Legislature(1995 - 1996)

02/08/1996 01:12 PM CRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
              HOUSE COMMUNITY AND REGIONAL AFFAIRS                             
                       STANDING COMMITTEE                                      
                        February 8, 1996                                       
                           1:12 p.m.                                           
 MEMBERS PRESENT                                                               
 Representative Ivan Ivan, Co-Chair                                            
 Representative Alan Austerman, Co-Chair                                       
 Representative Kim Elton                                                      
 Representative Pete Kott                                                      
 Representative Irene Nicholia                                                 
 MEMBERS ABSENT                                                                
 Representative Jerry Mackie                                                   
 Representative Al Vezey                                                       
 COMMITTEE CALENDAR                                                            
 REGIONAL AFFAIRS                                                              
      -  PASSED OUT OF COMMITTEE                                               
 * HOUSE BILL NO. 391                                                          
 "An Act relating to succession to assets and liabilities of                   
 dissolved municipalities."                                                    
      -  PASSED CS HB 391(CRA) OUT OF COMMITTEE                                
 HOUSE BILL NO. 358                                                            
 "An Act relating to dog mushers' contests."                                   
      -  PASSED CS HB 358(CRA) OUT OF COMMITTEE                                
 (* First Public Hearing)                                                      
 PREVIOUS ACTION                                                               
 BILL:  HB 391                                                               
 SPONSOR(S): REPRESENTATIVE(S) IVAN                                            
 JRN-DATE     JRN-DATE             ACTION                                      
 01/05/96      2369    (H)   PREFILE RELEASED                                  
 01/08/96      2369    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 01/08/96      2369    (H)   CRA, JUDICIARY, FINANCE                           
 01/25/96              (H)   CRA AT 01:00 PM CAPITOL 124                       
 01/25/96              (H)   MINUTE(CRA)                                       
 02/08/96              (H)   CRA AT 01:00 PM CAPITOL 124                       
 BILL:  HB 358                                                                
 SPONSOR(S): REPRESENTATIVE(S) IVAN                                            
 JRN-DATE     JRN-DATE             ACTION                                      
 12/29/95      2359    (H)   PREFILE RELEASED                                  
 01/08/96      2359    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 01/08/96      2360    (H)   CRA, FINANCE                                      
 01/23/96              (H)   CRA AT 01:00 PM CAPITOL 124                       
 01/23/96              (H)   MINUTE(CRA)                                       
 02/08/96              (H)   CRA AT 01:00 PM CAPITOL 124                       
 WITNESS REGISTER                                                              
 JEFF SMITH, Director                                                          
 Division of Community and Rural Development                                   
 Department of Community and Regional Affairs                                  
 333 West Fourth Avenue, Suite 220                                             
 Anchorage, Alaska  99501                                                      
 Telephone:  (907) 269-4607                                                    
 POSITION STATEMENT:  Presented department's position and answered             
                      questions on EO 93.                                      
 DONNA TOLLMAN, President                                                      
 ARDOR Association; and Executive Director,                                    
    Copper Valley Economic Development Council                                 
 P.O. Box 9                                                                    
 Glennallen, Alaska  99588                                                     
 Telephone:  (907) 822-5001                                                    
 POSITION STATEMENT:  Supported EO 93.                                         
 KIMBERLY METCALFE-HELMAR, Special Assistant                                   
 Office of the Commissioner                                                    
 Department of Community and Regional Affairs                                  
 P.O. Box 112100                                                               
 Juneau, Alaska  99811-2100                                                    
 Telephone:  (907) 465-4898                                                    
 POSITION STATEMENT:  Presented department's position and answered             
                      questions on EO 93.                                      
 JOHN WALSH, Legislative Assistant to                                          
    Representative Richard Foster                                              
 Alaska State Legislature                                                      
 State Capitol Building, Room 410                                              
 Juneau, Alaska  99801                                                         
 Telephone:  (907) 465-3789                                                    
 POSITION STATEMENT:  Testified on EO 93.                                      
 TOM WRIGHT, Legislative Assistant                                             
    to Representative Ivan Ivan                                                
 Alaska State Legislature                                                      
 State Capitol Building, Room 503                                              
 Juneau, Alaska  99801                                                         
 Telephone:  (907) 465-4942                                                    
 POSITION STATEMENT:  Presented sponsor statement and explained                
                      changes in the committee substitute for                  
 MARJORIE VANDOR, Assistant Attorney General                                   
 Civil Division (Juneau)                                                       
 Governmental Affairs Section                                                  
 Department of Law                                                             
 P.O. Box 110300                                                               
 Juneau, Alaska  99811-0300                                                    
 Telephone:  (907) 465-3600                                                    
 POSITION STATEMENT:  Answered questions on HB 391.                            
 JOHN BAKER, Assistant Attorney General                                        
 Natural Resources Section                                                     
 Civil Division (Anchorage)                                                    
 Department of Law                                                             
 1031 West Fourth Avenue, Suite 200                                            
 Anchorage, Alaska  99501-1994                                                 
 Telephone:  (907) 269-5100                                                    
 POSITION STATEMENT:  Answered questions on HB 391                             
 RON SWANSON, Director                                                         
 Central Office                                                                
 Division of Land                                                              
 Department of Natural Resources                                               
 3601 C Street, Suite 1122                                                     
 Anchorage, Alaska  99503-5947                                                 
 Telephone:  (907) 762-2692                                                    
 POSITION STATEMENT:  Presented department's position on HB 391.               
