Legislature(1993 - 1994)
01/28/1993 01:00 PM House CRA
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
HB 73: ANCSA STATE TAX EXEMPTIONS
CHAIRMAN OLBERG interrupted the DCRA overview to let
Representative MacLean, the prime sponsor of HB 73, testify
on behalf of her bill.
Number 613
REPRESENTATIVE EILEEN MACLEAN, PRIME SPONSOR of HB 73,
stated the bill had been introduced primarily to bring state
law into compliance with federal law. She explained that in
1987, federal law was changed to continue the property tax
exemption from federal, state or local taxation on ANCSA
(Alaska Native Claims Settlement Act) land indefinitely, or
until development occurred. House Bill 73 reflected those
changes in state law to avoid confusion in the application
of the state's tax laws, she said.
REPRESENTATIVE MACLEAN advised that some technical or
stylistic wording changes to update state law had been
included in HB 73. She noted the bill did not expand or
reduce any benefits already mandated by federal law, but
merely cleaned up state law and ensured obsolete state
statutes did not lead to misinterpretation by state
assessors and others who worked with Alaska's tax law.
REPRESENTATIVE MACLEAN noted HB 73 had a zero fiscal note
from the Department of Revenue, and that a similar bill
(CSHB 451 (RES)) had passed the House last year, but was
left in the Senate Rules Committee at the time of
adjournment. She said, "To my knowledge, there were no
problems and concerns, its just a technical bill cleanup."
CHAIRMAN HARLEY OLBERG considered HB 73 quite
straightforward and suggested the committee complete the
DCRA overview before further discussion of HB 73.
Number 648
COMMISSIONER BLATCHFORD resumed the discussion on CDQ's
cautioning that, "...if it does not succeed, then it will
foreclose the opportunity for Alaskans to fish in the Bering
Sea forever, in the words of Clem Tillion".
REPRESENTATIVE JOHN DAVIES asked for elaboration on why
Alaskans "would be foreclosed forever if this group fails."
Number 666
COMMISSIONER BLATCHFORD said, "Because we're dealing with
federal waters, there is a great deal of pressure coming
from outside companies, the Washington Fleet, the Oregon-
based fleet and also foreign owned companies. The
competition is swift, it's incredible. I don't think Alaska
is going to be able to suppress the political influence of
the Northwestern states forever and that's why we've been
very fortunate to get this door cracked open."
Number 675
MR. WALSH expanded on the Commissioner's last statement.
TAPE 93-2, SIDE B
Number 729
MR. GERAGHTY gave a history of the Bering Sea fish resource
and how it came to be that Alaska did not fish the Bering
Sea until CDQ's. He added, "You are probably going to see
infrastructure needs, in order to get the processing on
shore. Some communities, all they need to bring it on shore
is a safe freshwater source for processing..."
REPRESENTATIVE CON BUNDE asked if people from the
communities actually did the fishing or if they sold their
portion of the quota.
MR. WALSH gave an example which explained the partnership
arrangement between the community who had the quotas and the
vessels with technical experience which were used during the
first CDQ fishery in December, 1992.
REPRESENTATIVE BUNDE asked if there was a potential
relationship between the CDQs and Tyson Seafoods Co.
MR. WALSH said Mr. Tyson was quite familiar with CDQs and
seemed to have a commitment towards domestic marketing of
Alaska surimi. According to Mr. Walsh, Mr. Tyson's company,
Arctic Alaska, was not currently in partnership with a CDQ
group but might once market demand was determined.
Number 882
CHAIRMAN OLBERG stated this was a remarkable program
considering it had only been in existence one year.
REPRESENTATIVE TOOHEY asked what the eventual return to the
state would be.
MR. WALSH said it was hard to quantify what a job was to
people in areas which had "no outlook". He further claimed
possible reduced social costs and eventual development of
value-added processing as consequences of the CDQ program.
REPRESENTATIVE TOOHEY rephrased her question to include
direct revenue which the state would realize.
MR. WALSH said there were presently no taxes which applied
to fish harvested in federal waters.
Number 968
REPRESENTATIVE BILL WILLIAMS asked why other local fisheries
did not add to the wages of the community fishermen.
