04/08/1997 03:33 PM Senate STA

                                                                               
             HB 86 CITIES:  PAYMENTS IN LIEU OF TAXES                          
                                                                               
 CHAIRMAN GREEN brought HB 86 before the committee as the next order           
 of business.                                                                  
                                                                               
 REPRESENTATIVE IVAN IVAN, prime sponsor of HB 86, stated he                   
 introduced the legislation because it will have a positive economic           
 impact on communities in rural Alaska that are in unorganized areas           
 of the state.  The bill establishes the payment in lieu of taxes              
 program within the Department of Community & Regional Affairs for             
 home rule and general law cities located in the unorganized borough           
 within federally designed areas of the Alaska.                                
                                                                               
 He related the program will be financed by funds the states                   
 receives annually from the federal government under 31 U.S.C. 6901            
 - 31 U.S|.C. 6902.  Senator Ted Steven sponsored an amendment to              
 the Omnibus Parks and Public Lands Management Act which allows                
 cities in the unorganized borough to receive payment.                         
                                                                               
 Representative Ivan explained the legislation will provide a method           
 for the Department of Community & Regional Affairs to distribute              
 the annual funding and to establish criteria to determine whether             
 a city is eligible to receive payment under the program as intended           
 by federal law.  The amount of money to be distributed to each                
 eligible home rule or general law city will be based upon the                 
 population of the city as certified by the commissioner of the                
 DCRA.  The funds received by the cities under this program can be             
 used for any general purpose for which the city is authorized under           
 federal, state or local law.                                                  
                                                                               
 In conclusion, Representative Ivan said these funds will supplement           
 rather than replace current funding provided to the cities by the             
 state.  He said it will improve the financial health of the cities            
 and, hopefully, will enhance and encourage cities to remain                   
 incorporated instead of dissolving.                                           
                                                                               
 Number 430                                                                    
                                                                               
 CHAIRMAN GREEN asked Representative Ivan if the cities in the areas           
 that will impacted by the legislation are in favor of it, and he              
 acknowledged that they are.                                                   
                                                                               
 Number 440                                                                    
                                                                               
 KEVIN RITCHIE, Executive Director, Alaska Municipal League, voiced            
 the Alaska Municipal League's support for HB 86.                              
                                                                               
 Mr. Ritchie noted that before the federal legislation was passed              
 last year the only part of the United States that was not receiving           
 payment in lieu taxes funding was the unorganized boroughs, and               
 this legislation simply includes the unorganized borough with all             
 of the other boroughs in Alaska and the rest of the United States.            
                                                                               
 There being no further testimony on HB 86, CHAIRMAN GREEN asked for           
 the will of the committee.                                                    
                                                                               
 SENATOR MACKIE moved HB 86 and the accompanying zero fiscal note be           
 passed out of committee with individual recommendations.  Hearing             
 no objection, it was so ordered.