Legislature(2009 - 2010)HOUSE FINANCE 519

03/13/2009 08:30 AM FINANCE


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08:35:06 AM Start
08:35:16 AM HB121
09:38:34 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Please Note Time Change --
+ HB 121 MUNICIPAL AIR QUALITY PROPERTY TAX CREDIT TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
HOUSE BILL NO. 121                                                                                                            
     "An Act relating to a municipal property tax credit for                                                                    
     an improvement that aids in improving air quality."                                                                        
                                                                                                                                
8:35:52 AM                                                                                                                    
                                                                                                                                
KAREN LIDSTER,  STAFF, REPRESENTATIVE JOHN COGHILL,  read the                                                                   
following statement:                                                                                                            
                                                                                                                                
     HB 121 is being proposed to be able to provide the                                                                         
     municipalities with optional tools to create incentives                                                                    
     for individuals to take action that will improve air                                                                       
     quality and reduce fuel consumption. Local taxation                                                                        
     policy and discretion is governed by Title 29 of                                                                           
     Alaska Statute. Tax exemptions and tax credits are                                                                         
     only permitted within the authority of this section of                                                                     
     state law. The proposed legislation will expand the                                                                        
     discretion of municipalities in order to allow by                                                                          
     ordinance the creation of programs that will offer tax                                                                     
     credits for actions that the local governing body                                                                          
     determines will improve air quality. The proposed                                                                          
     language requires that eligibility, conditions, and                                                                        
     other criteria for the tax credits be established by                                                                       
     ordinance. This will create a full range of options                                                                        
     for local municipalities to address their air quality                                                                      
     issues rather than just through restriction and                                                                            
     enforcement.                                                                                                               
                                                                                                                                
     Portions of the Fairbanks North Star Borough were                                                                          
     designated as nonattainment for PM2.5 by the                                                                               
     (Environmental Protection Agency) EPA in December 2008.                                                                    
     Based on the requirements of the Clear Air Act the                                                                         
     state and the borough have three years to develop an                                                                       
     attainment plan that is designed to bring air quality                                                                      
     into compliance with federal air standards. It is                                                                          
     unquestioned that reduction of the amount of fine                                                                          
     particulates released into the air by space heating of                                                                     
     residences and businesses will be a component of any                                                                       
     attainment plan.                                                                                                           
                                                                                                                                
     The proposed legislation is requested as a fist step in                                                                    
     that process to allow local municipalities the latitude                                                                    
     in developing tax credit programs to address the                                                                           
     important public health and community compliance issues                                                                    
     that result from poor air quality.                                                                                         
                                                                                                                                
8:38:08 AM                                                                                                                    
                                                                                                                                
Ms. Lidster  cited representatives  from the Fairbanks  North                                                                   
Star  Borough,  Air Quality  Control,  Fairbanks  North  Star                                                                   
Borough  Assembly,  and  Alaska   Environmental  Conservation                                                                   
staff available to answer questions.                                                                                            
                                                                                                                                
8:38:29 AM                                                                                                                    
                                                                                                                                
ALICE  EDWARDS, ACTING  DIRECTOR,  DIVISION  OF AIR  QUALITY,                                                                   
DEPARTMENT OF ENVIRONMENTAL CONSERVATION  (DEC) indicated her                                                                   
availability  to answer  questions  relating  to air  quality                                                                   
issues in Fairbanks.                                                                                                            
                                                                                                                                
8:39:01 AM                                                                                                                    
                                                                                                                                
Representative  Fairclough asked  for the  number of  testing                                                                   
stations  in Fairbanks.  Ms. Edwards  replied that  Fairbanks                                                                   
has one primary  air monitoring station located  downtown and                                                                   
a  number of  additional monitors,  in  conjunction with  the                                                                   
Department  of  Environmental  Conservation, that  have  been                                                                   
implemented  in  the  borough  over the  past  few  years  to                                                                   
monitor air quality.                                                                                                            
                                                                                                                                
