Legislature(2011 - 2012)BARNES 124

02/09/2012 08:00 AM House COMMUNITY & REGIONAL AFFAIRS


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= HB 184 REFUND OF FISH BUSINESS TAX TO MUNIS TELECONFERENCED
Moved CSHB 184(CRA) Out of Committee
*+ HB 305 MUNI. PROP.TAX EXEMPTION: RELIGIOUS ORGS. TELECONFERENCED
Heard & Held
          HB 184-REFUND OF FISH BUSINESS TAX TO MUNIS                                                                       
                                                                                                                                
8:04:20 AM                                                                                                                    
                                                                                                                                
CHAIR MUNOZ announced  that the first order of  business would be                                                               
HOUSE  BILL NO.  184,  "An Act  relating to  the  sharing of  tax                                                               
revenue  from the  fisheries business  tax  and fishery  resource                                                               
landing tax  with municipalities; and providing  for an effective                                                               
date."  [Before the committee  was CSHB 184, Version 27-LS0576\R,                                                               
Bullard,  1/25/12, which  was adopted  at the  January 26,  2012,                                                               
meeting.]                                                                                                                       
                                                                                                                                
8:04:45 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE P.  WILSON, Alaska State Legislature,  speaking as                                                               
the sponsor,  reminded the committee  that HB 184  would increase                                                               
the  fish tax  share with  boroughs, communities,  and cities  to                                                               
help  with port  and harbor  maintenance and  improvements.   The                                                               
legislation also proposes to share  the unprocessed fish tax with                                                               
the area  where the  fish was landed.   Representative  P. Wilson                                                               
encouraged  the committee  to forward  the  legislation from  the                                                               
committee.                                                                                                                      
                                                                                                                                
8:05:38 AM                                                                                                                    
                                                                                                                                
TIM  ROONEY, Manager,  City &  Borough of  Wrangell, related  his                                                               
support for  HB 184.   In  response to the  question at  the last                                                               
meeting regarding how much of  the fish tax Wrangell now receives                                                               
goes to  the maintenance of  its ports  and harbors, he  said 100                                                               
percent of it does.                                                                                                             
                                                                                                                                
8:06:35 AM                                                                                                                    
                                                                                                                                
DAVE JACK,  Member, City &  Borough of Wrangell Assembly,  City &                                                               
Borough  of Wrangell,  informed  the committee  that  the City  &                                                               
Borough of Wrangell Assembly has  passed a  resolution in support                                                               
of HB  184.  He  reminded the committee  that the purpose  of the                                                               
fish tax  was to  be utilized to  maintain the  infrastructure of                                                               
ports  and  harbors.    Since   the  transfer  of  ownership  and                                                               
responsibility of  the harbors and  ports to  the municipalities,                                                               
it's appropriate  for the communities  to receive those  funds to                                                               
maintain the ports and harbors.                                                                                                 
                                                                                                                                
8:08:10 AM                                                                                                                    
                                                                                                                                
GLORIANNE  WOLLEN,  Harbormaster,  City  of  Petersburg,  related                                                               
support for HB 184, which she  opined has been crafted with great                                                               
care  to  help  communities  fund harbors  and  their  continuing                                                               
maintenance.   She informed  the committee  that when  the harbor                                                               
facilities were transferred to the  City of Petersburg, they were                                                               
in  need  of  major  repairs or  replacement.    Therefore,  this                                                               
additional funding will  help places like the  City of Petersburg                                                               
to  qualify for  grants such  as the  state's 50:50  harbor match                                                               
program.  These  harbors play a critical economic  role in Alaska                                                               
by   enabling   trade,  transportation,   commercial   fisheries,                                                               
tourism,  and recreational  opportunities  throughout the  state.                                                               
Increasing a stable  funding source, which HB 184  proposes, is a                                                               
significant  step in  ensuring that  the City  of Petersburg  and                                                               
other small communities are able  to adequately address the needs                                                               
of the port and harbor facilities.                                                                                              
                                                                                                                                
8:11:03 AM                                                                                                                    
                                                                                                                                
CHAIR  MUNOZ, upon  determining no  one else  wished to  testify,                                                               
closed public testimony.                                                                                                        
                                                                                                                                
