Legislature(1999 - 2000)

02/17/2000 08:10 AM House CRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
              HOUSE COMMUNITY AND REGIONAL AFFAIRS                                                                              
                       STANDING COMMITTEE                                                                                       
                        February 17, 2000                                                                                       
                            8:10 a.m.                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                                 
                                                                                                                                
Representative John Harris, Co-Chairman                                                                                         
Representative Carl Morgan, Co-Chairman                                                                                         
Representative Andrew Halcro                                                                                                    
Representative Lisa Murkowski                                                                                                   
Representative Fred Dyson                                                                                                       
Representative Reggie Joule                                                                                                     
Representative Albert Kookesh                                                                                                   
                                                                                                                                
MEMBERS ABSENT                                                                                                                  
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                              
                                                                                                                                
HOUSE BILL NO. 255                                                                                                              
"An Act relating to villages; and providing for an effective                                                                    
date."                                                                                                                          
                                                                                                                                
     - HEARD AND HELD; ASSIGNED TO SUBCOMMITTEE                                                                                 
                                                                                                                                
PREVIOUS ACTION                                                                                                                 
                                                                                                                                
BILL: HB 255                                                                                                                  
SHORT TITLE: HOME RULE VILLAGES                                                                                                 
                                                                                                                                
Jrn-Date    Jrn-Page           Action                                                                                           
 1/10/00      1886     (H)  PREFILE RELEASED 12/30/99                                                                           
 1/10/00      1886     (H)  READ THE FIRST TIME - REFERRALS                                                                     
 1/10/00      1886     (H)  CRA, FIN                                                                                            
 1/10/00      1886     (H)  REFERRED TO CRA                                                                                     
 2/17/00               (H)  CRA AT  8:00 AM CAPITOL 124                                                                         
                                                                                                                                
WITNESS REGISTER                                                                                                                
                                                                                                                                
MARJORIE VANDOR, Assistant Attorney General                                                                                     
Governmental Affairs Section                                                                                                    
Civil Division(Juneau)                                                                                                          
Department of Law                                                                                                               
PO Box 110300                                                                                                                   
Juneau, Alaska 99811-0300                                                                                                       
POSITION STATEMENT:  Expressed concerns with HB 255.                                                                            
                                                                                                                                
JOHN PEARSON, Economic Specialist                                                                                               
Hyder Community Association                                                                                                     
P.O. Box 149                                                                                                                    
Hyder, Alaska 99923                                                                                                             
POSITION STATEMENT:  Supported HB 255.                                                                                          
                                                                                                                                
KEVIN RITCHIE, Executive Director                                                                                               
Alaska Municipal League (AML)                                                                                                   
217 Second Street                                                                                                               
Juneau, Alaska 99801                                                                                                            
POSITION  STATEMENT:   Testified  that AML  is  interested in  any                                                              
legislation dealing  with municipalities; however, HB  255 has not                                                              
yet moved through AML's Local Government Committee.                                                                             
                                                                                                                                
PAT POLAND, Director                                                                                                            
Division of Municipal & Regional Assistance                                                                                     
Department of Community & Economic Development                                                                                  
333 West Fourth Avenue, Suite 220                                                                                               
Anchorage, Alaska 99501-2341                                                                                                    
POSITION  STATEMENT:   Provided  information  about current  local                                                              
government practices and HB 255.                                                                                                
                                                                                                                                
DAN BOCKHORST, Local Boundary Commission                                                                                        
Division of Municipal & Regional Assistance                                                                                     
Department of Community & Economic Development                                                                                  
333 West Fourth Avenue, Suite 220                                                                                               
Anchorage, Alaska 99501-2341                                                                                                    
POSITION STATEMENT:  Answered questions relating to HB 255.                                                                     
                                                                                                                                
ACTION NARRATIVE                                                                                                                
                                                                                                                                
TAPE 00-9, SIDE A                                                                                                               
Number 0001                                                                                                                     
                                                                                                                                
CO-CHAIRMAN  HARRIS  called  the   House  Community  and  Regional                                                              
Affairs    Standing  Committee  meeting  to  order  at  8:10  a.m.                                                              
Members present at the call to order  were Representatives Harris,                                                              
Morgan, Halcro, Murkowski, Dyson, Joule and Kookesh.                                                                            
                                                                                                                                
HB 255-HOME RULE VILLAGES                                                                                                     
                                                                                                                                
CO-CHAIRMAN  HARRIS  announced that  the  only order  of  business                                                              
before  the  committee  would  be  HOUSE BILL  NO.  255,  "An  Act                                                              
relating to villages; and providing for an effective date."                                                                     
                                                                                                                                
