Alaska State Legislature

News From The House Majority

Ken Freeman, Press Secretary
State Capitol
Juneau, AK 99801
phone: (907) 465-3804
web site: http://www.akrepublicans.org
Actuality line: 1-800-478-6540

Communities Outside State Boroughs To Receive Federal Funding

For Immediate Release: March 25, 1997 Contact: Rep. Ivan Ivan (907) 465-4942

JUNEAU - Communities outside state boroughs will now receive federal payment in lieu of taxes funds under legislation passed by the House of Representatives Tuesday by a vote of 35-0.

HB 86, sponsored by Representative Ivan Ivan of Akiak, establishes authority within the Department of Community and Regional Affairs to provide federal payment in lieu of taxes (PILT) to municipalities that reside in the unorganized boroughs of the state.

The current PILT program provides payments to boroughs or counties throughout the U.S. for federal lands that cannot be taxed by a local government body. A federal program was established to provide payments for those federal lands to make up for lost revenues.

Senator Ted Stevens sponsored an amendment last year which expanded the federal program to include municipalities that are not located within the boundaries of a borough or county.

"Only 40 percent of the federal lands in Alaska are located in organized boroughs. The remaining 60 percent of the federal lands in Alaska were not currently considered in determining PILT payments to Alaska. Therefore, nearly a hundred rural Alaskan cities which are surrounded by federal lands, but which are outside of organized boroughs, receive no PILT payments," said Ivan.

The funds received by the municipality in the unorganized borough can be used for any governing purpose. It is expected that approximately $3.5 million in new revenues will be generated in the State with the passage of House Bill 86.

"I see this legislation and the federal legislation as an incentive for rural communities to remain as incorporated state entities and discourage the process of dissolving municipal government," said Ivan.

This bill now moves to the Senate for consideration.

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