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