Legislature(1993 - 1994)
04/06/1993 01:00 PM House CRA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE April 6, 1993 1:00 p.m. MEMBERS PRESENT Representative Harley Olberg, Chairman Representative Jerry Sanders, Vice-Chairman Representative John Davies Representative Cynthia Toohey Representative Ed Willis Representative Bill Williams MEMBERS ABSENT Representative Con Bunde OTHER HOUSE MEMBERS PRESENT Representative Ron Larson COMMITTEE CALENDAR *HJR 37 Urging Congress to enact H.R. 1033 or similar legislation authorizing construction grants for publicly-owned treatment works in economically distressed rural communities. PASSED FROM COMMITTEE WITH A DO PASS RECOMMENDATION *HB 173 "An Act exempting certain charitable gaming activity from municipal sales and use taxes." PASSED FROM COMMITTEE WITH NO RECOMMENDATIONS HB 70 "An Act relating to state impact aid for municipalities: and providing for an effective date." NOT HEARD Bills Held from Previous Calendars: HB 209: "An Act relating to community health aide grants." PASSED FROM COMMITTEE WITH A DO PASS RECOMMENDATION (* first public hearing) WITNESS REGISTER Representative Ron Larson Capitol Building, Room 502 Juneau, AK 99801-1182 Phone: 465-3878 POSITION STATEMENT: Prime Sponsor of HB 173 Rick Urion, Lobbyist City of Bethel 321 Highland Drive Juneau, AK 99801 Phone: 586-6366 POSITION STATEMENT: Opposed HB 173 Ron Pagenkopf Juneau Youth Activities Co-op P.O. Box 33206 Juneau, AK 99803 Phone: 586-2027 POSITION STATEMENT: Supported HB 173 Myra Munson, Lobbyist Alaska Native Health Board 229 4th Street Juneau, Alaska 99801 586-5880 POSITION STATEMENT: Supported HB 209 Deborah Erickson Health Program Specialist II Division of Public Health Department of Health and Social Services P.O. Box 110610 Juneau, AK 99801-0610 Phone: 465-3090 POSITION STATEMENT: Supported HB 209 Roger McKowan, Legislative Aide to Representative Lyman Hoffman Capitol Building, Room 503 Juneau, AK 99801-1182 Phone: 465-4453 POSITION STATEMENT: Spoke on behalf of prime sponsor of HJR 37 Keith Kelton, Director Division of Facility Construction and Operation Department of Environmental Conservation 410 Willoughby Ave., Suite 105 Juneau, AK 99801-1795 Phone: 465-5180 POSITION STATEMENT: Supported HJR 37 PREVIOUS ACTION BILL: HJR 37 SHORT TITLE: FED MONEY FOR RURAL WATER/SEWER PROJECTS BILL VERSION: SPONSOR(S): REPRESENTATIVE(S) HOFFMAN,MacLean,Foster, Olberg,Williams,Davidson,Nicholia,Mackie,Ulmer,Brown, Carney,Brice, Menard,Sanders,Willis,G.Davis,B.Davis,Davies TITLE: Urging the Congress to enact H.R. 1033 or similar legislation authorizing construction grants for publicly- owned treatment works in economically distressed rural communities. JRN-DATE JRN-PG ACTION 03/30/93 853 (H) READ THE FIRST TIME/REFERRAL(S) 03/30/93 853 (H) CRA, HES 03/31/93 903 (H) COSPONSOR(S): SANDERS, WILLIS, G.DAVIS 04/01/93 919 (H) COSPONSOR(S): B.DAVIS 04/05/93 1047 (H) COSPONSOR(S): DAVIES 04/06/93 (H) CRA AT 01:00 PM CAPITOL 124 BILL: HB 173 SHORT TITLE: MUNI FEES & TAXATION OF CHARITABLE GAMES BILL VERSION: SPONSOR(S): REPRESENTATIVE(S) LARSON TITLE: "An Act exempting certain charitable gaming activity from municipal sales and use taxes." JRN-DATE JRN-PG ACTION 02/24/93 433 (H) READ THE FIRST TIME/REFERRAL(S) 02/24/93 433 (H) CRA, JUDICIARY, FINANCE 03/25/93 (H) CRA AT 01:00 PM CAPITOL 124 04/06/93 (H) CRA AT 01:00 PM CAPITOL 124 BILL: HB 70 SHORT TITLE: STATE IMPACT AID FOR MUNICIPALITIES BILL VERSION: SPONSOR(S): REPRESENTATIVE(S) MACLEAN TITLE: "An Act relating to state impact aid for municipalities; and providing for an effective date." JRN-DATE JRN-PG ACTION 01/18/93 101 (H) READ THE FIRST TIME/REFERRAL(S) 01/18/93 101 (H) CRA, JUDICIARY, FINANCE 03/25/93 (H) CRA AT 01:00 PM CAPITOL 124 04/01/93 (H) CRA AT 01:00 PM CAPITOL 124 04/06/93 (H) CRA AT 01:00 PM CAPITOL 124 BILL: HB 209 SHORT TITLE: COMMUNITY HEALTH AIDE GRANTS BILL VERSION: SPONSOR(S): HEALTH, EDUCATION AND SOCIAL SERVICES TITLE: "An Act relating to community health aide grants." JRN-DATE JRN-PG ACTION 03/10/93 590 (H) READ THE FIRST TIME/REFERRAL(S) 03/10/93 590 (H) CRA, STATE AFFAIRS, HES, FINANCE 04/01/93 (H) CRA AT 01:00 PM CAPITOL 124 ACTION NARRATIVE TAPE 93-21, SIDE A Number 000 CHAIRMAN HARLEY OLBERG called the meeting to order at 1:08 p.m. He noted Representatives Willis, Davies and Sanders were present. HB 173: MUNI FEES & TAXATION OF CHARITABLE GAMES Number 011 REPRESENTATIVE RON LARSON, PRIME SPONSOR OF HB 173, testified, "Last summer I was talking to one of my friends. My friend had a problem...and he asked us to look into the situation... In some ways we found that there are conflicting statutes. One interpretation...is that they (the city) was allowed to place a sales tax on the nonprofits. The other was that the city should not place a sales tax on it... What