Legislature(1993 - 1994)

02/08/1994 01:00 PM CRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
                                                                               
              HOUSE COMMUNITY AND REGIONAL AFFAIRS                             
                       STANDING COMMITTEE                                      
                        February 8, 1994                                       
                            1:00 p.m.                                          
                                                                               
  MEMBERS PRESENT                                                              
                                                                               
  Representative Harley Olberg, Chairman                                       
  Representative Con Bunde                                                     
  Representative John Davies                                                   
  Representative Cynthia Toohey                                                
  Representative Ed Willis                                                     
  Representative Jerry Sanders, Vice Chair                                     
  Representative Bill Williams                                                 
                                                                               
  OTHER LEGISLATORS PRESENT                                                    
                                                                               
  Representative Carl Moses                                                    
                                                                               
  MEMBERS ABSENT                                                               
                                                                               
  none                                                                         
                                                                               
  COMMITTEE CALENDAR                                                           
                                                                               
  HB 259:     "An Act relating to general grant                                
               land entitlements for certain                                   
               boroughs and unified municipalities;                            
               and providing for an effective date."                           
                                                                               
               PASSED FROM COMMITTEE WITH A DO PASS                            
               RECOMMENDATION                                                  
                                                                               
  *HB 393:    "An Act relating to unincorporated                               
               community capital project matching                              
               grant program; and providing for an                             
               effective date."                                                
                                                                               
               HEARD AND HELD IN COMMITTEE                                     
                                                                               
  (* First public hearing)                                                     
                                                                               
  WITNESS REGISTER                                                             
                                                                               
  REPRESENTATIVE CARL MOSES                                                    
  Alaska State Legislature                                                     
  Capitol Building, Room 204                                                   
  Juneau, AK  99801-1182                                                       
  Phone: 465-4451                                                              
  Position Statement:  Prime Sponsor of HB 393 and                             
                       Chairman of the House Rules                             
                       Committee which sponsored HB 259                        
                                                                               
  GLEN VERNON, Borough Manager                                                 
  Lake and Peninsula Borough                                                   
  P.O. Box 495                                                                 
  King Salmon, AK  99613                                                       
  Phone: 246-3421                                                              
  Position Statement:  Supported HB 259 and HB 393                             
                                                                               
  RON SWANSON, Director                                                        
  Division of Parks and Outdoor Recreation                                     
  Department of Natural Resources                                              
  P.O. Box 107001                                                              
  Anchorage, AK  99510-7001                                                    
  Phone: 762-2692                                                              
  Position Statement:  Supported HB 259                                        
                                                                               
  JACK FARGNOLI, Senior Policy Analyst                                         
  Office of Management and Budget                                              
  Office of the Governor                                                       
  Box 110020                                                                   
  Juneau, AK  99811-0020                                                       
  Phone: 465-3568                                                              
  Position Statement:  Commented on HB 393                                     
                                                                               
  LAMAR COTTEN, Lobbyist                                                       
  Lake and Peninsula Borough                                                   
  P.O. Box 103733                                                              
  Anchorage, AK  99801                                                         
  Phone: 258-7143                                                              
  Position Statement:  Supported HB 259 and HB 393                             
                                                                               
  KAREN BRAND, Staff                                                           
  Representative Carl Moses                                                    
  State Capitol, Room 204                                                      
  Juneau, AK  99801-1182                                                       
  Phone: 465-4451                                                              
  Position Statement:  Staff to Prime Sponsor of HB 393                        
                       and Chairman of the House Rules                         
                       Committee which sponsored HB 259                        
                                                                               
  PREVIOUS ACTION                                                              
                                                                               
  BILL:  HB 259                                                                
  SHORT TITLE: GENERAL GRANT LAND ENTITLEMENT                                  
  SPONSOR(S): RULES BY REQUEST                                                 
                                                                               
  JRN-DATE     JRN-PG               ACTION                                     
  03/26/93       796    (H)   READ THE FIRST TIME/REFERRAL(S)                  
  03/26/93       796    (H)   CRA, RESOURCES, FINANCE                          
  04/20/93              (H)   CRA AT 01:30 PM CAPITOL 124                      
  02/08/94              (H)   CRA AT 01:00 PM CAPITOL 124                      
                                                                               
  BILL:  HB 393                                                                
  SHORT TITLE: UNINCORPORATED COMMUNITY CAP PROJECT GRANT                      
  SPONSOR(S): REPRESENTATIVE(S) MOSES                                          
                                                                               
