Legislature(2019 - 2020)BELTZ 105 (TSBldg)

03/21/2019 03:30 PM COMMUNITY & REGIONAL AFFAIRS

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Audio Topic
03:31:42 PM Start
03:32:39 PM SB63
05:17:46 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ SB 63 FISH TAX: REPEAL MUNI REFUNDS/REV. SHARE TELECONFERENCED
Heard & Held
-Invited Testimony Followed by Public Testimony-
**Streamed live on AKL.tv**
                    ALASKA STATE LEGISLATURE                                                                                  
    SENATE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE                                                                  
                         March 21, 2019                                                                                         
                           3:31 p.m.                                                                                            
                                                                                                                                
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Click Bishop, Chair                                                                                                     
Senator Chris Birch, Vice Chair                                                                                                 
Senator Elvi Gray-Jackson                                                                                                       
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Mia Costello                                                                                                            
Senator Lyman Hoffman                                                                                                           
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
SENATE BILL NO. 63                                                                                                              
"An  Act  repealing  the fisheries  business  tax  allocation  to                                                               
municipalities;  repealing the  refunds to  local governments  of                                                               
fisheries  business  taxes;  repealing revenue  sharing  for  the                                                               
fishery resource landing tax; providing  for an effective date by                                                               
amending the  effective date of  Sec. 36,  Ch. 61, SLA  2014; and                                                               
providing for an effective date."                                                                                               
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: SB 63                                                                                                                   
SHORT TITLE: FISH TAX: REPEAL MUNI REFUNDS/REV. SHARE                                                                           
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR                                                                                    
                                                                                                                                
02/18/19       (S)       READ THE FIRST TIME - REFERRALS                                                                        
02/18/19       (S)       CRA, FIN                                                                                               
03/21/19       (S)       CRA AT 3:30 PM BELTZ 105 (TSBldg)                                                                      
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
BRUCE TANGEMAN, Commissioner                                                                                                    
Alaska Department of Revenue                                                                                                    
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Provided an overview of SB 63.                                                                            
                                                                                                                                
BRANDON SPANOS, Deputy Director                                                                                                 
Tax Division                                                                                                                    
Alaska Department of Revenue                                                                                                    
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Addressed tax questions related to SB 63.                                                                 
                                                                                                                                
NILS ANDREASSEN, Executive Director                                                                                             
Alaska Municipal League                                                                                                         
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Provided an overview of the impact of SB 63                                                               
and shared fisheries taxes on all Alaska communities.                                                                           
                                                                                                                                
JON ERICKSON, Manager                                                                                                           
City & Borough of Yakutat                                                                                                       
Yakutat, Alaska                                                                                                                 
POSITION STATEMENT: Testified in opposition of SB 63.                                                                         
                                                                                                                                
LAYTON LOCKETT, City Manager                                                                                                    
City of Adak                                                                                                                    
Adak, Alaska                                                                                                                    
POSITION STATEMENT: Testified in opposition of SB 63.                                                                         
                                                                                                                                
PHIL ZAVADIL, City Manager                                                                                                      
City of St. Paul                                                                                                                
St. Paul, Alaska                                                                                                                
POSITION STATEMENT: Testified in opposition of SB 63.                                                                         
                                                                                                                                
PAT BRANSON, Mayor                                                                                                              
City of Kodiak                                                                                                                  
Kodiak, Alaska                                                                                                                  
POSITION STATEMENT: Testified in opposition of SB 63.                                                                         
                                                                                                                                
ANNE BAILEY, Administrator                                                                                                      
Aleutians East Borough                                                                                                          
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified in opposition of SB 63.                                                                         
                                                                                                                                
GARY HENNIGH, City Administrator                                                                                                
City of King Cove                                                                                                               
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified in opposition of SB 63.                                                                         
                                                                                                                                
CLAY KOPLIN, Mayor                                                                                                              
City of Cordova                                                                                                                 
Cordova, Alaska                                                                                                                 
POSITION STATEMENT: Testified in opposition of SB 63.                                                                         
                                                                                                                                
MARY SWAIN, Assembly President                                                                                                  
Bristol Bay Borough                                                                                                             
Naknek, Alaska                                                                                                                  
POSITION STATEMENT: Testified in opposition of SB 63.                                                                         
                                                                                                                                
JOE BERESKIN, Mayor                                                                                                             
City of Akutan                                                                                                                  
Akutan, Alaska                                                                                                                  
POSITION STATEMENT: Testified in opposition of SB 63.                                                                         
                                                                                                                                
FRANK KELTY, Mayor                                                                                                              
City of Unalaska                                                                                                                
Unalaska, Alaska                                                                                                                
POSITION STATEMENT: Testified in opposition of SB 63.                                                                         
                                                                                                                                
JORDAN KEELER, City Administrator                                                                                               
City of Sand Point                                                                                                              
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified in opposition of SB 63.                                                                         
                                                                                                                                
ALICE RUBY, Mayor                                                                                                               
City of Dillingham                                                                                                              
Dillingham, Alaska                                                                                                              
POSITION STATEMENT: Testified in opposition of SB 63.                                                                         
                                                                                                                                
MATT ALWARD, President                                                                                                          
United Fishermen of Alaska                                                                                                      
Homer, Alaska                                                                                                                   
POSITION STATEMENT: Testified in opposition of SB 63.                                                                         
                                                                                                                                
JILA STUART, Finance Director                                                                                                   
Haines Borough                                                                                                                  
Haines, Alaska                                                                                                                  
POSITION STATEMENT: Testified in opposition of SB 63.                                                                         
                                                                                                                                
LEE BURGESS, Finance Director                                                                                                   
City & Borough of Wrangell                                                                                                      
Wrangell, Alaska                                                                                                                
POSITION STATEMENT: Testified in opposition of SB 63.                                                                         
                                                                                                                                
TERRY EUBANK, Finance Director                                                                                                  
City of Kenai                                                                                                                   
Kenai, Alaska                                                                                                                   
POSITION STATEMENT: Testified in opposition of SB 63.                                                                         
                                                                                                                                
MARILYN MENISH-MEUCCI, representing self                                                                                        
Petersburg, Alaska                                                                                                              
POSITION STATEMENT: Testified in opposition of SB 63.                                                                         
                                                                                                                                
GLORIANNE WOLLEN, representing self                                                                                             
Petersburg, Alaska                                                                                                              
POSITION STATEMENT: Testified in opposition of SB 63.                                                                         
                                                                                                                                
JEFF GUARD, representing self                                                                                                   
Cordova, Alaska                                                                                                                 
POSITION STATEMENT: Testified in opposition of SB 63.                                                                         
                                                                                                                                
JAMES WIESE, representing self                                                                                                  
Cordova, Alaska                                                                                                                 
POSITION STATEMENT: Testified in opposition of SB 63.                                                                         
                                                                                                                                
STOSH ANDERSON, representing self                                                                                               
Kodiak, Alaska                                                                                                                  
POSITION STATEMENT: Testified in opposition of SB 63.                                                                         
                                                                                                                                
SHAWN DOCHTERMANN, representing self                                                                                            
Kodiak, Alaska                                                                                                                  
POSITION STATEMENT: Testified in opposition of SB 63.                                                                         
                                                                                                                                
DARIUS KASPRZAK, representing self                                                                                              
Kodiak, Alaska                                                                                                                  
POSITION STATEMENT: Testified in opposition of SB 63.                                                                         
                                                                                                                                
RACHEL LORD, representing self                                                                                                  
Homer, Alaska                                                                                                                   
POSITION STATEMENT: Testified in opposition of SB 63.                                                                         
                                                                                                                                
JOHN MURRAY, representing self                                                                                                  
Sitka, Alaska                                                                                                                   
POSITION STATEMENT: Testified in opposition of SB 63.                                                                         
                                                                                                                                
CATHY RENFELDT, representing self                                                                                               
Cordova, Alaska                                                                                                                 
POSITION STATEMENT: Testified in opposition of SB 63.                                                                         
                                                                                                                                
DUSTIN DICKERSON, Vice President                                                                                                
Unalaska Native Fisherman's Association                                                                                         
Unalaska, Alaska                                                                                                                
POSITION STATEMENT: Testified in opposition of SB 63.                                                                         
                                                                                                                                
GERALD MCCUNE, Board President                                                                                                  
Cordova District Fishermen United                                                                                               
Cordova, Alaska                                                                                                                 
POSITION STATEMENT: Testified in opposition of SB 63.                                                                         
                                                                                                                                
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
3:31:42 PM                                                                                                                    
CHAIR  CLICK  BISHOP called  the  Senate  Community and  Regional                                                             
Affairs Standing Committee meeting to  order at 3:31 p.m. Present                                                               
at  the call  to  order were  Senators  Gray-Jackson, Birch,  and                                                               
Chair Bishop.                                                                                                                   
                                                                                                                                
         SB 63-FISH TAX: REPEAL MUNI REFUNDS/REV. SHARE                                                                     
                                                                                                                                
3:32:39 PM                                                                                                                    
CHAIR BISHOP  announced the consideration  of Senate Bill  63 (SB                                                               
63).                                                                                                                            
                                                                                                                                
3:33:29 PM                                                                                                                    
BRUCE  TANGEMAN,  Commissioner,  Alaska  Department  of  Revenue,                                                               
Juneau,  Alaska,  detailed that  the  state  currently shares  50                                                               
percent of  the revenues  collected from  its two  main fisheries                                                               
taxes with  municipalities. The Fisheries Business  Tax is shared                                                               
with  municipalities where  fisheries  resources were  processed,                                                               
and   the   Fishery  Resource   Landing   Tax   is  shared   with                                                               
municipalities  where the  fisheries  resources  were brought  to                                                               
shore. The tax revenues are shared  each October and are based on                                                               
actual receipts from the previous  calendar year. In [FY2018] the                                                               
state  shared   approximately  $29   million  in   revenues  with                                                               
municipalities.                                                                                                                 
                                                                                                                                
