Legislature(2007 - 2008)HOUSE FINANCE 519
03/03/2008 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB72 | |
| HB200 | |
| HB413 | |
| HB326 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 3 | TELECONFERENCED | |
| += | HB 200 | TELECONFERENCED | |
| + | HB 326 | TELECONFERENCED | |
| + | HB 413 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | SB 72 | TELECONFERENCED | |
CS FOR SENATE BILL NO. 72(FIN)
"An Act relating to the community revenue sharing
program; and providing for an effective date."
Co-Chair Meyer reviewed that the Committee had previously
adopted Amendments #1 and #2, and had withdrawn Amendment
#3.
1:40:47 PM
Co-Chair Chenault MOVED to ADOPT Amendment #3.
Page 7, lines 11-13: Delete all material. Insert
"assembly approval. If there is more than one qualified
entity in an unincorporated community in a borough or
unified municipality, one of the entities may receive
the entire payment, or the payment may be shared
between two or more of the qualified entities, as
determined by the assembly.
(c) An unincorporated community in a borough or unified
municipality is eligible for a community revenue
sharing payment only if at least three of the following
services are generally available to all residents of
the unincorporated community and each of the three
services, in any combination, are provided by one of
more qualifying incorporated nonprofit entities or a
Native village council or are substantially paid for by
the residents of the unincorporated community through
taxes, charges, or assessments levied or authorized by
the borough or unified municipality:"
Vice-Chair Stoltze OBJECTED.
Co-Chair Chenault pointed out that in previous discussion
there had been question about which communities would be
eligible for the revenue sharing. The Department of
Commerce, Community and Economic Development (DCCED) worked
with staff to put together a list of potentially eligible
communities.
TOM WRIGHT, STAFF, REPRESENTATIVE MIKE CHENAULT, explained
the list submitted by DCCED ("The Estimated Potentially
Eligible Unincorporated Community List Under Proposed
Amendment #3," Copy on File). The 31 communities in bold
typeface are already represented and receiving payment from
the State under the current revenue-sharing plan. The list
also contains 55 communities that may or may not be eligible
to receive the revenue. Under the amendment, the borough
would determine if the criteria is met. The communities
accepted would be eligible for the $20,000 payment.
Co-Chair Meyer asked what the total potential cost would be.
Mr. Wright answered that if all 55 communities were
accepted, the cost would be an additional $1.1 million. He
expressed doubt that all the communities would be able to
meet the criteria.
Co-Chair Chenault explained that the seven criteria used
were on page 7 of the bill. The community would have to
provide a minimum of three of the seven. He reiterated that
the borough would determine if the criteria were met.
Vice-Chair Stoltze expressed concerns that some of the
smaller communities were analogous to large homeowners
associations that would become eligible for funds. He
wondered if the intent of revenue sharing would be met in
those situations.
1:46:43 PM
Representative Hawker thought the list of potential
communities was quantifiable. He added that the criteria
established in the amendment does not increase the funding
mechanism. He thought the amendment would promote the
desired outcome of having communities take responsibility
for providing public services. He supported the amendment.
Co-Chair Chenault listed distinct areas with their own
organized governance in his district.
Representative Thomas noticed Haines, a community in his
district, was on the list. He noted that Haines had a
different status as a consolidated borough and believed they
would get more than $20,000.
BILL ROLFZEN, LOCAL GOVERNMENT SPECIALIST, DEPARTMENT OF
COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT, explained that
the list of unincorporated communities was taken from the
U.S. Census Bureau. The communities are not incorporated
cities but meet the definition of community. Haines was a
city for many years; when it consolidated with the Haines
Borough, the city government was dissolved. They are now
considered an unincorporated community within the Haines
Borough, which would make them eligible for the $20,000.
1:51:08 PM
Representative Thomas wondered if by consolidating
government, the community lost opportunity for revenue. Mr.
Rolfzen replied that the city of Haines would have received
a $75,000 base plus the per capita. Once the city dissolved
and consolidated with the Borough, eligibility changed to
$20,000. However, there were cost savings as a result of
streamlining government. Representative Thomas did not think
there was savings from unifying.
Vice-Chair Stoltze WITHDREW his OBJECTION.
There being NO OBJECTION, Amendment #3 was ADOPTED.
1:52:48 PM
Co-Chair Meyer MOVED to ADOPT Amendment #4.
Page 5, line 7: Delete "$50,000,000", Insert
"$60,000,000"; Page 5, line 9: Delete "$150,000,000",
Insert "$180,000,000"; Page 5, line 11: Delete
$50,000,000, Insert "$60,000,000"; Page 5, line 22:
Delete "50,000,000, divided by 50,000,000, plus one,
multiplied by 300,000", Insert "$60,000,000, divided by
60,000,000, plus one, multiplied by 384,000"; Page 6,
line 3: Delete "fifteenth", Insert "nineteenth"
Vice-Chair Stoltze OBJECTED for discussion purposes.
Co-Chair Meyer provided a general overview of Amendment #4.