 PATRICK K. POLAND, Director                                                   
 Central Office                                                                
 Division of Municipal and Regional Assistance                                 
 Department of Community and Regional Affairs                                  
 333 West Fourth Avenue, Suite 319                                             
 Anchorage, Alaska  99501                                                      
 Telephone:  (907) 269-4578                                                    
 POSITION STATEMENT:  Presented department's position on HB 391.               
 ANTHONY CAOLE, Tribal Administrator                                           
 Village of Quinhagak                                                          
 General Delivery                                                              
 Quinhagak, Alaska  99655                                                      
 Telephone:  (907) 556-8167                                                    
 POSITION STATEMENT:  Testified on HB 391.                                     
 DARIO NOTTI, Legislative Intern                                               
 Office of Representative Ivan Ivan                                            
 Alaska State Legislature                                                      
 State Capitol Building, Room 503                                              
 Juneau, Alaska  99801                                                         
 Telephone:  (907) 465-4942                                                    
 POSITION STATEMENT:  Presented committee substitute and discussed             
                      changes to HB 358.                                       
 DENNIS POSHARD, Director                                                      
 Charitable Gaming Division                                                    
 Department of Revenue                                                         
 P.O. Box 110440                                                               
 Juneau, Alaska  99811-0440                                                    
 Telephone:  (907) 465-2229                                                    
 POSITION STATEMENT:  Presented department's position and answered             
                      questions on HB 358.                                     
 VINCENT USERA, Assistant Attorney General                                     
 Commercial Section                                                            
 Civil Division (Juneau)                                                       
 Department of Law                                                             
 P.O. Box 110300                                                               
 Juneau, Alaska  99811-0300                                                    
 Telephone:  (907) 465-3600                                                    
 POSITION STATEMENT:  Answered questions on HB 358.                            
 ACTION NARRATIVE                                                              
 TAPE 96-11, SIDE A                                                            
 Number 0001                                                                   
 CO-CHAIR IVAN IVAN called the House Community and Regional Affairs            
 Committee meeting to order at 1:12 p.m.  Members present at the               
 call to order were Representatives Ivan, Austerman and Kott;                  
 Representative Elton joined the meeting shortly thereafter.                   
 Members absent were Representatives Mackie, Vezey and Nicholia.               
 Number 0074                                                                   
 CO-CHAIR IVAN IVAN noted that committee packets for EO 93 contained           
 a copy of the order; zero fiscal notes from the Department of                 
 Commerce and Economic Development and the Department of Community             
 and Regional Affairs; and the Governor's transmittal letter.  Co-             
 Chair Ivan informed the committee that any action opposing EO 93              
 must take place by March7, 1996; otherwise, the executive order               
 would stand.                                                                  
 Number 0153                                                                   
 JEFF SMITH, Director, Division of Community and Rural Development,            
 Department of Community and Regional Affairs (DCRA), testified via            
 teleconference from Anchorage in support of EO 93.  The department            
 believed that administering the ARDOR program would allow DCRA to             
 better integrate the program, using DCRA's regional office staff to           
 provide more specific technical assistance to individual ARDORs.              
 The department also thought it could help new ARDORs start up in a            
 more effective and efficient manner.  Mr. Smith noted that DCRA               
 would administer the program for approximately $60,000, down from             
 $250,000, with the savings due to utilizing DCRA's existing                   
 resources and regional offices, which were already involved in                
 economic development programs.                                                
 Number 0286                                                                   
 CO-CHAIR AUSTERMAN referred to the budget being reduced to $60,000            
 and asked Mr. Smith if that was due to federal cutbacks.                      
 MR. SMITH replied that some was due to federal reductions but there           
 were also reductions the Governor had included in the FY 97 budget.           
 Number 0326                                                                   
 CO-CHAIR AUSTERMAN asked how much of the $60,000 was federal money.           
 MR. SMITH believed none of it was.                                            
 CO-CHAIR AUSTERMAN asked if the ARDOR program would receive no                
 federal funding or whether that meant their budget was more than              
 Number 0358                                                                   
 MR. SMITH replied they did not anticipate any federal receipts for            
 the program next year.                                                        
 CO-CHAIR IVAN asked Mr. Smith how many ARDORs currently existed in            
 Number 0374                                                                   
 MR. SMITH responded he was not sure.                                          
 CO-CHAIR AUSTERMAN replied that he had just been signaled that                
 there were 12.                                                                
 MR. SMITH agreed that sounded right.                                          
 CO-CHAIR AUSTERMAN asked if they were talking about dividing                  
 $60,000 among the 12 ARDORs.                                                  
 Number 0420                                                                   
 MR. SMITH clarified that the $60,000 was for administration.  The             
 budget, including administration, was $650,000 for FY 97.  He added           
 that none of that was state general fund money.  Instead, they                
 would be working with the Alaska Industrial Development and Export            
 Authority (AIDEA), which would be expanding their investments                 
 throughout Alaska.  The DCRA would be utilizing those organizations           
 and corporate receipts from AIDEA to curry the atmosphere in areas            
 where economic development projects would be viable.                          
 Number 0536                                                                   
 DONNA TOLLMAN, President, ARDOR Association, and Executive                    
 Director, Copper Valley Economic Development Council, testified via           
 teleconference from Glennallen in support of EO 93.  Her                      
 organization's concern, she said, was that they be allowed to                 
 continue to serve the needs of the entire state of Alaska in                  
 economic development, in the manner they were currently doing it.             
 Number 0599                                                                   
 CO-CHAIR AUSTERMAN asked Ms. Tollman how much of a cut most ARDORs            
 would receive with the loss of federal funds.                                 
