SENATE COMMUNITY & REGIONAL AFFAIRS COMMITTEE April 13, 1993 9:05 a.m. MEMBERS PRESENT Senator Randy Phillips, Chairman Senator Robin Taylor, Vice Chairman Senator Al Adams MEMBERS ABSENT Senator Loren Leman Senator Fred Zharoff COMMITTEE CALENDAR SENATE BILL NO. 164 "An Act relating to municipal incorporation, reclassification, and dissolution." SENATE BILL NO. 176 "An Act relating to the municipal tax exemption for inventories intended for export." PREVIOUS SENATE COMMITTEE ACTION SB 164 - See Community & Regional Affairs minutes dated 3/30/93. SB 176 - No previous action to record. WITNESS REGISTER Dan Bockhorst, Local Boundary Commission Supervisor Division of Municipal & Regional Assistance Department of Community & Regional Affairs 333 W. 4th Ave., Suite 220 Anchorage, AK 99501-2341 POSITION STATEMENT: Offered information on SB 164 Portia Babcock, Staff to Senate State Affairs Committee State Capitol Juneau, AK 99801-1182 POSITION STATEMENT: Offered information on SB 176 Kent Swisher, Executive Director Alaska Municipal League 217 2nd St. Juneau, AK 99801 POSITION STATEMENT: Testified on SB 176 ACTION NARRATIVE TAPE 93-21, SIDE A Number 001 The Senate Community & Regional Affairs Committee was called to order by Chairman Randy Phillips at 9:05 a.m. SENATOR RANDY PHILLIPS brought SB 164 (MUNICIPAL INCORPORATION, RECLASSIFICATION, DISSOLUTION) before the committee as the first order of business. Number 015 DAN BOCKHORST, Department of Community & Regional Affairs, staff to Alaska Local Boundary Commission, testified from Anchorage over the Legislative Teleconference Network. He said he has reviewed the proposed committee substitute dated 4/9/93, and that it encompasses most of the recommendations made by the department with two exceptions. The work draft retains language the department recommended be deleted because it felt it was redundant to the LBC's tasks that would be assigned under the bill. It would retain the provision for a city council hearing on reclassification as well as requiring a hearing by the LBC. The department does not have strong objection to keeping the language in the bill, but they suggest a technical amendment to AS 29.04.040(c) to reflect that reclassification is now limited only to reclassification of first class cities. The second suggested change is of a policy nature and relates to language in AS 29.06.500(b) that allows a second class city with a population of 3,500 or more permanent residents in jurisdictional boundaries that encompass 35 square miles or more to adopt a home rule charter. The department feels that this proposal should be repealed because the language is tantamount to being local and special legislation. The provisions would apply only to one of Alaska's 116 second class cities, and the department believes that the statutes, from a policy standpoint, should be broad and general and not applicable to single interests as is the case in this particular situation. Mr. Bockhorst outlined three other suggested technical changes: expanding the title of the Act; amending the title of Section 2; and on page 8, line 19, change "shall" to "may." Number 155 SENATOR RANDY PHILLIPS requested that Mr. Bockhorst provide the committee with a letter outlining the changes he had discussed, as well as providing a new fiscal note for the committee substitute. He then closed the public hearing on SB 164. Number 162 SENATOR RANDY PHILLIPS introduced SB 176 (MUNICIPAL INVENTORY TAX EXEMPTION:EXPORTS) as the final order of business. PORTIA BABCOCK, staff to the Senate State Affairs Committee, said the legislation was introduced by the committee at the request of the Anchorage Economic Development Corporation. It will allow municipalities the flexibility to partially or totally exempt inventories from taxation, primarily goods being held for shipment out of state. She said it was requested because it is the general practice of most other large export areas that want to encourage their municipality to be a distribution center for storing large shipments for export. Number 192 SENATOR ADAMS asked what the Anchorage school district's position was on the legislation, because a portion of the taxes received was going to the school system and by making the change, all 10 percent can be exempted. PORTIA BABCOCK said the school district has not taken an official position on the bill, but she is not sure if this is even being used and whether any revenues currently would be affected. She said she would contact them and ask for a position. SENATOR PHILLIPS asked that information also be requested on how this tax exemption would affect the public school foundation formula. Number 224 KENT SWISHER, Executive Director, Alaska Municipal League, said the League's position is one of mild support. He said the legislation would create an additional option for local government; it doesn't require anyone to reduce their tax revenues, but it may be a useful tool for those who are attempting to do this type of thing. He said it may be good policy to suggest that this particular form of exemption allow a credit in terms of educational funding. Number 236 SENATOR RANDY PHILLIPS asked that Mr. Swisher submit the League's position in writing for the record. He then closed the public hearing on SB 176 and said it would be back before the committee at its next meeting. There being no further business to come before the committee, the meeting was adjourned at 9:22 a.m.