Legislature(1993 - 1994)
02/24/1994 09:05 AM CRA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SENATE COMMUNITY & REGIONAL AFFAIRS February 24, 1994 9:05 a.m. MEMBERS PRESENT Senator Randy Phillips, Chairman Senator Robin Taylor, Vice Chairman Senator Loren Leman MEMBERS ABSENT Senator Al Adams Senator Fred Zharoff COMMITTEE CALENDAR SENATE BILL NO. 261 "An Act relating to municipal sales and use taxes involving air carriers; and providing for an effective date." SENATE BILL NO. 294 "An Act relating to canned salmon classics; and providing for an effective date." SENATE BILL NO. 330 "An Act relating to water quality enhancement, water supply, wastewater, and solid waste grants; the Alaska clean water fund; the establishment of the Alaska clean water account, the Alaska drinking water fund, and the Alaska drinking water account; and providing for an effective date." PREVIOUS SENATE COMMITTEE ACTION SB 261 - See Transportation minutes dated 2/1/94 and Community & Regional Affairs minutes dated 2/15/94, 2/17/94. SB 294 - No previous action to record. SB 330 - No previous action to record. WITNESS REGISTER Senator Bert Sharp State Capitol Juneau, AK 99801-1182 POSITION STATEMENT: Offered information on SB 261 John Hartle, Assistant City Attorney City & Borough of Juneau 155 S. Seward St. Juneau, AK 99801 POSITION STATEMENT: Opposes SB 261 Paul Bowers, Airport Manager City & Borough of Juneau 1873 Shell Simmons Drive Juneau, AK 99801 POSITION STATEMENT: Opposes SB 261 Sharon Macklin, Representing the City of Bethel 315 5th St., #8 Juneau, AK 99801 POSITION STATEMENT: Opposes SB 261 Crystal Smith Alaska Municipal League 217 2nd St. Juneau, AK 99801 POSITION STATEMENT: Opposes SB 261 Robert Jacobsen Wings of Alaska 1873 Shell Simmons Drive Juneau, AK 99801 POSITION STATEMENT: Supports SB 261 Reed Stoops Alaska Air Carriers Association Juneau, AK 99801 POSITION STATEMENT: Supports SB 261 Patrick Wilson, Chairman Canned Salmon Classic Petersburg, AK POSITION STATEMENT: Supports SB 294 Senator Rick Halford State Capitol Juneau, AK 99801-1182 POSITION STATEMENT: Prime Sponsor of SB 330 Jon Ticket Box 53 Selawik, AK 99770 POSITION STATEMENT: Supports SB 330 Gary Skin Box 55 Selawik, AK 99770 POSITION STATEMENT: Supports SB 330 John Kamavoha Box 2226 Valdez, AK 99686 POSITION STATEMENT: Supports SB 330 William Mark Box 22 Goodnews Bay, AK 99589 POSITION STATEMENT: Supports SB 330 Keith Kelton, Director Division of Facility Construction & Operation Department of Environmental Conservation 410 Willoughby Ave., Suite 105 Juneau, AK 99801-1795 POSITION STATEMENT: Offered information on SB 330 ACTION NARRATIVE TAPE 94-17, SIDE A Number 001 The Senate Community & Regional Affairs Committee was called to order by Chairman Randy Phillips at 9:05 a.m. He brought SB 261 (NO MUNICIPAL SALES TAXES ON AIR CARRIERS) before the committee as the first order of business. Number 015 SENATOR BERT SHARP, prime sponsor of SB 261, said in response to the concern over the prohibition of "use taxes" in the Transportation CS, a new committee substitute has been drafted for the committee's consideration. The municipalities fear that "use taxes" is so vague that it may interfere with the collection of landing fees, fuel flowage fees, etc. The new language in the committee substitute, which is supported by the air carriers and the City & Borough of Juneau, eliminates "uses taxes" altogether and clearly prohibits taxation only of the transportation of individuals or goods. Senator Sharp stated that he opposes narrowly defining "federally certificated air carrier" as suggested by some of the municipalities. The federal preemption provision applies to all air carriers regulated by the FAA. Since it is the intent of the legislation to restate federal law, it would be unwise to include only those air carriers certified under Section 401 of the Federal Aviation Act, he said. Senator Sharp directed attention to a proposed amendment to the draft committee substitute. On page 1, line 11, after the word "carrier" it adds the phrase "other than a fee authorized under 49 U.S.C. Alp. 1513(e)", which is a passenger facility charge that is authorized by the federal government on local airports. He stressed that it is not a tax on passengers, it is allowable. Number 080 SENATOR TAYLOR asked if the committee substitute includes sufficient definition so as to give people the confidence that their landing fees and other incidental airport fees that have been routinely charged for years will not be impacted by this legislation. SENATOR SHARP answered that the legislation gives a higher degree of comfort to the municipalities in that it does not interfere with the collection of landing fees, fuel flowage charges, etc. Number 110 SENATOR TAYLOR asked if the words "federally certificated air carrier" include air taxis. SENATOR SHARP responded that the federal preemption provision applies to all air carriers regulated by the FAA. Number 155 JOHN HARTLE, Assistant City Attorney, City & Borough of Juneau, stated the committee substitute is an improvement in that it narrows the language, but there is still some concern with the legislation. The municipality opposes the bill as a matter of policy because they consider it to be an unfunded mandate and, if federal law is clear, it is not needed. Number 195 PAUL BOWERS, Airport Manager, City & Borough of Juneau, stated the committee substitute satisfies some of his concerns, but there is still concern with the word "fee" on line 10 and if it would encompass landing fees. SENATOR SHARP clarified that the intent of the legislation is that fee applies only to fees on individuals being transported or on shipments of goods being transported. Number 235 SHARON MACKLIN, representing the City of Bethel, stated their opposition to SB 261. She said the Bethel City