SB 183-MUNICIPAL ECON. DEVELOPMENT/TAXATION    SENATOR RALPH SEEKINS, bill sponsor, paraphrased from the sponsor statement. Current state law places a limitation on second-class boroughs with respect to expending funds designated for economic development purposes. Presently, second-class boroughs may only use these funds on a non-areawide basis. This means the Fairbanks North Star Borough can only deploy these funds on projects located outside the city limits of Fairbanks and North Pole. It is desirable for the borough to have the ability to utilize economic development funds on an areawide basis. In this way, worthy projects can be funded irrespective of their location-within, or without, municipal boundaries-so long as the project remains within the greater borough boundary. Such projects will benefit the entire borough community while physical location, whether within city boundaries or not, is considered immaterial to this greater good. This legislation is proposed at the request of the Fairbanks North Star Borough as well as the Cities of Fairbanks and North Pole. In summary, it will facilitate the development of economically attractive projects throughout the entire Fairbanks North Star Borough without regard to internal municipal boundaries. SENATOR JOHN COWDERY asked why there is a prohibition. SENATOR SEEKINS didn't know, but the borough is trying to work around the current statute and work with the two cities. SENATOR COWDERY asked if other states prohibit this. SENATOR SEEKINS wasn't aware of any, but most states have counties. CHAIR GARY STEVENS explained the foundation of the idea is to avoid duplication of powers. SENATOR COWDERY asked if the borough had particular projects in mind. SENATOR SEEKINS said no; the borough has had trouble developing a comprehensive economic development plan because of the impediments imposed by the boundaries. CHAIR GARY STEVENS stated he has letters of support from both the city council and mayor of the City of Fairbanks and the mayor of the City of North Pole. This addresses his initial concern regarding whether the two cities were in agreement on the issue. He asked for a motion to adopt the committee substitute (CS). SENATOR COWDERY made a motion to adopt CSSB 183 \Q version for discussion purposes. There was no objection. CHAIR GARY STEVENS asked if reference to population was still in the bill. SENATOR SEEKINS replied it was not and he wasn't sure what the difficulty had been. CHAIR GARY STEVENS noted the current version would affect every borough and every city in the state, not just Fairbanks. SENATOR SEEKINS said their intent was to give the three communities in the Fairbanks North Star Borough the ability to work together. CHAIR GARY STEVENS asked Mr. Bockhorst whether he read the current CS to include all the boroughs in the state or to apply to Fairbanks alone. DAN BOCKHORST, Local Boundary Commission, advised he didn't have a copy of the version the committee was considering. The version he was reading considered the 80,000-population limit that would affect only the Fairbanks North Star Borough. SENATOR SEEKINS explained the \Q version applies only to a borough that has entered into an agreement with a city located within the borough. It doesn't impede others; it simply allows those cities and boroughs that have an agreement to cooperate to do so. This makes it unnecessary to put a population base on to protect smaller boroughs or cities. CHAIR GARY STEVENS said that means other boroughs could make use of this if they made a cooperative agreement with cities within the borough boundaries. SENATOR SEEKINS agreed. SENATOR GRETCHEN GUESS asked whether the Kenai Borough could enter into an agreement with Soldotna and use the funds in Soldotna without other cities within the borough having any input with regard to the use of the funds. SENATOR SEEKINS said he thought they could. DAVID LEONE, special assistant to the North Star Borough mayor, testified via teleconference in support of the CS \Q version. SENATOR FRED DYSON made a motion to move CSSB 183(STA) and attached fiscal note from committee with individual recommendations. There being no objection, it was so ordered.