 MS. TOLLMAN explained that the $250,000 which DCED had was a match            
 with U.S. Department of Commerce, Economic Development                        
 Administration (EDA) grant funding.  The loss of funds would                  
 eliminate the ARDORs' ability to meet with each other.  Currently,            
 their organization received parts of two salaries and two full                
 salaries, for administration and technical assistance through the             
 ARDOR program.  Using EDA monies, they were also working on an                
 infrastructure project; each year, they tried to tackle an issue              
 such as that.  The reduction in funds would affect their ability to           
 accomplish such a major statewide task.  In terms of funding to               
 each individual organization, Ms. Tollman said, they had received             
 a substantial cut the previous year and did not anticipate                    
 receiving much larger amounts this year.  She said they were                  
 currently "at low maintenance level."  She reiterated that they had           
 to match all of those funds in order to receive them.  That was               
 done through a process using federal funds that were project-                 
 specific, as well as private sector contributions.                            
 Number 0717                                                                   
 CO-CHAIR IVAN noted for the record that Representative Irene                  
 Nicholia had joined the meeting.                                              
 KIMBERLY METCALFE-HELMAR, Special Assistant, Office of the                    
 Commissioner, Department of Community and Regional Affairs,                   
 acknowledged that the committee had questions about the budget.               
 Although she denied being an expert on that subject, she did know             
 that of the $250,000 that DCED had in their budget, $125,000 came             
 from a federal Economic Development Association (EDA) grant.  She             
 said DCED was in the sixth year of a three-year grant cycle.  They            
 had extended it three years beyond what they originally thought               
 they could, she explained.  That money would no longer be there               
 after the transfer occurred.  It was not expected, even if the                
 program had remained in DCED this year.                                       
 Number 0775                                                                   
 MS. METCALFE-HELMAR said she understood that the $125,000, a state            
 match, had been reduced to $60,000.  She explained that DCRA had              
 asked to fund one grants administrator position.  At DCED, she                
 noted, they had run the program using two grants administrators;              
 there had also been a $50,000 budget for travel that would no                 
 longer be there.  From her understanding, each ARDOR received a               
 yearly grant of approximately $50,000.                                        
 CO-CHAIR AUSTERMAN asked if that was from the state.                          
 MS. METCALFE-HELMAR replied that it came from the ARDOR grant fund            
 money, a total of $650,000.  This year, she said, that money came             
 from AIDEA corporate receipts.  It would no longer be general fund            
 money, as put into the Governor's budget this year, as she                    
 understood it.                                                                
 Number 0851                                                                   
 REPRESENTATIVE PETE KOTT asked who would pick up the moving costs             
 for transferring the program from DCED to DCRA.                               
 MS. METCALFE-HELMAR responded there should be no moving costs;                
 there might be files to be moved, but no positions were moving with           
 the transfer.  There would be no furniture or people moving.                  
 Number 0898                                                                   
 JOHN WALSH, Legislative Assistant to Representative Richard Foster,           
 explained that Representative Foster was Co-Chairman for the House            
 Finance Committee.  Mr. Walsh stated that EO 93 was evidently an              
 attempt by the Administration to streamline operations, in light of           
 budget changes on the federal level and reorganization of plans               
 internally.  He acknowledged that DCRA had a rural perspective and            
 outreach in their mission statement.                                          
 Number 0945                                                                   
 MR. WALSH voiced concern about the risk of taking funds from AIDEA,           
 based on the Governor's veto the previous year of the legislature's           
 attempt to take funds from AIDEA.  If the fund shift did not occur,           
 he said, the program could be vulnerable.  Whether or not it was a            
 House Finance Committee issue, it was certainly an issue in the               
 budget, Mr. Walsh said, and one that needed brought to the                    
 attention of the current committee.                                           
 Number 1030                                                                   
 CO-CHAIR AUSTERMAN mentioned that one of the questions he had was             
 how the Governor could use AIDEA corporate receipts, whereas the              
 legislature had to allocate those funds on a yearly budget basis.             
 He suggested that the House Finance Committee consider that                   
 Number 1087                                                                   
 CO-CHAIR AUSTERMAN moved that the committee pass EO 93 out of                 
 committee, with individual recommendations; Representative Kim                
 Elton added that there were attached zero fiscal notes.  There                
 being no objection, EO 93 was moved from committee.                           
 HB 391 - DISSOLVED MUNICIPALITIES/SUCCESSION                                
 Number 1118                                                                   
 CO-CHAIR IVAN noted that a committee substitute for HB 391 had been           
 submitted to committee members earlier in the week.                           
 REPRESENTATIVE KOTT moved that the committee substitute be adopted            
 for discussion purposes.  There being no objection, it was so                 
 Number 1143                                                                   
 CO-CHAIR IVAN explained that CS HB 391 was the result of work                 
 between the Department of Law, the Department of Natural Resources            
 (DNR) and the Legal Services Division of the legislature.  He noted           
 that on teleconference were DCRA representatives Pat Polland,                 
 Director, Division of Municipal and Regional Assistance, and Dan              
 Bockhorst of the Local Boundary Commission; Ron Swanson from DNR;             
 and John Baker from the Department of Law.                                    
 Number 1192                                                                   
 TOM WRIGHT, Legislative Assistant to Representative Ivan, sponsor             
 of HB 391, noted that the original hearing on HB 391 had been                 
 postponed until differences among the various departments had been            
 resolved.  The resolution of those differences, he said, were found           
 in CS HB 391.  He read the sponsor statement for HB 391:                      
 "The bill was introduced by request of the Department of Community            
 and Regional Affairs and the Local Boundary Commission.  Currently,           
 the state automatically becomes the successor to a dissolved                  
 municipality unless another municipal government assumes such                 
 responsibility.  In most cases, the state becomes the successor by            
 default.  This means the state takes over the responsibility and              
 liability of owning properties such as solid waste facilities, bulk           
 fuel storage facilities, power utilities, sewer systems and other             
 facilities that were previously owned by the municipality.                    
