Legislature(1995 - 1996)

04/04/1996 09:25 AM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
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  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."                       
                                                                               

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