Legislature(1995 - 1996)
02/28/1996 01:35 PM Senate CRA
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
SB 280 MANDATORY INCORP OF CERTAIN BOROUGHS
SENATOR TORGERSON, Prime Sponsor, introduced SB 280 as the next
order of business before the committee. He said that he intended
to have the committee look at adopting a CS which would place a
time line in the bill. The time line would provide better
direction to Community & Regional Affairs as well as to the Local
Boundary Commission; the original bill said that everything must
occur by 1998. That probably cannot be accomplished. He and the
committee staff had been in contact with the Local Boundary
Commission staff and others in order to place the time line in the
bill. Senator Torgerson invited the committee staff to come to the
table for an explanation of the CS.
Number 040
SENATOR RANDY PHILLIPS moved that CSSB 280(CRA) be adopted for
purposes of discussion. Hearing no objection, the CS was adopted.
DEB DAVIDSON, Staff for the Senate Community & Regional Affairs
Committee, explained that the bill directs the Department of
Community & Regional Affairs to submit second-class borough
incorporation proposals for all areas of the unorganized borough.
The proposals are to be based upon the 1995 "Model Borough
Boundaries" report. Once the Local Boundary Commission accepts the
proposals, elections will be held in order to elect assembly
members and to determine which of the non-areawide borough powers
are wanted. Boroughs would automatically be formed upon the
certification of the election. In addition to those directives,
the CS would direct the state assessor to estimate the true value
of the property in the unorganized borough. Then a guideline is
established for the department to submit the proposals to the Local
Boundary Commission. Borough proposals for those areas with a full
and true value of at least $550 million should be submitted to the
commission by July 1, 1997. Ms. Davidson pointed out the
restrictions for the following years which as listed on page 2,
lines 24-29 of the CS. The Local Boundary Commission has six
months from the time each proposal is submitted to determine if the
borough was feasible and could work. She informed the committee
that there is a copy of the Model Boundary Report as well as
information illustrating which new boroughs would be formed and
those that could be expanded if the commission deemed it so and
submitted it to the legislature. There is also information
indicating which boroughs would most likely be proposed each year,
as based on the 1994 value. The department does not believe those
would change with the 1997 estimate.
Number 090
In response to Senator Torgerson, DEB DAVIDSON said that no letter
of support had been received from the Administration. The
Administration appears to be neutral. Ms. Davidson said that the
department has expressed a willingness to work with the committee
on this matter.
SENATOR TORGERSON asked if there was any discussion on the adoption
of the CS. Hearing none, the CS was before the committee. Senator
Torgerson explained that he had intended to adopt the CS and then
distribute it across the state. The bill would be heard again in
about two weeks.
SENATOR ZHAROFF inquired as to how these boundaries come into play.
SENATOR TORGERSON explained that the Local Boundary Commission
began a Model Boundary in 1989 and was completed in 1992.
According to the commission, each model borough boundary can
sustain a local government. DEB DAVIDSON interjected that there
would be 19 new boroughs including Annette Island.
Number 142
SENATOR HOFFMAN pointed out that most of those boundaries follow
the last election districts; many of those boundaries have changed
as a result of the 1990 reapportionment.
SENATOR TORGERSON believed that the commission, or whoever did the
report, took into account the social, cultural, and economic
activities of each region in order to ensure their compatibility.
The report stated that it basically followed the existing REAA
boundaries of that time. Perhaps, some REAA districts have changed
since that time.
SENATOR HOFFMAN mentioned that many of the same requirements for
the election districts are the same as those for reapportionment.
SENATOR TORGERSON noted that if there are adjustments to be made,
the Local Boundary Commission would do so per the commission's
constitutional responsibility. In Senator Torgerson's opinion,
this should have been before the committee years ago.
SENATOR KELLY asked if mandatory boroughs were established, would
that obviate the need for the REAAs?
SENATOR TORGERSON assumed so. Currently, there are 54 school
districts in Alaska and this would consolidate the school districts
to one per borough as is the case in organized areas. SB 280 does
not address that, SB 280 provides the means for the equalization
between organized and unorganized areas.
SENATOR HOFFMAN noted that the unorganized areas encompass the
districts represented by Senator Zharoff, Senator Adams, Senator
Lincoln, and himself; who have travelled extensively through those
areas. One of the primary reasons for not organizing these areas
is that these areas feel uncomfortable with local government. To
place another layer of government on an ill-functioning existing
government seems to indicate that the next layer of government
would be even more ill-functioning. Many of these communities have
unique needs and their local governments are struggling to
determine whether second-class city status would be preferable over
organization under tribal organizations. He informed the committee
that many of these communities are choosing tribal organizations
like Metlakatla. Senator Hoffman expressed concern that SB 280
would not allow boroughs to function well and create divisiveness.
Number 218
SENATOR TORGERSON believed that Alaskan communities should start
out equal, especially before taking revenues from tax based
communities to provide services for unorganized communities or
communities that are not tax based. Recognizing 226 other nations
within Alaska is an entirely different subject. Senator Torgerson
hoped that Alaska did not recognize these nations nor that the
tribal status would drive Alaska to eliminate Native lands and
create areas that are no longer called Alaska.
SENATOR HOFFMAN pointed out that only one percent of Alaska's lands
are held privately, those holdings are in urban Alaska. In rural
Alaska, the largest land holding is held in trust with Native lands
which encompasses more than 20 percent of Alaska's land. Those
lands held in trust cannot be taxed.
SENATOR TORGERSON interjected that those lands are only in trust
until they are developed. Once the area is developed, the area
becomes taxable if in a tax based area. This is almost a different
subject than whether or not Alaska should have an equalization of
services across the state.
SENATOR RANDY PHILLIPS stated that all the legislators are the
local government for the unorganized areas: does the legislature
have the power to tax for schools in the unorganized areas?
SENATOR TORGERSON had asked that question of legal services who
indicated that the legislature cannot dedicate the funds for
schools, but the legislature has the authority to tax and place it
in the General Fund and distribute as seen fit. A tax could not be
instituted and dedicated to education, but the legislature can
place a mill rate with or without the mandatory borough act.
SENATOR ZHAROFF mentioned that much of the undeveloped land does
generate a significant amount of revenue through PL874 monies of
which a good portion is placed in education. If the entire borough
boundary system is to be restructured, then the notion that
everything should be erased and started over should be considered.
SENATOR TORGERSON agreed that could be considered, however, that is
not before the committee. SB 280 adopts a plan by the Local
Boundary Commission which is their responsibility under Alaska's
constitution. The bill merely establishes a few guidelines
regarding when the report should be presented to the legislature.
Senator Torgerson emphasized that the legislature does have the
authority to mandate the incorporation of a borough, but not
annexation. With regards to revenue that may be lost or gained due
to federal money, the fiscal notes will have to be reviewed
carefully. Certainly, there will be a transfer of revenue in the
portions of unorganized areas which have the pipeline or oil and
gas properties. Those are currently taxed at the maximum rate of
20 mills, local governments can tax up to the 20 mill rate. If the
unorganized areas choose to form a borough, that money would shift
from the state to the local government. The amendment which
establishes a time line would encourage agencies to produce their
fiscal notes in order to determine the actual shift of monies.
SENATOR ZHAROFF asked if there are any requests before the
commission regarding the formation of boroughs. SENATOR TORGERSON
specified that there are some requests for annexation, but not for
the formation of boroughs.
SENATOR TORGERSON held SB 280 in order that all the pertinent
information could be distributed across the state.
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