Legislature(2001 - 2002)
02/14/2001 01:37 PM Senate CRA
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SB 75-SERVICE AREAS:VOTER APPROVAL/TAX ZONES
SENATOR HALFORD, bill sponsor, thanked the committee for hearing
the bill on short notice. He said that SB 75 is similar to a House
bill currently under consideration. His interest stems not just
from the Chugiak/Eagle River area but also from watching happenings
in the Mat Su Borough. The bill offers protection of service areas.
This is particularly important in large areas such as the Mat Su
Borough where population densities vary and there are wide
variations in services wanted and needed between the different
areas. He said there was difficulty getting voter approval for
needs in the Palmer/Wasilla core from the residents of Trappers
Creek and Talkeetna where that level of service isn't wanted. SB 75
aims to protect the service area system.
SENATOR HALFORD said he would answer any questions or have his
staff go through the bill line by line. It is his hope that a
workable version of the bill that is not opposed by municipalities
can be passed so that services can be provided at different levels
within municipalities and boroughs.
CHAIRMAN TORGERSON asked for questions.
He noted that there are conflicting legal opinions, particularly
about the House version, that had to be resolved. Tam Cook,
legislative legal advisor, doesn't believe there is a
constitutional problem.
He called off-net testifiers.
SUSAN GORSKI, executive director for the Chugiak/Eagle River
Chamber of Commerce, represents 350 members. They want to go on
record in support of SB 75. They feel that service areas are an
excellent and cost effective way to provide services.
The wording in the bill reflects the chamber's sentiments. The
community and the chamber value the philosophy of self-
determination of government services.
CHAIRMAN TORGERSON thanked Ms. Gorski and called on the next
testifier.
LARRY DeVILBISS, a local farmer from Mat Su, strongly supports SB
75. He's on the local assembly but isn't representing them because
they haven't, as yet, taken a position.
He supports the bill because he is in favor of the "maximum amount
of power to the lowest level of the people." In his opinion, this
is how government should operate. Small service areas should be
able to determine their level of services and not have to rely on
the larger areas.
CHAIRMAN TORGERSON thanked Mr. DeVilbiss and asked for additional
testimony.
OCIE ADAMS, supervisor for service area 17 Knik, advised that he
was speaking for himself but said the residents do support SB 75
and are interested in seeing their rights protected from
consolidation. They have raised their mill rate to maintain their
road system and don't want to have their money help pay for areas
that haven't done the same.
He thanked Senator Halford for addressing these issues and
sponsoring SB 75.
CHAIRMAN TORGERSON thanked Mr. Adams and said the next testifier
would be from the Municipality of Anchorage.
WILLIAM GREENE, municipal attorney for the Municipality of
Anchorage, said the Anchorage Municipal Assembly has passed a
resolution in support of HB 13, a bill similar to SB 75, and the
municipality opposes it.
His purpose in testifying is to provide the same legal opinion that
he has given to the Municipality of Anchorage and the Mayor and
Administration. It is his opinion that both HB 13 and SB 75 violate
article 10, sections 1 and 3. "It specifically impairs the grant of
power to home rule municipalities of which Anchorage is one." It
impedes and impairs Article 10, section 5 and violates Article 2,
section 19. The latter covers boroughs, including home rule
boroughs and unified municipalities, but does not cover home rule
cities. There is no logical basis for this exclusion. Although home
rule cities don't normally have service areas, they may establish
differential tax zones, which are effectively the same as service
areas in boroughs.
MR. GREENE believes this bill is contrary to the home rule form of
government that has served this state so well.
He made reference to the documents that were presented to the House
Community and Regional Affairs Committee:
1/23/01 letter from the Alaska Municipal League
to Chairmen Meyer and Morgan.
5/19/00 veto letter from the Governor regarding
SB 133.
2/05/01 Alaska Department of Law memorandum.
Testimony of Vic Fischer, Alaska Constitutional
Convention participant and expert on home rule
government in Alaska.
He said this bill has been opposed by the Governor, Anchorage
Municipal League, Mayors of Anchorage and Fairbanks, State
Department of Community and Regional Affairs, Local Boundary
Commission and Mr. Vic Fischer. It overrides the Anchorage
Municipal Charter and takes away the self-determination embodied in
the Alaska Constitution.
The municipal charter and service areas in Anchorage are largely
governed by requirements for voter approval and this bill would
limit their ability to determine the type of service area they
would want.
He said he would answer questions or provide the committee with
copies of the documents referred to and, if desired, a brief.
Number 245
CHAIRMAN TORGERSON thanked Mr. Greene and asked him whether he had
read Tamara Cook's legal opinions and did he agree or disagree with
her.
