Legislature(2021 - 2022)BELTZ 105 (TSBldg)

05/05/2022 03:30 PM Senate COMMUNITY & REGIONAL AFFAIRS

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
**Streamed live on AKL.tv**
+= HB 298 ALASKA FOOD STRATEGY TASK FORCE TELECONFERENCED
Heard & Held
*+ HB 411 MUNI TAX EXEMPT/DEFER; ECON DEVELOPMENT TELECONFERENCED
Moved SCS CSHB 411(CRA) Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
    SENATE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE                                                                  
                          May 5, 2022                                                                                           
                           3:30 p.m.                                                                                            
                                                                                                                                
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Shelley Hughes, Chair                                                                                                   
Senator Robert Myers, Vice Chair                                                                                                
Senator Elvi Gray-Jackson                                                                                                       
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Lyman Hoffman                                                                                                           
Senator David Wilson                                                                                                            
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
COMMITTEE SUBSTITUTE FOR HOUSE BILL NO. 411(CRA)                                                                                
"An Act relating to municipal economic development; relating to                                                                 
municipal tax exemptions and deferrals on economic development                                                                  
property; and relating to economic development."                                                                                
                                                                                                                                
     - MOVED SCS CSHB 411(CRA) OUT OF COMMITTEE                                                                                 
                                                                                                                                
COMMITTEE SUBSTITUTE FOR HOUSE BILL NO. 298(CRA) AM                                                                             
"An Act establishing the Alaska Food Strategy Task Force; and                                                                   
providing for an effective date."                                                                                               
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: HB 411                                                                                                                  
SHORT TITLE: MUNI TAX EXEMPT/DEFER; ECON DEVELOPMENT                                                                            
SPONSOR(s): COMMUNITY & REGIONAL AFFAIRS                                                                                        
                                                                                                                                
04/04/22       (H)       READ THE FIRST TIME - REFERRALS                                                                        
04/04/22       (H)       CRA, L&C                                                                                               
04/05/22       (H)       CRA AT 8:00 AM BARNES 124                                                                              
04/05/22       (H)       -- MEETING CANCELED --                                                                                 
04/07/22       (H)       CRA AT 8:00 AM BARNES 124                                                                              
04/07/22       (H)       -- MEETING CANCELED --                                                                                 
04/12/22       (H)       CRA AT 8:00 AM BARNES 124                                                                              
04/12/22       (H)       Heard & Held                                                                                           
04/12/22       (H)       MINUTE(CRA)                                                                                            
04/14/22       (H)       CRA AT 8:00 AM BARNES 124                                                                              
04/14/22       (H)       Heard & Held                                                                                           
04/14/22       (H)       MINUTE(CRA)                                                                                            
04/19/22       (H)       CRA AT 8:00 AM BARNES 124                                                                              
04/19/22       (H)       Moved CSHB 411(CRA) Out of Committee                                                                   
04/19/22       (H)       MINUTE(CRA)                                                                                            
04/20/22       (H)       CRA RPT CS(CRA) NEW TITLE 3DP 2NR                                                                      
04/20/22       (H)       DP: MCCABE, HANNAN, SCHRAGE                                                                            
04/20/22       (H)       NR: MCCARTY, PRAX                                                                                      
04/20/22       (H)       L&C REFERRAL REMOVED                                                                                   
04/20/22       (H)       BILL REPRINTED                                                                                         
04/27/22       (H)       CRA CS ADOPTED Y34 N4 E1 A1                                                                            
04/27/22       (H)       SUSTAINED RULING OF CHAIR Y37 N2 E1                                                                    
04/29/22       (H)       TRANSMITTED TO (S)                                                                                     
04/29/22       (H)       VERSION: CSHB 411(CRA)                                                                                 
05/02/22       (S)       READ THE FIRST TIME - REFERRALS                                                                        
05/02/22       (S)       CRA                                                                                                    
05/05/22       (S)       CRA AT 3:30 PM BELTZ 105 (TSBldg)                                                                      
                                                                                                                                
BILL: HB 298                                                                                                                  
SHORT TITLE: ALASKA FOOD STRATEGY TASK FORCE                                                                                    
SPONSOR(s): SNYDER                                                                                                              
                                                                                                                                
