Legislature(2001 - 2002)
03/07/2001 01:37 PM Senate CRA
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SB 48-MUNICIPALITIES:INCORP/PROPERTY VALUATION
CHAIRMAN JOHN TORGERSON called the Senate Community & Regional
Affairs Committee meeting to order at 1:37 p.m. Present were
Senators Austerman, Phillips and Chairman Torgerson.
The first order of business was CSSB 48(CRA). The committee adopted
the CS at the previous meeting so the working document was 22-
LS0025\S Cook 2/27/01. Teleconference testimony was accepted and
limited to three minutes. Written testimony was to be faxed to
(907) 465-4779 for inclusion in information packets.
STEVE GINNIS, President of the Tanana Chiefs Conference, supports
Senator Lincoln's amendment to SB 48 requiring that local elections
be held in areas under consideration for incorporation. In
addition, wording on page 4, line 7, should be changed from "at
least one meeting" to "an adequate number of meetings."
On February 3 [10], 2001 he testified before the committee and
posed questions concerning the financial impacts this bill would
have on the state government and he wondered whether his questions
had generated discussion among committee members.
Number 65
CHAIRMAN TORGERSON said that there is some old data on model
borough boundaries but the bill doesn't speak to that.
SENATOR PHILLIPS asked what number of meetings might be acceptable.
MR. GINNIS didn't have an absolute number but using the term
adequate would work.
SENATOR PHILLIPS said "at least one meeting" created a floor not a
ceiling on the number of meetings held.
MR. GINNIS said there are 43 villages in his region and he wants
assurance that there wouldn't be just one meeting held in Fairbanks
for the entire region.
CHAIRMAN TORGERSON said the Local Boundary Commission (LBC) has
population guidelines governing where meetings would be held. He
cautioned that there is no guarantee that the entire area under
discussion would be in one borough.
Number 35
PETE HALLGREN, Economic Development Director from Delta Junction,
said the city passed a resolution opposing SB 48 as currently
written. However, they do have several recommendations that would
make the legislation more palatable. Mr. Hallgren personally
believes that if proper boundaries were drawn for the school
district and the City of Delta Junction was dissolved when a
borough was formed and there was no requirement to adhere to the
model borough boundaries then there could be a good borough formed
in the Delta Junction area. Requiring the new borough to encompass
the entire model borough boundaries would create many problems.
The LBC appears to have a bias against individual community
boroughs or municipalities expanding to borough size. He hopes the
legislature aids borough formation by overturning the regulation
favoring the model boroughs boundaries.
Next, boroughs shouldn't be forced to annex areas they don't want.
Finally, "There's a provision in there saying that if you don't
have a property tax in your borough and you're in the pipeline
area, if you don't have property tax on the pipeline you don't have
as much local school support. Sounds nice, but I don't know any
areas along the pipeline which could take advantage of that
provision, at this point."
JOHN GLOTFELTY from Delta said the LBC will hold the minimum number
of meetings required so the Tanana Chief's concern is valid. He
supports the idea that individuals should be able to vote for or
against annexation. Next, he isn't in support of the model borough
boundaries that combine large areas. People need options to
determine organization rather than giving regulatory powers to the
LBC.
Number 249
RUSS BOWDRE from Delta is particularly concerned about not being
able to vote for or against annexation. To refute the charge that
unorganized areas don't support schools and government, he read
from the 2/11/01 Fairbanks News Minor that referred to the amount
of support outlying areas bring to both Anchorage and Fairbanks. He
estimated that his family and families like his that live in
outlying areas spend close to 80% of their incomes in the Anchorage
and Fairbanks economies. He said that this money doesn't return to
their local economies and they're not complaining but he resents
hearing that they aren't paying their fair share. He says they're
supporting both economies.
Abigail Fuller, representing Citizens Concerned About Annexation,
said she has no objection to the new section but Section 4 is a
different matter. "The people have the basic fundamental right to
decide, for themselves, when they are ready for local government
and what form it would take. For the state to impose it against
their will is tyranny."