Number 0106                                                                                                                     
                                                                                                                                
REPRESENTATIVE  DYSON testified  as  the sponsor  of HB  255.   He                                                              
informed the committee  that HB 255 is something  he has wanted to                                                              
do for the  three-plus years he has  been in the legislature.   He                                                              
pointed out  that the  constitution mandates that  all be  done to                                                              
allow  and encourage  communities to  organize.   However, he  has                                                              
observed that the  trend is moving towards disorganization  due to                                                              
the  limitations and  financial  responsibilities  that come  with                                                              
organization.                                                                                                                   
                                                                                                                                
REPRESENTATIVE  DYSON  related how  he  became involved  with  the                                                              
issue  of wanting  to  make it  easier  for small  communities  to                                                              
organize in  a way that  made sense for  them, to allow  the small                                                              
community to  choose the  responsibilities it  wanted in  order to                                                              
achieve  a government  that  is practical  for  the community  and                                                              
perhaps,  culturally comfortable  as well.   Representative  Dyson                                                              
commented  that  he  has  spent much  time  visiting  with  former                                                              
Senator  Vic Fisher, a  member of  the Constitutional  Convention,                                                              
who had made similar attempts at this in the past.                                                                              
                                                                                                                                
REPRESENTATIVE  DYSON commented  that the  legislation began  with                                                              
Version D,  which was quite clumsy  and did not get the  job done.                                                              
Therefore, the committee has a proposed  committee substitute (CS)                                                              
in the packet,  which is largely  based on the suggestions  of the                                                              
staff  of  the Department  of  Community  &  Economic  Development                                                              
(DCED).   He noted his  observation of  DCRA struggling to  find a                                                              
local  entity in  communities  with which  the  department can  do                                                              
business.  The department  has been eager for it  to be easier for                                                              
the communities to organize.                                                                                                    
                                                                                                                                
REPRESENTATIVE  DYSON explained that  the proposed  CS adds  a new                                                              
category of a  home rule second-class city which  would be allowed                                                              
to define  its own constitution  or charter, the  responsibilities                                                              
desired by  that entity.   Furthermore,  a home rule  second-class                                                              
city would  be allowed to determine  how it wants to  organize and                                                              
support itself.   Thus  providing all  the flexibility  that first                                                              
class cities have, while allowing  this new entity to choose which                                                              
responsibilities   it  wants  and   how  it  wants   to  organize.                                                              
Therefore,  Representative  Dyson  hoped  this  legislation  would                                                              
provide some of the already organized  communities the flexibility                                                              
to divest themselves of some of the  responsibilities that are too                                                              
difficult  for  them  while  organizing   in  a  more  comfortable                                                              
fashion.  He requested that the committee adopt the proposed CS.                                                                
                                                                                                                                
Number 0507                                                                                                                     
                                                                                                                                
REPRESENTATIVE MURKOWSKI moved that  the committee adopt CSHB 255,                                                              
version 1-LS1000\H, Cook, 1/24/00,  as the working document before                                                              
the committee.   There being no objection, it was so ordered.                                                                   
                                                                                                                                
REPRESENTATIVE DYSON predicted that  the Department of Law will be                                                              
testifying to  the need  to change the  name of the  new category.                                                              
He  explained  that this  prediction  is  based on  comments  from                                                              
Tamara  Cook, Director,  Legislative  Legal Services,  Legislative                                                              
Affairs  Agency.   He related  that Ms.  Cook said  that the  name                                                              
change  is   not  necessary,  although   she  believed   that  the                                                              
Department of Law  would say that it is necessary.   He listed the                                                              
various names  he had  developed thus  far.  Representative  Dyson                                                              
felt that home rule second-class city sounded the best.                                                                         
                                                                                                                                
CO-CHAIRMAN HARRIS asked if the "home  rule community" is the name                                                              
in question with regard to whether it fits legal parameters.                                                                    
                                                                                                                                
REPRESENTATIVE DYSON replied yes.                                                                                               
                                                                                                                                
REPRESENTATIVE  JOULE commented  that when  this matter was  first                                                              
discussed, "it  was in recognition  that the real rub  was between                                                              
tribes and whatever form of government  that the state would allow                                                              
to be  sanctioned or  recognized."   He asked  what that  does "to                                                              
eliminate the rub from the tribes?"                                                                                             
                                                                                                                                
Number 0778                                                                                                                     
                                                                                                                                
REPRESENTATIVE  DYSON acknowledged  that everyone approaches  this                                                              
from a  different perspective.   He  related his own  perspective,                                                              
which is to allow as many communities  as desire to organize under                                                              
state law.   He mentioned  that he  is particularly interested  in                                                              
Quinhagak,  which is organized  as an  IRA (Indian  Reorganization                                                              
Act) as well as a second-class city.   Everyone sits down together                                                              
for the town meeting;  it is an integrated approach.   The City of                                                              
Quinhagak contracts with the tribe  [Kwinhagak] to provide all the                                                              
city services.                                                                                                                  
                                                                                                                                
REPRESENTATIVE  JOULE surmised that  Representative Dyson  did not                                                              
see HB  255 as usurping what  tribal governments will  continue to                                                              
be able to do.                                                                                                                  
                                                                                                                                