8:39:51 AM                                                                                                                    
                                                                                                                                
Representative Fairclough asked  if the violation site was in                                                                   
the downtown  area. Ms. Edwards  indicated that  was correct.                                                                   
Representative  Fairclough remarked that  she has  dealt with                                                                   
nonattainment  in the municipality  of Anchorage  and offered                                                                   
that  downtown air  quality may  be  more closely  affiliated                                                                   
with cold starts.                                                                                                               
                                                                                                                                
8:40:26 AM                                                                                                                    
                                                                                                                                
Co-Chair Hawker asked  if this bill was point  specific for a                                                                   
problem  in  Fairbanks.  Ms.  Edwards  replied  that  HB  121                                                                   
focuses on giving Fairbanks additional  tools to address fine                                                                   
particulate matter  problems; Juneau  also faces  this issue.                                                                   
Both communities  have a variety  of sources that  contribute                                                                   
to pollution,  but a large part  of the problem  derives from                                                                   
space heating or other solid fire fuel heating devices.                                                                         
                                                                                                                                
8:41:18 AM                                                                                                                    
                                                                                                                                
JIM  CONNOR,  AIR  QUALITY  CONTROL,   FAIRBANKS  NORTH  STAR                                                                   
BOROUGH,  testified  via  teleconference,  indicated  he  was                                                                   
available for questions.                                                                                                        
                                                                                                                                
8:41:49 AM                                                                                                                    
                                                                                                                                
Representative  Fairclough inquired  if Mr.  Conner would  be                                                                   
responsible  for putting  together the  attainment plan.  Mr.                                                                   
Conner  indicated  he  would  be  working  closely  with  the                                                                   
Department    of   Environmental    Conservation   and    the                                                                   
Environmental  Protection  Agency Region  10  to develop  the                                                                   
attainment plan.                                                                                                                
                                                                                                                                
8:42:29 AM                                                                                                                    
                                                                                                                                
Representative Fairclough  asked if he  would be the  lead in                                                                   
Fairbanks. Mr. Conner replied that he would.                                                                                    
                                                                                                                                
8:42:41 AM                                                                                                                    
                                                                                                                                
Representative Gara asked what  portion of the pollutants was                                                                   
generated by automobiles.  Mr. Conner replied  that the study                                                                   
is continuing on the actual apportionment  between sources of                                                                   
pollution, but  the belief is  that automobiles  contribute 5                                                                   
to  10  percent  to the  problem;  space  heating  components                                                                   
generate around 25 to 30 percent.                                                                                               
                                                                                                                                
8:44:01 AM                                                                                                                    
                                                                                                                                
NADINE  WINTERS,  PRESIDING  OFFICER,  FAIRBANKS  NORTH  STAR                                                                   
BOROUGH  ASSEMBLY,  testified via  teleconference,  commented                                                                   
that the  borough is in nonattainment  for the PM2.5  and the                                                                   
borough was  trying to reach attainment  while  making  it as                                                                   
painless as possible  for residents and businesses.  The bill                                                                   
could  be used  to provide  incentives  through property  tax                                                                   
credits  to change  old wood  stoves for  EPA certified  wood                                                                   
stoves;  this may reduce  particulate  matter by 67  percent.                                                                   
The situation represents  a health issue for  residents and a                                                                   
possible  hindrance for  future  economic development.  House                                                                   
Bill 121  provides tools  to help the  community in  terms of                                                                   
economic  development,   resident  health,  and   to  achieve                                                                   
attainment. Ms. Winters urged support for HB 121.                                                                               
                                                                                                                                