8:11:21 AM                                                                                                                    
                                                                                                                                
REBECCA  ROONEY, Staff,  Representative P.  Wilson, Alaska  State                                                               
Legislature, explained  that in  both the fisheries  business and                                                               
the  fisheries resource  landing  taxes, there  is language  that                                                               
helps a newly  formed borough transition to the  50:50 split when                                                               
a  borough  is formed  over  the  course of  four  years.     The                                                               
fisheries  resource landing  tax  wasn't  originally included  in                                                               
CSHB 184,  Version R, so  this amendment  would include it.   She                                                               
characterized is as conforming language.                                                                                        
                                                                                                                                
REPRESENTATIVE   P.  WILSON   interjected   that  including   the                                                               
fisheries resource  landing tax would maintain  what's already in                                                               
existing statute.                                                                                                               
                                                                                                                                
8:13:03 AM                                                                                                                    
                                                                                                                                
CHAIR  MUNOZ   surmised  that  this  amendment   wouldn't  impact                                                               
existing city  & boroughs  rather it  only impacts  situations in                                                               
which a new borough forms [and a city and borough then exist].                                                                  
                                                                                                                                
MS. ROONEY  replied yes.   She noted  that although  the existing                                                               
statute has never  been exercised, the sponsor wanted  to be sure                                                               
that the change was made in all the necessary areas.                                                                            
                                                                                                                                
8:13:52 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  AUSTERMAN  pointed out  that  the  change in  the                                                               
amendment to  renumber the bill sections  on page 4, line  11 and                                                               
page 5, line  12 doesn't seem to correspond with  the sections in                                                               
Version R.                                                                                                                      
                                                                                                                                
The committee took an at-ease from 8:15 a.m. to 8:18 a.m.                                                                       
                                                                                                                                
8:19:20 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   AUSTERMAN  moved   that   the  committee   adopt                                                               
Amendment 1, labeled 27-LA0576\R.1, Bullard, 2/1/12, which read:                                                                
                                                                                                                                
     Page 4, following line 18:                                                                                                 
     Insert a new bill section to read:                                                                                         
        "* Sec. 8. AS 43.77.060(b) is amended to read:                                                                      
          (b)  Notwithstanding the provisions of (a)(2) and                                                                     
     (a)(3)(B)   of    this   section,   and    subject   to                                                                    
     appropriation  by  the  legislature,  the  commissioner                                                                    
     shall pay to each                                                                                                          
               (1)    city  that  is located  in  a  borough                                                                    
     incorporated  after  January 1,   1994,  the  following                                                                    
     percentages  of the  tax revenue  collected from  taxes                                                                    
     levied under  this chapter on fishery  resources landed                                                                    
     in the city and accounted for under AS 43.77.050(b):                                                                       
               (A)   67.5  [45] percent  of the  tax revenue                                                                
     collected  during  the  calendar   year  in  which  the                                                                    
     borough is incorporated;                                                                                                   
               (B)    60 [40]  percent  of  the tax  revenue                                                                
     collected  during the  first  calendar  year after  the                                                                    
     calendar year in which the borough is incorporated;                                                                        
               (C)   52.5  [35] percent  of the  tax revenue                                                                
     collected  during the  second calendar  year after  the                                                                    
     calendar  year in  which the  borough is  incorporated;                                                                    
     and                                                                                                                        
               (D)    45 [30]  percent  of  the tax  revenue                                                                
     collected  during the  third  calendar  year after  the                                                                    
     calendar  year in  which the  borough is  incorporated;                                                                    
     and                                                                                                                        
               (2)    borough  that  is  incorporated  after                                                                    
     January 1, 1994,  the following percentages of  the tax                                                                    
     revenue collected from taxes  levied under this chapter                                                                    
     on  fishery  resources  landed in  the  cities  located                                                                    
     within   the   borough    and   accounted   for   under                                                                    
     AS 43.77.050(b):                                                                                                           
               (A)   7.5 [FIVE]  percent of the  tax revenue                                                                
     collected  during  the  calendar   year  in  which  the                                                                    
     borough is incorporated;                                                                                                   
               (B)    15 [10]  percent  of  the tax  revenue                                                                
     collected  during the  first  calendar  year after  the                                                                    
     calendar year in which the borough is incorporated;                                                                        
               (C)   22.5  [15] percent  of the  tax revenue                                                                
     collected  during the  second calendar  year after  the                                                                    
     calendar  year in  which the  borough is  incorporated;                                                                    
     and                                                                                                                        
               (D)    30 [20]  percent  of  the tax  revenue                                                                
     collected  during the  third  calendar  year after  the                                                                    
     calendar year in which the borough is incorporated."                                                                       
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 4, line 11:                                                                                                           
          Delete "Sections 6 and 9"                                                                                             
          Insert "Sections 6 and 10"                                                                                            
                                                                                                                                
