Legislature(2007 - 2008)BARNES 124

03/20/2007 08:00 AM House COMMUNITY & REGIONAL AFFAIRS


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ HB 202 COMMUNITY REVENUE SHARING TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= HB 152 ESTABLISHING A RENEWABLE ENERGY FUND TELECONFERENCED
Heard & Held
                    ALASKA STATE LEGISLATURE                                                                                  
    HOUSE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE                                                                   
                         March 20, 2007                                                                                         
                           8:06 a.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Anna Fairclough, Co-Chair                                                                                        
Representative Gabrielle LeDoux, Co-Chair                                                                                       
Representative Nancy Dahlstrom                                                                                                  
Representative Mark Neuman                                                                                                      
Representative Kurt Olson                                                                                                       
Representative Sharon Cissna                                                                                                    
Representative Woodie Salmon                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
OTHER LEGISLATORS PRESENT                                                                                                     
                                                                                                                                
Representative Bryce Edgmon                                                                                                     
Representative Paul Seaton                                                                                                      
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
HOUSE BILL NO. 202                                                                                                              
"An Act relating to the community revenue sharing program; and                                                                  
providing for an effective date."                                                                                               
                                                                                                                                
     - HEARD AND HELD                                                                                                           
                                                                                                                                
HOUSE BILL NO. 152                                                                                                              
"An Act establishing a renewable energy fund and describing its                                                                 
uses and purposes."                                                                                                             
                                                                                                                                
     - HEARD AND HELD                                                                                                           
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: HB 202                                                                                                                  
SHORT TITLE: COMMUNITY REVENUE SHARING                                                                                          
SPONSOR(s): COMMUNITY & REGIONAL AFFAIRS                                                                                        
                                                                                                                                
03/14/07       (H)       READ THE FIRST TIME - REFERRALS                                                                        
03/14/07       (H)       CRA, FIN                                                                                               
03/20/07       (H)       CRA AT 8:00 AM BARNES 124                                                                              
                                                                                                                                
BILL: HB 152                                                                                                                  
SHORT TITLE: ESTABLISHING A RENEWABLE ENERGY FUND                                                                               
SPONSOR(s): REPRESENTATIVE(s) HARRIS                                                                                            
                                                                                                                                
02/26/07       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/26/07       (H)       CRA, FIN                                                                                               
03/06/07       (H)       CRA AT 8:00 AM BARNES 124                                                                              
03/06/07       (H)       Heard & Held                                                                                           
03/06/07       (H)       MINUTE(CRA)                                                                                            
03/20/07       (H)       CRA AT 8:00 AM BARNES 124                                                                              
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
SONYA HYMER, Staff                                                                                                              
to Representative LeDoux                                                                                                        
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Speaking as staff to the House Community                                                                   
and Regional Affairs Standing Committee, sponsor of HB 202,                                                                     
presented HB 202.                                                                                                               
                                                                                                                                
KATHY WASSERMAN                                                                                                                 
Alaska Municipal League                                                                                                         
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Encouraged the committee to forward HB 202                                                                 
from committee.                                                                                                                 
                                                                                                                                
TOM QUICK, Member                                                                                                               
Ouzinkie City Council                                                                                                           
City of Ouzinkie                                                                                                                
Ouzinkie, Alaska                                                                                                                
POSITION STATEMENT:  Testified in support of HB 202.                                                                            
                                                                                                                                
LUKE HOPKINS, Member                                                                                                            
Alaska Municipal League (AML);                                                                                                  
Presiding Officer, Fairbanks North Star Borough Assembly                                                                        
Fairbanks North Star Borough                                                                                                    
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  During hearing of HB 202, urged the                                                                        
committee to put in place a formula for the use of general fund                                                                 
dollars for revenue sharing.                                                                                                    
                                                                                                                                
LYNNE WOODS, Member                                                                                                             
Matanuska-Susitna Borough Assembly                                                                                              
Matanuska-Susitna Borough                                                                                                       
Palmer, Alaska                                                                                                                  
POSITION STATEMENT:  Testified in support of HB 202.                                                                            
                                                                                                                                
DAN COFFEY, Vice Chair                                                                                                          
Anchorage Assembly                                                                                                              
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Urged the committee to offer revenue                                                                       
sharing, whether through HB 202 or other legislation.                                                                           
                                                                                                                                
MARVIN YODER                                                                                                                    
Seward, Alaska                                                                                                                  
POSITION STATEMENT:  Testified on HB 202.                                                                                       
                                                                                                                                
TAMMIE WILSON                                                                                                                   
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of HB 202.                                                                            
                                                                                                                                
TIM BOURCY, President                                                                                                           
Alaska Municipal League;                                                                                                        
Mayor, City of Skagway                                                                                                          
Skagway, Alaska                                                                                                                 
POSITION STATEMENT:  Testified in support of HB 202.                                                                            
                                                                                                                                
CARTER CRAWFORD                                                                                                                 
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  Testified on HB 202.                                                                                       
                                                                                                                                
CHARISSE MILLET, Staff                                                                                                          
to Representative John Harris                                                                                                   
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Reviewed the changes embodied in CSHB 152,                                                                 
Version V.                                                                                                                      
                                                                                                                                
REPRESENTATIVE JOHN HARRIS                                                                                                      
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Spoke as the sponsor of HB 152.                                                                            
                                                                                                                                
JEROME SELBY, Mayor                                                                                                             
Kodiak Island Borough                                                                                                           
Kodiak, Alaska                                                                                                                  
POSITION STATEMENT:  Urged the passage of HB 152 and HB 202.                                                                    
                                                                                                                                
CHRIS ROSE, Executive Director                                                                                                  
Renewable Energy Alaska Project                                                                                                 
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of HB 152.                                                                            
                                                                                                                                
TOM ABELL, Member                                                                                                               
Kodiak Island Borough Assembly;                                                                                                 
President, Southwest Alaska Municipal Conference                                                                                
Kodiak, Alaska                                                                                                                  
POSITION STATEMENT:   During hearing of HB 202,  related the need                                                               
for sustainable revenue sharing.                                                                                                
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
                                                                                                                                
CO-CHAIR ANNA FAIRCLOUGH called  the House Community and Regional                                                             
Affairs  Standing  Committee  meeting  to order  at  8:06:22  AM.                                                             
Representatives  Fairclough,  LeDoux,   Neuman,  and  Olson  were                                                               
present  at  the  call  to  order.    Representatives  Dahlstrom,                                                               
Cissna, and Salmon arrived as the  meeting was in progress.  Also                                                               
in attendance were Representatives Edgmon and Seaton.                                                                           
                                                                                                                                
