Legislature(1997 - 1998)
04/14/1997 01:37 PM Senate CRA
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATE COMMUNITY & REGIONAL AFFAIRS COMMITTEE
April 14, 1997
1:37 p.m.
MEMBERS PRESENT
Senator Jerry Mackie, Chairman
Senator Gary Wilken, Vice Chairman
Senator Dave Donley
Senator Randy Phillips
Senator Lyman Hoffman
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
SENATE BILL NO. 98
"An Act relating to the conveyance of certain isolated tracts of
state land to boroughs and unified municipalities; and providing
for an effective date."
- MOVED CSSB 98(CRA) OUT OF COMMITTEE
SENATE BILL NO. 161
"An Act relating to management of certain municipal assets by the
Alaska Permanent Fund Corporation."
- MOVED CSSB 161(CRA) OUT OF COMMITTEE
PREVIOUS SENATE COMMITTEE ACTION
SB 98 - See Community & Regional Affairs minutes dated 3/19/97,
4/9/97.
SB 161 - No previous action to record.
WITNESS REGISTER
Senator Bert Sharp
State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Prime Sponsor of SB 161
Mayor James Hayes
City of Fairbanks
800 Cushman St.
Fairbanks, AK 99701
POSITION STATEMENT: Testified in support of SB 161
Harry Porter
3206 Riverview Drive
Fairbanks, AK 99709
POSITION STATEMENT: Present to respond to questions on SB 161
Jim Kelly, Research & Liaison Officer
Alaska Permanent Fund Corporation
P.O. Box 25500
Juneau, AK 99802-5500
POSITION STATEMENT: Neutral on SB 161
Kevin Ritchie, Executive Director
Alaska Municipal League
217 2nd St.
Juneau, AK 99801
POSITION STATEMENT: No position on SB 161
Ms. Annette Kreitzer, Staff to Senator Loren Leman
State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Reviewed CSSB 98(CRA)
Ms. Jane Angvik, Director
Division of Land
Department of Natural Resources
3601 C St., Suite 1122
Anchorage, AK 99503-5947
POSITION STATEMENT: Testified in support of CSSB 98(CRA)
Gary Gustafson, Director
Heritage Land Bank
Municipality of Anchorage
P.O. Box 196650
Anchorage, AK 99519
POSITION STATEMENT: Testified in support of CSSB 98(CRA) with one
exception
Paul Costello, Director of Land Management
Fairbanks North Star Borough
P.O. Box 71267
Fairbanks, AK 99707
POSITION STATEMENT: Suggested changes to CSSB 98(CRA)
Rick Elliott, Municipal Lands Trustee
Section Supervisor
Division of Municipal & Regional Assistance
Department of Community & Regional Affairs
333 W. 4th Ave, Suite 220
Anchorage, AK 998501-2341
POSITION STATEMENT: Present to respond to questions on CSSB
98(CRA)
ACTION NARRATIVE
TAPE 97-16 , SIDE A
Number 001
CHAIRMAN MACKIE called the Senate Community & Regional Affairs
Committee meeting to order at 1:37 p.m., and noted all committee
members were present.
Number 020
SB 161 PERM. FUND CORP TO MANAGE MUNI ASSETS
CHAIRMAN MACKIE brought SB 161 before the committee as the first
order of business and noted there was a draft committee substitute
for its consideration.
SENATOR BERT SHARP , prime sponsor of SB 161, explained the
legislation authorizes the Alaska Permanent Fund Corporation to
manage the assets of a municipal savings or investment account. He
noted the parameter of a management agreement starts on page 1,
line 9 through the remainder of the bill. These parameters were
set by the corporation as conditions they could accommodate without
compromising their mission. The legislation offers municipalities
the option of investment management services within Alaska and one
in which the average citizen has confidence.
Senator Sharp noted that the bill carries a break-even fiscal note
because the management costs are totally reimbursable to the Alaska
Permanent Fund Corporation by the municipalities based on the
billings rendered by the corporation and the agreements as set out
by the parameters of the bill. He said the original bill put the
payments into the general fund, however, the proposed committee
substitute puts the payments into the earnings reserve account.