eventually happened then was the business was moved out of the City of Palmer, because they were interpreting the legislation one way, to the City of Wasilla, where they interpreted the legislation another way." REPRESENTATIVE LARSON continued, "So this bill is basically then just trying to set a policy that will be uniform for all of the municipalities. ...Should the money raised by charities be shared with municipalities or should the money raised by charities be used for those charities in the purposes that is expressed?... This bill (HB 173) will basically exempt from municipal sales taxes those nonprofits or charities who have the permit and who are also the operator or the seller." NUMBER 080 REPRESENTATIVE JOHN DAVIES asked if the language (on line nine of HB 173) "to the extent" could be substituted with "if". REPRESENTATIVE LARSON understood that language to mean "if the activity was carried on by the person who has the permit was also the one who was the operator". CHAIRMAN OLBERG asked, "Would it be possible to operate your own deal and also allow somebody to operate for you?" Number 106 REPRESENTATIVE LARSON replied, "What we are trying to do is narrow it down right here where the nonprofit or the charity, the one who has the permit, is the only one exempt from the sales tax." CHAIRMAN OLBERG gave an example, "So if the charity was running a bingo game and at the same time somebody else was running dart toss for them for a fee, the dart toss would not be exempt but the bingo game would, is the way I read this. To the extent that the permittee who holds the permit is actually conducting the activity." REPRESENTATIVE LARSON concurred and added, "The state does collect a sales tax on these activities. Those dollars then go to the general fund and from the general fund they are redistributed back to the municipalities. So municipalities do get some revenue from these activities." Number 133 RICK URION, LOBBYIST, CITY OF BETHEL, testified in opposition to HB 173 saying, "On one hand the legislature is restricting revenue sharing and municipal assistance and then on the other hand, you are cutting back the municipal's right to tax. We think this should be a local option and not be dictated by the state. The City of Bethel receives about ten percent of its sales tax from this type of activity. Passage of this bill would seriously restrict the ability of the city to provide the services it provides. Maybe in your wisdom, if you think this is a good idea, you could exempt the municipalities who already levy this tax." Number 154 REPRESENTATIVE JERRY SANDERS asked if the City of Bethel "gets about ten percent from this" and, "Is all the gaming in Bethel covered by this? They lose the whole ten percent?" MR. URION replied, "That is my understanding, that is what the city (Bethel) tells me, yes." REPRESENTATIVE DAVIES asked, "What fraction of their total budget would that represent?" MR. URION said, "I don't know what that is...it's about $200,000 a year is what it amounts to." Number 174 RON PAGENKOPF, JUNEAU YOUTH ACTIVITIES CO-OP, testified in support of HB 173 saying, "There are basically two problems that we have with a sales tax on gaming. One is that it is recognized throughout almost every place in the United States except Alaska, that a front end sales tax does not work with gaming. It is not possible to collect that tax from the player at the time of sale. The second problem we have is that the boroughs, or the taxing authorities, want to tax the same dollar four to five times rather than just once." He then gave the committee examples of multiple taxation of a dollar spent on gaming. Representative Williams joined the committee at 1:17 and Representative Toohey joined the committee at 1:18. MR. PAGENKOPF continued, "Our proposal is, of course we support this bill (HB 173) very heavily, but if they do wish to tax us, tax us the way the state taxes. That is on the difference between the price of the ticket and the winnings, where we pay a three percent tax to the state. We also pay a one percent tax to the state on the net revenue that we receive from gaming... The thing that scares us is that as the boroughs raise the sales tax, they will literally put us out of business and the intent of the law was to raise money for charity, was my understanding..." He then rendered further examples. Number 262 CHAIRMAN OLBERG asked, "Because you are a co-op then you are subject to this tax?" MR. PAGENKOPF said, "Everybody is subject to the tax regardless of who you are. This (HB 173) would allow us not to pay a sales tax because all we do is share a location." CHAIRMAN OLBERG clarified, "Your primary objection is not to this bill, but to the way the tax is imposed at the present time... (HB 173) in effect would preclude the borough from taxing