Legislature(2001 - 2002)
03/15/2001 04:15 PM EDT
* first hearing in first committee of referral
= bill was previously heard/scheduled
= 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 Alaska. 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 44.33.315 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 include (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 Tourism.