SENATE COMMUNITY & REGIONAL AFFAIRS COMMITTEE April 12, 1995 1:40 p.m. MEMBERS PRESENT Senator John Torgerson, Chairman Senator Randy Phillips, Vice Chairman Senator Tim Kelly Senator Lyman Hoffman MEMBERS ABSENT Senator Fred Zharoff COMMITTEE CALENDAR SENATE BILL NO. 79 "An Act relating to errors in surveys of land." CS FOR HOUSE BILL NO. 86(CRA)(title am) "An Act relating to municipal flat taxes on personal property and permitting municipalities to classify and exempt or partially exempt some or all types of personal property from ad valorem taxes." HOUSE BILL NO. 180 "An Act relating to liquor licenses issued to a hotel, motel, resort, or similar establishment; and providing for an effective date." SENATE BILL NO. 124 "An Act relating to the human services community matching grant program; and providing for an effective date." PREVIOUS SENATE COMMITTEE ACTION SB 79 - No previous action to record. HB 86 - No previous action to record. HB 180 - No previous action to record. SB 124 - See Community & Regional Affairs minutes dated 4/7/95. WITNESS REGISTER Senator Steve Rieger, Prime Sponsor of SB 79 State Capitol Juneau, AK 99801-1182 Bob Kean, Representing the Alaska Society of Professional Land Surveyors 14510 Ahtena Circle Anchorage, AK 99516 POSITION STATEMENT: Supports CSSB 79(CRA) Tom Knox, Municipal Surveyor Municipality of Anchorage 3500 Tudor Road Anchorage, AK 99519 POSITION STATEMENT: Supports CSSB 79(CRA) George Newsham Municipality of Anchorage 632 W. 6th, Suite 730 Anchorage, AK 99519 POSITION STATEMENT: Supports CSSB 79(CRA) Mike Horne 7801 E. 36th Anchorage, AK 99504 POSITION STATEMENT: Testified in support of CSSB 79(CRA) Craig Savage P.O. Box 520403 Big Lake, AK 99652 POSITION STATEMENT: Opposes SB 79 in current form William Mendenhall 1907 Yankovich Road Fairbanks, AK 99709 POSITION STATEMENT: Supports CSSB 79(CRA) John Bennett, President Alaska Society of Professional Land Surveyors 3123 Penguin Lane Fairbanks, AK 99712 POSITION STATEMENT: No position until review of CSSB 79(CRA) George Strother, Engineering Division Manager Matanuska-Susitna Borough 350 E. Dahlia Palmer, AK 99645 POSITION STATEMENT: Has concerns with CSSB 79(CRA) Representative Mark Hanley, Prime Sponsor of HB 86 State Capitol Juneau, AK 99801-1182 Mayor Don Long, President, Alaska Municipal League P.O. Box 629 Barrow, AK 99723 POSITION STATEMENT: Testified in support of HB 86 Steve Van Sant, State Assessor Division of Municipal & Regional Assistance Department of Community & Regional Affairs 333 W. 4th Ave., Suite 319 Anchorage, AK 99501 POSITION STATEMENT: Present to respond to questions on HB 86 Tom Pitman, Municipal Assessor Municipality of Anchorage 632 W. 6th Ave., 99519 POSITION STATEMENT: Supports HB 86 Barbara Cotting, Staff to Representative Jeannette James State Capitol Juneau, AK 99801-1182 POSITION STATEMENT: Offered information on HB 180 Tim Tittle 4107 Wilson Anchorage, AK 99503 POSITION STATEMENT: Supports HB 180 Pat Sharrock, Director Alcoholic Beverage Control Board 550 W. 7th Ave., Suite 350 Anchorage, AK 99501-3510 POSITION STATEMENT: Testified in support of HB 180 ACTION NARRATIVE TAPE 95-12, SIDE A Number 001 CHAIRMAN TORGERSON called the Senate Community & Regional Affairs Committee meeting to order at 1:40 p.m. SB 79 ADJUSTMENTS FOR DEFECTIVE SURVEY SENATOR TORGERSON introduced SB 79 as the first order of business. SENATOR STEVE RIEGER, prime sponsor of SB 79, said the legislation was requested by the Municipality of Anchorage and was prompted by situations in the state where old surveys are so far off that the standard judicial remedies for clearing up title aren't practical. SB 79 creates an alternative mechanism for surveys which are labeled "manifestly defective." Senator Rieger explained the procedure in SB 79 allows a resurvey and a replat to be submitted to a judge. The judge reviews the information, including the objections from people who may object to the replat, and then can decree an equitable replat of the area. Because this expands judicial power, there are a number of protections that are built into the legislation. One protection is that the area involved pays the cost; there has to be a special assessment district formed to pay for the resurvey, replat, legal costs, etc. Also, the municipality has to adopt a resolution supporting the procedure. Senator Rieger said in working with the Society of Land Surveyors and the municipal attorney on the legislation, there