02/04/22       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/04/22       (H)       CRA                                                                                                    
03/15/22       (H)       CRA AT 8:00 AM BARNES 124                                                                              
03/15/22       (H)       Heard & Held                                                                                           
03/15/22       (H)       MINUTE(CRA)                                                                                            
03/17/22       (H)       CRA AT 8:00 AM BARNES 124                                                                              
03/17/22       (H)       Heard & Held                                                                                           
03/17/22       (H)       MINUTE(CRA)                                                                                            
03/24/22       (H)       CRA AT 8:00 AM BARNES 124                                                                              
03/24/22       (H)       Moved CSHB 298(CRA) Out of Committee                                                                   
03/24/22       (H)       MINUTE(CRA)                                                                                            
04/04/22       (H)       CRA RPT CS(CRA) 6DP 1NR                                                                                
04/04/22       (H)       DP: MCCARTY, DRUMMOND, MCCABE, PRAX,                                                                   
                        HANNAN, SCHRAGE                                                                                         
04/04/22       (H)       NR: PATKOTAK                                                                                           
04/14/22       (H)       BEFORE HOUSE IN THIRD READING                                                                          
04/14/22       (H)       CALL FOR THE QUESTION WITHDRAWN                                                                        
04/14/22       (H)       TRANSMITTED TO (S)                                                                                     
04/14/22       (H)       VERSION: CSHB 298(CRA) AM                                                                              
04/19/22       (S)       READ THE FIRST TIME - REFERRALS                                                                        
04/19/22       (S)       CRA                                                                                                    
04/28/22       (S)       CRA AT 3:30 PM BELTZ 105 (TSBldg)                                                                      
04/28/22       (S)       Heard & Held                                                                                           
04/28/22       (S)       MINUTE(CRA)                                                                                            
05/05/22       (S)       CRA AT 3:30 PM BELTZ 105 (TSBldg)                                                                      
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
REPRESENTATIVE CALVIN SCHRAGE                                                                                                   
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Presented HB 411 as Co-Chair of the House                                                                 
Community and Regional Affairs Committee.                                                                                       
                                                                                                                                
RYAN JOHNSTON, Staff                                                                                                            
Representative Calvin Schrage                                                                                                   
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Presented the sectional analysis for HB 411.                                                              
                                                                                                                                
WILLIAM FALSEY, representing self                                                                                               
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Provided invited testimony in support of HB
411.                                                                                                                            
                                                                                                                                
MIKE EDGINGTON, Co-Chair                                                                                                        
Girdwood Board of Supervisors                                                                                                   
Girdwood, Alaska                                                                                                                
POSITION STATEMENT: Provided invited testimony in support of HB
411.                                                                                                                            
                                                                                                                                
BRITTANY SMART, Special Assistant to the Mayor                                                                                  
Fairbanks North Star Borough                                                                                                    
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT: Provided invited testimony in support of HB
411.                                                                                                                            
                                                                                                                                
NILS ANDREASSEN, Executive Director                                                                                             
Alaska Municipal League                                                                                                         
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Provided invited testimony in support of HB
411.                                                                                                                            
                                                                                                                                
DANIEL PHELPS, Staff                                                                                                            
Senator Shelley Hughes                                                                                                          
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Presented the explanation of  changes for the                                                            
SCS for HB 298 on behalf of the committee.                                                                                      
                                                                                                                                
REPRESENTATIVE LIZ SNYDER                                                                                                       
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Sponsor of HB 298.                                                                                        
                                                                                                                                
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
3:30:26 PM                                                                                                                    
CHAIR  SHELLEY HUGHES  called the  Senate  Community and  Regional                                                            
Affairs Standing  Committee meeting to order at  3:30 p.m. Present                                                              
at  the call  to  order  were Senators  Myers,  Gray-Jackson,  and                                                              
Chair Hughes.                                                                                                                   
                                                                                                                                
         HB 411-MUNI TAX EXEMPT/DEFER; ECON DEVELOPMENT                                                                     
                                                                                                                                
3:30:52 PM                                                                                                                    
CHAIR  HUGHES announced  the consideration  of CS  FOR HOUSE  BILL                                                              
NO. 411(CRA) "An  Act relating to municipal  economic development;                                                              
relating  to municipal tax  exemptions and  deferrals on  economic                                                              
development property; and relating to economic development."                                                                    
                                                                                                                                
3:31:15 PM                                                                                                                    
REPRESENTATIVE CALVIN  SCHRAGE, Alaska State  Legislature, Juneau,                                                              
Alaska, presented  HB 411 as co-chair  of the House  Community and                                                              
Regional  Affairs  Committee.  He  explained that  the  bill  came                                                              
about  when residents  from the  Girdwood area  brought forward  a                                                              
concern  that an  economic development  bill  that passed  several                                                              
years  ago  did not  include  service  areas.  HB 411  amends  the                                                              
statute to allow  special services areas to take  part in economic                                                              
development  programs, but  they  could opt  out  if they  thought                                                              
such  projects  would  have  a  negative  effect.  The  bill  also                                                              
addresses  two  concerns  his  office heard  this  year  from  the                                                              
Fairbanks area. One,  it allows a borough and  municipality within                                                              
that borough  to work together to  use federal funds  for economic                                                              
development.   Second,  the  bill   broadens  the  definition   of                                                              
"economic development   to allow local  areas to define  that term                                                              
to meet the local needs.                                                                                                        
                                                                                                                                
3:34:52 PM                                                                                                                    
SENATOR  GRAY-JACKSON asked  whether  HB 411  would  apply to  all                                                              
types of service areas                                                                                                          
                                                                                                                                
REPRESENTATIVE SCHRAGE deferred  the question to Ryan Johnston.                                                                 
                                                                                                                                
3:35:14 PM                                                                                                                    
RYAN  JOHNSTON,  Staff,  Representative   Calvin  Schrage,  Alaska                                                              
State Legislature,  Juneau, Alaska,  answered that HB  411 applies                                                              
to all service areas that have appointed or elected boards.                                                                     
                                                                                                                                
