Legislature(1993 - 1994)
02/24/1994 09:05 AM Senate CRA
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* first hearing in first committee of referral
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+ 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
ordered.
Number 420
SENATOR RANDY PHILLIPS brought SB 294 (PETERSBURG CANNED SALMON
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
community.
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
ordered.
Number 490
SENATOR RANDY PHILLIPS brought SB 330 (WATER QUALITY FUNDS AND
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
Conservation.
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
opportunity.
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
ordered.
There being no further business to come before the committee, the
meeting was adjourned at 10:17 a.m.
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