8:45:30 AM                                                                                                                    
                                                                                                                                
Representative  Salmon  requested  more  information  on  the                                                                   
types  of  improvements.  Ms.   Lidster  responded  that  the                                                                   
options  available  to the  communities  are  open for  their                                                                   
determination  on  how  to best  attain  the  designated  air                                                                   
quality.  Ms.  Winters  described  wood  smoke  pollution,  a                                                                   
popular  method   for  heating  in  Fairbanks,   as  a  major                                                                   
contributor to the problem. The  purpose of HB 121 is to give                                                                   
tax credits  for residents to  replace their old  wood stoves                                                                   
with  EPA  certified  wood stoves.  Tax  credits  would  help                                                                   
people offset the costs.                                                                                                        
                                                                                                                                
8:47:42 AM                                                                                                                    
                                                                                                                                
Representative Salmon agreed Fairbanks  has real problem with                                                                   
cold during  the winter;  a wood stove  in the home  helps as                                                                   
electricity frequently goes out during cold weather.                                                                            
                                                                                                                                
8:48:32 AM                                                                                                                    
                                                                                                                                
Representative  Fairclough  remarked  that she  was  familiar                                                                   
with  nonattainment during  local service  in Anchorage,  but                                                                   
she wondered  if the inversion  affect in Fairbanks  prevents                                                                   
attainment no matter what is attempted.                                                                                         
                                                                                                                                
8:49:10 AM                                                                                                                    
                                                                                                                                
Ms.  Winters  remarked  that  the  PM2.5  nonattainment  area                                                                   
covers a  significant part  of the borough,  not just  in the                                                                   
city.  The boundaries  extend  past  Ft. Wainwright  to  Gold                                                                   
Stream. Representative  Fairclough referred  to page  1, line                                                                   
10, "…  the credit may  be granted for  more than  one year."                                                                   
She  questioned  how  Fairbanks  would  implement  this.  Ms.                                                                   
Winters  replied that  they are waiting  on this  legislation                                                                   
before  making a  final decision,  but a  consideration is  a                                                                   
dollar for dollar  tax credit. She suggested that  if it cost                                                                   
$1500  to replace  a wood stove  for the  EPA certified  wood                                                                   
stove, then there would be a $1500 tax credit.                                                                                  
                                                                                                                                
8:51:05 AM                                                                                                                    
                                                                                                                                
Representative  Fairclough  appreciated   the  challenged  in                                                                   
Fairbanks, but  she noted  that in past  two years  there had                                                                   
been conversation  and publicity  about the boroughs  ability                                                                   
to tax  in different  ways. She wondered,  in making  a local                                                                   
decision to implement  an ordinance, if Fairbanks  would take                                                                   
the financial  responsibility and not  have a cost  return to                                                                   
the state. Ms.  Winters asserted that Fairbanks  would accept                                                                   
that responsibility.  She indicated Fairbanks  operates under                                                                   
a tax cap,  and it will be  painful in the short run,  but it                                                                   
must  be done  for the  health  of the  residents and  future                                                                   
economic development. Representative  Fairclough asked if Ms.                                                                   
Winters  knew  the  costs  of  the  replacement  stoves.  Ms.                                                                   
Winters  reported that  the EPA certified  stove would  costs                                                                   
between $1500 and $2500.                                                                                                        
                                                                                                                                
8:52:53 AM                                                                                                                    
                                                                                                                                
Representative Gara  questioned why a wood stove  over an oil                                                                   
heater.  Ms. Winters  noted  that  a cord  of  wood could  be                                                                   
purchased  for  around  $250 or  harvested  free  in  certain                                                                   
public  areas.  The  numbers   of  homes  heating  with  wood                                                                   
increased as the price of oil  increased. Representative Gara                                                                   
asked  if the  rebate  program would  also  be available  for                                                                   
those who  go off  wood. Ms. Winters  indicated that  had not                                                                   
been thought through.                                                                                                           
                                                                                                                                
8:54:38 AM                                                                                                                    
                                                                                                                                
Co-Chair Stoltze asked if the  borough has policies promoting                                                                   
information that wood is available  in some public areas. Ms.                                                                   
Winters replied there  was no policy, but in  road accessible                                                                   
borough  lands  some areas  have  been  opened up  for  local                                                                   
timber harvest.                                                                                                                 
                                                                                                                                