MR.  JOHNSTON presented  the sectional  analysis for  HB 411  that                                                              
read as follows:                                                                                                                
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
     Section 1:                                                                                                               
     Amends  AS 29.35.110(c)  to include  "other sources"  to                                                                   
     possible funding  sources for use by a borough  and city                                                                   
     that  have   entered  into   an  agreement  to   provide                                                                   
     economic development.                                                                                                      
                                                                                                                                
     Section 2:                                                                                                               
     Amends AS  29.45.050(m) to  allow for tax deferrals  and                                                                   
     incentives within  a service area. The service  area has                                                                   
     a 30-day window  after the adoption of the  ordinance to                                                                   
     op-out  of the tax  deferral or  incentive. Deletes  the                                                                   
     definition  of "economic development  property" for  the                                                                   
     section.                                                                                                                   
                                                                                                                                
     Section 3:                                                                                                               
     Adds  a definition  for "economic  development",  "means                                                                   
     an action intended  to result in an outcome  that causes                                                                   
     an  increase  in,  or avoids  a  decrease  of,  economic                                                                   
     activity, gross domestic product, or the tax base."                                                                        
                                                                                                                                
3:38:04 PM                                                                                                                    
At ease.                                                                                                                        
                                                                                                                                
3:38:03 PM                                                                                                                    
CHAIR HUGHES  reconvened the  meeting and  asked if the  committee                                                              
had questions or comments.                                                                                                      
                                                                                                                                
3:38:10 PM                                                                                                                    
SENATOR  MYERS  referenced the  new  language  in Section  2  that                                                              
allows a  municipality to apply  an exemption or  deferral "unless                                                              
the   board   objects   to   the    exemption   or   deferral   by                                                              
resolution....He    relayed that someone  in his district  who has                                                              
considerable  experience  with   road  service  areas,  questioned                                                              
whether  a  road  service  area   board,  an  appointed  board  in                                                              
particular,  has the  ability to  pass a resolution.  He asked  if                                                              
there was a definitive answer to that question.                                                                                 
                                                                                                                                
3:38:59 PM                                                                                                                    
REPRESENTATIVE  SCHRAGE said he  imagines that  even if  the board                                                              
wasn't  strictly  authorized to  pass  a resolution,  the  members                                                              
could  sign and send  a document  to the  municipality that  would                                                              
fulfill the requirement spelled out in statute.                                                                                 
                                                                                                                                
SENATOR MYERS  clarified that he  was not opposed to  the process,                                                              
he just wanted to make sure the  bill wasn't overly prescriptive.                                                               
                                                                                                                                
3:39:58 PM                                                                                                                    
CHAIR  HUGHES asked  whether a road  service  areas could  place a                                                              
time limit on the exemption.                                                                                                    
                                                                                                                                
REPRESENTATIVE  SCHRAGE answered  yes; the  statute says  that the                                                              
tax  deferral or  exemption must  be  for a  specified period.  He                                                              
added  that the  taxes would  only be  deferred or  exempted in  a                                                              
service  area  if  the  project  was in  that  service  area.  For                                                              
example,  if there  was a  development in  midtown Anchorage,  the                                                              
property  taxes for  the special  service area  in Girdwood  would                                                              
not be deferred  or exempted. The taxes would only  be exempted or                                                              
deferred if the project was in Girdwood.                                                                                        
                                                                                                                                
3:41:49 PM                                                                                                                    
CHAIR HUGHES opened invited testimony on HB 411.                                                                                
                                                                                                                                
3:42:07 PM                                                                                                                    
WILLIAM  FALSEY,  representing  self,  Anchorage,  Alaska,  stated                                                              
that he  is a private  practice attorney  testifying today  in his                                                              
personal  capacity.  He  voiced   support  for  the  provision  in                                                              
Section 2  that corrects an  issue that  was created in  2017 with                                                              
passage  of  Senate  Bill  100.   That  bill  created  significant                                                              
challenges  for   municipalities  that  want  to   enact  economic                                                              
development  tax  incentives  in  areas  where  taxes  are  mostly                                                              
collected for a service area that is overseen by a board.                                                                       
                                                                                                                                
MR. FALSEY  explained that in 2017,  Senate Bill 100  expanded the                                                              
ability  of municipalities  to  provide economic  development  tax                                                              
incentives.  It was  a good  bill that  has benefited  communities                                                              
across  the state,  but  it  also added  a  new limitation  to  AS                                                              
29.45.050(m)  that prevents  a municipality  from  applying a  tax                                                              
exemption or deferral  for special services when  the service area                                                              
is supervised by a board under AS 29.35.460.                                                                                    
                                                                                                                                
MR.  FALSEY  reminded   the  committee  that  service   areas  are                                                              
authorized in  the state constitution.  They are  taxing districts                                                              
within  boroughs  and  unified  municipalities  that  offer  local                                                              
services that a  local borough or unified municipality  has chosen                                                              
not  to  provide  on  an  areawide  basis.  For  example,  in  the                                                              
Municipality of  Anchorage core  services for police,  fire, parks                                                              
and  recreation,  and  roads and  drainage  are  provided  through                                                              
service  areas. He  noted that they  were not  affected by  Senate                                                              
Bill 100 because they are not supervised by a board.                                                                            
                                                                                                                                
