Legislature(2003 - 2004)
03/10/2003 05:10 PM House EDT
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON ECONOMIC DEVELOPMENT,
INTERNATIONAL TRADE AND TOURISM
March 10, 2003
5:10 p.m.
MEMBERS PRESENT
Representative Cheryll Heinze, Chair
Representative Lesil McGuire, Vice Chair
Representative Nancy Dahlstrom
Representative Vic Kohring
Representative Harry Crawford
MEMBERS ABSENT
Representative Pete Kott
Representative Sharon Cissna
COMMITTEE CALENDAR
HOUSE BILL NO. 126
"An Act authorizing municipalities to provide for economic
development and authorizing boroughs to expend revenue collected
on an areawide or nonareawide basis to provide for economic
development."
- MOVED HB 126 OUT OF COMMITTEE
OVERVIEW: INSTITUTE OF THE NORTH, BY DR. JOHN TICHOTSKY
- HEARD [See 5:36 p.m. minutes for this date]
HOUSE BILL NO. 95
"An Act relating to permits for aquatic farming of geoducks."
- BILL HEARING POSTPONED
PREVIOUS ACTION
BILL: HB 126
SHORT TITLE:MUNICIPAL ECONOMIC DEVELOPMENT
SPONSOR(S): REPRESENTATIVE(S)HOLM
Jrn-Date Jrn-Page Action
02/26/03 0304 (H) READ THE FIRST TIME -
REFERRALS
02/26/03 0304 (H) EDT, CRA
03/10/03 (H) EDT AT 5:00 PM CAPITOL 120
WITNESS REGISTER
REPRESENTATIVE JIM HOLM
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Testified as the sponsor of HB 126.
DAVID LEONE, Special Assistant to the Mayor
Fairbanks North Star Borough
Fairbanks, Alaska
POSITION STATEMENT: Testified on reasons the borough wants
HB 126.
PATRICK COLE, Administrative Services Director
City of Fairbanks
Fairbanks, Alaska
POSITION STATEMENT: Testified in support of HB 126, noting that
the city council also endorses this change.
CHICK WALLACE, Member
Executive Committee
Fairbanks Economic Development Corporation
Fairbanks, Alaska
POSITION STATEMENT: Testified in support of HB 126.
SARAH GILBERTSON
Alaska Municipal League (AML)
Juneau, Alaska
POSITION STATEMENT: Offered the belief that the appropriate
legislative committee of AML would support HB 126.
ACTION NARRATIVE
TAPE 03-3, SIDE A
Number 0001
CHAIR CHERYLL HEINZE called the House Special Committee on
Economic Development, International Trade and Tourism meeting to
order at 5:10 p.m. Representatives Heinze, McGuire, Kohring,
and Crawford were present at the call to order. Representative
Dahlstrom arrived as the meeting was in progress.
HB 126-MUNICIPAL ECONOMIC DEVELOPMENT
CHAIR HEINZE announced that the committee would hear HOUSE BILL
NO. 126, "An Act authorizing municipalities to provide for
economic development and authorizing boroughs to expend revenue
collected on an areawide or nonareawide basis to provide for
economic development."
Number 0069
REPRESENTATIVE JIM HOLM, Alaska State Legislature, sponsor,
indicated the idea behind HB 126 was brought forth by the
assembly for the Fairbanks North Star Borough (FNSB) when he
served on the assembly. When he became a legislator, he'd had
the bill drafted to resolve this particular situation. The
problem is that current state law places a difficult limitation
on second class boroughs with regard to spending funds for
economic development. Presently, second class boroughs may only
use funds for economic development on a nonareawide basis. Thus
FNSB may only expend economic development funds outside the city
limits of Fairbanks and North Pole.
REPRESENTATIVE HOLM explained, however, that the borough must be
able to provide for nonareawide economic development, because
development in any part of the community will ultimately benefit
the rest of the community. He suggested that this legislation,
requested by the city and borough of Fairbanks, will expand
economic development for all of Interior Alaska. He pointed out
that HB 126 also affects the following boroughs, allowing them
to do areawide economic development without an encumbrance from
having two entities that aren't able to work together:
Aleutians East Borough, Bristol Bay Borough, Kenai Peninsula
Borough, Ketchikan Gateway Borough, Kodiak Island Borough, and
Matanuska-Susitna Borough.