REPRESENTATIVE DYSON replied no and  specified that it was not his                                                              
intention to do that, either.  He  said, "The rub will come, to be                                                              
frank - is to organize under state  law with our constitution, the                                                              
selection  of the city  government  probably cannot  be done  on a                                                              
racial basis  or an ethnic basis."   As long as the  elections are                                                              
open, things  would be fine  under state law.   He hoped  that the                                                              
legislation  would not  cause  any more  divisions  or dampen  any                                                              
community's desire to do what it wanted under federal law.                                                                      
                                                                                                                                
REPRESENTATIVE  JOULE read  this  bill to  merely  offer, but  not                                                              
mandate, another option.                                                                                                        
                                                                                                                                
REPRESENTATIVE DYSON agreed.                                                                                                    
                                                                                                                                
CO-CHAIRMAN  HARRIS  asked if  Representative  Dyson  had been  in                                                              
contact  with   the  Local  Boundary  Commission   regarding  this                                                              
legislation.                                                                                                                    
                                                                                                                                
Number 0976                                                                                                                     
                                                                                                                                
PETER  TORKELSON,  Staff  to Representative  Dyson,  Alaska  State                                                              
Legislature, informed the committee  that they had been in contact                                                              
with  Pat  Poland,  Director, Division  of  Municipal  &  Regional                                                              
Assistance,   and  Dan  Bockhorst,   Local  Boundary   Commission,                                                              
Division  of  Municipal  &  Regional   Assistance.    Through  the                                                              
suggestions of Mr.  Poland and Mr. Bockhorst, the  proposed CS was                                                              
developed.  The original bill did  not provide for any new options                                                              
to  existing  second-class cities  to  which  Mr. Poland  and  Mr.                                                              
Bockhorst commented that the largest  need may be with the second-                                                              
class  cities because  there  are  very few  Alaskans,  relatively                                                              
speaking,  who   are  not   already  under  second-class   cities.                                                              
Therefore,  allowing  second-class   cities  to  adopt  their  own                                                              
charter became the soul of the proposed CS.                                                                                     
                                                                                                                                
CO-CHAIRMAN   HARRIS   related   his   understanding   that   this                                                              
legislation  would  allow  a  second-class   city  the  option  of                                                              
becoming a home rule community and  to choose the services that it                                                              
sees fit to offer.                                                                                                              
                                                                                                                                
REPRESENTATIVE DYSON added, "And write their own constitution."                                                                 
                                                                                                                                
CO-CHAIRMAN  MORGAN  inquired  as  to  the  difference  between  a                                                              
second-class city and home rule.                                                                                                
                                                                                                                                
MR. TORKELSON pointed  out that currently any  unincorporated area                                                              
can choose to be  a home rule city, but it must  have a population                                                              
of 400.   Furthermore, the home rule  city would have to  zone and                                                              
plat its land and  have a full financial audit every  year.  Those                                                              
stipulations  are barriers  to an unincorporated  area becoming  a                                                              
home rule  city.  An existing  second-class city  cannot currently                                                              
choose to become a home rule city,  but if it did have that option                                                              
it could  determine the  type of organization  it wanted  and what                                                              
exactly it wanted to accomplish.  The key is flexibility.                                                                       
                                                                                                                                
REPRESENTATIVE JOULE inquired as  to how difficult it would be for                                                              
the legislature  -  if this  bill passes  - to come  back to  this                                                              
issue and  mandate that  a home  rule community/second-class  city                                                              
would have to pick up some other responsibilities.                                                                              
                                                                                                                                
REPRESENTATIVE  DYSON stated that  only takes  [a vote  of] 21-11,                                                              
which is true now.                                                                                                              
                                                                                                                                
Number 1252                                                                                                                     
                                                                                                                                
CO-CHAIRMAN  HARRIS  noted  that  he  viewed  this  as  a  win-win                                                              
situation for communities that may  be having difficulties staying                                                              
classified at  their current status.   He asked  if Representative                                                              
Dyson saw any downsides with regard  to tribal governments and the                                                              
like.                                                                                                                           
                                                                                                                                
REPRESENTATIVE  DYSON replied no.   He  emphasized that  this bill                                                              
would expand the option.  He said  that he longed for the day when                                                              
the real  and imaginary  divisions in  the state are  ameliorated.                                                              
This legislation  is helpful in  providing another small  step for                                                              
some flexibility.  He hoped that  folks would recognize this as an                                                              
attempt of the  legislature to allow more flexibility  under state                                                              
law.  He commented  that it can be daunting for  a small community                                                              
to pick up platting or have to be a school district.                                                                            
                                                                                                                                
REPRESENTATIVE  MURKOWSKI  asked if  there  is any  opposition  to                                                              
this.  She  recalled that Representative Dyson  had indicated that                                                              
Mr. Fisher  had worked with  the same  concept for years,  but had                                                              
not been able to reach this point.   What has been the difficulty?                                                              
                                                                                                                                
