Legislature(1995 - 1996)
02/28/1996 01:35 PM Senate CRA
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATE COMMUNITY & REGIONAL AFFAIRS COMMITTEE
February 28, 1996
1:35 p.m.
MEMBERS PRESENT
Senator John Torgerson, Chairman
Senator Randy Phillips, Vice Chairman
Senator Tim Kelly
Senator Fred Zharoff
Senator Lyman Hoffman
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
SENATE BILL NO. 280
"An Act relating to the mandatory incorporation of certain boroughs
in the unorganized borough."
SENATE BILL NO. 287
"An Act relating to the unincorporated community capital project
matching grant program; and providing for an effective date."
SENATE BILL NO. 293
"An Act relating to municipal capital project matching grants for
a municipality organized under federal law as an Indian reserve;
and providing for an effective date."
PREVIOUS SENATE COMMITTEE ACTION
SB 280 - No previous action to record.
SB 287 - No previous action to record.
SB 293 - No previous action to record.
WITNESS REGISTER
Senator John Torgerson
State Capitol
Juneau, Alaska 99801-1182
POSITION STATEMENT: Prime sponsor of SB 280.
Senator Fred Zharoff
State Capitol
Juneau, Alaska 99801-1182
POSITION STATEMENT: Prime sponsor of SB 293.
Kim Metcalfe-Helmar, Special Assistant
Department of Community & Regional Affairs
PO Box 112100
Juneau, Alaska 99811-2100
POSITION STATEMENT: Supported SB 293.
Bill Rolfzen, State Revenue Sharing
Division of Municipal & Regional Assistance
Department of Community & Regional Affairs
PO Box 112100
Juneau, Alaska 99811-2100
POSITION STATEMENT: Answered questions.
Jack Fargnoli, Senior Policy Analyst
Office of Management & Budget
Office of the Governor
PO Box 110020
Juneau, Alaska 99811-0020
POSITION STATEMENT: Answered questions.
Sal Atkinson, Member
Metlakatla City Council
PO Box 8
Metlakatla, Alaska 99926
POSITION STATEMENT: Answered questions.
ACTION NARRATIVE
TAPE 96-12, SIDE A
Number 001
CHAIRMAN TORGERSON called the Senate Community & Regional Affairs
Committee meeting to order at 11:35 a.m.
SENATOR TORGERSON announced SB 287 (UNINCORP. COMMUNITY MATCHING)
GRANTS) would not be heard by the committee until some additional
information, which has been requested, is received.
SB 280 MANDATORY INCORP OF CERTAIN BOROUGHS
SENATOR TORGERSON, Prime Sponsor, introduced SB 280 as the next
order of business before the committee. He said that he intended
to have the committee look at adopting a CS which would place a
time line in the bill. The time line would provide better
direction to Community & Regional Affairs as well as to the Local
Boundary Commission; the original bill said that everything must
occur by 1998. That probably cannot be accomplished. He and the
committee staff had been in contact with the Local Boundary
Commission staff and others in order to place the time line in the
bill. Senator Torgerson invited the committee staff to come to the
table for an explanation of the CS.
Number 040
SENATOR RANDY PHILLIPS moved that CSSB 280(CRA) be adopted for
purposes of discussion. Hearing no objection, the CS was adopted.
DEB DAVIDSON, Staff for the Senate Community & Regional Affairs
Committee, explained that the bill directs the Department of
Community & Regional Affairs to submit second-class borough
incorporation proposals for all areas of the unorganized borough.
The proposals are to be based upon the 1995 "Model Borough
Boundaries" report. Once the Local Boundary Commission accepts the
proposals, elections will be held in order to elect assembly
members and to determine which of the non-areawide borough powers
are wanted. Boroughs would automatically be formed upon the
certification of the election. In addition to those directives,
the CS would direct the state assessor to estimate the true value
of the property in the unorganized borough. Then a guideline is
established for the department to submit the proposals to the Local
Boundary Commission. Borough proposals for those areas with a full
and true value of at least $550 million should be submitted to the
commission by July 1, 1997. Ms. Davidson pointed out the
restrictions for the following years which as listed on page 2,
lines 24-29 of the CS. The Local Boundary Commission has six
months from the time each proposal is submitted to determine if the
borough was feasible and could work. She informed the committee
that there is a copy of the Model Boundary Report as well as
information illustrating which new boroughs would be formed and
those that could be expanded if the commission deemed it so and
submitted it to the legislature. There is also information
indicating which boroughs would most likely be proposed each year,
as based on the 1994 value. The department does not believe those
would change with the 1997 estimate.
