Legislature(1999 - 2000)
04/12/1999 01:50 PM House FIN
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
HOUSE BILL NO. 133
"An Act relating to municipal service areas and
providing for voter approval of the formation,
alteration, or abolishment of certain service areas;
and providing for an effective date."
VICE CHAIR CON BUNDE explained that HB 133 would amend AS
29.35.450 to support local control by clearly identifying
who should vote on the abolishment and alternation of a
service area under three scenarios:
* Abolishment of a service area.
Subject to approval by the majority of the voters
residing in that service area.
* Abolishment and replacement of a service area.
Must be approved separately by a majority of
voters inside an existing service area and by a
majority of voters residing in the proposed
service area but outside the existing service
area.
* Alteration of a service area or combining it with
another service area.
Must be approved, separately by a majority of
voters who vote on the question and who reside in
each of the service areas or in a proposed service
area affected by the proposal.
Representative Bunde concluded that the legislation would
settle a long time debate about who is entitled to vote
during the creation, alteration or abolishment of a service
area. He urged the Committee's favorable support.
Representative Grussendorf asked, if there was an area
where people did not want the service to be provided, would
the State then be placed in an "obligated" situation. Co-
Chair Therriault noted that in Fairbanks, a school bus will
not travel on a road which is not being maintained.
Representative Bunde added, subdivision roads are not
thoroughfares and there would be no obligation for the
State to maintain these services.
Representative J. Davies recalled that there is a provision
in the Alaska State Constitution, Title 29 which addresses
the formation of service areas. He recommended that the
Committee revisit the logic of that constitutional
provision. He questioned if the proposed legislation would
be inconsistent with that provision because it provides for
people living in an existing service area to prohibit the
annexation of another area by voting "no". In the past,
the State has allowed city assemblies to decide if and when
annexation should go forward.
Co-Chair Mulder read to the Committee, Article 10, Section
5 of the Alaska State Constitution:
"A new service area shall not be established if
consistent with the purposes of this article, the new
service area could be provided by an existing service
area by incorporation as a city or annexation of a
city".
PATTI SWENSON, STAFF, REPRESENTATIVE CON BUNDE, emphasized
that the bill is about "abolishment and alteration" and not
new services. She added that there are over 200 service
areas in Alaska and that 120 of them are in the Fairbanks
area. The legislation would allow people to vote to
abolish, replace or alter a service area, giving themselves
differential tax rates.
Representative J. Davies agreed that the issue of
differential maintenance has been a problem, however, the
language of the bill would allow the formation of new
service areas. Currently, the assemblies do have the power
to make that decision and the people do have the ability to
comment on it through their assembly members.
CHRIS BIRCH, (TESTIFIED VIA TELECONFERENCE), ANCHORAGE,
spoke in support of HB 133. He noted that service areas
involve a lot of time and energy but they are government
working at a "grass roots" level. He urged support of the
bill.
BROOKS CHANDLER, (TESTIFIED VIA TELECONFERENCE), GIRDWOOD,
testified in support of the legislation. He noted that his
service area encompassed road, parks, recreation and fire
protection areas. He viewed the proposed legislation as
implementing an unenforceable compact made at the time of
unification to provide a level of service and control from
property tax dollars. Mr. Chandler commented that Girdwood
would appreciate the bill be adopted in order to provide
for the protection of services.
JIM NORCROSS, (TESTIFIED VIA TELECONFERENCE), MAT-SU,
voiced his support of the legislation. He commented that
the individual road service area residents are better
capable to determine what is needed to maintain their
roads. He feared that if a local borough decided that
there was an emergency, they could spend road service funds
without approval. Mr. Norcross urged the Committee's
support of the legislation.
In response to Representative Austerman's query,
Representative Bunde replied that in previous committee
hearings, only one person had testified against the
proposed legislation.
HANK HOVE, (TESTIFIED VIA TELECONFERENCE), MAYOR,
FAIRBANKS, testified in support of the legislation. He
stated that if passed, the bill would allow the City of
Fairbanks to consolidate some of their road service areas.
It has become inefficient and difficult to manage road
service areas and costs are higher than they might be under
the service proposed in the legislation. He pointed out
that the legislation would offer an opportunity to
consolidate service areas, which has not occurred in the
past because the conditions of roads in the various service
areas were not comparable.
Mayor Hove noted that under the terms of the proposed
legislation, a taxation scheme would be established for the
purpose of supporting roads. He agreed that the bill was
sufficient, as it is at this time, however, legal counsel
has advised that an additional change to AS 29.60.080 would
be advantageous adding "or a service area". He urged
passage of the bill.
Representative J. Davies agreed with the inclusion of
Section 4, although, asked if the addition of Section 3
would impede consolidation if a service area voted no
approval. Mayor Hove replied that the "hope" was that
language could create a circumstance in which approval
would be more readily granted. Representative J. Davies
acknowledged the "hope", but argued if that could act as a
possible impediment. Mayor Hove agreed that was a
possibility.
Representative J. Davies questioned if adopting Section 4
and excluding Section 3 would accomplish the concerns.
Mayor Hove commented that Section 3 was part of the
original SB 208 presented last session.