  JRN-DATE     JRN-PG               ACTION                                     
  01/21/94      2125    (H)   READ THE FIRST TIME/REFERRAL(S)                  
  01/21/94      2125    (H)   CRA, STATE AFFAIRS, FINANCE                      
  02/08/94              (H)   CRA AT 01:00 PM CAPITOL 124                      
                                                                               
  ACTION NARRATIVE                                                             
                                                                               
  TAPE 94-6, SIDE A                                                            
  Number 001                                                                   
                                                                               
  CHAIRMAN HARLEY OLBERG called the meeting to order at 1:04                   
  p.m.  He noted for the record Representatives Willis,                        
  Davies, Williams, Toohey and Sanders were present and noted                  
  a quorum was present.                                                        
                                                                               
  Number 024                                                                   
  HB 259 - GENERAL GRANT LAND ENTITLEMENT                                      
                                                                               
  REPRESENTATIVE CARL MOSES, CHAIRMAN OF THE RULES COMMITTEE,                  
  SPONSOR OF HB 259 said, "House bill 259 amends AS 29.65.010,                 
  the land entitlement section, to statutorily authorize                       
  187,000 acres for the Lake and Peninsula Borough, and gives                  
  the Borough until October 1, 1996 to select those lands.                     
  This figure represents approximately three percent of the                    
  total state lands located within the Borough.  By formula in                 
  statute, the Lake and Pen Borough would receive                              
  approximately 30,000 acres.  Because the Lake and Pen                        
  Borough is attempting to promote economic development,                       
  become less dependent on the price of fish, and because the                  
  value of an acre of land in urban Alaska is much greater                     
  than an acre in southwest Alaska, the borough planning                       
  commission felt that an entitlement of 187,000 acres was                     
  more equitable than 30,000.  The borough assembly and                        
  planning commission are developing a comprehensive borough                   
  plan, and have identified lands of interest to them.  AS                     
  29.65 currently provides a land selection process for newly                  
  formed boroughs.  Within the boundaries of the Lake and                      
  Peninsula Borough, there is very little land available from                  
  Vacant, Unappropriated, and Unreserved inventories.  Because                 
  other state lands would need reclassification before                         
  issuance to the borough, pursuing entitlements through the                   
  formula in AS 29.65.030 would be a more time consuming                       
  process.  Because the land selection process would be very                   
  time consuming, House Bill 259 would raise the priority for                  
  processing grant land entitlements for the Lake and                          
  Peninsula Borough by simply adding their entitlement to the                  
  list of municipalities and boroughs currently in AS                          
  29.65.010(a).  HB 259 is a noncontroversial bill, and does                   
  not affect other boroughs or their grant allocations.  I                     
  would ask that the Community and Regional Affairs Committee                  
  favorably consider the bill."                                                
                                                                               
  Representative Bunde joined the committee at 1:09 p.m.                       
                                                                               
  REPRESENTATIVE JOHN DAVIES asked, "Would the Lake and Pen                    
  Borough be entitled to this much land without this, but it                   
  would just take longer?  Is that the point here?                             
                                                                               
  REPRESENTATIVE MOSES replied, "Without this statute, they                    
  would only be entitled to 30,000 acres."                                     
                                                                               
  REPRESENTATIVE DAVIES continued, "So it's more than just a                   
  timing issue, they want to speed the process up?"                            
                                                                               
  REPRESENTATIVE MOSES said yes.                                               
                                                                               
  GLEN VERNON, BOROUGH MANAGER, LAKE AND PENINSULA BOROUGH,                    
  via teleconference, said, "...fish tax being the only real                   
  tax base that we have and what's needed is this land in                      
  order to diversify and bolster the tax base and support the                  
  activities in the borough.  The process of selecting the                     
  acreage in this bill is a detailed one.  The planning                        
  commission and the borough assembly have gone through and                    
  identified, parcel by parcel, the lands that they feel would                 
  be appropriate for the borough to select and the total                       
  number of acres in the bill reflects that process. Simply                    
  adding up the parcels they feel are essential to the                         
  borough.  The total state lands involved here represent only                 
  three percent approximately, of the state lands within the                   
  borough, even though many of those lands are presently not                   
  classified."                                                                 
                                                                               
  REPRESENTATIVE DAVIES asked, "Could you give us an overview                  
  of the resource values that you selected for when you were                   
  looking for this land?"                                                      
                                                                               