He explained  that SB  63 would repeal  the statute  that provide                                                               
for  the  fisheries tax  revenue  sharing.  The policy  rationale                                                               
behind SB  63 is to  identify statewide revenues  currently being                                                               
shared  or  diverted  in  order to  help  balance  the  statewide                                                               
budget.  The  loss  of  shared  revenue  is  somewhat  offset  by                                                               
Governor Dunleavy's  pledge to  share 50  percent of  the alcohol                                                               
tax revenues  through the Community Assistance  Program, although                                                               
the  administration  recognized that  the  legislation  is not  a                                                               
dollar-for-dollar offset.                                                                                                       
                                                                                                                                
He detailed that SB 63  repeals the 50-percent revenue sharing of                                                               
the Fisheries  Business Tax,  also known as  the "Raw  Fish Tax,"                                                               
collected  from  processors  and people  who  export  unprocessed                                                               
fisheries  resources  from  Alaska,   and  the  Fishery  Resource                                                               
Landing Tax  levied on fishery  resources process outside  of and                                                               
first landed in Alaska. The  fisheries taxes relate to processing                                                               
activities  within  and  outside   of  an  incorporated  city  or                                                               
organized  borough.   Language  in  the  bill   states  that  the                                                               
legislation is retroactive to January  1, 2019; consequently, the                                                               
fisheries taxes  will not be shared  with municipalities starting                                                               
in October 2019 even though the taxable even occurred in 2018.                                                                  
                                                                                                                                
3:35:40 PM                                                                                                                    
COMMISSIONER TANGEMAN  detailed that  the business  fisheries tax                                                               
dates  to  pre-territorial Alaska  in  1899.  The tax  was  first                                                               
shared  with municipalities  at 10  percent of  total revenue  in                                                               
1962, raised to 20 percent in  1979, and then raised again to the                                                               
current 50 percent  in 1981. Sharing with  an unorganized borough                                                               
was authorized  in 1990. The  Fishery Resource Landing  Tax dates                                                               
to 1994. The  legislature restructured the tax in  1996 to mirror                                                               
the  Fisheries Business  Tax  program. Sharing  was  part of  the                                                               
program from the beginning.                                                                                                     
                                                                                                                                
SENATOR  BIRCH asked  if  local communities  will  be allowed  to                                                               
raise a  tax or  equivalent tax  to offset  whatever diminishment                                                               
they see from SB 63.                                                                                                            
                                                                                                                                
3:38:07 PM                                                                                                                    
BRANDON SPANOS, Deputy Director,  Tax Division, Alaska Department                                                               
of  Revenue,  Anchorage,  Alaska,   answered  that  there  is  no                                                               
statutory  provision  in state  statutes  that  would preclude  a                                                               
municipality from having a fish tax.                                                                                            
                                                                                                                                
SENATOR GRAY-JACKSON  disclosed that she was  the finance manager                                                               
for Akutan  and noted that  approximately 95 percent  of revenues                                                               
for their budget come from the  "fish tax." She asked what amount                                                               
Akutan  would receive  in substituted  revenue  from the  alcohol                                                               
tax.                                                                                                                            
                                                                                                                                
COMMISSIONER  TANGEMAN  specified that  the  portion  of the  50-                                                               
percent alcohol tax is not part of  SB 63; it is a separate piece                                                               
of  legislation. He  offered to  get back  to the  committee with                                                               
additional information.                                                                                                         
                                                                                                                                
SENATOR   GRAY-JACKSON   replied   that  she   would   appreciate                                                               
Commissioner Tangeman providing the information.                                                                                
                                                                                                                                
CHAIR  BISHOP  asked  that the  sectional  analysis  overview  be                                                               
presented for SB 63.                                                                                                            
                                                                                                                                
MR. SPANOS reviewed the sectional analysis for SB 63 as follows:                                                                
                                                                                                                                
   • Section 1:                                                                                                               
        o Amends AS 29.60.800(a).                                                                                               
        o Relates to the harbor facility grant fund.                                                                            
        o Conforms to the repeal later in the bill of the                                                                       
          statute providing for refunds to municipalities from                                                                  
          the fisheries business taxes.                                                                                         
   • Section 2:                                                                                                               
        o Amends AS 29.60.810.                                                                                                  
        o Relates to grant applications for harbor facilities.                                                                  
        o Conforms to the repeals later in the bill of the                                                                      
          statutes providing for the allocations and the refunds                                                                
          to municipalities of fisheries business taxes.                                                                        
   • Section 3:                                                                                                               
        o Amends AS 43.77.015(b).                                                                                               
        o Relates to payments under a fishery cooperative                                                                       
          contract.                                                                                                             
        o Conforms to the repeal later in the bill of the                                                                       
          statute    providing    for    revenue    sharing    to                                                               
          municipalities from the fishery resource landing tax.                                                                 
   • Section 4:                                                                                                               
        o Amends AS 43.77.050(b).                                                                                               
        o Relates to separate accounting for fishery resource                                                                   
          landing tax revenues.                                                                                                 
        o Conforms to the repeal later in the bill of the                                                                       
          statute    providing    for    revenue    sharing    to                                                               
          municipalities from the fishery resource landing tax.                                                                 
   • Section 5:                                                                                                               
        o Repeals the following statutes:                                                                                       
             1. AS 29.60.450:                                                                                                   
                  • Relates to allocations to municipalities of                                                                 
                    revenues from the refunds for fisheries                                                                     
                    business taxes and the revenue sharing from                                                                 
                    the fishery resource landing tax.                                                                           
             2. AS 43.75.130:                                                                                                   
                  • Relates to refunds to municipalities from                                                                   
                    the fisheries business taxes.                                                                               
             3. AS 43.75.133:                                                                                                   
                  • Relates to the provision of information to                                                                  
                    municipalities   regarding    the   fisheries                                                               
                    business taxes.                                                                                             
             4. AS 43.75.137:                                                                                                   
                  • Relates  to     additional    refunds    to                                                                 
                    municipalities from the fisheries business                                                                  
                    taxes.                                                                                                      
             5. AS 43.77.060:                                                                                                   
                  • Relates to revenue sharing of fishery                                                                       
                    resource tax with municipalities.                                                                           
   • Sections 6 through 9:                                                                                                    
        o Makes   conforming   amendments   to   delayed   repeal                                                               
          provisions in existing law.                                                                                           
   • Section 10:                                                                                                              
        o Clarifies the applicability of the changes in sections                                                                
          1 through 5 of the bill.                                                                                              
   • Sections 11 and 12:                                                                                                      
        o Provides the Department of Revenue with flexibility in                                                                
          timing to adopt or repeal any regulations necessary to                                                                
          conform to the changes in the bill.                                                                                   
   • Section 13:                                                                                                              
        o Provides for retroactive application of bill sections                                                                 
          1-5 back to January 1, 2019.                                                                                          
   • Sections 14 - 18:                                                                                                        
        o Provides effective dates.                                                                                             
   • Note:                                                                                                                    
        o Most sections of the bill have an immediate effective                                                                 
          date.                                                                                                                 
        o Sections 6, 8, and 9 are amendments to delayed repeals                                                                
          in existing law with effective dates that match the                                                                   
          effective dates in existing law.                                                                                      
                                                                                                                                
3:42:54 PM                                                                                                                    
SENATOR  BIRCH  asked what  the  net  difference is  between  the                                                               
alcohol tax revenue and the fish tax revenue.                                                                                   
                                                                                                                                
MR. SPANOS answered  that the fiscal note shows the  half that is                                                               
not  going  to   be  shared,  if  the  bill  were   to  pass,  is                                                               
approximately $30 million  out of the total $60  million that the                                                               
state  receives  from  the Fisheries  Business  Tax  and  Fishery                                                               
Landing Tax.  The total  alcohol tax number  in 2018  was roughly                                                               
$40 million.                                                                                                                    
                                                                                                                                
SENATOR BIRCH asked  him to clarify that the alcohol  tax is then                                                               
going  to  be  split  to  replace, in  part,  the  fisheries  tax                                                               
distribution.                                                                                                                   
                                                                                                                                
MR. SPANOS answered that the alcohol  tax is a separate bill. The                                                               
governor wishes to share half of  the alcohol tax to offset other                                                               
reductions.  The alcohol  tax in  2018 was  $40 million  and half                                                               
would be $20 million. He conceded  that the alcohol tax would not                                                               
be  a dollar-for-dollar  replacement for  each community  because                                                               
the fishery  tax is  dependent on  where the  fish was  landed or                                                               
processed  or exported  from, whereas  the alcohol  tax would  be                                                               
shared differently.                                                                                                             
                                                                                                                                
3:45:21 PM                                                                                                                    
CHAIR BISHOP  asked if  there have  been communications  with the                                                               
impacted communities as it pertains to SB 63.                                                                                   
                                                                                                                                
COMMISSIONER TANGEMAN answered that  he has not communicated with                                                               
the  communities and  he  is not  sure  what communications  have                                                               
taken place from the governor's office.                                                                                         
                                                                                                                                
CHAIR BISHOP asked  that the aide for the committee  reach out to                                                               
the   governor's   office   regarding  communication   with   the                                                               
communities that would be impacted from SB 63.                                                                                  
                                                                                                                                
He asked  Mr. Tangeman to  confirm that SB  63 is a  priority for                                                               
the administration.                                                                                                             
                                                                                                                                
COMMISSIONER TANGEMAN  confirmed it  is a  priority. He  said the                                                               
state  has been  trying to  grapple with  a revenue  and spending                                                               
issue  for several  years.  He explained  that SB  63  is one  of                                                               
several bills that  approaches revenues in a manner  that is part                                                               
of a  bigger picture  to bring all  revenue streams  together and                                                               
then   be  distributed   to  benefit   all  Alaskans   statewide.                                                               
Consolidating the  state's revenue  streams will allow  the state                                                               
to know what is available for statewide spending.                                                                               
                                                                                                                                
3:47:12 PM                                                                                                                    
CHAIR BISHOP  asked what sort  of analysis  has been done  on the                                                               
secondary and tertiary  impacts that would occur  by taking money                                                               
out of the municipalities.                                                                                                      
                                                                                                                                
COMMISSIONER  TANGEMAN answered  that  he was  not  aware of  any                                                               
analysis.                                                                                                                       
                                                                                                                                
MR. SPANOS added that the division has not done an analysis.                                                                    
                                                                                                                                