Representative J. Davies MOVED to AMEND the bill
conceptually by removing Section 3. Representative Bunde
OBJECTED.
Representative J. Davies asserted that most concerns were
addressed in Section 4 of the bill. Section 3 speaks to a
situation that has only occurred a couple of times in the
State. Representative J. Davies additionally suggested that
Section 3 was unconstitutional within the existing statute.
Representative Bunde understood why Representative J.
Davies would want to retain the section which addresses the
needs in Fairbanks, however, Representative Bunde believed
that would be inconsistent with passage of the bill. He
noted that it would be "good government" to not allow a
larger area to dominate a smaller area.
A roll call vote was taken on the motion to amend.
IN FAVOR: Grussendorf, J. Davies, Mulder
OPPOSED: G. Davis, Foster, Kohring, Williams,
Austerman, Bunde, Therriault
Representative Moses was not present for the vote.
The MOTION FAILED (3-7).
Representative Foster MOVED to report CS HB 133 (FIN) out of
Committee with individual recommendations and with the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
CS HB 133 (FIN) was reported out of Committee with a "do
pass" recommendation and with a zero fiscal note by the
Department of Community and Regional Affairs dated 3/31/99.
HOUSE BILL NO. 161
"An Act relating to reduction in payments to
individuals under certain benefit programs; and
providing for an effective date."
Co-Chair Therriault restated that HB 161 would allow program
administrators to reduce payments in benefit programs to
match the appropriate level of funding. It would allow the
Legislature and Administration to deal with reductions in
revenue and increases to recipients in a simple and
practical manner.
He explained that current circumstances require that
payments be made at a prescribed level without reference to
appropriation. If the enrollment exceeds affordable levels,
managers would be allowed to manage within the appropriated
resources. Currently, the only option is to request a
supplemental appropriation or shut a program down in the
later months of the fiscal year.
HB 161 would provide a reasonable budgetary tool to the
Administration and Legislature. Co-Chair Therriault
believed that the legislation would help deal with the
State's fiscal realities.
(Tape Change HFC 99 - 77, Side 1).
Representative Grussendorf pointed out that in some
programs, the departments must make a projection. He asked
how supplemental requests would be addressed in these
situations. Co-Chair Therriault replied those
determinations would be made individually in each following
year by the full Legislature.
Representative Grussendorf questioned how Power Cost
Equalization (PCE) would be affected by the bill. Co-Chair
Therriault replied that because it currently has statutory
pro rata language, this bill would not impact it.
Co-Chair Mulder reiterated that the decision to seek a
supplemental was driven by the adoption terms of each
department's budget. He stated for the record that it was
not the Committee's intention to short-fund budgets for the
coming year. Representative Grussendorf voiced concern for
those departments that have to make cost projections. Co-
Chair Therriault agreed that in many programs, that would be
a guess. He pointed out that in the Department of Health
and Social Services budget, he would follow it throughout
the year making sure when federal help is available, they
apply. He emphasized that dialogue should be continued with
the departments throughout the interim.
Representative J. Davies inquired which programs would be
scrutinized with passage of the legislation. Co-Chair
Therriault explained that the legislation would be used as a
"tool" for the current fiscal year. He acknowledged the he
personally did not intent for it to apply to any specific
program.
Representative Foster MOVED to report CS HB 161 (FIN) out of
Committee with individual recommendations and the
accompanying fiscal note. Representative J. Davies
OBJECTED.
Representative J. Davies commented that in most of the cases
where these issues exist, they are addressed on an on-going
basis. He foresaw possible "mis-use" with the legislation.
Representative J. Davies noted that if it was the
Committee's intent to "under-fund" a department, that should
be indicated in the appropriation, rather than leaving out a
fiscal note and expect that department to "get" the message.
He reiterated that underfunding should be done up front so
that it is fair. He reiterated that the bill's language
provides for misunderstanding and punishment.
Co-Chair Mulder disagreed, suggesting that if this tool is
utilized, information would be stipulated up front.
Whereas, the only alternative now with these programs is to
cut off assistance. He suggested that the bill would allow
short funding evenly throughout the calendar year. The
departments will need to receive clear guidance regarding
the intent.
Representative J. Davies requested that a conceptual
amendment be submitted which would address that concern.
The language could state that the Legislature, in cases
where there is intent to reduce an appropriation on a pro
rata basis, it should be submitted in writing.
Co-Chair Therriault pointed out that there was a MOTION
before the Committee to move the bill. Representative J.
Davies stated that his MOTION would AMEND that MOTION.
Representative Foster WITHDREW the MOTION to MOVE the bill.
Representative J. Davies MOVED that a conceptual amendment
be written which would provide for the Legislature to
clearly indicate intent to reduce the appropriation on a pro
rata basis. Co-Chair Therriault OBJECTED to the amendment
at this time, remarking that he might be persuaded
differently once the language of the amendment was drafted.
Representative J. Davies WITHDREW his MOTION to adopt the
conceptual amendment.
Representative Foster MOVED to report CS HB 161 (FIN) out of
Committee with individual recommendations and the
accompanying fiscal note. There being NO further OBJECTION,
it was so ordered.
CS HB 161 (FIN) was reported out of Committee with "no
recommendation" and with a zero fiscal note by the Office of
the Governor.
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