MR. WALSH said they had to address each fishery separately
according to the individual management plans but that often
the same vessels stayed in those waters, maintaining the
same local crews, for the other fisheries.
CHAIRMAN OLBERG called an at ease at 2:10 p.m.
CHAIRMAN OLBERG reconvened the meeting at 2:16 p.m. with all
members present and took up HB 73. He gave a brief history
of CSHB 451, the predecessor of HB 73, which nearly passed
last session.
Number 100
REPRESENTATIVE ED WILLIS asked what the various
municipalities and boroughs thought of HB 73.
Number 110
JACK CHENOWITH, LEGISLATIVE LEGAL COUNSEL, LEGISLATIVE
AFFAIRS AGENCY, testified that, "There ought not to be any
further harm done to municipal taxation. Most
assessors...are very well aware of the provisions of the
Alaska Native Claims Settlement Act and the exemptions to
the Act and subsequent amendments to that act have brought.
What we are trying to do in the first two sections of this
bill in the Title 29 amendments is only alert people who
rely on Title 29 exclusively to the fact that there are
further exemptions that have been legislated into effect in
these last 20 years and that those exemptions do have a role
or do have an effect on the municipal tax roles and give
notice to them of that. I was cautioned a long time ago
that if you don't get it in Title 29, in some cases it
doesn't get read, it doesn't get noticed..."
REPRESENTATIVE WILLIS asked if anything would be affected by
the retroactive provision.
MR. CHENOWITH replied in the negative and gave further
explanation.
Number 140
REPRESENTATIVE WILLIS asked about the effect HB 73 would
have on land exchanges between Native corporations and
municipalities and gave an example.
MR. CHENOWITH set out the criteria in which an exemption
would or would not continue.
REPRESENTATIVE WILLIAMS gave an example of a current land
exchange in Ketchikan.
REPRESENTATIVE BUNDE asked about the limitations to the term
"seasonal habitation" and gave an example.
MR. CHENOWITH said, "The term that has been used is
'developed' and though the exemption from taxation applies
to land that is undeveloped and is extended even when
surveying, construction of roads, providing utilities and
other similar actions normally considered to be component
parts of the development process occur, the exemption is
allowed. It's only when you put that property to use so a
commercial activity, even a seasonal commercial activity,
ought to bring it over the line to the point where the
municipality would be able to levy and collect."
REPRESENTATIVE WILLIS asked Chairman Olberg if any
municipality had been consulted about HB 73.
CHAIRMAN OLBERG said no because HB 73 was not new and had
fared so well during the last session.
REPRESENTATIVE WILLIS asked if any comments had been found
while researching HB 73.
CHAIRMAN OLBERG replied in the negative.
REPRESENTATIVE TOOHEY asked if there were any changes to HB
73 since last year's session.
MR. CHENOWITH indicated no substantive changes, only
"housekeeping" changes were made.
REPRESENTATIVE BUNDE reiterated HB 73 died last session
purely due to lack of time and that Chairman Olberg had
found no opposition to the bill.
CHAIRMAN OLBERG concurred.
Number 238
REPRESENTATIVE JERRY SANDERS moved that HB 73 be passed out
of committee with individual recommendations.
REPRESENTATIVE WILLIS voted "no recommendation" at this
point because he wanted to check with the municipality of
Anchorage.
CHAIRMAN OLBERG suggested that Representative Willis sign
the committee report accordingly.
Number 257
REPRESENTATIVE WILLIAMS asked if he should abstain from
signing the committee report due to his affiliation with a
Native corporation.
MR. CHENOWITH recommended that Representative Williams ask
to be excused from voting when HB 73 reached the House Floor
but indicated he could sign the committee report.
CHAIRMAN OLBERG asked that the record show Representative
Williams identified himself as a possible beneficiary of HB
73.
Number 262
CHAIRMAN OLBERG noted there was a motion to pass HB 73 from
committee with individual recommendations. Hearing no
objections, HB 73 moved out of committee
ADJOURNMENT
CHAIRMAN OLBERG adjourned the meeting at 2:33.
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