HB 202-COMMUNITY REVENUE SHARING                                                                                              
                                                                                                                                
8:07:19 AM                                                                                                                    
                                                                                                                                
CO-CHAIR FAIRCLOUGH  announced that  the first order  of business                                                               
would be  HOUSE BILL NO. 202,  "An Act relating to  the community                                                               
revenue sharing program; and providing for an effective date."                                                                  
                                                                                                                                
8:07:30 AM                                                                                                                    
                                                                                                                                
SONYA  HYMER,  Staff  to   Representative  LeDoux,  Alaska  State                                                               
Legislature,  speaking  as  staff  to  the  House  Community  and                                                               
Regional  Affairs Standing  Committee, sponsor,  paraphrased from                                                               
the   sponsor  statement,   which   read  [original   punctuation                                                               
provided]:                                                                                                                      
                                                                                                                                
     HB  202  establishes   a  sustainable  revenue  sharing                                                                    
     program  based   on  the  owner-state  concept.     The                                                                    
     resources of the state belong  to all Alaskans.  Cities                                                                    
     and  boroughs were  formed by  the  state as  political                                                                    
     subdivisions  to   provide  services  to   the  people.                                                                    
     Without  revenue  sharing,  the entire  cost  of  basic                                                                    
     services is [borne] by local taxpayers.                                                                                    
                                                                                                                                
     Skyrocketing  fuel  and  retirement  system  costs  and                                                                    
     inflation, in  conjunction with severe cuts  in revenue                                                                    
     sharing  over  the  past several  years  have  crippled                                                                    
     local  governments'  ability   to  provide  even  basic                                                                    
     services such  as public safety, snow  removal and road                                                                    
     maintenance, and the education of our children.                                                                            
                                                                                                                                
     HB  202  provides  a   means  for  sustainable  revenue                                                                    
     sharing  in  order  to allow  communities  to  continue                                                                    
     providing  basic  services.   HB  202  would allow  the                                                                    
     legislature to allocate 6%  of certain natural resource                                                                    
     revenues  to  revenue  sharing   every  year.    Basing                                                                    
     revenue  sharing on  the state's  annual income  allows                                                                    
     for  the flexibility  needed  to  continue the  program                                                                    
     during lean years, when state revenue is down.                                                                             
                                                                                                                                
     The Alaska Senate is  currently considering a companion                                                                    
     bill,  SB  72,  which   was  sponsored  by  the  Senate                                                                    
     Committee  on  Community  and  Regional  Affairs.  Last                                                                    
     month, the Senate CRA moved  a committee substitute for                                                                    
     SB 72 out of Committee.  That bill now awaits a hearing                                                                    
     in Senate  Finance.  SB  72 is nearly identical  to the                                                                    
     bill before  this committee  today. However,  there are                                                                    
     two important differences between HB 202 and SB 72.                                                                        
                                                                                                                                
        · In addition to providing for unincorporated                                                                           
          communities  in the  unorganized  borough, HB  202                                                                  
          includes payments  of $25,000  for the  benefit of                                                                    
          an  unincorporated   community  in   an  organized                                                                  
          borough.   According  to  Section 29.60.870(b)  of                                                                  
          this  bill, a  qualified unincorporated  community                                                                    
          has a population  of at least 25  people and there                                                                    
          is  a   non-profit  community  entity   or  tribal                                                                    
          council   providing  at   least  three   of  seven                                                                    
          services   to  the   community,  including:   fire                                                                    
          protection, emergency medical  services, water and                                                                    
          sewer, solid waste management,  public road or ice                                                                    
          road  maintenance, public  health, and  search and                                                                    
          rescue.   This  service-based eligibility  applies                                                                    
          to   unincorporated   communities   in   organized                                                                    
          boroughs.    In     the    unorganized    borough,                                                                    
          unincorporated   communities  with   25  or   more                                                                    
          residents would  continue to qualify  for payments                                                                    
          of $25,000.                                                                                                           
                                                                                                                                
        · Another difference between HB 202 and SB 72 is HB
          202's    'pass-through'    clause    in    Section                                                                    
          29.60.870(b),  by   which  the  assembly   of  the                                                                    
          organized  borough, rather  than the  State, would                                                                    
          determine  which   nonprofit  entity   or  village                                                                    
          council in  a community  should receive  the funds                                                                    
          and would cut the individual checks to the                                                                            
          communities.                                                                                                          
                                                                                                                                
     The House  and Senate versions  of this bill  share the                                                                    
     same  goals.   They establish  a dedicated  fund source                                                                    
     for  sharing  natural  resource revenues  in  order  to                                                                    
     fulfill  two requirements  of  our State  Constitution.                                                                    
     The first is  Article 8, Section 2: to  use our natural                                                                    
     resources  for the  maximum benefit  of  the people  of                                                                    
     Alaska.  The  second  is  Article  10,  Section  I:  to                                                                    
     maximize  local  government  with a  minimum  of  local                                                                    
     government units.                                                                                                          
                                                                                                                                
     Without   consistent,   dependable   revenue   sharing,                                                                    
     provision  of basic  local  services  will continue  to                                                                    
     decline.   Some small  communities have  already closed                                                                    
     their doors.   HB  202 provides the  tool to  solve the                                                                    
     problem  of   helping  local  governments   fund  basic                                                                    
     services.                                                                                                                  
                                                                                                                                
8:11:52 AM                                                                                                                    
                                                                                                                                
MS. HYMER suggested a conforming  amendment striking the language                                                               
"or  unincorporated community"  on page  3,  line 22.   She  then                                                               
highlighted  documents  in  the packet,  including  the  document                                                               
entitled "Unincorporated  Communities of At least  25 People" and                                                               
"HB 202  Community Revenue Sharing  Program."  The latter  of the                                                               
two  documents  points  out  that  the  Department  of  Commerce,                                                               
Community,   &  Economic   Development  (DCCED)   estimates  that                                                               
approximately  68 unincorporated  communities in  the unorganized                                                               
borough   that   would   qualify   for   $25,000   payments   and                                                               
approximately   68   unincorporated  communities   in   organized                                                               
boroughs would also  qualify.  She noted  that the aforementioned                                                               
are  merely  estimates  because  in  each  case  the  eligibility                                                               
requirements would  have to  be reviewed  in detail  to determine                                                               
which communities would qualify.                                                                                                
                                                                                                                                