8:55:40 AM                                                                                                                    
                                                                                                                                
Representative  Fairclough   asked  if  there   was  a  state                                                                   
assessor online. Co-Chair Stoltze responded there was not.                                                                      
                                                                                                                                
8:55:51 AM                                                                                                                    
                                                                                                                                
Representative  Fairclough remarked  that  when other  cities                                                                   
take  tax credits  against property  taxes  the community  is                                                                   
adversely  affected  by student  reimbursement  calculations,                                                                   
depending on  if the state  assessor accepts that  credit and                                                                   
how it is applied. She referred  to a tax credit in Anchorage                                                                   
for religious  organizations  and how  some of these  credits                                                                   
adversely impact  the student rate. She inquired  if that had                                                                   
been  considered in  this legislation.  Ms. Winters  remarked                                                                   
that  this  tax  credit  will   not  affect  their  education                                                                   
funding.                                                                                                                        
                                                                                                                                
8:57:25 AM                                                                                                                    
                                                                                                                                
Co-Chair  Stoltze   asked  if  Steve  van  Sant,   the  State                                                                   
Assessor, attended  the recent Alaska Municipal  League event                                                                   
(copy on file). Ms. Winters replied  she had not participated                                                                   
in the meeting, therefore she did not know who attended.                                                                        
                                                                                                                                
8:57:47 AM                                                                                                                    
                                                                                                                                
Representative  Kelly  asked if  wood boilers  qualify  under                                                                   
this bill. Ms. Winters replied  it could be investigated, but                                                                   
she not  sure how it would  be handled. Representative  Kelly                                                                   
wanted more clarification if wood boilers would qualify.                                                                        
                                                                                                                                
9:00:10 AM                                                                                                                    
                                                                                                                                
Representative Austerman  felt this bill was  written so that                                                                   
any  community  in Alaska  who  wanted  to change  their  air                                                                   
quality could  develop any  method they  wanted. He  asked if                                                                   
that was a correct interpretation.                                                                                              
                                                                                                                                
9:01:05 AM                                                                                                                    
                                                                                                                                
Ms. Lidster  stated in HB  121, page  1, line 12-13,  that "a                                                                   
credit  may be  granted under  this section  and to  property                                                                   
located  in areas  that  do not  meet  air quality  standards                                                                   
required by federal or state law  or regulation." She did not                                                                   
know  how far  that  extended, but  it  could be  researched.                                                                   
Representative  Austerman  asked  if  DEC  could  answer  the                                                                   
question.                                                                                                                       
                                                                                                                                
9:01:50 AM                                                                                                                    
                                                                                                                                
Ms. Edwards replied  that three communities have  air quality                                                                   
problems:  Fairbanks, Anchorage,  and Juneau.  Representative                                                                   
Austerman  questioned  if this  bill  was specific  to  those                                                                   
three communities. Ms. Edwards  remarked she could not answer                                                                   
that  question.  Co-Chair  Stoltze asked  if  any  community,                                                                   
other than the  Fairbanks North Star Borough,  advocated this                                                                   
legislation. Ms. Lister reported  she had no contact with any                                                                   
other community. Representative  Austerman asked if DEC could                                                                   
provide this information.                                                                                                       
                                                                                                                                
9:03:10 AM                                                                                                                    
                                                                                                                                
Ms. Edwards replied she would  work with the bill sponsor and                                                                   
the  borough to  obtain an  answer. Representative  Austerman                                                                   
asked if  DEC sets the standards.  Ms. Edwards  declared that                                                                   
air quality  standards are set  by the federal  Environmental                                                                   
Protection  Agency, and  then  the state  adopts the  federal                                                                   
standards.  Representative Austerman  asked if the  standards                                                                   
had been adopted. Ms. Edward replied  they are in the process                                                                   
of adopting them.                                                                                                               
                                                                                                                                