GLEN MARUNDE from Tok supports Senator Lincoln's amendment and
would like an additional hearing and the opportunity to respond to
the new information that has been presented. He then read a letter
he sent to LBC Chairman Waring responding to the Chairman's
discussion of disincentives to borough incorporation and annexation
and his request that the legislature consider changing state law
concerning incorporation and annexation. He doesn't feel that SB 48
deals with disincentives, instead, it forces boroughs on citizens
without their approval or consent. He went on to say that HB 16
does more toward removing disincentives to the formation of
boroughs. The two changes that the committee substitute for SB 48
appears to make are determining true property values and the
recreation of third class boroughs. However, there is no clear
guide for forming a third class borough and he thinks it's improper
to add third class borough formation as a committee substitute.
He closed by urging Chairman Waring to support HB 16 and not SB 48.
Number 370
JOHN KUNIK, a Copper Basin resident, said he is against SB 48 for
the same reasons given in previous testimony. The unorganized
borough contributed $26.3 million to the general fund last year and
this doesn't include Payment in Lieu of Taxes (PILT) payments and
timber and fisheries taxes. This shows that the unorganized borough
does contribute.
Number 387
JANE BROWN, a Copper River resident against bureaucracy, would like
SB 48 amended to allow citizens the opportunity to vote before
annexation. In addition, she would like another hearing on the bill
so the public has time to testify on the changes. She then asked
why the additional level of bureaucracy was added on page 3, line
26. Since the Constitution states that the legislature is supposed
to act as the representative of the unorganized borough, why must
the Department of Community and Economic Development and the LBC be
inserted?
ART GRISWOLD from Delta Junction said that SB 48 is an annexation
bill for existing boroughs and that wealthy areas will be annexed
and areas that are small or with no economic base will remain. He
would like to see the annexation portion of the bill removed or
better yet drop the bill entirely.
KEVIN WARING, Chairman of the Local Boundary Commission, said he
would like to give the commission's view of some of the concerns
expressed during the hearing. First, the commission would implement
SB 48 by taking up, at most, one or two petitions per year. Second,
the bill requires the commission to hold at least one public
hearing. In practice, the commission would hold meetings at
regional centers and, at minimum, in communities with 400 or more
residents. It is customary for meetings to be held in areas that
are significantly affected. Third, areas with no economic resources
to support municipal services will not be forced into unworkable
situations. The LBC will work with the Department of Community and
Economic Development (DCED) to set up criteria to determine an
area's economic viability. Areas that don't meet a certain
threshold won't be nominated for borough formation. Finally, he
would like the committee to consider a change in the timetable as
set forth in Section 6. He would like the date to be moved forward
to November 30, 2001 from September 30, 2001 to allow DCED more
time to submit a proposal to the LBC for division of the
unorganized borough.
CHAIRMAN TORGERSON said conversation between his staff and the LBC
indicated that the timeline is tight but workable.
MR. WARING said the LBC is comfortable with the reporting
requirement during the first 10 days of the Second Session of the
Twenty-Second Alaska Legislature" but more latitude is needed on
the September 30, 2001 date.
DAN BOCKHORST, staff to the Local Boundary Commission from DCED,
urged that the date set forth in Section 6 be changed to allow more
time for the department to send recommendations to the LBC for the
division of the unorganized borough. Additionally, the January 23,
2002 deadline for dividing the unorganized borough into multiple
unorganized boroughs with boundaries conforming to the standards
set out in law will occupy the commission and staff fully until
that date so it is questionable that the department could meet the
September 30, 2001 deadline to identify which unorganized areas
reasonably meet the standards for borough incorporation and
annexation.
CHAIRMAN TORGERSON said they were working on an amendment to change
the September dates on pages 3 and 5 to November 30, 2001.
MR. BOCKHORST wanted to make it clear that there are two separate
issues. As Mr. Waring explained, Section 6, line 25 needs to be
changed from September 30, 2001 to November 30, 2001. Mr. Bockhorst
was speaking about the fact that, in addition to and separate from
the provisions in Section 6, which divides the single unorganized
borough into multiple unorganized boroughs, Section 4 requires the
department to make the determination as to which areas of the
unorganized borough appear to meet the standards for borough
incorporation and annexation.
CHAIRMAN TORGERSON asked Mr. Bockhorst whether changing the dates
on page 3, line 29 and page 5, line 25 to November 30, 2001 would
suit him.
MR. BOCKHORST continued his explanation that the dates were
problematic.
CHAIRMAN TORGERSON said that they weren't going out to the year
2002. They'd change the dates to November 30,2001 so both sections
would agree.