REPRESENTATIVE HOLM noted that in committee packets were letters
[or resolutions] in support from the City of North Pole; the
City of Fairbanks; the Alaska Municipal League; the Fairbanks
North Star Borough assembly, with his own name listed; the
Greater Fairbanks Chamber of Commerce; and the Fairbanks
Economic Development Corporation.
Number 0313
REPRESENTATIVE CRAWFORD requested an example of how this would
work. He asked whether taxes from Ester, for example, would be
spent in another part of the borough.
REPRESENTATIVE HOLM said the Fairbanks North Star Borough, for
instance, sets the taxing for all the area: "the City of North
Pole, the City of Fairbanks, and all of the areas that are not
within an established city environment." State law says taxes
taken within the City of Fairbanks cannot be used for areawide
services for the borough as a whole, to his understanding. This
bill gives the ability to use taxes from the City of Fairbanks
in that way to improve economic development [nonareawide].
REPRESENTATIVE CRAWFORD surmised that the reverse wouldn't be
true, and that taxes wouldn't be taken outside the city [for use
in the city].
REPRESENTATIVE HOLM answered, "You could. In this case, you
could do both ways." He suggested that David Leone from FNSB
might be able to speak to that.
Number 0449
CHAIR HEINZE asked whether Representative Holm knew the
reasoning behind the inability to use such money for economic
development within the borough in the first place.
REPRESENTATIVE HOLM said he didn't know and suggested others
could better address that. He surmised, however, that it was so
people wouldn't be taxed and then have those taxes be used
outside the service area. He noted that people choose to tax
themselves in service areas for snow removal, for example, and
normally there isn't the ability to tax one service area for use
in another area. In his borough, for example, every service
area has a different mill rate; because [residents of different
areas] choose to have different mill rates, there is a need to
be careful about using that money inappropriately.
Number 0536
REPRESENTATIVE McGUIRE asked whether this is only for second
class boroughs.
REPRESENTATIVE HOLM answered in the affirmative.
REPRESENTATIVE McGUIRE asked whether a first class borough may
do this already.
REPRESENTATIVE HOLM said yes, to his understanding.
Number 0574
DAVID LEONE, Special Assistant to the Mayor, Fairbanks North
Star Borough, expressed appreciation to Representative Holm for
sponsoring the bill. He noted the difficulty of using money
received from a nonareawide tax - outside the city limits of the
City of Fairbanks or the City of North Pole - in a nonareawide
capacity without "touching areawide economic development." He
suggested the goal is to clean up [previous] legislation that
didn't have the intention of creating such a problem with regard
to economic development, and he proposed that this bill does an
excellent job of doing so. Thus the source of funding for
economic development that crosses the boundaries of "areawide
and nonareawide" won't be as important as the outcome of the use
of those funds - for the entire borough, including the
municipalities within the borough.
Number 0667
REPRESENTATIVE CRAWFORD requested an example of economic
development for which taxes would be taken from one area for use
in another.
MR. LEONE cited tourism as an example. He said there is
nonareawide tax that the borough charges that it would like to
see used for tourism, which affects more than the nonareawide
portion of the borough, since it has impacts on the City of
Fairbanks and the City of North Pole. He mentioned the ability
to [commingle] the dollars from a bed tax within the city limits
and the dollars coming from an economic development tax or bed
tax within the borough to provide "an areawide impact for
tourism." With this bill, the borough no longer would have to
worry about where any particular dollar was being used for
tourism impacts; it removes that complexity.
Number 0789
REPRESENTATIVE CRAWFORD asked whether Mr. Leone was talking
about advertisement, for example.
MR. LEONE replied:
Last fiscal year - and, I believe, upcoming this
fiscal year - the Fairbanks North Star Borough has
granted funding to the Fairbanks Convention and
Visitors Bureau in their efforts to promote not just
the City of Fairbanks and the City of North Pole, but
also the entire borough, as well as even the Interior
of Alaska. And, of course, that money was used for
advertising: pamphlets, brochures, television ads,
radio ads. It was used to kind of entice folks ...
from Europe to come here - special airline package
deals, those kind of things. ...