8:13:35 AM                                                                                                                    
                                                                                                                                
MS.  HYMER, in  response to  Co-Chair Fairclough,  clarified that                                                               
the  estimates  are  "68  plus  68."   She  reiterated  that  the                                                               
estimates  are   that  68   unincorporated  communities   in  the                                                               
unorganized  boroughs   and  68  unincorporated   communities  in                                                               
organized boroughs would qualify.                                                                                               
                                                                                                                                
8:14:06 AM                                                                                                                    
                                                                                                                                
KATHY  WASSERMAN, Alaska  Municipal League  (AML), related  AML's                                                               
appreciation  for   HB  202.     She  explained  that   in  AML's                                                               
discussions  over  the  years  it  has  become  clear  that  most                                                               
legislators are  okay with revenue  sharing, but that  AML needed                                                               
to develop some sort of fund  that was sustainable.  Last summer,                                                               
AML discussed  tailoring the revenue sharing  program with regard                                                               
to  market fluctuations  related  to oil  revenue,  which is  the                                                               
state's  main source  of revenue.    Therefore, in  doing so  AML                                                               
developed  tying  [revenue  sharing]  to  6  percent  of  certain                                                               
natural  resource  revenues.    Ms.  Wasserman  opined  that  all                                                               
communities  need   revenue  sharing.     In  fact,   the  larger                                                               
communities have committed to deducting  the revenue sharing from                                                               
their tax  base, and thus  the savings will  be passed on  to the                                                               
residents.  However, the smaller  communities need the funds just                                                               
to provide basic services.   Ms. Wasserman pointed out that while                                                               
communities may receive  capital budget funds for  things such as                                                               
a new fire  hall or a new fire truck,  it still takes maintenance                                                               
hours,  employees, fuel,  and basic  services  to maintain  those                                                               
things   funded  through   capital   funds.     Communities   are                                                               
experiencing  difficulty  in  keeping  up  the  day-to-day  basic                                                               
infrastructure for  which there is  no grant or funding  from the                                                               
capital budget, she  further pointed out.   Ms. Wasserman thanked                                                               
the committee for hearing HB  202 and encouraged the committee to                                                               
forward it from committee.                                                                                                      
                                                                                                                                
8:17:22 AM                                                                                                                    
                                                                                                                                
MS. WASSERMAN,  in response to Representative  Neuman, reiterated                                                               
that most of  the larger communities have  committed to deducting                                                               
the revenue sharing from their property taxes.                                                                                  
                                                                                                                                
REPRESENTATIVE  NEUMAN  asked  if  there's  anything  in  writing                                                               
specifying that  an area with  a population over a  certain point                                                               
would have  to distribute  a certain  percentage of  the [revenue                                                               
sharing] to reduce the tax liability of the property owners.                                                                    
                                                                                                                                
MS.  WASSERMAN answered  that  AML had  no  intention of  placing                                                               
restrictions  on revenue  sharing  because  each community  knows                                                               
best how  to use the  money.   Last year the  tri-boroughs, which                                                               
consists of the Mat-Su Borough,  the Kenai Peninsula Borough, and                                                               
the Municipality of  Anchorage, all committed on  paper to offset                                                               
the amount of revenue sharing received on property taxes.                                                                       
                                                                                                                                
8:19:41 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  LEDOUX  inquired  as  to whom  these  communities  have                                                               
committed.                                                                                                                      
                                                                                                                                
MS.  WASSERMAN said  that there  are some  letters of  commitment                                                               
from  some  of  the  larger communities,  which  she  offered  to                                                               
provide to the committee.                                                                                                       
                                                                                                                                
8:20:38 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   OLSON  asked   whether  the   Public  Employees'                                                               
Retirement System  (PERS) and  Teachers' Retirement  System (TRS)                                                               
contributions   planned  by   the  legislature   this  year   are                                                               
considered municipal assistance.                                                                                                
                                                                                                                                
MS. WASSERMAN replied no, adding  that over 90 communities aren't                                                               
involved in  PERS/TRS but will  still need operating funds.   The                                                               
revenue sharing funds, she opined,  are a way for the communities                                                               
to use the funds in a way the communities see fit.                                                                              
                                                                                                                                
8:22:09 AM                                                                                                                    
                                                                                                                                
TOM  QUICK,  Member, Ouzinkie  City  Council,  City of  Ouzinkie,                                                               
informed  the  committee  that  he   is  speaking  on  behalf  of                                                               
Ouzinkie,  which consists  of  six villages  around  the base  of                                                               
Kodiak Island.  He said that  by extension he is also speaking on                                                               
behalf  of the  250 villages  throughout  the state.   Mr.  Quick                                                               
opined that "we're" at a crisis  point.  In fact, 100 communities                                                               
of  the 250  communities  have moderate  to  severe concern  with                                                               
regard to  their financial integrity.   He likened  the situation                                                               
to damage  control.   Mr. Quick  related that  last week  the six                                                               
villages  from  Kodiak  met   and  discussed  the  organizational                                                               
structure,  roles, responsibilities,  and  the  positions of  the                                                               
village,  state, and  the  borough.   He  noted  that he  relayed                                                               
concerns  brought  out at  that  meeting  to the  Kodiak  Borough                                                               
Island  Assembly.   He  then  noted that  he  has  many years  of                                                               
experience  working  with  the Native  leadership.    During  the                                                               
aforementioned discussion,  there was review of  the communities'                                                               
ability  to   carry  out  and  sustain   the  individual  village                                                               
positions.   There was discussion  that originally the  state, as                                                               
it  was formed,  had the  authority to  collect revenue  from the                                                               
resources, which  were located by  and large in rural  areas, and                                                               
the  borough  had  the  authority  to  collect  and  redistribute                                                               
revenues from the state as well  as collect revenues from the tax                                                               
base on  the real estate and  businesses in Kodiak.   The bulk of                                                               
that budget goes to education.   He pointed out that the villages                                                               
don't have  any tax base.   Furthermore, the majority  of housing                                                               
is low-income  U.S. Department of  Housing and  Urban Development                                                               
(HUD)  housing   and  thus  those  properties   are  exempt  from                                                               
taxation.  The  local impacts in Ouzinkie  have been particularly                                                               
severe  and Ouzinkie,  in  particular, has  used  almost all  its                                                               
reserves.  Those reserves are coming  to a close and there aren't                                                               
any further options.  Basically,  Ouzinkie's fate is in the hands                                                               
of the  legislature, he opined.   Mr. Quick stated support  of HB
202 and SB 72.                                                                                                                  
                                                                                                                                