MR. GREENE said he has read the 1/25/01 and 1/26/01 opinions from
Tamara Cook and he respectfully disagrees with her analysis and her
view of the legislative history of the Alaska Constitution.
SENATOR PHILLIPS asked if he had seen the Attorney General's
opinion of 2/5/01.
MR. GREENE said he has.
SENATOR PHILLIPS said the legislature wouldn't be deciding what was
constitutional or not, that is a matter for the courts.
SENATOR LINCOLN apologized for not having HB 13 in front of her and
said that she wasn't sure whether the bills were identical or not.
She had Tam Cook's legal opinion on HB 13 and wanted to know if it
was identical to SB 75.
CHAIRMAN TORGERSON read from Ms. Cook's letter dated 2/9/01 stating
that she isn't concerned with the constitutionality of the bill.
She cited Article 10, section 5, giving assemblies power over
service areas, subject to provisions of law or charter, as a point
for its constitutionality.
He asked Mr. Greene if he was the attorney for the assembly.
MR. GREENE said that as representative for the municipality, he
represents both the assembly and the administration.
SENATOR PHILLIPS asked why the assembly passed a resolution in
support of HB 13 and excluded parks and recreation.
MR. GREENE wasn't sure, but he suspects that section 3 of HB 13 did
not apply to parks and recreation service areas, only to fire and
road service areas. This is a difference between the two bills.
SENATOR PHILLIPS asked how many service areas there are in
Anchorage that relate to parks and recreation.
MR. GREENE said there are three: Girdwood, Anchorage and
Chugiak/Eagle River.
Number 921
CHAIRMAN TORGERSON said his job is to come up with a bill that
isn't vetoed and caters to the wishes or intent of the sponsor
without jeopardizing municipal powers. He asked for suggestions to
change the bill to make it more satisfactory without "gutting it"
entirely.
MR. GREENE said he'd like to look at the first sentence in section
3; it is a reflection of what is already in the Anchorage Municipal
Charter.
The second sentence deals with the argument that occurred with the
expansion of the Hillside Police Service Area. He noted that this
bill does not apply to police service areas but the argument is
applicable. That is that people outside the existing police service
area should have a separate dual majority vote on whether or not
they accept police services. In this instance, the existing police
service area was dissolved and the new police service area that
encompassed an additional area of the municipality was put before
the voters as a whole and was approved. The second sentence would
prohibit what the Supreme Court of Alaska has found permissible
under the Anchorage Charter. This would override the Anchorage
Municipal Charter, which was approved by the voters.
SENATOR PHILLIPS asked if he was talking about unification when he
said "approved by the voters."
MR. GREENE said yes.
SENATOR PHILLIPS said, "In our neck of the woods, we did not even
have an opportunity to vote on that, because we were in a vote of
separation of the borough."
MR. GREENE said that statement is correct.
SENATOR PHILLIPS wanted that on the record.
MR. GREENE said that the third sentence, beginning on line 15,
"requires an alteration of combination of service areas to be voted
on by voters both within the existing service area as well as the
second service if there is one. It also requires a vote by people
outside both of those service areas that are affected by the
proposal." For instance, an assembly under municipal power could
combine two fire service areas without a vote and this bill would
prohibit this. This bill would also require a vote of people who
are affected by that change of service area. From a legal
perspective, it overrides the present status of the Anchorage
Municipal Charter.
CHAIRMAN TORGERSON said that perhaps the wording could be improved
for areas outside the service areas. He thanked Mr. Greene for his
participation and called Kevin Ritchie to testify.
KEVIN RITCHIE, Alaska Municipal League (AML), said that the policy
statement adopted by members of the AML, in November, was in the
committee packets. It states opposition to the reduction of home
rule powers that municipalities have to determine what would be
best for service areas on a local level.
He quoted the constitution saying, "Service areas to provide
special services within an organized borough may be established,
altered or abolished by the assembly, subject to the provisions of
the law or charter." Municipalities have different needs and views
that may change over time. It's the same position the AML took on
the tax cap issue. Local communities could vote for their own tax
caps and the AML looks upon that as a local decision. However, a
statewide tax cap was opposed because it violates local choice.
He said that the Constitutional Convention addresses this issue.
Section 4 of the bill allows assemblies the authority to create
different tax rates within service areas and is thought to be
desirable to help make services more efficient in different service
areas. Section 3 is different, as Mr. Greene enumerated in his
testimony. It will affect different municipalities differently but
it is his understanding that "a home rule municipality can make
that decision by charter or ordinance and a second class borough
can make the decision by ordinance if that's how they want to treat
service area issues in their community."
