SB 293 CAP PROJ MATCHING GRANT FOR INDIAN RESERV  SENATOR TORGERSON introduced SB 293 as the next order of business before the committee. Number 305 SENATOR ZHAROFF, Prime Sponsor, explained that SB 293 would clarify an ambiguity in the statute with regard to how Metlakatla is treated under the Capital Matching Grants program. Senator Zharoff discussed the following sponsor statement: SB 293 would amend the Capital Matching Grants program to clarify that the Metlakatla Indian Community can participate in the program as a municipality rather than as an unincorporated community. The Capital Matching Grants program became effective in FY 1994. The prior administration adopted regulations to implement the Capital Matching Grants program that allowed Metlakatla to receive Capital Matching Grants as both a municipality and unincorporated community. Last year, Legislative Legal Services determined that Metlakatla could not legally receive a Capital Matching Grant as a municipality and without an amendment to the Capital Matching Grants statutes, could only receive funds under the unincorporated portion of the program. This bill corrects what I believe was an oversight in the original legislation that created the Capital Matching Grants program to specifically allow Metlakatla to receive their Capital Matching Grants under the municipal portion of the program rather than as an unincorporated community. Senator Zharoff said that since Metlakatla was not listed as a municipality, Metlakatla only received $25,000. As a municipality, Metlakatla would be eligible for $50,000. In discussions with the Administration and the Department of Community & Regional Affairs, there is no objection to SB 293. He hoped that SB 293 would be viewed as a housekeeping measure. SENATOR RANDY PHILLIPS clarified that SB 293 would be recognized as an incorporated area, as a municipality which would allow Metlakatla to be eligible for $50,000. SENATOR ZHAROFF agreed with that assessment. SENATOR RANDY PHILLIPS asked why Metlakatla was not currently receiving that amount. SENATOR ZHAROFF explained that Metlakatla was omitted from the legislation that established the Capital Matching Grants Program in 1994; that was an oversight. SENATOR TORGERSON pointed out that the additional money, $14,910, is needed to upgrade Metlakatla. Perhaps the department could inform the committee from where this money would come. Number 354 KIM METCALFE-HELMAR, Special Assistant for the Department of Community & Regional Affairs, supported SB 293 which the department views as a housekeeping measure. SB 293 would clarify an ambiguity in current law by establishing Metlakatla as a municipality for the purposes of the Municipal Capital Project Matching Grant Program. She requested that Bill Rolfzen from the department to come forward to answer specific questions. SENATOR RANDY PHILLIPS inquired as to how Metlakatla operated. BILL ROLFZEN, State Revenue Sharing for the Department of Community & Regional Affairs, explained that the Metlakatla Indian Community operates similarly to a municipality organized under state law. Metlakatla has a City Council, a Mayor, and it provides basic community services for Annette Island. As far as Mr. Rolfzen knew, the Mayor and the City Council are elected by the people in Metlakatla. Mr. Rolfzen clarified that the Metlakatla Community Development Corporation must be established as required under the Municipal Assistance Legislation which was amended in 1986 as well as under the National Forest Receipts Program. The corporation has been formed. Within the charter of the corporation, the election of the board of directors must be open to all members of the community regardless of race. Once the money is received, a determination regarding how the money would be spent would be made and then the money would be given to the Metlakatla Indian Community. The Metlakatla Indian Community is basically the local government that provides all the local services. The expenditure of the fund would be documented in the financial statements the department receives; those monies are audited and tracked. Number 382 SENATOR KELLY asked if SB 293 was site specific to Metlakatla. SENATOR TORGERSON replied yes. SENATOR TORGERSON pointed out that the fiscal note is zero, although the transition would require $14,910. He assumed that money would be taken from other communities in order to make the transition. JACK FARGNOLI, Office of Management and Budget for the Office of the Governor, said that the funding issue is before the legislature. One option would entail the extra money being added to the total amount of money being appropriated to both programs or money could be taken from one side and moved to the other side. Once the funding decision is made for the municipal program, that money would be spread by formula. Therefore if money were added to that side, it would come out of the CRA side. If money were added to the CRA side, the money would come from Community & Regional Affairs. Including Metlakatla in this funding would be another community for which the municipal funding would have to be spread by formula. Mr. Fargnoli pointed out that there are two choices, either add more money or let the allocations follow the formula. SENATOR TORGERSON asked if the Administration's position was to leave it to the legislature. JACK FARGNOLI noted that the Governor has proposed a net cut of the Metlakatla decision. Mr. Fargnoli assumed that the total funding level would remain the same and Metlakatla would be included with the municipalities. Number 415 SENATOR TORGERSON handed out a breakdown of where this money would come from and listing each municipality in the current program. He assumed that this would create zero impact to the budget. This report was provided by Municipal Grants in the Administration. JACK FARGNOLI