Number 090
In response to Senator Torgerson, DEB DAVIDSON said that no letter
of support had been received from the Administration. The
Administration appears to be neutral. Ms. Davidson said that the
department has expressed a willingness to work with the committee
on this matter.
SENATOR TORGERSON asked if there was any discussion on the adoption
of the CS. Hearing none, the CS was before the committee. Senator
Torgerson explained that he had intended to adopt the CS and then
distribute it across the state. The bill would be heard again in
about two weeks.
SENATOR ZHAROFF inquired as to how these boundaries come into play.
SENATOR TORGERSON explained that the Local Boundary Commission
began a Model Boundary in 1989 and was completed in 1992.
According to the commission, each model borough boundary can
sustain a local government. DEB DAVIDSON interjected that there
would be 19 new boroughs including Annette Island.
Number 142
SENATOR HOFFMAN pointed out that most of those boundaries follow
the last election districts; many of those boundaries have changed
as a result of the 1990 reapportionment.
SENATOR TORGERSON believed that the commission, or whoever did the
report, took into account the social, cultural, and economic
activities of each region in order to ensure their compatibility.
The report stated that it basically followed the existing REAA
boundaries of that time. Perhaps, some REAA districts have changed
since that time.
SENATOR HOFFMAN mentioned that many of the same requirements for
the election districts are the same as those for reapportionment.
SENATOR TORGERSON noted that if there are adjustments to be made,
the Local Boundary Commission would do so per the commission's
constitutional responsibility. In Senator Torgerson's opinion,
this should have been before the committee years ago.
SENATOR KELLY asked if mandatory boroughs were established, would
that obviate the need for the REAAs?
SENATOR TORGERSON assumed so. Currently, there are 54 school
districts in Alaska and this would consolidate the school districts
to one per borough as is the case in organized areas. SB 280 does
not address that, SB 280 provides the means for the equalization
between organized and unorganized areas.
SENATOR HOFFMAN noted that the unorganized areas encompass the
districts represented by Senator Zharoff, Senator Adams, Senator
Lincoln, and himself; who have travelled extensively through those
areas. One of the primary reasons for not organizing these areas
is that these areas feel uncomfortable with local government. To
place another layer of government on an ill-functioning existing
government seems to indicate that the next layer of government
would be even more ill-functioning. Many of these communities have
unique needs and their local governments are struggling to
determine whether second-class city status would be preferable over
organization under tribal organizations. He informed the committee
that many of these communities are choosing tribal organizations
like Metlakatla. Senator Hoffman expressed concern that SB 280
would not allow boroughs to function well and create divisiveness.
Number 218
SENATOR TORGERSON believed that Alaskan communities should start
out equal, especially before taking revenues from tax based
communities to provide services for unorganized communities or
communities that are not tax based. Recognizing 226 other nations
within Alaska is an entirely different subject. Senator Torgerson
hoped that Alaska did not recognize these nations nor that the
tribal status would drive Alaska to eliminate Native lands and
create areas that are no longer called Alaska.
SENATOR HOFFMAN pointed out that only one percent of Alaska's lands
are held privately, those holdings are in urban Alaska. In rural
Alaska, the largest land holding is held in trust with Native lands
which encompasses more than 20 percent of Alaska's land. Those
lands held in trust cannot be taxed.
SENATOR TORGERSON interjected that those lands are only in trust
until they are developed. Once the area is developed, the area
becomes taxable if in a tax based area. This is almost a different
subject than whether or not Alaska should have an equalization of
services across the state.
SENATOR RANDY PHILLIPS stated that all the legislators are the
local government for the unorganized areas: does the legislature
have the power to tax for schools in the unorganized areas?