Senator Sharp related that the legislation was introduced at the
request of the City of Fairbanks, however, it would give any
municipality the option of engaging the Alaska Permanent Fund
Corporation to manage its assets.
Number 075
SENATOR WILKEN moved the adoption of CSSB 161(CRA). Hearing no
objection, it was so ordered.
Number 095
SENATOR HOFFMAN referred to page 1, line 14, and asked how the
asset value of $50 million was established. SENATOR SHARP replied
that all of the terms that are in the bill were put in at the
suggestion of the Alaska Permanent Fund Corporation.
Number 106
CHAIRMAN MACKIE stated the committee would take testimony via the
teleconference network.
JIM HAYES , Mayor of the City of Fairbanks, said the ownership of
the utilities by the city was an issue that had been around for
some 20 years. The Fairbanks City Council decided the city should
get out of the utility business and that a permanent fund should be
established with the proceeds of the sale. In October 1996, the
voters approved the sale of the utilities as well as a change to
the city's charter to establish a permanent fund. Approval of the
sale of the utilities by the Alaska Public Utilities Commission is
expected sometime this summer. Once the sale has been approved and
the funds have been transferred, the City of Fairbanks would like
to be able to deposit those funds into the permanent fund by the
end of this year.
Number 175
SENATOR PHILLIPS asked who the city utilities are being sold to.
MAYOR HAYES related that PTI is purchasing the telephone utility;
a group of Fairbanks investors have formed a corporation to
purchase the water and sewer utility; and the electric utility is
being purchased by Golden Valley.
HARRY PORTER of Fairbanks advised that he and Cindy Shelling were
members of the City of Fairbanks' permanent fund committee and were
available to respond to questions from the committee.
Number 210
JIM KELLY , Research & Liaison Officer for the Alaska Permanent Fund
Corporation, testifying in Juneau, stated the corporation has not
taken a position on the legislation, but he pointed out that they
have provided a fiscal note showing that it will cost money.
Number 245
SENATOR WILKEN informed the committee that he has a conflict in
that he is one of the 10 investors in Fairbanks Sewer & Water. He
then moved to be excused from voting on SB 161. SENATOR DONLEY
objected. CHAIRMAN MACKIE stated he didn't think there was a
conflict in that this is money that the city has and wants to
invest in the permanent fund. It doesn't have anything to do with
the sale of the utility.
Number 250
SENATOR WILKEN asked how the City of Fairbanks will be able to
access this money once it is deposited with the permanent fund.
MAYOR HAYES said it is his understanding that it will not be a
problem for the city to receive a certain amount every year that it
may need for its operations.
Number 295
SENATOR HOFFMAN asked if the state would have any liability for the
investment of a municipality's funds. MR. KELLY replied that he
didn't know if there was any liability there, but if they don't
make income, they are not paying out any income. It is the
trustees main function is to keep the money safe and to then
produce income with it. There is no guarantee that the fund is
going to produce income. However, he noted the corporation has a
record where they have earned 11.6 percent over the last 13 years.
He added that he would ask the corporation's attorney if there is
any liability and what protection the state would have.
Number 330
KEVIN RITCHIE , Executive Director, Alaska Municipal League, stated
the League sees this as a one municipality issue, and that they do
not have a position on the legislation.
Number 334
SENATOR DONLEY moved CSSB 161(CRA) and the accompanying fiscal note
be passed out of committee with individual recommendations.
Hearing no objection, it was so ordered.
SB 98 CONVEY LAND TO MUNICIPALITIES/BOROUGHS
CHAIRMAN MACKIE brought SB 98 before the committee and directed
attention to a new proposed C&RA committee substitute, which would
replace the version adopted by the committee at the previous
hearing on the legislation.
ANNETTE KREITZER , staff to Senator Loren Leman, reviewed the
changes made in the committee substitute. She said at a previous
hearing on the legislation DNR expressed concern about the
definition of "isolated tracts of land" so the committee substitute
goes back to the "vacant, unappropriated, unreserved land"
definition. On page 2, line Senator Wilken was concerned about
the phrase "in proximity to" and the phrase has been changed to the
word "near." There was concern by Senator Wilken and others about
value of the tract to the state, which is initially taken care of
on page 1, line 13, as well as in a new subsection (d) on page 2.