  MR. VERNON said, "The borough would only be able to gain                     
  surface estate on any selected lands, so the resource values                 
  that we're dealing with would be only those resource values                  
  that relate to surface use.  Primarily, we had a number of                   
  selections that relate to the tourism, visitor, hunting,                     
  fishing, recreational industry that's in the borough.  The                   
  resource value would come primarily from the location of the                 
  lands relative to the visitor industry."                                     
                                                                               
  REPRESENTATIVE BILL WILLIAMS asked, "You talked about a tax                  
  base, what type of tax base are you talking about?"                          
                                                                               
  MR. VERNON said, "The only real revenue base or tax base                     
  that the borough presently has, is a tax that imposes on the                 
  sale of raw fish.  We have imposed a permit fee requirement                  
  on lodges and guides that are involved in the recreation                     
  industry, however, it's very minimal.  We are looking at the                 
  possibility...a room tax or bed tax type of arrangement.                     
  That would help to diversify."                                               
                                                                               
  REPRESENTATIVE CYNTHIA TOOHEY asked, "Have you done any                      
  poling of the people that are going to be made part of this                  
  whole in the neighborhoods at all?"                                          
                                                                               
  MR. VERNON replied, "We've had public hearings and meetings                  
  throughout the communities.  We have 17 communities                          
  throughout the borough, and public hearings have been held                   
  in all of those communities."                                                
                                                                               
  REPRESENTATIVE TOOHEY asked if it was only "positive                         
  feedback."                                                                   
                                                                               
  MR. VERNON said, "We've had generally positive feedback                      
  throughout the borough from individuals living within the                    
  borough.  We have had concerns expressed, not about the                      
  lands to be selected, but about the potential bed tax or                     
  sales tax that the borough might impose if we're successful                  
  in moving in the direction we'd like to."                                    
                                                                               
  Number 268                                                                   
                                                                               
  REPRESENTATIVE CON BUNDE asked what Mayor Alsworth's                         
  position was on HB 259.                                                      
                                                                               
  MR. VERNON said, "Mayor Alsworth was indeed a part of the                    
  selection of going through and identifying the parcels;                      
  however, he did indicate the potential conflict and that was                 
  discussed and I think, full disclosure has been made of the                  
  interest that he has there."                                                 
                                                                               
  REPRESENTATIVE BUNDE said, "The question was not to question                 
  Glen's integrity, I was just wondering if he was in favor of                 
  the bill or not."                                                            
                                                                               
  MR. VERNON said, "He favors the bill."                                       
                                                                               
  CHAIRMAN OLBERG asked, "Where did the 34,000 acre figure                     
  come from and where did the 187,000 acre figure come from?"                  
                                                                               
  MR. VERNON said, "The approximately 30,000 comes from the                    
  formula in the statute.  The alternative that we would like                  
  to pursue is the one that sets forth 187...189,000 acres                     
  that is in the proposed bill, and that total comes from                      
  simply going through the borough selecting those lands we                    
  feel the borough should administer.  So the figure is tied                   
  to specific parcels."                                                        
                                                                               
  REPRESENTATIVE DAVIES asked, "Would it be fair to                            
  characterize this as a wish list to some extent?  Or was                     
  there some kind of competitive process that brought the list                 
  down to 187,000?"                                                            
                                                                               
  MR. VERNON said, "Yes there was a much larger number of                      
  parcels that were initially selected.  The parcels that were                 
  finally settled upon actually resulted from two different                    
  meetings where paring down took place.  Yes, I think it does                 
  still, to some extent, represent a wish list.  We recognize                  
  that we may not be able to select everything that we've                      
  identified.  We would still like to have the acreage                         
  identified in the bill and then go through the process with                  
  DNR (Department of Natural Resources) and other agencies as                  
  to which lands can be reclassified and be openly selected."                  
                                                                               
  Number 337                                                                   
                                                                               
  REPRESENTATIVE TOOHEY asked, "Have you communicated with the                 
  other boroughs?  Are you stepping on anybody toes?"                          
                                                                               
  MR. VERNON said, "We believe that we're not stepping on                      
  anyone's toes.  I'm not aware of any other boroughs that                     
  object to this.  Indeed, there may be other boroughs who                     
  would like to follow this same procedure."                                   
                                                                               
  CHAIRMAN OLBERG said, "The 34,000 acres comes from a formula                 
  that's based on the physical size of the borough?"                           
                                                                               
