Legislature(2001 - 2002)
05/09/2002 09:37 AM FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SENATE CS FOR CS FOR HOUSE BILL NO. 296(JUD) "An Act relating to mergers and consolidations of municipalities." This was the first hearing for this bill in the Senate Finance Committee. LORI BACKES, Staff to Representative Jim Whitaker, the bill's sponsor, informed the Committee that this bill contains language to correct "perceived unfairnesses in statute in regard to the consolidation petition process as well as the election process" for municipalities. AT EASE 6:02 PM / 6:03 PM Ms. Backes commented that some municipalities have experienced difficulties in following current State statute procedures. She exampled that currently there is no time limit imposed for the gathering of signatures on a consolidation petition and that this bill imposes a limit of 365 days. She stated that this time frame is necessary because some petitions have circulated for up to five years, and at the time the petition was verified, it was found that many of the signers no longer resided in the municipality. Ms. Backes explained that Sections 2 and 3 specify that a consolidation question "must be approved by the voters within the borough but outside the cities when it is a consolidation of a borough with one or more cities within it, and must also be approved by the voters in at least one of the cities." She furthered that these two sections provide for a city "to opt out" of the consolidation process when there are more than two cities within the borough identified on the consolidation petition. She stressed that "this opt out language" must be included in the petition. She stated that the process of consolidating two or more cities within a borough also must be approved by a vote of the people. Ms Backes summarized that the goal of this bill is "to allow each individual city, the voters within each individual city, and the voters outside of the city but within the borough to have their own vote of self-determination as to whether they want to be a consolidated community or not." Ms. Backes noted that Section 4 exempts the new petition language from applying to a petition or a vote on a petition filed before the effective date of the bill. Senator Green asked why the language changes in Sections 2 and 3 are necessary. Ms. Backes responded that current statute specifies that a petition for consolidation must be approved by a majority of the voters within both the city and the borough. She noted that currently the entire petition for consolation would fail in the instance where the voters outside of the city but within the borough approve the consolidation but one of two cities proposed to consolidate does not approve of the merger. She continued that the new language would permit the one city to remain unconsolidated, but would allow the other parties to continue the consolidation process. She reiterated that this "opt out option" language must be specified in the petition. Senator Hoffman opined that this "self-determination opt out" language should also be considered for communities that might not want to become part of a "mandatory borough." DAN BOCKHORST, Local Boundary Commission, Division of Community and Business Development, Department of Community and Economic Development, testified offnet to voice opposition to components of the bill that would alter the outcome of a consolidation election. He stated that current law specifies that a simple majority vote would determine the outcome of a merger, and that the proposed legislation would establish "de facto voting districts" for each city and for voters within the borough but outside of a city. He stated that the proposed process "weights the vote of residents of small districts more heavily than the vote of residents of populace districts." He exampled that a vote by the City of Kupreanof with a population of "less than one-half-of-one-percent of the total voters" of the City of Petersburg, in opposition to the merger of these two adjoining cities in Southeast could block a consolidation or merger even if 99-percent of the voters in the City of Petersburg support it. He stated that the Department's position is that this bill's language "would disregard the will of the majority of the voters about their preferred form of local government." Mr. Bockhorst identified contradictory elements within the bill's components, particularly Section 3, lines 26 and 27. He furthered "that the provisions of the bill are intended to be consistent with the voting requirements for annexation specified in AS 29.06.040(c)(1); however, there is absolutely nothing in the reference statute that provides for de facto voting districts." He stated that, "the statute provides for the exact opposite: approval of a local option annexation by a simple majority of the votes in the affected area." He exampled various de facto voting scenarios whereby the proposed language would incur a contradictory situation. Mr. Bockhorst continued that the proposed bill "would reflect a major departure from constitutional principles and established legislative policy" in which State statute "specifies a minimum of local government units and encourages the prevention of duplication of tax levying jurisdictions." He stated that this bill "would perpetuate inefficient, inequitable, and ineffective local government structures resulting in duplication of government units and tax levying jurisdictions regardless of the will of the majority of the local voters." He stated that the current legislation has, for 30 years, allowed for "harmony" with the principles of the State Constitution as well as "efficiency and fiscal accountability in the local governments." He stated that the proposed bill would hinder that forward progression and notified the Committee that the Local Boundary Commission has issued a formal statement, dated May 1, 2002, [copy on file] that opposes the proposed legislation. Ms. Backes expressed awareness of the Local Boundary Commission's concerns; however, she stressed that the bill's sponsor strongly supports the people's right to self-determine what type of community they wish to live in. She elaborated that this bill essentially prohibits "a hostile takeover" of one community by another. She presented examples of this scenario. Senator Hoffman concurred with the sponsor's reasoning, and asserted, "that self-determination should the most