Legislature(1993 - 1994)

02/24/1994 09:05 AM Senate CRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
              SENATE COMMUNITY & REGIONAL AFFAIRS                              
                       February 24, 1994                                       
                           9:05 a.m.                                           
  MEMBERS PRESENT                                                              
 Senator Randy Phillips, Chairman                                              
 Senator Robin Taylor, Vice Chairman                                           
 Senator Loren Leman                                                           
  MEMBERS ABSENT                                                               
 Senator Al Adams                                                              
 Senator Fred Zharoff                                                          
  COMMITTEE CALENDAR                                                           
 SENATE BILL NO. 261                                                           
 "An Act relating to municipal sales and use taxes involving air               
 carriers; and providing for an effective date."                               
 SENATE BILL NO. 294                                                           
 "An Act relating to canned salmon classics; and providing for an              
 effective date."                                                              
 SENATE BILL NO. 330                                                           
 "An Act relating to water quality enhancement, water supply,                  
 wastewater, and solid waste grants; the Alaska clean water fund;              
 the establishment of the Alaska clean water account, the Alaska               
 drinking water fund, and the Alaska drinking water account; and               
 providing for an effective date."                                             
  PREVIOUS SENATE COMMITTEE ACTION                                             
 SB 261 - See Transportation minutes dated 2/1/94 and                          
          Community & Regional Affairs minutes dated                           
          2/15/94, 2/17/94.                                                    
 SB 294 - No previous action to record.                                        
 SB 330 - No previous action to record.                                        
  WITNESS REGISTER                                                             
 Senator Bert Sharp                                                            
 State Capitol                                                                 
 Juneau, AK 99801-1182                                                         
  POSITION STATEMENT:   Offered information on SB 261                          
 John Hartle, Assistant City Attorney                                          
 City & Borough of Juneau                                                      
 155 S. Seward St.                                                             
 Juneau, AK 99801                                                              
  POSITION STATEMENT:   Opposes SB 261                                         
 Paul Bowers, Airport Manager                                                  
 City & Borough of Juneau                                                      
 1873 Shell Simmons Drive                                                      
 Juneau, AK 99801                                                              
  POSITION STATEMENT:   Opposes SB 261                                         
 Sharon Macklin, Representing the                                              
   City of Bethel                                                              
 315 5th St., #8                                                               
 Juneau, AK 99801                                                              
  POSITION STATEMENT:   Opposes SB 261                                         
 Crystal Smith                                                                 
 Alaska Municipal League                                                       
 217 2nd St.                                                                   
 Juneau, AK 99801                                                              
  POSITION STATEMENT:   Opposes SB 261                                         
 Robert Jacobsen                                                               
 Wings of Alaska                                                               
 1873 Shell Simmons Drive                                                      
 Juneau, AK 99801                                                              
  POSITION STATEMENT:   Supports SB 261                                        
 Reed Stoops                                                                   
 Alaska Air Carriers Association                                               
 Juneau, AK 99801                                                              
  POSITION STATEMENT:   Supports SB 261                                        
 Patrick Wilson, Chairman                                                      
 Canned Salmon Classic                                                         
 Petersburg, AK                                                                
  POSITION STATEMENT:   Supports SB 294                                        
 Senator Rick Halford                                                          
 State Capitol                                                                 
 Juneau, AK 99801-1182                                                         
  POSITION STATEMENT:   Prime Sponsor of SB 330                                
 Jon Ticket                                                                    
 Box 53                                                                        
 Selawik, AK 99770                                                             
  POSITION STATEMENT:   Supports SB 330                                        
 Gary Skin                                                                     
 Box 55                                                                        
 Selawik, AK 99770                                                             
  POSITION STATEMENT:   Supports SB 330                                        
 John Kamavoha                                                                 
 Box 2226                                                                      
 Valdez, AK 99686                                                              
  POSITION STATEMENT:   Supports SB 330                                        
 William Mark                                                                  
 Box 22                                                                        
 Goodnews Bay, AK 99589                                                        
  POSITION STATEMENT:   Supports SB 330                                        
 Keith Kelton, Director                                                        
 Division of Facility Construction & Operation                                 
 Department of Environmental Conservation                                      
 410 Willoughby Ave., Suite 105                                                
 Juneau, AK 99801-1795                                                         
  POSITION STATEMENT:   Offered information on SB 330                          
  ACTION NARRATIVE                                                             
 TAPE 94-17, SIDE A                                                            
 Number 001                                                                    
 The Senate Community & Regional Affairs Committee was called to               
 order by Chairman Randy Phillips at 9:05 a.m.  He brought  SB 261             
 (NO MUNICIPAL SALES TAXES ON AIR CARRIERS) before the committee as            
 the first order of business.                                                  
 Number 015                                                                    
 SENATOR BERT SHARP, prime sponsor of SB 261, said in response to            
 the concern over the prohibition of "use taxes" in the                        
 Transportation CS, a new committee substitute has been drafted for            
 the committee's consideration.  The municipalities fear that "use             
 taxes" is so vague that it may interfere with the collection of               
 landing fees, fuel flowage fees, etc.  The new language in the                
 committee substitute, which is supported by the air carriers and              
 the City & Borough of Juneau, eliminates "uses taxes" altogether              
 and clearly prohibits taxation only of the transportation of                  
 individuals or goods.                                                         
 Senator Sharp stated that he opposes narrowly defining "federally             
 certificated air carrier" as suggested by some of the                         
 municipalities.  The federal preemption provision applies to all              
 air carriers regulated by the FAA.  Since it is the intent of the             
 legislation to restate federal law, it would be unwise to include             
 only those air carriers certified under Section 401 of the Federal            
 Aviation Act, he said.                                                        
 Senator Sharp directed attention to a proposed amendment to the               
 draft committee substitute.  On page 1, line 11, after the word               
 "carrier" it adds the  phrase "other than a fee authorized under 49           
 U.S.C. Alp. 1513(e)", which is a passenger facility charge that is            
 authorized by the federal government on local airports.  He                   
 stressed that it is not a tax on passengers, it is allowable.                 