CHAIR  BISHOP referenced  a Senate  Finance Committee  meeting in                                                               
January  where Senator  Hoffman  asked Office  of Management  and                                                               
Budget  (OMB) Director  Arduin if  education appropriations  will                                                               
occur in FY2019  and FY2020 and Director  Arduin responded "yes."                                                               
He asked Commissioner Tangeman if he recalled the conversation.                                                                 
                                                                                                                                
COMMISSIONER  TANGEMAN answered  no  and noted  that  he did  not                                                               
attend the meeting.                                                                                                             
                                                                                                                                
SENATOR  GRAY-JACKSON  asked  Mr.  Tangeman to  confirm  that  an                                                               
economic analysis  on the communities  affected by SB 63  has not                                                               
been done.                                                                                                                      
                                                                                                                                
COMMISSIONER TANGEMAN answered correct.                                                                                         
                                                                                                                                
3:49:41 PM                                                                                                                    
At ease.                                                                                                                        
                                                                                                                                
3:50:31 PM                                                                                                                    
CHAIR BISHOP  called the  committee back  to order.  He announced                                                               
that the committee would hear invited testimony.                                                                                
                                                                                                                                
3:50:53 PM                                                                                                                    
NILS  ANDREASSEN,  Executive  Director, Alaska  Municipal  League                                                               
(AML), Juneau,  Alaska, stated that AML's  presentation will show                                                               
that the fisheries  taxes affect all of  Alaska's communities. He                                                               
emphasized that  as Alaskan,  AML is  not interested  in dividing                                                               
its approach for addressing the  budget on the backs of different                                                               
areas  of  the state.  He  opined  that  care  must be  taken  in                                                               
targeting  coastal communities  where the  state has  such strong                                                               
fisheries  and  economic  activity.   AML  does  include  in  its                                                               
presentation OMB's mantra,  "principle, sustainable, predictable,                                                               
and  affordable," because  that  is what  shared fisheries  taxes                                                               
achieve in Alaska communities.                                                                                                  
                                                                                                                                
He detailed  that AML represents  165 cities and  boroughs. Those                                                               
affected  by the  fisheries taxes  is  roughly one  third of  all                                                               
local governments  in Alaska. Every  Senate district  is effected                                                               
to  varying degrees,  but  the  AML overview  will  focus on  the                                                               
cities and  boroughs that are  most significantly affected  by SB                                                               
63.                                                                                                                             
                                                                                                                                
3:52:24 PM                                                                                                                    
He  referenced "Shared  Fish Taxes,  Sustainable Communities"  as                                                               
follows:                                                                                                                        
                                                                                                                                
   • Used by municipalities to:                                                                                                 
        o Operate/maintain ports and harbors.                                                                                   
        o Provide local contribution to education.                                                                              
        o Support public safety and municipal-owned hospitals.                                                                  
        o Maintain   public   works   such   as   water,   sewer,                                                               
          sanitation, solid waste.                                                                                              
        o Replace gaps in State capital investment.                                                                             
        o Provide grants to local nonprofits and youth                                                                          
          activities.                                                                                                           
        o Offer quality of life programs:                                                                                       
             square4 Pools,                                                                                                     
             square4 Libraries,                                                                                                 
             square4 Parks.                                                                                                     
        o Improve credit ratings.                                                                                               
                                                                                                                                
MR. ANDREASSEN summarized that the  shared fish taxes are used to                                                               
ensure sustainable  communities where the revenue  contributes to                                                               
general funds,  help support  education, hospitals,  solid waste,                                                               
public works,  replacing gaps in  state capital  investment which                                                               
has declined over  these last few years, provide  grants to local                                                               
nonprofits,  and  ensure  quality   of  life  programs  in  those                                                               
communities for residents. He noted  that the taxes are also used                                                               
to operate and maintain ports  and harbors, many were transferred                                                               
in neglect from the state to municipalities many years ago.                                                                     
                                                                                                                                
He referenced  "Municipal Impact:  Hardest Hit Total  Dollars" as                                                               
follows:                                                                                                                        
                                                                                                                                
   • City of Dillingham:                                                                                                        
        o 2018 Total: $443,905;                                                                                                 
        o Tax Revenue: 8.04 percent.                                                                                            
   • City & Borough of Juneau:                                                                                                  
        o 2018 Total: $447,875;                                                                                                 
        o Tax Revenue: 0.43 percent.                                                                                            
   • City of Seward:                                                                                                            
        o 2018 Total: $456,144;                                                                                                 
        o Tax Revenue: 6.61 percent.                                                                                            
   • City of Valdez:                                                                                                            
        o 2018 Total: $512,449;                                                                                                 
        o Tax Revenue: 1.16 percent.                                                                                            
   • City of King Cove:                                                                                                         
        o 2018 Total: $564,174;                                                                                                 
        o Tax Revenue: 33.04 percent.                                                                                           
   • City of Saint Paul:                                                                                                        
        o 2018 Total: $623,979;                                                                                                 
        o Tax Revenue: 30.62 percent.                                                                                           
   • Kenai Peninsula Borough:                                                                                                   
        o 2018 Total: $860,097;                                                                                                 
        o Tax Revenue: 0.85 percent.                                                                                            
   • City of Kodiak:                                                                                                            
        o 2018 Total: $880,642;                                                                                                 
        o Tax Revenue: 6.67 percent.                                                                                            
   • City of Akutan:                                                                                                            
        o 2018 Total: $999,031;                                                                                                 
        o Tax Revenue: $29.94 percent.                                                                                          
   • City & Borough of Sitka:                                                                                                   
        o 2018 Total: $1,279.885;                                                                                               
        o Tax Revenue: 6.55 percent.                                                                                            
   • City of Cordova:                                                                                                           
        o 2018 Total: $1,429,951;                                                                                               
        o Tax Revenue: 24.03 percent.                                                                                           
   • Aleutians East Borough:                                                                                                    
        o 2018 Total: $1,887,896;                                                                                               
        o Tax Revenue: 38.13 percent.                                                                                           
   • Kodiak Island Borough:                                                                                                     
        o 2018 Total: $1,919,461;                                                                                               
        o Tax Revenue: 10.39 percent.                                                                                           
   • Bristol Bay Borough:                                                                                                       
        o 2018 Total: $3,820,480;                                                                                               
        o Tax Revenue: 57.79 percent.                                                                                           
   • City of Unalaska:                                                                                                          
        o 2018 Total: $8,162,129;                                                                                               
        o Tax Revenue: 37.21 percent.                                                                                           
                                                                                                                                
MR. ANDREASSEN stated  that the "hardest hit" list  focuses on 15                                                               
communities  impacted that  range  from almost  $500,000 to  more                                                               
than  $8 million.  The revenue  from the  taxes are  essential to                                                               
maximizing self-government which is a constitutional mandate.                                                                   
                                                                                                                                
He referenced "Municipal Impact: Hardest Hit Tax Revenue                                                                        
Percentage" as follows:                                                                                                         
                                                                                                                                
   • City of Atka:                                                                                                              
        o 2018 Total: $11,318;                                                                                                  
        o Tax Revenue: 22.00 percent.                                                                                           
   • City of Adak:                                                                                                              
        o 2018 Total: $195,387;                                                                                                 
        o Tax Revenue: 23.16 percent.                                                                                           
   • City of Emmonak:                                                                                                           
        o 2018 Total: $61,167;                                                                                                  
        o Tax Revenue: 23.74 percent.                                                                                           
   • City of Cordova:                                                                                                           
        o 2018 Total: $1,429,951;                                                                                               
        o Tax Revenue: 24.03 percent.                                                                                           
   • City of Akutan:                                                                                                            
        o 2018 Total: $999,031.                                                                                                 
        o Tax Revenue: 29.94 percent                                                                                            
   • City of Saint Paul:                                                                                                        
        o 2018 Total: $623,979;                                                                                                 
        o Tax Revenue: 30.62 percent.                                                                                           
   • City of King Cove:                                                                                                         
        o 2018 Total: $564,174;                                                                                                 
        o Tax Revenue: 33.04 percent.                                                                                           
   • City of Unalaska:                                                                                                          
        o 2018 Total: $8,162,129;                                                                                               
        o Tax Revenue: 37.21 percent.                                                                                           
   • Aleutians East Borough:                                                                                                    
        o 2018 Total: $1,887,896;                                                                                               
        o Tax Revenue: 38.13 percent.                                                                                           
   • City of False Pass:                                                                                                        
        o 2018 Total: $51,588;                                                                                                  
        o Tax Revenue: 41.95 percent.                                                                                           
   • Bristol Bay Borough:                                                                                                       
        o 2018 Total: $3,820,480;                                                                                               
        o Tax Revenue: 57.79 percent.                                                                                           
   • City of Togiak:                                                                                                            
        o 2018 Total: $165,013;                                                                                                 
        o Tax Revenue: 107.03 percent.                                                                                          
   • City of Chignik:                                                                                                           
        o 2018 Total: $98,919;                                                                                                  
        o Tax Revenue: 178.38 percent.                                                                                          
   • City of Larsen Bay:                                                                                                        
        o 2018 Total: $155,056;                                                                                                 
        o Tax Revenue: 303.81 percent.                                                                                          
                                                                                                                                
MR.  ANDREASSEN  said  a  second  way to  look  at  the  proposed                                                               
legislation is  by impacts  as a percentage  of tax  revenue. The                                                               
proposed legislation could  mean as much as  a 300-percent impact                                                               
to  some  communities.  The  tax   percentage  listing  shows  15                                                               
municipalities  that  would  experience  at  least  a  20-percent                                                               
reduction in their overall tax revenue.                                                                                         
                                                                                                                                
He noted  that Senator Birch  had inquired about  the possibility                                                               
of  a municipality  implementing a  tax  at the  local level.  He                                                               
opined  that the  state's  preemption of  the  shared fish  taxes                                                               
might result  in additional  taxes on  one of  Alaska's strongest                                                               
industries and largest employers.                                                                                               
                                                                                                                                
3:54:42 PM                                                                                                                    
He referenced "Total impact" as follows:                                                                                        
                                                                                                                                
