Legislature(1995 - 1996)

02/27/1996 01:38 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= 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                 
  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                 
  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                 
  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                 
  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                 
  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.                  

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