SENATOR TORGERSON had asked that question of legal services who
indicated that the legislature cannot dedicate the funds for
schools, but the legislature has the authority to tax and place it
in the General Fund and distribute as seen fit. A tax could not be
instituted and dedicated to education, but the legislature can
place a mill rate with or without the mandatory borough act.
SENATOR ZHAROFF mentioned that much of the undeveloped land does
generate a significant amount of revenue through PL874 monies of
which a good portion is placed in education. If the entire borough
boundary system is to be restructured, then the notion that
everything should be erased and started over should be considered.
SENATOR TORGERSON agreed that could be considered, however, that is
not before the committee. SB 280 adopts a plan by the Local
Boundary Commission which is their responsibility under Alaska's
constitution. The bill merely establishes a few guidelines
regarding when the report should be presented to the legislature.
Senator Torgerson emphasized that the legislature does have the
authority to mandate the incorporation of a borough, but not
annexation. With regards to revenue that may be lost or gained due
to federal money, the fiscal notes will have to be reviewed
carefully. Certainly, there will be a transfer of revenue in the
portions of unorganized areas which have the pipeline or oil and
gas properties. Those are currently taxed at the maximum rate of
20 mills, local governments can tax up to the 20 mill rate. If the
unorganized areas choose to form a borough, that money would shift
from the state to the local government. The amendment which
establishes a time line would encourage agencies to produce their
fiscal notes in order to determine the actual shift of monies.
SENATOR ZHAROFF asked if there are any requests before the
commission regarding the formation of boroughs. SENATOR TORGERSON
specified that there are some requests for annexation, but not for
the formation of boroughs.
SENATOR TORGERSON held SB 280 in order that all the pertinent
information could be distributed across the state.
SB 293 CAP PROJ MATCHING GRANT FOR INDIAN RESERV
SENATOR TORGERSON introduced SB 293 as the next order of business
before the committee.
Number 305
SENATOR ZHAROFF, Prime Sponsor, explained that SB 293 would clarify
an ambiguity in the statute with regard to how Metlakatla is
treated under the Capital Matching Grants program. Senator Zharoff
discussed the following sponsor statement:
SB 293 would amend the Capital Matching Grants program to clarify
that the Metlakatla Indian Community can participate in the program
as a municipality rather than as an unincorporated community.
The Capital Matching Grants program became effective in FY 1994.
The prior administration adopted regulations to implement the
Capital Matching Grants program that allowed Metlakatla to receive
Capital Matching Grants as both a municipality and unincorporated
community. Last year, Legislative Legal Services determined that
Metlakatla could not legally receive a Capital Matching Grant as a
municipality and without an amendment to the Capital Matching
Grants statutes, could only receive funds under the unincorporated
portion of the program.
This bill corrects what I believe was an oversight in the original
legislation that created the Capital Matching Grants program to
specifically allow Metlakatla to receive their Capital Matching
Grants under the municipal portion of the program rather than as an
unincorporated community.
Senator Zharoff said that since Metlakatla was not listed as a
municipality, Metlakatla only received $25,000. As a municipality,
Metlakatla would be eligible for $50,000. In discussions with the
Administration and the Department of Community & Regional Affairs,
there is no objection to SB 293. He hoped that SB 293 would be
viewed as a housekeeping measure.
SENATOR RANDY PHILLIPS clarified that SB 293 would be recognized as
an incorporated area, as a municipality which would allow
Metlakatla to be eligible for $50,000. SENATOR ZHAROFF agreed with
that assessment. SENATOR RANDY PHILLIPS asked why Metlakatla was
not currently receiving that amount. SENATOR ZHAROFF explained
that Metlakatla was omitted from the legislation that established
the Capital Matching Grants Program in 1994; that was an oversight.
SENATOR TORGERSON pointed out that the additional money, $14,910,
is needed to upgrade Metlakatla. Perhaps the department could
inform the committee from where this money would come.