 "House Bill 391 allows the Local Boundary Commission to designate             
 a Native council or nonprofit corporation to be a direct successor            
 to a dissolved municipality.  The terms of the transfer of assets             
 and liabilities of the dissolved municipality must be approved by             
 the Department of Law.  The bill also specifies that any transfer             
 of assets or liabilities does not constitute recognition by the               
 state of that organization."                                                  
 Number 1268                                                                   
 MR. WRIGHT explained that the changes made in the committee                   
 substitute, draft LS 1371\C, were recommended by DCRA, the                    
 Department of Law and DNR.  Mr. Wright noted that the document                
 before him, entitled "Changes in Committee Substitute for HB 391              
 (CRA)," was presented to the committee members at the time the                
 committee substitute was distributed.  He read from the document              
 and added further comments:                                                   
 "The first change occurs in the title.  It adds `and to the                   
 administration and disposal of certain land dissolved                         
 municipalities.'  This reflects the various changes made throughout           
 the bill."                                                                    
 Number 1316                                                                   
 "The second change occurs in Section 1, line 6.  At the suggestion            
 of the Department of Natural Resources, before the Local Boundary             
 Commission and the Department of Law decide where a dissolved                 
 municipality's former state land assets will be transferred, DNR              
 must be consulted."                                                           
 Number 1330                                                                   
 "The third change occurs in Section 1, line 7.  Reference is made             
 to AS 38.05.825(d); this was suggested by DNR.  This statute                  
 requires that tide and submerged land conveyed revert to the state            
 upon dissolution of the municipality.  The reason for this, as                
 stated by DNR in their fiscal note, is to protect the public                  
 interest, as established through the public trust doctrine."                  
 Number 1350                                                                   
 "The fourth change is Section 1, line 13.  Moved the state as a               
 successor from the first option to the last option, and that is               
 noted in subsection (b), found on page 2, line 6, of the committee            
 substitute.  This addresses the Department of Law's concern that              
 the state succeed to the dissolved municipality's assets or                   
 liabilities only if there is no other successor, as another                   
 municipality, under current law.  This lessens the liability for              
 the state in the succession process."                                         
 Number 1380                                                                   
 "The fifth change occurs in Section 1, line 14."  Mr. Wright noted            
 this was still on the first page.  "Reference is changed from `a              
 Native council organized under federal law' to `a council formed              
 under 25 U.S.C. 473(a).'  This change was recommended by the                  
 Department of Law.  According to the department, a Native council             
 organized under federal law is generally considered to be a federal           
 IRA council.  This conflicts with current regulations and practice,           
 which allow traditional councils, as well as IRAs and nonprofit               
 corporations, to be deeded certain real properties from dissolved             
 municipalities.  Also, in the original bill, reference was made to            
 `within the entire area of the dissolved municipality', which may             
 have caused problems, since Indian county is not recognized in                
 Alaska, except in Metlakatla, and it could be that the area where             
 a Native council operates may be different from what were the                 
 boundaries of the former municipality."                                       
 Number 1429                                                                   
 "The sixth change occurs in Section 1, page 2, line 18.  The change           
 in subsection (c) (lines 18-19) is a change in drafting and                   
 technical in nature.  This change was recommended by the Department           
 of Community and Regional Affairs."                                           
 Number 1440                                                                   
 "The seventh change is in Section 2, page 3, line 4.  The original            
 bill would have deleted authority of the commissioner of DC&RA to             
 dispose of relevant trust lands to an appropriate village entity if           
 a municipality dissolves.  Current regulations allow the                      
 commissioner of DC&RA to transfer the lands of a dissolved                    
 municipality to an appropriate village entity.  Deletion of this              
 authority would make current regulations inapplicable to land asset           
 distribution in the event of a municipal dissolution.  Therefore,             
 the Department of Law recommended reinstating this authority."                
 Number 1464                                                                   
 "The eighth change is Section 3."  Mr. Wright noted this was a                
 whole new section, not found in the original bill.  He said, "This            
 is a recommendation by the Department of Law.  This requires that             
 the transfer of land by sale, lease, right of way, easement or                
 permit may be made by the commissioner only after the approval of             
 the appropriate village entity by resolution filed with the                   
 Number 1483                                                                   
 "The final change is found in a whole new section, Section 4.                 
 Language was added to AS 44.47.150(c).  This states that after one            
 complete fiscal year after incorporation of a municipality that               
 includes all or part of the area of a dissolved municipality, land            
 or interest in land acquired under (a)(3) of this section and                 
 retained by the state will be conveyed without cost to the newly              
 incorporated municipality."                                                   
 Number 1510                                                                   
 MR. WRIGHT concluded by saying Marjorie Vandor was present from the           
 Department of Law to answer questions.  He noted that John Baker,             
 who was well-versed in Native lands issues, was also present via              
 Number 1566                                                                   
 MARJORIE VANDOR, Assistant Attorney General, Governmental Affairs             
 Section, Civil Division (Juneau), Department of Law, said she                 
 believed the ANCSA land issues were not addressed in HB 391, which            
 dealt with municipal trust lands.  She indicated she would defer to           
 John Baker for clarification, but said the only lands that DCRA had           
 control over under HB 391 were municipal lands given to a city;               
 once it dissolved, those lands needed to revert to the state or be            
 moved into trust again with the new entity.  Ms. Vandor reiterated            
 that it did not address ANCSA trust lands at all.                             