REPRESENTATIVE DYSON  answered that he did not know.   However, he                                                              
pointed  out that  there is  a fair  amount of  suspicion in  this                                                              
state.  He  said, "The only  opposition that I understand  is from                                                              
people who actually  or believe that they have  been badly treated                                                              
by the state and  its been very awkward for them  to deal with the                                                              
state."   Therefore,  those  folks have  significant  reservations                                                              
with regard to anything the state  does that involves their arena.                                                              
                                                                                                                                
REPRESENTATIVE  DYSON  replied,   in  response  to  Representative                                                              
Halcro, that  he has had interest  in this even though  he has not                                                              
publicized this.                                                                                                                
                                                                                                                                
Number 1563                                                                                                                     
                                                                                                                                
MARGIE VANDOR,  Assistant Attorney  General, Governmental  Affairs                                                              
Section, Civil  Division (Juneau), Department of  Law, stated that                                                              
she   just had  an opportunity to  look at the  proposed CS.   She                                                              
pointed  out that the  constitution specifically  states  that all                                                              
local governments  shall be  in cities and  boroughs.   With that,                                                              
home rule  status can  only extend  to cities  and boroughs.   She                                                              
imagined  that  home rule  status  could  be extended  to  another                                                              
entity,  just  by redefining  what  a city  is  in  statute.   The                                                              
constitution goes further in saying  that a city shall be governed                                                              
by and named the  city council, while a borough is  governed by an                                                              
assembly.  Notwithstanding a charter,  the constitution supercedes                                                              
a charter that would name its city council otherwise.                                                                           
                                                                                                                                
MS.  VANDOR   referred  to   the  constitutional  minutes,   which                                                              
illustrate that  there was  much debate with  regard to  how areas                                                              
can organize and under what parameters.   Section 11 of Article 10                                                              
allows the legislature to extend  home rule status to other cities                                                              
and boroughs.   She  was not  sure that  the constitution  allowed                                                              
renaming  a new classification  of local  government a  community.                                                              
Ms.  Vandor informed  the committee  that  she has  been with  the                                                              
Local  Boundary  Commission  for  over  ten  years  and  thus  has                                                              
reviewed the government  article a lot.                                                                                         
                                                                                                                                
MS.  VANDOR   explained  that   the  constitutional   framers  had                                                              
discussed many  possibilities that  ultimately resulted in  use of                                                              
the terms  of city  and borough  for organized  government  in the                                                              
state  - to  which the  legislature could  delegate taxing  power.                                                              
She noted  that there are  two major  supreme court cases  on this                                                              
matter,  State v.  Alex and  the  Liberati case,  which said  that                                                          
local governments  are not allowed to delegate  that taxing power.                                                              
Therefore, Ms. Vandor  believes the name is a problem.   She said,                                                              
"I'm not certain  ... calling something a home  rule community and                                                              
then redefining  'city' to allow that  to be considered  a city is                                                              
accomplishing  any  more  than  allowing  home rule  status  to  a                                                              
second-class city."  In conclusion,  Ms. Vandor noted that she has                                                              
not had a chance to hear Ms. Cook's views on this matter.                                                                       
                                                                                                                                
CO-CHAIRMAN  HARRIS  inquired  as  to  Ms. Vandor's  view  of  the                                                              
differences  between  a home  rule  community and  a  second-class                                                              
city.                                                                                                                           
                                                                                                                                
MS. VANDOR  reiterated that "community"  is not a  recognized term                                                              
for local government  in Alaska.   Home rule can be extended  to a                                                              
second-class city and allow adoption  of a home rule charter.  The                                                              
constitution  does  allow  the legislature  to  extend  home  rule                                                              
status to other than first-class  cities and first-class boroughs.                                                              
                                                                                                                                
CO-CHAIRMAN HARRIS asked:  If home  rule status were extended to a                                                              
second-class city, would that second-class  city be able to choose                                                              
which services it wanted to offer?                                                                                              
                                                                                                                                
MS. VANDOR  replied, "As long as  you provide for it in  state law                                                              
as to what things  a second-class, home rule -  what the mandatory                                                              
powers  would be."    She pointed  out that  all  home rules  have                                                              
certain  mandatory powers  notwithstanding  their charters;  those                                                              
are  organic   law.    A  home   rule  charter  does   allow  more                                                              
personalized power.   Although samples [of the  home rule charter]                                                              
are  given  out,  the mandatory  powers  are  established  by  the                                                              
legislature in  the law.   If an area  did become home  rule, then                                                              
the  area would  qualify  under  the  constitution as  having  all                                                              
powers that are not limited by law or by the charter.                                                                           
                                                                                                                                
REPRESENTATIVE MURKOWSKI surmised  that this legislation should be                                                              
referred  to  the  House  Judiciary   Committee.    She  asked  if                                                              
Representative Dyson would object to that.                                                                                      
                                                                                                                                