  RON SWANSON, DIRECTOR, DIVISION OF PARKS AND OUTDOOR                         
  RECREATION, DEPARTMENT OF NATURAL RESOURCES, said, "The                      
  formula that is used for figuring peninsula entitlement,                     
  that's both cities and boroughs, is based on 10 percent of                   
  the vacant, unappropriated, unreserved state land within the                 
  borough's or city's boundaries.  So what we do is, we go                     
  through, we figure out how many acres of state land is                       
  within a given municipality and how many has a proper                        
  classification.  The VUU (Vacant Unappropriate Unreserved)                   
  formula does not take into consideration, the unique or                      
  special circumstances of each municipality.  For example,                    
  the Municipality of Anchorage has very little state land                     
  within its boundaries, but has a tremendous demand.  Other                   
  cases, such as Lake and Pen, there's a substantial amount of                 
  state land there but because of the classification, not much                 
  is made available.  We have not yet certified Lake and Pen's                 
  entitlement, we're not allowed to do that by law until after                 
  January 1st of this year and we're given two years to do it,                 
  but we do estimate we'll come up with about 29,000 acres."                   
                                                                               
  CHAIRMAN OLBERG reiterated, "How do we get from 34,000 to                    
  187,000?"                                                                    
                                                                               
  MR. SWANSON said, "That's exactly what this bill does.  This                 
  municipality, like every other municipality kind of goes                     
  through it and looks at land that they think is appropriate                  
  for municipal ownership, and identifies it and flat argues                   
  for acreage.  In this particular case, I certainly support                   
  conveying land to a municipality and I do think that 29,000                  
  acres is low for a borough of that particular size, but if                   
  187,000 is the right figure, that's a policy call for you to                 
  make."                                                                       
                                                                               
  Number 393                                                                   
                                                                               
  CHAIRMAN OLBERG asked, "If we stipulate 187,000 acres in                     
  this legislation, is that an entitlement chiseled in stone                   
  that they will receive 187,000 acres or is that a maximum                    
  that they can receive?"                                                      
                                                                               
  MR. SWANSON said, "That is a maximum, but every municipality                 
  I've seen certainly achieves their maximum."                                 
                                                                               
  CHAIRMAN OLBERG continued, "These figures are subject to                     
  legislative as well as formula computation."                                 
                                                                               
  MR. SWANSON said, "The statutes now require the formula of                   
  computation which we will do in due time.  But all boroughs,                 
  basically, at least the older ones, have come to the                         
  legislature and have established entitlement with them that                  
  reflects various formulas that they think meet their needs."                 
                                                                               
  Number 411                                                                   
                                                                               
  REPRESENTATIVE DAVIES said, "I would like to ask about the                   
  process that the Lake and Pen Borough would go through in                    
  selecting and specifically, I would like to know if                          
  essentially the same criteria would be applied to the                        
  state's interest in these lands as would apply elsewhere in                  
  the state."                                                                  
                                                                               
  MR. SWANSON said, "Through this bill process through the                     
  legislature, I think it's very useful if the legislature                     
  gives us a type order of what kind of land they think is                     
  appropriate to convey to any given municipality.  Even if                    
  that does not happen, we would go through what we call a                     
  best interest finding and see if the best interest of the                    
  state to convey any given parcel to a local government."                     
                                                                               
  REPRESENTATIVE BUNDE asked if DNR has taken an official                      
  position on HB 259.                                                          
                                                                               
  MR. SWANSON said, "The department supports in concept an                     
  increased entitlement.  We have not had a chance to review                   
  the selections to see if they're appropriate.  I think it's                  
  appropriate for the borough to, and Mr. Vernon has done                      
  that, identify the types of land that they're selecting."                    
                                                                               
  REPRESENTATIVE BUNDE continued, "This bill allows a maximum                  
  selection but it doesn't aberrate the state selection                        
  process where the borough has to make it's best case and the                 
  state may or may not agree with them on that."                               
                                                                               
  MR. SWANSON said, "I agree, what you're saying is the                        
  Department of Natural Resources should convey up to 187,000                  
  acres of state land to the municipality.  The municipality                   
  would then make their selection, we would go through                         
  (indiscernible) to see if it's appropriate for that parcel                   
  or parcels to go to borough ownership."                                      
                                                                               
  Number 457                                                                   
                                                                               
  REPRESENTATIVE TOOHEY asked, "Is there any Native land in                    
  there?"                                                                      
                                                                               
  MR. SWANSON said, "There, of course, is Native land within                   
  the borough, but none of that is considered, only state                      
  land."                                                                       
                                                                               