Council recently reintroduced an ordinance that would, in fact, put an issue on the ballot for the local community to raise revenues by a sales tax on liquor that would be coming into the community. Because Bethel does not have liquor stores but liquor can be shipped in, the most reasonable way to levy to any kind of sales tax is through the air carriers. She urged the committee to consider the ramifications of local jurisdiction and allowing communities to have the ability to raise revenues in these declining state revenue days. Number 295 CRYSTAL SMITH, representing the Alaska Municipal League, stated Senator Sharp's proposed committee substitute is an improvement, but the League is still in opposition to the legislation. The League believes that the prohibition on putting a sales tax on freight is an expansion of the intent of the federal law. She also voiced opposition to the retroactivity clause, noting the question of taxation on flight seeing is still in court, and though it may not preclude the situation of what happens where the Kenai-Homer air case is, it will cut out that option without allowing the court to make the decision on it. Number 358 ROBERT JACOBSEN, representing Wings of Alaska, said from the air carriers' perspective, they don't believe the legislation expands the focus of the federal law. He said they believe it is just helping to clarify it, and that there is a lot of case law to back up that claim. Number 368 REED STOOPS, representing the Alaska Air Carriers Association, agreed with Mr. Jacobsen that the legislation does not expand federal law, and he noted he has provided opinions and case law to back up their contention. He added that the air carriers would prefer to have the retroactivity provision in the bill, but feel that should be left up to the committee. Number 400 SENATOR RANDY PHILLIPS asked for the pleasure of the committee. Number 405 SENATOR TAYLOR moved that CSSB 261(CRA) dated 2/23/94 be adopted. Hearing no objection, the motion carried. SENATOR TAYLOR moved the following amendment be adopted and incorporated into the committee substitute. Hearing no objection the motion carried. AMENDMENT NO. 1 Page 1, line 11: After the word "carrier" insert "other than a fee authorized under 49 U.S.C. App. 1513(e)" Number 415 SENATOR TAYLOR moved that CSSB 261(CRA) be passed out of committee with individual recommendations. Hearing no objection, it was so ordered. Number 420 SENATOR RANDY PHILLIPS brought SB 294 (PETERSBURG CANNED SALMON CLASSIC) before the committee as the next order of business. SENATOR TAYLOR, prime sponsor of SB 294, explained that the bill will amend the law to include, among all the other classics, a canned salmon classic. In the event, people purchase a ticket and guess the number of cans of salmon that will be produced in the two salmon canneries in Petersburg during the fishing season. It has been a good money raiser in the past for good causes in the community. Number 443 SENATOR RANDY PHILLIPS asked if this existed before January 1959. SENATOR TAYLOR answered that it didn't, although various bars and canneries themselves have done that sort of thing on and off for years. However, it wasn't formally done in the community until just recently. Number 452 SENATOR RANDY PHILLIPS stated testimony would be taken over the teleconference network from Petersburg. PATRICK WILSON, Chairman of the Canned Salmon Classic and Plant Manager of Petersburg Fisheries, said being a community that is heavily dependent on the fishing industry, they thought it would be appropriate to get their name out in front, raise some funds for the Petersburg Chamber of Commerce and roll the revenues back into the community, and to have some fun doing it by bringing the canned salmon classic program into existence. There being no other witnesses wishing to testify on SB 294, SENATOR RANDY PHILLIPS asked for the pleasure of the committee. SENATOR TAYLOR moved that SB 294 be passed out of committee with individual recommendations. Hearing no objection, it was so ordered. Number 490 SENATOR RANDY PHILLIPS brought SB 330 (WATER QUALITY FUNDS AND GRANTS) before the committee as the final order of business. SENATOR RICK HALFORD, prime sponsor of SB 330, said he introduced the bill at the request of the Department of Environmental Conservation. SB 330 provides funding assistance through grants and loans to Alaska's incorporated municipalities for the construction of water, wastewater and solid waste improvements. By amending AS 46.03.030, the flexibility of funding alternatives available to incorporated governments will be increased. Changes to AS 46.03.032 will position the State to take advantage of a new federal loan program for construction of water supply systems. This legislation is now pending in Congress and by passing this bill this session, it will enable the State to participate at the earliest possible opportunity. Senator Halford said there are a number of policy decisions, and he encouraged the committee to go through the changes made in the legislation and have the Department of Environmental Conservation explain why they believe each of them should be the way they are. Number 510 SENATOR LEMAN asked Senator Halford if he thought this bill would be the appropriate vehicle to bring about some consistency in having local communities participate somehow in the cost of these projects. SENATOR HALFORD answered that he has no objection to anything that makes sense. He added that he agrees with the long- term goal, because he's afraid that when we really do get down to the reality of spending within our income, these programs are either going to be maintained from local sources or they are going to fall apart. Number 551 JON TICKET, a Close-Up Program student from Selawik, said they do not have water or sewer systems in