you as they are now." MR. PAGENKOPF concurred. Number 298 REPRESENTATIVE DAVIES MOVED to PASS HB 173 out of committee with individual recommendations. There were no objections, and the MOTION CARRIED. Number 307 CHAIRMAN OLBERG called a short at ease from 1:21 to 1:23 p.m. HB 209: COMMUNITY HEALTH AIDE GRANTS Number 312 MYRA MUNSON, LOBBYIST, ALASKA NATIVE HEALTH BOARD, testified in support of HB 209 saying, "The Community Health Aide Training Program is a grant program supported by the state to assist in a federal effort that supports over 400 health aides throughout the rural villages of Alaska, providing health care to the residents of the most remote and rural communities of Alaska. All the salaries of those employees are paid for by federal funds. The Alaska contribution to sustaining that part of our health care system has been to provide some training funds through a grant program that was established in 1985." MS. MUNSON continued, "In order to control the budget of that program without anticipating the way things could change over time, that grant program was established so that the only eligible grantees were those corporations and communities which were currently receiving federal funds and currently employing health aides. That worked fine until last year (1992) when in one region...Eastern Aleutian Tribes formed and began receiving the federal funds to provide the health aides. When they came to the state to apply for the grant for training they were told, 'Sorry, you are not eligible because you did not exist in 1985'." MS. MUNSON continued further, "That was fixed for the first year by an agreement of subcontracts between the two organizations, but it had the effect of changing the amount of funding that was available within the organization. We worked with the Department of Health and Social Services to try to come up with a minimal solution to that problem and that is the bill that was introduced here (HB 209), that provides a very technical change that says any organization which is receiving the federal funds to provide Community Health Aide Service can receive a grant, but we left in place the limit on the size of that grant based on the number of health aides that were employed in 1985. It simply says, they had to be employed by some regional organization, not necessarily the same organization, and it reflects the tendency to form smaller organizations that can provide better services in a local area." MS. MUNSON concluded, "This bill (HB 209) is a very technical solution to one of those glitches that develops as time goes by..." She then addressed the zero fiscal note. Number 381 REPRESENTATIVE CYNTHIA TOOHEY said, "I support this bill (HB 209). When Myra first came to me, there was some feeling that this would create a large fiscal note...that apparently has been straightened out. It does show that there is no fiscal note with it..." She then asked, "Does this allow other communities to tighten up if they had aides in place?" MS. MUNSON said, "This bill (HB 209) will allow new programs to come into existence and receive the funding. The protection against diminishing the level of funding for any program too much is that, only programs which can receive the base funding, if the total were appropriated of $30,000, (but) no one has ever gotten that full amount, is if they had three health aides in 1985..." Number 416 DEBORAH ERICKSON, HEALTH PROGRAM SPECIALIST II, DIVISION OF PUBLIC HEALTH, DEPARTMENT OF HEALTH AND SOCIAL SERVICES, testified in support of HB 209. "The department feels that under self-determination these communities have the right to choose who is going to be providing the services for them, if they are going to provide the services for themselves. Under the current statute it is not equitable in that if a community, if a village decides to change the organization that was providing services to them, under the Community Health Aide Program in 1984, they would no longer be eligible for state funds..." Number 436 REPRESENTATIVE DAVIES asked why HB 209, introduced by the HESS Committee, will be referred to the HESS Committee. MS. MUNSON said, "I was out of town. The bill (HB 209) went to the speaker's office for referral and the speaker's staff recognized that if the bill went into effect and the legislature was to appropriate at the one hundred percent appropriation level, which as I have indicated has never occurred, there could be a possible fiscal impact..." REPRESENTATIVE TOOHEY concurred, "We were not able to get a hold of her to reassure the speaker's chamber that it was as face value. So that is why the delay and long list of referrals..." Number 483 REPRESENTATIVE TOOHEY then MOVED that HB 209 be PASSED out of committee with individual recommendations. There were no objections, and the MOTION