 Number 1594                                                                   
 JOHN BAKER, Assistant Attorney General, Natural Resources Section,            
 Civil Division (Anchorage), Department of Law, testified via                  
 teleconference.  He said he was not too familiar with HB 391.  He             
 did not have an understanding one way or another whether HB 391               
 would allow the trust lands acquired from the village corporations            
 under 14(c) to then go to the village council; if they did,                   
 however, it would certainly be subject to a reversionary interest,            
 whether HB 391 accomplished it or not.  What the state could be a             
 party to, consistent with its trust responsibilities under Title              
 29, as well as under federal law under ANCSA, would be to make the            
 conveyance subject to a reversionary interest, so that it would               
 revert to the state in the event a municipality ever formed again.            
 Mr. Baker asked if that answered the question.                                
 Number 1640                                                                   
 CO-CHAIR IVAN expressed appreciation for the response and indicated           
 it answered his questions.  He noted they were dealing with land              
 that already had been conveyed or property of the municipal                   
 government at this point in time, not six months or a year from               
 Number 1668                                                                   
 REPRESENTATIVE KOTT referred to page 2, lines 8 - 11, and asked for           
 an explanation.  He said it left him with the impression that if an           
 entity went belly-up or into bankruptcy, the state would end up               
 taking over liabilities.                                                      
 Number 1686                                                                   
 MS. VANDOR replied that was if a municipality dissolved under the             
 statute right now, which required a petition process and going to             
 the Local Boundary Commission.  Depending on the type of petition             
 process that occurred, it either came directly to the legislature             
 with a recommendation to allow dissolution and/or it could involve            
 a vote of the people to allow dissolution.  Ms. Vandor noted that             
 several instances had occurred where there were inactive cities;              
 DCRA had, on their behalf, petitioned for them.  This was not                 
 dealing with bankruptcy, she emphasized.  If a municipality went              
 bankrupt, that was handled in the bankruptcy court, through a                 
 completely different proceeding.                                              
 Number 1717                                                                   
 MS. VANDOR explained what subsection (b) accomplished.  Under                 
 current law, the state was the successor to an asset if there was             
 no municipality to take over.  In most cases, she said, there was             
 not, because most of the dissolving entities were small, second-              
 class cities in the unorganized borough.  It was not as if they               
 were being absorbed into an organized borough, which would happen             
 by operation of law, she added.                                               
 Number 1741                                                                   
 MS. VANDOR explained that by arranging and setting out who could              
 succeed to the assets of a dissolving municipality, the Local                 
 Boundary Commission was given a directive, in subsection (b), to              
 grant a preference to any of the four listed entities before the              
 state could become the successor, by operation of law.  In other              
 words, they first looked at 1) another municipality; 2) an IRA                
 council, which was a corporation providing certain protections in             
 transferring title to land and assets; 3) a traditional council;              
 and 4) a nonprofit corporation, which was a community association,            
 such as Red Devil or Point Baker, able to accept state revenue                
 sharing money for unincorporated communities in order to provide              
 public services.  If none of those four existed or it was not                 
 feasible or practicable to have the assets go to them, then the               
 assets would revert to the state.  If that happened, the state                
 could then contract to provide those services or take over those              
 assets.  That had always been provided in law, Ms. Vandor added.              
 No one expected the state to really run it; they would probably               
 contract out for services.                                                    
 Number 1864                                                                   
 RON SWANSON, Director, Central Office, Division of Land, Department           
 of Natural Resources, testified via teleconference from Anchorage             
 that the committee substitute had addressed his concerns and that             
 he had no further comments.                                                   
 Number 1880                                                                   
 PATRICK K. POLAND, Director, Central Office, Division of Municipal            
 and Regional Assistance, Department of Community and Regional                 
 Affairs, testified via teleconference from Anchorage.  He referred            
 to written testimony he had submitted to the committee earlier that           
 day and stated support for CS HB 391.                                         
 Number 1920                                                                   
 ANTHONY CAOLE, Tribal Administrator, Native Village of Quinhagak,             
 testified via teleconference.  He mentioned that he had no copy of            
 the bill; however, he had a copy of the Local Boundary Commission's           
 policy concerning the transfer of municipal assets to IRA councils.           
 He voiced concern about 1) the disclaimer that the conveyance did             
 not constitute recognition of tribal status and 2)  the conveyance            
 containing a waiver of claims of Indian country.  Mr. Caole                   
 wondered, under HB 361, whether the IRA councils would still have             
 to sign a waiver stating the lands being received from the city               
 would not constitute Indian country.                                          
 Number 2003                                                                   
 MS. VANDOR replied yes, there would have to be a waiver of                    
 sovereign immunity in order to gain title to the assets, whether it           
 was land or personal assets of the dissolved municipality.  Also,             
 if there was land to be transferred, a statement would be a                   
 required that no assertion of Indian country would be made at a               
 future time.  That was in the agreement, she added.                           
 Number 1990                                                                   
 MR. CAOLE asked if there was a reason why the language could not be           
 neutral on the issue of Indian country.                                       
 Number 2003                                                                   
 MS. VANDOR said she believed at this point, based on the Venetie            
 case and the status of such lands in Alaska, it was the policy of             
 the Department of Law and the Local Boundary Commission to require            
 that such a statement be included.                                            
 Number 2020                                                                   
 MR. CAOLE responded that it was rather insulting for IRA councils             
 to accept land and then sign a waiver saying that land did not                
 constitute Indian country.  He asked again if it would be possible            
 to change the language so that it was neutral or so that the state            
 could say it was still subject to federal courts.                             