their village, and he believes passage of SB 330 will help their situation. He said Selawik is in a unique location, surrounded by rivers, and their city council is trying very hard to get water and sewer for their village. He pointed out that last year their region had numerous reported cases of hepatitis. Number 575 SENATOR LEMAN asked if any Village Safe Water projects have been done in Selawik. KEITH KELTON answered that DEC is working with the Public Health Service to provide a project for Selawik. SENATOR LEMAN asked Mr. Ticket if he thought people in Selawik would be willing to contribute a portion of the cost of a project whether its is contributing a piece of property, or a gravel source, or labor, etc. JON TICKET answered that he thought the people would be willing to cooperate in any way they can. Number 585 SENATOR PHILLIPS asked where Selawik gets it water, and how they dispose of their waste material. TAPE 92-17, SIDE B Number 001 JON TICKET answered that they basically get their water from the laundromat, but usually melt ice from the river for drinking. They use "honey buckets" and the waste material is put into plastic bags and hauled to a nearby lagoon. Number 025 GARY SKIN, a Close-Up student from Selawik, shared pictures of the disposal line from the laundromat to the lagoon. The line has leaks in it that freeze up in the winter months, and when it thaws in the summer months it seeps into the river where they mainly get their drinking water. Number 060 JOHN KAMAVOHA, a Close-up student from Valdez, said the small villages in his area have problems similar to Selawik. Number 070 WILLIAM MARK of Good News Bay said they get their drinking water from the creek or use rain water. They also use a lagoon for disposing of their waste. SENATOR LEMAN pointed out that the fact that these villages have lagoons and that the waste is being separated is very good. Number 110 KEITH KELTON, Director, Division of Facility Construction & Operation, Department of Environmental Conservation, stated DEC's strong support for SB 330. He echoed Senator Halford's comments that there are several areas in the bill which they feel are open to discussion as far as policy by the Legislature. Mr. Kelton said SB 330 makes it easier for the smaller communities to get funding, particularly by removing a match provision for federal funds. It would allow using federal funds for full match with state funds which is prohibited in the current statute. SB 330 also changes the state participation-local participation ratios for the communities under 5,000 in the grants program. The loan program, which is capitalized by the federal government at 80 percent with a 20 percent state match, currently covers only the waste water program. There are three different bills within the U.S. Congress which would extend the federal loan program to cover drinking water supplies. SB 330 would provide state authorization to have a program in place prior to the federal program being enacted so that the state would have a quicker opportunity to use the federal dollars on a capitalization loan program as it becomes available. Mr. Kelton said that program would benefit nearly any community that had a surface water source and wanted to apply for a loan. Mr. Kelton said the legislation also contains several housekeeping measures. The statute has been in place since 1972 and has been amended several times by adding new programs onto it, and the legislation cleans up and consolidates the language. Number 152 SENATOR TAYLOR asked if the changes in SB 330 will make DEC's job a bit easier and make for a more efficient building and development of facilities. KEITH KELTON answered that it will and, at the same time, it has a benefit of helping the communities. Number 160 SENATOR LEMAN asked for Mr. Kelton's comments on the concept of local participation in these projects. KEITH KELTON said his proposal has been discussed and, in concept, they support his proposal, but, in practicality, it has limited application. In working with the smaller communities and villages, it has been DEC's experience that most of them don't have the resources even to guarantee satisfactory maintenance and operation once the facility is built, even though the department insists on those type of precautions being taken. Even though they are willing to put up a local share, most of the time in a subsistence economy it doesn't exist. He added that there are some things that may be possible like land donations, which have worked in the past. SENATOR RANDY PHILLIPS said he agreed with Senator Leman that there should be some local participation, and he wondered if it could somehow be tied in with the permanent fund dividend program, because if a person lives in the state for a year and is qualified to receive $1,000, then part of it should be used to purchase a piece of government. KEITH KELTON agreed that there are ways to come up with money in different configurations and he reiterated that they don't oppose the concept for village safe water, but he felt that if the bill were amended in that manner it would detract from the bill and could cause delays. Number 230 SENATOR LEMAN said he thought SB 330 would be a good vehicle for such an amendment and that he would draft one and present it to the Senate Finance Committee, which is the next committee of referral. Number 355 PAM DUNDY, staff to Senator Zharoff, voiced Senator Zharoff's support for SB 330. She said it encompasses what he wanted to see addressed and, at the same time, it will get more projects out into the districts. Number 345 SENATOR TAYLOR moved that SB 330 be passed out of committee with individual recommendations. Hearing no objection, it was so ordered. There being no further business to come before the committee, the meeting was adjourned at 10:17 a.m.