   • Top 37:                                                                                                                    
        o $27,920,880;                                                                                                          
        o Representing 186,739;                                                                                                 
        o Not including Anchorage: 25 percent of state.                                                                         
   • Average impact:                                                                                                            
        o $615,845.                                                                                                             
   • Average fish tax impact as percentage of tax revenue:                                                                      
        o 29.82 percent.                                                                                                        
   • Top 10 characteristics:                                                                                                    
        o Total population: 97,908;                                                                                             
        o Total employees: 929;                                                                                                 
        o Bond debt: $455,300,666;                                                                                              
        o School bond debt: $131,489,219;                                                                                       
        o Combined    contribution     to    school    districts:                                                               
          $72,033,407;                                                                                                          
        o Hospitals: 3;                                                                                                         
        o Police powers: 6;                                                                                                     
        o 100-percent PERS;                                                                                                     
        o 7/Property tax;                                                                                                       
        o 6/Sales tax.                                                                                                          
                                                                                                                                
MR.  ANDREASSEN said  that the  total impact  for "Top  37" lists                                                               
municipalities  that  would  have the  most  significant  revenue                                                               
effected  by  the  proposed legislation.  The  cumulative  amount                                                               
would be  approximately $27 million,  representing 25  percent of                                                               
the state  if Anchorage, which  receives $51,000 from  the shared                                                               
taxes,  was  taken out.  The  average  impact  for the  "Top  37"                                                               
communities is  $615,000 and the  average impact as  a percentage                                                               
of tax revenue is just under 30 percent.                                                                                        
                                                                                                                                
He emphasized that the "Top  37" are strong communities where the                                                               
"top ten" account  for 100,000 in population,  have a 100-percent                                                               
participation  in  the  state's  pension,  service  almost  1,000                                                               
employees between them, have property  taxes, and some have sales                                                               
taxes.  Some of  the "Top  37" impacted  municipalities have  the                                                               
option of implementing a tax and some would struggle.                                                                           
                                                                                                                                
He explained that  a local tax is on local  activity, the sharing                                                               
is from local to state,  not vice versa. The impacted communities                                                               
carry bond  debt and rely on  the shared taxes revenue  to ensure                                                               
their debt obligations are made.  The communities that contribute                                                               
to school  districts do  so in  the amount  of $72  million. Many                                                               
communities   have  municipal-owned   hospitals  and   local  law                                                               
enforcement.                                                                                                                    
                                                                                                                                
3:56:09 PM                                                                                                                    
SENATOR  BIRCH  asked  how  the tax  dollars  are  collected  and                                                               
distributed.                                                                                                                    
                                                                                                                                
MR. ANDREASSEN answered that he does  not have a clear answer but                                                               
will get back to the committee.                                                                                                 
                                                                                                                                
CHAIR BISHOP said Commissioner Tangeman  will probably be able to                                                               
answer the question.                                                                                                            
                                                                                                                                
MR. ANDREASSEN  referenced "Total  impact by Senate  district" as                                                               
follows:                                                                                                                        
                                                                                                                                
   • District E:                                                                                                                
        o Total fish: $546,938.                                                                                                 
   • District F-N:                                                                                                              
        o Total fish: $53,269.                                                                                                  
   • District O:                                                                                                                
        o Total fish: $1,442,426.                                                                                               
   • District P:                                                                                                                
        o Total fish: $5,588,775.                                                                                               
   • District Q:                                                                                                                
        o Total fish: $800,759.                                                                                                 
   • District R:                                                                                                                
        o Total fish: $2,600,153.                                                                                               
   • District S:                                                                                                                
        o Total fish: $17,687,490.                                                                                              
   • District T:                                                                                                                
        o Total fish: $61,167.                                                                                                  
                                                                                                                                
He pointed out that the data on total impact by Senate district                                                                 
clearly shows that the repeal or defunding of the shared                                                                        
fisheries taxes has a significant impact.                                                                                       
                                                                                                                                
3:57:05 PM                                                                                                                    
He addressed "Scenario Development: Shared Fish Taxes" as                                                                       
follows:                                                                                                                        
                                                                                                                                
   • Taxes and or moorage fees increase:                                                                                        
        o Seafood prices remain low or flat.                                                                                    
        o Small vessels and business owners become unviable.                                                                    
        o Sell-off of local, small vessels to larger fleets.                                                                    
        o Fleet consolidation benefits accrue to outside owners.                                                                
   • Maintenance and repair of ports and harbors diminished:                                                                    
        o State-transferred assets increasingly unable to serve                                                                 
          seafood or tourist industry.                                                                                          
   • Additional taxes considered, where none exist:                                                                             
        o Duplicate industry taxing and decreased economic                                                                      
          growth.                                                                                                               
                                                                                                                                
He summarized that additional taxes would have to be considered                                                                 
where none exist, and you end up with duplicate industry taxing                                                                 
and decreased economic growth.                                                                                                  
                                                                                                                                
3:58:10 PM                                                                                                                    
MR. ANDREASSEN referenced specific "scenario development" for                                                                   
the communities and boroughs of Kodiak, Dillingham, Kenai, Atka,                                                                
Petersburg, St. Paul, Yakutat, and Seldovia as follows:                                                                         
                                                                                                                                
   • City of Kodiak:                                                                                                            
        o The  combined reductions  and  cost-shifting will  mean                                                               
          that the City of Kodiak anticipates:                                                                                  
         square4 Potential staff reductions: 13 of 133;                                                                         
             square4 Public Safety budget reduced by 8 percent;                                                                 
             square4 Public Works budget reduced by 8 percent;                                                                  
             square4 Harbor budget reduced by one full-time equivalent                                                          
               (FTE):                                                                                                           
                  • Lack of need for officers at Alaska Marine                                                                  
                    Highway System (AMHS) Terminal.                                                                             
                  • $50,000 loss of revenue at Pier I and II.                                                                   
             square4 Quality of Life programs potentially eliminated                                                            
               include the Kodiak Public Library and Parks and                                                                  
               Recreation programs.                                                                                             
        o Taxes would  need to increase  to offset  the decisions                                                               
          from SB 63.                                                                                                           
        o The City of Kodiak  underwent a strenuous evaluation of                                                               
          sales tax during the 2016-2018 fiscal years:                                                                          
             square4 The sales tax cap was increased.                                                                           
             square4 Future adjustments to sales tax would include                                                              
               taxing internet sales, eliminating exemption                                                                     
               programs, and compliance audits.                                                                                 
             square4 Other adjustments to sales tax would come as cuts                                                          
               of City services to residents.                                                                                   
                                                                                                                                
   • City of Dillingham:                                                                                                        
        o Receives Shared  Fisheries Business Tax of  $398,350 in                                                               
          FY2019.                                                                                                               
        o Despite an almost nine-year  effort, the Local Boundary                                                               
          Commission denied the city's efforts to expand its                                                                    
          municipal boundaries in order to levy a local                                                                         
          fisheries tax.                                                                                                        
        o While   the  city   is  a   major  commercial   fishing                                                               
          community, the does not have the resources to make up                                                                 
          the loss of state shared fish tax revenue.                                                                            
        o Reduction  in state  revenue will  significantly impact                                                               
          the city's overall ability to continue to provide                                                                     
          services:                                                                                                             
             square4 Up to 25-percent staff reductions.                                                                         
             square4 Significant reduction in services in all or most                                                           
               departments/services.                                                                                            
             square4 Tax increases:                                                                                             
                  • Mill rate and sales tax need to be explored.                                                                
        o The tertiary impact will be a significant loss of jobs                                                                
          and a loss of residents as people will move to seek                                                                   
          employment.                                                                                                           
        o Unknown where funding will come from to replace lost                                                                  
          shared revenues.                                                                                                      
                                                                                                                                
   • City of Kenai:                                                                                                             
        o The combined reductions and cost-shifting will mean:                                                                  
             square4 Potential staff reductions:                                                                                
                  • 6-7 fulltime positions.                                                                                     
             square4 Public Safety budget reduction to be determined.                                                           
             square4 Public Works budget reduction to be determined.                                                            
        o Quality of Life programs potentially eliminated that                                                                  
          includes ski trails, outdoor ice skating, and possible                                                                
          reduction in park maintenance and beautification.                                                                     
        o Taxes would need to increase by 0.63 mills to offset                                                                  
          SB 63.                                                                                                                
                                                                                                                                
   • City of Atka:                                                                                                              
        o The combined reductions and cost-shifting will mean                                                                   
          that the City of Atka anticipates:                                                                                    
             square4 Potential staff reductions = 4.                                                                            
             square4 Public Safety budget reduced by 100 percent. Atka                                                          
               has a VPSO through  the regional tribal entity but                                                               
               provides about  $6,000 in additional  support from                                                               
               City funds.                                                                                                      
             square4 Public Works budget reduced by 40 percent.                                                                 
             square4 The ability to comply with unfunded mandates                                                               
               related  to utility  operations  will be  severely                                                               
               hindered.                                                                                                        
             square4 The City will not be able to adequately maintain                                                           
               and  operate public  facilities or  provide public                                                               
               services.                                                                                                        
        o Job opportunities in Atka are limited at present. Low                                                                 
          income  residents cannot  afford additional  costs that                                                               
          would be  necessary to cover increases  in charges that                                                               
          would  be  needed  to   continue  operation  of  public                                                               
          utilities and services:                                                                                               
             square4 The tax base in Atka is severely limited. Even if                                                          
               the  local   population  were  to  agree   to  tax                                                               
               themselves,  this would  not  bring  in enough  to                                                               
               cover even  the cost of implementing  and managing                                                               
               tax collection.                                                                                                  
                                                                                                                                
   • Petersburg Borough:                                                                                                        
        o The combined reductions and cost-shifting will mean                                                                   
          that the Petersburg Borough anticipates:                                                                              
             square4 Property Taxes would need to increase by 1.7                                                               
               mills in service Area 1 to offset the elimination                                                                
               of the State school bond debt reimbursement.                                                                     
        o The current property tax levy for Education of 4.35                                                                   
          mills would need to double  to make up the lost funding                                                               
          from  the State.  Due to  the Borough's  tax cap  of 10                                                               
          this would  not be possible  as we are already  at 9.25                                                               
          for  school  and  general  services.  This  would  mean                                                               
          drastic  cuts  to  our  school  and  local  government,                                                               
          including:                                                                                                            
             square4 Quality of Life programs potentially eliminated                                                            
               including our community aquatic center, reduced                                                                  
               hours to the library and to our Parks &                                                                          
               Recreation Department.                                                                                           
             square4 Loss of School Activities (sports, music, etc.),                                                           
               and increase in classroom sizes.                                                                                 
             square4 Reduction of staff Borough wide (Borough, School                                                           
               and Hospital).                                                                                                   
             square4 Major rate increase for Harbor moorage and its                                                             
               resulting impact on the economic engine of the                                                                   
               Borough.                                                                                                         
                                                                                                                                
