Legislature(1993 - 1994)

01/28/1993 01:00 PM House CRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
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  HB 73:  ANCSA STATE TAX EXEMPTIONS                                           
                                                                               
  CHAIRMAN OLBERG interrupted the DCRA overview to let                         
  Representative MacLean, the prime sponsor of HB 73, testify                  
  on behalf of her bill.                                                       
                                                                               
  Number 613                                                                   
                                                                               
  REPRESENTATIVE EILEEN MACLEAN, PRIME SPONSOR of HB 73,                       
  stated the bill had been introduced primarily to bring state                 
  law into compliance with federal law.  She explained that in                 
  1987, federal law was changed to continue the property tax                   
  exemption from federal, state or local taxation on ANCSA                     
  (Alaska Native Claims Settlement Act) land indefinitely, or                  
  until development occurred.  House Bill 73 reflected those                   
  changes in state law to avoid confusion in the application                   
  of the state's tax laws, she said.                                           
                                                                               
  REPRESENTATIVE MACLEAN advised that some technical or                        
  stylistic wording changes to update state law had been                       
  included in HB 73.  She noted the bill did not expand or                     
  reduce any benefits already mandated by federal law, but                     
  merely cleaned up state law and ensured obsolete state                       
  statutes did not lead to misinterpretation by state                          
  assessors and others who worked with Alaska's tax law.                       
                                                                               
  REPRESENTATIVE MACLEAN noted HB 73 had a zero fiscal note                    
  from the Department of Revenue, and that a similar bill                      
  (CSHB 451 (RES)) had passed the House last year, but was                     
  left in the Senate Rules Committee at the time of                            
  adjournment.  She said, "To my knowledge, there were no                      
  problems and concerns, its just a technical bill cleanup."                   
                                                                               
  CHAIRMAN HARLEY OLBERG considered HB 73 quite                                
  straightforward and suggested the committee complete the                     
  DCRA overview before further discussion of HB 73.                            
                                                                               
  Number 648                                                                   
                                                                               
  COMMISSIONER BLATCHFORD resumed the discussion on CDQ's                      
  cautioning that, "...if it does not succeed, then it will                    
  foreclose the opportunity for Alaskans to fish in the Bering                 
  Sea forever, in the words of Clem Tillion".                                  
                                                                               
  REPRESENTATIVE JOHN DAVIES asked for elaboration on why                      
  Alaskans "would be foreclosed forever if this group fails."                  
                                                                               
  Number 666                                                                   
                                                                               
  COMMISSIONER BLATCHFORD said, "Because we're dealing with                    
  federal waters, there is a great deal of pressure coming                     
  from outside companies, the Washington Fleet, the Oregon-                    
  based fleet and also foreign owned companies.  The                           
  competition is swift, it's incredible.  I don't think Alaska                 
  is going to be able to suppress the political influence of                   
  the Northwestern states forever and that's why we've been                    
  very fortunate to get this door cracked open."                               
                                                                               
  Number 675                                                                   
                                                                               
  MR. WALSH expanded on the Commissioner's last statement.                     
                                                                               
  TAPE 93-2, SIDE B                                                            
  Number 729                                                                   
                                                                               
  MR. GERAGHTY gave a history of the Bering Sea fish resource                  
  and how it came to be that Alaska did not fish the Bering                    
  Sea until CDQ's.  He added, "You are probably going to see                   
  infrastructure needs, in order to get the processing on                      
  shore.  Some communities, all they need to bring it on shore                 
  is a safe freshwater source for processing..."                               
                                                                               
  REPRESENTATIVE CON BUNDE asked if people from the                            
  communities actually did the fishing or if they sold their                   
  portion of the quota.                                                        
                                                                               
  MR. WALSH gave an example which explained the partnership                    
  arrangement between the community who had the quotas and the                 
  vessels with technical experience which were used during the                 
  first CDQ fishery in December, 1992.                                         
                                                                               
  REPRESENTATIVE BUNDE asked if there was a potential                          
  relationship between the CDQs and Tyson Seafoods Co.                         
                                                                               
  MR. WALSH said Mr. Tyson was quite familiar with CDQs and                    
  seemed to have a commitment towards domestic marketing of                    
  Alaska surimi.  According to Mr. Walsh, Mr. Tyson's company,                 
  Arctic Alaska, was not currently in partnership with a CDQ                   
  group but might once market demand was determined.                           
                                                                               
  Number 882                                                                   
                                                                               
  CHAIRMAN OLBERG stated this was a remarkable program                         
  considering it had only been in existence one year.                          
                                                                               
  REPRESENTATIVE TOOHEY asked what the eventual return to the                  
  state would be.                                                              
                                                                               
  MR. WALSH said it was hard to quantify what a job was to                     
  people in areas which had "no outlook".  He further claimed                  
  possible reduced social costs and eventual development of                    
  value-added processing as consequences of the CDQ program.                   
                                                                               
  REPRESENTATIVE TOOHEY rephrased her question to include                      
  direct revenue which the state would realize.                                
                                                                               
  MR. WALSH said there were presently no taxes which applied                   
  to fish harvested in federal waters.                                         
                                                                               
  Number 968                                                                   
                                                                               
  REPRESENTATIVE BILL WILLIAMS asked why other local fisheries                 
  did not add to the wages of the community fishermen.                         
                                                                               