8:30:36 AM                                                                                                                    
                                                                                                                                
LUKE HOPKINS,  Member, Alaska  Municipal League  (AML); Presiding                                                               
Officer, Fairbanks  North Star Borough Assembly,  Fairbanks North                                                               
Star  Borough,  pointed out  that  in  many areas  where  natural                                                               
resources are  extracted/harvested, the general fund  dollars for                                                               
that flow  into state  coffers provide the  vast majority  of the                                                               
revenue used  in the  state government.   He further  pointed out                                                               
that  the Alaska  State  Constitution calls  for  sharing to  the                                                               
maximum benefit  with the  citizens of Alaska.   In  the previous                                                               
two  legislative sessions,  as  many as  22  different pieces  of                                                               
legislation addressed  revenue sharing.  In  closing, Mr. Hopkins                                                               
urged the  committee to  put in  place a formula  for the  use of                                                               
general fund dollars for revenue sharing.                                                                                       
                                                                                                                                
8:33:31 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE NEUMAN  highlighted that  some very  large amounts                                                               
of money  have gone into  the Fairbanks area for  various capital                                                               
projects.  He asked if  Mr. Hopkins considered those as community                                                               
revenue sharing.                                                                                                                
                                                                                                                                
MR.  HOPKINS  answered  that  he   considered  such  support  for                                                               
transportation projects.  He then  pointed out that the Fairbanks                                                               
North Star Borough  doesn't have road service powers  and many of                                                               
the  funds received  for such  are grants  that come  through the                                                               
Department  of  Transportation   &  Public  Facilities  (DOT&PF).                                                               
Therefore, it's  a bit blurry  whether that's  considered revenue                                                               
sharing.    In further  response  to  Representative Neuman,  Mr.                                                               
Hopkins said he doesn't believe  the capital improvement projects                                                               
decreased property  taxes in  the area.   However, he  noted that                                                               
the  additional municipal  aid last  year  was used  to offset  a                                                               
portion  of  property  taxes  and  assisted  with  large  borough                                                               
maintenance projects.                                                                                                           
                                                                                                                                
8:35:53 AM                                                                                                                    
                                                                                                                                
LYNNE   WOODS,   Member,  Matanuska-Susitna   Borough   Assembly,                                                               
Matanuska-Susitna  Borough, highlighted  the  increasing cost  of                                                               
local  government and  the high  growth of  the area  causing the                                                               
market  value  to  increase, which  in  turn  increases  property                                                               
taxes.    Furthermore,  the  demand   for  various  services  has                                                               
increased also.   Ms. Woods stated  her support for HB  202.  She                                                               
informed the  committee that in the  two years she has  served on                                                               
the Mat-Su Borough  Assembly all possible measures  to reduce the                                                               
burden of  property tax  have been taken.   The  proposed formula                                                               
would certainly fall in line  with what other states and counties                                                               
have found  in an effort  to balance  their budget.   She related                                                               
that she  philosophically agrees  with the  approach taken  in HB
202.  Ms.  Woods recalled a recent assembly meeting  in which the                                                               
Mat-Su  Assembly had  to approve  local  tax dollars  to pay  for                                                               
improvements  to   a  state  road   for  which   the  legislature                                                               
appropriated  $150,000,   but  the  improvements   actually  cost                                                               
$320,000.    Therefore, as  the  state  demands more  from  local                                                               
[governments],  [local  governments]  need  more  resources  than                                                               
property taxes, which [the borough] is committed to reducing.                                                                   
                                                                                                                                
8:40:14 AM                                                                                                                    
                                                                                                                                
DAN  COFFEY,   Vice  Chair,  Anchorage  Assembly,   related  that                                                               
Anchorage has  pledged every  bit of state  money to  reduce real                                                               
property taxes and increased the  exemption for property taxes to                                                               
the maximum allowed.   He said, "We've been asking  for years for                                                               
the state to  stop unfunded mandates."  He  then highlighted that                                                               
the  state  has many  opportunities  with  regard to  sources  of                                                               
revenue, including  the substantial  permanent fund.   Therefore,                                                               
local property  tax relief  is necessary in  the form  of revenue                                                               
sharing, which was  a long-standing policy of the  state for many                                                               
years.   He said  he was  glad people  are bringing  back revenue                                                               
sharing.   The source of  revenue [for revenue sharing]  needs to                                                               
be consistent and reliable over time  in order to allow for local                                                               
governments  to plan  their budgets.   Furthermore,  such a  plan                                                               
should recognize that local governments,  in many instances, know                                                               
better how to spend their money  than does the state.  Mr. Coffey                                                               
urged the committee to offer  revenue sharing, whether through HB
202 or other legislation.                                                                                                       
                                                                                                                                
8:42:26 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE NEUMAN  related his understanding from  Mr. Coffey                                                               
that communities don't  have anything left from  which to produce                                                               
more revenue,  and that [funds  for revenue sharing]  should come                                                               
from  the  permanent fund  dividend.    "The people  have  stated                                                               
several times  that they don't  want that  to happen and  I think                                                               
that that  money belongs to  ... all  citizens of the  state," he                                                               
pointed.  He  inquired as to how Mr. Coffey  would respond to the                                                               
aforementioned as  well as  the fact that  Anchorage has  a self-                                                               
imposed tax  cap and doesn't  meet the maximum amount  of funding                                                               
for education.                                                                                                                  
                                                                                                                                
MR. COFFEY said  that there's no law  prohibiting the legislature                                                               
from  making  adjustments  to  the   permanent  fund  if  it  was                                                               
desirous.   In response to Representative  Neuman's question, Mr.                                                               
Coffey questioned:   "How much  is enough  and why should  all of                                                               
the earnings be applied to the  permanent fund as opposed to some                                                               
of the  needs of  local government."   Mr. Coffey  then clarified                                                               
that his  earlier comment was  that local governments  have fewer                                                               
other  resources.   He opined  that the  vast resources  that can                                                               
solve these  problems aren't  found in  any one  local government                                                               
but rather are found at the state level.                                                                                        
                                                                                                                                