CARRIED. Number 492 HJR 37: FED MONEY FOR RURAL WATER/SEWER PROJECTS ROGER MCKOWAN, LEGISLATIVE STAFF TO REPRESENTATIVE LYMAN HOFFMAN, testified on his behalf saying, "In the summer of 1990, nearly a quarter of the residents of the village of Kotlik were victims of viral meningitis...I think we all understand there are some very critical water and sewer problems in rural Alaska. In an ongoing effort to identify sources of funding for rectifying these situations, Representative Hoffman has come into contact with HJR 1033 in Congress. This piece of legislation is sponsored by Congressman Hayes of Louisiana and suggests that the federal government should provide 300 million dollars a year for six consecutive years...for constructing water and sewer projects in economically depressed rural communities." MR. MCKOWAN continued, "Under the intent currently established in HJR 1033, the allotments would be made to the states in the ratio which the population and economically distressed rural communities of each state bears to the total population in economically distressed rural communities of all the states... In a 1990 report to Congress, the EPA (Environmental Protection Agency) estimated that 74 percent of the nation's Native wastewater problems were located in the state of Alaska." MR. MCKOWAN continued further, "The governor has asked for 26 million dollars for village safe water through the DEC... Should HJR 1033 pass...the state of Alaska would qualify for 45 million dollars. It is a 90 percent federal match, so rather than go in and have to spend 26 million dollars in general funds to accomplish (less)...it is my understanding, that the state, through Village Safe Water dollars, could go in with five million dollars, purchase 45 million more dollars, through the federal government, accomplish all the projects that are listed...on this prioritized list and save the state 20 million dollars approximately, in general fund dollars..." Number 560 REPRESENTATIVE ED WILLIS pointed out that a Glennallen water/sewer project was on the governor's priority list. (A copy of this list may be found in the House Community and Regional Affairs Committee Room, Capitol Room 126, and after the adjournment of the second session of the 18th Alaska State Legislature, in the Legislative Reference Library.) REPRESENTATIVE TOOHEY asked if the governor's priority list included population considerations. Number 578 KEITH KELTON, DIRECTOR, DIVISION FACILITY CONSTRUCTION OPERATION, ALASKA DEPARTMENT OF ENVIRONMENTAL CONSERVATION, indicated that materials providing this information had been distributed to legislators. He added, "We are very much in support of HJR 37... HJR 1033 is the first comprehensive attempt to try to provide grants for those smaller communities which are unable to afford the loan programs... We think it would be a very good tool to have in the box with rural communities... This is just one of the possible sources of revenue and a very attractive option at this time, and the timing on this is very good." Number 630 CHAIRMAN OLBERG asked about the dollar sign notation on the governor's priority list. MR. KELTON explained, "The dollar figures that are shown on there relate to basically two programs. It is either a match with the U.S. Public Health Service on projects where we are going in jointly, or the Environmental Protection Agency has had a very limited program called the Indian Set Aside Program where basically half of one percent of the total federal appropriation for wastewater has been available for Indian Set Aside Projects. ...The total identified need is over 1.2 billion dollars for rural Alaska, so we have a long ways to go unless we get a steady sustained source of funding, and we are looking at the federal government to pick up part of it." Number 651 REPRESENTATIVE TOOHEY asked, "Again, is there any limit on the amount of people in a village that precludes the fact that they can have a sewer system? If you have ten people that set up camp in Iditarod, does that equate to a fact that they can have a sewer and water system?" MR. KELTON said, "That is a very good question and one we have wrestled with for years. The way we have addressed that is the priority list that is handed out is developed through a series of evaluation criteria...obviously, those that have the bigger problem associated with a larger population are going to be at the top of the list. So we are addressing the bigger needs and if we ever get down to the point where we are talking about ten people, then perhaps we will have a real question to answer..." Number 678 REPRESENTATIVE SANDERS MOVED that HJR 37 be moved out of committee with individual recommendations. There were no objections, and the MOTION CARRIED. ADJOURNMENT CHAIRMAN OLBERG adjourned the meeting at 1:53 p.m.