Legislature(1993 - 1994)
03/01/1994 09:05 AM Senate CRA
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
SENATE COMMUNITY & REGIONAL AFFAIRS
March 1, 1994
9:05 a.m.
MEMBERS PRESENT
Senator Randy Phillips, Chairman
Senator Robin Taylor, Vice Chairman
Senator Loren Leman
Senator Al Adams
Senator Fred Zharoff
MEMBERS ABSENT
COMMITTEE CALENDAR
SPONSOR SUBSTITUTE FOR SENATE BILL NO. 223
"An Act relating to credits against certain taxes for contributions
to certain public educational radio and television networks and
stations; and providing for an effective date."
SENATE BILL NO. 291
"An Act relating to including all regions in the state in an
organized borough or unified municipality; and providing for an
effective date."
PREVIOUS SENATE COMMITTEE ACTION
SB 223 - No previous action to record..
SB 291 - See Community & Regional Affairs minutes dated
2/22/94.
WITNESS REGISTER
Joe Ambrose, Staff to Senator Robin Taylor
State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Offered information on SSSB 223
Ms. Marty West
123 Stedman
Ketchikan, AK 99901
POSITION STATEMENT: Supports SSSB 223
Don Rinker
Box 109
Barrow, AK 99723
POSITION STATEMENT: Supports SSSB 223
Leonard Anderson
P.O. Box 78
Kotzebue, AK 99752
POSITION STATEMENT: Supports SSSB 223
Ms. Kelly Law
718 Mill Bay Road
Kodiak, AK 99615
POSITION STATEMENT: Supports SSSB 223
Ken Fate
2B Lincoln St.
Sitka, AK 99835
POSITION STATEMENT: Supports SSSB 223
Stephen Helgeson
Box 588
Wrangell, AK 99929
POSITION STATEMENT: Support SSSB 223
Matt Holms
Box 149
Petersburg, AK 99833
POSITION STATEMENT: Supports SSSB 223
Paul Dick, Juneau Operations
Income & Excise Audit Division
Department of Revenue
P.O. Box 110420
Juneau, AK 99811-0420
POSITION STATEMENT: Offered information on fiscal
note on SSSB 223
Alexis Miller, Staff to Senator Dave Donley
State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Answered questions on SB 291
Dan Bockhorst, Local Boundary Commission
Staff Supervisor
Department of Community & Regional Affairs
333 W. 4th Ave., Suite 220
Anchorage, AK 99501-2341
POSITION STATEMENT: Offered information on SB 291
Mike Walleri, General Counsel
Tanana Chiefs Conference
122 1st Ave., Suite 600
Fairbanks, AK 99701
POSITION STATEMENT: Has concerns with SB 291
ACTION NARRATIVE
TAPE 94-18, SIDE A
Number 001
The Senate Community & Regional Affairs Committee was called to
order by Chairman Randy Phillips at 9:05 a.m. He introduced SSSB
223 (TAX CREDIT: GIFTS TO PUBLIC BROADCASTING) as the first order
of business.
JOE AMBROSE, staff to Senator Taylor who is the prime sponsor of
SSSB 223, read into the record Senator Taylor's sponsor statement:
"Despite reductions of about 35 percent since 1986, public
broadcasting in Alaska still costs the general fund more than six
million dollars per year. Enactment of this legislation would
provide an incentive for business and industry to contribute to
public broadcasting and reduce the dependence on state funding.
Alaska's public radio and television networks and stations are
recognized as an integral part of our educational system. Under
SSSB 223, contributions to those networks and stations would be
allowed as a tax credit under the same provisions which allow for
credit for donations to our colleges and universities.
This bill would allow for such credits against the Alaska Net
Income Tax and four other state taxes. In fiscal year 1993, Alaska
business and industry claimed $533,429 against their taxes for
donations under the education tax credit provisions.
The Alaska State Legislature has shown strong support for
public broadcasting in the past. Public broadcasting is a vital
part of our communications and education system, depended upon by
thousands of rural and urban Alaskans.
To quote Rich McClear, the former manager of Raven Radio in
Sitka, "Raven Radio would find this bill very useful in helping us
become more independent of state support." That is the goal of
SSSB 223 and I ask for your support."