said that original intent was to include Metlakatla as a municipality which was echoed in regulations through a definition including Metlakatla as a municipality. The way the local revenue sharing program was written, the unincorporated side of the program, meant that Metlakatla had to be included as an unincorporated entity as well. Last year, Senator Halford pointed out that a different prevailing statute's definition of municipality, Metlakatla did not fall under that. The only recourse was to allow Metlakatla to remain on the unincorporated side of the program. SENATOR RANDY PHILLIPS asked if there was a tax base in Metlakatla. JACK FARGNOLI replied yes and deferred to Mr. Rolfzen. Number 449 SAL ATKINSON, member of the Metlakatla City Council, informed the committee that he was present to represent the mayor and the council. He thanked Senator Zharoff for introducing SB 293. Mr. Atkinson explained that last year, Metlakatla missed some matching grant funds through some technical error. After reviewing the situation, the community discovered that it qualified under the definition of unincorporated community as well as the definition of a municipality. Metlakatla has its own constitution, law and order code, police force, judicial system, 12 councilmen, judges, and all the services provided by other communities. Mr. Atkinson emphasized that Metlakatla wants to build a closer working relationships with the State of Alaska. SB 293 would draw Metlakatla closer to this goal. SENATOR RANDY PHILLIPS inquired as to how many members were there on the Metlakatla council. SAL ATKINSON said there were 12 members. The town engineer is elected separately. In response to Senator Randy Phillips' question regarding Metlakatla's tax base, Mr. Atkinson stated that Metlakatla does not have a tax base. There are some timber lands and that money is used to provide services to the people. For instance, services are provided for senior citizens in Metlakatla beyond what is provided in other communities. SENATOR RANDY PHILLIPS asked if the monies that Metlakatla has for the government comes entirely from timber sales. SAL ATKINSON informed the committee that Metlakatla does receive grants from the State of Alaska. At one time, Metlakatla received money from the Bureau of Indian Affairs, but that money is shrinking. Therefore, Metlakatla wants to diversify its economy. Currently, Metlakatla does not have a tax base, but eventually that may happen. Mr. Atkinson noted that research is being done on the possibility of a sales tax. Metlakatla has a population of 1,826. In response to Senator Kelly's question regarding the location of Metlakatla, SENATOR RANDY PHILLIPS said that Metlakatla is south of Ketchikan. SENATOR KELLY asked if all of Annette Island was Metlakatla, is the community called Metlakatla? SAL ATKINSON replied yes. Mr. Atkinson explained that when the area was set aside by presidential proclamation, the area was set aside for the Indians of Metlakatla living on Annette Islands. Number 495 SENATOR RANDY PHILLIPS asked if the people of Metlakatla had decided not to participate in the Native Land Claims in lieu of title to the land and a way of life. SAL ATKINSON agreed that the people of Metlakatla decided not to participate in the Native Land Claims. Mr. Atkinson explained that all the land of the Annette Islands belongs to the federal government, a parcel of land can be leased for a maximum of 50 years renewable. SENATOR KELLY asked if homes were built on that leased land. Are homes bought and sold on leased land? SAL ATKINSON said that homes were built on the leased land, but rarely is a house on leased land sold. These homes are in private ownership. SENATOR RANDY PHILLIPS thought that the tribe decided that the land belongs to the people collectively, but that is not the case. Why did the tribe opt out of the Native Land Claims Act? SAL ATKINSON expressed gratitude that the tribe had chosen not to participate in the Native Land Claims Act. A subsistence lifestyle is still present and no commercial fishery is allowed within any of the waters surrounding Annette Island. For instance, if someone proposes a shellfish harvest or other commercial harvest, Metlakatla can refuse. SENATOR HOFFMAN asked if members of the tribe could go commercial fish in those waters. SAL ATKINSON replied yes. SENATOR KELLY inquired as to how far from the island are commercial fisheries not allowed. SAL ATKINSON informed the committee that it extended 3,000 feet from the land. SENATOR KELLY asked if any of the people in Metlakatla belonged to any of the regional corporations. SAL ATKINSON said no, they are not allowed; although, the ANSCA amendments would allow the people of Metlakatla to inherit stock, but not a controlling amount. In response to Senator Randy Phillips, SAL ATKIINSON said that the elders of Metlakatla made the decision not to participate in the Native Land Claims Act. SENATOR RANDY PHILLIPS asked what the elders of Metlakatla saw that other elders did not with regard to the Native Land Claims Act. SAL ATKINSON said that the elders of Metlakatla looked at the way of life they had; they did not want to change their lifestyle which still prevails today. SENATOR TORGERSON asked if anyone else would like to testify. Hearing none, Senator Torgerson said that he was tempted to hold SB 293 until Wednesday for a corrected fiscal note. He did not believe that the Administration was being honest with the zero fiscal note when money, $14,000, will be taken from tax based communities to spread around. Senator Torgerson explained that his opposition comes from the Administration's opposition to SB 20 which is about the same, but with a $900,000 fiscal note because the Administration did not like that bill. SB 293 was held until Wednesday and a request will be made for a corrected fiscal note.