Legislature(2001 - 2002)

03/07/2001 01:37 PM CRA

Audio Topic
* first hearing in first committee of referral
+ 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                                                            
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                                                            
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                                                            
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                                                            
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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