has been concern expressed because this is breaking new ground. The provision has been put into temporary law and it will apply for three years so that, in a way, it doesn't sunset if it turns out that there are problems that come up as a result of it. Number 075 SENATOR R. PHILLIPS asked what the difference was between last year's legislation that failed to pass the legislature and SB 79. SENATOR RIEGER responded that the bill was totally rewritten and restructured, but he believes that the general procedure being prescribed is the same. SENATOR R. PHILLIPS inquired if other areas of the state are having the same problems as the Municipality of Anchorage. SENATOR RIEGER replied that he is not aware of any other areas. Number 107 SENATOR KELLY asked if the Municipality of Anchorage supports the proposed committee substitute before the committee for its consideration, and SENATOR RIEGER acknowledged that they do. Number 118 SENATOR KELLY moved that CSSB 79(CRA) be adopted. Hearing no objection, the motion carried. Number 125 BOB KEAN, representing the Alaska Society of Professional Land Surveyors and testifying from Cordova, stated support for CSSB 79(CRA). Mr. Kean noted he has surveyed in the Rabbit Creek area of Anchorage and he is very familiar with the problems there. He does not believe there is another way of handling a complex problem of this nature through the existing laws. He pointed out that there are people who cannot sell their homes; they cannot make clear title on them. Even with the people who may have taken steps to resolve some of their property problems, the title companies will still have difficulty in guaranteeing clear title, granting loans, or the like. Number 215 TOM KNOX, Municipal Surveyor for the Municipality of Anchorage, testifying from Anchorage, said in the nine years he has worked with the municipality, he has not had one month go by where he hasn't had at least one property owner from the two plat areas that the bill has basically been drafted to remedy, call him up and discuss the survey problems which they have encountered in trying to either sell their property, or to improve their property, or to replat their property lines to purchase other lots around them. Mr. Knox noted that the municipality has received letters from financial institutions asking them what type of remedy could be applied in order to rectify the situation. Mr. Knox stated his support for the committee substitute. Number 290 GEORGE NEWSHAM, Municipality of Anchorage, testifying from Anchorage, stated CSSB 79(CRA) is a greatly improved version of the legislation that was before the legislature last year. He spoke to major improvements in the legislation such as the requirement that prior to implementing any action a improvement district be formed, and it gives a clearer understanding of what the process will be after an improvement district is formed. Number 330 MIKE HORNE, a registered land surveyor in Anchorage, voiced his support for the committee substitute, as well as the comments of the previous speakers. Number 340 CRAIG SAVAGE, a registered land surveyor testifying from Anchorage, stated his strong opposition to the legislation in its present form. He noted there is not a single similar piece of legislation anywhere else in the U.S. He said the legislation is an attempt to establish a process by which owners can find relief from their impasse, and, so long as they are willing to pay to implement the process that solution is workable, but funding the process through a special assessment is unfair, unnecessarily cumbersome, and will be even more expensive than it needs to be. He added that it is a well-intentioned bill in an attempt to assist people with economic difficulties, but it is unfair because it exacts payment of a share of the cost from owners who may not need help and/or may not want help. Number 415 WILLIAM MENDENHALL, testifying from Fairbanks, stated his basic support for the legislation. Number 425 JOHN BENNETT, President, Alaska Society of Professional Land Surveyors, testifying from Fairbanks, said in recognizing the serious nature of the survey problem, a committee was formed to find out whether or not there were solutions outside of legislative action that would be appropriate. The committee issued their findings and came up with a substitute bill. He said he has been in contact with their board of directors and also the chapters on this