01/31/2006 08:00 AM House COMMUNITY & REGIONAL AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| HB334 | |
| HB371 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 334 | TELECONFERENCED | |
| *+ | HB 371 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE
January 31, 2006
8:07 a.m.
MEMBERS PRESENT
Representative Kurt Olson, Co-Chair
Representative Bill Thomas, Co-Chair
Representative Pete Kott
Representative Gabrielle LeDoux
Representative Mark Neuman
Representative Sharon Cissna
Representative Woodie Salmon
MEMBERS ABSENT
COMMITTEE CALENDAR
HOUSE BILL NO. 334
"An Act relating to an exemption from and deferral of municipal
property taxes for certain types of deteriorated property."
- MOVED HB 334 OUT OF COMMITTEE
HOUSE BILL NO. 371
"An Act relating to a community dividend program; and providing
for an effective date."
- MOVED CSHB 371(CRA) OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: HB 334
SHORT TITLE: MUNICIPAL PROPERTY TAX DEFERRAL/EXEMPTION
SPONSOR(S): REPRESENTATIVE(S) RAMRAS
01/09/06 (H) PREFILE RELEASED 12/30/05
01/09/06 (H) READ THE FIRST TIME - REFERRALS
01/09/06 (H) CRA, FIN
01/31/06 (H) CRA AT 8:00 AM CAPITOL 124
BILL: HB 371
SHORT TITLE: COMMUNITY DIVIDEND PROGRAM
SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR
01/13/06 (H) READ THE FIRST TIME - REFERRALS
01/13/06 (H) CRA, FIN
01/31/06 (H) CRA AT 8:00 AM CAPITOL 124
WITNESS REGISTER
JIM POUND, Staff
to Representative Jay Ramras
Alaska State Legislature
POSITION STATEMENT: Presented HB 334 on behalf of Representative
Ramras, sponsor.
SALLY SADDLER, Legislative Liaison
Department of Commerce, Community and Economic Development
Juneau, Alaska
POSITION STATEMENT: Presented HB 371 on behalf of the
Administration.
KACI SCHROEDER HOTCH, Staff
to Representative Bill Thomas
Alaska State Legislature
POSITION STATEMENT: Presented a committee substitute (CS) to HB
371 on behalf of Representative Thomas.
KEVIN RITCHIE, Executive Director
Alaska Municipal League
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 371.
BILL ROLFZEN
Municipal Assistance
Department of Commerce, Community, & Economic Development
Juneau, Alaska
POSITION STATEMENT: Answered questions regarding HB 371.
WAYNE STEVENS, President
Alaska State Chamber of Commerce
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 371.
ACTION NARRATIVE
CO-CHAIR KURT OLSON called the House Community and Regional
Affairs Standing Committee meeting to order at 8:07:04 AM.
Representatives Olson, Thomas, LeDoux and Kott were present at
the call to order. Representatives Cissna, Salmon and Neuman
arrived as the meeting was in progress. Representative Carl
Moses was also in attendance.
HB 334-MUNICIPAL PROPERTY TAX DEFERRAL/EXEMPTION
CO-CHAIR OLSON announced that the first order of business would
be HOUSE BILL NO. 334, "An Act relating to an exemption from and
deferral of municipal property taxes for certain types of
deteriorated property."
8:07:12 AM
JIM POUND, Staff to Representative Jay Ramras, sponsor of HB
334, said it is a re-development bill. There are abandoned
structures around the state including the McKay building in
Anchorage and the Polaris building in Fairbanks, and he said
developers are planning to take the basic structure of these
sound buildings and change the interiors to condominiums or
offices. Current statute allows for tax deferment while the
buildings are being refurbished, but the language is not clear
when that deferment ends. He noted that the uncertainty hampers
the developers' ability to borrow money. The bill will provide
certainty by ending the deferment only at the point when a
portion or all of the building is transferred from the original
developer.
8:08:27 AM
CO-CHAIR THOMAS asked if communities have that option.
8:09:00 AM
MR. POUND said yes but HB 334 clarifies existing language, which
will provide certainty when going to the bank.
8:09:35 AM
REPRESENTATIVE LEDOUX noted the change in the date when the
deferral may be granted.
MR. POUND said the entire section of the statute has a sunset
date, so the date in HB 334 needs to correspond to it.
8:10:21 AM
CO-CHAIR OLSON asked for testifiers.
8:10:59 AM
CO-CHAIR THOMAS moved to report HB 334 out of committee with
individual recommendations and the accompanying fiscal notes.
Hearing no objection, HB 334 was reported out of the House
Community and Regional Affairs Standing Committee.
8:11:19 AM
HB 371-COMMUNITY DIVIDEND PROGRAM
CO-CHAIR OLSON announced that the final order of business would
be HOUSE BILL NO. 371, "An Act relating to a community dividend
program; and providing for an effective date."
CO-CHAIR THOMAS moved to adopt the proposed committee substitute
(CS) for HB 371, Version 24-GH2063/G, Cook, 1/28/06, as a
working document. There being no objection, Version G was
before the committee.