Number 354
KIM METCALFE-HELMAR, Special Assistant for the Department of
Community & Regional Affairs, supported SB 293 which the department
views as a housekeeping measure. SB 293 would clarify an ambiguity
in current law by establishing Metlakatla as a municipality for the
purposes of the Municipal Capital Project Matching Grant Program.
She requested that Bill Rolfzen from the department to come forward
to answer specific questions.
SENATOR RANDY PHILLIPS inquired as to how Metlakatla operated.
BILL ROLFZEN, State Revenue Sharing for the Department of Community
& Regional Affairs, explained that the Metlakatla Indian Community
operates similarly to a municipality organized under state law.
Metlakatla has a City Council, a Mayor, and it provides basic
community services for Annette Island. As far as Mr. Rolfzen knew,
the Mayor and the City Council are elected by the people in
Metlakatla. Mr. Rolfzen clarified that the Metlakatla Community
Development Corporation must be established as required under the
Municipal Assistance Legislation which was amended in 1986 as well
as under the National Forest Receipts Program. The corporation has
been formed. Within the charter of the corporation, the election
of the board of directors must be open to all members of the
community regardless of race. Once the money is received, a
determination regarding how the money would be spent would be made
and then the money would be given to the Metlakatla Indian
Community. The Metlakatla Indian Community is basically the local
government that provides all the local services. The expenditure
of the fund would be documented in the financial statements the
department receives; those monies are audited and tracked.
Number 382
SENATOR KELLY asked if SB 293 was site specific to Metlakatla.
SENATOR TORGERSON replied yes.
SENATOR TORGERSON pointed out that the fiscal note is zero,
although the transition would require $14,910. He assumed that
money would be taken from other communities in order to make the
transition.
JACK FARGNOLI, Office of Management and Budget for the Office of
the Governor, said that the funding issue is before the
legislature. One option would entail the extra money being added
to the total amount of money being appropriated to both programs or
money could be taken from one side and moved to the other side.
Once the funding decision is made for the municipal program, that
money would be spread by formula. Therefore if money were added to
that side, it would come out of the CRA side. If money were added
to the CRA side, the money would come from Community & Regional
Affairs. Including Metlakatla in this funding would be another
community for which the municipal funding would have to be spread
by formula. Mr. Fargnoli pointed out that there are two choices,
either add more money or let the allocations follow the formula.
SENATOR TORGERSON asked if the Administration's position was to
leave it to the legislature. JACK FARGNOLI noted that the Governor
has proposed a net cut of the Metlakatla decision. Mr. Fargnoli
assumed that the total funding level would remain the same
and Metlakatla would be included with the municipalities.
Number 415
SENATOR TORGERSON handed out a breakdown of where this money would
come from and listing each municipality in the current program. He
assumed that this would create zero impact to the budget. This
report was provided by Municipal Grants in the Administration.
JACK FARGNOLI said that original intent was to include Metlakatla
as a municipality which was echoed in regulations through a
definition including Metlakatla as a municipality. The way the
local revenue sharing program was written, the unincorporated side
of the program, meant that Metlakatla had to be included as an
unincorporated entity as well. Last year, Senator Halford pointed
out that a different prevailing statute's definition of
municipality, Metlakatla did not fall under that. The only
recourse was to allow Metlakatla to remain on the unincorporated
side of the program.
SENATOR RANDY PHILLIPS asked if there was a tax base in Metlakatla.
JACK FARGNOLI replied yes and deferred to Mr. Rolfzen.
Number 449
SAL ATKINSON, member of the Metlakatla City Council, informed the
committee that he was present to represent the mayor and the
council. He thanked Senator Zharoff for introducing SB 293. Mr.
Atkinson explained that last year, Metlakatla missed some matching
grant funds through some technical error. After reviewing the
situation, the community discovered that it qualified under the
definition of unincorporated community as well as the definition of
a municipality. Metlakatla has its own constitution, law and order
code, police force, judicial system, 12 councilmen, judges, and all
the services provided by other communities. Mr. Atkinson
emphasized that Metlakatla wants to build a closer working
relationships with the State of Alaska. SB 293 would draw
Metlakatla closer to this goal.
