reason for
the amendment, which she supported. She continued to read
from a prepared statement:
Senator Wilson, who is a co-chair of the Victims'
Advocate Selection Committee along with co-chair
Representative Carpenter approached Senate President
Stevens with a problem.
The Victims' Advocate Selection Committee had been
appointed on March 1, 2023, because the director of
the OVR, Taylor Winston, resigned and a new director
needs to be selected. However, working with the
Personnel Office, the co-chairs of the selection
committee determined that it was too late in the
session to advertise, screen, interview, score,
consider, make an offer to, and nominate a candidate
by the time our Joint Confirmation Session takes
place.
At that time, SB 81 was identified as a vehicle to
assist the joint Victims' Advocate Selection Committee
with their task of hiring a permanent victims'
advocate. Senator Wilson, on behalf of the selection
committee, proposed an amendment that made two
substantive changes to the OVR statutes.
The first substantive change is to AS 24.65.070(a)
which relates to "Staff and delegation," and says, in
part:
"The victims' advocate shall appoint a person to serve
as acting victims' advocate in the absence of the
victims' advocate."
New language was added in the amendment which is on
Page 2, Lines 3 6 of Version B.A which says,
"If the victims' advocate is not available to appoint
a person to serve as acting Section 3 adds a provision
that gives the President of the Senate and the Speaker
of the House the authority to jointly appoint an
acting victims' advocate if the victims' advocate is
not available to appoint an acting victims' advocate
or if the legislature is unable to ratify one during
the legislative session.
Senator Gray-Jackson continued as follows:
The amendment that modified this section of statute
contemplates a situation where the victims' advocate
appoints an acting victims' advocate and for some
reason that acting victims' advocate leaves the job
before a permanent victims' advocate has been hired,
leaving a vacancy in this important leadership
position. In this scenario, which we think is unlikely
to happen but possible, the amendment added a
provision that says the presiding officers can jointly
appoint an acting victims' advocate.
It would also allow the presiding officers to jointly
appoint a new acting victims' advocate to serve until
being ratified. Without this change, a successful
candidate for Victims' Advocate who is nominated by
the Selection Committee, for example, during the
summer or fall, could not begin working until being
ratified during the following legislative session.
The second substantive change is to AS 24.65.020(b)
which relates to the "Appointment of the victims'
advocate," which currently says, in part:
"The appointment is effective if the nomination is
approved by a roll call vote of two-thirds of the
members of the legislature in joint session."
New language was added in the amendment that modified
this sentence, so it reads in the current version of
the bill on Page 2, Lines 7 and 8:
"The appointment is effective if the nomination is
ratified by two-thirds of the full membership of the
senate and two-thirds of the full membership of the
house of representatives."
Therefore, this version of the bill removes the
requirement that the Legislature confirm the victims'
advocate by a roll call vote in a joint session. The
maker of the amendment proposed that this would be a
more efficient process while still requiring
ratification by 2/3 of our membership and I agree,
Mr. Chairman.
With these changes to the original version of the
bill, the selection committee can be more deliberative
in the hiring process.
Finally, a quick word of support for the Office of
Victims' Rights.
As noted in a letter in your packet that was written
by Acting Director Kathy Hansen:
"OVR attorneys work directly with prosecutors, law
enforcement officers, and lay victim advocates when
advocating for crime victims. OVR attorneys regularly
advocate for victims throughout the entire State of
Alaska. They handle the most serious and high-profile
felony criminal prosecutions in our state - including
homicides, sexual assaults involving adult and minor
victims, felony property crimes, and felony thefts -
as well as both felony and misdemeanor domestic
violence crimes ?"
Supporting the important work of the Office of
Victims' Rights is the goal of this legislation and
I encourage support of SB 81, Version B.A.
3:19:53 PM
Representative Josephson asked whether there was a
provision that allowed the exempt and partially exempt
staff salaries track the Alaska Public Employees
Associations (APEA) pay increases, so the OVR attorneys
would not slip behind as they had previously. He asked if
the victims' rights attorneys would be part of the
provision.
3:20:47 PM
JESSICA GEARY, EXECUTIVE DIRECTOR, LEGISLATIVE AFFAIRS
AGENCY, was unsure and deferred the answer to Legislative
Legal Services.
3:21:13 PM
MEGAN WALLACE, CHIEF COUNSEL, LEGISLATIVE LEGAL SERVICES,
JUNEAU (via teleconference), answered that a provision in
HB 226 ensured that the legislature shall increase the
salary schedule at the same time and rate as the
supervisory bargaining unit. However, the language required
further legislative action before the salary schedule could
be increased. She furthered that the salary increase
provision was separate from the subsection of HB 226 that
provided the initial increase for state attorneys.
Representative Josephson asked if the attorneys could be
accidentally left out again. Ms. Wallace responded that the
employees that were paid on the basic legislative salary
schedule and would tag along with all other future
increases however, since the OVR attorneys were omitted
from AS 39.27.011 subsection (l) without the proposed
amendment, the attorneys would not be eligible for the
additional increase.
3:23:59 PM
Co-Chair Foster asked for wrap-up comments.
Senator Gray-Jackson thanked the committee.
SB 81 was HEARD and HELD in committee for further
consideration.
SENATE BILL NO. 77
"An Act relating to municipal property tax; and
providing for an effective date."