MR.  FALSEY  said   the  municipality  also  has   numerous  board                                                              
supervised  service areas  that  were affected  by the  exclusion.                                                              
This includes  the Hillside  area out to  the Anchorage  Bowl that                                                              
has  numerous limited  road service  areas and  Chugiak and  Eagle                                                              
River that  have board supervised  parks and fire  boards. Perhaps                                                              
most  significantly  was  the Girdwood  Valley  service  area.  It                                                              
operates  like a  small  city,  providing separate  police,  fire,                                                              
roads and parks services.                                                                                                       
                                                                                                                                
MR. FALSEY stated  that the provision that excluded  service areas                                                              
supervised  by a  board  was added  late in  the  Senate Bill  100                                                              
process.  It was  in response  to  a concern  voiced in  committee                                                              
that  a borough  or  municipal assembly  might  enact an  economic                                                              
development incentive  that would  negatively affect the  board of                                                              
a  supervised   service  area.  The   fix  was  to   ban  economic                                                              
development   incentives  in   board   supervised  service   areas                                                              
altogether.  That  was  not  the  right  fix.  Rather,  the  board                                                              
supervised  service areas should  have been  given the  ability to                                                              
decide for themselves.                                                                                                          
                                                                                                                                
MR. FALSEY  said HB  411 makes  a surgical  correction and  allows                                                              
tax  incentives  in  board  supervised   service  areas  when  the                                                              
service  area  board  doesn't  object.  It  will  be  particularly                                                              
meaningful  for Girdwood.  Mechanically,  the  fix allows  service                                                              
areas to  opt out by  passing a resolution  of objection  no later                                                              
than 30 days after  the ordinance passes. This would  be after the                                                              
notice and public hearing requirements are fulfilled.                                                                           
                                                                                                                                
MR. FALSEY,  in response to an  earlier discussion, said  he knows                                                              
that   the   Girdwood   Valley  service   area   commonly   adopts                                                              
resolutions.  He thought  most boards  would think  it was  within                                                              
their  powers to  pass  or adopt  a resolution  either  expressing                                                              
their opinion  or awarding a contract  to a specific  road service                                                              
contractor.                                                                                                                     
                                                                                                                                
MR. FALSEY  concluded his comments stating  that HB 411  is a good                                                              
measure  that he  strongly supports  and that  he appreciates  the                                                              
committee's consideration of the bill.                                                                                          
                                                                                                                                
3:47:41 PM                                                                                                                    
CHAIR  HUGHES  acknowledged  that  he  said  he  was  representing                                                              
himself,  but  wondered  if  he  also  worked  for  the  Anchorage                                                              
Assembly and  was aware that the  Municipality of Anchorage  had a                                                              
resolution in support of HB 411.                                                                                                
                                                                                                                                
MR. FALSEY  replied that the Anchorage  Assembly had hired  him on                                                              
other  issues,  but  not  this  one.  Today  he  was  representing                                                              
himself.                                                                                                                        
                                                                                                                                
3:48:24 PM                                                                                                                    
SENATOR GRAY-JACKSON  noted that  the bill packet  did not  have a                                                              
resolution  from the Anchorage  Assembly. She  asked if  there was                                                              
one.                                                                                                                            
                                                                                                                                
REPRESENTATIVE   SCHRAGE  responded  that   his  office   had  not                                                              
received a letter  of support for HB 411 from  the Municipality of                                                              
Anchorage,  but there were  letters of  support from the  Girdwood                                                              
Service  Area  Board,   the  Alaska  Municipal  League,   and  the                                                              
Fairbanks North Star Borough.                                                                                                   
                                                                                                                                
3:49:42 PM                                                                                                                    
MIKE   EDGINGTON,  Co-Chair,   Girdwood   Board  of   Supervisors,                                                              
Girdwood, Alaska,  testified on  HB 411  by invitation.  He stated                                                              
that  of all  the  issues facing  Girdwood,  housing  is the  most                                                              
pressing  because it  affects  all the  economic  activity in  the                                                              
community.  When the  board was  looking for  possible options  to                                                              
pursue,   they  identified   the  restriction   on  offering   tax                                                              
exemptions  for  economic  development  projects.  He  highlighted                                                              
that  just under  half of  the taxes  levied  locally through  the                                                              
service  area   are  used   to  fund   police,  fire,   parks  and                                                              
recreation,  the cemetery,  and  roads. He  reiterated that  under                                                              
existing law,  the service area is  not able to take  advantage of                                                              
tax exemptions.                                                                                                                 
                                                                                                                                
MR.   EDGINGTON   highlighted   that  the   ordinance   that   the                                                              
Municipality  of Anchorage  introduced to  look at incentives  for                                                              
accessory dwelling  units impacted areas of the  municipality very                                                              
differently  depending   on  what  local  services   are  provided                                                              
through  the  service   areas.  Because  of  the   exclusion,  the                                                              
ordinance would  not be useful  at all  in Girdwood, but  it would                                                              
have a  positive effect in parts  of the Anchorage  bowl, Chugiak,                                                              
and Eagle River.  He voiced support for the provision  for service                                                              
areas to  opt out  if there was  concern about  the impact  on tax                                                              
valuations.                                                                                                                     
                                                                                                                                