 Number 080                                                                    
 SENATOR TAYLOR asked if the committee substitute includes                     
 sufficient definition so as to give people the confidence that                
 their landing fees and other incidental airport fees that have been           
 routinely charged for years will not be impacted by this                      
 legislation.  SENATOR SHARP answered that the legislation gives a             
 higher degree of comfort to the municipalities in that it does not            
 interfere with the collection of landing fees, fuel flowage                   
 charges, etc.                                                                 
 Number 110                                                                    
 SENATOR TAYLOR asked if the words "federally certificated air                 
 carrier" include air taxis.   SENATOR SHARP responded that the                
 federal preemption provision applies to all air carriers regulated            
 by the FAA.                                                                   
 Number 155                                                                    
 JOHN HARTLE, Assistant City Attorney, City & Borough of Juneau,               
 stated the committee substitute is an improvement in that it                  
 narrows the language, but there is still some concern with the                
 legislation.  The municipality opposes the bill as a matter of                
 policy because they consider it to be an unfunded mandate and, if             
 federal law is clear, it is not needed.                                       
 Number 195                                                                    
 PAUL BOWERS, Airport Manager, City & Borough of Juneau, stated the            
 committee substitute satisfies some of his concerns, but there is             
 still concern with the word "fee" on line 10 and if it would                  
 encompass landing fees.  SENATOR SHARP clarified that the intent of           
 the legislation is that fee applies only to fees on individuals               
 being transported or on shipments of goods being transported.                 
 Number 235                                                                    
 SHARON MACKLIN, representing the City of Bethel, stated their                 
 opposition to SB 261.  She said the Bethel City Council recently              
 reintroduced an ordinance that would, in fact, put an issue on the            
 ballot for the local community to raise revenues by a sales tax on            
 liquor that would be coming into the community.  Because Bethel               
 does not have liquor stores but liquor can be shipped in, the most            
 reasonable way to levy to any kind of sales tax is through the air            
 carriers.  She urged the committee to consider the ramifications of           
 local jurisdiction and allowing communities to have the ability to            
 raise revenues in these declining state revenue days.                         
 Number 295                                                                    
 CRYSTAL SMITH, representing the Alaska Municipal League, stated               
 Senator Sharp's proposed committee substitute is an improvement,              
 but the League is still in opposition to the legislation.  The                
 League believes that the prohibition on putting a sales tax on                
 freight is an expansion of the intent of the federal law.  She also           
 voiced opposition to the retroactivity clause, noting the question            
 of taxation on flight seeing is still in court, and though it may             
 not preclude the situation of what happens where the Kenai-Homer              
 air case is, it will cut out that option without allowing the court           
 to make the decision on it.                                                   
 Number 358                                                                    
 ROBERT JACOBSEN, representing Wings of Alaska, said from the air              
 carriers' perspective, they don't believe the legislation expands             
 the focus of the federal law.  He said they believe it is just                
 helping to clarify it, and that there is a lot of case law to back            
 up that claim.                                                                
 Number 368                                                                    
 REED STOOPS, representing the Alaska Air Carriers Association,                
 agreed with Mr. Jacobsen that the legislation does not expand                 
 federal law, and he noted he has provided opinions and case law to            
 back up their contention.  He added that the air carriers would               
 prefer to have the retroactivity provision in the bill, but feel              
 that should be left up to the committee.                                      
 Number 400                                                                    
 SENATOR RANDY PHILLIPS asked for the pleasure of the committee.               