     Page 5, line 12:                                                                                                           
          Delete "sec. 11"                                                                                                      
          Insert "sec. 12"                                                                                                      
                                                                                                                                
8:19:50 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE AUSTERMAN moved that the committee adopt the                                                                     
following amendment to Amendment 1, as follows:                                                                                 
                                                                                                                                
     Delete the following language from Amendment 1:                                                                            
                                                                                                                                
     Page 4, line 11:                                                                                                           
          Delete "Sections 6 and 9"                                                                                             
          Insert "Sections 6 and 10"                                                                                            
                                                                                                                                
     Page 5, line 12:                                                                                                           
          Delete "sec. 11"                                                                                                      
          Insert "sec. 12"                                                                                                      
                                                                                                                                
      Insert "Any conforming renumbered sections that need                                                                      
     to be renumbered."                                                                                                         
                                                                                                                                
There being no objection, the amendment to Amendment 1 was                                                                      
adopted.                                                                                                                        
                                                                                                                                
8:20:41 AM                                                                                                                    
                                                                                                                                
There being no objection, Amendment 1, as amended, was adopted.                                                                 
                                                                                                                                
8:21:05 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE CISSNA moved to report CSHB 184, Version 27-                                                                     
LS0576\R, Bullard, 1/25/12, as amended, out of committee with                                                                   
individual recommendations and the zero fiscal notes.                                                                           
                                                                                                                                
8:21:39 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE AUSTERMAN objected.                                                                                              
                                                                                                                                
8:21:57 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GARDNER  stated that Representative P.  Wilson has                                                               
identified  a real  problem, but  the concern  is this  isn't the                                                               
right  fix.   She  expressed concern  that  this legislation  may                                                               
create other  problems because currently the  funding [from these                                                               
fish taxes] support other state agencies.                                                                                       
                                                                                                                                
8:22:36 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  P. WILSON  explained that's  why the  legislation                                                               
specifies that 25 percent [of  the fish tax proceeds] remain with                                                               
the  state.    She  recalled  that  testimony  from  the  [Alaska                                                               
Department of  Fish & Game]  said the  25 percent was  enough for                                                               
their needs.                                                                                                                    
                                                                                                                                
8:23:01 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GARDNER  recalled testimony that if  HB 184 passes                                                               
as written, it doesn't  make much of a dent in the  need.  If the                                                               
legislation passes as written, she  suggested that if communities                                                               
still seek  funds from the  legislature, there might  be comments                                                               
that the  communities are already  receiving more funds  from the                                                               
fish tax.   Therefore, she stressed that  the legislation doesn't                                                               
solve the problem and creates additional problems.                                                                              
                                                                                                                                
8:23:34 AM                                                                                                                    
                                                                                                                                
CHAIR MUNOZ  acknowledged that the legislation  doesn't solve the                                                               
problem,  but  highlighted  that  it helps.    She  reminded  the                                                               
committee that  there's a tremendous  backlog of  maintenance for                                                               
the  ports  and  harbors  since the  state  transferred  them  to                                                               
communities.  She  also reminded the committee that  Juneau is on                                                               
record in support of the legislation.                                                                                           
                                                                                                                                
8:24:02 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   CISSNA   inquired   as   to   the   reason   for                                                               
Representative  Austerman's objection  because she  characterized                                                               
[the  lack of  funding for  ports  and harbor  maintenance] as  a                                                               
growing problem  she has observed  in her travels  throughout the                                                               
state.                                                                                                                          
                                                                                                                                