3:52:42 PM                                                                                                                    
BRITTANY SMART,  Special Assistant  to the Mayor,  Fairbanks North                                                              
Star  Borough  (FNSB),  Fairbanks,  Alaska,  stated  that  current                                                              
statute   does  not  have   a  broad   definition  for   "economic                                                              
development,which     makes  it  very difficult  for  FNSB,  as  a                                                              
second-class  borough,  to understand  what  authority  it has  to                                                              
apply   for  federal   economic   development   funds.  This   was                                                              
particularly  problematic during  the COVID-19  pandemic when  the                                                              
borough tried to  navigate the various relief programs  to support                                                              
the  community. The  FNSB  Assembly identified  defining  economic                                                              
development within  Title 29 as a 2022 legislative  priority. This                                                              
will help  the borough leverage  additional programs and  tools to                                                              
support  the community  and economy  as it  moves beyond  recovery                                                              
and into growth and resiliency.                                                                                                 
                                                                                                                                
3:54:24 PM                                                                                                                    
NILS  ANDREASSEN,  Executive  Director,  Alaska  Municipal  League                                                              
(AML), Juneau, Alaska,  stated that HB 411 is  consistent with two                                                              
resolutions  that AML  passed. One  spoke broadly  about the  need                                                              
for economic  development  that is consistent  with the  interests                                                              
of  local   government.  The  second   was  to  provide   a  broad                                                              
definition  of "economic  development," which  is consistent  with                                                              
the interests of local governments.                                                                                             
                                                                                                                                
MR. ANDREASSEN  emphasized the  importance of  having a  clear but                                                              
flexible definition  of economic development so  local governments                                                              
understand how  they can contribute  to local economies  such that                                                              
it is  beneficial to residents  and businesses. The  definition in                                                              
HB 411  is both.  It provides  multiple ways  to measure  economic                                                              
development  and it  not  only creates  new  business activity  it                                                              
also stabilizes  current  businesses. The  pandemic made  it clear                                                              
that there is a  need for local governments to step  in where they                                                              
haven't in  the past. He  opined that if  the definition  had been                                                              
in  place during  the  pandemic,  the  local response  to  support                                                              
local  economies  would  have been  more  robust.  The  definition                                                              
gives local  governments clarity  about what economic  development                                                              
looks  like;   it  gives   flexibility  to  incentivize   economic                                                              
development; it ensures  that funding is available  from a variety                                                              
of  sources;  and  it allows  the  optional  exemptions  to  apply                                                              
broadly  but  through  a  deliberative   and  public  process.  He                                                              
encouraged support for the bill.                                                                                                
                                                                                                                                
3:57:48 PM                                                                                                                    
CHAIR HUGHES asked for confirmation that road service areas are                                                                 
required to publicly notice meetings so the local area would be                                                                 
aware of any proposed exemptions.                                                                                               
                                                                                                                                
MR. ANDREASSEN responded that is correct. Decisions about                                                                       
optional exemptions go through a months-long process; they are                                                                  
not made in a piecemeal approach.                                                                                               
                                                                                                                                
3:59:01 PM                                                                                                                    
At ease.                                                                                                                        
                                                                                                                                
3:59:16 PM                                                                                                                    
CHAIR HUGHES reconvened the meeting and invited the public to                                                                   
submit written testimony on HB 411 to scra@akleg.gov.                                                                           
                                                                                                                                
3:59:33 PM                                                                                                                    
SENATOR MYERS moved to adopt Amendment 1, work order 32-                                                                        
LS1646\B.3.                                                                                                                     
                                                                                                                                
                                                 32-LS1646\B.3                                                                  
                                                       Dunmire                                                                  
                                                        5/5/22                                                                  
                                                                                                                                
                                                                                                                                
                          AMENDMENT 1                                                                                       
                                                                                                                                
                                                                                                                                
    OFFERED IN THE SENATE                   BY SENATOR MYERS                                                                    
          TO:  CSHB 411(CRA)                                                                                                    
                                                                                                                                
     Page 2, line 7:                                                                                                            
          Delete "a service area"                                                                                           
          Insert "an elected service area [A]"                                                                              
          Following "the":                                                                                                  
               Insert "elected service area"                                                                                
                                                                                                                                
     Page 2, line 9:                                                                                                            
          Delete "30"                                                                                                       
          Insert "90"                                                                                                       
                                                                                                                                
3:59:37 PM                                                                                                                    
CHAIR HUGHES objected for discussion purposes.                                                                                  
                                                                                                                                
3:59:40 PM                                                                                                                    
SENATOR  MYERS  stated  that  service areas  in  Fairbanks  are  a                                                              
little different  than the  rest of the  state. It is  a patchwork                                                              
of  over  100 road  service  areas,  about  a dozen  fire  service                                                              
areas, and  a couple  of water service  areas. Another  difference                                                              
is that members  are appointed rather than elected,  which creates                                                              
a different power dynamic among the boards and residents.                                                                       
                                                                                                                                