  CHAIRMAN OLBERG asked, "Does unencumbered mean not subject                   
  to mental health trust land's complications?"                                
                                                                               
  MR. SWANSON confirmed, "That is correct."                                    
                                                                               
  Number 463                                                                   
                                                                               
  REPRESENTATIVE DAVIES said, "You had said that the                           
  department hasn't yet had a chance to evaluate whether they                  
  thought that this was a reasonable selection or amount.  Do                  
  you have any sense of what the time frame for that would                     
  be?"                                                                         
                                                                               
  MR. SWANSON said, "It's difficult to answer because I don't                  
  know what form the borough has their information in.  Once                   
  it's given to me, I would try to give it real prompt review                  
  to help you in your deliberating process.  I can't tell you                  
  whether it's days or weeks without seeing what they've got."                 
                                                                               
  Number 476                                                                   
                                                                               
  MR. VERNON responded, "We do have the land selected in the                   
  form that it could be submitted immediately to the division.                 
  We'd be happy to do that."                                                   
                                                                               
  MR. SWANSON said, "If Mr. Vernon can supply it immediately,                  
  I will also review it immediately."                                          
                                                                               
  Number 485                                                                   
                                                                               
  REPRESENTATIVE DAVIES said, "I would appreciate that; if we                  
  could have the lands that the borough has selected, the maps                 
  be transmitted to DNR and have DNR respond to us on their                    
  observations on those particular selections."                                
                                                                               
  REPRESENTATIVE BUNDE said, "I'm reassured with the idea that                 
  you go through the normal land selection process and so I                    
  don't expect DNR to give away the farm and I don't feel                      
  particularly qualified to decide whether 187,000 or 180,000                  
  or 190,000 acres is the appropriate amount of land."                         
                                                                               
  Number 497                                                                   
                                                                               
  CHAIRMAN OLBERG said, "It's obvious in looking at the other                  
  boroughs that there is no formula.  You can base it on a lot                 
  of things.  So what we're talking about is whether or not we                 
  should allow the Lake and Peninsula Borough to select no                     
  more than 187,000 acres with the concurrence of the                          
  Department of Natural Resources."                                            
                                                                               
  REPRESENTATIVE DAVIES said, "I agree with that.  Mr. Swanson                 
  had indicated that he thought it might be helpful if the                     
  committee would consider whether or not there should be any                  
  kind of committee guidance on the resource values to be                      
  selected for in the lands, and I don't think there's any way                 
  we could know whether or not there are any issues there that                 
  we should be concerned about or not unless we have some                      
  other people look at the range of lands that are being                       
  considered."                                                                 
                                                                               
  CHAIRMAN OLBERG asked, "Is that a fair assessment of your                    
  remarks?"                                                                    
                                                                               
  MR. SWANSON replied yes.                                                     
                                                                               
  CHAIRMAN OLBERG questioned, "Natural Resources would like to                 
  look at the selections prior to this legislation passing?"                   
                                                                               
  MR. SWANSON said, "That's the recommendation we're making to                 
  you, of course it's your call to make but we can give you a                  
  lot better assessment in a week.  I think it's in the                        
  state's best interest to convey the types of land of a                       
  particular parcel the borough has identified."                               
                                                                               
  Number 520                                                                   
                                                                               
  REPRESENTATIVE WILLIAMS said, "It's going to the Resources                   
  Committee next.  How about if Mr. Swanson's concerns (are                    
  addressed there)?"                                                           
                                                                               
  MR. SWANSON said, "I would be more than happy to provide                     
  that information to the Resources Committee."                                
                                                                               
  CHAIRMAN OLBERG said, "To me, it's more a matter of                          
  curiosity than concern.  I'm not concerned about DNR giving                  
  away the farm or Lake and Peninsula Borough running off with                 
  our acres."                                                                  
                                                                               
  REPRESENTATIVE TOOHEY agreed.                                                
                                                                               
  Number 537                                                                   
                                                                               
  REPRESENTATIVE DAVIES said, "There are some state interest,                  
  we have some fiduciary responsibility."                                      
                                                                               
  CHAIRMAN OLBERG said, "The legislature will not make the                     
  determination of which lands are selected and which lands                    
  are not.  We will make the determination of what the maximum                 
  numbers of acres can be, according to this legislation.  On                  
  the other side of the coin, the state seems very slow to get                 
  land into private ownership and maybe this is a way to                       
  advance this process."                                                       
                                                                               