9:03:58 AM                                                                                                                    
                                                                                                                                
Representative  Kelly  agreed   that  the  PM2.5  problem  in                                                                   
Fairbanks is real in the core  area, but the EPA extended the                                                                   
area to  cover all the  way to the  base of the  Alaska Range                                                                   
where no human lives. He wondered  if Fairbanks had been able                                                                   
to get a reduction  of this area. Ms. Lister  replied she had                                                                   
not been  given information that  the area had  been reduced.                                                                   
Ms. Edwards remarked that the  DEC was successful in reducing                                                                   
the original EPA boundary. The  boundary does not include the                                                                   
flats south  of the  river, Eielson Air  Force Base,  and the                                                                   
training areas to the east, but  does include North Pole, Ft.                                                                   
Wainwright,  downtown Fairbanks,  Gold Stream  valley out  to                                                                   
Ester, and Fox. Representative  Kelly read on page 1, line 5-                                                                   
8,  "A municipality  may, by  ordinance, provide  for an  air                                                                   
quality improvement  tax credit  to offset  a portion  of the                                                                   
property taxes  due on property that, during  the immediately                                                                   
preceding  tax year,  has been  improved in  a way that  aids                                                                   
improving the air quality in the  municipality."  He wondered                                                                   
how  this would  work  to qualify  for  the  tax credit.  Ms.                                                                   
Winters  replied that  whatever year  improvements are  made,                                                                   
the following year the tax credit would be applicable.                                                                          
                                                                                                                                
9:07:43 AM                                                                                                                    
                                                                                                                                
Representative Kelly  remarked that the  EPA had cut  in half                                                                   
the PM2.5  per cubic liter  from 65 to  30 which  changed the                                                                   
equation.  He indicated  his frustration  with this  decision                                                                   
and questioned  the medical impact studies in  Fairbanks. Ms.                                                                   
Winters   replied  there   was  no  study   on  the   medical                                                                   
implications,  but she  reported  receiving many  constituent                                                                   
calls in  the last year  indicating a public  perception that                                                                   
air quality is a problem. Representative  Kelly remarked that                                                                   
he did  not believe the  number change  made by the  EPA made                                                                   
any  difference and  he strongly  believed that  the EPA  was                                                                   
unreasonably hassling the community.                                                                                            
                                                                                                                                
9:11:49 AM                                                                                                                    
                                                                                                                                
Representative  Fairclough  asked  the  state  assessor,  now                                                                   
online,  how the  credit  would be  calculated  and if  there                                                                   
would be an adverse effect on school funding.                                                                                   
                                                                                                                                
STEVE  VAN  SANT, STATE  ASSESSOR,  DEPARTMENT  OF  COMMERCE,                                                                   
COMMUNITY    AND   ECONOMIC    DEVELOPMENT   testified    via                                                                   
teleconference, that this bill  goes to the tax side, not the                                                                   
assessment  side. If  the improvement  is  exempted from  the                                                                   
assessment for full value, the  assessor's office will add it                                                                   
back in for school funding. This  is a tax credit rather than                                                                   
an assessment exception. There  will be times that the credit                                                                   
will probably  be different from  what an exemption  would be                                                                   
because the  exemption might not  show up on  the improvement                                                                   
value. In reality it will not  affect the full value since it                                                                   
is on the tax side.                                                                                                             
                                                                                                                                
9:14:27 AM                                                                                                                    
                                                                                                                                
Representative  Austerman read  HB 121,  page 1, line  10-13,                                                                   
"The  ordinance may  limit the  availability of  a credit  to                                                                   
some, but  no all, types of  improvements for which  a credit                                                                   
may be granted under this section  and to property located in                                                                   
areas  that do  no  meet air  quality  standards required  by                                                                   
federal  or  state law  or  regulation."  His  interpretation                                                                   
indicated  that  it would  be  open  to all  areas.  Co-Chair                                                                   
Stoltze asked Ms.  Lidster if she needed that  much direction                                                                   
and specificity from  a state statute or just  the ability to                                                                   
grant the tax credit for Fairbanks.                                                                                             
                                                                                                                                