important factor in self-government." Senator Green noted that within a relatively short distance from the Mat-Su area where she resides, there are four separate communities, each with their own governmental offices. She questioned whether the original intent of the current regulation was to eliminate or discourage duplication of local government services in the same or similar areas. Ms. Backes responded that the original intent of the regulation was not to prevent duplication; however, she clarified, "that is the intent of consolidation or unification." Senator Green opined that the reason for establishment of the Local Boundary Commission was to prevent duplication. She surmised that the proposed legislation would "do away" with that directive. Ms. Backes clarified that rather than blocking consolidation or mergers or encouraging the duplication of services, the intent of the proposed legislation is "to merely make the voting and petition process more fair." She asserted that Alaska's Constitution calls "for the maximum local self-government with the minimum of local government units," and mandates that the Local Boundary Commission consider the consolidation of these governments. However, she insisted, this should not be "forced over the will of a residents of that area." AT EASE 6:18 PM / 6:19 PM Co-Chair Donley commented that at the time of Statehood, the goal "was that all of Alaska would be organized into some form of local government;" however, some people have resisted because they do not want to pay local taxes. He reminded the Committee that a few years prior at public hearings regarding education, many people voiced that they did not want to contribute "a penny to educate their children" or to support local services. He asserted that this position is not fair to the people of Alaska who do pay local taxes, and it is "clearly" not attuned with the vision of the drafters of Alaska's Constitution. He stated that Alaska is the only State that does not have widespread governmental organization. He noted that some communities do not provide funds to employ a local police staffer, and that local services are not provided without some sort of outside assistance. He voiced concern about any proposal that discourages inclusion of people in local governments because, he opined, in the long run, this is the direction the State must go. Senator Wilken voiced uncertainty as to how to establish a balance in this legislation, as "it is a one size fits all" type of bill that, while addressing the needs of one, harms the needs of another. Senator Olson characterized this legislation as "setting another layer of government out there." He contended that multiple and overlaying State, federal and local governments result in non- productivity, and he stressed that the costs associated with this duplication usually "fall onto the shoulders of the private sector." He voiced that the possibility of a larger community's "hostile takeover" of a smaller community is "somewhat troublesome." JAN WRENTMORE, Resident, City of Skagway, informed the Committee that this is an important bill for Skagway because it supports the issue of self-determination. She informed the Committee that Skagway, the oldest incorporated city in the State, is self- sufficient, has real estate, tourism and sales taxes, and funds 52- percent of the community's education needs. She stated that townspeople were disturbed to receive a Local Boundary Commission determination stating that Skagway is viewed as not being self sufficient, that the community's government is inefficient, and that the residents do not make sufficient contributions. She contended that this legislation would allow residents to vote on whether they desire to merge with another community. She continued that in some situations, mergers or consolidations might not increase efficiencies in government as differing communities may have different lifestyles, distance might be an obstacle to efficiencies, and communities might become polarized due to differing "ethics" regarding major industries such as tourism. She urged the Committee to consider the affect this legislation would have on communities. Senator Green stated that, as part of the petition process, the Local Boundary Commission grants the authorization for a consolidation or merger petition to be circulated. She asked whether permission to petition could be granted without the express approval from the affected communities, which she characterized as a "hostile consolidation" situation. Mr. Bockhurst replied, "that a petition may be initiated by a host of different parties; some of which might be construed to be hostile and some not be construed to be hostile." He continued that in most situations, it is impossible to have 100 percent support for a consolidation or merger proposal; however, the Commission endeavors to consider the broad public interest as intended in its Constitutional creation. AT EASE 6:31 PM / 6:34 PM Senator Olson asked Mr. Bockhorst how this legislation would affect new boroughs. Mr. Bockhurst stated that "this legislation directly does not affect the incorporation of new boroughs from an area within an organized borough, but technically, a consolidation of a city in a borough results in the incorporation of a new borough so in that sense, it would affect the creation of boroughs." He explained that State law specifies that "the incorporation of a borough government is subject to area-wide voter approval, and this bill certainly would represent a significant departure from that practice if it were applied to an organization of a borough from the unorganized territory of Alaska;" however, it "would not affect a new borough from an unincorporated area of the State." Senator Olson voiced that perhaps an amendment should be considered "so that it is applicable to the new boroughs." Senator Austerman moved to report "Senate CS for House Bill 296, Judiciary, from Committee with individual recommendations and zero fiscal note." Co-Chair Donley objected. A roll call was taken on the motion. IN FAVOR: Senator Leman, Senator Olson, Senator Ward, Senator Wilken, Senator Austerman, Senator Green, Co-Chair Kelly OPPOSED: Co-Chair Donley ABSENT: Senator Hoffman The motion PASSED (7-1-1) SCS CS HB 296 (JUD) was REPORTED from Committee with a previous zero fiscal note, dated February 28, 2002 from the Department of Community and Economic Development.