 Number 2037                                                                   
 MS. VANDOR pointed out that the land being transferred under HB 361           
 was municipal trust land.  It had a legal status already, existing            
 in state law.  In many cases, about which Ms. Vandor said she could           
 not speak for certain, some of the lands were transferred to the              
 state from the federal government.  She emphasized that the lands             
 had a legal status now.  It was only those lands, she said, that              
 were being addressed and transferred under the agreement.  Under              
 any quitclaim deed the state would give to an IRA council or tribal           
 village, the recipient would only receive as much interest in the             
 land as the municipality had or the state had.  It would always               
 have that municipal trust status, Ms. Vandor added.  She said she             
 could not understand why there was a problem on the assertion of              
 Indian country because it could not constitute that.  The question            
 was more "why would we have to litigate over this in the future."             
 The state would like assertions of Indian country to be waived so             
 the land would keep its legal status, avoiding problems.  The                 
 Venetie case, she said, did not concern municipal trust lands.              
 Number 2090                                                                   
 MR. CAOLE replied if he was not mistaken, some of the municipal               
 lands were originally tribal lands that were being transferred to             
 the cities and then, after dissolution, being transferred to an IRA           
 council.  He asserted it was a situation concerning lands that were           
 once tribal lands, potentially Indian country, being transferred to           
 the cities and obtaining a lesser status, then being transferred              
 back to the IRA councils, which could not assert any jurisdiction             
 on those lands.                                                               
 Number 2116                                                                   
 MR. BAKER expressed his understanding that these lands were the               
 former ANCSA Section 14(c)(3) lands.  The relationship between                
 those lands and the municipal trust under state law was part of the           
 design from ANCSA, which directed that lands in the core village              
 areas would be part of the village corporation entitlements, to               
 then be conveyed either to existing municipalities in those                   
 villages or to the state to hold in trust for future                          
 Number 2150                                                                   
 MR. BAKER explained that in the present situation, those                      
 conveyances had already been made, only now the formerly existing             
 municipalities were dissolved.  The problem was that no one knew              
 whether the cities might form again in the future.  Under existing            
 federal and state law, the state still had a responsibility to                
 protect the municipal trust status of those lands.  Whether there             
 might be a claim that those lands were at some time considered                
 tribal lands, he did not know.  However, the only legal status                
 extended by the federal government had been the progression of                
 being federal lands, then ANCSA village corporation lands, then               
 municipal lands subject to the state trust.                                   
 Number 2203                                                                   
 MR. CAOLE commented that it was frustrating for the IRA councils,             
 which were trying to govern the communities.  He expressed concern            
 over having to sign a waiver of jurisdiction on the land.  He cited           
 the possibility of a public safety officer not knowing what to do             
 about an intoxicated person because of lack of jurisdiction.  He              
 did not know why "the state is so afraid to allow the IRA councils            
 to have some jurisdiction."                                                   
 Number 2242                                                                   
 CO-CHAIR IVAN asked if there was any further testimony and thanked            
 Mr. Banker and Ms. Vandor for their contribution.                             
 Number 2258                                                                   
 REPRESENTATIVE NICHOLIA moved to pass CS HB 391 out of committee,             
 with individual recommendations.  There being no objection, it was            
 so ordered.                                                                   
 HB 358 - DOG MUSHING CONTESTS/GAMES OF CHANCE                               
 Number 2273                                                                   
 CO-CHAIR IVAN noted that some of the concerns expressed about HB
 358 in a previous hearing had been worked on by his staff and the             
 Division of Charitable Gaming.  He said a committee substitute had            
 been submitted to committee members.                                          
 Number 2290                                                                   
 REPRESENTATIVE NICHOLIA moved to adopt CS HB 358 for discussion               
 purposes.  There being no objection, it was so ordered.                       
 Number 2309                                                                   
 DARIO NOTTI, Legislative Intern, Office of Representative Ivan                
 Ivan, sponsor of the bill, presented the committee substitute for             
 HB 358 and outlined the changes.  He explained that the only                  
 changes were in Section 2.  The first change was a specification              
 that the games of chance must be operated by dog mushers'                     
 associations, to ensure that proceeds would go to the cause                   
 intended.  The second change was a definition of the three elements           
 of chance specifying that the first element was the primary                   
 determinant, with the second and third elements being tie-breakers.           
 The third change was to drop the 200-mile minimum, amending it to             
 include any race recognized by the Charitable Gaming Division.  The           
 purpose of this was to include the entire sport and to avoid an               
 inference that it was special legislation.                                    
 Number 2417                                                                   
 CO-CHAIR AUSTERMAN referred to page 2, section (B), lines 6 and 7,            
 and asked if the "primary determinant of success" was the winner.             
 MR. NOTTI affirmed that was correct.                                          
 REPRESENTATIVE ELTON referred to "primary determinant of success,"            
 saying he read it in terms of the three different elements.  One              
 element would be primary, being the winning person or the winning             
 time, for example; that would be how the prize would initially be             
 awarded.  However, if there were a tie, the second element would be           
 used; if there were still a tie, the third element would be used.             
 Representative Elton said he had not read it as necessarily being             
 the winning musher, but rather that each race would have to specify           
 the primary determinant of success, whether it be time of finish or           
 another element.                                                              
 TAPE 96-11, SIDE B                                                            
 Number 0002                                                                   
 CO-CHAIR AUSTERMAN asked if the primary determinant of success was            
 defined either in the bill or in statute.                                     
