Legislature(1995 - 1996)
04/30/1996 01:35 PM House CRA
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
HOUSE COMMUNITY AND REGIONAL AFFAIRS
STANDING COMMITTEE
April 30, 1996
1:35 p.m.
MEMBERS PRESENT
Representative Ivan Ivan, Co-Chair
Representative Alan Austerman, Co-Chair
Representative Kim Elton
Representative Al Vezey
Representative Pete Kott
Representative Irene Nicholia
MEMBERS ABSENT
Representative Jerry Mackie
COMMITTEE CALENDAR
CS FOR SENATE BILL NO. 287(FIN)
"An Act relating to the unincorporated community capital project
matching grant program; and providing for an effective date."
- PASSED HCS CSSB 287(CRA) OUT OF COMMITTEE
PREVIOUS ACTION
BILL: SB 287
SHORT TITLE: UNINCORP. COMMUNITY MATCHING GRANTS
SPONSOR(S): SENATOR(S) TORGERSON
JRN-DATE JRN-DATE ACTION
02/09/96 2358 (S) READ THE FIRST TIME - REFERRAL(S)
02/09/96 2358 (S) CRA, FIN
02/28/96 (S) CRA AT 1:30 PM BUTROVICH ROOM 205
02/28/96 (S) MINUTE(CRA)
03/11/96 (S) CRA AT 1:30 PM BUTROVICH ROOM 205
03/11/96 (S) MINUTE(CRA)
03/20/96 (S) CRA AT 2:00 PM BUTROVICH ROOM 205
03/22/96 2832 (S) CRA RPT CS 2DP 3NR SAME TITLE
03/22/96 2833 (S) FISCAL NOTE TO SB & CS (DCRA)
03/27/96 2928 (S) COSPONSOR(S): HOFFMAN
04/15/96 (S) FIN AT 8:00 AM SENATE FINANCE 532
04/16/96 (S) FIN AT 9:30 AM SENATE FINANCE 532
04/17/96 (S) FIN AT 5:00 PM SENATE FINANCE 532
04/18/96 (S) FIN AT 9:00 AM SENATE FINANCE 532
04/19/96 (S) FIN AT 8:30 AM SENATE FINANCE 532
04/22/96 (S) RLS AT 8:40 PM FAHRENKAMP RM 203
04/22/96 3410 (S) FIN RPT CS 2DP 3NR 1DNP SAME TITLE
04/22/96 3410 (S) FISCAL NOTE TO CS (DCRA)
04/23/96 3448 (S) RULES TO CALENDAR 4/23/96
04/23/96 3452 (S) READ THE SECOND TIME
04/23/96 3453 (S) FIN CS ADOPTED Y12 N8
04/23/96 3453 (S) COSPONSOR'S NAME WITHDRAWN: HOFFMAN
04/23/96 3453 (S) ADVANCE TO THIRD READING
FAILED Y12 N8
04/23/96 3453 (S) THIRD READING 4/24 CALENDAR
04/24/96 3536 (S) READ THE THIRD TIME CSSB 287(FIN)
04/24/96 3536 (S) PASSED Y13 N7
04/24/96 3536 (S) EFFECTIVE DATE(S) ADPTD Y14 N6
04/24/96 3536 (S) Duncan NOTICE OF RECONSIDERATION
04/25/96 3575 (S) RECON TAKEN UP - IN THIRD READING
04/25/96 3576 (S) PASSED ON RECONSIDERATION Y14 N6
04/25/96 3576 (S) EFFECTIVE DATE(S) SAME AS PASSAGE
04/25/96 3581 (S) TRANSMITTED TO (H)
04/26/96 4035 (H) READ THE FIRST TIME - REFERRAL(S)
04/26/96 4035 (H) CRA & FINANCE
04/30/96 (H) CRA AT 1:00 PM CAPITOL 124
WITNESS REGISTER
JOHN TORGERSON, Senator
Alaska State Legislature
State Capitol Building, Room 427
Juneau, Alaska 99801
Telephone: (907) 465-2828
POSITION STATEMENT: Sponsor of SB 287.
ACTION NARRATIVE
TAPE 96-21, SIDE A
Number 0001
CO-CHAIR IVAN IVAN called the House Community and Regional Affairs
Committee meeting to order at 1:35 p.m. Members present at the
call to order were Representatives Ivan, Austerman, Elton and
Vezey. Representatives Nicholia and Kott joined the meeting at
1:37 p.m. and 1:40 p.m., respectively. Representative Mackie was
absent.