  Number 545                                                                   
                                                                               
  REPRESENTATIVE MOSES said, "DNR is still going to protect                    
  the state as to what the borough can select, so I think                      
  you're covered on that basis.  What's more important here is                 
  the state is starving with our budget crisis and whatnot for                 
  economic development and this is a step in the right                         
  direction to create economic development."                                   
                                                                               
  REPRESENTATIVE DAVIES said, "I don't have any disagreement                   
  with any of that.  I think that's all fine, I just think we                  
  have a certain responsibility to look over DNR's shoulders                   
  as the process goes along and make sure it's all in the                      
  state's best interest."                                                      
                                                                               
  Number 554                                                                   
                                                                               
  REPRESENTATIVE BUNDE said, "It seems like a reasonable                       
  compromise, moving it from here on to resources with those                   
  people at the DNR having a chance to provide more                            
  information there (in the House Resources Committee)."                       
                                                                               
  REPRESENTATIVE TOOHEY added, "That's DNR's job and they're                   
  much more qualified than we are."                                            
                                                                               
  CHAIRMAN OLBERG said, "Who are we to quibble with the                        
  Chairman of Resources about this matter.  He wants it, he                    
  gets it."                                                                    
                                                                               
  Number 560                                                                   
                                                                               
  REPRESENTATIVE TOOHEY moved that HB 259 be moved from                        
  committee with individual recommendations.  There were no                    
  objections.                                                                  
  HB 393 - UNINCORPORATED COMMUNITY CAP PROJECT GRAN                           
                                                                               
  CHAIRMAN OLBERG brought forth HB 393.                                        
                                                                               
  Number 581                                                                   
                                                                               
  REPRESENTATIVE MOSES, SPONSOR, testified, "HB 393 relates to                 
  the unincorporated community capital matching grant program.                 
  HB 393 amends AS 37.06.020, the eligibility requirements to                  
  participate in the unincorporated community capital matching                 
  grants program.  Currently, only unincorporated communities                  
  outside of organized boroughs can participate directly in                    
  the program.  Unincorporated communities within boroughs do                  
  not participate directly, and only receive a portion of the                  
  borough's allocation of the municipal capital matching                       
  grants program, if the borough sees fit.  HB 393 will level                  
  the playing field for all unincorporated communities by                      
  allowing those outside of boroughs, and those inside of                      
  boroughs where 25 or more residents permanently reside, and                  
  where there is no roadway connection to other communities,                   
  to participate in the program currently administered from                    
  the Department of Community and Regional Affairs.  The bill                  
  will take effect July 1, 1994.  When the language to develop                 
  the Capital Matching Grants Programs was drafted, there was                  
  an oversight in recognizing that the Lake and Peninsula                      
  Borough, for instance, has 13 unincorporated communities                     
  that must share the pool of Municipal grant monies that the                  
  borough receives.  I would appreciate prompt consideration                   
  for HB 393, so that the 24 unincorporated communities that                   
  will be made eligible to participate in the program can do                   
  so in FY '95.  This tries to straighten out an inequity.                     
  What happens now, you penalize communities for becoming                      
  organized in a borough.                                                      
                                                                               
  JACK FARGNOLI, SENIOR POLICY ANALYST, OFFICE OF MANAGEMENT                   
  AND BUDGET, OFFICE OF THE GOVERNOR stated, "Our position on                  
  the legislation is that we have no objection to this.  We                    
  have discussed this with Lake and Peninsula Borough.  While                  
  we don't have exactly the same view on whether or not it's                   
  unfair, we do understand where it's constituents are coming                  
  from insofar as whenever you draw a line someone's on one                    
  side of the line and someone's on the other side of the                      
  line.  We do have one concern about it.  Our point of view                   
  is that, as the legislation has been proposed, in its                        
  current form, it sets up two dynamics which are at odds with                 
  each other.  One of which is the constitutional mandate that                 
  boroughs have the responsibility for planning their capital                  
  projects within their borough districts and the associated                   
  constitutional mandate to provide for the greatest level                     
  government with the fewest number of elements of local                       
  government.  We feel that new unincorporated communities                     
  that are located within the boroughs grantees, would be at                   
  odds with that mandate.  So we feel it would improve the                     
  legislation and be more in keeping with constitutional                       
  mandates, if the boroughs involved were required to have                     
  some approval over the capital projects that are being                       
  proposed by the new eligibles, if you will.  This would                      
  allow the kind of coordination of capital project planning                   
  and development within boroughs which is the responsibility                  
  under the constitution of the boroughs."                                     
                                                                               