Amendment  No. 1  adds  the word  "elected"  to  specify that  the                                                              
board  is elected.  He noted  that this  wouldn't affect  Girdwood                                                              
because  it has  an elected  board. The  amendment also  increases                                                              
the number of days  to veto a municipality's action  from 30 to 90                                                              
days. Extending the  time recognizes that some  public notices may                                                              
be misplaced  or lost and that  some board members may  not always                                                              
be  readily   available  due  to   travel  or  because   they  are                                                              
snowbirds.  Service  areas in  the  Fairbanks region  often  don't                                                              
have enough  volunteers  to fill  all the board  seats, which  can                                                              
make  it  difficult  to meet  the  quorum  requirements  when  all                                                              
sitting members are absent.                                                                                                     
                                                                                                                                
4:02:31 PM                                                                                                                    
CHAIR  HUGHES voiced  support  for the  amendment.  She asked  the                                                              
sponsor if meetings  have to be publicly noticed  two weeks before                                                              
the meeting.                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SCHRAGE answered that  for the Anchorage  Assembly                                                              
to approve  an economic  development program,  there are  multiple                                                              
meetings  with multiple  public  notice opportunities.  He  didn't                                                              
know  about outside  Anchorage other  than that  public notice  is                                                              
required  in   statute  as  part   of  implementing   an  economic                                                              
development program.                                                                                                            
                                                                                                                                
Speaking to  Amendment 1, he said  he supports the change  on page                                                              
2, line 7  to clarify it applies  to elected service  area boards.                                                              
But  extending the  time  from 30  to  90 days  for  the board  to                                                              
object to a municipal  exemption or deferral is  a concern. First,                                                              
there are  very few elected service  area boards so it  won't have                                                              
broad applicability.  Second, an entire construction  season could                                                              
pass if  90 days is  added to  the time to  go through  the public                                                              
process.                                                                                                                        
                                                                                                                                
4:04:52 PM                                                                                                                    
CHAIR HUGHES pointed  out that nothing would prevent  a board from                                                              
approving a municipal exemption or deferral well before 90 days.                                                                
                                                                                                                                
REPRESENTATIVE  SCHRAGE said  it's a  good point  but there  could                                                              
still be  the chance  that a  financer would  be concerned  that a                                                              
board could change  its position during the time  remaining in the                                                              
90-day window.                                                                                                                  
                                                                                                                                
SENATOR  GRAY-JACKSON said  the sponsor  has a  sound concern  and                                                              
she would support something less than 90 days.                                                                                  
                                                                                                                                
4:06:43 PM                                                                                                                    
SENATOR  MYERS  suggested  the  committee  consider  a  conceptual                                                              
amendment  to give  the  board explicit  authority  to approve  an                                                              
exemption or  deferral, which would  stop the clock  once approval                                                              
was granted.                                                                                                                    
                                                                                                                                
CHAIR  HUGHES  added  that  to address  the  valid  concern  about                                                              
jeopardizing the  financing, the  conceptual amendment  would need                                                              
to clarify that  the board could not reverse the  approval once it                                                              
is formally given.                                                                                                              
                                                                                                                                
4:08:56 PM                                                                                                                    
At ease                                                                                                                         
                                                                                                                                
4:10:06 PM                                                                                                                      
CHAIR HUGHES reconvened the meeting.                                                                                            
                                                                                                                                
                                                                                                                                
4:10:18 PM  SENATOR MYERS  moved to  adopt Conceptual  Amendment 1                                                            
to Amendment 1.                                                                                                                 
                                                                                                                                
             CONCEPTUAL AMENDMENT 1 TO AMENDMENT 1                                                                          
                                                                                                                                
                                                                                                                                
     Page 1, line 9 of Amendment 1:                                                                                             
                                                                                                                                
          Delete "90                                                                                                        
          Insert "60                                                                                                        
                                                                                                                                
4:10:31 PM                                                                                                                    
CHAIR HUGHES objected for discussion purposes.                                                                                  
                                                                                                                                
4:10:40 PM                                                                                                                    
REPRESENTATIVE SCHRAGE  stated that 60  days is a  good compromise                                                              
between 90 days,  requested by the amendment sponsor,  and 30 days                                                              
in the bill. It strikes a good balance that he can support.                                                                     
                                                                                                                                
4:10:55 PM                                                                                                                    
CHAIR   HUGHES  withdrew   her  objection.   Finding  no   further                                                              
objection, Conceptual Amendment 1 to Amendment 1 was adopted.                                                                   
                                                                                                                                
CHAIR  HUGHES  stated  Amendment   1  as  amended  is  before  the                                                              
committee.                                                                                                                      
                                                                                                                                
CHAIR HUGHES  withdrew her  objection to  Amendment 1  as amended;                                                              
finding  no  further  objection,   Amendment  1  as  amended,  was                                                              
adopted.                                                                                                                        
                                                                                                                                
4:11:22 PM                                                                                                                    
CHAIR HUGHES moved to adopt Amendment 2, 32-LS1646\B.4.                                                                         
                                                                                                                                
                                                 32-LS1646\B.4                                                                  
                                                       Dunmire                                                                  
                                                        5/5/22                                                                  
                                                                                                                                
                          AMENDMENT 2                                                                                       
                                                                                                                                
                                                                                                                                
                     OFFERED IN THE SENATE                                                                                      
          TO:  CSHB 411(CRA)                                                                                                    
                                                                                                                                
