Legislature(1995 - 1996)
02/27/1996 01:38 PM FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE BILL NO. 466 "An Act establishing the Adak Reuse Authority." Co-Chair Hanley assigned HB 466 to a subcommittee consisting of Co-Chair Foster as Chair and Representatives Kelly and Grussendorf. REPRESENTATIVE CARL MOSES, sponsor HB 466, spoke in support of HB 466. He noted that HB 466 would establish an Adak Reuse Authority to serve as the facilitating body for conversion of the Naval Air Base to civilian use. He observed that there is no local government on Adak Island. The Authority would perform administrative functions relative to the Reuse Plan. He observed that the objective of the Navy is to vacate the Adak site earlier than January 1998. The legislation would allow the Governor to appoint a 7 member Authority. The Authority would develop and implement a comprehensive Reuse Plan. The Authority would be empowered to enter into contracts, operate enterprises, receive grants, assets and other funds, disburse funds, distribute assets and issue revenue bonds. An enterprise development account would also be established. Representative Moses asserted that in line with base closure procedures nationwide that the Department of Defense makes some funding available for economic redevelopment. He emphasized that communities and municipalities in the area are supportive. He noted that the Coast Guard, Corps of Engineers, Navy and other groups wish to maintain a presence on the Island. He noted that Adak has a world class 7 airfield, two deep water port facilities and a modern tank farm. He observed that there are approximately $2.3 billion dollars in fixed and rolling assets currently on the Island. Representative Martin asked if there will be a cost to the State. Representative Moses stated that he hoped that there will not be any cost to the State. He noted that there is considerable federal money available for the transition. Representative Martin questioned the State's responsibility to provide services until the transition takes place. Representative Mulder stated that there are a number of federal agencies that are interested in maintaining a presence in Adak. He stated that the income derived from federal agencies would offset operation costs. He stressed that the transitional phase will be the most difficult. In response to a question by Representative Martin, Representative Moses stated that the highest point on the Island is 2,500 thousand feet. He added that the every twin jet that flies from Anchorage overseas uses the airport as an alternate landing site. He observed that closure of the airport would effect these flights. Representative Martin noted that earthquakes are common, but that there are no glaciers on the Island. Representative Moses noted that the base has geothermal potential. Representative Parnell asked if the State's Bond Council has issued a legal opinion on the validity of the scope being given to the Authority. Representative Moses stated that he did not know of any legal opinions. In response to a question by Representative Parnell, Representative Moses noted that there will be proceeds from investments. He anticipated that federal transition money would be available. Representative Parnell asked what would happen to the Authority's assets if the Authority went bankrupt. Representative Moses noted that the Authority cannot obligate the State. Representative Mulder suggested that the project would be moth-balled if the Authority did not succeed. Representative Brown asked if bonds issued by the Authority would obligate the State. Representative Moses reiterated that the legislation clarifies that the State cannot be obligated. Representative Brown noted that up to $4.0 million dollars in bonds could be issued. Representative Carl stated that he did not anticipate that bonds to that magnitude would be issued. He clarified that specified 8 revenue bonds could be issued for additional projects. Representative Brown asked if the Authority would stand in the place of a local government. Representative Moses recommended that within one year of the formation of a first class city or borough that the Authority fold into the municipality. He clarified that the Navy will donate facilities to the State without any requirement for payment. Representative Brown referred to page 9, (b). Representative Moses explained that the Authority would not have taxation powers. Representative Brown questioned if the State would have the power to tax. TIM BENINTENDI, STAFF, REPRESENTATIVE MOSES agreed that the Authority would not have the power to tax. The sponsor agreed to clarify the intent of (b) on page 9. Representative Martin referred to Fort Richardson and the issue of Native rights to surplus military property. Representative Moses noted that Native groups can work through the Interior Department to obtain surplus military equipment. Representative Martin asked if Adak has been classified as surplus property. Representative Moses pointed out that Adak is in the process of going through base closure procedures. Representative Brown noted that the operating budget of the Authority would be subject to provisions of the Executive Budget Act. She asked the relationship of the revenue stream from the use of facilities at Adak. She questioned how these funds could be subject to the Executive Budget Act if they are not state funds. She referred to problems with the Sutton/Glenallen intertie. She observed that it is not always clear what is financially sound. She expressed concern that the State will be responsible for additional debt. She asked how the State could escape liability if decisions are made by state officers. HB 466 was assigned to a subcommittee consisting of Co-Chair Foster as Chair and Representatives Grussendorf and Kelly.