8:44:40 AM                                                                                                                    
                                                                                                                                
MARVIN YODER  said that the  source of  funds is the  change [for                                                               
revenue sharing] as  local governments are willing to  be tied to                                                               
the resources of  the state.  In the past,  revenue sharing plans                                                               
have  tried  to find  another  source  of  revenue and  obtain  a                                                               
general appropriation  each year, which  didn't really work.   He                                                               
then related  that as  he drives from  Palmer into  Anchorage, he                                                               
finds it ironic that public safety  services on the first half of                                                               
the trip  are paid  for out  of the  state's resources  while the                                                               
second half  of the  trip those  services are  paid for  by local                                                               
taxes in Anchorage.   It seems, he opined, that  the resources of                                                               
the  state should  be  applied equally.    The aforementioned  is                                                               
important when  reviewing the basic  revenue stream  that's being                                                               
tapped under  HB 202.  He  then pointed out that  revenue sharing                                                               
was  originally  tied  to  what  services  the  local  government                                                               
provided.   This  legislation,  he emphasized,  is  aimed at  the                                                               
basic services.                                                                                                                 
                                                                                                                                
8:47:06 AM                                                                                                                    
                                                                                                                                
TAMMIE  WILSON related  that  she  is in  great  support of  this                                                               
revenue sharing.   She noted  that probably like many  others she                                                               
has seen  her taxes increase over  the years.  She  said that she                                                               
likes HB 202 because it  provides a sustainable source of revenue                                                               
so  that new  monies won't  have to  be found  to meet  this need                                                               
every year.   Furthermore, HB  202 allows communities  to provide                                                               
basic services as well as give  tax relief to others.  Ms. Wilson                                                               
applauded   those  communities   and  municipalities   that  have                                                               
committed all of their revenue  sharing funds to relieve property                                                               
taxes.  With  regard to the PERS/TRS issue,  she characterized it                                                               
as  a separate  issue that  should be  addressed separately.   In                                                               
closing, Ms. Wilson  expressed her hope that  the committee would                                                               
support HB 202.                                                                                                                 
                                                                                                                                
8:49:14 AM                                                                                                                    
                                                                                                                                
TIM BOURCY,  President, Alaska Municipal  League; Mayor,  City of                                                               
Skagway; related  support for HB  202.  The  legislation provides                                                               
that  municipalities "share  in  the wealth  and  ... the  pain."                                                               
Although  the state  has so  much potential  and opportunity,  it                                                               
lacks the  basics of  sustainable government.   He  expressed the                                                               
need  to take  the  resources  the state  has  and  invest it  in                                                               
education  and infrastructure  in order  to create  opportunities                                                               
for  individuals  to establish  roots  and  start families.    In                                                               
conclusion, he requested the committee's support for HB 202.                                                                    
                                                                                                                                
8:51:22 AM                                                                                                                    
                                                                                                                                
CARTER  CRAWFORD  had her  testimony  read  by Tammie  Wilson  as                                                               
follows:                                                                                                                        
                                                                                                                                
     With  my involvement  with  the  upcoming elections  to                                                                    
     resolve  property taxes  and the  efforts  to keep  the                                                                    
     community block grant make it  painfully aware just how                                                                    
     important  the municipal  [revenue] sharing  program is                                                                    
     and  how critical  local analysis  of  needs and  local                                                                    
     allocation  of state  funding is.   So,  please support                                                                    
     it.                                                                                                                        
                                                                                                                                
8:52:21 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  FAIRCLOUGH,  upon determining  no  one  else wished  to                                                               
testify, closed public testimony.                                                                                               
                                                                                                                                
8:52:37 AM                                                                                                                    
                                                                                                                                
CO-CHAIR FAIRCLOUGH asked if there  was any opposition to holding                                                               
HB 202.   [None was stated.]  She related  her understanding that                                                               
committee  members  should have  copies  of  two amendments  from                                                               
Representative  Seaton.   She then  informed  the committee  that                                                               
staff  has   just  received  a   new  document  to   replace  the                                                               
aforementioned amendments.                                                                                                      
                                                                                                                                
8:53:42 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  NEUMAN  clarified  that  Representative  Seaton's                                                               
[conceptual] amendment  that was  just provided to  the committee                                                               
is labeled 25-LS0489\K.1, Cook, 3/20/07.                                                                                        
                                                                                                                                
CO-CHAIR  FAIRCLOUGH announced  that HB  202 would  be held  over                                                               
until Thursday.                                                                                                                 
                                                                                                                                
[Further testimony was taken on HB 202 later in this hearing.]                                                                  
                                                                                                                                
HB 152-ESTABLISHING A RENEWABLE ENERGY FUND                                                                                   
                                                                                                                                
8:55:06 AM                                                                                                                    
                                                                                                                                
CO-CHAIR FAIRCLOUGH  announced that  the final order  of business                                                               
would be  HOUSE BILL  NO. 152, "An  Act establishing  a renewable                                                               
energy fund and describing its uses and purposes."                                                                              
                                                                                                                                
The committee took an at-ease from 8:55 a.m. to 8:58 a.m.                                                                       
                                                                                                                                
8:58:50 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  NEUMAN  moved  to  adopt CSHB  152,  Version  25-                                                               
LS0413\V, Kane,  3/20/07, as the  working document.   There being                                                               
no objection, Version V was before the committee.                                                                               
                                                                                                                                
8:59:27 AM                                                                                                                    
                                                                                                                                
CHARISSE  MILLET, Staff  to  Representative  John Harris,  Alaska                                                               
State  Legislature, explained  that within  Version V  Section 2,                                                               
which  establishes a  renewable energy  project fund,  was added.                                                               
The  aforementioned funds  would  be under  the  umbrella of  the                                                               
Power  Project Fund  (PPF) within  the  Alaska Energy  Authority.                                                               
Section 3  takes the  loan component  out of  the fund,  and thus                                                               
this section would  be used as the grant money  for the renewable                                                               
energy  fund.   Version  V  also  includes some  other  technical                                                               
changes such as  the elimination of the requirement  for there to                                                               
be a minimum of 50 kilowatts  in order to allow other user groups                                                               
to use  the renewable  energy fund  and the  account.   Version V                                                               
also eliminates  the reference to  "electric grids"  and replaces                                                               
it  with  "transmission and  distribution  lines"  in order  that                                                               
those  projects  that  are connectors  to  the  renewable  energy                                                               
projects will have some opportunity  to have their portion of the                                                               
project funded through  these accounts.  One of  the main changes                                                               
embodied  in Version  V  is that  it provides  for  5 percent  of                                                               
market value (POMV) of the fund in order to have a self-                                                                        
sustaining fund.   Therefore, the  loan component is  a revolving                                                               
loan fund  and the grant  fund is a POMV  fund.  Section  3(k) is                                                               
merely  boiler-plate language  regarding  the  components of  the                                                               
board.   Under Version V,  the state government board  seat would                                                               
be held  by the Denali Commission  as it's an advocate  for rural                                                               
renewable energy  projects.  Furthermore,  the sponsor  felt that                                                               
the Denali  Commission would  provide good  input with  regard to                                                               
the  focus of  the renewable  energy  fund and  may provide  some                                                               
matching federal funds.                                                                                                         
                                                                                                                                
