03/20/1996 02:00 PM Senate CRA

                                                                               
          SB 287 UNINCORP. COMMUNITY MATCHING GRANTS                         
                                                                               
 SENATOR TORGERSON brought SB 287 before the committee and directed            
 attention to a draft committee substitute dated 3/20/96.                      
                                                                               
 DEB DAVIDSON, committee aide to the Senate Community & Regional               
 Affairs Committee, explaining the changes in the committee                    
 substitute, said the current program provided that unincorporated             
 communities in the unorganized borough who had participated in                
 revenue sharing the preceding fiscal year would be eligible to                
 participate, whereas the committee substitute opens it to any                 
 unincorporated community in the state that was a place in which 25            
 or more individuals resided as a social unit.  A qualified entity             
 would be a nonprofit corporation or a Native village council that             
 would be required to meet standards that are currently in                     
 regulation under the revenue sharing program.                                 
                                                                               
 Under the current program, when there was an appropriation made to            
 the fund, it was divided equally among all of the eligible                    
 communities regardless if they had requested a project or not.                
 Under the committee substitute, instead of an appropriation that is           
 divided equally among all of the communities, the appropriation is            
 allocated on the basis of the projects they request.  The list of             
 requested projects is submitted to the governor and the governor              
 places that list in the budget request.                                       
                                                                               
 The qualified entity must have the written approval and designation           
 of the borough assembly.                                                      
                                                                               
 The current program has a five-year lapse provision for projects              
 that do not have substantial, ongoing work being done, and the                
 committee substitute changes the lapse period to three years.                 
                                                                               
 Under the local share requirement, communities within boroughs have           
 their local share calculated on the same basis as the boroughs in             
 which they reside, which for most of the boroughs is a 30 percent             
 calculation.  The local share outside of the borough will remain at           
 5 percent.                                                                    
                                                                               
 Number 334                                                                    
                                                                               
 SENATOR HOFFMAN voiced his concern with changing the lapse time               
 from three years to five years, because in a lot of cases, many of            
 the small communities are in rural areas of the state where                   
 construction costs are higher and it's very hard to fund any                  
 sizable project for $75,000.  It will be minimizing the scope of              
 any project by reducing that lapse time.                                      
                                                                               
 SENATOR TORGERSON commented that one of the things he is trying to            
 change in this bill is that the money is driving the project                  
 instead of the project looking for money.  He said that is the main           
 difference in the approach he is trying to take.                              
                                                                               
 MS. DAVIDSON pointed out that the way the lapse funds work, it                
 would be possible for a community to come in in phases for a                  
 project request.  If a community got an allocation over a three-              
 year period, it would have to begin the project within the three              
 years, but it could continue the project and the lapse date would             
 be three years from each year that the allocation was received.               
                                                                               
 Number 385                                                                    
                                                                               
 WALT WREDE, Borough Manager, Lake & Peninsula Borough, stated the             
 borough's strong support for SB 287.  He said the borough has                 
 communities that have suffered greatly under the current program.             
 The borough has a total of 17 communities and 11 of them are                  
 unincorporated communities.  For the last two years in a row, the             
 borough has received a total of only $44,000 for those 11                     
 communities, which works out to about $4,000 a community.  He added           
 that penalizing unincorporated communities that are within                    
 organized boroughs, as is happening under the current program, is             
 a disincentive to form new boroughs, and he believes it is in the             
 state's interest to encourage borough formation at this time.                 
                                                                               
 Mr. Wrede said the borough supports changes that have been made to            
 the legislation with the exception of the change in the lapse time            
 from five years to three years.                                               
                                                                               
 Number 440                                                                    
                                                                               
 SENATOR KELLY moved that on page 4, line 3 the lapse date be                  
 changed from three years to four years.  Hearing no objection the             
 Chairman stated the motion carried.                                           
                                                                               
 SENATOR KELLY moved the adoption of CSSB 287(CRA) as amended.                 
 Hearing no objection, the motion carried.                                     
                                                                               
 SENATOR KELLY moved CSSB 287(CRA) out of committee with individual            
 recommendations.  Hearing no objection, it was so ordered.