Legislature(1995 - 1996)
04/04/1996 09:25 AM Senate FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATE BILL NO. 280
An Act relating to the mandatory incorporation of
certain boroughs in the unorganized borough.
Senator Torgerson, sponsor of the legislation, came before
committee. He noted that at a previous hearing, the
committee held Amendment No. 2 for discussion at this time.
Senator Rieger, sponsor of the amendment, voiced his
understanding that the Local Boundary Commission is strongly
opposed to the amendment. He said he did not wish to impede
progress of the bill because of that objection.
Senator Rieger said that, in researching the issue further,
he came across statutes that appear to be contrary to the
intent of self-determination and which do not remove the
power of the Local Boundary Commission to review changes in
municipal governments. He said that text from the statutes
was attached to an amendment he wished to offer as Revised
Amendment No. 2. Senator Rieger next read wording from AS
29.05.011(a)(5) and 29.05.021. He suggested that petition
to the Local Boundary Commission reflects desire for a local
government. The proposed amendment repeals statutory
provisions cited above.
Senator Torgerson concurred in withdrawal of Amendment No.
2. He acknowledged that while he agreed with what the
amendment attempts to do, it raises many questions,
constitutional issues, and problems for the Local Boundary
Commission.
Speaking to Revised Amendment No. 2, Senator Torgerson
expressed agreement, saying that he was not previously aware
that language within AS 29.05.011 and 29.05.021 existed.
Co-chairman Halford raised questions regarding footnote
information attached to the above-cited statutes. LAMAR
COTTON, Deputy Commissioner, Dept. of Community and Regional
Affairs, spoke via teleconference from Anchorage and
introduced DAN BOCKHORST, Local Boundary Commission staff.
Mr. Bockhorst spoke to case law relating to municipal
extension and the issue of cohesiveness.
Senator Rieger MOVED for adoption of Revised Amendment No.
2. Senator Zharoff OBJECTED and inquired concerning the
number of unincorporated communities. Mr. Bockhorst
attested to 68 or 70 in the unorganized borough. He
explained that language to be removed by the second citation
in Revised Amendment No. 2 applies to any class of city.
Language in the first citation applies only to first-class
and home-rule cities.
In response to a further question from Senator Zharoff
regarding removal of language relating to a demonstrated
need for city government, Mr. Bockhorst explained that it is
currently one of the standards used by the Local Boundary
Commission in evaluating applications. It reflects an
attempt by the legislature to ensure that city governments
are formed only where there is a need for local government
services. Removal would make it easier to form city
governments.
Senator Randy Phillips asked if removal poses a
constitutional problem. Mr. Bockhorst said he saw none. He
cited Article X, Sec. 1, of the Alaska Constitution which
calls for a minimum of local government units. The state
supreme court has interpreted that to mean "a minimum number
of local government units." The commission is sensitive to
that issue. The proposed amendment does not pose a
substantial problem for either the Local Boundary Commission
or the Dept. of Community and Regional Affairs.
In response to an additional question regarding removal of
AS 29.05.021, Senator Rieger explained that it eliminates
some of the prohibitions and gives greater variety to the
form of local government the local population might prefer.
The existing statute is poor public policy in that it, in
effect, says that a community cannot do what it might wish
to do. It would have to annex to another community or allow
some other form of government to provide local services.
Co-chairman Halford concurred in need for removal. However,
he expressed concern over removal of 29.05.011(5), relating
to demonstrated need. He suggested it might send a signal
the legislature does not intend to send. Senator Rieger
voiced his belief that the Local Boundary Commission would
defer to the desires of the local population. AS
29.05.011(5) is extremely vague and injects uncertainty as
to how it will be used by the Local Boundary Commission.
The paramount concern should be the desire of local
citizens. Senator Torgerson noted that following the
petition and other activities necessary to establish a city,
there has to be a vote of those in the impacted area. If
there is no demonstrated need for establishment of the city,
it will be voted down.
Co-chairman Halford called for a show of hands on adoption
of Revised Amendment No. 2. Co-chairman Frank inquired
concerning the department and Local Boundary Commission
position on the amendment. PAT POLAND, Director, Division
of Municipal and Regional Assistance, Dept. of Community and
Regional Affairs, advised via teleconference from Anchorage
that the department was comfortable with the amendment. It
does not effect a substantial change, and it removes
confusion surrounding formation of cities and service areas.
PAUL WEIR next testified via teleconference from Glennallen.
He voiced opposition to forcing communities into boroughs
and asked how residents of Anchorage, Fairbanks, and Juneau
would gain by that action. Senator Torgerson explained that
the proposed legislation represents a move to equalize
taxation and education. Mr. Weir again protested against
need to undergo the rigors of planning, zoning, and other
necessities of incorporation. Senator Torgerson explained
that an amendment made at the previous hearing took care of
that problem. If the bill is adopted as now written, there
will be a vote in each unorganized area. Residents will
have a choice of either forming or not forming a borough.
If residents choose not to form, the state assessor will
construct a mill rate or mill rate equivalency for the local
contribution to education, per the other fifteen boroughs in
Alaska. The word "mandatory" was removed from the bill.
The compromise recognizes that in some areas of Alaska it
may not make sense to form a borough government.
Co-chairman Halford again called for objections to Revised
Amendment No. 2. Senator Zharoff maintained his OBJECTION.
The Co-chairman again called for a show of hands. Revised
Amendment No. 2 was ADOPTED on a vote of 4 to 2 (Co-chairman
Frank and Senator Zharoff were opposed, and Senator Sharp
was absent from the meeting.)
Senator Zharoff advised members that he might subsequently
offer an amendment to impose a six percent state sales tax
on communities that do not currently have one. In response
to suggestions that the amendment would be unpopular,
Senator Zharoff stressed that it would create equity to
offset educational assessments against unincorporated
communities.
END: SFC-96, #68, Side 1
BEGIN: SFC-96, #68, Side 2
Discussion of sales versus property tax options followed
among committee members.
Senator Rieger MOVED for passage of CSSB 280 (Fin) with
individual recommendations and accompanying fiscal notes.
Senator Zharoff OBJECTED. Co-chairman Halford called for a
show of hands. CSSB 280 (Fin) was REPORTED OUT of committee
on a vote of 5 to 1. The following fiscal notes accompanied
the bill:
Dept. of Administration 0
Dept. of Commerce and Economic Development 0
Dept. of Community and Regional Affairs
(State Assessor) 63.5
(Local Boundary Commission) 15.6
Dept. of Education 0
Dept. of Law 0
Dept. of Natural Resources 0
Dept. of Public Safety 0
Dept. of Transportation and Public Facilities 0
Office of the Governor/Elections 25.4
Co-chairmen Frank and Halford and Senators Donley, Phillips,
and Rieger signed the committee report with a "do pass"
recommendation. Senator Zharoff signed "do not pass."
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