Legislature(2015 - 2016)HOUSE FINANCE 519
04/16/2016 08:30 AM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB196 | |
| SB210 | |
| SB196 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 196 | TELECONFERENCED | |
| += | SB 210 | TELECONFERENCED | |
| += | HB 245 | TELECONFERENCED | |
| += | HB 250 | TELECONFERENCED | |
| += | HB 249 | TELECONFERENCED | |
| + | TELECONFERENCED |
CS FOR SENATE BILL NO. 210(FIN) am
"An Act relating to the community revenue sharing
program; and changing the name of the community
revenue sharing program to the community assistance
program."
9:43:39 AM
Co-Chair Neuman MOVED to ADOPT the proposed committee
substitute for HCS CSSB 210(FIN), Work Draft 29-LS1593\N
(Shutts, 4/14/16). There being NO OBJECTION, it was so
ordered.
PETE ECKLUND, STAFF, REPRESENTATIVE MARK NEUMAN, explained
that the only change to the bill was the effective date,
which would leave the current revenue sharing formula in
place for FY 17. He stated that when the bill took effect
in FY 18, $30 million would be distributed as a new
community assistance program, as opposed to community
revenue sharing. He noted the document in member packets,
"SB 210: Community Assistance Payments FY 18-19"(copy on
file).
9:46:04 AM
Representative Gara understood that the fund had been
capitalized so that the annual payout would not disappear.
Mr. Ecklund responded that the fund had not been
capitalized in the FY 17 operating budget, which meant that
one-third, or $38 million, of the $115 million, would be
distributed in FY 17 as community revenue sharing.
9:46:50 AM
Representative Gara queried the capitalization formula that
had been used in the past.
Mr. Ecklund replied that current statute stated that
whatever the balance of the fund, one-third had to be
distributed until there was less than $60 million in the
fund. He stressed that under the current program, with no
further capitalizations, the last community revenue sharing
would be distributed in FY 18.
9:47:50 AM
Representative Gara asked what was being use to capitalize
the fund in the past.
Co-Chair Thompson stated that general funds had been used.
Mr. Teal added that the capitalization of the fund came
from progressive oil tax proceeds, and when oil prices fell
and progressivity went away there was no funding source for
the program. He furthered that if the price of oil did not
increase the program would falter until prices increased;
at the restart the program funding would be at the $60
million distribution level.
Representative Gara wondered whether general funds had been
used to capitalize progressivity after ACES.
Mr. Teal replied in the affirmative. He clarified that
unrestricted general funds had been used under ACES, and
were still being used, it was a matter of naming the source
of the revenue. He added that the named revenue stream
would be well in access of the funding for the program and
would not contain phase out provisions for community
assistance.
Representative Kawasaki queried the version of the
Community Assistance Payments FY 16-18, Non-Unified
Boroughs by Community, prepared by the Legislative Finance
Division.
9:51:15 AM
ALEXI PAINTER, ANALYST, LEGISLATIVE FINANCE DIVISION,
ALASKA STATE LEGISLATURE, clarified that the document dated
April 15, 2017 included incorporated boroughs, which were
eligible at an amount that was one-nineteenth the base of
the program. He said that it had been requested that the
committee see all communities that received distribution,
some of which were unincorporated.
Representative Kawasaki understood that the Fairbanks
Northstar Borough would receive $1.93 million in addition
to what Chena Hot Springs, Ester, Ester Dom, Fox, and
Golstream combined would receive.
Alexi responded in the affirmative.
Vice-Chair Saddler asked Mr. Painter read the title of the
document he was referring to, and then to explain what the
document represented.
9:53:00 AM
AT EASE
9:55:15 AM
RECONVENED
Co-Chair Thompson clarified that the title of the chart
being referred to was "SB 210 Community Assistance Payments
FY 18-19."
Representative Kawasaki requested a chart that reflected
the percentages side-by-side, year-by-year.
Vice-Chair Saddler asked what the second column on the
chart, "SB 210 Distribution: $30 million' represented.
Mr. Ecklund responded that the column represented the bill
before the committee, with an effective date of January 1,
2017; the new community assistance program would come into
effect in FY 18.
9:57:37 AM
Representative Gara expressed concerned about too deep of a
cut to revenue sharing program.
Co-Chair Thompson purported that if action was not taken
now, in two years revenue sharing would be zero.
Mr. Ecklund agreed.
Representative Gattis believed that the state had no
revenue to share to support community assistance.