He asked whether there were any questions for Mr. Bockhorst. There
were none.
WAYNE SCHAFER from Slana said Senator Lincoln's amendment was a
step in the right direction but he is still adamantly opposed to
the bill.
ALBERT REYERSE from Slana testified that the state constitution
does not mandate that all areas incorporate into boroughs. If more
money is needed for education then 1 percent of each permanent fund
dividend check should be allocated for that purpose.
WAYNE MACMURRAY of Slana charged that there wasn't enough public
notice given that public testimony would be taken at this meeting.
He's not in favor of SB 48.
Number 566
SENATOR PHILLIPS responded to the last testimony by saying that
legislative uniform rules outline specific public notification
times requirements.
DANIEL BOONE testified that there wasn't sufficient notice given
for this meeting. He expressed concern about the effect SB 48 would
have on revenue sharing and matched grants for rural communities.
PAMELA BABISH testified that she is against SB 48 primarily because
government is interfering in citizens' lives.
CHAIRMAN TORGERSON said there were three amendments and a corrected
fiscal note before the committee. The corrected fiscal note is the
result of the committee substitute, which changes the unorganized
borough into multiple unorganized boroughs thereby adding $30,000
in the first year.
SENATOR PHILLIPS made a motion to adopt amendment 1, providing an
effective date. There were no objections.
On behalf of Senator Lincoln, Senator Phillips made a motion to
adopt amendment 2.
CHAIRMAN TORGERSON asked Sara Boario to explain the amendment.
SARA BOARIO, staff for Senator Lincoln, read the following:
"It is ironic that a piece of legislation that intends to
bring government closer to the dinner table would take
away the right of those sitting at that table to vote. I
believe that taking away the right of citizens to vote on
the shape of their local government is poor public
policy. The Department of Community and Regional Affairs
(DCRA) summarized in 1998 that 'This agencies experience
with mandatory boroughs is that because there is so much
resentment and animosity revolving around their creation,
the borough is seen as an enemy to be fought against for
years after its initial creation.' On the other hand,
there are boroughs that we can point to today that
successfully organized voluntarily, such as the Northwest
Arctic Borough, Yakutat Borough and Aleutians East
Borough. When the time was right, the resources were
adequate and common interests identified, these people
added borough government. I believe that the people will
make the best decisions for their communities based on
local and regional economic and human resources. I
believe the people have a greater understanding of
differences that must be resolved and common interests
that must be defined before borough incorporation can
proceed. While there is a role for the state to assist in
evaluating the resources and common interests of a
region, the final decision should ultimately be made by
the residents within these boundaries. My amendment
ensures that the right of Alaskan citizens to vote on
their future is preserved."
If the amendment passes, there would be no further legislative
review, rather, there would be a local vote.
SENATOR WILKEN, bill sponsor, had two comments. He wanted it to be
clear that this doesn't change current law. The organized areas
will remain as such but SB 48 enables the LBC and appropriate state
agencies to determine the appropriateness of organization for the
areas that choose "not to be responsible for their own government".
He said the right to vote isn't withdrawn with this legislation,
this simply provides another way "to help people pull their weight
as far as local government including education" is concerned. He
went on to point out that 83 percent of Alaskans reside in boroughs
that they didn't vote on in 1963. State law mandates that organized
areas not be penalized because of their organization and he
believes that the organized areas are being penalized by having to
"carry the weight" of areas without organized government.
With the forgoing in mind, Senator Wilken is against amendment 2
for SB 48 and recommends a no vote.
SENATOR PHILLIPS agreed that organized areas weren't given the
right to vote on organization.
CHAIRMAN TORGERSON noted that there was objection to the amendment
and asked for a roll call.
Senator Austerman, Phillips and Chairman Torgerson voted no.
Senators Lincoln and Kelley were absent. Amendment 2 failed to be
adopted by a 3 to 0 margin.
SENATOR PHILLIPS made a motion that amendment 3 read as follows: On
page 5, line 25 delete "September" replace with "November" and on
page 3, line 29, delete "September" replace with "November".
There were no objections so amendment #3 was adopted.
SENATOR PHILLIPS made a motion to move CSSB 48(CRA) with the
revised fiscal note from committee. There were no objections.
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