                                                                                                                                
     Page 1, line 2:                                                                                                            
          Delete "and"                                                                                                        
                                                                                                                                
     Page 1, line 3, following "development":                                                                                 
          Insert "; and relating to a municipal tax                                                                           
     exemption for certain farm structures"                                                                                   
                                                                                                                                
     Page 3, following line 19:                                                                                                 
          Insert a new bill section to read:                                                                                    
     "* Sec. 4. Section 2, ch. 66, SLA 2013, is repealed."                                                                  
                                                                                                                                
4:11:25 PM                                                                                                                    
SENATOR MYERS objected for discussion purposes.                                                                                 
                                                                                                                                
4:11:30 PM                                                                                                                    
CHAIR HUGHES  explained that her  constituents voiced  interest in                                                              
allowing the  local governing board  to give voters the  option of                                                              
giving  certain  farm  structures  in  the  MatSu  Borough  a  tax                                                              
exemption  for a given  period of  time. This  is also  a priority                                                              
for  the  Food and  Farm  Caucus,  which  more  than half  of  the                                                              
legislature  has  joined.  She  said  this is  not  a  factor  for                                                              
agricultural areas  that are not  in an organized borough,  but in                                                              
addition  to   MatSu  it  would   affect  Fairbanks,   Kenai,  and                                                              
Anchorage. The exemption would sunset July 1, 2023.                                                                             
                                                                                                                                
4:14:01 PM                                                                                                                    
REPRESENTATIVE  SCHRAGE  stated  that  he defers  to  the  Chair's                                                              
testimony about  the need in her  area and therefore  supports the                                                              
amendment.                                                                                                                      
                                                                                                                                
4:14:22 PM                                                                                                                    
CHAIR  HUGHES asked  Mr. Andreassen  if  he wanted  to comment  on                                                              
behalf of  AML on Amendment  2. She noted  that he shook  his head                                                              
and commented that AML was probably neutral.                                                                                    
                                                                                                                                
4:14:43 PM                                                                                                                    
SENATOR MYERS withdrew his objection to Amendment 2.                                                                            
                                                                                                                                
4:14:45 PM                                                                                                                    
CHAIR  HUGHES found  no  further objection,  and  Amendment 2  was                                                              
adopted.                                                                                                                        
                                                                                                                                
She asked Representative Schrage for closing comments.                                                                          
                                                                                                                                
4:15:04 PM                                                                                                                    
REPRESENTATIVE  SCHRAGE expressed  appreciation  to the  committee                                                              
for hearing the bill and hope for support in moving it forward.                                                                 
                                                                                                                                
4:15:35 PM                                                                                                                    
SENATOR MYERS commented  that initially he was  a little concerned                                                              
that  HB 411  might contain  cost shifts.  Fairbanks has  numerous                                                              
road service areas,  some of which are very small,  and adding one                                                              
property  that  has  a tax  exemption  could  mean  a  significant                                                              
increase in  property taxes  for their  neighbors. He  was worried                                                              
this  might  be  a  disincentive   to  economic  development,  but                                                              
Amendment 1  addressed a lot  of the concerns.  He said  this will                                                              
be a good bill moving forward.                                                                                                  
                                                                                                                                
4:16:35 PM                                                                                                                    
CHAIR HUGHES solicited the will of the committee.                                                                               
                                                                                                                                
4:16:37 PM                                                                                                                    
SENATOR MYERS  moved to report HB  411, work order  32-LS1646\B as                                                              
amended,  from  committee  with   individual  recommendations  and                                                              
attached fiscal note(s).                                                                                                        
                                                                                                                                
4:16:52 PM                                                                                                                    
CHAIR  HUGHES  found  no  objection  and  SCS  CSHB  411(CRA)  was                                                              
reported from committee.                                                                                                        
                                                                                                                                
4:16:57 PM                                                                                                                    
At ease.                                                                                                                        
                                                                                                                                
             HB 298-ALASKA FOOD STRATEGY TASK FORCE                                                                         
                                                                                                                                
4:22:15 PM                                                                                                                    
CHAIR   HUGHES   reconvened   the  meeting   and   announced   the                                                              
consideration  of  CS FOR  HOUSE  BILL  NO.  298(CRA) am  "An  Act                                                              
establishing the  Alaska Food Strategy  Task Force;  and providing                                                              
for an effective date."                                                                                                         
                                                                                                                                
4:22:45 PM                                                                                                                    
SENATOR  MYERS moved  to  adopt  the Senate  Committee  Substitute                                                              
(SCS)  for  CSHB  298, work  order  32-LS1398\I,  as  the  working                                                              
document.                                                                                                                       
                                                                                                                                
4:22:58 PM                                                                                                                    
CHAIR HUGHES objected for discussion purposes.                                                                                  
                                                                                                                                
4:23:11 PM                                                                                                                    
DANIEL  PHELPS,  Staff,  Senator   Shelley  Hughes,  Alaska  State                                                              
Legislature,   Juneau,  Alaska,   presented  the  explanation   of                                                              
changes for  the SCS  for HB 298  on behalf  of the committee.  He                                                              
paraphrased the following changes  from version B.A to version I:                                                               
                                                                                                                                
