Legislature(1995 - 1996)
04/04/1996 09:25 AM FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SENATE BILL NO. 280 An Act relating to the mandatory incorporation of certain boroughs in the unorganized borough. Senator Torgerson, sponsor of the legislation, came before committee. He noted that at a previous hearing, the committee held Amendment No. 2 for discussion at this time. Senator Rieger, sponsor of the amendment, voiced his understanding that the Local Boundary Commission is strongly opposed to the amendment. He said he did not wish to impede progress of the bill because of that objection. Senator Rieger said that, in researching the issue further, he came across statutes that appear to be contrary to the intent of self-determination and which do not remove the power of the Local Boundary Commission to review changes in municipal governments. He said that text from the statutes was attached to an amendment he wished to offer as Revised Amendment No. 2. Senator Rieger next read wording from AS 29.05.011(a)(5) and 29.05.021. He suggested that petition to the Local Boundary Commission reflects desire for a local government. The proposed amendment repeals statutory provisions cited above. Senator Torgerson concurred in withdrawal of Amendment No. 2. He acknowledged that while he agreed with what the amendment attempts to do, it raises many questions, constitutional issues, and problems for the Local Boundary Commission. Speaking to Revised Amendment No. 2, Senator Torgerson expressed agreement, saying that he was not previously aware that language within AS 29.05.011 and 29.05.021 existed. Co-chairman Halford raised questions regarding footnote information attached to the above-cited statutes. LAMAR COTTON, Deputy Commissioner, Dept. of Community and Regional Affairs, spoke via teleconference from Anchorage and introduced DAN BOCKHORST, Local Boundary Commission staff. Mr. Bockhorst spoke to case law relating to municipal extension and the issue of cohesiveness. Senator Rieger MOVED for adoption of Revised Amendment No. 2. Senator Zharoff OBJECTED and inquired concerning the number of unincorporated communities. Mr. Bockhorst attested to 68 or 70 in the unorganized borough. He explained that language to be removed by the second citation in Revised Amendment No. 2 applies to any class of city. Language in the first citation applies only to first-class and home-rule cities. In response to a further question from Senator Zharoff regarding removal of language relating to a demonstrated need for city government, Mr. Bockhorst explained that it is currently one of the standards used by the Local Boundary Commission in evaluating applications. It reflects an attempt by the legislature to ensure that city governments are formed only where there is a need for local government services. Removal would make it easier to form city governments. Senator Randy Phillips asked if removal poses a constitutional problem. Mr. Bockhorst said he saw none. He cited Article X, Sec. 1, of the Alaska Constitution which calls for a minimum of local government units. The state supreme court has interpreted that to mean "a minimum number of local government units." The commission is sensitive to that issue. The proposed amendment does not pose a substantial problem for either the Local Boundary Commission or the Dept. of Community and Regional Affairs. In response to an additional question regarding removal of AS 29.05.021, Senator Rieger explained that it eliminates some of the prohibitions and gives greater variety to the form of local government the local population might prefer. The existing statute is poor public policy in that it, in effect, says that a community cannot do what it might wish to do. It would have to annex to another community or allow some other form of government to provide local services. Co-chairman Halford concurred in need for removal. However, he expressed concern over removal of 29.05.011(5), relating to demonstrated need. He suggested it might send a signal the legislature does not intend to send. Senator Rieger voiced his belief that the Local Boundary Commission would defer to the desires of the local population. AS 29.05.011(5) is extremely vague and injects uncertainty as to how it will be used by the Local Boundary Commission. The paramount concern should be the desire of local citizens. Senator Torgerson noted that following the petition and other activities necessary to establish a city, there has to be a vote of those in the impacted area. If there is no demonstrated need for establishment of the city, it will be voted down. Co-chairman Halford called for a show of hands on adoption of Revised Amendment No. 2. Co-chairman Frank inquired concerning the department and Local Boundary Commission position on the amendment. PAT POLAND, Director, Division of Municipal and Regional Assistance, Dept. of Community and Regional Affairs, advised via teleconference from Anchorage that the department was comfortable with the amendment. It does not effect a substantial change, and it removes confusion surrounding formation of cities and service areas. PAUL WEIR next testified via teleconference from Glennallen. He voiced opposition to forcing communities into boroughs and asked how residents of Anchorage, Fairbanks, and Juneau would gain by that action. Senator Torgerson explained that the proposed legislation represents a move to equalize taxation and education. Mr. Weir again protested against need to undergo the rigors of planning, zoning, and other necessities of incorporation. Senator Torgerson explained that an amendment made at the previous hearing took care of that problem. If the bill is adopted as now written, there will be a vote in each unorganized area. Residents will have a choice of either forming or not forming a borough. If residents choose not to form, the state assessor will construct a mill rate or mill rate equivalency for the local contribution to education, per the other fifteen boroughs in Alaska. The word "mandatory" was removed from the bill. The compromise recognizes that in some areas of Alaska it may not make sense to form a borough government. Co-chairman Halford again called for objections to Revised Amendment No. 2. Senator Zharoff maintained his OBJECTION. The Co-chairman again called for a show of hands. Revised Amendment No. 2 was ADOPTED on a vote of 4 to 2 (Co-chairman Frank and Senator Zharoff were opposed, and Senator Sharp was absent from the meeting.) Senator Zharoff advised members that he might subsequently offer an amendment to impose a six percent state sales tax on communities that do not currently have one. In response to suggestions that the amendment would be unpopular, Senator Zharoff stressed that it would create equity to offset educational assessments against unincorporated communities. END: SFC-96, #68, Side 1 BEGIN: SFC-96, #68, Side 2 Discussion of sales versus property tax options followed among committee members. Senator Rieger MOVED for passage of CSSB 280 (Fin) with individual recommendations and accompanying fiscal notes. Senator Zharoff OBJECTED. Co-chairman Halford called for a show of hands. CSSB 280 (Fin) was REPORTED OUT of committee on a vote of 5 to 1. The following fiscal notes accompanied the bill: Dept. of Administration 0 Dept. of Commerce and Economic Development 0 Dept. of Community and Regional Affairs (State Assessor) 63.5 (Local Boundary Commission) 15.6 Dept. of Education 0 Dept. of Law 0 Dept. of Natural Resources 0 Dept. of Public Safety 0 Dept. of Transportation and Public Facilities 0 Office of the Governor/Elections 25.4 Co-chairmen Frank and Halford and Senators Donley, Phillips, and Rieger signed the committee report with a "do pass" recommendation. Senator Zharoff signed "do not pass."