8:11:42 AM
SALLY SADDLER, Legislative Liaison, Department of Commerce,
Community and Economic Development, said HB 371 is the
Governor's bill to establish a community dividend program. She
said there are 13 revenue sharing bills currently in the
legislature, and the administration welcomes the opportunity to
work with the legislature to craft one. She noted that HB 371
calls for establishing a community dividend program funded with
a reliable sustainable source: an estimated $27.6 million from
the annual earnings of the Alaska Capital Income Fund. The bill
calls for base grants to all cities and boroughs under a three-
tier process.
MS. SADDLER said that $10 million would be distributed to cities
and boroughs based on their size. Cities with less than 100
residents would receive $25,000; cities with 100 to 249
residents would receive $30,000; cities with 250-500 residents
would receive $35,000; cities with more that 500 residents would
receive $40,000; and all boroughs would receive $50,000. The
balance of the $10 million would be allocated on a per capita
basis.
MS. SADDLER said the second part of HB 371 calls for financial
incentives for borough organization. It would increase the
incorporation grants to areas that organize into boroughs. That
would consist of $1 million for each of the first two years and
$0.5 million in the third year, which would be an increase from
current financial incentives of $300,000, $200,000 and $100,000
for each of the first the three years. She said the third part
of the bill distributes the remaining funds, which she estimated
at $16.6 million, to organized boroughs on a per capita basis.
The community dividend payments could be used for public safety,
infrastructure, maintenance, education and fuel, she concluded.
8:14:26 AM
REPRESENTATIVE SALMON asked if unincorporated villages are
included.
8:14:48 AM
MS. SADDLER said they are not.
8:14:51 AM
CO-CHAIR THOMAS said that the committee substitute (CS) before
the committee includes those villages. He opined that "oil
money belongs to the people whether they are unincorporated or
not."
8:15:12 AM
REPRESENTATIVE NEUMAN said the Matanuska-Susitna Borough and the
Municipality of Anchorage will use a community dividend for the
relief of property taxes, and he asked if the bill could be
amended to allow dividends to be used that way.
MS. SADDLER said the committee has the ability to do that.
8:16:23 AM
KACI SCHROEDER HOTCH, Staff to Representative Bill Thomas, said
the CS allows unincorporated communities to receive grants,
including Metlakatla, which is a reserve. Another change would
give $25,000 to each community, and a community is defined as a
place in the unorganized borough that is not incorporated and
has 25 or more individuals residing as a social unit. She noted
that that definition has been used in other revenue sharing
bills.
8:17:45 AM
REPRESENTATIVE LEDOUX said she has a number of communities in
her district that are in the organized borough but are not
cities. "It seems like my communities are being penalized
because they happen to be in a borough."
8:18:27 AM
MS. HOTCH said that might have been an oversight, and it was not
the intent.
8:18:45 AM
REPRESENTATIVE NEUMAN asked what a reserve is.
MS. HOTCH explained that Metlakatla is an Indian reservation.
REPRESENTATIVE NEUMAN asked if an unorganized city would qualify
for this program under the CS.
MS. HOTCH said that is correct.
REPRESENTATIVE NEUMAN offered Conceptual Amendment 1 that would
allow municipalities to use the dividend money for property tax
deduction.
Hearing no objection, Conceptual Amendment 1 passed.
8:19:57 AM
REPRESENTATIVE LEDOUX offered Conceptual Amendment 2 to include
communities in organized boroughs.
Hearing no objection, Conceptual Amendment 2 passed.
8:20:41 AM
KEVIN RITCHIE, Executive Director, Alaska Municipal League, said
the bill is key for all communities. He provided editorials
from the Voice of the Times and the Daily News, saying it shows
broad support for the concept. He noted that the priorities of
the Alaska Municipal League are in a document before the
committee. He said that to provide substantial property tax
relief, "you'll probably need something closer to what we have
in our priority list, which is about $75 million, so this is a
very good base. Obviously there are other thoughts about adding
funding to it to have a very sustainable program, which not only
helps small communities, but also provides substantial property
tax relief."
8:22:20 AM
CO-CHAIR THOMAS said all the bills will come together, and "the
idea is that we continue to move the ideas forward, and then we
will see what happens."
REPRESENTATIVE CISSNA asked for a side-by-side comparison for
all the bills.
MR. RITCHIE said the Alaska Municipal League has one.
REPRESENTATIVE NEUMAN asked about Conceptual Amendment 2 that he
said adds communities in unorganized areas of the state. He
expressed concern that there is a finite amount of funds that
would be diluted "by adding all the small communities that are
population 25 persons or greater." He said he believes that the
committee just added hundreds more communities around the state.
8:24:47 AM
CO-CHAIR OLSON said Conceptual Amendment 2 just refers to
communities within the organized boroughs, but it will add new
participants.
MR. RITCHIE said he thinks that "under the old program there are
about 75 unincorporated communities receiving assistance under-
this is in the CS that you put on the table-so that would be 75
times $25,000, and then I don't have a number for the
unorganized communities within boroughs."