Representative Kawasaki stated that community revenue
sharing had been established to support communities that
were not directly involved in oil and gas development, or
other resource development, to receive a share of the
state's common interest resources. He expressed concern
that the City of Fairbanks would receive public assistance
when the revenue sharing had been intended for the
aforementioned communities. He contended that many of the
communities that participated in revenue sharing could not
institute and income tax, and might not have a tax base. He
added that many of those communities raised revenue through
sales taxes. He rejected the characterization that revenue
sharing was public assistance for communities, and believed
that the revenue sharing should continue even during times
of fiscal uncertainty.
10:01:03 AM
Vice-Chair Saddler thought that those same communities that
received extra petroleum dollars through revenue sharing
during positive times should also be responsible to pay to
make up for any deficit in revenues during times of low oil
prices.
Representative Gara spoke to Anchorage's "weirdly worded
tax cap." He said that a 67 percent reduction in revenue
sharing would drive the need for other sources of revenue
or cuts in Anchorage services equaling $2.7 million.
Co-Chair Thompson wondered whether Representative Gara was
referencing the numbers off of the correct chart.
Mr. Ecklund replied that he did not believe so. He added
that the chart he was looking at reflected that the
distribution for Anchorage under SB 210, in FY 18, would be
$4.473 million.
Representative Gara stated that he was referring to both
charts. He apologized that he had been looking at the
numbers for the Mat-Su. He noted that the current chart did
not include historical comparisons.
10:04:03 AM
Co-Chair Neuman noted that the price of oil had been on the
rise when revenue sharing had first been introduced, and
the price for municipalities to heat homes and buildings
had increased rapidly. He said that in the event of a drop
in oil prices the intention had been to ramp-down the
program. He stated that many communities in rural Alaska
would not be able to survive without revenue sharing, which
could end up costing more money if the state has to step in
an manage those communities. He explained that the
legislation would "lock-in" a community assistance program
that would help communities plan their yearly budgets. He
stressed that the state did not currently have any excess
revenue, which made it essential to make adjustments to the
program. He expressed support for the current version of
the bill.
Co-Chair Thompson expressed support for the current bill
version. He reiterated that without the legislation, in two
years the revenue sharing would end altogether. He stressed
that the program supported the operating budgets of over
100 rural communities in the state. He lamented that if the
program shut down the state would end up funding those
budgets, or that the affected communities would shut down.
10:08:41 AM
Representative Gara relayed that he was not debating the
legislation. He wondered whether Anchorage would be forced
to raise property taxes in order to absorb the cuts to the
program by FY 18. He thought that it would be useful to
know that the community revenue sharing amounts were for
all communities during previous time of low oil prices.
10:10:13 AM
Co-Chair Neuman admitted that he did not know what
communities would do. He disagreed with Representative Gara
about needing the information concerning what had happened
in the past in order to move the bill.
10:10:45 AM
Representative Edgmon favored the approach of the bill. He
did not believe that the distribution was equal for every
community involved, but noted that the legislation had the
support of the Alaska Municipal League.
Co-Chair Thompson expressed the desire to move the bill
from committee.
Vice-Chair Saddler reviewed the fiscal note.
10:12:08 AM
Co-Chair Neuman MOVED to REPORT HCS CSSB 210(FIN) out of
committee with individual recommendations and the
accompanying fiscal notes. There being NO OBJECTION, it was
so ordered.
HCS CSSB 210(FIN) was REPORTED out of committee with a "do
pass" recommendation and with one new fiscal note from the
House Finance Committee for Fund Cap; and one previously
published zero fiscal note: FN1 (SFC for CED).
10:12:34 AM
RECESSED
6:54:17 PM
RECONVENED
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 196 CS WORKDRAFT HFIN vT.pdf |
HFIN 4/16/2016 8:30:00 AM |
SB 196 |
| CS SB 210 HFIN WORKDRAFT vN.pdf |
HFIN 4/16/2016 8:30:00 AM |
SB 210 |
| 4 14 16 SB 210 to status quo FY18-19.pdf |
HFIN 4/16/2016 8:30:00 AM |
SB 210 |
| Copy of 4 15 16 PCE Endowment Analysis of SB 196 for CS.pdf |
HFIN 4/16/2016 8:30:00 AM |
SB 196 |
| PAGE 2 of 4 15 16 PCE Endowment Analysis of SB 196 for CS.pdf |
HFIN 4/16/2016 8:30:00 AM |
SB 196 |
| SB 210 HCS FIN NEW FN FUND CAP.pdf |
HFIN 4/16/2016 8:30:00 AM |
SB 210 |
| 4-14-16 SB210 Letter to House Finance w-attach.pdf |
HFIN 4/16/2016 8:30:00 AM |
SB 210 |
| SB 196 HCS WORKDRAFT FIN vR.pdf |
HFIN 4/16/2016 8:30:00 AM |
SB 196 |