Legislature(2001 - 2002)
05/09/2002 09:37 AM Senate FIN
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
SENATE CS FOR CS FOR HOUSE BILL NO. 296(JUD)
"An Act relating to mergers and consolidations of
municipalities."
This was the first hearing for this bill in the Senate Finance
Committee.
LORI BACKES, Staff to Representative Jim Whitaker, the bill's
sponsor, informed the Committee that this bill contains language to
correct "perceived unfairnesses in statute in regard to the
consolidation petition process as well as the election process" for
municipalities.
AT EASE 6:02 PM / 6:03 PM
Ms. Backes commented that some municipalities have experienced
difficulties in following current State statute procedures. She
exampled that currently there is no time limit imposed for the
gathering of signatures on a consolidation petition and that this
bill imposes a limit of 365 days. She stated that this time frame
is necessary because some petitions have circulated for up to five
years, and at the time the petition was verified, it was found that
many of the signers no longer resided in the municipality.
Ms. Backes explained that Sections 2 and 3 specify that a
consolidation question "must be approved by the voters within the
borough but outside the cities when it is a consolidation of a
borough with one or more cities within it, and must also be
approved by the voters in at least one of the cities." She
furthered that these two sections provide for a city "to opt out"
of the consolidation process when there are more than two cities
within the borough identified on the consolidation petition. She
stressed that "this opt out language" must be included in the
petition. She stated that the process of consolidating two or more
cities within a borough also must be approved by a vote of the
people.
Ms Backes summarized that the goal of this bill is "to allow each
individual city, the voters within each individual city, and the
voters outside of the city but within the borough to have their own
vote of self-determination as to whether they want to be a
consolidated community or not."
Ms. Backes noted that Section 4 exempts the new petition language
from applying to a petition or a vote on a petition filed before
the effective date of the bill.
Senator Green asked why the language changes in Sections 2 and 3
are necessary.
Ms. Backes responded that current statute specifies that a petition
for consolidation must be approved by a majority of the voters
within both the city and the borough. She noted that currently the
entire petition for consolation would fail in the instance where
the voters outside of the city but within the borough approve the
consolidation but one of two cities proposed to consolidate does
not approve of the merger. She continued that the new language
would permit the one city to remain unconsolidated, but would allow
the other parties to continue the consolidation process. She
reiterated that this "opt out option" language must be specified in
the petition.
Senator Hoffman opined that this "self-determination opt out"
language should also be considered for communities that might not
want to become part of a "mandatory borough."
DAN BOCKHORST, Local Boundary Commission, Division of Community and
Business Development, Department of Community and Economic
Development, testified offnet to voice opposition to components of
the bill that would alter the outcome of a consolidation election.
He stated that current law specifies that a simple majority vote
would determine the outcome of a merger, and that the proposed
legislation would establish "de facto voting districts" for each
city and for voters within the borough but outside of a city. He
stated that the proposed process "weights the vote of residents of
small districts more heavily than the vote of residents of populace
districts." He exampled that a vote by the City of Kupreanof with a
population of "less than one-half-of-one-percent of the total
voters" of the City of Petersburg, in opposition to the merger of
these two adjoining cities in Southeast could block a consolidation
or merger even if 99-percent of the voters in the City of
Petersburg support it. He stated that the Department's position is
that this bill's language "would disregard the will of the majority
of the voters about their preferred form of local government."
Mr. Bockhorst identified contradictory elements within the bill's
components, particularly Section 3, lines 26 and 27. He furthered
"that the provisions of the bill are intended to be consistent with
the voting requirements for annexation specified in AS
29.06.040(c)(1); however, there is absolutely nothing in the
reference statute that provides for de facto voting districts." He
stated that, "the statute provides for the exact opposite: approval
of a local option annexation by a simple majority of the votes in
the affected area." He exampled various de facto voting scenarios
whereby the proposed language would incur a contradictory
situation.
Mr. Bockhorst continued that the proposed bill "would reflect a
major departure from constitutional principles and established
legislative policy" in which State statute "specifies a minimum of
local government units and encourages the prevention of duplication
of tax levying jurisdictions." He stated that this bill "would
perpetuate inefficient, inequitable, and ineffective local
government structures resulting in duplication of government units
and tax levying jurisdictions regardless of the will of the
majority of the local voters." He stated that the current
legislation has, for 30 years, allowed for "harmony" with the
principles of the State Constitution as well as "efficiency and
fiscal accountability in the local governments." He stated that the
proposed bill would hinder that forward progression and notified
the Committee that the Local Boundary Commission has issued a
formal statement, dated May 1, 2002, [copy on file] that opposes
the proposed legislation.
Ms. Backes expressed awareness of the Local Boundary Commission's
concerns; however, she stressed that the bill's sponsor strongly
supports the people's right to self-determine what type of
community they wish to live in. She elaborated that this bill
essentially prohibits "a hostile takeover" of one community by
another. She presented examples of this scenario.
Senator Hoffman concurred with the sponsor's reasoning, and
asserted, "that self-determination should the most important factor
in self-government."
