Legislature(2001 - 2002)

03/15/2001 04:15 PM EDT

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
HB 36 - ENTERPRISE ZONES                                                                                                      
Number 0543                                                                                                                     
CHAIR  McGUIRE turned  attention to  HOUSE BILL  NO. 36,  "An Act                                                               
relating to  enterprise zones."   She noted that at  the previous                                                               
hearing, some questions had arisen from committee members.                                                                      
Number 0581                                                                                                                     
REPRESENTATIVE JOE  HAYES, Alaska  State Legislature,  sponsor of                                                               
HB 36,  offered a quick  recap of  his intentions with  the bill.                                                               
Emphasizing the  desire to help impoverished  "economic zones" in                                                               
Alaska,  Representative Hayes  said  he is  looking  at areas  in                                                               
Anchorage,  Fairbanks,  Wrangell,  Ketchikan, and  anywhere  else                                                               
that could use  any of the four criteria established  in HB 36 to                                                               
help spur development.                                                                                                          
REPRESENTATIVE  HAYES told  members  there  is substantial  proof                                                               
that this concept works both in  urban and rural settings.  Prime                                                               
examples in rural  settings are Metlakatla and  Pine Ridge, South                                                               
Dakota.   He  referred  to  a document  named  "List of  Champion                                                               
Communities,"  pointing  out that  it  has  information on  rural                                                               
economic development and empowerment zones.                                                                                     
REPRESENTATIVE HAYES  reported that  in Metlakatla, where  he had                                                               
talked  to  Paul  Brindaball  (ph),   two  projects  were  either                                                               
heightened  or brought  in  because of  its  being an  enterprise                                                               
zone:   one was water-related,  and one was mining-related.   The                                                               
two companies  involved were particularly  interested in  the tax                                                               
incentives.   Representative Hayes  informed members that  he had                                                               
been unable  to get anyone  from Metlakatla to testify,  but said                                                               
"they  are very  supportive."   He  offered  to answer  questions                                                               
about  the bill  and  how  it could  bring  an  economic boom  to                                                               
Number 0710                                                                                                                     
CHAIR McGUIRE  advised the committee  that although  some members                                                               
who  had  questions at  the  previous  hearing were  not  present                                                               
currently, she  understood that  Representative Hayes  had spoken                                                               
to people individually  about those concerns.  One  focus [of the                                                               
questions] had related  to tax incentives, with  concern that the                                                               
rural areas,  which might  need the  economic benefits  the most,                                                               
might  have nothing  to  give in  that regard.    She noted  that                                                               
[Representative  Hayes] had  pointed  out that  there are  really                                                               
four benefit areas.                                                                                                             
CHAIR McGUIRE  also said Representative  Hayes had  addressed the                                                               
other  line of  questioning  -  about how  the  areas which  have                                                               
utilized  the  federal enterprise  zones  have  benefited -  very                                                               
well.    She   noted  that  Metlakatla  and   Mountain  View  [in                                                               
Anchorage] were the two areas specifically mentioned.                                                                           
Number 0581                                                                                                                     
REPRESENTATIVE HAYES clarified that  he doesn't believe [Mountain                                                               
View]  to be  part of  the  federal program  as far  as being  an                                                               
"enterprise  zone";  to  his  understanding,  Mountain  View  had                                                               
applied, but was denied.  He continued:                                                                                         
     They have  a new region that's  called the "renaissance                                                                    
     zone, and  they're doing ...  a lot of the  things that                                                                    
     an enterprise  zone would  do, but ...  not all  of the                                                                    
     things an  enterprise zone  would do.  ... As  of right                                                                    
     now,  I   do  not   believe  they  have   any  economic                                                                    
     development going  on in that  particular zone.  ... It                                                                    
     is   simply  a   defined  area   for  which   they  are                                                                    
     concentrating their efforts on  HUD [U.S. Department of                                                                    
     Housing and Urban Development] assistance.                                                                                 
REPRESENTATIVE HAYES  said he  believes HB  36 would  really help                                                               
open  up  an  opportunity  for  [Mountain View]  to  get  a  full                                                               
enterprise  zone, because  HB 36  proposes  a statewide  process.                                                               
The statewide  process would  be the first  step, after  which [a                                                               
