02/22/1994 01:00 PM House CRA

  HB 393 - UNINCORPORATED COMMUNITY CAP PROJECT GRAN                           
                                                                               
  CHAIRMAN OLBERG called an at ease from 2:00 p.m. to 2:06 p.m                 
  when HB 393 was brought forth.  He said, "I think there was                  
  some degree of consensus that perhaps all small communities,                 
  similarly situated within the state, be treated the same and                 
  there was some reading of the original HB 393 that it was                    
  treating similarly situated communities somewhat                             
  differently, because they're connected to the rest of us by                  
  road versus the not connected by road aspect," and he asked                  
  if the amendments provided to the committee address this.                    
                                                                               
  Number 298                                                                   
                                                                               
  KAREN BRAND, STAFF TO REPRESENTATIVE MOSES, SPONSOR OF HB
,  stated, "Amendment number one...there was talk about                   
  having the borough sign off on or approve any projects that                  
  unincorporated communities within them wanted.  So that is                   
  addressed in amendment number one.  All it says is that the                  
  borough has to sign off the project.  And amendment number                   
  two simply omits the sections that we had included in the                    
  bill that would make the requirement contingent on being off                 
  of the road system.  So that just omits that part.  In fact,                 
  what it does is simply open it to now 60 eligible                            
  communities instead of the 24 that used to be just off the                   
  road system.  Between those two amendments, I think the                      
  concerns that were brought up in the last meeting are                        
  probably addressed.  The other concern that Representative                   
  Davies brought up regarding the population data on the last                  
  page of the bill, we had written a memo to Representative                    
  Davies simply explaining that to add a qualifier...that                      
  would simply be redundant because that section is already                    
  referring to statute that says that DCRA has authority over                  
  the population data that's used."                                            
                                                                               
  REPRESENTATIVE DAVIES clarified that the determination of                    
  population is found somewhere else in statute.                               
                                                                               
  CHAIRMAN OLBERG said, "There's a fiscal impact.  Not by way                  
  of a fiscal note so much as a redelineation of who gets                      
  what."                                                                       
                                                                               
  MICHAEL CUSHING, RESEARCH ANALYST, DEPARTMENT OF COMMUNITY                   
  AND REGIONAL AFFAIRS, testified, "With regard to the fiscal                  
  impact, basically we're looking at three situations under                    
  the current law there are 68 eligibles and if the program                    
  were fully funded we would have $1.7 million for that                        
  program.  With the amendments that we have before us here,                   
  we're estimating our best conservative guess would be, we'd                  
  have 60 new eligible unincorporated communities.  If the                     
  funding in that unincorporated account would remain the same                 
  at $1.7 million, there are provisions in the current law                     
  that provide for prorating.  So that you'd now have 128                      
  communities sharing $1.7 million and instead of getting the                  
  $25,000 each per community, each would get about $13,281.                    
  The other option would be to fully fund the unincorporated                   
  account.  It would require a funding level of $2.2 million,                  
  an additional $1.5 million what's currently in the account."                 
                                                                               
  CHAIRMAN OLBERG said, "So it will have the effect of                         
  diluting but, what we're trying to do is make sure that                      
  small unincorporated communities within boroughs are treated                 
  the same as incorporated cities.  And I don't see anything                   
  wrong with doing that, but we do need to recognize that the                  
  incorporated cities within boroughs and the boroughs                         
  themselves are going to supply the funds for this to happen                  
  in theory."                                                                  
                                                                               
  MR. CUSHING said, "In theory, it could happen a number of                    
  ways:  If the overall capital match funding levels were to                   
  remain the same, say $20 million, then you have the choice                   
  of either funding the unincorporated account out of the                      
  municipal account or leaving it at its current level and                     
  prorating it.  But in theory you could add, you could have a                 
  $21.5 million program and everybody could be pretty much in                  
  status quo."                                                                 
                                                                               
  CHAIRMAN OLBERG agreed.                                                      
                                                                               
  MR. CUSHING continued, "But given a fixed funding level,                     
  your choices are either to prorate the unincorporateds or to                 
  fully fund the unincorporated and take it out of the                         
  municipal account."                                                          
                                                                               
  REPRESENTATIVE DAVIES asked, "Do we know which ones of these                 
  are the new eligibles?  It seems to me the one possibility                   
  is that, if you looked at this thing at kind of a borough                    
  basis, that adding the new eligibles might not necessarily                   
  increase the total amount of money that would go into that                   
  borough.  It would simply allocate it differently."                          
                                                                               
  MR. CUSHING said, "It's a case by case situation; in the                     
  Lake and Peninsula Borough for instance, that borough                        
  is...(getting) $35, $40 thousand, and when it's divided up                   
  amongst the unincorporates, they're getting three, four                      
  thousand dollars apiece, which is how they're appropriating                  
  it out there now.  Under the new scenario, they'd be getting                 
  $25,000 per each of those ten communities.  So you'd be                      
  looking at $250, $300, thousand going into that borough as                   
  opposed to the $35 or $40 (thousand) that's going into there                 
  now."                                                                        
                                                                               