9:02:57 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE CISSNA  recalled U.S. Senator Ted  Stevens address                                                               
to the  legislature in  which he  focused on  the need  for state                                                               
funding to the Denali Commission.   She said that although she is                                                               
a proponent of the Denali  Commission having a long life, there's                                                               
a question  as [to its funding].   Therefore, she inquired  as to                                                               
what the legislature  should do when something  isn't embedded in                                                               
the state structure.                                                                                                            
                                                                                                                                
MS. MILLET  related her understanding that  the Denali Commission                                                               
was included because it doesn't seem  that it would be going away                                                               
this  year or  next  year.   Furthermore, the  hope  is that  the                                                               
Denali  Commission will  continue.   However, Ms.  Millet pointed                                                               
out  that the  Denali Commission  is merely  part of  an advisory                                                               
board established  under HB 152  and thus the composition  of the                                                               
board could  be amended to  add state  government as a  member if                                                               
the Denali Commission no longer existed.                                                                                        
                                                                                                                                
9:04:47 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOHN HARRIS,  Alaska State  Legislature, sponsor,                                                               
highlighted that the Denali Commission  has been involved in many                                                               
rural projects,  including energy  projects.   A good  portion of                                                               
what  HB 152  attempts  to address  is  rural energy,  especially                                                               
attempting to  reduce costs to the  rural areas of the  state, he                                                               
said.   Although  this legislation  isn't  exclusively for  rural                                                               
Alaska,  it is  predominantly  for rural  areas  where it's  more                                                               
difficult  to  generate  cheap energy.    The  Denali  Commission                                                               
actually  petitioned the  sponsor to  be an  active part  in this                                                               
process [proposed by HB 152].                                                                                                   
                                                                                                                                
9:06:01 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE NEUMAN directed  attention to page 3,  line 6, and                                                               
inquired as  to whether the funds  for this fund would  come from                                                               
the permanent fund dividend or the Railbelt Energy Fund.                                                                        
                                                                                                                                
REPRESENTATIVE HARRIS  said that  he didn't  know from  where the                                                               
funds  for  this proposal  will  come.    The  first step  is  to                                                               
authorize the  program in statute.   He offered to work  with the                                                               
Finance Committees  and the  administration to  determine funding                                                               
sources.  He  mentioned that the funds could come  from a variety                                                               
of sources,  including the 2007  surplus.   Representative Harris                                                               
said that although this program  probably won't be funded when it                                                               
goes through  the legislative  process, the hope  is that  at the                                                               
conclusion of  the budget process  there will be some  seed money                                                               
to generate revenue.   He noted that this proposal  is similar to                                                               
the power cost  equalization (PCE) fund in which a  set amount of                                                               
funds are placed  in a fund from which  the interest/earnings are                                                               
used to  facilitate and pay  for projects.   He also  likened the                                                               
proposal embodied in HB 152  to the former science and technology                                                               
fund.      In   further  response   to   Representative   Neuman,                                                               
Representative  Harris suggested  that perhaps  a portion  of the                                                               
2007 surplus will  be utilized, but at this point  there's no set                                                               
amount.   He emphasized the need  to generate a decent  amount of                                                               
revenue  from  the  earnings  of  whatever  funds  are  utilized.                                                               
Again,  he related  that  there  could be  a  variety of  funding                                                               
sources and it would depend upon what's politically palatable.                                                                  
                                                                                                                                
9:10:03 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SALMON referred  to  Section 3(f)(2)  of HB  152,                                                               
which specifies that  in order for a renewable  energy project to                                                               
qualify  for a  grant or  loan, the  project must  "generate more                                                               
than 50  kilowatts of electricity and  distribute the electricity                                                               
to  more  than 20  end  users".   He  then  inquired  as to  what                                                               
[language] replaces that in Version V.                                                                                          
                                                                                                                                
MS.  MILLET said  that the  aforementioned limiting  language was                                                               
deleted.    She noted  that  AEA  would  be  able to  relate  the                                                               
problems associated with  limiting it to 50 kilowatts  and 20 end                                                               
users.                                                                                                                          
                                                                                                                                
REPRESENTATIVE HARRIS  interjected that  he didn't want  to limit                                                               
[a renewable energy project] or what qualifies.                                                                                 
                                                                                                                                
9:11:52 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SALMON recalled  that HB  152 specified  that the                                                               
Alaska   Native  organizations   would  qualify   as  a   housing                                                               
authority.                                                                                                                      
                                                                                                                                
REPRESENTATIVE HARRIS said he believes that's correct.                                                                          
                                                                                                                                
MS. MILLET  confirmed that  [Alaska Native  organizations] remain                                                               
qualifying entities in [Version V].                                                                                             
                                                                                                                                
9:12:23 AM                                                                                                                    
                                                                                                                                
CO-CHAIR   FAIRCLOUGH  related   that   committee  members   have                                                               
expressed  concern that  the committee  just  received Version  V                                                               
and  committee members  wish to  hold  HB 152  until Thursday  in                                                               
order   to  provide   an  opportunity   to   review  Version   V.                                                               
Additionally, numerous  individuals have signed up  to testify on                                                               
HB  152,   although  the  public   testimony  has   been  closed.                                                               
Therefore,  she  announced  that  the committee  has  decided  to                                                               
reopen  the public  hearing.   Co-Chair Fairclough,  drawing upon                                                               
her  experience of  attending the  Energy Council,  recalled that                                                               
there  was great  concern with  regard  to the  efficient use  of                                                               
energy.  Therefore,  she asked if the sponsor  would consider, on                                                               
the criteria  for qualification on  the project, a  criteria that                                                               
would include efficient use of energy.                                                                                          
                                                                                                                                