9:15:44 AM                                                                                                                    
                                                                                                                                
Ms.  Lidster  indicated  that  the  legislation  was  brought                                                                   
forward for communities  in nonattainment. She  could not say                                                                   
how  it  would be  interpreted  beyond  that.  Representative                                                                   
Austerman   believed  that   the   interpretation  was   open                                                                   
according to his reading of the bill.                                                                                           
                                                                                                                                
9:16:39 AM                                                                                                                    
                                                                                                                                
Representative  Gara believed  this  bill could  be used  for                                                                   
communities  that  want to  offer  the  tax credit,  but  not                                                                   
telling communities  what they have  to do. He  observed that                                                                   
there is a  movement of individuals in some  communities that                                                                   
want to  use alternative  energy, such as  wind or  solar. He                                                                   
offered that in helping Fairbanks,  tax credits could also be                                                                   
available for other communities  should they wish. He thought                                                                   
a questionable part  of the sentence on line 12  could have a                                                                   
period inserted  after the word  "section." This  would allow                                                                   
communities to offer the tax credit if they so choose.                                                                          
                                                                                                                                
9:18:09 AM                                                                                                                    
                                                                                                                                
Co-Chair Hawker asked if public  testimony was concluded. Co-                                                                   
Chair Stoltze invited Kate Troll to testify.                                                                                    
                                                                                                                                
9:18:30 AM                                                                                                                    
                                                                                                                                
KATE TROLL, EXECUTIVE DIRECTOR,  ALASKA CONSERVATION ALLIANCE                                                                   
(ACA),  declared that  the Alaska  Conservation Alliance,  an                                                                   
umbrella  organization of  40  conservation groups,  supports                                                                   
the idea  of allowing municipalities  to create  an incentive                                                                   
to help them reach their particulate  matter standard of 2.5.                                                                   
The bill is being  driven by the needs of Fairbanks  to reach                                                                   
the attainment  area; Juneau is  also in non-attainment.  Ms.                                                                   
Troll believed  HB 121 enables  communities to have  one more                                                                   
tool to  help meet  air quality  standards. She  acknowledged                                                                   
that if  this tax  credit option could  be extended  to other                                                                   
communities   to  address   their   needs   to  reduce   fuel                                                                   
consumption or  attain air quality  challenges, then  the ACA                                                                   
supports this effort.                                                                                                           
                                                                                                                                
9:20:36 AM                                                                                                                    
                                                                                                                                
Representative  Foster asked if  the conservation  group list                                                                   
is updated.  Ms. Troll replied  that it is updated  regularly                                                                   
and is available on the ACA website.                                                                                            
                                                                                                                                
9:21:08 AM                                                                                                                    
                                                                                                                                
Co-Chair Stoltze announced public testimony closed.                                                                             
                                                                                                                                
9:21:32 AM                                                                                                                    
                                                                                                                                
Representative Gara  observed that all communities  should be                                                                   
allowed to decide if they want  to grant tax credits to their                                                                   
citizens that want to reduce air  pollution. Co-Chair Stoltze                                                                   
noted that  the bill would not  pass out today as  there were                                                                   
so  many   questions  and  concerns.  Representative   Foster                                                                   
indicated his support for this bill.                                                                                            
                                                                                                                                
9:22:20 AM                                                                                                                    
                                                                                                                                
Representative  Austerman expressed  his  need to  understand                                                                   
the bill more clearly. He believed  the bill, as it currently                                                                   
reads,  could  be  interpreted  both  ways.  He  agreed  with                                                                   
Representative  Gara that  there were  many communities  that                                                                   
would  like to  be  more  diversified in  alternative  energy                                                                   
choices.                                                                                                                        
                                                                                                                                