Number 1899                                                                                                                     
                                                                                                                                
REPRESENTATIVE DYSON  stated that he is  eager to do this  as well                                                              
as possible,  this session.  He  believes this legal  question can                                                              
be fixed by changing the name.  He  related his understanding that                                                              
if  the  option  of  expanding  the   existing  second-class  city                                                              
category  through home  rule were  allowed,  then the  legislature                                                              
would  have  to  determine  at  what  size  village  platting  and                                                              
becoming  a  school district  should  be  mandated.   With  a  new                                                              
category and  a new name, that is  not necessary.  He  asked if he                                                              
was correct.                                                                                                                    
                                                                                                                                
MR. TORKELSON replied  that is essentially correct.   If home rule                                                              
status  is  opened up  to  second-class  cities,  then a  line  of                                                              
distinction  has   to  be  drawn.     Currently,  all   home  rule                                                              
communities are  school districts and  have to zone and  plat land                                                              
as well  as have a full  financial audit.   On the other  hand, if                                                              
the  community  decides  to  move  to this  new  class,  then  the                                                              
community is not  a school district, and it does  not have to plat                                                              
its land or have an audit.  Therefore,  the development of the new                                                              
name arose, and  these essentially artificial distinctions  do not                                                              
have to made.                                                                                                                   
                                                                                                                                
CO-CHAIRMAN HARRIS  asked if Ms.  Vandor could be of  help because                                                              
he  did  not want  this  to  be problematic  because  he  supports                                                              
Representative  Dyson's intention.   He  indicated that help  from                                                              
the Department  of Law would be  necessary if this  legislation is                                                              
not referred to the House Judiciary Committee.                                                                                  
                                                                                                                                
MS. VANDOR  said she would  be available and  happy to help.   She                                                              
restated  that  she had  just  had  the  opportunity to  view  the                                                              
proposed CS today and did not know  that she had anything to offer                                                              
now  without consulting  with the  Local  Boundary Commission  and                                                              
Representative Dyson.                                                                                                           
                                                                                                                                
REPRESENTATIVE KOOKESH recalled Ms.  Vandor's comment about debate                                                              
on this issue with Ms. Cook.  He  expressed interest in having Ms.                                                              
Cook present at the next meeting.                                                                                               
                                                                                                                                
MS. VANDOR  said she  had understood  Representative Dyson  to say                                                              
that Ms. Cook  did not believe that the word  "community" would be                                                              
problematic.                                                                                                                    
                                                                                                                                
REPRESENTATIVE  KOOKESH commented that  the interpretation  of law                                                              
is not an  art form.  He  did not believe that  the constitutional                                                              
framers wanted to exclude the number  of communities that would be                                                              
excluded   without  adoption   of   legislation   such  as   this.                                                              
Representative  Kookesh expressed his  concern that  someone would                                                              
look at a  CS and minutes later  offer an opinion that  would kill                                                              
the direction of  the legislation.  Therefore, he  agreed with Co-                                                              
Chairman Harris that the committee needs help.                                                                                  
                                                                                                                                
Number 2198                                                                                                                     
                                                                                                                                
REPRESENTATIVE  DYSON related his  understanding that  the problem                                                              
addressed by Ms. Vandor is not a  "game stopper" and if a new name                                                              
were chosen, then the constitutional  problem would be eliminated.                                                              
He clarified  that Ms. Cook  merely said  that [the new  name] may                                                              
not be  necessary.  Therefore,  Representative Dyson said  that he                                                              
did not have a problem with changing  the name to eliminate "your"                                                              
[the Department of Law's] concern  and the possible constitutional                                                              
concern.  There is no downside to changing the name.                                                                            
                                                                                                                                
REPRESENTATIVE  HALCRO suggested  the  name of  limited home  rule                                                              
borough.  He asked if that would satisfy the concern.                                                                           
                                                                                                                                
MS.  VANDOR commented  that  although  she had  never  heard of  a                                                              
limited home  rule borough, she recognized  that does not  mean it                                                              
cannot   be  defined   under   state  law.      She  agreed   with                                                              
Representative  Halcro that  the  limited home  rule borough  name                                                              
would address the constitutional  question of only having boroughs                                                              
and  cities.   She  informed the  committee  that  even a  unified                                                              
municipality,   a  term  in   state  law  that   is  not   in  the                                                              
constitution, took a city and a borough  together.  Therefore, the                                                              
underlying  concept is  not changed,  which may  also be the  case                                                              
with a limited home rule borough.                                                                                               
                                                                                                                                
REPRESENTATIVE HALCRO explained that  he had suggested the name of                                                              
"limited  home rule  borough" because  the  "limited" would  refer                                                              
back to  the legislation's  intent to  allow the  city or  area to                                                              
limit its involvement.                                                                                                          
                                                                                                                                