Number 432
SENATOR LINCOLN said that in reading the letter from Mr. Ritchie
she understands that there is not opposition to the legislation per
say but to Section 3 of the legislation due to constitutional
issues. She asked Mr. Ritchie whether he had read the response from
Ms. Cook, legal counsel to the legislature and, if so, to give his
response to her opinion.
MR. RITCHIE said he had read the opinion and he doesn't debate
attorneys on legal issues. However, it is his understanding that
this bill would make decisions for municipalities whether the
voters and assemblies were in favor of those decisions or not. This
would limit the options of municipalities. He said that Juneau has
consolidated 15 service areas into 2 and provisions in this
legislation could have made it difficult to accomplish this
consolidation. Each community should be able to make this type of
decision locally.
Number 450
SENATOR PHILLIPS said Mr. Ritchie made the point that decisions are
best made on a local level but then he contradicts himself when it
comes to service areas because they are "the local of the local."
He asked why they didn't favor giving service areas self-
determination. He said that in his area, the service areas are
running parks and recreation, schools and roads "whether the
Municipality of Anchorage knows it or not," and they're doing a
fine job. People in his area are satisfied with local determination
and the unification of government won't be readily accepted.
CHAIRMAN TORGERSON thanked Mr. Ritchie and said again that it is
his intention to work through the bill. He then called Jeff Bush to
testify.
JEFF BUSH, Deputy Commissioner to Department of Community and
Economic Development, testified, on behalf of the Administration,
in opposition to the bill for the same reasons as those given in
last year's veto letter for HB 133. They are much more comfortable
with the current legislation than either HB 133 from last year or
this year's HB 13. However, the Attorney General's office is on
record stating that there are constitutional issues raised by
section 3 just as Mr. Greene outlined. It isn't uncommon for there
to be differing legal opinions and the Attorney General disagrees
with legislative legal counsel on the constitutionality arguments.
He said that the following is his understanding of the legal
analysis. "Before the legislature can restrict a home rule
municipal government authority they must demonstrate an overriding
state interest. To date, there has been no evidence of the state
interest as opposed to local interest that would justify those
limitations." Of course there can be a difference of opinion of
what is an overriding state opinion but that from a policy
standpoint, the administration opposes the bill for the same
reasons. His department continues to support the municipal form of
government and the strength of municipalities to make decisions as
the "ultimate local entity in this state." Service areas are not a
government entity rather, municipalities create them and they
shouldn't have the powers given to the borough. They are a smaller
unit within the borough. As a matter or policy, the appropriate
place for decisions to be made is at the municipal level and not at
the service area level.
The Administration has no objection to Section 4, relating to
different tax zones. Having differential tax zones allows multiple
service areas to share administration costs. This provision makes
it clear that this is acceptable.
Number 530
"Nothing in this bill can not currently be done at the local level
by the municipalities if they were to choose to do so."
His last point relates to borough formation and the appropriateness
of the borough form of government. It is a philosophical decision
that the borough is an appropriate form of government and that form
of government should be empowered. There should be fewer
disincentives to forming new boroughs. This bill seems to be
philosophically opposed to this position and actually takes away
the powers of the borough and gives it to smaller entities in the
same region. He wants the Legislature to consider these
philosophical issues when it considers the bill.
CHAIRMAN TORGERSON said that borough powers are area wide and these
powers are non-area wide so they're different.
MR. BUSH said that is correct but that this bill is taking away
area wide powers and redistributing them at a smaller level.
CHAIRMAN TORGERSON said "possibly in a home rule but not in the
second class boroughs."
CHAIRMAN PHILLIPS read the conclusion from the Attorney General's
legal opinion. It said, "This bill raises complex policy and legal
concerns, some of which have yet to be decided by the courts."
MR. BUSH said that was written in response to the original HB 13 so
part two of the opinion no longer applies to either SB 75 or the
current version of HB 13. The local and special legislation
analysis doesn't apply.
The first section of the opinion relating to Section 3 still does
apply and it concludes that, "In sum, we believe there are serious
issues as to whether this bill improperly limits home rule
municipality's powers to control their service areas as matters of
local concern." It doesn't say that it is unconstitutional; it says
it raises serious issues.
Number 573
SENATOR LINCOLN said that she finds it ironic that this legislation
supports more local control and allows voting on such issues and
yet SB 48 says people can't vote on matters such as whether they
will join or form a borough.
CHAIRMAN TORGERSON said he's working on that too. He supports the
intent of the bill and is interested in working through the issues
to come to some sort of compromise.
The bill was held in committee and the meeting was adjourned at
2:25 p.m.
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