   • City of St. Paul:                                                                                                          
        o The combined reductions and cost-shifting will mean                                                                   
          that the City of Saint Paul anticipates:                                                                              
             square4 Potential staff reductions of 3 to 4 fulltime                                                              
               positions with a reduced work week from 40 hours                                                                 
               per week to 35 hour per week.                                                                                    
             square4 Public Safety budget reduced by 7 percent.                                                                 
             square4 Public Works budget reduced by 19 percent.                                                                 
             square4 Travel and training budgets reduced   by  90                                                               
               percent.                                                                                                         
             square4 General fund capital improvement budget reduced                                                            
               by 100 percent.                                                                                                  
             square4 Local sales tax would need to increase by 90 to                                                            
               95 percent to offset these decisions.                                                                            
             square4 An increase in utility (electric, water, sewer,                                                            
               and refuse) rates to cover the administrative                                                                    
               costs for operation of these utilities.                                                                          
                                                                                                                                
   • City and Borough of Yakutat:                                                                                               
        o Impacts based on the proposed FY2020 budget: we have                                                                  
          highlighted below some of the impacts that this                                                                       
          proposal will have on our residents.                                                                                  
             square4 Community Assistance funding has been $310,615.28                                                          
               and is 10 percent of the budget.                                                                                 
             square4 Current local contribution to education is the                                                             
              maximum amount allowed of $503,849.                                                                               
             square4 Residents depend on $351,731.65 in PCE funding to                                                          
               afford high energy costs.                                                                                        
             square4 Share of the Shared Fisheries Business Tax is                                                              
               $218,773 and the share of the Fish Landing Tax is                                                                
               $39,078.                                                                                                         
             square4 Anticipated cuts to the school district  are                                                               
               $252,220.                                                                                                        
             square4 Senior Services cuts are expected of $100,000.                                                             
        o Yakutat    is    concerned    about    the    long-term                                                               
          sustainability of Community Assistance and PCE.                                                                       
        o Anticipated combined reductions and cost shifting:                                                                    
             square4 Potential staff reductions:                                                                                
                  • 3 of 17 or 17 percent reduction in staff.                                                                   
             square4 Public Safety budget reduced by 20 percent.                                                                
             square4 Public Works budget reduced by 20 percent.                                                                 
             square4 Taxes would need to be increased by 300 percent.                                                           
                                                                                                                                
   • City of Seldovia:                                                                                                          
        o Share of the Shared Fisheries Business Tax in FY2019                                                                  
          is $2,341:                                                                                                            
             square4 Funds are invested directly into the city's fish                                                           
               dock to support its commercial fishing industry.                                                                 
        o The combined reductions and cost shifting will mean                                                                   
          that the City of Seldovia anticipates:                                                                                
             square4 Potential staff reductions:                                                                                
                  • Two Full-Time Equivalents (FTE);                                                                            
                  • Less workforce equals less services.                                                                        
             square4 Public Safety budget reduced by 13 percent.                                                                
             square4 Public Works budget reduced by 13 percent.                                                                 
             square4 Reductions in staffing would lead to potential                                                             
               deficiencies in health and welfare, including                                                                    
               monitoring our water utility and preservation of                                                                 
              the city's safe working environment.                                                                              
             square4 Important significant programs   potentially                                                               
               eliminated include  Seldovia Senior  Meal Program,                                                               
               quality of life to  Medicaid recipients, Parks and                                                               
               Recreation,  and  overall   quality  of  life  for                                                               
               Seldovians and visitors alike.                                                                                   
                                                                                                                                
4:00:54 PM                                                                                                                    
MR. ANDREASSEN addressed "Choices Combined: Micro Implications"                                                                 
and first addressed matters that compound the situation:                                                                        
                                                                                                                                
   • Capital Project Reimbursement:                                                                                             
        o $32,450,199;                                                                                                          
        o FY2020:                                                                                                               
             square4 $2,003,484.                                                                                                
   • Harbor Matching Grants:                                                                                                    
        o $7,500,000.                                                                                                           
   • Alaska Marine Highway System:                                                                                              
        o $8,709,307.                                                                                                           
                                                                                                                                
MR. ANDREASSEN addressed  the micro implications that  act like a                                                               
"feedback loop" that includes:                                                                                                  
                                                                                                                                
   • Decreased economic growth,                                                                                                 
   • Departure of residents,                                                                                                    
   • Departure of businesses,                                                                                                   
   • Fewer jobs in private and public sector,                                                                                   
   • Decrease in taxability,                                                                                                    
   • Decrease in local required school contribution,                                                                            
   • Quality of schools decrease,                                                                                               
   • Departure of families,                                                                                                     
   • Industry invests elsewhere.                                                                                                
                                                                                                                                
He  explained   that  the   previously  noted   municipal  impact                                                               
statements include  things that  compound the situation  like the                                                               
Capital Project  Reimbursement, the Harbor Matching  Grants, loss                                                               
of the Alaska  Marine Highway System; but, the  fish taxes repeal                                                               
would  be tough  to  manage at  a  local level  as  noted in  the                                                               
"feedback  loop"  where  the departure  of  residents  means  the                                                               
departure of  businesses, decreased taxability, and  its knock-on                                                               
effect on others in the "loop."                                                                                                 
                                                                                                                                
He addressed outcomes from the passage  of SB 63 will lead to the                                                               
following:                                                                                                                      
                                                                                                                                
   • Less sustainable communities.                                                                                              
   • Less predictable economies.                                                                                                
   • Less affordable services.                                                                                                  
                                                                                                                                
4:02:52 PM                                                                                                                    
CHAIR  BISHOP  announced that  the  committee  will hear  invited                                                               
testimony.                                                                                                                      
                                                                                                                                
4:02:58 PM                                                                                                                    
JON  ERICKSON,  Manager,  City &  Borough  of  Yakutat,  Yakutat,                                                               
Alaska, testified  in opposition  of SB 63.  He said  he supports                                                               
the state's  commitment to having  a sustainable budget,  but not                                                               
by making  Yakutat unsustainable. The  fish tax money is  used to                                                               
repair  and upgrade  Yakutat's fish  plant  dock. Yakutat's  dock                                                               
gives commercial fishermen a place to sell their fish.                                                                          
                                                                                                                                
He opined  that the  recipe to  kill the  economy in  Yakutat and                                                               
Southeast Alaska is to take away  the fish tax, weaken Power Cost                                                               
Equalization  (PCE), cut  contributions  to  education, stop  the                                                               
ferry  service,  take  away  Medicaid funds  for  a  new  clinic,                                                               
takeaway  revenue sharing,  and  cause the  City  and Borough  of                                                               
Yakutat to  raise property taxes  and sales taxes. He  asked what                                                               
part of  shutting down  rural Alaska equates  to "Alaska  is open                                                               
for business."                                                                                                                  
                                                                                                                                
4:05:56 PM                                                                                                                    
CHAIR  BISHOP asked  Mr. Erickson  to confirm  that the  City and                                                               
Borough of  Yakutat uses its fish  tax funds to keep  its dock up                                                               
and running.                                                                                                                    
                                                                                                                                
MR. ERICKSON  answered yes. He  added that the rent  from various                                                               
companies is also used for Yakutat's dock.                                                                                      
                                                                                                                                
SENATOR  GRAY-JACKSON   said  she  agreed  with   Mr.  Erickson's                                                               
comments.                                                                                                                       
                                                                                                                                
4:07:19 PM                                                                                                                    
LAYTON  LOCKETT,  City  Manager,  City  of  Adak,  Adak,  Alaska,                                                               
testified in opposition of SB  63. He explained that Adak derives                                                               
the  majority of  its  revenue through  taxation  of the  fishing                                                               
industry. Thirty-four  percent of the operating  revenues to date                                                               
are derived  from the tax. Adak  is a former naval  facility that                                                               
was never platted or subdivided  upon its transfer and the city's                                                               
ability to institute  a property tax would  require a significant                                                               
amount of  capital and effort;  therefore, the city's  ability to                                                               
generate revenue  must continue  to come from  the levy  of taxes                                                               
such  as sales  and local  fish taxes.  In order  to replace  the                                                               
equivalent amount of average revenue  would require a 200 percent                                                               
increase in the city's sales tax  or institute a budget cut of 33                                                               
to 51 percent that would decimate the city's services.                                                                          
                                                                                                                                
4:10:48 PM                                                                                                                    
PHIL ZAVADIL, City  Manager, City of St. Paul,  St. Paul, Alaska,                                                               
testified in opposition  of SB 63. He said the  fishing tax makes                                                               
up one third  of St. Paul's total general  fund operating budget,                                                               
funds  that go  directly to  providing public  safety and  public                                                               
work services  to residents. He  detailed the history of  how the                                                               
state supported Saint  Paul and the Pribilof  Islands in creating                                                               
a stable, fisheries-based economy. He  said SB 63 sends a message                                                               
that  the state  will no  longer  support its  commitment to  the                                                               
community and  value people.  SB 63  will threaten  the long-term                                                               
stability  and  sustainability  of  significant  investments  the                                                               
state and local entities made into  St. Paul's harbor. SB 63 will                                                               
impair St.  Paul's ability to  pay back  the loans that  the city                                                               
had to take  to pay for its  share of the harbor  and other local                                                               
infrastructure. Over  $100 million  in state, federal,  and local                                                               
funds was  invested into St. Paul's  harbor infrastructure alone.                                                               
Thanks to St.  Paul's harbor, St. Paul remains as  one of the top                                                               
generators statewide of fisheries business taxes.                                                                               
                                                                                                                                