MS.  VANDOR  said  she  believes   that  is  the  intent  of  this                                                              
legislation.  However,  Title 29 does specify  certain limitations                                                              
on home rules.   She indicated the  need for more research.   As a                                                              
drafting  measure, she  indicated her belief  that allowing  these                                                              
limited home rules to choose not  to do some of these requirements                                                              
to be doable.                                                                                                                   
                                                                                                                                
Number 2455                                                                                                                     
                                                                                                                                
JOHN  PEARSON, Economic  Specialist,  Hyder Community  Association                                                              
(HCA), noted  his support  of HB 255.   He informed  the committee                                                              
that Hyder  is an  unincorporated community  located on  the U.S.-                                                              
Canada border.   In addition  to being  the most eastern  point in                                                              
Alaska, it is also Alaska's only  border town.  Furthermore, Hyder                                                              
allows the shortest distance by road  between Alaska and the Lower                                                              
48.  Often referred to as "Alaska's  front door," Hyder is home to                                                              
approximately  130 individuals.   There  are only five  year-round                                                              
jobs,  of which  only  one is  a full-time  year-round  job.   The                                                              
highest wage  in Hyder is $10.00  per hour.  The  distance between                                                              
Hyder and  the nearest  [other Alaskans]  is 165  miles by  water.                                                              
However,  last fall the  Department of  Transportation and  Public                                                              
Transportation  (DOT/PF) eliminated  all future  ferry service  to                                                              
Hyder  in  order  to  save  funds.   Mr.  Pearson  said  that  the                                                              
community is supportive of that because  the Alaska Marine Highway                                                              
was taking a loss.                                                                                                              
                                                                                                                                
MR.  PEARSON noted  that the  children  in Hyder  are exported  to                                                              
Stewart,  British Columbia,  each day  to go to  school, which  is                                                              
funded in  part by  the State of  Alaska.   Hyder lacks  sewer and                                                              
water   facilities.     Therefore,   the   community  operates   a                                                              
noncompliant  solid waste  disposal site.   Furthermore,  there is                                                              
hazardous waste  build-up that  is the  result of mining  activity                                                              
which started around the turn of  the last century.  The community                                                              
is unable to get those dangerous items out of the community.                                                                    
                                                                                                                                
MR. PEARSON  informed the committee  that HCA is a  nonprofit that                                                              
represents all  of the interests of  the residents in Hyder.   The                                                              
association  has a long  history  of providing  for the people  of                                                              
Hyder;  its current  functions  include the  operation  of a  fire                                                              
department,  emergency  aide  service,   a  community  library,  a                                                              
community  museum,  snow removal,  a  summer visitor's  center,  a                                                              
noncompliant  solid waste  system,  a television  station and  the                                                              
State of  Alaska's small  boat harbor.   As a nonprofit,  HCA also                                                              
administers grant opportunities as  well as a very active economic                                                              
development program.  In addition,  HCA has a contract with DOT/PF                                                              
to maintain 14 miles of state roads in the area.                                                                                
                                                                                                                                
Number 2726                                                                                                                     
                                                                                                                                
MR.  PEARSON stated  that  HCA fully  supports  HB  255, which  it                                                              
recognizes as  an option  to rural communities  to meet  the local                                                              
needs and  concerns while  avoiding bureaucratic  red tape.   This                                                              
legislation could  provide rural  communities the ability  to meet                                                              
the  critical local  needs with  local  talents and  capabilities.                                                              
Mr. Pearson  noted that  he is Co-Chair  of the Regional  Economic                                                              
Development Committee with the Southeast  Conference.  He believes                                                              
that a number  of small communities could benefit  from this bill,                                                              
particularly in  the Prince  of Wales area.   However, it  is very                                                              
difficult for  many of these  rural communities to  participate in                                                              
this forum.                                                                                                                     
                                                                                                                                
MR.  PEARSON  pointed  out  that  often  Hyder  has  identified  a                                                              
potential funding  source or service  the community would  like to                                                              
participate  in.  However,  Hyder has  been unable to  participate                                                              
due to the lack   of government organization.  On  the other hand,                                                              
HCA has been quite  successful.  A little over 18  months ago, HCA                                                              
became actively  involved in the  construction of a  bottled water                                                              
project.   As a result  of the planning  process and  support from                                                              
the   U.S.    Department   of   Commerce   Economic    Development                                                              
Administration,  Hyder will complete  construction of  the bottled                                                              
water plant in about four months  and the first of 41 employees of                                                              
the  plant  will  be hired.    Unfortunately,  Hyder  received  no                                                              
support  from the  state.   However,  Mr. Pearson  hoped that  the                                                              
community  could   receive  some  help  from  the   state  on  the                                                              
transportation issue in the next few years.                                                                                     
                                                                                                                                
MR.  PEARSON   informed   the  committee   that  the  plant   will                                                              
manufacture over 100,000 plastic  bottles per day.  The plant will                                                              
do the  bottle [fill],  cap, label  and shipping.   Also,  a major                                                              
pallet  manufacturing   facility  has  been  constructed.     This                                                              
facility  will  create  one  new  pallet every  48  seconds.    In                                                              
closing,  Mr. Pearson  urged the  committee's support  of HB  255,                                                              
which he viewed as a major step forward for smaller communities.                                                                
                                                                                                                                