MS. MILLET said  that the efficiency language  wasn't included in                                                               
the legislation,  although the legislation does  include language                                                               
that  establishes criteria.   She  noted that  AEA has  been very                                                               
effective  in not  doing  a project  unless  it's economical  and                                                               
makes good  sense.  Therefore,  developing the criteria  has been                                                               
left to the regulatory process.                                                                                                 
                                                                                                                                
REPRESENTATIVE  HARRIS  said that  there  are  the following  two                                                               
thoughts:   the cost of generating  power; the facility/procedure                                                               
to  make it  cost-efficient  for the  end  user.   Representative                                                               
Harris acknowledged  that although  there is  the desire  to have                                                               
less expensive power,  people need to use common  sense and build                                                               
correctly.   He opined that  one certainly wouldn't want  to dump                                                               
electricity  into a  system that  doesn't call  for conservation.                                                               
Representative  Harris  then  related  that  he  doesn't  have  a                                                               
problem with the legislation being held over.                                                                                   
                                                                                                                                
9:16:17 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   CISSNA  characterized   HB   152  as   important                                                               
legislation.   She  noted that  she has  been very  interested in                                                               
this legislation,  and therefore she  asked if the  sponsor would                                                               
work with her on potential amendments.                                                                                          
                                                                                                                                
REPRESENTATIVE   HARRIS   replied   yes.     He   then   credited                                                               
Representative  Thomas   and  his   staff  who   sponsored  other                                                               
legislation   that   has   been   incorporated   into   HB   152.                                                               
Representative Thomas and his staff  did a considerable amount of                                                               
work to get the legislation to its current point, he mentioned.                                                                 
                                                                                                                                
9:17:50 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  NEUMAN  related  that   the  City  of  Galena  is                                                               
reviewing  partnering with  Japan  on a  small  nuclear plant  in                                                               
rural Alaska.   He asked  if such a  program would qualify  as an                                                               
alternative energy program under this legislation.                                                                              
                                                                                                                                
REPRESENTATIVE HARRIS replied yes.   He recalled that a few years                                                               
ago  the  legislature  appropriated $500,000  to  facilitate  the                                                               
economics and  engineering for that  particular project.   If the                                                               
project  can be  done economically,  it would  be helpful  to the                                                               
rural parts of the state as  nuclear energy is a very inexpensive                                                               
power source  that can  be moved into  villages and  other areas.                                                               
However, the difficulty  with nuclear energy is waste  and how to                                                               
deal  with  it  over  time.    Obviously,  the  amount  of  funds                                                               
available to do  these things won't be  large initially, although                                                               
it  will   take  large  capital   infusions  to   establish  wind                                                               
generation power and other alternative energy projects.                                                                         
                                                                                                                                
REPRESENTATIVE NEUMAN  referred to  page 3,  line 6,  and related                                                               
his  understanding that  the language  infers that  the state  is                                                               
seeking help from private industry.                                                                                             
                                                                                                                                
REPRESENTATIVE  HARRIS replied  yes, adding  that help  [would be                                                               
welcome]  from anywhere.   He  noted that  the utility  companies                                                               
within the state  are trying to partner with state  agencies.  He                                                               
mentioned the rural intertie and the DC power cable prototype.                                                                  
                                                                                                                                
9:20:50 AM                                                                                                                    
                                                                                                                                
MS.  MILLET  pointed out  that  the  last  section of  Version  V                                                               
delegates  the  appointments  by  the governor  to  the  advisory                                                               
committee.                                                                                                                      
                                                                                                                                
9:21:39 AM                                                                                                                    
                                                                                                                                
CO-CHAIR FAIRCLOUGH then reopened the public hearing on HB 152.                                                                 
                                                                                                                                
[Further testimony on HB 152 was taken later in this hearing.]                                                                  
                                                                                                                              
HB 202-COMMUNITY REVENUE SHARING                                                                                              
                                                                                                                              
CO-CHAIR  FAIRCLOUGH,  noting  that  public  testimony  had  been                                                               
closed on  HB 202,  allowed testimony from  those who  had missed                                                               
the earlier opportunity to testify on HB 202.                                                                                   
                                                                                                                                
9:22:09 AM                                                                                                                    
                                                                                                                                
JEROME  SELBY,  Mayor,  Kodiak   Island  Borough,  expressed  the                                                               
significance and level of desperation  that exists in a number of                                                               
the smaller  communities in  the state.   There  are a  number of                                                               
villages in  the state, he opined,  that have about a  year left.                                                               
If the  legislature can't  determine how  to help  these villages                                                               
this year,  there will be  a disaster in these  small communities                                                               
in Alaska.  He  opined that the issue embodied in  HB 202 will be                                                               
the issue that  defines this legislature.  Mayor  Selby urged the                                                               
committee to move HB  202 and HB 152 forward.   He noted that for                                                               
villages  such as  Ouzinkie, the  cost of  electricity is  partly                                                               
what's driving it  out of existence and renewable  energy is part                                                               
of the long-term  solution to help bring operating  costs down in                                                               
rural Alaska.                                                                                                                   
                                                                                                                                
[Further testimony on HB 202 was taken later in this hearing.]                                                                  
                                                                                                                                
HB 152-ESTABLISHING A RENEWABLE ENERGY FUND                                                                                   
                                                                                                                                
CO-CHAIR  FAIRCLOUGH  then  allowed  those  who  had  missed  the                                                               
earlier opportunity to testify on HB 152 the ability to do so.                                                                  
                                                                                                                                
9:27:08 AM                                                                                                                    
                                                                                                                                
CHRIS ROSE, Executive Director,  Renewable Energy Alaska Project,                                                               
related his support of HB 152 and urged its passage.                                                                            
                                                                                                                                
9:28:20 AM                                                                                                                    
                                                                                                                                
CO-CHAIR FAIRCLOUGH again closed public testimony on HB 152.                                                                    
                                                                                                                                
[HB 152 was held over.]                                                                                                         
                                                                                                                                
HB 202-COMMUNITY REVENUE SHARING                                                                                              
                                                                                                                                
9:29:01 AM                                                                                                                    
                                                                                                                                
CO-CHAIR FAIRCLOUGH  then returned  the committee's  attention to                                                               
HB 202 and reopened public testimony.                                                                                           
                                                                                                                                