The final change on page 2, line 6 was to address a concern of the
Department of Transportation & Public Facilities that the
conveyance does not adversely affect present or future interests of
the state.
Number 367
SENATOR DONLEY moved the adoption of CSSB 98(CRA), version "F".
Hearing no objection, it was so ordered.
Number 370
SENATOR PHILLIPS asked if the Municipality of Anchorage was in
support of the changes made in the committee substitute. MS.
KREITZER replied that municipalities are not happy with the
language in the new subsection (d) which speaks to paying an amount
that is fair, proper, and in the best interests of the public.
Number 378
JANE ANGVIK , Director, Division of Lands, Department of Natural
Resources, testifying from Anchorage, stated her division has
looked over the proposed committee substitute, and they support
it, although they do have some concern with the language on page 2,
in subsection (d) which reads "the commissioner may require the
municipality to pay an amount that is fair..."
Number 390
GARY GUSTAFSON , Director, Heritage Land Bank, Municipality of
Anchorage, stated the municipality is supportive of all but one of
the changes in the committee substitute. There is concern with the
new subsection (d) on page 2 because it would establish a new
precedence for municipal entitlement transfers that up to this
point has never occurred. He said he thinks the bill is targeting
areas in the state where municipalities could be the better land
manager, and it would be more cost effective for municipalities to
manage lands in the state.
Number 418
SENATOR WILKEN directed attention to subsection (d) on page 2, line
12, and commented that he thinks the word "may" should be replaced
with "shall." He then asked Mr. Gustafson why the state shouldn't
be reimbursed for the value of that land that is owned by the
people. MR. GUSTAFSON responded the bill will amend AS 29.65,
which is the Municipal Entitlement Act. Also, there are a lot of
isolated tracts of state land in Alaska, some of which are going to
be useful over time for municipalities. This bill allows
municipalities, if they have a use for that state land, to step
forward and make an application for it. The commissioner can then
make a determination of whether it is in the best interests of the
public, and if it isn't, then the state shouldn't convey it to the
municipality, he said.
Number 472
PAUL COSTELLO , Director of Land Management, Fairbanks North Star
Borough, read into the record a prepared statement in support of
the concept of conveying isolated tracts of state lands to
municipalities, which will allow them to more economically develop
borough lands, and in the process make former state land available
for the public where it would otherwise not be available.
However, the borough has two areas of concern about the
legislation. The first is with the limiting of the selection of
land to vacant, unappropriated, unreserved land, which effectively
eliminates the borough from consideration under this legislation.
There is very little state land within the borough's boundaries
that is not already classified for one purpose of another. It is
suggested that the legislation include by definition, within the
VCC classification, lands which are classified for forestry or
other resource development purposes. This would add to the borough
land more developable tracts and would therefore compliment any
proposed development.
The borough's second concern is with the new subsection (d) and it
encourages its deletion because paying fair market value and the
survey costs for isolated tracts will, in most cases, make the
participation of the borough in any land development uneconomical,
and it effectively locks state land from any development in the
near future.
Number 495
CHAIRMAN MACKIE noted that RICK ELLIOTT of the Division of Regiona
& Municipal Assistance, Department of Community & Regional Affairs,
was present in Anchorage to respond to questions on SB 98.
Number 500
There being no further testimony on CSSB 98(CRA), CHAIRMAN MACKIE
asked for the pleasure of the committee.
SENATOR WILKEN moved the following amendment to CSSB 98(CRA):
Amendment No. 1
Page 2, line 12: Delete the word "may" and insert "shall"
SENATOR DONLEY objected to adoption of the amendment. The roll was
taken with the following result: Senators Phillips, Hoffman,
Wilken and Mackie voted "Yea" and Senator Donley voted "Nay." The
Chairman stated the amendment was adopted.
SENATOR WILKEN moved CSSB 98(CRA), as amended, 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 adjourned at 2:12 p.m.
| Document Name | Date/Time | Subjects |
|---|