SB 287 - UNINCORP. COMMUNITY MATCHING GRANTS
Number 0038
CO-CHAIR IVAN noted that committee packets for SB 287 contained
copies of the bill, a fiscal note from the Department of Community
and Regional Affairs, a sponsor statement, a sectional analysis,
and support materials. Also in the packets was a proposed
committee substitute. Co-Chair Ivan welcomed Senator Torgerson to
speak about the bill.
Number 0066
SENATOR JOHN TORGERSON, sponsor of SB 287, explained, "Basically,
it would change the unincorporated community matching grant program
to allow unincorporated communities within organized boroughs to
also participate in the matching grant program. Currently, any
community that qualifies ... under the municipal assistance and
revenue sharing program is entitled to receive $25,000 a year,
whether or not they have a project that is approved.... The money
is set aside until they come forward with an approved project. This
would change that to where we have projects that are approved
before the money is allocated, and all unincorporated communities
within the state would participate in the same program, ...
irregardless of borough boundaries or other things."
Number 0138
SENATOR TORGERSON continued, "If you are in a borough, ... this
legislation requires the borough assembly to recognize you as the
unincorporated area or community for that area. It also requires
a borough assembly to approve your project. And the bill also
maintains the local matching share that is currently for
`unincorporateds' outside of boroughs, and it requires that the
local share for inside boroughs be whatever the qualifying share is
for that borough, which I believe is 30 percent in most cases, but
there might be some less than that."
SENATOR TORGERSON indicated he had not seen the committee
substitute, then said, "There is also a transition period in here
that says that areas ... that might already be under a project and
had been granted money toward that project, that we would continue
on funding those projects. The bill that came over from the Senate
side also has language in there that says you must be ... an
incorporated nonprofit community in order to receive the funds.
And the transition period is actually speaking to entities that may
not have been incorporated but have received funds under waivers or
other general law practices that have been in place in the past."
Number 0253
CO-CHAIR IVAN noted that Representative Nicholia had joined the
meeting. He expressed appreciation to the sponsor for giving
communities in the unorganized borough an opportunity to
participate in the program. He said, "The only difference I have
is the amendment on requiring nonprofit corporations to administer
grants. I just didn't agree with that portion, but I'm certainly
supportive of the bill. And however it ends up, with whatever
language in the end, I'll certainly support the intent...."
Number 0353
CO-CHAIR IVAN acknowledged that Representative Kott had joined the
meeting and noted there was a committee substitute.
REPRESENTATIVE ALAN AUSTERMAN made a motion that House CS for CS
for Senate Bill No. 287(CRA), version M, dated 4/27/96, be adopted
as a working draft. There being no objection, it was so ordered.
Number 0397
REPRESENTATIVE AL VEZEY asked the sponsor the reason for changing
the wording. He referred to page 2, line 21, of the Senate bill
and page 2, line 22, of the committee substitute. He said, "We're
changing that to be a nonprofit corporation." He asked what the
difference is between an incorporated nonprofit entity and a
nonprofit corporation.
Number 0479
SENATOR TORGERSON replied the intent of the amendment made in the
Senate Finance Committee was that the disbursement of money would
not go to any entity not organized within the state of Alaska.
REPRESENTATIVE VEZEY indicated that was not his question. He said,
"The current statute reads `an incorporated nonprofit entity' and
the proposed wording is `a nonprofit corporation'. To me, ...
those two things say exactly the same thing."
SENATOR TORGERSON responded that disbursements were being changed
to only go to nonprofit organizations recognized under Alaska law.
"A nonprofit entity does not have to be a corporation," he said.
"And we wanted to make sure that the corporation was nonprofit, and
not just a corporation ... that was recognized under the laws of
the state of Alaska, so that the corporations wouldn't have the
opportunity to take money out of the appropriation as a profit-
making for the shareholders of the corporation. ... That was the
intent of the amendment."
Number 0589
REPRESENTATIVE VEZEY said current statute limits the grants to
nonprofit corporations. He asked: "Is that really what we want to
do? ... Are we limiting ourselves to who can administer these
grants unnecessarily, by saying you have to be a nonprofit
corporation, as opposed to a for-profit corporation?"
SENATOR TORGERSON replied, "It's an interesting question and one
that we've been wrestling with. A for-profit corporation most
generally is not organized to serve a public purpose. That's where
you run into a problem. They serve a purpose for the shareholders
of their corporation, and that's not necessarily a public service."
Number 0651
CO-CHAIR IVAN said, "There's ANCSA corporations that are also
incorporated under state law. This separate nonprofit would be a
group that incorporates under the state statutes and be eligible to
receive matching grants. That's separate from the for-profit."
SENATOR TORGERSON responded, "We heard in different testimony that
... the for-profit corporations are taking ... up to 39 percent
overhead to administer these programs. So, the idea was to keep it
to a nonprofit, and we're not paying for corporations to make money
to share back to their shareholders."