4:14:15 PM                                                                                                                    
PAT BRANSON, Mayor, City of  Kodiak, Kodiak, Alaska, testified in                                                               
opposition of  SB 63.  He said  the City of  Kodiak faces  a dire                                                               
threat from  the governor's  proposed budget  to grab  the Shared                                                               
Fisheries  Business Tax  and  Shared  Fisheries Resource  Landing                                                               
Tax.  The  taxes amount  to  $859,000  to  the City  of  Kodiak's                                                               
budget, or  4.5 percent  of the general  fund revenue.  The funds                                                               
are used to maintain infrastructure,  which supports Kodiak's and                                                               
the state's economic engine, the  seafood industry. Kodiak is the                                                               
third-ranked community  in pounds  landed, and fourth  in product                                                               
value in all  U.S. ports for the fisheries economy.  The state no                                                               
longer owns the infrastructure in  Kodiak, an infrastructure that                                                               
supports   an  important   industry.   Without   the  tax   funds                                                               
municipalities  will  have  to look  at  raising  taxes,  cutting                                                               
services, and  for some  communities to  even continue  as viable                                                               
government  entities.  She  summarized  that  cost  shifting  and                                                               
revenue grabbing is not budget solving.                                                                                         
                                                                                                                                
4:16:55 PM                                                                                                                    
ANNE  BAILEY, Administrator,  Aleutians East  Borough, Anchorage,                                                               
Alaska, testified in  opposition of SB 63. She  detailed that the                                                               
Aleutians  East  Borough  is   responsible  for  3,141  residents                                                               
located in  the following communities:  City of Sand  Point, City                                                               
of King Cove, The King Cove  View, City of Akutan, Native Village                                                               
of Nelson Lagoon, City of Cold  Bay, and the City of False Point.                                                               
She said the shared fisheries  taxes is a partnership between the                                                               
state  and municipalities.  There  are  significant general  fund                                                               
revenues that  the municipalities  rely on as  part of  their tax                                                               
base  that supports  services and  capital  projects. The  shared                                                               
fisheries taxes  program represents  28 percent of  the borough's                                                               
operating budget, approximately $2.2 million.                                                                                   
                                                                                                                                
4:19:42 PM                                                                                                                    
GARY HENNIGH,  City Administrator, City of  King Cove, Anchorage,                                                               
Alaska, testified  in opposition of  SB 63. He said  fisheries is                                                               
the revenue cornerstone  of the city's economy.  The prospects of                                                               
SB 63  becoming law is  the most daunting of  any fishing-related                                                               
changes during his 29 years  as city administrator. State-shared-                                                               
fish  taxes has  been  20 to  25 percent  of  the city's  budget,                                                               
currently  equivalent  to  $580,000.   He  asserted  that  SB  63                                                               
threatens the long-term survival of King Cove.                                                                                  
                                                                                                                                
4:22:56 PM                                                                                                                    
CLAY KOPLIN,  Mayor, City of Cordova,  Cordova, Alaska, testified                                                               
in opposition of  SB 63. He said Cordova has  already reduced its                                                               
budget from  $12 million to $10  million in the wake  of economic                                                               
contraction.  Taking Cordova's  $1.2 million  in fish  taxes will                                                               
not allow the city to invest  in a growing fishery. Cordova ranks                                                               
as  the thirteenth  largest seafood  port in  the United  States,                                                               
nearly a $100 million  economy, and the city is on  pace to be in                                                               
the top-five  seafood ports.  The state  made a  partnership with                                                               
the community via  the fish tax revenues. Cordova is  on a growth                                                               
trajectory  and taking  away  the  tax will  put  the  city in  a                                                               
survival  mode.  He  opined  that,  "Maybe  Alaska  is  open  for                                                               
business, as  long as you  don't want to  live here." He  said if                                                               
the state  is the  only local-tax  beneficiary, the  incentive is                                                               
removed to  make the  local investments that  have grown  the tax                                                               
revenues.  The   possible  result  in  five   years  is  floating                                                               
processors that generate less revenue for the state.                                                                            
                                                                                                                                
4:26:56 PM                                                                                                                    
MARY  SWAIN, Assembly  President,  Bristol  Bay Borough,  Naknek,                                                               
Alaska, testified  in opposition of  SB 63. She said  the borough                                                               
is the  heart of the largest  red salmon fishing industry  in the                                                               
world, estimated  to an  annual value of  $1 billion.  The Naknek                                                               
port is the  third largest commercial landing port  in the United                                                               
States,  based on  commercial fishing  landings ranked  by dollar                                                               
value.  The   tax  revenue   supports  the   borough's  essential                                                               
services. The  borough hopes that  the state will continue  to be                                                               
its  long-standing  partner of  57  years  in supporting  Bristol                                                               
Bay's annual $1 billion fishing industry.                                                                                       
                                                                                                                                
4:30:16 PM                                                                                                                    
JOE BERESKIN,  Mayor, City of  Akutan, Akutan,  Alaska, testified                                                               
in  opposition  of  SB  63.  He said  the  shared  fishing  taxes                                                               
accounts for 38 percent of  the city's revenues in 2018, combined                                                               
with  the city's  other  fish  taxes the  total  accounts for  88                                                               
percent  of the  city's revenues.  The shared  fishing taxes  has                                                               
allowed Akutan to develop projects  completely paid for with city                                                               
funds.  The  taxes  have  also  supported  the  city's  essential                                                               
services  and  capital  projects.  The shared  fishing  taxes  is                                                               
essential for the city to meet  its goals as well as allowing the                                                               
city to step up as a partner with the state.                                                                                    
                                                                                                                                
SENATOR  GRAY-JACKSON  noted  that   she  had  worked  for  Mayor                                                               
Bereskin in Akutan and thanked him for his testimony.                                                                           
                                                                                                                                
4:34:42 PM                                                                                                                    
FRANK  KELTY,   Mayor,  City   of  Unalaska,   Unalaska,  Alaska,                                                               
testified in  opposition of SB 63.  He pointed out that  the City                                                               
of Unalaska  is the nation's  number-one commercial  fishing port                                                               
for 22 years and is highly  dependent on the fishery's shared and                                                               
local landing taxes. The fisheries  industry of the Bering Sea is                                                               
Unalaska's  only  industry  and  if the  fish  tax  revenues  are                                                               
impacted  the result  will be  felt  in all  the city's  sectors.                                                               
Unalaska's  shared fish  taxes  accounts for  26  percent of  the                                                               
city's  $31  million  general fund  revenues.  Unalaska  provides                                                               
services to help support the  nation's largest commercial fishing                                                               
port  that  supports  harvesters  and  processors.  Unalaska  has                                                               
heavily invested  in the infrastructure that  supports the city's                                                               
fishermen,  processors, essential  services, nonprofit  services,                                                               
and  capital projects.  With the  lack of  state capital  project                                                               
funds,  many communities  have taken  over formally  funded state                                                               
services. Unalaska's  fish taxes  allow the city  to pay  its own                                                               
way.                                                                                                                            
                                                                                                                                
He summarized  that the  governor has  repeatedly stated  he will                                                               
not  implement  a tax  on  the  people.  By taking  dollars  from                                                               
communities that service industries on  a local level, the impact                                                               
will require  higher taxes imposed  by municipalities.  He opined                                                               
that the  administration is in  fact forcing local  government to                                                               
tax the people of Alaska negatively  and the bill will impact the                                                               
quality of life for all Alaskans.                                                                                               
                                                                                                                                
4:38:29 PM                                                                                                                    
CHAIR BISHOP noted that Unalaska  will be seeing an additional 20                                                               
cruise ships and asked how the city will deal with the impact.                                                                  
                                                                                                                                
MAYOR  KELTY  replied  that  cruise   ship  visits  are  part  of                                                               
Unalaska's recent  $40 million dock  expansion. He  detailed that                                                               
the expanded dock  has room for two container ships  or up to two                                                               
cruise  ships.  He noted  that  Unalaska  annually ships  over  a                                                               
billion pounds of seafood out of  its port and the city must take                                                               
care of its facilities on its own.                                                                                              
                                                                                                                                
SENATOR BIRCH asked how taxes are collected.                                                                                    
                                                                                                                                
MAYOR  KELTY answered  that  the  three-percent Alaska  Fisheries                                                               
Business Tax  is paid  to the  state by  the processors  that are                                                               
based on shore and half goes  back to the communities. The three-                                                               
percent  Fisheries Resource  Landing Tax  makes an  equal playing                                                               
field  between  the  shore-based  and  the  off-shore  processing                                                               
fleet. The "landing  tax" is based on where  the finished product                                                               
is landed  because the processing  occurs in federal  waters. The                                                               
majority of the  landing taxes goes to Unalaska  because the city                                                               
has the only major shipping port in the Aleutians.                                                                              
                                                                                                                                
4:41:21 PM                                                                                                                    
JORDAN   KEELER,  City   Administrator,  City   of  Sand   Point,                                                               
Anchorage,  Alaska,   testified  in  opposition  of   SB  63.  He                                                               
explained that  the fisheries tax  comprises 15 to 20  percent of                                                               
Sand Point's general  fund over the past decade.  The shared fish                                                               
taxes  are  used  for  the   city's  administrative  costs,  core                                                               
services, enterprise  funds, and debt service  obligations. SB 63                                                               
will  have a  serious impact  on Sand  Point and  its ability  to                                                               
serve its residents.                                                                                                            
                                                                                                                                
4:43:14 PM                                                                                                                    
ALICE  RUBY,  Mayor,  City  of  Dillingham,  Dillingham,  Alaska,                                                               
testified  in opposition  of  SB  63. She  said  Dillingham is  a                                                               
small, first-class city in Bristol  Bay that is located among the                                                               
communities located in  the middle of the  Bristol Bay commercial                                                               
salmon  fishery. Dillingham  is the  economic transportation  and                                                               
public  service  center  for western  Bristol  Bay.  Dillingham's                                                               
fishing  industry  contributes  a  great deal  to  both  its  own                                                               
community and to  the state since over 40 percent  of the permits                                                               
that  participate in  the  fishery are  owned  by residents  from                                                               
outside of the  city's region but located within  the state. Part                                                               
of  Dillingham's  success  is  due  the  city's  support  of  the                                                               
infrastructure  that  the  industry   needs  and  its  community.                                                               
Dillingham  currently  receives  $398,000   in  shared  fish  tax                                                               
revenue, and amount  that is critical to the  community. The fish                                                               
tax  revenue  accounts  for  one   third  of  the  city's  school                                                               
contribution, one quarter  of its public safety  budget, and half                                                               
of its  public works budget.  The city  cannot levy its  own fish                                                               
tax because the  local boundary commission has  denied the city's                                                               
nine-year effort  to expand  its boundaries  for levying  a local                                                               
fish  tax. Dillingham  taxes itself  heavily and  its ability  to                                                               
generate more tax revenue  to make up for its loss  from SB 63 is                                                               
limited if not impossible. Dillingham's  only alternative to make                                                               
up for its  loss would be to reduce essential  services. The loss                                                               
from  SB  63 will  impact  Dillingham's  ability to  support  the                                                               
fishing  industry,  the  very industry  that  is  generating  the                                                               
economic benefit for both the state and Dillingham.                                                                             
                                                                                                                                
