Sponsor Statement for HB 86

House Bill 86 establishes the payment in lieu of taxes program within the Department of Community and Regional Affairs for home rule and general law cities located in the unorganized borough within federally designated areas of Alaska.

The payment in lieu of taxes program or PILT is financed by funds the state receives annually from the federal government under 31 U.S.C. 6901 - 31 U.S.C. 6902. An amendment, sponsored by Senator Stevens, was passed as part of the Omnibus Parks and Public Lands Management Act of 1996 (P.L. 104-333, sec. 1033) to allow cities in the unorganized borough to receive payment.

The main purpose of this bill is to provide a method for the Department of Community and Regional Affairs to distribute the annual funding and to establish criteria to determine whether a city is eligible to receive payment under the program as intended by federal law. The amount of money to be distributed to each eligible home rule and general law city in the unorganized borough will be based upon the population of the city as certified by the commissioner of the department for the fiscal year preceding the year in which payment is made to the city. This bill establishes an annual payment date of November 1 of the state fiscal year. The money received by the cities from this program may be used for any general purpose for which a city is authorized under federal, state or local law. Finally, the bill is given an immediate effective date in order to meet the first year's application and payment schedule set out in the bill.