 DENNIS POSHARD, Director, Charitable Gaming Division, Department of           
 Revenue, replied no, he did not believe "success" was defined                 
 anywhere in statute.  Neither was "winner."  Certainly, he said,              
 there would be other choices of words that may read better.  He               
 thought there were not many other ways to interpret the bill other            
 than the interpretation provided by Representative Elton.  Mr.                
 Poshard felt that the "primary determinant of success" in the                 
 contest, meaning whether or not a person won, would be the first              
 element; the second element would be the secondary determinant of             
 success and so forth.  He added that was how he himself read the              
 bill and that was how the Charitable Gaming Division would                    
 interpret it.  The division would certainly ensure that contests              
 were structured in that manner, he added.                                     
 Number 0056                                                                   
 REPRESENTATIVE NICHOLIA commented that CS HB 358 was a good                   
 committee substitute.  She noted that it addressed all the problems           
 people had testified about and that it was a good bill for the dog            
 mushing associations.                                                         
 REPRESENTATIVE ELTON agreed with Representative Nicholia.  He then            
 brought up an issue for the purposes of discussion, saying he was             
 not sure how he felt about it.  He referred to the elimination of             
 the 200-mile restriction; he expressed some discomfort with the               
 notion that some junior mushing events might be the subject of                
 gambling by adults.                                                           
 Number 0099                                                                   
 REPRESENTATIVE NICHOLIA responded that she had grown up around dog            
 mushing and had been a junior dog musher herself.  In all the races           
 she had been to, she had never seen bets placed on junior races.              
 CO-CHAIR IVAN commented that in looking at Iditarod-qualifying                
 races of 200 miles and more, there were quite a few; they were                
 looking for ways to assist in the fund-raising efforts.  He said              
 they had conceded to include, for example, the Fur Rendezvous races           
 in Anchorage, which were a 25-mile, three-day event.  The smaller             
 races occurred in small communities, which did their own fund-                
 Number 0167                                                                   
 CO-CHAIR AUSTERMAN said he had the same question the last time                
 around.  He wondered, if there was an 18-year-old running in a dog            
 race, or a 17-year-old, what the public perception would be if                
 betting was allowed on that race.  He also wondered if there were             
 limits in the mushing association.  He added that it was probably             
 a public perception issue and that it made no difference to him one           
 way or the other.                                                             
 Number 0189                                                                   
 REPRESENTATIVE ELTON said he assumed the Charitable Gaming Division           
 would adopt regulations or a permit application.  He explained his            
 experience with dog mushing was more urban, including organized               
 races for juniors in the Mat-Su Valley.  He was more concerned                
 about races organized for children and juniors than about an                  
 Iditarod race or Iditarod-qualifying race that might have juniors             
 in it.  He asked Mr. Poshard if it were possible, in the permit               
 application, to specify no betting on races designed and organized            
 for the benefit of junior mushers.                                            
 Number 0237                                                                   
 MR. POSHARD responded that the division could adopt regulations,              
 but he had concerns about the difficulty of doing that within the             
 gaming industry.  The more clearly it was spelled out in statute,             
 he said, the better off they were.  If the committee wished to set            
 an age limit for betting or prohibit gambling on a junior mushing             
 race, Mr. Poshard preferred that it be addressed in statute.                  
 However, the division certainly could adopt regulations.                      
 Number 0266                                                                   
 CO-CHAIR IVAN said before proceeding further, he wanted to have               
 Vincent Usera from the Department of Law address that issue.                  
 VINCENT USERA, Assistant Attorney General, Commercial Section,                
 Civil Division (Juneau), Department of Law, agreed with Mr. Poshard           
 that if the committee wanted to set an age limit, it would be best            
 done in statute.  He explained that there was a question at times             
 whether a particular regulation exceeded statutory authority.                 
 Statutory authority for adopting regulations in general was                   
 extremely broad for charitable gaming.  However, there was still a            
 question.  It would be best to place any restrictions in the                  
 statute itself.                                                               
 Number 0308                                                                   
 CO-CHAIR AUSTERMAN asked Mr. Usera to expound on his feelings about           
 the technicality of a 19-year-old or 17-year-old actually running             
 in a race where there was betting going on.                                   
 MR. USERA asked if the question was whether it was legal or not.              
 CO-CHAIR AUSTERMAN clarified he wanted to know if the law precluded           
 MR. USERA specified that the law did not say one way or the other.            
 One might have moral objections, but the law itself did not address           
 the issue.                                                                    
 Number 0331                                                                   
 REPRESENTATIVE NICHOLIA asked whether the salmon classics were                
 restricted by age.                                                            
 MR. USERA replied no, he did not believe so.                                  
 REPRESENTATIVE NICHOLIA questioned why it should be done for dog              
 MR. USERA continued, saying if a seven-year-old boy caught the                
 biggest fish in the derby, he got the prize.                                  
 Number 0357                                                                   
 MR. POSHARD explained that the only age limits in statute that                
 dealt with charitable gaming activity were:  1) a person had to be            
 19 years old to play bingo and 2) a person had to be 21 years old             
 to play pull tabs.  Those were the only statutory or regulatory age           
 limits that had been established.  None of the other contests,                
 including the Nenana Ice Classic, had any age limitations placed              
 there by law.                                                                 
 Number 0378                                                                   
 MR. USERA pointed out there was a distinction, which he thought               
 important here, between the age of the person playing the game and            
 the age of the person who was the subject of the game.                        
 REPRESENTATIVE ELTON asked Mr. Usera if "juvenile" was defined in             
 statute elsewhere and, if so, what that definition was.                       
 Number 0400                                                                   
 MR. USERA replied no, not in the charitable gaming statutes.  There           
 was a definition of "minority," he said, which was the age of 18.             