3:24:49 PM
SENATOR FORREST DUNBAR, SPONSOR, introduced SB 77. He read
from prepared remarks.
Thank you, all. SB 77 is the companion bill to HB 84
by Rep. Sumner
SB 77 gives local governments two optional tools to
incentivize economic developmentparticularly
residential/commercial housing developments.
First, it allows for a full property tax exemption
instead of limiting that exemption to the value above
a property's local minimum school contribution.
However, local governments will STILL be required to
meet their minimum local contribution, meaning SB 77
will not have an impact on total school funding.
The second tool gives local governments the option to
adopt an ordinance for implementing a blight tax.
This is a conditional increase, capped at 50% of the
property's annual assessed property tax, on abandoned
and dilapidated commercial properties that pose a
threat to public safety and welfare.
Primary residences of property owners are exempted
from being designated as blighted.
The blight tax may be removed once the property begins
remediation or redevelopment. It also may NOT be
applied to primary residences.
Senator Dunbar stressed that the tools were optional, and
it a local government did not levy a property tax the
provisions were not applicable. Additionally, the
definition of "blighted" was added to the bill.
All session, many of us have heard about the unmet
demand for new housing and the growing need for
economic development. SB 77 will help local
governments work towards these goals.
Senator Dunbar concluded that the fiscal note was zero and
there was no cost to state governments.
3:27:19 PM
ALLIANA SALANGUIT, STAFF, SENATOR DUNBAR, (via
teleconference), read the sectional analysis of the bill.
Section 1: Amends AS 29.45.050 Optional exemptions and
exclusions to allow municipalities to completely
exempt property taxes for an economic development
property. Currently, only the amount above the school
district's local required contribution may be
exempted.
Section 2: Adds a new section AS 29.45.057 Levy of tax
on blighted property that allows municipalities to
adopt an ordinance establishing a blight tax. The
ordinance must include the following:
Standards for determining if a property is blighted.
The standards must include that the property meets one
or more of the following criteria.
The property: Endangers public health and safety.
Is a public nuisance under a local housing, building,
plumbing, fire, or other related code or ordinance;
Has been vacant for no less than a year; o Is the
subject or center of repeated illegal activity due to
its unsecured, vacant, or deteriorated state; or
Is open to the elements, unfit for occupancy, or a
fire hazard; A procedure for designating a property as
blighted, notifying the property owner, and providing
the property owner an opportunity to appeal;
A tax rate for the blighted property that may not
exceed 50% of the annual property tax assessed on the
property;
Standards for remediating or redeveloping the property
so it will no longer be considered blighted;
A duration of time and reduced tax rate for remediated
properties. To qualify for the reduced tax rate, the
property owner must have a plan for remediating or
redeveloping the property submitted to and approved by
the municipality. The blight tax may be removed once
they began the remediation or redevelopment process
and follow the approved plan. Municipalities may
designate the tax revenue to be used for community
redevelopment purposes. Primary residences are exempt
from this section. Section 3: Allows home rule and
first-class cities inside boroughs to levy a blight
tax. Section 4: Provides for an immediate effective
date after enactment per AS 01.10.070(c).
3:29:49 PM
Co-Chair Foster asked whether the blighted definition was
contained in the House companion bill sponsored by
Representative Jessee Sumner, HB 84-Exemption/Tax Blighted
Prop. Senator Dunbar replied in the affirmative.
3:30:08 PM
Representative Hannan asked if the definition of blighted
property was on page 2, subsection 2 of the bill and if the
word standards was used interchangeably in the
definition. Senator Dunbar responded in the affirmative. He
explained that the definition was not a separate section in
the bill, but the blighted definition was in the standards
section on page 2, line 12 of the legislation. He noted
that a municipality could choose not to use all the
standards; the standards were optional. A municipality
could use one or two of the standards, none, or all. He
noted that the Alaska Municipal League (AML) did not want
to include any standards in order to maintain local
control. He generally supported local control but there
were legislators who wanted to put some parameters on how
far a local government could act.
Representative Hannan referred to the standards in
subsection 2 and noted that a local government only had to
meet one of the standards for determining a blighted
property. She asked if the standards were all contained in
subsections (a) through (e). Senator Dunbar responded that
there was a drafting error, and he was going to ask a
member of the committee to amend it. He explained that
subsections (e) and (C) were intended to be one section.
He thanked her for spotting the error.
3:33:17 PM
Co-Chair Foster
Senator Dunbar offered a practical example on the types of
situations that might occur. He recounted that local
governments were restricted in the kind of property taxes
and policies it could implement. The Anchorage Assembly
adopted a 12-year property tax abatement for construction
of residential property in the downtown Overlake district.
He detailed that there were projects that went forward that
would not have been able to go forward without it. In
regard to the blight tax, there was a large building in
Midtown Anchorage that sat vacant for more than a decade
and caused significant consternation. The owners were out
of state and had been unwilling to demolish the building
until recently. The blight tax would have been one tool
used to convince the owners to remediate the property. He
emphasized that the tax was not intended to raise
significant property tax for local government, but to spur
remediation for vacant and potentially dangerous buildings
in communities.
Co-Chair Foster reviewed the agenda for the following
committee meeting.
SB 77 was HEARD and HELD in committee for further
consideration.
ADJOURNMENT
3:36:23 PM
The meeting was adjourned at 3:36 p.m.