9:23:03 AM                                                                                                                    
                                                                                                                                
Representative Fairclough  favored the bill passing  from the                                                                   
committee at the appropriate time.  She believed the existing                                                                   
language already  allows the flexibility  that Representative                                                                   
Gara and Representative Austerman  suggested. She referred to                                                                   
page 1,  line 12-13,  "…areas  that do not  meet air  quality                                                                   
standards required  by federal  or state law or  regulation."                                                                   
She believed that  because of the inclusion of  "or" the bill                                                                   
already conveys that it includes any community.                                                                                 
                                                                                                                                
9:23:54 AM                                                                                                                    
                                                                                                                                
Co-Chair  Hawker questioned  if  there is  any  limit to  the                                                                   
amount  of credit granted  under the  authority requested  in                                                                   
this bill.                                                                                                                      
                                                                                                                                
9:24:12 AM                                                                                                                    
                                                                                                                                
Ms. Lidster understood  there to be no limit  as written. Co-                                                                   
Chair Hawker agreed  that is how the bill reads;  there is no                                                                   
limit on the amount of credit.  Co-Chair Hawker expressed his                                                                   
concern  that this  bill permits  any  municipality to  allow                                                                   
credits; there is no constraint  being applied. He noted that                                                                   
HB 121 was written  for the immediate needs  of Fairbanks and                                                                   
Juneau. The fact that the credit  is unlimited and any action                                                                   
taken by the  municipal assembly that would  offer credits up                                                                   
to unlimited  amount, is going  to transfer the  property tax                                                                   
obligation  from  the  beneficiaries   to  the  rest  of  the                                                                   
community.  Co-Chair  Hawker   expressed  his  hesitancy  and                                                                   
concern passing  a bill  that would  empower his assembly  to                                                                   
pass credit  to special interests  groups that would  have to                                                                   
be born  by all the  citizens residing  in his district.  Co-                                                                   
Chair  Hawker  noted he  understands  Representative  Kelly's                                                                   
dilemma of not  liking this idea, but  acknowledged Fairbanks                                                                   
is being backed into the wall by federal regulations.                                                                           
                                                                                                                                
9:26:26 AM                                                                                                                    
                                                                                                                                
Co-Chair Hawker read  on page 1, line 9, the  "…amount of the                                                                   
credit  shall be  based  on a  percentage  of the  verifiable                                                                   
costs…" He  contended that the  "shall" makes it  a mandatory                                                                   
methodology. He  wondered if this inappropriately  limits the                                                                   
bill. He  ascertained it  might be  more appropriate  for the                                                                   
credit to  be on a unit  cost option. This would  protect the                                                                   
community and other  tax payers to whom the  tax burden would                                                                   
be transferred. The  language is limiting in  that there does                                                                   
not appear  to be the ability  to have a percent  of variable                                                                   
costs up to a certain amount.                                                                                                   
                                                                                                                                
9:28:16 AM                                                                                                                    
                                                                                                                                
Co-Chair Hawker  read page 1,  line 10-13, "...The  Ordinance                                                                   
may limit the availability of  a credit to some, but not all,                                                                   
types  of improvements  for  which a  credit  may be  granted                                                                   
under this section  and to property located in  areas that do                                                                   
no meet  air quality standards  required by federal  or state                                                                   
law  or  regulation."   He  believed  that  the   term  "may"                                                                   
indicated that it was purely permissive,  since it could also                                                                   
be read  as "may not" and  if so, everything beyond  that was                                                                   
irrelevant. The  section "…to some,  but not all…"  gives the                                                                   
government complete latitude.  Co-Chair Hawker suggested that                                                                   
in  redrafting this  legislation,  he wanted  to protect  his                                                                   
constituents from the transference  of tax burdens to special                                                                   
interest  groups. The  bill needs  to be  written simpler  to                                                                   
protect his community.                                                                                                          
                                                                                                                                