8:25:07 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  AUSTERMAN expressed  concern that  the underlying                                                               
change  in the  fishery resource  landing tax  distribution takes                                                               
away from  some communities and  gives it to others.   Basically,                                                               
the  change  is taking  away  from  the smaller  communities  and                                                               
giving to  the larger communities.   Furthermore, the legislation                                                               
takes  another  25  percent  from  the  state  and  gives  it  to                                                               
communities.  Although  he agreed that communities  need funds to                                                               
work  on their  harbors, at  the same  time more  state money  is                                                               
being  given to  municipalities.   The  overall  amount given  to                                                               
municipalities in Alaska is overwhelming,  when compared to other                                                               
states.   Representative  Austerman said  he understood  the goal                                                               
with HB 184,  but didn't like the idea of  hiding what's going on                                                               
by  putting  25  percent on  it  to  make  it  look as  if  every                                                               
community is  getting more money  when that's  not the case.   In                                                               
House Finance discussions regarding  whether the fishing industry                                                               
pays its  way most  who argue that  the fishing  industry doesn't                                                               
pay its  way point to  the revenue  generated by the  fish taxes.                                                               
Already  50  percent   of  the  fish  taxes  are   given  to  the                                                               
communities and  there's less  revenue that  can be  justified as                                                               
the  fishing  industry  paying  its way  and  taking  another  25                                                               
percent to  the communities would  lead to the argument  that the                                                               
fishing industry  doesn't pay  its way because  they look  at the                                                               
state dollars rather  than what goes to the  municipalities.  The                                                               
aforementioned is of concern as well, he said.                                                                                  
                                                                                                                                
8:27:54 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE CISSNA  pointed out that  fishing is still  one of                                                               
the largest  [employers] in  the state.   The  kinds of  costs to                                                               
communities are  from the  conditions, such as  the high  cost of                                                               
fuel, that  bring the  state more funds.   The  aforementioned is                                                               
threatening  the   fishing  industry   as  well  as   many  other                                                               
industries  that are  located away  from the  urban centers  that                                                               
reap   large  profits   from  the   investments  made   in  small                                                               
communities.   Communities with expenditures by  the state aren't                                                               
the ones  determining whether it's a  need they have.   For those                                                               
communities to obtain some funds,  offset the aforementioned, and                                                               
avoid  failure  of  the  fishing  industry  is  important.    She                                                               
stressed the  need to ensure  that [the  state] needs to  make it                                                               
possible for humans to get what they need to eat and sell.                                                                      
                                                                                                                                
8:30:13 AM                                                                                                                    
                                                                                                                                
CHAIR  MUNOZ   directed  attention   to  the   document  entitled                                                               
"Fisheries  Tax  Revenue  Share Analysis  and  Community  Revenue                                                               
Sharing," which relates that the  majority of communities receive                                                               
substantial increases  in funding  for their  harbors.   In those                                                               
cases in  which there is a  decrease in the amount  the community                                                               
receives, the decline is very little.                                                                                           
                                                                                                                                
REPRESENTATIVE AUSTERMAN  pointed out that the  analysis is based                                                               
on a  25 percent increase, not  necessarily on the change  to the                                                               
tax.   Without the 25  percent increase, the numbers  are totally                                                               
different.  The  aforementioned is one of  his objections because                                                               
once  this legislation  reaches  the House  Finance Committee  he                                                               
believes the legislation won't make  it through the House Finance                                                               
Committee with  the 25  percent increase.   Although  the sponsor                                                               
has indicated  she would withdraw  the legislation if  it doesn't                                                               
maintain the  25 percent increase, Representative  Austerman said                                                               
that going out of this committee he didn't know.                                                                                
                                                                                                                                
CHAIR MUNOZ related  her understanding that the  bill sponsor has                                                               
pledged to  withdraw HB 184 if  one of the taxes  were amended or                                                               
not included in the formula.                                                                                                    
                                                                                                                                
8:32:11 AM                                                                                                                    
                                                                                                                                
A  roll  call vote  was  taken.   Representatives  Foster,  Dick,                                                               
Cissna, Gardner, and Munoz voted  in favor of reporting CSHB 184,                                                               
Version  27-LS0576\R,  Bullard,  1/25/12,   as  amended,  out  of                                                               
committee.   Representatives Saddler and Austerman  voted against                                                               
it.   Therefore,  CSHB 184(CRA)  was  reported out  of the  House                                                               
Community and  Regional Affairs Standing  Committee by a  vote of                                                               
5-2.                                                                                                                            
                                                                                                                                
The committee took an at-ease from 8:32 a.m. to 8:37 a.m.                                                                       
                                                                                                                                

Document Name Date/Time Subjects
HB305 2006 statutes.pdf HCRA 2/9/2012 8:00:00 AM
HB 305
HB305 Leg research memo.pdf HCRA 2/9/2012 8:00:00 AM
HB 305
HB305 Sponsor Statement.pdf HCRA 2/9/2012 8:00:00 AM
HB 305
HB305-Public comments sent to Rep Gardner.pdf HCRA 2/9/2012 8:00:00 AM
HB 305
HB305 Support-Repasky.msg HCRA 2/9/2012 8:00:00 AM
HB 305