4:47:04 PM                                                                                                                    
MATT  ALWARD,  President,  United  Fishermen  of  Alaska,  Homer,                                                               
Alaska,  testified   in  opposition  of   SB  63.  He   said  the                                                               
legislature  chose a  long time  ago to  share a  portion of  the                                                               
fisheries  taxes  with the  communities  that  the fish  industry                                                               
relies   on  for   processing   and   shore-side  services.   The                                                               
communities  use the  funds to  support the  fishing industry  as                                                               
well as paying  for its basic services. Communities  will have no                                                               
choice  but to  back-fill funds  or  cut services  if the  shared                                                               
taxes  are  removed.  If  SB  63  passes,  some  of  the  fishing                                                               
industry's  financial  burden  will  be  transferred  on  coastal                                                               
communities  which will  result  in more  financial stresses  for                                                               
commercial fishing operations.                                                                                                  
                                                                                                                                
4:48:41 PM                                                                                                                    
JILA STUART,  Finance Director,  Haines Borough,  Haines, Alaska,                                                               
testified  in  opposition of  SB  63.  She  said she  shared  the                                                               
concerns  that  were  voiced  by  the  coastal  communities  that                                                               
support  the fishing  industry. The  Haines Borough  receives the                                                               
Fisheries Business Tax which makes up  between 3 to 10 percent of                                                               
the  borough's  general fund  revenues,  funds  that the  borough                                                               
tries to use  for infrastructure to support  the fishing industry                                                               
as well as supporting schools in Haines.                                                                                        
                                                                                                                                
4:50:02 PM                                                                                                                    
LEE  BURGESS,  Finance  Director,  City &  Borough  of  Wrangell,                                                               
Wrangell, Alaska, testified in opposition  of SB 63. He explained                                                               
that Wrangell  uses its share  of the  fish taxes to  reinvest in                                                               
its harbor  infrastructure. To  make up for  the loss  of revenue                                                               
from SB 63,  Wrangell will have to increase its  moorage rates by                                                               
43 to 57 percent.                                                                                                               
                                                                                                                                
He opined that the effects from  SB 63 will be extremely variable                                                               
depending on the  community and would in effect be  an example of                                                               
arbitrarily    picking   winners    and    losers   by    causing                                                               
disproportionate  harm to  certain  communities  relative to  how                                                               
much their economic backbone is made up by commercial fishing.                                                                  
                                                                                                                                
4:51:40 PM                                                                                                                    
TERRY  EUBANK, Finance  Director, City  of Kenai,  Kenai, Alaska,                                                               
testified in opposition  of SB 63. He  said SB 63 is  a bill that                                                               
will   eliminate  the   current   sharing  of   tax  revenue   to                                                               
municipalities   who   are   providing  direct   assistance   and                                                               
infrastructure to the processors  and fishermen who are operating                                                               
within the municipalities' boundaries.                                                                                          
                                                                                                                                
MR.  EUBANK explained  that  while small  in  comparison to  many                                                               
communities,  the  City of  Kenai  receives  between $125,000  to                                                               
$225,000  per  year in  shared  fisheries  business and  resource                                                               
landing  tax;  these  shared  taxes allow  the  city  to  provide                                                               
services  and  infrastructure  directly  to  the  processors  and                                                               
fishermen in Kenai.  Loss of the shared tax  revenues will result                                                               
in a shift  of the taxes to  other non-fishing-related taxpayers.                                                               
The proposed bill does not eliminate  the need for revenue at the                                                               
local level but shifts the tax burden to other taxpaying groups.                                                                
                                                                                                                                
4:53:07 PM                                                                                                                    
MARILYN  MENISH-MEUCCI,  representing self,  Petersburg,  Alaska,                                                               
testified in opposition  of SB 63. She opined  that the fisheries                                                               
business  fish  tax  needs  to   stay  in  the  communities  that                                                               
generated the tax.  Petersburg received $899,855 in  2018 and the                                                               
revenue  was used  for the  harbors and  the other  needs of  the                                                               
community.  She  suggested  that the  governor  find  alternative                                                               
revenue sources.                                                                                                                
                                                                                                                                
4:53:55 PM                                                                                                                    
CHAIR BISHOP opened public testimony.                                                                                           
                                                                                                                                
4:54:07 PM                                                                                                                    
GLORIANNE   WOLLEN,   representing  self,   Petersburg,   Alaska,                                                               
testified  in opposition  of SB  63. She  noted that  she is  the                                                               
harbormaster  in   Petersburg.  She  detailed  her   fishing  and                                                               
crabbing history. She said repealing  the shared fish taxes would                                                               
devastate coastal communities who rely  on the program to support                                                               
infrastructure and  quality of life  programs. She  addressed the                                                               
history  of  the shared  taxes  and  explained that  because  the                                                               
fishing  industry gets  the opportunity  to harvest  seafood, the                                                               
industry owes  it to the  state and  communities to share  in the                                                               
bounty. The  concept is  "We are  all in  this together"  and the                                                               
state government  had faith in  the industry by  providing enough                                                               
tools to "better care for  itself." She said the fishing industry                                                               
is proud of  the partnerships created amongst  the fishing fleet,                                                               
the state, and the communities where the seafood is landed.                                                                     
                                                                                                                                
4:57:10 PM                                                                                                                    
JEFF  GUARD, representing  self,  Cordova,  Alaska, testified  in                                                               
opposition of  SB 63.  He opined that  legislators took  oaths to                                                               
"serve  and  defend  the  State   of  Alaska."  He  said  coastal                                                               
communities are starting to feel  under attack after watching the                                                               
proposals for  the state ferry  system, the shared "Raw  Fish Tax                                                               
revenue, and  school dollars. He  asked that the  legislature use                                                               
the "power of  the purse" to defend coastal  communities from the                                                               
administration's proposed budget cuts.                                                                                          
                                                                                                                                
4:58:25 PM                                                                                                                    
JAMES  WIESE, representing  self, Cordova,  Alaska, testified  in                                                               
opposition of SB  63. He noted that the shared  fishery taxes are                                                               
used  to support  Cordova's  infrastructure,  city services,  and                                                               
bond debt.  He said the  repeal from SB  63 cannot be  managed at                                                               
the local level.                                                                                                                
                                                                                                                                
5:00:27 PM                                                                                                                    
STOSH ANDERSON,  representing self, Kodiak, Alaska,  testified in                                                               
opposition of  SB 63. He  said he  is a commercial  fisherman who                                                               
has delivered  fish throughout coastal  communities who  have all                                                               
benefited  from the  taxes that  fishermen have  paid. The  taxes                                                               
collected and conveyed to the  cities are appropriate and need to                                                               
be  maintained.  The  proposed  alcohol  tax  distribution  as  a                                                               
mitigation  for reducing  the  sharing  of the  fish  tax is  not                                                               
appropriate.  He  opined that  any  distribution  of the  alcohol                                                               
taxes  will not  be  proportional to  the  communities that  have                                                               
received fish taxes.                                                                                                            
                                                                                                                                
5:02:15 PM                                                                                                                    
SHAWN DOCHTERMANN,  representing self, Kodiak,  Alaska, testified                                                               
in opposition of SB 63. He  said he is a commercial fisherman and                                                               
delivers  seafood to  multiple coastal  communities. He  remarked                                                               
that  he has  great concern  with the  taking of  the taxes  that                                                               
helps  provide for  each port  to keep  its local  infrastructure                                                               
healthy. He opined that the  governor has no business in removing                                                               
the  shared funds  with the  municipalities that  receive seafood                                                               
landings. The  economic stability of every  coastal community and                                                               
borough is at stake if SB 63  were to pass. He suggested that the                                                               
governor consider other revenue sources.                                                                                        
                                                                                                                                
5:03:52 PM                                                                                                                    
DARIUS KASPRZAK, representing self,  Kodiak, Alaska, testified in                                                               
opposition of SB  63. He noted that he is  a commercial fisherman                                                               
and  opined that  eliminating the  shared  taxes will  accelerate                                                               
Kodiak's recent  and consistent population decreases.  He said as                                                               
the monies will necessarily be  made up from new additional local                                                               
taxes, Kodiak is already one of  the most expensive towns to live                                                               
in within the  state. He remarked that SB  63 will disenfranchise                                                               
Kodiak.                                                                                                                         
                                                                                                                                
CHAIR BISHOP  said he would like  to give a shout-out  to all the                                                               
fishermen,  men and  women, who  risk  their lives  every day  to                                                               
provide a very sustainable industry for Alaska.                                                                                 
                                                                                                                                
5:05:44 PM                                                                                                                    
RACHEL  LORD,  representing  self, Homer,  Alaska,  testified  in                                                               
opposition of SB 63. She detailed  that she is a staff member for                                                               
the  statewide  Alaska  Association  of  Harbormasters  and  Port                                                               
Administrators and  sits on the  Homer City Council. She  said SB                                                               
63 is  an irresponsible effort  to balance the state  finances on                                                               
the backs of municipalities and  working waterfronts. The state's                                                               
harbors are  set up as  enterprise funds where harbors  pay their                                                               
way  including  funding  deprecation reserves  through  fees  and                                                               
tariffs.  Fish do  not  come  across the  dock  unless docks  are                                                               
maintained  and properly  managed. The  shared fish  tax revenues                                                               
are  used to  help  recapitalize infrastructure  and operate  the                                                               
docks and  harbors. She asserted that  the "Raw Fish Tax"  is not                                                               
statewide  revenue. She  opined  that SB  63 would  irresponsibly                                                               
pull revenue  from the  communities that  are generating  the tax                                                               
revenue  that  is  used  to   maintain  the  infrastructure  that                                                               
generates the revenue.                                                                                                          
                                                                                                                                