The Governor had recommended $75 million for revenue sharing
but had only recommended a one-year solution. Senate Bill 72
recommends $50 million each year for three years. If the
price of oil stays above $60, 20% of that progressivity
amount will be added to the fund. Hopefully, the fund will
continue as long as oil prices stay high. Amendment #4
proposes a compromise of $60 million, higher than the $50
million recommended by the Senate but less than the
Governor's request of $75 million. The total for the three
years becomes $180 million.
SUZANNE ARMSTRONG, STAFF, REPRESENTATIVE KEVIN MEYER,
provided more detail regarding Amendment #4. Page 5, line 22
makes the adjustments to the formula and increases the
borough basic payment. The basic payments for the borough
will be $384,000; city reserves and unincorporated
communities inside boroughs and unincorporated communities
outside of boroughs will be based on $384,000 rather than
$300,000. Page 6, line 3 changes the factor by which the
basic payment for unincorporated communities inside the
boroughs will be calculated to one nineteenth instead of one
fifteenth to keep payments roughly at the $20,000 level.
Co-Chair Meyer added that the level jumps from $320 to $384
because of the floating base. As that amount goes up, so
does the base.
1:56:14 PM
Vice-Chair Stoltze sought clarification regarding the
changes in the numbers.
Representative Hawker queried Co-Chair Meyer's statement
regarding a "three-year program." Representative Hawker
surmised that the bill and the amendment would establish a
permanent and durable change of statute that would continue
to fund as long as oil prices remained above $60 per barrel.
Co-Chair Meyer clarified that the bill intends a three-year
minimum, but hoped it would last twenty years or more. He
acknowledged the fund was dependent on the price of oil. He
pointed out that if the price goes below $60, communities
would have time to make adjustments.
1:58:19 PM
Representative Kelly did not like the phrase "twenty or
thirty years." He said he would not object to the
amendments, but voiced his concerns regarding over-spending.
Representative Crawford referred to other bills that target
the progressivity funding source and wondered what would
happen if the Legislature passed two bills targeting the
same source. Co-Chair Meyer thought the bill Representative
Crawford was referring to would not be considered for a vote
of the people for another year.
Ms. Armstrong added that Amendment #1 added language to the
section dealing with progressivity. The bill would not limit
the Legislature's ability to appropriate General Fund money
or other revenue sources.
Vice-Chair Stoltze WITHDREW his OBJECTION. There being NO
further OBJECTION, Amendment #4 was ADOPTED.
2:00:57 PM
Representative Kelly restated concerns regarding
progressivity and how it would fund revenue sharing. He
thought that, allowing for budget growth, the State would
not have enough money without using all of the progressivity
revenue. He worried that the debate was not addressing the
difficulty of sustaining the payments to the municipalities.
He stated his intent to vote against the bill.
2:03:26 PM
Representative Hawker reiterated his concerns regarding the
State's inability to predict future revenue sharing. He was
reluctant to go forward with revenue sharing, but said there
were two reasons he could move forward with SB 72. First,
the self-limiting component in the bill says that if the
price or production of oil declines, the program would phase
itself out. Second, he thought the State's highest priority
should be putting wealth into the communities through
revenue sharing. He read the statement of purpose of the
Alaska Statehood Act, Section 6, which selected land and the
resource wealth "For the purposes of furthering the
development of and expansion of communities." Representative
Hawker thought the revenue sharing program reflected in SB
72 was exactly what the crafters of statehood wanted. He
stated his intention to support the bill.
2:07:02 PM
Representative Thomas talked about his experience serving on
a borough assembly during a time when revenue sharing was
lost. He supports revenue sharing with clear limits,
especially related to building infrastructure. He wants debt
retirement instead and would like to see limits placed on
how the municipalities spend the money.
Co-Chair Meyer agreed that it would be interesting to see
how communities would use the money. He expressed confidence
in the bill and encouraged movement.
2:09:50 PM
Representative Hawker acknowledged Representative Carl Moses
and thought the Act should be dedicated to him and his
"Never give up" legacy.
Representative Kelly stated that he supports revenue sharing
but wants to control the budget. He thought a policy call
would be needed regarding a state tax.
2:12:47 PM
Vice-Chair Stoltze MOVED to report HCS for CSSB 72 (FIN) out
of Committee with individual recommendations and with new
fiscal note by the House Finance Committee for the
Department of Commerce, Community and Economic Development,
new zero fiscal note by the Department of Administration,
and new zero fiscal note by the Department of Natural
Resources.
AT EASE: 2:13:42 PM
RECONVENED: 2:14:07 PM
Representative Kelly OBJECTED. A roll call vote was taken on
the motion.
IN FAVOR: Nelson, Stoltze, Thomas, Crawford, Hawker, Joule,
Meyer and Chenault
OPPOSED: Kelly
Representative Harris and Representative Gara were absent
from the vote.
The MOTION PASSED (8/1).
HCS CSSB 72(FIN) was REPORTED out of Committee with a "do
pass" recommendation and with new zero fiscal note by the
Department of Natural Resources, new fiscal note by the
House Finance Committee for the Department of Commerce,
Community and Economic Development, and new zero fiscal note
by the Department of Administration.
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