  REPRESENTATIVE BUNDE said, "We'd like to encourage                           
  unorganized areas of the state to organize and take more                     
  local responsibility.  Do you view that without this bill                    
  there's an impediment to organizing?"                                        
                                                                               
  MR. FARGNOLI said, "Would a change in the legislation be                     
  enough to change a community's mind is the question really                   
  as it would be valuated by a community.  There are lots of                   
  pluses and minuses in incorporating or staying                               
  unincorporated.  In general, we don't feel it would be a                     
  large determinant in that decision.  If this were a 300                      
  million dollar program, whatever incentives were there or                    
  disincentives, would be proportionately larger.  Certainly,                  
  at this current level, we don't think it would be a                          
  determining factor."                                                         
                                                                               
  Number 680                                                                   
                                                                               
  CHAIRMAN OLBERG clarified, "An organized city within a                       
  borough is already excluded and receives separate funding                    
  under this.  On one level you can consider it as giving                      
  unincorporated cities and incorporated cities within the                     
  borough equal footing on a funding standpoint.  The                          
  population of each of which is excluded from the grant for                   
  the borough itself."                                                         
                                                                               
  MR. FARGNOLI confirmed this, "Under Representative Moses'                    
  legislation, the proper populations are backed out so that                   
  there's no double counting of the populations."                              
                                                                               
  CHAIRMAN OLBERG said, "Borough oversight is a wonderful                      
  thing up to a point, but the moment you said that,                           
  `skimming' raced through my mind."                                           
                                                                               
  MR. FARGNOLI said, "There are limitations in the existing                    
  law that would limit the administrative costs that can be                    
  taken by any pass through entity."                                           
                                                                               
  REPRESENTATIVE BUNDE asked for a response from                               
  Representative Moses and Mr. Vernon on borough oversight.                    
                                                                               
  REPRESENTATIVE MOSES said, "I certainly don't have any                       
  problem with it, in fact I welcome it.  There was no intent                  
  to circumvent the borough government.  We welcome an                         
  amendment to take care of that."                                             
                                                                               
  TAPE 94-6, SIDE B                                                            
  Number 000                                                                   
                                                                               
  MR. VERNON said, "Even under the present program the borough                 
  has taken the money that it's entitled to, which is a                        
  relatively small amount, a little over $39,000 to spread                     
  among 12 unincorporated communities, which gives each of                     
  them around $3300 as I recall.  In any event, we would                       
  concur with the idea of the borough becoming a coordinator.                  
  In fact, with regard to the small amount of money which we                   
  have received under the fiscal '94 provision, that's exactly                 
  what we're doing."                                                           
                                                                               
  REPRESENTATIVE DAVIES asked, "How many such unincorporated                   
  communities are affected by this legislation in Lake and Pen                 
  and then statewide?"                                                         
                                                                               
  MR. FARGNOLI said, "We have a rough estimate so far from the                 
  Department of Community and Regional Affairs.  We're looking                 
  at about 23 or 24 communities, approximately 10 of which are                 
  within Lake and Pen."                                                        
                                                                               
  Number 047                                                                   
                                                                               
  REPRESENTATIVE DAVIES said, "I would be interested in a                      
  little bit of sensitivity analysis to the number 25.  How                    
  would those numbers change if we changed the limiting number                 
  of 25 persons."                                                              
                                                                               
  Number 055                                                                   
                                                                               
  MR. FARGNOLI said, "We had initially started out looking                     
  when we were exploring this topic with Lake and Peninsula                    
  Borough folks, of a potential population of about 78                         
  eligibles and that was on a rather inclusive 25 people or                    
  more living as a coherent social unit and that list of                       
  criteria that are in the proposed legislation, the one that                  
  brought that down to 24, would be whether they're roadless                   
  or not."                                                                     
                                                                               
  Number 076                                                                   
                                                                               
  REPRESENTATIVE SANDERS asked, "How many communities are                      
  currently participating in this?"                                            
                                                                               
  MR. FARGNOLI replied, "Right now, we have about 67 in the                    
  '94 version of the program in the unincorporated community                   
  side and I think that becomes 68 in fiscal '95.  So it would                 
  be 24 added to that."                                                        
                                                                               
  REPRESENTATIVE SANDERS continued, "If there's no fiscal                      
  note, that means you're just going to divide the pot out                     
  among more communities?"                                                     
                                                                               