Senator Green noted that within a relatively short distance from
the Mat-Su area where she resides, there are four separate
communities, each with their own governmental offices. She
questioned whether the original intent of the current regulation
was to eliminate or discourage duplication of local government
services in the same or similar areas.
Ms. Backes responded that the original intent of the regulation was
not to prevent duplication; however, she clarified, "that is the
intent of consolidation or unification."
Senator Green opined that the reason for establishment of the Local
Boundary Commission was to prevent duplication. She surmised that
the proposed legislation would "do away" with that directive.
Ms. Backes clarified that rather than blocking consolidation or
mergers or encouraging the duplication of services, the intent of
the proposed legislation is "to merely make the voting and petition
process more fair." She asserted that Alaska's Constitution calls
"for the maximum local self-government with the minimum of local
government units," and mandates that the Local Boundary Commission
consider the consolidation of these governments. However, she
insisted, this should not be "forced over the will of a residents
of that area."
AT EASE 6:18 PM / 6:19 PM
Co-Chair Donley commented that at the time of Statehood, the goal
"was that all of Alaska would be organized into some form of local
government;" however, some people have resisted because they do not
want to pay local taxes. He reminded the Committee that a few years
prior at public hearings regarding education, many people voiced
that they did not want to contribute "a penny to educate their
children" or to support local services. He asserted that this
position is not fair to the people of Alaska who do pay local
taxes, and it is "clearly" not attuned with the vision of the
drafters of Alaska's Constitution. He stated that Alaska is the
only State that does not have widespread governmental organization.
He noted that some communities do not provide funds to employ a
local police staffer, and that local services are not provided
without some sort of outside assistance. He voiced concern about
any proposal that discourages inclusion of people in local
governments because, he opined, in the long run, this is the
direction the State must go.
Senator Wilken voiced uncertainty as to how to establish a balance
in this legislation, as "it is a one size fits all" type of bill
that, while addressing the needs of one, harms the needs of
another.
Senator Olson characterized this legislation as "setting another
layer of government out there." He contended that multiple and
overlaying State, federal and local governments result in non-
productivity, and he stressed that the costs associated with this
duplication usually "fall onto the shoulders of the private
sector." He voiced that the possibility of a larger community's
"hostile takeover" of a smaller community is "somewhat
troublesome."
JAN WRENTMORE, Resident, City of Skagway, informed the Committee
that this is an important bill for Skagway because it supports the
issue of self-determination. She informed the Committee that
Skagway, the oldest incorporated city in the State, is self-
sufficient, has real estate, tourism and sales taxes, and funds 52-
percent of the community's education needs. She stated that
townspeople were disturbed to receive a Local Boundary Commission
determination stating that Skagway is viewed as not being self
sufficient, that the community's government is inefficient, and
that the residents do not make sufficient contributions. She
contended that this legislation would allow residents to vote on
whether they desire to merge with another community. She continued
that in some situations, mergers or consolidations might not
increase efficiencies in government as differing communities may
have different lifestyles, distance might be an obstacle to
efficiencies, and communities might become polarized due to
differing "ethics" regarding major industries such as tourism. She
urged the Committee to consider the affect this legislation would
have on communities.
Senator Green stated that, as part of the petition process, the
Local Boundary Commission grants the authorization for a
consolidation or merger petition to be circulated. She asked
whether permission to petition could be granted without the express
approval from the affected communities, which she characterized as
a "hostile consolidation" situation.
Mr. Bockhurst replied, "that a petition may be initiated by a host
of different parties; some of which might be construed to be
hostile and some not be construed to be hostile." He continued that
in most situations, it is impossible to have 100 percent support
for a consolidation or merger proposal; however, the Commission
endeavors to consider the broad public interest as intended in its
Constitutional creation.
AT EASE 6:31 PM / 6:34 PM
Senator Olson asked Mr. Bockhorst how this legislation would affect
new boroughs.
Mr. Bockhurst stated that "this legislation directly does not
affect the incorporation of new boroughs from an area within an
organized borough, but technically, a consolidation of a city in a
borough results in the incorporation of a new borough so in that
sense, it would affect the creation of boroughs." He explained that
State law specifies that "the incorporation of a borough government
is subject to area-wide voter approval, and this bill certainly
would represent a significant departure from that practice if it
were applied to an organization of a borough from the unorganized
territory of Alaska;" however, it "would not affect a new borough
from an unincorporated area of the State."
Senator Olson voiced that perhaps an amendment should be considered
"so that it is applicable to the new boroughs."
Senator Austerman moved to report "Senate CS for House Bill 296,
Judiciary, from Committee with individual recommendations and zero
fiscal note."
Co-Chair Donley objected.
A roll call was taken on the motion.
IN FAVOR: Senator Leman, Senator Olson, Senator Ward, Senator
Wilken, Senator Austerman, Senator Green, Co-Chair Kelly
OPPOSED: Co-Chair Donley
ABSENT: Senator Hoffman
The motion PASSED (7-1-1)
SCS CS HB 296 (JUD) was REPORTED from Committee with a previous
zero fiscal note, dated February 28, 2002 from the Department of
Community and Economic Development.
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