Legislature(1993 - 1994)

03/01/1994 09:05 AM Senate CRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
              SENATE COMMUNITY & REGIONAL AFFAIRS                              
                         March 1, 1994                                         
                           9:05 a.m.                                           
  MEMBERS PRESENT                                                              
 Senator Randy Phillips, Chairman                                              
 Senator Robin Taylor, Vice Chairman                                           
 Senator Loren Leman                                                           
 Senator Al Adams                                                              
 Senator Fred Zharoff                                                          
  MEMBERS ABSENT                                                               
  COMMITTEE CALENDAR                                                           
 SPONSOR SUBSTITUTE FOR SENATE BILL NO. 223                                    
 "An Act relating to credits against certain taxes for contributions           
 to certain public educational radio and television networks and               
 stations; and providing for an effective date."                               
 SENATE BILL NO. 291                                                           
 "An Act relating to including all regions in the state in an                  
 organized borough or unified municipality; and providing for an               
 effective date."                                                              
  PREVIOUS SENATE COMMITTEE ACTION                                             
 SB 223 - No previous action to record..                                       
 SB 291 - See Community & Regional Affairs minutes dated                       
  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
 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                  
 Number 300                                                                    
 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                 
 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                
 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                    
 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             
 Number 195                                                                    
 SENATOR RANDY PHILLIPS stated a new fiscal note would be requested            
 from DCRA on SB 291.  He then adjourned the meeting at 10:10 a.m.             

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