Under current law, if the borough gave Fairbanks
Convention and Visitors Bureau a thousand dollars
towards its effort, that money theoretically would
have to be spent only on their advertising and
promotion that only impacted outside of the city
limits of Fairbanks and North Pole. And that becomes
so difficult. When a brochure is handed to a tourist
in Chicago, ... it's advertising and promoting the
Fairbanks North Star Borough-Interior Alaska site ...
for tourism. So that's how this legislative change
would allow us to not have to worry about that
mingling of dollars, but, rather, look at the positive
impact of whatever economic development effort we're
after.
Number 0893
REPRESENTATIVE CRAWFORD said it sounds as if the desire is to
use these tax dollars to promote tourism. He asked whether this
[bill] should be limited to that specific purpose or should be
left broad.
MR. LEONE strongly recommended leaving it broad. He offered
other examples: marketing for the airport to be able to bring
additional airlines in, whether for tourism or cargo; expansion
of the petroleum industry; and cold-weather testing. He said
the funds would be used for anything that helps develop the
economy. Limiting this to tourism would be detrimental to the
economic efforts and "wouldn't solve our problems," he added.
Number 0958
REPRESENTATIVE McGUIRE pointed out that this would provide a
local option because it says "may". There still will have to be
debate among community members and a vote, she suggested.
MR. LEONE concurred, saying "may" is fine, and that local
discussions need to occur on an ongoing basis. He reiterated
the desire of Fairbanks to do this.
Number 1038
PATRICK COLE, Administrative Services Director, City of
Fairbanks, testified in support of HB 126, noting that Mayor
Steve Thompson was unavailable and that he was speaking in his
place. Reporting that the city council also endorses [HB 126],
he referred to talks over the past year between the borough and
the city about how the borough can have more flexibility with
regard to economic development. He said [AS 29.35.210(a)(8),
repealed by the bill] provides that a second class borough can
only provide for economic development on a nonareawide basis -
that is, outside of North Pole and Fairbanks.
MR. COLE noted that powers can be provided nonareawide for
ambulance service, trash collection, and street cleaning, for
example. He then told members that anything done to help the
economy helps the entire economy. He offered his belief that
HB 126 will fix the problem, since it amends AS 29.35.010 to
provide that all boroughs have this power, if they wish, to
promote economic development. He said it cleans up AS 29.35.010
and AS 29.35.210 to reflect the change.
MR. COLE recalled that [AS 29.35.]210 was amended about two
years ago to allow bed-tax revenues to be used for promoting
tourism marketing. He said that was only part of the problem,
though, and that this bill fixes the problem, and would allow
both the city and borough to spend money for airport marketing
and industry, regardless of where in the borough or city the
activity occurred. He thanked Representative Holm for
sponsoring the bill.
Number 1144
CHICK WALLACE, Member, Executive Committee, Fairbanks Economic
Development Corporation, testified in support of HB 126, saying
it cleans up the way money is allocated for economic
development. As it stands now, funds cannot be [commingled]:
those funds collected in the borough cannot be used in the city,
and vice versa.
CHAIR HEINZE asked whether Mr. Wallace knew of anyone who was
opposed to this bill.
MR. WALLACE said he thought everyone was 100 percent for it.
Number 1214
SARAH GILBERTSON, Alaska Municipal League (AML), noting that
Kevin Ritchie [executive director] was out of town, informed
members that she was speaking in his place. She explained that
typically AML would hand this legislation to one of its
legislative committees for review, but that the appropriate
legislative committee wouldn't be able to meet until March 24.
She said the following:
But having looked at this legislation and heard the
testimony, I believe that this is something that that
committee would definitely support, for a number of
reasons. One, the AML policy statement supports
economic development and anything that would drive
economic development in the state of Alaska. Second
of all, we support anything that would give
municipalities and local governments more optional
powers, more authority to local governments. And so,
for those reasons, I think this is something that that
committee - and definitely AML - would support.
REPRESENTATIVE KOHRING lauded the concept in the bill of placing
the authority at the local level. He questioned why the state
had that authority to begin with.
Number 1290
REPRESENTATIVE KOHRING moved to report HB 126 out of committee
with individual recommendations and the accompanying zero fiscal
note.
CHAIR HEINZE announced that HB 126 was reported from the House
Special Committee on Economic Development, International Trade
and Tourism.
ADJOURNMENT
Number 1310
CHAIR HEINZE called an at-ease at 5:31 in order to prepare for
the overview on the Institute of the North by Dr. John
Tichotsky. [For minutes on the overview, see the 5:36 p.m.
minutes for this date.]
| Document Name | Date/Time | Subjects |
|---|