REPRESENTATIVE MURKOWSKI asked what  the enactment of HB 255 would                                                              
mean to Hyder.  What would Hyder do differently under HB 255?                                                                   
                                                                                                                                
MR. PEARSON  mentioned Hyder's involvement  in the  development of                                                              
Southeast Alaska's  transportation plan.   It was  determined that                                                              
Hyder was off the map with regard to being part of that plan.                                                                   
                                                                                                                                
TAPE 00-9, SIDE B                                                                                                               
                                                                                                                                
MR. PEARSON  informed the  committee that  Senator Torgerson  made                                                              
available  some  funds that  could  be  available for  the  marine                                                              
facility in Hyder.  At that time  Senator Torgerson had the notion                                                              
that  Hyder  would   participate  with  the  Inner   Island  Ferry                                                              
Authority.  However, Hyder was not  able to participate due to the                                                              
community's inability  to secure the bond.  Therefore,  he thought                                                              
that  HB 255  would  provide  an immediate  help  in  the area  of                                                              
transportation.                                                                                                                 
                                                                                                                                
MR. PEARSON  felt that there are  a number of activities  in Hyder                                                              
in which the community could become  involved which would help the                                                              
regional economy.   For example, every  day there are at  least 65                                                              
container  trucks traveling  south  bound on  the Alaska  Highway.                                                              
The position  of Hyder and  Stewart would  be "a natural"  for the                                                              
development  of marine facilities  to take  product coming  out of                                                              
Southeast  Alaska   via  barge  into  Hyder.     Then  inexpensive                                                              
transport of those goods to the East  Coast could occur.  He noted                                                              
that  Hyder   has  put  in  a  lot   of  time  on  the   issue  of                                                              
transportation and  how it would  relate to Hyder Waterworks.   He                                                              
mentioned that all of the production  from the Hyder bottled water                                                              
plant has  been sold  to areas down  South.  If  this can  be done                                                              
with water, Mr. Pearson said that  Hyder can do it also with fish.                                                              
This legislation  would help  Hyder in  its attempts to  establish                                                              
facilities in Hyder.                                                                                                            
                                                                                                                                
Number 2820                                                                                                                     
                                                                                                                                
REPRESENTATIVE  DYSON  commented  that without  recognition  under                                                              
state law it  is difficult for state agencies  to give communities                                                              
such  as Hyder a  "place at  the table."   He  indicated that  the                                                              
Department of  Community & Economic  Development has  struggled to                                                              
find an  entity [in the rural  areas] to establish  a relationship                                                              
with.                                                                                                                           
                                                                                                                                
MR. PEARSON commented that it has  been an incredible two years in                                                              
putting this  project together.   He  informed the committee  that                                                              
this project only  happened after a lady contacted  him, after she                                                              
failed  to  receive  any  response   from  the  Governor  and  the                                                              
Department  of  Commerce.    About 72  hours  after  that  initial                                                              
conversation,  three folks  from Detroit  arrived, prepared  to do                                                              
business.                                                                                                                       
                                                                                                                                
REPRESENTATIVE  KOOKESH said  that when  Representative Dyson  put                                                              
this  legislation  together, many  had  the impression  that  just                                                              
Native communities  were interested in participating.   Therefore,                                                              
he highlighted that Hyder, a non-Native community is interested.                                                                
                                                                                                                                
Number 2646                                                                                                                     
                                                                                                                                
KEVIN RITCHIE, Executive Director,  Alaska Municipal League (AML),                                                              
commented that AML  is interested in any legislation  dealing with                                                              
municipalities; however,  HB 255 has  not yet moved  through AML's                                                              
Local Government  Committee.  Mr.  Ritchie clarified,  with regard                                                              
to the  difference between  a home  rule city  and a  second-class                                                              
city, that the states as established  by the U.S. Constitution are                                                              
set up as  home rule states.   Therefore, the states have  all the                                                              
powers not reserved by the constitution.   A second-class city can                                                              
currently do anything  allowed specifically in law  whereas a home                                                              
rule city can do anything not prohibited  to it unless mandated by                                                              
law.  A  home rule city has  a great deal more  flexibility, which                                                              
is a real  advantage.  He said  HB 255 actually allows  a stronger                                                              
local home  government, which  he believes is  a goal  of Alaska's                                                              
constitution.                                                                                                                   
                                                                                                                                