  MR. FARGNOLI said, "The Department of Administration won't                   
  be affected by this.   They would get adjusted population                    
  numbers and that would be the only difference they would see                 
  programatically.  The DCRA feels... that the additional                      
  grant administration load that would come with 24 new                        
  eligible grantees could be done within their existing                        
  staffing.  As far as the funding, that's a question that                     
  would be before the legislature as a whole and the governor.                 
  The question really would begin at what's the overall                        
  funding targets set by the governor and proposed and                         
  appropriated by the legislature for the municipal and the                    
  unincorporated programs.  Would they look at those as one                    
  pot of money to be split two ways or two separate pots.                      
  Another option is to take money from the municipal side and                  
  move $600,000 over or add $600,000 to the unincorporated or                  
  keep the unincorporated at it's current and let everyone's                   
  allocation drop."                                                            
                                                                               
  REPRESENTATIVE DAVIES asked why there is a reference to the                  
  previous fiscal year in HB 393.                                              
                                                                               
  MR. FARGNOLI said, "I think the emphasis on the previous                     
  fiscal year is that in the other parts of the existing                       
  statute, the eligibility...is driven by their standing as of                 
  the previous fiscal year."                                                   
                                                                               
  Number 222                                                                   
                                                                               
  LAMAR COTTEN, LOBBYIST FOR LAKE PENINSULA BOROUGH, testified                 
  in support of HB 393, saying, "Lake and Pen is like many                     
  other boroughs in rural Alaska where they work directly and                  
  are a chief source of funding for capital projects.  It's                    
  not out of the ordinary for them to participate or provide                   
  oversight as it stands now for such projects.  Typically, a                  
  lot of those projects relate back to the services that the                   
  borough, either directly or indirectly, provide.  So I think                 
  the intent of oversight by the borough is compatible with                    
  how Lake and Pen and Aleutians East and other rural boroughs                 
  have operated.  The constitution talks about limited number                  
  of governments in rural Alaska...I think it's unfair to some                 
  small communities that have reviewed the issue of                            
  incorporating but...shouldn't be forced into it simply to                    
  receive funds such as this program.  So instead of adding                    
  another level of government...the basic function of                          
  government is being provided by one entity and simply adding                 
  another hat to a small group of people sometimes, I don't                    
  think really serves a greater purpose of providing services.                 
  With respect to the issue of population, I think the way                     
  this is written is good.  All boroughs or communities are,                   
  for some reason or another, forced to go through this                        
  process of identifying who actually does live in a community                 
  for various grants.  So I think they do update their                         
  population base every twelve months."                                        
                                                                               
  REPRESENTATIVE DAVIES cautioned that the language regarding                  
  population data is vague in HB 393 and suggested that it                     
  specify that DCRA should arbitrate the population of                         
  communities.                                                                 
                                                                               
  MR. COTTEN agreed and said, "They currently are the ones                     
  that review and sign off on the populations for the other                    
  programs."                                                                   
                                                                               
  Number 294                                                                   
                                                                               
  KAREN BRAND, STAFF FOR REPRESENTATIVE MOSES, stated "The                     
  reason we put that qualifier in there is that without it, we                 
  were coming up with several definitions of communities that                  
  would now qualify.  There were groups of residents, 25 or                    
  more, that would qualify as being a separate community and                   
  that was not the intent."                                                    
                                                                               
  CHAIRMAN OLBERG said, "But my little bity communities in                     
  organized boroughs are on the road system.  Where does that                  
  leave them?"                                                                 
                                                                               
  MS. BRAND said, "That's the other side of the hat.  We had                   
  to come up with a qualifier and after many deliberations                     
  with the legal drafter of trying to pare down, it hurt some                  
  of our communities also, it omitted them."                                   
                                                                               
  REPRESENTATIVE BUNDE reminded the committee, "There was some                 
  discussion of an amendment... that would keep the borough in                 
  the loop."                                                                   
                                                                               
  CHAIRMAN OLBERG said, "My staff and Representative Moses'                    
  staff and the department may draft something in the way of a                 
  committee substitute."                                                       
                                                                               
  REPRESENTATIVE DAVIES said, "I was wondering if there might                  
  be a qualifier that depended on distance along the road."                    
                                                                               
  There was some discussion about possible qualifying                          
  language.                                                                    
                                                                               
  CHAIRMAN OLBERG said, "I think this one needs a little                       
  reflection and work," and announced adjournment at 2:11 p.m.                 
                                                                               

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