HB 121 - MUNICIPAL AIR QUALITY PROPERTY TAX CREDIT 8:02:24 AM CO-CHAIR HERRON announced that the first order of business would be HOUSE BILL NO. 121, "An Act relating to a municipal property tax credit for an improvement that aids in improving air quality." 8:03:06 AM KAREN LIDSTER, Staff, Representative John Coghill, Alaska State Legislature, relayed that one of the dynamics of living in the Alaska is the cold and the inversions that occur. She then informed the committee that in 2006 the Environmental Protection Agency (EPA) increased the stringency of the particulate matter 2.5 standard. In 2007 the EPA defined the requirements for state's to clean the air in areas where the fine particulate pollution didn't meet the national air quality standard; these were referred to as nonattainment areas. Nonattainment areas had three years to submit a plan to EPA that included enforceable measures to reduce air pollution emissions and show how reasonable progress would be made to attain that standard. These standards must be achieved no later than 2015. MS. LIDSTER explained that as Fairbanks North Star Borough and other communities seek ways in which to meet air quality standards, they wanted more than just restrictions and enforcement-based options. This legislation provides the aforementioned in the form of an optional tax credit. The legislation provides an incentive to citizens to make improvements to their home and business that improve the community's air quality. The language in HB 121 requires that eligibility conditions and other criteria be established by local ordinance to address local community needs. Ms. Lidster pointed out that nonattainment areas are a public as well as an economic issue. In fact, Federal Highway Administration funds could be lost or new projects denied. This legislation will help communities provide incentives that promote a healthy economy for residents. In closing, Ms. Lidster requested the committee's support for HB 121. 8:05:49 AM REPRESENTATIVE HARRIS offered his understanding that HB 121 is permissive not mandatory and merely encourages people to install systems that promote healthier air. MS. LIDSTER concurred on both counts. 8:07:05 AM REPRESENTATIVE GARDNER asked whether there has been any indication that the Fairbanks North Star Borough would implement this if HB 121 passes. She also asked what would happen if the borough implemented the program and it was wildly successful with many participants, and the property tax receipts in Fairbanks decreased. MS. LIDSTER related her understanding that the Fairbanks North Star Borough is very interested in the passage of HB 121 and having the option to use incentives to encourage its residents to help with air quality. Ms. Lidster surmised that were the program to be wildly successful, the borough would review the impact of a reduction in the tax at the local level since the incentive would be a local ordinance. 8:08:52 AM REPRESENTATIVE HARRIS surmised, then, that the portion of the property tax that is allowed to be credited would be for the expense of installing a new system, which wouldn't occur each year. He further surmised that an individual would have to provide proof of improvements to air quality that would qualify for the proposed credit. MS. LIDSTER stated her agreement. 8:09:34 AM CO-CHAIR MUNOZ moved to report HB 121 out of committee with individual recommendations and the accompanying zero fiscal note. There being no objection, HB 121 was reported from the House Community and Regional Affairs Standing Committee.