 Number 405                                                                    
 SENATOR TAYLOR moved that CSSB 261(CRA) dated 2/23/94 be adopted.             
 Hearing no objection, the motion carried.                                     
 SENATOR TAYLOR moved the following amendment be adopted and                   
 incorporated into the committee substitute.  Hearing no objection             
 the motion carried.                                                           
 AMENDMENT NO. 1                                                             
 Page 1, line 11:  After the word "carrier" insert "other than a fee           
                   authorized under 49 U.S.C. App. 1513(e)"                    
 Number 415                                                                    
 SENATOR TAYLOR moved that CSSB 261(CRA) be passed out of committee            
 with individual recommendations.  Hearing no objection, it was so             
 Number 420                                                                    
 CLASSIC) before the committee as the next order of business.                  
 SENATOR TAYLOR, prime sponsor of SB 294, explained that the bill              
 will amend the law to include, among all the other classics, a                
 canned salmon classic.  In the event, people purchase a ticket and            
 guess the number of cans of salmon that will be produced in the two           
 salmon canneries in Petersburg during the fishing season.  It has             
 been a good money raiser in the past for good causes in the                   
 Number 443                                                                    
 SENATOR RANDY PHILLIPS asked if this existed before January 1959.             
 SENATOR TAYLOR answered that it didn't, although various bars and             
 canneries themselves have done that sort of thing on and off for              
 years.  However, it wasn't formally done in the community until               
 just recently.                                                                
 Number 452                                                                    
 SENATOR RANDY PHILLIPS stated testimony would be taken over the               
 teleconference network from Petersburg.                                       
 PATRICK WILSON, Chairman of the Canned Salmon Classic and Plant               
 Manager of Petersburg Fisheries, said being a community that is               
 heavily dependent on the fishing industry, they thought it would be           
 appropriate to get their name out in front, raise some funds for              
 the Petersburg Chamber of Commerce and roll the revenues back into            
 the community, and to have some fun doing it by bringing the canned           
 salmon classic program into existence.                                        
 There being no other witnesses wishing to testify on SB 294,                  
 SENATOR RANDY PHILLIPS asked for the pleasure of the committee.               
 SENATOR TAYLOR moved that SB 294 be passed out of committee with              
 individual recommendations.  Hearing no objection, it was so                  
 Number 490                                                                    
 GRANTS) before the committee as the final order of business.                  
 SENATOR RICK HALFORD, prime sponsor of SB 330, said he introduced             
 the bill at the request of the Department of Environmental                    
 SB 330 provides funding assistance through grants and loans to                
 Alaska's incorporated municipalities for the construction of water,           
 wastewater and solid waste improvements.  By amending AS 46.03.030,           
 the flexibility of funding alternatives available to incorporated             
 governments will be increased.  Changes to AS 46.03.032 will                  
 position the State to take advantage of a new federal loan program            
 for construction of water supply systems.  This legislation is now            
 pending in Congress and by passing this bill this session, it will            
 enable the State to participate at the earliest possible                      
 Senator Halford said there are a number of policy decisions, and he           
 encouraged the committee to go through the changes made in the                
 legislation and have the Department of Environmental Conservation             
 explain why they believe each of them should be the way they are.             
 Number 510                                                                    
 SENATOR LEMAN asked Senator Halford if he thought this bill would             
 be the appropriate vehicle to bring about some consistency in                 
 having local communities participate somehow in the cost of these             
 projects.  SENATOR HALFORD answered that he has no objection to               
 anything that makes sense.  He added that he agrees with the long-            
 term goal, because he's afraid that when we really do get down to             
 the reality of spending within our income, these programs are                 
 either going to be maintained from local sources or they are going            
 to fall apart.                                                                
 Number 551                                                                    
 JON TICKET, a Close-Up Program student from Selawik, said they do             
 not have water or sewer systems in their village, and he believes             
 passage of SB 330 will help their situation.   He said Selawik is             
 in a unique location, surrounded by rivers, and their city council            
 is trying very hard to get water and sewer for their village.  He             
 pointed out that last year their region had numerous reported cases           
 of hepatitis.                                                                 
 Number 575                                                                    
 SENATOR LEMAN asked if any Village Safe Water projects have been              
 done in Selawik.  KEITH KELTON answered that DEC is working with              
 the Public Health Service to provide a project for Selawik.                   
 SENATOR LEMAN asked Mr. Ticket if he thought people in Selawik                
 would be willing to contribute a portion of the cost of a project             
 whether its is contributing a piece of property, or a gravel                  
 source, or labor, etc.  JON TICKET answered that he thought the               
 people would be willing to cooperate in any way they can.                     
