Legislature(1993 - 1994)
02/22/1994 01:00 PM CRA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
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 393, 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.