Number 045
SENATOR RANDY PHILLIPS stated testimony would be taken over the
teleconference network.
MS. MARTY WEST, General Manager of radio station KRBD FM in
Ketchikan, stated support for SSSB 223. She noted KRBD FM has had
an enormous cut in their budgets over the past eight years, and
SSSB 223 would give them a great deal more autonomy. They have
been increasingly relying on locals for memberships and for
underwriting and the legislation would offer an additional benefit
for their underwriting. She urged the committee's support for SSSB
223.
Number 072
DON RINKER, General Manager of the radio station KBRW in Barrow,
voiced support for SB 223. He said in every community there is a
significant outpouring of local support for the public broadcasting
community. He noted that in Barrow, public radio has had the
support of the organizations throughout the North Slope. He
suggested that in-kind contributions should also be eligible for
tax credits.
Number 162
LEONARD ANDERSON, General Manager of KOTZ in Kotzebue, said as
state support dwindles, they have to find other funding sources.
KOTZ has been increasingly turning to underwriting, and SB 223 will
give then that extra edge. He stated his strong support for
passage of the legislation.
Number 223
MS. KELLY LAW of public radio station KMXT in Kodiak said they are
in the midst of a very large capital campaign to acquire a decent
facility and the legislation could have immediate benefit to them
as they try to raise a large sum of money.
Number 234
KEN FATE, Station Manager of Raven Radio in Sitka, stated his
strong support for SSSB 223.
Number 238
STEPHAN HELGESON, Board of Directors member for KSTK-FM in
Wrangell, stated their strong support for the legislation.
Number 245
MATT HOLMES, Manager of public radio station KFSK in Petersburg,
voiced his support for SSSB 223.
Number 255
PAUL DICK, Income & Excise Audit Division, Department of Revenue,
explained that the legislation allows for credits for taxpayers
that make contributions not to exceed $150,000. It would apply to
corporate net income tax, oil and gas production and property
taxes, mining licenses taxes and fisheries business taxes. The
department estimates that maximum impact would be $122,250,000. He
added that they realize that the figure is a high range.
Number 282
SENATOR TAYLOR moved that SSSB 223 be passed out of committee with
individual recommendations. Hearing no objection, it was so
ordered.
Number 300
SENATOR RANDY PHILLIPS brought SB 291 (BOROUGH INCORPORATION &
ANNEXATION) before the committee as the next order of business.
Number 315
DAN BOCKHORST, Staff to the Local Boundary Commission, Department
of Community & Regional Affairs, testified via teleconference from
Anchorage. He referred to a letter from the department expressing
any technical concerns it has regarding SB 291, and he said their
comments are not intended to express either support or opposition
to SB 291.
Mr. Bockhorst referred to Section 2(b) and said it is presumed that
other members of the committee [e.g., the chair of the Local
Boundary Commission, who is not appointed under Sec (a)(3) - (7)]
are also entitled to per diem and travel expenses. Also, Section
3 requires the Local Boundary Commission to conduct a boundary
study, and he pointed out that the Local Boundary Commission
completed a "model borough study" of the unorganized borough in
1992. Section 4(d) provides that if a borough incorporation is
disapproved, the commission may submit the proposal for
incorporation to the First Session of the Eighteenth Alaska State
Legislature, and it is presumed it should read the First Session of
the Twentieth Alaska State Legislature.
Mr. Bockhorst noted that CSSB 164(JUD) would allow an
unincorporated region to form a unified municipality, and he
suggested that if that bill becomes law, it would be ideal to
accommodate that option in SB 291.
Number 400
SENATOR TAYLOR referred to Section 4(a) which speaks to an election
in each region and area to determine whether the voters desire
borough incorporation or annexation, and he asked who would vote in
that election. DAN BOCKHORST responded that only the voters
residing in the area proposed for annexation would vote on the
issue. SENATOR TAYLOR then expressed his concern that if an
annexation is disapproved by the voters, the commission can then
submit the proposal for annexation to the Legislature. He is
concerned that this is an encroachment of state and local
government over a lot of people in the state who would probably
just as soon not have that benefit available to them.