 Number 585                                                                    
 SENATOR PHILLIPS asked where Selawik gets it water, and how they              
 dispose of their waste material.                                              
 TAPE 92-17, SIDE B                                                            
 Number 001                                                                    
 JON TICKET answered that they basically get their water from the              
 laundromat, but usually melt ice from the river for drinking.  They           
 use "honey buckets" and the waste material is put into plastic bags           
 and hauled to a nearby lagoon.                                                
 Number 025                                                                    
 GARY SKIN, a Close-Up student from Selawik, shared pictures of the            
 disposal line from the laundromat to the lagoon.  The line has                
 leaks in it that freeze up in the winter months, and when it thaws            
 in the summer months it seeps into the river where they mainly get            
 their drinking water.                                                         
 Number 060                                                                    
 JOHN KAMAVOHA, a Close-up student from Valdez, said the small                 
 villages in his area have problems similar to Selawik.                        
 Number 070                                                                    
 WILLIAM MARK of Good News Bay said they get their drinking water              
 from the creek or use rain water.  They also use a lagoon for                 
 disposing of their waste.                                                     
 SENATOR LEMAN pointed out that the fact that these villages have              
 lagoons and that the waste is being separated is very good.                   
 Number 110                                                                    
 KEITH KELTON, Director, Division of Facility Construction &                   
 Operation, Department of Environmental Conservation, stated DEC's             
 strong support for SB 330.  He echoed Senator Halford's comments              
 that there are several areas in the bill which they feel are open             
 to discussion as far as policy by the Legislature.                            
 Mr. Kelton said SB 330 makes it easier for the smaller communities            
 to get funding, particularly by removing a match provision for                
 federal funds.  It would allow using federal funds for full match             
 with state funds which is prohibited in the current statute.                  
 SB 330 also changes the state participation-local participation               
 ratios for the communities under 5,000 in the grants program.                 
 The loan program, which is capitalized by the federal government at           
 80 percent with a 20 percent state match, currently covers only the           
 waste water program.  There are three different bills within the              
 U.S. Congress which would extend the federal loan program to cover            
 drinking water supplies.  SB 330 would provide state authorization            
 to have a program in place prior to the federal program being                 
 enacted so that the state would have a quicker opportunity to use             
 the federal dollars on a capitalization loan program as it becomes            
 available.  Mr. Kelton said that program would benefit nearly any             
 community that had a surface water source and wanted to apply for             
 a loan.                                                                       
 Mr. Kelton said the legislation also contains several housekeeping            
 measures.  The statute has been in place since 1972 and has been              
 amended several times by adding new programs onto it, and the                 
 legislation cleans up and consolidates the language.                          
 Number 152                                                                    
 SENATOR TAYLOR asked if the changes in SB 330 will make DEC's job             
 a bit easier and make for a more efficient building and development           
 of facilities.  KEITH KELTON answered that it will and, at the same           
 time, it has a benefit of helping the communities.                            
 Number 160                                                                    
 SENATOR LEMAN asked for Mr. Kelton's comments on the concept of               
 local participation in these projects.  KEITH KELTON said his                 
 proposal has been discussed and, in concept, they support his                 
 proposal, but, in practicality, it has limited application.  In               
 working with the smaller communities and villages, it has been                
 DEC's experience that most of them don't have the resources even to           
 guarantee satisfactory maintenance and operation once the facility            
 is built, even though the department insists on those type of                 
 precautions being taken.  Even though they are willing to put up a            
 local share, most of the time in a subsistence economy it doesn't             
 exist.  He added that there are some things that may be possible              
 like land donations, which have worked in the past.                           
 SENATOR RANDY PHILLIPS said he agreed with Senator Leman that there           
 should be some local participation, and he wondered if it could               
 somehow be tied in with the permanent fund dividend program,                  
 because if a person lives in the state for a year and is qualified            
 to receive $1,000, then part of it should be used to purchase a               
 piece of government.  KEITH KELTON agreed that there are ways to              
 come up with money in different configurations and he reiterated              
 that they don't oppose the concept for village safe water, but he             
 felt that if the bill were amended in that manner it would detract            
 from the bill and could cause delays.                                         
 Number 230                                                                    
 SENATOR LEMAN said he thought SB 330 would be a good vehicle for              
 such an amendment and that he would draft one and present it to the           
 Senate Finance Committee, which is the next committee of referral.            
 Number 355                                                                    
 PAM DUNDY, staff to Senator Zharoff, voiced Senator Zharoff's                 
 support for SB 330.  She said it encompasses what he wanted to see            
 addressed and, at the same time, it will get more projects out into           
 the districts.                                                                
 Number 345                                                                    
 SENATOR TAYLOR moved that SB 330 be passed out of committee with              
 individual recommendations.  Hearing no objection, it was so                  
 There being no further business to come before the committee, the             
 meeting was adjourned at 10:17 a.m.                                           

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