matter, and a head count taken yesterday resulted in a 6-6 split as far as support or opposition to the original proposed legislation. However, the new committee substitute has not been reviewed by their committee or any of the their members, so he does not believe that they can support it until they have had an opportunity to fully review it. Number 450 SENATOR TORGERSON asked if the committee substitute adopted by the committee was the same substitute recommended by the Society's committee. SENATOR RIEGER answered that it was except that because of the sunset nature of the bill the drafters were unwilling to put it into the Earthquake Relief Act with that sunset provision. All the parts that are elsewhere that apply were put into this temporary law, so, although the content is the same, the placement is not. Number 460 SENATOR R. PHILLIPS asked what was the main concern of the six people who were opposed to the original legislation and MR. BENNETT responded that basically his head count was of whether they either supported or opposed the general concept of a legislative solution. Number 477 GEORGE STROTHER, Engineering Division Manager, Matanuska-Susitna Borough, testifying from the Mat-Su LIO, stated the committee substitute is much better than the original bill, but he cannot fully support it at this time. He outlined several areas of concern and suggested the bill needs some fine tuning, which would make it more workable, but there are still some other concerns. He reiterated that the committee substitute is better, but he could not support it at this time. Number 558 SENATOR TORGERSON requested that Mr. Strother fax his testimony outlining his areas of concern with the committee substitute, and stated that because C&RA was the only committee of referral, the bill would be held over until the following week so that he could look at his objections to the actual wording in the language of the bill and share that with the sponsor of the bill. He also invited others with areas of concern to forward them to the committee. CSHB 86(CRA) (title am) MUNICIPAL PERSONAL PROPERTY TAXATION  SENATOR TORGERSON introduced CSHB 86(CRA) (title am) as the next order of business.  REPRESENTATIVE MARK HANLEY, prime sponsor of HB 86, explained that the legislation allows municipalities to exempt or partially exempt personal property from ad valorem taxes. It also allows municipalities to levy a flat tax on personal property that has been exempted. Representative Hanley noted that the 18th Alaska State Legislature passed SSHB 263, which allowed the exemption of certain types of personal property from taxation, but did not allow for a flat rate tax to be levied as was intended. The legislation before the committee is clean-up legislation, and in addition to allowing the flat tax, wording has been changed to allow exemption of any type of personal property, as defined in AS 29.71.800 (16), rather than listing each item. TAPE 95-12, SIDE B Number 001 REPRESENTATIVE HANLEY noted that this is an option for the municipalities and will give them more flexibility in their tax structure. It does not affect the amount of money that comes to the state, nor the assessments for any other purposes. Number 015 SENATOR TORGERSON commented that the only part of the bill that he had even a little problem with was the procedure for the appeal and the request that the municipalities would include that procedure in their flat tax ordinance. His concern was that an appeal procedure could be substantially different from municipality to municipality, based on what was adopted by that particular group. However, he has discussed this with the state assessor and he convinced him that it is probably something that couldn't be put into statute and is best left at the local level. Number 025 MAYOR DON LONG of Barrow, President of the Alaska Municipal League, testifying from Barrow, stated the Alaska Municipal League's support for HB 86. Mayor Long said the bill offers municipalities an alternative that may significantly reduce the administrative costs of property valuation. It also allows communities the flexibility to design a tax on personal property that meets the needs of that community. Mayor Long pointed out that over the past several years the state has asked its municipalities to take over and pay for more and more state programs and services, and he said it is essential that the state also provide municipalities with more