SENATOR RANDY PHILLIPS inquired as to how many members were there
on the Metlakatla council. SAL ATKINSON said there were 12
members. The town engineer is elected separately. In response to
Senator Randy Phillips' question regarding Metlakatla's tax base,
Mr. Atkinson stated that Metlakatla does not have a tax base.
There are some timber lands and that money is used to provide
services to the people. For instance, services are provided for
senior citizens in Metlakatla beyond what is provided in other
communities.
SENATOR RANDY PHILLIPS asked if the monies that Metlakatla has for
the government comes entirely from timber sales. SAL ATKINSON
informed the committee that Metlakatla does receive grants from the
State of Alaska. At one time, Metlakatla received money from the
Bureau of Indian Affairs, but that money is shrinking. Therefore,
Metlakatla wants to diversify its economy. Currently, Metlakatla
does not have a tax base, but eventually that may happen. Mr.
Atkinson noted that research is being done on the possibility of a
sales tax. Metlakatla has a population of 1,826.
In response to Senator Kelly's question regarding the location of
Metlakatla, SENATOR RANDY PHILLIPS said that Metlakatla is south of
Ketchikan. SENATOR KELLY asked if all of Annette Island was
Metlakatla, is the community called Metlakatla? SAL ATKINSON
replied yes. Mr. Atkinson explained that when the area was set
aside by presidential proclamation, the area was set aside for the
Indians of Metlakatla living on Annette Islands.
Number 495
SENATOR RANDY PHILLIPS asked if the people of Metlakatla had
decided not to participate in the Native Land Claims in lieu of
title to the land and a way of life. SAL ATKINSON agreed that the
people of Metlakatla decided not to participate in the Native Land
Claims. Mr. Atkinson explained that all the land of the Annette
Islands belongs to the federal government, a parcel of land can be
leased for a maximum of 50 years renewable.
SENATOR KELLY asked if homes were built on that leased land. Are
homes bought and sold on leased land? SAL ATKINSON said that homes
were built on the leased land, but rarely is a house on leased land
sold. These homes are in private ownership.
SENATOR RANDY PHILLIPS thought that the tribe decided that the land
belongs to the people collectively, but that is not the case. Why
did the tribe opt out of the Native Land Claims Act? SAL ATKINSON
expressed gratitude that the tribe had chosen not to participate in
the Native Land Claims Act. A subsistence lifestyle is still
present and no commercial fishery is allowed within any of the
waters surrounding Annette Island. For instance, if someone
proposes a shellfish harvest or other commercial harvest,
Metlakatla can refuse.
SENATOR HOFFMAN asked if members of the tribe could go commercial
fish in those waters. SAL ATKINSON replied yes.
SENATOR KELLY inquired as to how far from the island are commercial
fisheries not allowed. SAL ATKINSON informed the committee that it
extended 3,000 feet from the land.
SENATOR KELLY asked if any of the people in Metlakatla belonged to
any of the regional corporations. SAL ATKINSON said no, they are
not allowed; although, the ANSCA amendments would allow the people
of Metlakatla to inherit stock, but not a controlling amount.
In response to Senator Randy Phillips, SAL ATKIINSON said that the
elders of Metlakatla made the decision not to participate in the
Native Land Claims Act. SENATOR RANDY PHILLIPS asked what the
elders of Metlakatla saw that other elders did not with regard to
the Native Land Claims Act. SAL ATKINSON said that the elders of
Metlakatla looked at the way of life they had; they did not want to
change their lifestyle which still prevails today.
SENATOR TORGERSON asked if anyone else would like to testify.
Hearing none, Senator Torgerson said that he was tempted to hold
SB 293 until Wednesday for a corrected fiscal note. He did not
believe that the Administration was being honest with the zero
fiscal note when money, $14,000, will be taken from tax based
communities to spread around. Senator Torgerson explained that his
opposition comes from the Administration's opposition to SB 20
which is about the same, but with a $900,000 fiscal note because
the Administration did not like that bill. SB 293 was held until
Wednesday and a request will be made for a corrected fiscal note.
There being no further business before the committee, the meeting
was adjourned at 2:22 p.m.
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