CS FOR SENATE BILL NO. 72(CRA) "An Act relating to the community revenue sharing program; and providing for an effective date." This was the second hearing for this bill in the Senate Finance Committee. 2:26:34 PM Co-Chair Hoffman moved to adopt CS SB 72, Version 25-LS0506\L as the working document. Without objection, the Version "L" committee substitute was ADOPTED as the working document. Co-Chair Stedman advised that, rather than any incorporating significant changes, the committee substitute simply made numerical changes such as updating community population numbers. 2:27:09 PM Co-Chair Hoffman communicated that his staffer, Tim Grussendorf, would review the committee substitute. 2:27:22 PM TIM GRUSSENDORF, Staff to Senator Lyman Hoffman, affirmed that the Version "L" committee substitute included a few technical changes, but did not make any substantive changes. Mr. Grussendorf directed attention to a six page spreadsheet, dated May 7, 2007, and titled "Est FY08 Revenue Sharing Distribution - Organized Communities Under CSSB 72(FIN) [copy on file] pertaining to Version "L". Communities' population figures, depicted in the second column, reflect the most current census information. Mr. Grussendorf advised that the population numbers on the spread sheet "backed out" municipality populations from the total borough population in the cases of the State's three unified boroughs: Anchorage, Juneau, and Sitka. As a result, borough numbers are smaller than previously presented. 2:29:26 PM KATHY WASSERMAN, Executive Director, Alaska Municipal League (AML), testified in Juneau and voiced appreciation for the effort exerted on "this wonderful bill". When the Holy Cross city clerk was informed of the amount that community would receive under the provisions of this revenue sharing program, her excited response was "We can buy fuel!" AML is in "total support" of the bill. 2:31:26 PM JEROME SHELBY, Mayor, Kodiak Island Borough, testified via teleconference from Kodiak and commended the Committee for the "outstanding job" conducted on addressing a wide array of issues and developing a good bill for Alaska. One element not addressed in the bill, however, is the State's 27 unincorporated communities within organized boroughs. Even thought their inclusion would decrease the per capita multiplier, unincorporated communities should be provided, at the very minimum, $25,000. They should not be penalized for being an unincorporated community within an organized borough. Mr. Shelby noted that while only one such community existed on Kodiak Island, seven or eight were located on the Kenai Peninsula. Another borough had approximately nine. Not considering them in the bill would produce "some pretty big inequities in some of these areas where this occurs." This is the only concern with the bill. All other aspects of it are "excellent". 2:33:04 PM ROBERT PRUNELLA, City Manager, City of Wrangell, testified via teleconference from Wrangell, in support of the bill. "We're pleased with the outcome" and the assistance the bill would provide to communities' budgets. Co-Chair Stedman was aware of Wrangell's "budget circumstances". This bill, and the separate school funding bill, would provide assistance to the city. 2:33:53 PM DAN SALMON, Administrator and Representative, Igiugig Village Council and Assembly Member, Lake Peninsula Borough, testified via teleconference from an offnet location in support of the bill with the addition of including unincorporated communities within an organized borough, such as Igiugig, in it. Mr. Salmon contended that unincorporated communities are being penalized by their absence from the bill. Mr. Salmon explained that currently Igiugig, whose population typically ranges between 45 and 50, except for summer when it's population swells toward 150 primarily due to tourism activities, does not discriminate in providing fire and emergency services to residents and visitors. The community's infrastructure system includes a public boat landing and campgrounds; a medical clinic; a solid waste facility and recycling program; electrical generation for the community's schools, residents, public buildings and airport; water and sewer systems; and road maintenance. It also interacts with federal and state entities and municipalities. Mr. Salmon stated that when the community involved itself in the effort undertaken in 1989 to form an organized borough in the area, he had been advised not to "encourage Igiugig to join the borough" as they would lose revenue. Since then, Igiugig has investigated becoming classified as a city. The Department of Commerce, Community and Economic Development informed them that, due to its small population, they would be intensely scrutinized. The Department also "saw no sense" in why the community wanted to become a city in light of how effectively it manages its infrastructure. He had to agree since Igiugig is doing as much or more than what recognized cities in the State do. Mr. Salmon extended an invitation to Legislators to visit the community to witness how it manages its affairs. The infrastructure is impeccably maintained and "the place is spotless. In conclusion, on behalf of unorganized communities in organized boroughs, he "strongly encouraged you to find a way to finance the 25 or so communities that have been left out of this bill as presently written." 2:38:36 PM Mr. Grussendorf informed the Committee that the Department of Commerce, Community and Economic Development fiscal note accompanying Version "L" specifies that the fiscal impact in FY 08 to be $48.1 million. Thereafter, funding would be provided by the community revenue sharing fund established by the bill. The annual funding beginning in FY 09 would equate to the lesser of $50 million or three percent of all mineral lease rentals, royalties, royalty sale proceeds, federal mineral revenue sharing payments and bonuses received by the state during the preceding year as specified in the analysis section of the fiscal note. 2:39:14 PM Co-Chair Stedman restated the funding mechanism for the program. Mr. Grussendorf affirmed. The funding would likely not exceed $50 million. Senator Olson asked regarding the requests to include unincorporated communities within organized boroughs in the community revenue sharing program proposed in the bill. 2:40:03 PM Mr. Grussendorf advised that discussions with these communities have occurred. The decision was made however, to follow traditional Legislative policy in determining which communities would receive the funding. The Committee could make a policy call and opt in additional communities. Senator Olson asked whether there had been a "large outcry" to include funding for unincorporated communities. Mr. Grussendorf responded that they had heard from "quite a few" such communities. 2:40:43 PM Co-Chair Hoffman moved to report the bill from Committee with individual recommendations and accompanying fiscal notes. Without objection, CS SB 72(FIN) was REPORTED from Committee with new $48,100,000 fiscal note dated May 7, 2007 from the Department of Commerce, Community and Economic Development. 2:41:20 PM