Legislature(1993 - 1994)
03/09/1993 09:06 AM CRA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SENATE COMMUNITY & REGIONAL AFFAIRS COMMITTEE March 9, 1993 9:06 a.m. MEMBERS PRESENT Senator Randy Phillips, Chairman Senator Robin Taylor, Vice Chairman Senator Rick Halford Senator Fred Zharoff MEMBERS ABSENT Senator Al Adams COMMITTEE CALENDAR HOUSE BILL NO. 73 "An Act relating to state and local taxation and other state regulation as affected by the Alaska Native Claims Settlement Act, as amended, and related federal statutes; and providing for an effective date." SENATE BILL NO. 42 "An Act relating to municipal taxation of alcoholic beverages; and providing for an effective date." SENATE BILL NO. 88 "An Act relating to grants to municipalities, named recipients, and unincorporated communities; establishing capital project matching grant programs for municipalities and unincorporated communities; establishing a local share requirement for capital project grants to municipalities, named recipients, and unincorporated communities; and providing for an effective date." SENATE BILL NO. 89 "An Act making appropriations for capital project matching grant programs; and providing for an effective date." SENATE BILL NO. 95 "An Act relating to multiple-beneficiary charitable gaming permits and door prizes for charitable gaming; and providing for an effective date." SENATE BILL NO. 102 "An Act relating to municipal property tax exemptions for certain residences and to property tax equivalency payments for certain residents; and providing for an effective date." PREVIOUS SENATE COMMITTEE ACTION HB 73 - No previous action to record. SB 42 - See Community & Regional Affairs minutes dated 2/25/93, 3/2/93, 3/4/93. SB 88 - See Community & Regional Affairs minutes dated 2/16/93, 2/18/93, 2/23/93, 3/2/93, 3/4/9. SB 89 - See Community & Regional Affairs minutes dated 2/16/93, 2/18/93, 2/23/93, 3/2/93, 3/4/93. SB 95 - No previous action to record. SB 102 - See Community & Regional Affairs minutes dated 2/18/93, 2/25/93, 3/4/93. WITNESS REGISTER Rena Buckovich, Staff to Representative Eileen MacLean State Capitol Juneau, AK 99801-1182 POSITION STATEMENT: Offered information on HB 73 Bryce Edgmon, Staff to Senator George Jacko State Capitol Juneau, AK 998-1-1182 POSITION STATEMENT: Offered information on CSSB 42 (CRA) Shelby Stastny, Director Office of Management & Budget P.O. Box 110020 Juneau, AK 99811-0020 POSITION STATEMENT: Offered information on SB's 88 & 89 John Hansen, Gaming Manager Division of Occupational Licensing Department of Commerce & Economic Development P.O. Box 110806 Juneau, AK 99811-0806 POSITION STATEMENT: Offered information on SB 95 ACTION NARRATIVE TAPE 93-12, SIDE A Number 001 The Senate Community & Regional Affairs Committee was called to order by Chairman Randy Phillips at 9:06 a.m. CHAIRMAN RANDY PHILLIPS introduced HB 73 (ANCSA STATE TAX EXEMPTIONS) as the first order of business. RENA BUCKOVICH, staff to Representative Eileen MacLean, explained that the legislation was introduced to bring state law into compliance regarding the exemption of ANCSA property from taxation. In 1987, federal law was changed to continue the property tax exemption from federal, state or local taxation on ANCSA land until development occurs. The bill reflects those changes in state law to avoid confusion in the application of the state's tax laws. Ms. Buckovich said that in the drafting process, the attorney noted other sections of state law which need to be updated and has included those changes in HB 73. For the most part, they represent technical or stylistic wording changes to update state law to federal law. HB 73 does not expand or reduce any benefits already mandated by federal law. It merely cleans up state law, and ensures that obsolete state statutes do not lead to misinterpretation by state assessors and others who work with Alaska's tax law. Ms. Buckovich said that to her knowledge, there are no problems or concerns with the legislation and that it is primarily housekeeping in nature. There being no other witnesses present to testify on HB 73, the Chairman asked for the pleasure of the committee. SENATOR TAYLOR moved that HB 73 be passed out of committee with individual recommendations. Hearing no objection, it was so ordered. Number 095 CHAIRMAN RANDY PHILLIPS introduced SB 42 (LOCAL SALES TAX ON ALCOHOLIC BEVERAGES) as the next order of business. BRYCE EDGMON, staff to Senator George Jacko, speaking to the proposed committee substitute, said the only change is that it exempts communities that have a population larger than 2,500 from being impacted by the bill. SENATOR