5:07:49 PM                                                                                                                    
JOHN  MURRAY,  representing  self, Sitka,  Alaska,  testified  in                                                               
opposition  of  SB  63.  He  detailed that  he  is  a  commercial                                                               
fisherman. He noted  that Sitka is the largest  small boat harbor                                                               
system  in Alaska,  both commercial  and recreational.  He opined                                                               
that Sitka would be hard pressed  to backfill the loss of the tax                                                               
revenue. He asserted that SB 63  would be very detrimental to the                                                               
commercial fleet.                                                                                                               
                                                                                                                                
5:08:43 PM                                                                                                                    
CATHY RENFELDT, representing self,  Cordova, Alaska, testified in                                                               
opposition of  SB 63. She  noted that  she works for  the Cordova                                                               
Chamber of Commerce. She said  all Cordova businesses are opposed                                                               
to SB  63 and repealing the  revenue sharing of fish  taxes would                                                               
be  extremely detrimental  to  city. The  revenue  from the  fish                                                               
taxes represents  25 percent of  the city's operating  budget and                                                               
cutting the  tax would likely  result in cuts to  Cordova's basic                                                               
services. The cuts in SB 63  are unrealistic and show a disregard                                                               
for  the wellbeing  of  the state.  The approach  from  SB 63  is                                                               
shortsighted and  sends a clear  message that  the administration                                                               
does not value its coastal  communities, which include six of the                                                               
largest seafood  ports for landing  value in the world.  She said                                                               
without  Alaska's coastal  communities  the state  would lose  an                                                               
extremely rare,  wild, and intact  ecosystems along with  much of                                                               
its history, native culture, and unique character and charm.                                                                    
                                                                                                                                
5:10:56 PM                                                                                                                    
DUSTIN  DICKERSON, Vice  President,  Unalaska Native  Fisherman's                                                               
Association, Unalaska, Alaska, testified  in opposition of SB 63.                                                               
He said  he makes a hundred  percent of his income  from the fish                                                               
that he  delivers on  the docks. He  announced that  the Unalaska                                                               
Native Fisherman's Association does not support SB 63.                                                                          
                                                                                                                                
5:11:39 PM                                                                                                                    
GERALD  MCCUNE,  Board   President,  Cordova  District  Fishermen                                                               
United, Cordova,  Alaska, testified  in opposition  of SB  63. He                                                               
explained that  fishermen indirectly pay  the tax and the  tax is                                                               
included in the  processors' business plans, but the  cost of the                                                               
tax has  to come out  something, the  price, the labor,  it's all                                                               
included in the business plan.  He detailed that a fisherman pays                                                               
a 2-percent  aquaculture tax  and a  1-percent marketing  tax; to                                                               
make up the money  in the tax a fisherman would have  to pay 9 or                                                               
10 percent out  of their own income  to make up for  the loss. He                                                               
asserted that if  Cordova put in a 9-percent "Raw  Fish Tax" then                                                               
plants  in Valdez,  Whittier and  Seward would  attract fishermen                                                               
away  from  Cordova. He  opined  that  coastal communities  would                                                               
probably lose  money because less  fish is coming in  which leads                                                               
to less work  and less product. He added  that Cordova's hospital                                                               
is struggling and  without a hospital the U.S.  Coast Guard would                                                               
have to go to a location that has a hospital facility.                                                                          
                                                                                                                                
5:13:32 PM                                                                                                                    
CHAIR BISHOP announced that public testimony is done for now.                                                                   
                                                                                                                                
COMMISSIONER  TANGEMAN commented  that he  appreciates everyone's                                                               
concern  and passion  from their  testimony. He  stated that  the                                                               
testifiers are  obviously seeing  the possible impact  from their                                                               
backyards,  from their  own communities  along the  coastline. He                                                               
said his hope  is everyone can also appreciate the  fact that the                                                               
state in  general is really  struggling with the budget  as well.                                                               
He pointed out  that the state has a $1.6  billion deficit with a                                                               
budget that is unsustainable.                                                                                                   
                                                                                                                                
CHAIR BISHOP  asked if  SB 63  was not to  pass, would  the funds                                                               
still flow out from the state's  coffers to the communities as it                                                               
has been for many years.                                                                                                        
                                                                                                                                
COMMISSIONER  TANGEMAN replied  that the  shared tax  is the  law                                                               
that  is in  place. He  said  the administration's  intent is  to                                                               
change the law through SB 63.                                                                                                   
                                                                                                                                
SENATOR  GRAY-JACKSON   said  she  thanked  everyone   for  their                                                               
comments  and   noted  how  much  she   appreciated  Commissioner                                                               
Tangeman's comments  that the state  is struggling;  however, she                                                               
opined that the administration  cannot punish communities because                                                               
the state  is struggling and  that is not  the way to  handle the                                                               
problem.                                                                                                                        
                                                                                                                                
SENATOR  BIRCH asked  what the  motivation was  behind allocating                                                               
the alcohol  tax revenue as opposed  to the fisheries tax  to the                                                               
coastal communities.                                                                                                            
                                                                                                                                
COMMISSIONER  TANGEMAN replied  that  he did  not  know what  the                                                               
policy call was for the  50-percent distribution from the alcohol                                                               
tax. He noted that the alcohol tax  is not connected to SB 63 and                                                               
he cannot speak to the policy.                                                                                                  
                                                                                                                                
CHAIR  BISHOP  remarked that  he  thinks  one of  the  commenters                                                               
summed it up  best with the alcohol taxes, as  much as they might                                                               
try to, he did  not think they could drink enough  to make up the                                                               
shortfall. He  admitted that his  remark is  a bit of  levity but                                                               
pointed  out that  the state  is trying  to go  the other  way by                                                               
using the  alcohol funds to  help people with  drinking addiction                                                               
problems.  He opined  that  the state  needs  to address  alcohol                                                               
addiction on the front end and  that is where that money needs to                                                               
go.                                                                                                                             
                                                                                                                                
COMMISSIONER TANGEMAN  referenced the question on  the process of                                                               
the  fisheries  tax collection  and  explained  that the  tax  is                                                               
administered  and   collected  at   the  state  level   and  then                                                               
distributed to the communities.                                                                                                 
                                                                                                                                
5:17:04 PM                                                                                                                    
CHAIR BISHOP opened and closed public testimony.                                                                                
                                                                                                                                
5:17:26 PM                                                                                                                    
CHAIR BISHOP held SB 63 in committee.                                                                                           
                                                                                                                                
5:17:46 PM                                                                                                                    
There being  no further  business to  come before  the committee,                                                               
Chair Bishop adjourned the Senate  Community and Regional Affairs                                                               
Standing Committee meeting at 5:17 p.m.                                                                                         

Document Name Date/Time Subjects
SB 63 Transmittal Letter.pdf SCRA 3/21/2019 3:30:00 PM
SB 63
SB 63 Version A.PDF SCRA 3/21/2019 3:30:00 PM
SB 63
SB63 Sectional.pdf SCRA 3/21/2019 3:30:00 PM
SB 63
SB 63 Fiscal note CED.PDF SCRA 3/21/2019 3:30:00 PM
SB 63
SB 63 Fiscal note REV.PDF SCRA 3/21/2019 3:30:00 PM
SB 63
AML Fisheries Tax Presentation.pdf SCRA 3/21/2019 3:30:00 PM
SB 63
Letter_Opposition_Bristol Bay Borough.pdf SCRA 3/21/2019 3:30:00 PM
SB 63
Resolution_ Opposition_ SouthWest Alaska Municipal Conference.pdf SCRA 3/21/2019 3:30:00 PM
SB 63
Resolution_Opposition_City of Kenai.pdf SCRA 3/21/2019 3:30:00 PM
SB 63
Letter_Opposition_Petersburg Borough.pdf SCRA 3/21/2019 3:30:00 PM
SB 63
Letter_Opposition_Torie Baker and Troy Tirrell.pdf SCRA 3/21/2019 3:30:00 PM
SB 63
Letter_Opposition_Torgeson.pdf SCRA 3/21/2019 3:30:00 PM
SB 63
Letter_Opposition_Oswalt.pdf SCRA 3/21/2019 3:30:00 PM
SB 63
Letter_Support_Weathers.pdf SCRA 3/21/2019 3:30:00 PM
SB 63
Letter_Opposition_City of Ouzinkie.pdf SCRA 3/21/2019 3:30:00 PM
SB 63
Letter_Opposition_Renner.pdf SCRA 3/21/2019 3:30:00 PM
SB 63
Letter_Opposition_Renner_Ray.pdf SCRA 3/21/2019 3:30:00 PM
SB 63
Letter_Opposition_Niles.pdf SCRA 3/21/2019 3:30:00 PM
SB 63
Letter_Opposition_Petersburg Chamber.pdf SCRA 3/21/2019 3:30:00 PM
SB 63
Letter_Opposition_McLaughlin.pdf SCRA 3/21/2019 3:30:00 PM
SB 63
Letter_Opposition_City of Larsen Bay.pdf SCRA 3/21/2019 3:30:00 PM
SB 63
Letter_Opposition_Cordova District Fishermen United.pdf SCRA 3/21/2019 3:30:00 PM
SB 63
Letter_Opposition_City of Unalaska.pdf SCRA 3/21/2019 3:30:00 PM
SB 63
Resolution_Opposition_Aluetians East Borough.pdf SCRA 3/21/2019 3:30:00 PM
SB 63
Letter_Opposition_Cordova Board of Education.pdf SCRA 3/21/2019 3:30:00 PM
SB 63
Letter_Opposition_Reynolds.pdf SCRA 3/21/2019 3:30:00 PM
SB 63
Letter_Opposition_City of King Cove.pdf SCRA 3/21/2019 3:30:00 PM
SB 63
Letter_Opposition_Menish-Meucci .pdf SCRA 3/21/2019 3:30:00 PM
SB 63
Letter_Opposition_Wollen.pdf SCRA 3/21/2019 3:30:00 PM
SB 63
Letter_Opposition_Strand.pdf SCRA 3/21/2019 3:30:00 PM
SB 63
Letter_Opposition_Burgess.pdf SCRA 3/21/2019 3:30:00 PM
SB 63