8:25:41 AM
BILL ROLFZEN, Municipal Assistance, Department of Commerce,
Community, & Economic Development, said, depending how one
defines them, there are 75 to "well over" 100 unincorporated
communities within organized boroughs. He noted that the CS
will add about 75 communities within the unorganized boroughs.
CO-CHAIR OLSON asked how the small communities were handled
three years ago in municipal assistance.
MR. ROLFZEN said, "Historically only unincorporated communities
within the unorganized boroughs received funding directly from
the state through revenue sharing or capital matching grants or
other such programs."
REPRESENTATIVE CISSNA asked how many communities were included
before the CS.
MR. ROLFZEN said about 163 incorporated cities and boroughs,
plus Metlakatla.
8:27:23 AM
MR. ROLFZEN said the qualification language for an
unincorporated community to receive the money is similar to that
in statute for paying Metlakatla under the safe communities
program, "and it's different from the language we used under the
old revenue sharing program to pay unincorporated communities."
He said with the CS the Native village councils across the state
in unincorporated communities will have to form community
development corporations and hold annual elections, which is
significantly different than the way they were treated in the
past. He said the CS uses language that "was specific to
Metlakatla in the old programs, not broadly against all the
unincorporated communities." He added that, "we used different
language when we paid the Native village councils and nonprofit
community associations across the state under the unincorporated
community aid program under capital matching grants and revenue
sharing."
CO-CHAIR THOMAS said, "We tried to be consistent...and still try
to pick up some of the smaller villages." He said everyone
deserves to share in the oil revenues. He added that somebody
is going to take this language and "meld it all anyway."
8:29:45 AM
REPRESENTATIVE SALMON asked if it would help to add the previous
language.
MR. ROLFZEN said that was correct. A slight amendment would be
appropriate to pay Metlakatla through this program, "and then if
you added one more section that mirrored the old revenue sharing
unincorporated community, that would cover all the other 75 to
potentially 100 unincorporated [communities] with Native village
councils. So they would not have to adopt a charter and so on."
8:30:34 AM
REPRESENTATIVE SALMON asked about making the aforementioned
language Conceptual Amendment 3.
There were no objections, so Conceptual Amendment 3 was treated
as moved and passed.
8:30:48 AM
WAYNE STEVENS, President, Alaska State Chamber of Commerce, said
one of the top six priorities for the chamber is sustainable
community dividends that use an endowment management method in
order to provide tax relief to businesses and families and to
assist in providing basic services. He added that the chamber
supports the concepts and urges passage of HB 371.
8:32:27 AM
MS. SADDLER said part of the spirit of this [original]
legislation is to provide financial incentives for borough
formation and to protect those communities that have taken the
responsibility to organize. She said some of the unincorporated
communities are not organized in a way that can make them
accountable for receiving money. An administrative borough
would provide that accountability and help insure a sustainable
approach, she stated.
8:33:41 AM
CO-CHAIR THOMAS said he spent all summer on the administrative
borough government and there is an incentive package in it
already. He stated that the governor's bill would conflict with
that, and added that oil money belongs to all Alaskans
regardless of political affiliation. The governor did not
participate in the process, and "doesn't know the lack of land
for many of the regions, and $1 million don't get it." He noted
that there is already an incentive bill in the legislature, and
he thinks it is confusing to put incentives in a revenue sharing
bill. "I think that we should be concentrating on community
dividends equally, and let the administrative bill...try to go
forward," he concluded.
8:35:58 AM
REPRESENTATIVE CISSNA asked Co-Chair Thomas if he envisions the
dividend to be similar to the Permanent Fund Dividend for every
man, woman and child-only for communities.
CO-CHAIR THOMAS said yes, and that he worked on a bill for
incentives this summer. He stated that oil revenue and Amerada
Hess money belong to everybody. He said if the PFD excluded a
political faction, it would be wrong. He said, "We have not
introduced the administrative borough on this side because we
want to see what it looks like on the Senate side. If they take
the incentives out, then we won't introduce the bill on this
side. There is no reason to go forward with formation of
boroughs unless there's an incentive, and it all revolves around
the land." He said some boroughs have 300,000 acres of land,
and the Petersburg/Wrangell borough has 2100 acres, "so there is
no way they can sustain a government." He said the Glacier Bay
borough has 321 acres, and "we've gutted pretty much the primo
land in Southeast" with the university taking all the land. He
said, "Once people understand the incentive bill, which is the
administrative borough bill, they will see what we are trying to
do."
8:39:16 AM
REPRESENTATIVE NEUMAN said the money in this bill is from
Amerada Hess money, not from the permanent fund.
8:39:48 AM
REPRESENTATIVE LEDOUX said she supports the bill as amended.
REPRESENTATIVE NEUMAN moved to report the proposed CSHB 371,
Version 24-GH2063/G, Cook, 1/28/06, as amended, out of committee
with individual recommendations and the accompanying fiscal
notes. There being no objection, CSHB 371(CRA) was reported out
of committee.
8:40:32 AM
ADJOURNMENT
There being no further business before the committee, the House
Community and Regional Affairs Standing Committee meeting was
adjourned at 8:40:40 AM.
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