Number 460
MIKE WALLERI, General Counsel, Tanana Chiefs Conference, said the
issue of borough organization has been a contentious issue for some
time. They have conducted several studies on it, with the last one
be done in 1989. The policy within the region has generally been
to oppose mandatory borough formation because they believe that
local government is something that should come from the people.
There is a dissolution movement of local governments as the
viability with local governments, with the decline of transfer
payments in particular, in rural Alaska is actually gaining a
momentum.
Mr. Walleri said the major concerns should be: is if the
government is needed; and does it perform a useful function.
Speaking to specific concerns with SB 291, Mr. Walleri suggested
the deletion of Section 4(d), which relates to the proposal for
incorporation being submitted to the Legislature. There is also
concern with the representation on the committee on municipalities
in that it opens it up to a constitutional challenge because only
three of the seven members represent interests from the unorganized
borough. He suggested it should be changed to reflect maximum
participation by unorganized borough residents.
Mr. Walleri said the exact boundaries of a borough are critical in
determining the financial viability. The viability, in terms of
long term and short term, vary depending upon the relative transfer
of payments available to the borough. He suggested local
government should be based upon the ability of an area to
economically support a government rather than the State of Alaska
providing transfer payments in order for them to exist.
Number 565
SENATOR RANDY PHILLIPS inquired as to the status of the Yukon Flats
Borough. MIKE WALLERI responded that the Tanana Chiefs report in
1989 recommended against the organization of the Yukon Flats
Borough, primarily because it would represent a net loss of
revenues. It would be totally supported by transfer payments from
the State of Alaska. The organization of that particular borough
is not financially viable, especially with the proposed reduction
of transfer payments from the federal and state government.
SENATOR PHILLIPS said he assumed then that the Tanana Chiefs
wouldn't mind the North Star Borough annexing a portion of that
pipeline. MIKE WALLERI answered that they would probably still be
opposed to that.
TAPE 94-18, SIDE B
Number 001
SENATOR ZHAROFF suggested the following change to Section 4,
subsection (d) on page 3: On line 18 change "may" to "shall" and
change "disapproved" to "approved;" and on line 20 delete "not" and
change "disapproved" to "approved." He explained that by making
the change, rather than leaving it as a final decision of no
action, the Legislature then has to take an action in order for
this to go through. There would then be another step of
"bureaucracy" to affirm that the borough formation should take
place.
Number 025
ALEXIS MILLER, staff to Senator Dave Donley, agreed with Senator
Zharoff's suggestion. She added that this is a complex issue and
there is a lot of tinkering that needs to be done with the
legislation.
Number 035
SENATOR RANDY PHILLIPS stated that conceptually, he is in favor of
the legislation due to Article X, Section 3 of the Alaska State
Constitution. He said the Legislature acts as an assembly for the
unorganized areas and can make those decisions on behalf of those
people. However, he said it can't be both ways, either get rid of
the mandatory borough act and Article X, Section 3, or just
implement one of the two, but not both. He believes it is about
time that the Legislature starts addressing this issue.
Number 055
SENATOR DONLEY said the most important question to him is if people
in these areas can afford local government, and, if they can, they
should. The Boundary Commission's studies analyzing the ability of
people in those areas being able to pay for local government
generally showed most regions of the unorganized borough were
capable of providing at least the minimum services required by law.
He said the legislation is a pretty reasoned approach in obtaining
this goal, especially with the state's current fiscal problems.
Number 085
SENATOR ZHAROFF pointed out that the fiscal note does not reflect
the added staff and administrative assistance required of the
department, nor is there a breakdown on how much state assistance
a new borough would receive.
SENATOR RANDY PHILLIPS asked if there was any reason why the
unorganized areas cannot contribute to the state government for the
services they receive. SENATOR DONLEY responded that it probably
could be done with a state sales tax or a property tax for those
unorganized areas that don't have their own sales tax or property
tax.
Number 195
SENATOR RANDY PHILLIPS stated a new fiscal note would be requested
from DCRA on SB 291. He then adjourned the meeting at 10:10 a.m.
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