  CHAIRMAN OLBERG said, "I'm inclined to think that perhaps it                 
  might be worthy of considering lowering the minimum.  But                    
  I'm not sure that's something we want to do... the dollar                    
  minimum."                                                                    
                                                                               
  REPRESENTATIVE DAVIES said, "I would agree that probably the                 
  appropriate committee to deal with that issue would be the                   
  Finance Committee.  Perhaps this committee should just flag                  
  that as an issue, that they think they ought to consider as                  
  to what the effects are in redistribution under these                        
  various plans."                                                              
                                                                               
  CHAIRMAN OLBERG said, "An accompanying memo of intent from                   
  Community and Regional Affairs perhaps to (the Finance                       
  Committee), State Affairs is also a committee of referral.                   
                                                                               
  Number 443                                                                   
                                                                               
  REPRESENTATIVE BUNDE said, "To reflect my wishes, it would                   
  be for reallocation rather than additional money.                            
  Reallocation of the money that's available, rather than                      
  additional money."                                                           
                                                                               
  CHAIRMAN OLBERG said, "I think we're all thinking that                       
  way...I don't think we're thinking of increasing the funding                 
  of the Capital Matching Grants project as much as we are                     
  reallocating."                                                               
                                                                               
  MS. BRAND said, "I just want to put on the record that                       
  Representative Moses would also like to see the same thing.                  
  His intention was to suggest that the money simply be                        
  reallocated, not necessarily an addition to the program."                    
                                                                               
  Number 457                                                                   
                                                                               
  REPRESENTATIVE DAVIES moved to adopt amendment number one.                   
  There was no objection.                                                      
                                                                               
  REPRESENTATIVE TOOHEY moved to adopt amendment number two.                   
  There was no objection.                                                      
                                                                               
  CHAIRMAN OLBERG stated, "We are now dealing with committee                   
  substitute of HB 393."                                                       
                                                                               
  CRYSTAL SMITH, DIRECTOR OF MEMBER SERVICES, ALASKA MUNICIPAL                 
  LEAGUE, testified,  "I feel that the Municipal League needs                  
  to go on record at this point, since you have indicated an                   
  interest in this committee of reallocating the funds.                        
  Apparently the total amount of funds which would cause a                     
  definite negative impact on organized municipalities.  The                   
  Municipal League, and in fact I believe it's the basic                       
  principal of many parts of the state government, are                         
  committed to encouraging the incorporation of                                
  municipalities.  The Municipal League as an organization has                 
  a commitment to making sure that there are incentives to                     
  incorporation and incentives to organizing to provide basic                  
  services at the local government level, so that the state                    
  doesn't have to come in and provide a lot of services.  I                    
  would just like to say, that if, in fact you are to take the                 
  entire pot, whatever size it is and spread it out to an                      
  additional 60 communities and give those the same $25,000                    
  minimum entitlement, then we're looking at additional                        
  disincentives to incorporation."                                             
                                                                               
  REPRESENTATIVE BUNDE said, "I think you did also mention                     
  that you were encouraging looking at reducing the minimum                    
  entitlement."                                                                
                                                                               
  CHAIRMAN OLBERG said, "That's one way it could be addressed,                 
  and I agree with Representative Davies that probably Finance                 
  is best equipped to do the actual nuts and bolts.  But we                    
  should certainly send on our thoughts about not adding to                    
  the overall cost, and perhaps looking at a reduced minimum                   
  as a way to more fairly treat the organized municipalities                   
  at this point."                                                              
                                                                               
  LAMAR COTTEN, LOBBYIST, LAKE AND PENINSULA BOROUGH,                          
  testified via teleconference, saying, "We concur with the                    
  comments made by Representative Moses's staff on this issue.                 
  The other comment I would make is that, with reference to                    
  Chrystal Smith's comment, I understand her concerns about                    
  the incentives and disincentives for municipal                               
  organizations.  I would take it from a little different                      
  tack, and that is we're talking about unorganized                            
  communities within a borough.  I think the fact that                         
  boroughs that have unorganized communities within them, that                 
  are treated differently than unorganized communities outside                 
  a borough, is a disincentive for areas to organize as a                      
  borough.  So, I realize that's a small point, but I think                    
  it's an important one with respect to other regional areas                   
  of the unorganized borough that are looking at future                        
  organization in the years ahead."                                            
                                                                               
  Number 534                                                                   
                                                                               
  REPRESENTATIVE BUNDE moved CSHB 393 out of committee with                    
  individual recommendations and an accompanying intent memo.                  
  There were no objections.                                                    
                                                                               
  CHAIRMAN OLBERG adjourned the meeting at 2:27 p.m.