9:29:11 AM                                                                                                                    
                                                                                                                                
TOM  ABELL, Member,  Kodiak Island  Borough Assembly;  President,                                                               
Southwest  Alaska  Municipal  Conference  (SWAMC),  informed  the                                                               
committee that he is  one of the 20 percent who  voted to use the                                                               
permanent  fund  for the  "rainy  day."    He then  informed  the                                                               
committee  that the  Public Employees'  Retirement System  (PERS)                                                               
and the Teachers' Retirement  System (TRS) [contributions planned                                                               
by   the  legislature]   don't  help   the  small   villages  and                                                               
communities as it's a minute matter  for them.  He echoed earlier                                                               
comments  that small  communities  are being  devastated.   These                                                               
communities,  he  opined,  need sustainable  revenue  sharing  in                                                               
order  to budget  things such  as landfills.   Mr.  Abell related                                                               
that although  Ouzinkie is one  of the better funded  areas, it's                                                               
within  a  few months  of  going  bankrupt  at which  point  [the                                                               
responsibility] will fall to the municipalities.                                                                                
                                                                                                                                
9:31:35 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   NEUMAN  recalled   that   Mr.  Ritchie,   former                                                               
executive  director of  the Alaska  Municipal  League (AML),  had                                                               
testified  that AML  would  identify the  permanent  fund as  the                                                               
source of funding  for revenue sharing.  He asked  if that's what                                                               
AML has been discussing.                                                                                                        
                                                                                                                                
MR. ABELL deferred to Mayor Selby.                                                                                              
                                                                                                                                
9:32:30 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   CISSNA  acknowledged   the  importance   of  the                                                               
communities  around  Kodiak Island  to  be  healthy in  order  to                                                               
maintain the health  of the town of Kodiak itself.   She inquired                                                               
as  to  the impact  on  Kodiak,  if the  surrounding  communities                                                               
failed.                                                                                                                         
                                                                                                                                
MR. ABELL  said that he  can't specify a percentage  of financial                                                               
impact because  he believes that the  devastation is to a  way of                                                               
life.  He explained that people  live in small towns because they                                                               
don't  want  to  live  in  the larger  town  and  if  there's  no                                                               
government  to   keep  the  smaller  town   moving  forward,  the                                                               
community ceases  to exist.   He  pointed out  that those  in the                                                               
outlying communities surrounding Kodiak  have to come into Kodiak                                                               
for supplies and it's where the  tourism industry is located.  As                                                               
an example of the deterioration  of these smaller communities, he                                                               
highlighted  that in  the small  town of  Port Lyons  the grocery                                                               
store  just  closed.    Mr.  Abell then  pointed  out  that  such                                                               
communities  can't afford  to come  and  represent themselves  in                                                               
larger venues.                                                                                                                  
                                                                                                                                
9:36:05 AM                                                                                                                    
                                                                                                                                
JEROME SELBY,  Mayor, Kodiak Island  Borough, related  that after                                                               
trying to work  through revenue sharing last  year, basically AML                                                               
stepped back.   He further related that [AML]  feels that revenue                                                               
sharing isn't  about a pot  of money but rather  about providing,                                                               
at  the  local   level,  basic  services  to   live  wherever  an                                                               
individual chooses  to live.   From  that perspective  the notion                                                               
was borne  to take  a percentage  of the  revenues coming  to the                                                               
state,  the  largest of  which  comes  from the  state's  natural                                                               
resources.    Furthermore,  according  to  the  constitution  the                                                               
revenue  from  the  state's natural  resources  is  the  people's                                                               
money.   He then left  the committee documentation  from Ouzinkie                                                               
illustrating  its dwindling  resources over  the past  few years.                                                               
Ouzinkie's situation  is repeated  in roughly 200  communities in                                                               
the state.                                                                                                                      
                                                                                                                                
9:39:01 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  CISSNA identified  two  dynamics: government  and                                                               
public funding, and the private sector.   She then inquired as to                                                               
the value  of smaller  communities for Kodiak  Island as  a whole                                                               
and whether  there would be  tangible impacts were  those smaller                                                               
communities to go away.                                                                                                         
                                                                                                                                
MAYOR  SELBY   submitted  that  Alaska   is  about   its  smaller                                                               
communities and  which is  why they are  important.   Mayor Selby                                                               
opined that  the smaller  communities of  Alaska are  the state's                                                               
identity  and hold  the "real  Alaskans."   He  then opined  that                                                               
leaders  have a  responsibility  to ensure  that  those in  rural                                                               
areas  have the  ability to  live wherever  they want.   "It's  a                                                               
matter of  us sharing,"  he said.   He further  said that  it's a                                                               
matter of  where the state's  priorities lie rather  than whether                                                               
there's   money  available.     These   individuals  in   smaller                                                               
communities contribute to  the larger communities as  well as the                                                               
state economy.  However, these  smaller communities are too small                                                               
to generate  enough property  tax to  pay for  basic needs.   The                                                               
aforementioned  is why  revenue  sharing is  necessary, he  said.                                                               
"And in  a state with  $37 billion in the  bank and a  $3 billion                                                               
operating budget, we rank either 49th  or 50th ... in how much is                                                               
shared  back,"  he   related.    He  further   related  that  the                                                               
aforementioned is embarrassing to him.                                                                                          
                                                                                                                                
9:43:37 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  FAIRCLOUGH pointed  out that  Alaska ranks  last, after                                                               
the distribution  of the permanent  fund, for taxes.   Therefore,                                                               
she opined that the state shares  the wealth and it's a matter of                                                               
perspective.   Still, she  maintained that  [the state]  needs to                                                               
look to provide viable communities in rural Alaska.                                                                             
                                                                                                                                
9:44:23 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  FAIRCLOUGH,  upon determining  no  one  else wished  to                                                               
testify, again closed public testimony.                                                                                         
                                                                                                                                
[HB 202 was held over.]                                                                                                         
                                                                                                                                
A conversation  then ensued regarding  time limitations  that may                                                               
not always allow already closed  public testimony to be reopened.                                                               
There was also commentary with  regard to attendance of committee                                                               
hearings  and the  various  responsibilities  of legislators  and                                                               
ways in which they can participate in the process.                                                                              
                                                                                                                                
9:51:51 AM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no  further business before the  committee, the House                                                               
Community  and Regional  Affairs Standing  Committee meeting  was                                                               
adjourned at 9:51 a.m.                                                                                                          

Document Name Date/Time Subjects