SB 240 - MUNICIPAL TAX CREDIT/STUDENT HOUSING CHAIRMAN OLBERG brought forth CSSB 240. Number 160 WENDY REDMAN, VICE PRESIDENT, UNIVERSITY RELATIONS, UNIVERSITY OF ALASKA, said, "SB 240 is legislation which amends the current tax statutes which would provide municipalities the option of passing local ordinance to provide a property tax exemption for the development of student housing projects at the University of Alaska. It's sort of a new trend around the country. There are now 13 states that are moving into this area of turning over their student housing to private entities. I think that they can build and operate it more efficiently, in most cases, than the universities themselves can. We don't currently have an option that we're ready to jump on but we have several parties that have been interested in pursuing the option in Anchorage and Fairbanks. Particularly in Fairbanks right now. So we would like to get this legislation passed. It certainly enhances our ability to go forward with this kind of a proposal. It makes it much more attractive if we're able to work with the municipality to see if they would be willing to give the tax exemption while there is a private leasehold, private interest in the university property." Number 186 REPRESENTATIVE DAVIES said, "I've been in communication with the Mayor of Fairbanks and he's a little bit concerned about some of the issues here. I don't think anybody objects to the intent here of trying to provide the option for municipalities to provide some tax exempt status for buildings that are designed exclusively for university housing, but there are some dueling lawyers in the wings here about exactly how this should be worded." He then asked if this bill could be held over until the following day, for the next Community and Regional Affairs Committee, when some new "consensus language" might be presented. CHAIRMAN OLBERG asked, "Who's involved in the consensus?" REPRESENTATIVE DAVIES said, "The Fairbanks North Star Borough and the University of Alaska." CHAIRMAN OLBERG asked, "Is that an accurate depiction of the University's wishes at this point?" MS. REDMAN replied, "We have language which we think resolves the issue for the municipality, or for the borough. We have not been able to get a hold of their attorney with our attorney to reach some closure on it. Their concern is a legitimate concern. Part of the problem is that they're concerned that somebody doesn't have a duplex in town and just because the duplex happens to be housing at that particular time exclusively university students, that suddenly that person says we get to be tax exempt. And we clearly don't intend that to happen either. So we're trying to get some language in here which indicates that it has to be on a contractual basis with the University of Alaska." Number 222 CHAIRMAN OLBERG asked, "Is this something that we think that we can resolve in 24 hours to everybody's mutual agreement?" REPRESENTATIVE TOOHEY asked how many committees SB 240 was referred to in the Senate and if this concern was brought forth previously. MS. REDMAN said, "It was in the Finance Committee and then it had a substantive hearing in the Rules Committee because of a change that was added in the Rules Committee, which limited the municipalities to 30 year segments for the tax exemption and allows them to do a second 30 years if they wish... It did not come up and, in fact the way the bill is currently written, we feel, our attorneys feel it would in fact prevent exactly what the borough is concerned about. However, to allay any fears with the borough, we're willing to put in an amendment which will address their concern more specifically." Number 245 CHAIRMAN OLBERG said, "It will be preferable to do it here than on the floor," and indicated that he would hold the bill in committee until the following day's committee meeting. He then adjourned the meeting at 1:17 p.m.