community] would apply to HUD "or  whatever the case may be," and                                                               
then would be eligible, hopefully, to apply for federal monies.                                                                 
Number 0850                                                                                                                     
REPRESENTATIVE GUESS noted that  she represents the Mountain View                                                               
area, then clarified,  "They did apply to be  a renaissance zone;                                                               
unfortunately,  the ball  dropped in  the former  mayor's office.                                                               
So,  there  wasn't  a  denial,   but,  unfortunately,  it  didn't                                                               
happen."    She stated  that  a  bill  like  this would  be  very                                                               
beneficial for areas such as  Mountain View, South Mountain View,                                                               
Fairview, or Russian  Jack, where she herself lives,  in order to                                                               
try to get  the type of economic development  needed, rather than                                                               
just  pawnshops and  liquor stores.   She  thanked Representative                                                               
Hayes for introducing HB 36.                                                                                                    
REPRESENTATIVE GUESS remarked that the  nice thing about HB 36 is                                                               
that it allows  municipalities freedom to do some  things, and it                                                               
allows the state  some freedom regarding incentives.   She asked,                                                               
"Would those be  done on a case-by-case basis?   Is there kind of                                                               
a toolbox that they can pull out  for each one, or would they set                                                               
up certain reductions ... in fees for any enterprise zone?"                                                                     
REPRESENTATIVE HAYES  answered that a  local area is able  to use                                                               
any of the four criteria.   There is no mandate, so the community                                                               
can  pick   and  choose   what  is  believed   to  be   the  most                                                               
advantageous.  "X"  amount of communities would apply.   The bill                                                               
would authorize the  governor to designate up  to four enterprise                                                               
zones each year  from a prioritized list;  that designation would                                                               
last  for  20  years.    He  stressed  the  local  option  aspect                                                               
regarding the four criteria.                                                                                                    
Number 0966                                                                                                                     
REPRESENTATIVE GUESS sought further  clarification.  She referred                                                               
to  HB 36,  page  2 [beginning  at lines  30-31],  which read  as                                                               
follows [followed by the four listed criteria on page 3]:                                                                       
     Sec.  44.33.319.    Local  incentives.    A  qualifying                                                                    
     municipality  may  identify   as  incentives  under  AS                                                                    
She also  called attention to  subsection (d) [page  3, beginning                                                               
at line 24], which read:                                                                                                        
     (d) The  department may recommend  to the  governor and                                                                    
     the  legislature incentives  to  enterprise zones  that                                                                    
          (1) reduction of state permit or user fees;                                                                           
          (2) credits on state income taxes or exemptions                                                                       
     from the taxes; and                                                                                                        
          (3) the proposed lease or sale to private persons                                                                     
     of the state's real property  that is not designated or                                                                    
     otherwise targeted for public use.                                                                                         
REPRESENTATIVE GUESS  asked how it would  work.  Would it  be the                                                               
same  for all  enterprise zones?   Or  could the  Municipality of                                                               
Anchorage, for example,  say that Mountain View  is an enterprise                                                               
zone  that  needs  a particular  "package,"  whereas  Muldoon  is                                                               
another enterprise  zone that needs  another type of  package, in                                                               
order to be the most beneficial?                                                                                                
REPRESENTATIVE HAYES  said that  is what he  is envisioning.   He                                                               
then  noted  that  representatives  from  Legislative  Legal  and                                                               
Research  Services, the  Alaska Municipal  League (AML),  and the                                                               
Department   of  [Community]   and   Economic  Development   were                                                               
available to answer questions.                                                                                                  
CHAIR McGUIRE asked whether anyone  else wished to testify; there                                                               
was no response.  She  asked whether there were further questions                                                               
or comments from the committee; none were offered.                                                                              
Number 1129                                                                                                                     
REPRESENTATIVE  CRAWFORD made  a  motion  to move  HB  36 out  of                                                               
committee  with  individual   recommendations  and  the  attached                                                               
fiscal note.   There being no  objection, HB 36 was  moved out of                                                               
the House  Special Committee on  Economic Development,  Trade and                                                               

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