 REPRESENTATIVE ELTON mentioned again that he was not sure how he              
 felt about the issue.  However, he suggested that, for example, the           
 committee could, on page 1, line 14, in Section 2, do something               
 while defining contests.  For example, the language could read,               
 "contests, conducted by a dog mushers' association, except dog                
 mushers' contests restricted to juveniles".  That would preclude              
 people from betting on the three-dog children's races, for example,           
 without precluding them from betting on the Iditarod if there was             
 a 17-year-old in that race.                                                   
 Number 0441                                                                   
 REPRESENTATIVE NICHOLIA said she had a problem with that because              
 they were not putting restrictions on salmon and snow machine                 
 classics.  She foresaw the possibility of a discrimination lawsuit            
 from dog mushers.                                                             
 Number 0466                                                                   
 CO-CHAIR IVAN pointed out that HB 358 was trying to allow dog                 
 musher organizations to raise funds in order for the mushing                  
 contests to be held.  Small, junior dog races were not at the site            
 of the main event, he said.  They were on the side and held one or            
 two days prior to the main event.  As far as he saw, those races              
 would not be involved in the placing of bets.                                 
 Number 0508                                                                   
 REPRESENTATIVE ELTON responded to Representative Nicholia that he             
 was not trying to restrict the game of chance so that people under            
 21 years of age could not buy a chance.  The notion that bothered             
 him, he said, was adults betting on kids' races.  He felt that put            
 too much pressure on kids.  He agreed that it might not be a                  
 problem.  However, there was nothing in the bill to stop that,                
 Number 0543                                                                   
 CO-CHAIR AUSTERMAN clarified that in no way was he trying to be               
 discriminatory.  That was the furthest thing from his mind, he                
 added.  While they might all be lumped together in the bill, there            
 was a difference between catching a salmon and having two people              
 vying against each other and trying to pick out who would be the              
 winner of those two, be it dog mushers or boxers in a ring.                   
 Perhaps it was a moral feeling, he said, but he viewed them as                
 Number 0603                                                                   
 REPRESENTATIVE KOTT agreed with Representative Nicholia that if               
 they made a substantive change such as the one they were talking              
 about, it would be discriminatory.  He believed that in the snow              
 machine classic, for example, people could now bet on a driver of             
 16 or 17 years of age.  Perhaps they should look at changing the              
 parameters, he said.  He agreed that adults should not be betting             
 on juveniles that participated in any one of the races.  Fishing              
 derbies were entirely different, he added.  He agreed it would be             
 discriminatory if they just carved out dog mushers.  However, they            
 had a broader perspective to consider, one they had already                   
 basically allowed to occur.                                                   
 Number 0647                                                                   
 MR. NOTTI said he thought for the top-of-the-line races, such as              
 the Iditarod, the Yukon Quest, the North American and the Fur                 
 Rendezvous, participants had to be 18 years old.  However, for                
 other races, 17-year-olds were allowed.  He envisioned that the               
 betting would be on the bigger races, with tickets sold a month or            
 six weeks prior to the race.  He did not see it as being like at a            
 horse race.  For the junior races, he said, the kids signed up the            
 day of the race or the day before.  He did not envision having                
 betting booths where a person could sign up right until the start             
 of the race.  He saw this more as buying tickets six weeks before             
 the big race, with the big names drawing the ticket sales.  He                
 thought they would not go to the bother of printing up tickets for            
 $100 worth of tickets.  "I may be wrong," he added.                           
 Number 0740                                                                   
 REPRESENTATIVE ELTON responded he was not sure Mr. Notti was wrong.           
 However, he wanted to present a scenario involving an organized               
 children's racing group in Anchorage.  He wondered about the                  
 possibility of parents wanting to fund the group and financing it             
 by selling bets on the races.  This would be a situation where a              
 adults would be betting on kids, which he did not want to see                 
 happen.  He added that he did not know that it would happen but               
 nothing in HB 358 prevented it.                                               
 Number 0797                                                                   
 CO-CHAIR AUSTERMAN referred to Representative Kott's comments and             
 said he tended to agree that it would be discriminatory to only               
 place the restriction on dog mushing.  What they were really                  
 discussing was a much broader concept of law, he said.  He stated             
 he would favor moving CS HB 358 out as it was.  If they wanted to             
 address the overall issue of betting on minors, that should be                
 brought back as a second bill addressing everything done in the               
 state that was now considered betting, whether it involved minors             
 or not.                                                                       
 Number 0843                                                                   
 REPRESENTATIVE ELTON said he would not make an amendment.  However,           
 he was not sure he saw it being any more discriminatory, for                  
 example, than limiting betting to races longer than 200 miles.                
 Number 0862                                                                   
 REPRESENTATIVE KOTT said he shared the concerns.  He suggested that           
 if a race held in Anchorage had betting opportunities on minors,              
 there would be a public outcry.                                               
 Number 0891                                                                   
 CO-CHAIR AUSTERMAN moved that CS HB 358 move out of committee, with           
 individual recommendations and attached fiscal notes.  There being            
 no objection, CS HB 358 moved out of the House Community and                  
 Regional Affairs Committee.                                                   
 CO-CHAIR IVAN thanked the committee members and noted that the                
 agenda for the meeting on Tuesday, February 13, included a briefing           
 by the Local Boundary Commission and HB 409.                                  
 Number 0923                                                                   
 There being no further business to conduct, CO-CHAIR IVAN adjourned           
 the House Community and Regional Affairs Committee meeting at 2:22            

Document Name Date/Time Subjects