9:30:12 AM                                                                                                                    
                                                                                                                                
Co-Chair Stoltze agreed with Co-Chair Hawker.                                                                                   
                                                                                                                                
9:30:21 AM                                                                                                                    
                                                                                                                                
Representative Foster believed  there needs to be a mechanism                                                                   
to  reward communities  for making  air  quality changes.  He                                                                   
acknowledged that different solutions  for alternative energy                                                                   
depend  on   the  location  of   and  variables   within  the                                                                   
community. Co-Chair  Stoltze believed Fairbanks  would rather                                                                   
not deal with this issue.                                                                                                       
                                                                                                                                
9:31:34 AM                                                                                                                    
                                                                                                                                
Representative  Kelly commented  that tax  based erosion  and                                                                   
general applicability  concerned him.  He wanted the  bill to                                                                   
stay narrow enough  to prevent erosion of the  local tax base                                                                   
which results  in more  municipal revenue sharing  pressures.                                                                   
He expressed  his fear that the  bill could die on  the floor                                                                   
if it moved  too far away from solving the  specific problem.                                                                   
Representative  Kelly indicated he  had problems  opening the                                                                   
bill up beyond  its original intent. He also did  not want to                                                                   
hear from  constituents who believed  they were  being denied                                                                   
conversions of  their stove or  have people playing  games to                                                                   
get the tax  credit. He worried about the  bill's application                                                                   
if local officials were empowered  to do things with the bill                                                                   
that was never intended.                                                                                                        
                                                                                                                                
9:35:07 AM                                                                                                                    
                                                                                                                                
Representative  Kelly  believed  his constituents  wanted  to                                                                   
"fight  the  calendar"  on the  EPA  ruling  until  first-gas                                                                   
arrives  in Fairbanks.  He asked  Ms. Winters  if it was  the                                                                   
intention of the  borough to do what they had  to do to reach                                                                   
compliance or to "fight the calendar."                                                                                          
                                                                                                                                
9:35:50 AM                                                                                                                    
                                                                                                                                
Ms.  Winters  observed   that  a  report  on   how  to  reach                                                                   
attainment in Fairbanks must be  reported to the EPA within 3                                                                   
years. Fairbanks  is trying to  reach attainment to  meet EPA                                                                   
requirements and  deal with the health of residents,  but not                                                                   
hinder  any economic  development projects  that might  bring                                                                   
gas to Fairbanks.                                                                                                               
                                                                                                                                
9:37:36 AM                                                                                                                    
                                                                                                                                
Representative  Kelly believed the  borough could  generate a                                                                   
great deal of expense over a temporary  measure that may look                                                                   
like  a  joke when  the  gas  pipeline  is developed  and  in                                                                   
general  use.  He  recognized  that  the  borough  was  being                                                                   
threatened under a timeline and there was no easy solution.                                                                     
                                                                                                                                
9:38:34 AM                                                                                                                    
                                                                                                                                
Co-Chair  Stoltze  invited  all   to  work  with  the  bill's                                                                   
sponsors to  try and get  the bill back  to the  committee as                                                                   
quickly as possible.                                                                                                            
                                                                                                                                
HB  121  was   HEARD  and  HELD  in  Committee   for  further                                                                   
consideration.                                                                                                                  
                                                                                                                                

Document Name Date/Time Subjects
AML Resolution.doc.pdf HFIN 3/13/2009 8:30:00 AM
HB 121
FNSB_letter of support herron.doc.pdf HFIN 3/13/2009 8:30:00 AM
HB 121
FNSB_letter of support_Munoz.doc.pdf HFIN 3/13/2009 8:30:00 AM
HB 121
memo to Finance for hearing.doc HFIN 3/13/2009 8:30:00 AM
HB 121
sectional.doc HFIN 3/13/2009 8:30:00 AM
HB 121
sponsor statement.doc HFIN 3/13/2009 8:30:00 AM
HB 121
Letter ACA.pdf HFIN 3/13/2009 8:30:00 AM
HB 121