                                                                                                                                
Change 1    Section 2, subsection  (b) is amended to say  that the                                                            
executive  board of  the task force  will consist  of two  members                                                              
from  the  Alaska  Food  Policy   Council,  one  member  from  the                                                              
Institute of  Social and  Economic Research,  one member  from the                                                              
Alaska  Farm  Bureau,  one  member   from  the  Alaska  Industrial                                                              
Development and Export  Authority, and four members  of the Alaska                                                              
State Legislature.                                                                                                              
                                                                                                                                
Change 2    Section 2, subsection  (d), number (11) is  amended to                                                            
say a youth  member from Alaska  Future Farmers of America  or the                                                              
Alaska 4-H Program.                                                                                                             
                                                                                                                                
Change 3    Section 2,  subsection (j),  number (3) is  amended to                                                            
say  enhancing the  climate for  food and  beverage processing  or                                                              
distribution businesses.                                                                                                        
                                                                                                                                
Change 4    Section 2,  subsection (j),  number (6) is  amended to                                                            
say  ensuring  food security  in  all  communities in  the  state,                                                              
including those  that are and are  not connected to the  main road                                                              
system of the state.                                                                                                            
                                                                                                                                
Change  5    Section 2,  subsection (k)  is amended  to say  seven                                                            
integrated  focus  areas  to  resolve  a  drafting  error  in  the                                                              
previous version.                                                                                                               
                                                                                                                                
4:25:53 PM                                                                                                                    
CHAIR   HUGHES  withdrew   her  objection.   Finding  no   further                                                              
objection, SCS CSHB 298 was adopted as the working document.                                                                    
                                                                                                                                
4:26:36 PM                                                                                                                    
REPRESENTATIVE  LIZ  SNYDER,  Alaska  State  Legislature,  Juneau,                                                              
Alaska,  sponsor  of  HB  298, expressed  her  gratitude  for  the                                                              
opportunity  to discuss  the bill  and work  through changes  with                                                              
committee members.                                                                                                              
                                                                                                                                
4:27:00 PM                                                                                                                    
CHAIR HUGHES commented  that the Institute of Social  and Economic                                                              
Research (ISER) was  excited about the prospect of  being a member                                                              
the Alaska Food  Strategy Task Force. ISER has not  delved in this                                                              
area but  understands  the importance  of this  task force  and is                                                              
willing  to  serve. The  same  is  true  with  AIDEA. One  of  the                                                              
reasons  AIDEA  was  selected  is  its  experience  with  areawide                                                              
distribution systems  and financing. Food strategy  will require a                                                              
lot of  effort over  time for systemic  transformation.  The start                                                              
date was  changed to  accommodate legislators  and the  task force                                                              
will pick up where the executive task force ended.                                                                              
                                                                                                                                
CHAIR  HUGHES asked  Representative Snyder  if she  would like  to                                                              
make closing remarks.                                                                                                           
                                                                                                                                
4:31:52 PM                                                                                                                    
REPRESENTATIVE  SNYDER replied  that  she was  looking forward  to                                                              
working with the committee next week.                                                                                           
                                                                                                                                
4:32:01 PM                                                                                                                    
CHAIR HUGHES held HB 298 in committee.                                                                                          
                                                                                                                                
4:32:10 PM                                                                                                                    
There  being no  further business  to come  before the  committee,                                                              
Chair Hughes adjourned  the Senate Community and  Regional Affairs                                                              
Standing Committee meeting at 4:32.                                                                                             

Document Name Date/Time Subjects
HB 411 Testimony - Alaska Municpal League.pdf SCRA 5/5/2022 3:30:00 PM
HB 411
HB 411 Testimony - Girdwood Board of Supervisors.pdf SCRA 5/5/2022 3:30:00 PM
HB 411
HB 411 Testimony - Fairbanks North Star Borough.pdf SCRA 5/5/2022 3:30:00 PM
HB 411
HB 411 Amendment #2 (B.4).pdf SCRA 5/5/2022 3:30:00 PM
HB 411
HB 411 Amendment #1 (B.3).pdf SCRA 5/5/2022 3:30:00 PM
HB 411
HB 411 Sponsor Statement 04.20.2022.pdf SCRA 5/5/2022 3:30:00 PM
HB 411
HB 411 Summary of Changes Version A.1 04.20.2022.pdf SCRA 5/5/2022 3:30:00 PM
HB 411
HB 411 Sectional Analysis Version B 04.21.2022.pdf SCRA 5/5/2022 3:30:00 PM
HB 411
HB 411 Supporting Document - Title 29 Economic Development Occurences.pdf SCRA 5/5/2022 3:30:00 PM
HB 411
HB 411 Back up Service Area Statute 4.20.2022.pdf SCRA 5/5/2022 3:30:00 PM
HB 411
HB 411 DCCED Fiscal Note.pdf SCRA 5/5/2022 3:30:00 PM
HB 411
HB 298 Public Testimony Recieved by (S)CRA as of 05.03.2022.pdf SCRA 5/5/2022 3:30:00 PM
HB 298
HB 298 Work Draft Version I.pdf SCRA 5/5/2022 3:30:00 PM
HB 298
HB 298 Explanation of Changes version I 05.05.2022.pdf SCRA 5/5/2022 3:30:00 PM
HB 298