TAYLOR moved that CSSB 42 (CRA) be adopted. Hearing no objection, the motion carried. SENATOR TAYLOR moved that CSSB 42 (CRA) be passed out of committee with individual recommendations. Hearing no objection, it was so ordered. Number 140 CHAIRMAN RANDY PHILLIPS brought SB 88 (CAPITAL PROJECT GRANTS) before the committee. He directed attention to a proposed amendment that limits administrative costs for capital matching projects to 10 percent. SENATOR TAYLOR moved the adoption of the following amendment AMENDMENT #1 Page 5, after line 7, insert a new bill section to read: "*Sec. 8. AS 37.05.321 is amended by adding a new subsection to read: (b) No more than 10 percent of the total amount of money spent on a capital project funded in whole or in part with money granted under AS 37.05.315 - 37.05.317 may be used for administrative expenses." Renumber the following bill sections accordingly. Page 7, line 4, after "state." insert: "No more than 10 percent of the total amount of money spent on a capital project funded in whole or in part with money appropriated under this subsection may be used for administrative expenses." Page 9, line 22, after "state." insert: "No more than 10 percent of the total amount of money spent on a capital project funded in whole or in part with money appropriated under this subsection may be used for administrative expenses." Page 13, line 10: Delete "sec. 8" and insert "sec. 9" Page 13, line 13: Delete "sec. 8" and insert "sec. 9" Page 13, line 18: Delete "sec. 11" and insert "sec. 12" Hearing no objection to the amendment, the Chairman stated amendment #1 had been adopted and would be incorporated into a C&RA committee substitute. Number 180 CHAIRMAN RANDY PHILLIPS directed attention to a proposed amendment #2, which was suggested by Mayor Fink of the Municipality of Anchorage. It would change the match requirement to a 75/25 match as opposed to the 75/30 match requirement in SB 88. SENATOR TAYLOR said he was not satisfied that the percentages in the bill are fair and equitable. He said he appreciates the simplicity of the formula because it applies readily across the board based merely on population, but he still thinks that there should be something within the formula that adjusts for the wealth factor. Number 242 SHELBY STASTNY, Director, Office of Management & Budget, Office of the Governor, said that as the legislation was drafted the previous year, it had a wealth factor based on DCRA's assessed valuations. The formula was lengthy, and strictly out of a matter of simplicity, the bill was drafted in its current form. He said he agreed that there are circumstances where the formula is not equitable for some of the smaller communities, but the dollars involved are usually fairly small because the amounts allocated in SB 88 are based strictly on population. He added that his office would be willing to work with the committee or Senator Taylor on another formula that would be more equitable. SENATOR TAYLOR said he didn't want to hold the legislation up and that he would work with the Finance Committee on his concern. CHAIRMAN RANDY PHILLIPS asked Mr. Stastny for his comments on amendment #2. SHELBY STASTNY responded that Governor feels strongly that the 50/50 match down the road is where we ought to be headed and prefers the 75/30 match. There being no motion on amendment #2, the Chairman asked for the pleasure of the committee. Number 290 SENATOR TAYLOR moved that CSSB 88 (CRA) be passed out of committee with individual recommendations. Hearing no objection, it was so ordered. CHAIRMAN RANDY PHILLIPS brought SB 89 (APPROP: CAPITAL PROJECT MATCHING GRANTS) before the committee. He then asked for the pleasure of the committee. Number 320 SENATOR TAYLOR moved that SB 89 be passed out of committee with individual recommendations. Hearing no objection, it was so ordered. Number 325 CHAIRMAN RANDY PHILLIPS introduced SB 95 (MULTIPLE PERMITTEE GAMING; PRIZE AMOUNTS) as the next order of business. SENATOR FRED ZHAROFF, prime sponsor of SB 95, said the legislation is an attempt to clarify what is already in statute. It establishes a new charitable gaming permit called a multiple-beneficiary permit. Senator Zharoff said the terms of the legislation allows two to six entities that would otherwise qualify for a gaming permit to join together and apply for a multiple-beneficiary permit. It allows the permit holders to operate without an operator to give them more control. Number 354 JOHN HANSEN, Program Manger, Department of Commerce & Economic Development, stated this is already done by regulation and this would recognize it in statute. Mr. Hansen noted