Number 0697
REPRESENTATIVE VEZEY said nonprofit corporations have as much
overhead as for-profit corporations. He noted that the University
of Alaska's standard overhead was 45 percent.
SENATOR TORGERSON stated, "I believe in some instances overhead is
considered an amount of profit that they take off of everything.
... It's the charge of a for-profit corporation to make money on
anything that they do."
Number 0782
REPRESENTATIVE IRENE NICHOLIA referred to the Senate Finance
Committee version of the bill and said that, to her, it was an
attack on the Native people, some of whom were dissolving their
municipalities.
SENATOR TORGERSON said he assumed she was referring to the
amendment adopted in the Senate committee substitute.
2REPRESENTATIVE NICHOLIA concurred.
SENATOR TORGERSON explained there were lawsuits in Alaska trying to
define the meaning and authority of tribal status and tribal land
status. "And along with that, we have communities that are sucked
up into this thing, if they like to or not, based on just the fact
that they may be an IRA or some other entity that is not a
recognized entity to handle funds for the state of Alaska," he
said. "Now, what we do is we have them sign a waiver that says,
`we know you're not a recognized nonprofit and not formed for a
public purpose, but we'd like you to sign this waiver that says
that you are, and that you will come under the laws of the state of
Alaska as far as filing suit for reimbursement of funds or non-
performance of the grant or other provisions that might be in that
waiver.' This takes those communities out of the loop of any
lawsuits that happen in the future, that is going over ... the
tribal issue."
SENATOR TORGERSON continued, "Now, if the tribal issues weren't in
court, and if we weren't having this issue out there, then, this
wouldn't be before us. That's my opinion of it. It's not taking
on anybody's rights one way or the other. It's not arguing about
what issues a tribal government has, or what authorities that they
have. We already know what they're asserting that they have. And
we already know that we can possibly be drug into the argument by
recognizing that they have the authority to waive the authority.
And what this amendment does is take it completely off the table.
It says, `Be a nonprofit. Let's not get into that argument.' It
has nothing to do with how they feel about it. There's many, many
groups that are not in the Native sovereignty issue. They don't
necessarily agree with it. But there are many, many that are. And
there are some that are suing. And they're suing for fish and game
rights. They're suing for court rights. They're suing for a lot
of rights that we don't recognize that they currently have."
SENATOR TORGERSON indicated it required only $50 and filling out a
form to form a nonprofit corporation.
Number 0979
CO-CHAIR IVAN stated his concern that the money get to the villages
while the issue was being debated.
SENATOR TORGERSON replied that was how he felt, too. He
acknowledged the issue would not be resolved soon. He said, "And
if we're going to have this hanging over our head, eventually
there's going to be some intervention in the money that we disburse
to communities who say, by waiver, that they want to participate in
the program and are organized for a public purpose. This just
takes it completely off the table." He concluded, "And I really
believe that if the state of Alaska had taken this approach to
begin with, it wouldn't be in this particular instance. You had
two things to offer: either sign a waiver or become a nonprofit.
And they just continued on with signing the waivers."
Number 1059
CO-CHAIR IVAN pointed out that was for a previous version. "I
think we have a substitute before us that gets away from that
discussion," he stated.
REPRESENTATIVE NICHOLIA thanked the chairman for his leeway and
indicated she had wanted to hear the sponsor's thoughts on the
previous version. Referring to the committee substitute on the
table, she asked: "How would this CS impact matching grant
requirements for federal funds?"
CO-CHAIR IVAN asked if someone from the Department of Community and
Regional Affairs was available to answer the question. No one
responded.
Number 1130
SENATOR TORGERSON said the Senate version did not change
requirements on how the money was used, only for who could
participate. If the money was currently used for federal match
funds, nothing in the bill changed that.
REPRESENTATIVE NICHOLIA, saying she had the answer, referred to
page 2, line 23, and noted that would meet the federal funds
requirement.
Number 1190
CO-CHAIR IVAN asked if there was further discussion or anyone
wishing to testify.
REPRESENTATIVE ELTON thanked Co-Chair Ivan for the committee
substitute and said it avoided many of the problems.
CO-CHAIR IVAN stated he liked the program and wished to see the
bill move on.
Number 1244
REPRESENTATIVE PETE KOTT made a motion that House CS for CSSB
287(CRA) move from committee with individual recommendations and
the accompanying fiscal note. There being no objection, it was so
ordered.
ADJOURNMENT
CO-CHAIR IVAN announced this was the final meeting, unless
otherwise noticed. He thanked committee members and the committee
secretary, Nancy Vidal, for their participation during the session.
The House Community and Regional Affairs Committee meeting was
adjourned at 1:57p.m.
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