flexible methods of designing taxes so the cost of new mandates can be fairly distributed to all residents. Number 045 STEVE VAN SANT, State Assessor, Department of Community & Regional Affairs, noted he was present in Anchorage to answer questions on the legislation. Number 050 TOM PITMAN, Municipal Assessor, Municipality of Anchorage, stated his support for the bill and the flexibility it provides, especially from his perspective of administrating the law. Number 065 There being no further testimony on the legislation, SENATOR TORGERSON asked for the will of the committee. SENATOR R. PHILLIPS moved that CSHB 86(CRA)(title am) be passed out of committee with individual recommendations. Hearing no objection, it was so ordered. HB 180 LIQUOR LICENSES FOR RESORT/LODGES  SENATOR TORGERSON brought HB 180 before the committee. BARBARA COTTING, staff to Representative Jeannette James, said HB 180 will allow businesses in more remote areas of organized boroughs to get a liquor license. Presently, a small lodge or tourist facility in a remote or inaccessible area or an organized borough has to have 40 rental rooms to obtain a liquor license. She said the sponsor is trying to make this change so that there will not be such stringent requirements in those small remote areas, which will allow some development of tourist facilities. Number 090 TIM TITTLE, testifying from Anchorage, related that his brother owns a lodge on the Denali Highway. He said right now, in order to establish the infrastructure to build a small lodge with 10 to 15 rooms, which would accommodate fishermen, snow machiners, tourists, etc., the minimum cost would be around $500,000. To require these individuals who would like to go into this type of a business to build another 25 or 30 rooms would require an additional investment of approximately $300,000, and business people that would like to get into this type of an enterprise will not do it because it doesn't capitalize out. Mr. Tittle stated his support for HB 180, saying that it will be great for economic development in these remote areas. Number 120 PAT SHARROCK, Director, Alcoholic Beverage Control Board, testified from Anchorage that the ABC Board supports HB 180. SENATOR HOFFMAN said there are several lodges out in the Bristol Bay region, and he asked how many lodges will be impacted as a result of HB 180. He also noted there has been discussion on annexing the whole Bristol Bay region into a borough. PAT SHARROCK did not know the number of lodges that would be impacted. He said the legislation applies only to those businesses that reside within the boundaries of a municipality or borough. If a business is located outside in the unincorporated area, there are different rules of the road under AS 04.11.400 relating to population limitations and the number of licenses within a five-mile radius. Number 140 SENATOR TORGERSON directed attention to a his proposed amendment to HB 180 and explained that subparagraphs (A), (B) & (C) are basically the same language currently in HB 180. The new subparagraph (4) defines "highway" to read more directly to what the intent of the sponsor was, which was state maintained roads for public transportation. SENATOR KELLY moved the adoption of the following amendment: Amendment No. 1 Page 2, lines 8 thru 13: Delete language in paragraph (3) and replace with the following language: "(3) A hotel, motel, resort, or similar business that is inside a unified municipality or organized borough and (A) has at least 10 rooms available for the public to rent; (B) cannot be reached by highway from the nearest first or second class city or established village; or (C) could be reached by highway during no more than 10 months in a calendar year preceding the year in which the issuance or transfer is requested." Add new paragraph (4) to read: "(4) "Highway" for purposes of this section is a road maintained by the state for public transportation." Hearing no objection to the adoption of the amendment, the motion carried. SENATOR KELLY moved that SCS HB 180(CRA) be passed out of committee with individual recommendations. Hearing no objection, it was so ordered. Number 180 SB 124 HUMAN SERVICES COMMUNITY MATCHING GRANTS  SENATOR TORGERSON brought SB 124 , which had a hearing on April 7, back before the committee and asked for the pleasure of the committee. SENATOR KELLY moved that SB 124 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 2:45 p.m.