  MR. WALSH said they had to address each fishery separately                   
  according to the individual management plans but that often                  
  the same vessels stayed in those waters, maintaining the                     
  same local crews, for the other fisheries.                                   
                                                                               
  CHAIRMAN OLBERG called an at ease at 2:10 p.m.                               
  CHAIRMAN OLBERG reconvened the meeting at 2:16 p.m. with all                 
  members present and took up HB 73.  He gave a brief history                  
  of CSHB 451, the predecessor of HB 73, which nearly passed                   
  last session.                                                                
                                                                               
  Number 100                                                                   
                                                                               
  REPRESENTATIVE ED WILLIS asked what the various                              
  municipalities and boroughs thought of HB 73.                                
                                                                               
  Number 110                                                                   
                                                                               
  JACK CHENOWITH, LEGISLATIVE LEGAL COUNSEL, LEGISLATIVE                       
  AFFAIRS AGENCY, testified that, "There ought not to be any                   
  further harm done to municipal taxation.  Most                               
  assessors...are very well aware of the provisions of the                     
  Alaska Native Claims Settlement Act and the exemptions to                    
  the Act and subsequent amendments to that act have brought.                  
  What we are trying to do in the first two sections of this                   
  bill in the Title 29 amendments is only alert people who                     
  rely on Title 29 exclusively to the fact that there are                      
  further exemptions that have been legislated into effect in                  
  these last 20 years and that those exemptions do have a role                 
  or do have an effect on the municipal tax roles and give                     
  notice to them of that.  I was cautioned a long time ago                     
  that if you don't get it in Title 29, in some cases it                       
  doesn't get read, it doesn't get noticed..."                                 
                                                                               
  REPRESENTATIVE WILLIS asked if anything would be affected by                 
  the retroactive provision.                                                   
                                                                               
  MR. CHENOWITH replied in the negative and gave further                       
  explanation.                                                                 
                                                                               
  Number 140                                                                   
                                                                               
  REPRESENTATIVE WILLIS asked about the effect HB 73 would                     
  have on land exchanges between Native corporations and                       
  municipalities and gave an example.                                          
                                                                               
  MR. CHENOWITH set out the criteria in which an exemption                     
  would or would not continue.                                                 
                                                                               
  REPRESENTATIVE WILLIAMS gave an example of a current land                    
  exchange in Ketchikan.                                                       
                                                                               
  REPRESENTATIVE BUNDE asked about the limitations to the term                 
  "seasonal habitation" and gave an example.                                   
                                                                               
  MR. CHENOWITH said, "The term that has been used is                          
  'developed' and though the exemption from taxation applies                   
  to land that is undeveloped and is extended even when                        
  surveying, construction of roads, providing utilities and                    
  other similar actions normally considered to be component                    
  parts of the development process occur, the exemption is                     
  allowed.  It's only when you put that property to use so a                   
  commercial activity, even a seasonal commercial activity,                    
  ought to bring it over the line to the point where the                       
  municipality would be able to levy and collect."                             
                                                                               
  REPRESENTATIVE WILLIS asked Chairman Olberg if any                           
  municipality had been consulted about HB 73.                                 
                                                                               
  CHAIRMAN OLBERG said no because HB 73 was not new and had                    
  fared so well during the last session.                                       
                                                                               
  REPRESENTATIVE WILLIS asked if any comments had been found                   
  while researching HB 73.                                                     
                                                                               
  CHAIRMAN OLBERG replied in the negative.                                     
                                                                               
  REPRESENTATIVE TOOHEY asked if there were any changes to HB
  73 since last year's session.                                                
                                                                               
  MR. CHENOWITH indicated no substantive changes, only                         
  "housekeeping" changes were made.                                            
                                                                               
  REPRESENTATIVE BUNDE reiterated HB 73 died last session                      
  purely due to lack of time and that Chairman Olberg had                      
  found no opposition to the bill.                                             
                                                                               
  CHAIRMAN OLBERG concurred.                                                   
                                                                               
  Number 238                                                                   
                                                                               
  REPRESENTATIVE JERRY SANDERS moved that HB 73 be passed out                  
  of committee with individual recommendations.                                
                                                                               
  REPRESENTATIVE WILLIS voted "no recommendation" at this                      
  point because he wanted to check with the municipality of                    
  Anchorage.                                                                   
                                                                               
  CHAIRMAN OLBERG suggested that Representative Willis sign                    
  the committee report accordingly.                                            
                                                                               
  Number 257                                                                   
                                                                               
  REPRESENTATIVE WILLIAMS asked if he should abstain from                      
  signing the committee report due to his affiliation with a                   
  Native corporation.                                                          
                                                                               
  MR. CHENOWITH recommended that Representative Williams ask                   
  to be excused from voting when HB 73 reached the House Floor                 
  but indicated he could sign the committee report.                            
                                                                               
  CHAIRMAN OLBERG asked that the record show Representative                    
  Williams identified himself as a possible beneficiary of HB
  73.                                                                          
                                                                               
  Number 262                                                                   
                                                                               
  CHAIRMAN OLBERG noted there was a motion to pass HB 73 from                  
  committee with individual recommendations.  Hearing no                       
  objections, HB 73 moved out of committee                                     
                                                                               
  ADJOURNMENT                                                                  
                                                                               
  CHAIRMAN OLBERG adjourned the meeting at 2:33.                               

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