that the department has prepared a fiscal note to fund a position that would actually be responsible for issuing these new class of licenses. Number 362 SENATOR TAYLOR asked what impact this legislation would have on the current permittees that are operating. JOHN HANSEN answered that there are approximately seven groups of people that are doing this in the state right now. They would be recognized as a separate entity and that would require them to get licenses and to file the same reports that operators do. In some instances, it would make their operations easier because they could buy pull-tabs under one permit number, but there will also be an increase in their reporting requirements. The legislation will allow the permittees to join together at a single facility, share the expenses, and get a single permit to operate that one facility. Number 394 SENATOR ZHAROFF raised his concern with the fiscal note because he didn't think it would involve an additional person because this is something that is already being done. JOHN HANSEN responded that the department is issuing a tremendous amount of licenses already. They have one examiner performing this duty and right now he is over a five weeks behind. The bill will probably recognize another 30 to 40 organizations that may want to join together and do these activities and they will be required to file separate applications for each of those locations, which will increase the workload and push the issuance of the permits seven or eight weeks behind. Number 410 CHAIRMAN RANDY PHILLIPS directed attention to a letter from the Juneau Soccer Club in support of the legislation, but suggesting some changes. JOHN HANSEN said he has seen the letter, and the concerns outlined in the letter are addressed in the legislation. CHAIRMAN PHILLIPS also directed attention to a letter from Pat Vincent, Executive Officer of the Kenai Builders Association. JOHN HANSEN explained that the bill prohibits the people that hold these permits from operating in other locations by saying they can't have another permit. He said he can't think of a good reason why organizations should be limited to do business at one location. SENATOR ZHAROFF suggested that because the bill now has a fiscal note, it may also need a Finance referral, although he disagrees that there is the need for an additional staff person. The Chairman said he would request an additional referral to the Finance Committee. Number 525 CHAIRMAN RANDY PHILLIPS pointed out that the bill has at least two more committees of referral where some of these problems can be worked out. He then asked for the pleasure of the committee. SENATOR TAYLOR moved that SB 95 be passed out of committee with individual recommendations. Hearing no objection, it was so ordered. Number 545 The final order of business was SB 102 (MUNICIPAL PROPERTY TAX EXEMPTIONS). There was a committee substitute before the committee which includes three changes: (1) it exempts the optional taxes from the full and true value determination by DCRA in the education foundation formula; (2) it changes the effective date from January 1, 1993 to January 1, 1994; and (3) it retains the mandatory property tax exemption and renters rebate for disabled veterans. Number 555 SENATOR ZHAROFF asked why the effective date was changed SHIRLEY ARMSTRONG, staff to Senator Phillips, explained that their office had been contacted by several people asking that the effective date not occur this year. The department has said that it wouldn't affect tax assessments because they couldn't gear up fast enough to deny the exemption. She said the department did suggest July 1, 1993, because that assures that they couldn't deny the exemption for this year. Speaking to the first change in the committee substitute whereby it exempts the optional taxes from the full and true value determination, SENATOR TAYLOR said the modification makes certain that if the municipalities chose to exempt those properties they would still be exempted under DCRA. CHAIRMAN RANDY PHILLIPS explained the third amendment eliminates the disabled veterans to both the home owners tax exemption as well as the renters rebate, which amounts to approximately $230,0000. TAPE 93-12, SIDE B Number 001 CHAIRMAN RANDY PHILLIPS asked for the pleasure of the committee. SENATOR TAYLOR moved that CSSB 102 (CRA) be adopted. Hearing no objection, the motion carried. SENATOR TAYLOR moved that CSSB 102 (CRA) be passed out of committee with individual recommendations. Hearing no objection, it was so ordered. There being no further business to come before the committee, the meeting was adjourned at 9:54 a.m.