MR. RITCHIE explained that in an  unorganized borough, a home rule                                                              
or a first-class  city is literally  a borough in that  it has the                                                              
same  responsibilities as  a  borough along  with  its own  school                                                              
district.    For  example, Wrangell  is  a  first-class/home  rule                                                              
municipality  with its  own school  district, as  are Pelican  and                                                              
Tanana.   Those choices  are difficult to  make.  Furthermore,  if                                                              
there were  another  50 communities  that wanted  to be home  rule                                                              
municipalities  in the  state,  there would  suddenly  be 50  more                                                              
school districts, which  probably does not make sense.   Even now,                                                              
there are  small municipalities  that have  chosen to become  home                                                              
rule cities; therefore, there is  a district within a larger Rural                                                              
Education  Attendance Area  (REAA).   Thus  there  are two  school                                                              
districts in a relatively small area with a small population.                                                                   
                                                                                                                                
Number 2485                                                                                                                     
                                                                                                                                
MR. RITCHIE  noted that  he has had  many discussions  with former                                                              
Senator Fisher,  the Chair  of the  Local Government Committee  of                                                              
the Constitutional Committee.  He  then commented that the problem                                                              
that  cannot  be  resolved  constitutionally   is  that  a  tribal                                                              
government is one  that is run by members of the  tribe.  However,                                                              
a municipal  government is  one that is  run by anyone  within the                                                              
boundary  of a particular  area.   Therefore,  it is probably  not                                                              
possible  to reasonably  merge the tribe  and municipal  concepts,                                                              
although HB 255 would appear to provide  those in the district the                                                              
flexibility  to  talk   about  things  in  a   manner  similar  to                                                              
Quinhagak.                                                                                                                      
                                                                                                                                
MR.  RITCHIE said  that AML,  as did  the constitutional  framers,                                                              
feels  that the  local government  is  the most  effective way  to                                                              
attack a problem.  The structure  of local government in Alaska is                                                              
in question  in many rural areas  simply because the  structure of                                                              
funding,   education  and   taxation  needs   to  be   considered.                                                              
Otherwise,  things do  not get  done or  they fall  to the  state.                                                              
Therefore,  AML advocates  continued  funding  when necessary  for                                                              
small communities.                                                                                                              
                                                                                                                                
MR. RITCHIE answered,  in response to Co-Chairman  Harris, that he                                                              
believed  a meeting  is scheduled  within two  weeks.  Since  this                                                              
legislation  offers an  optional  power, he  did  not foresee  any                                                              
opposition to HB 255.                                                                                                           
                                                                                                                                
Number 2320                                                                                                                     
                                                                                                                                
PAT   POLAND,  Director,   Division   of   Municipal  &   Regional                                                              
Assistance,  Department  of  Community   &  Economic  Development,                                                              
testified  via teleconference  from  Anchorage.   As expressed  by                                                              
others, Mr. Poland said that he was  supportive of the end goal to                                                              
provide maximum  flexibility and control  at the local level.   He                                                              
stated:                                                                                                                         
                                                                                                                                
     There  has   been  reference  to  issues   about  school                                                                   
     districts,  platting,  planning  and zoning  and  audits                                                                   
     with respect  to home  rule status,  if we don't  change                                                                   
     the  name.   That  is true,  generally  speaking in  the                                                                   
     unorganized borough; it is not  true inside of organized                                                                   
     boroughs.                                                                                                                  
                                                                                                                                
MR. POLAND informed  the committee that there is  also a provision                                                              
in state law  that requires the commissioner of  the Department of                                                              
Education [and Early Development]  to approve the formation of any                                                              
school district with  less than 250 children.   That many children                                                              
roughly equates to  1,250 people.  He noted that  Tok, and perhaps                                                              
Glennallen, may be able to rise above that level.                                                                               
                                                                                                                                
MR. POLAND  interpreted there to  be an impression  that currently                                                              
some communities  are precluded from participation  in the state's                                                              
local  government system.    He indicated  that  to be  more of  a                                                              
perception than a  reality.  This legislation does  not change the                                                              
standards for  municipal incorporation  in that  there must  be 25                                                              
adult  resident voter  signatures  on a  petition in  order for  a                                                              
community to be incorporated.  With  regard to the suggestion that                                                              
there  is  a  fair  amount  of  red   tape  and  mandatory  powers                                                              
associated  with second-class  cities,  Mr. Poland  again did  not                                                              
believe that to  be an accurate representation.   There are really                                                              
no  mandatory powers  for  second-class cities,  although  second-                                                              
class  cities  do  have  to conduct  elections  and  hold  council                                                              
meetings; he  expected those to be  functions of any  normal local                                                              
government.   In fact, the true test  would be whether  there is a                                                              
demonstrated need  for local government.  Historically,  the Local                                                              
Boundary  Commission  has  been very  permissive  with  regard  to                                                              
whether that standard has been met.                                                                                             
                                                                                                                                
MR. POLAND  said that  one of  the positives  he foresaw  from the                                                              
potential home  rule charter for second-class cities  was relating                                                              
to communities  such as Quinhagak.   Quinhagak has entered  into a                                                              
contractual relationship  between the  tribe and the  second-class                                                              
city to define  who provides public services, the  nature of those                                                              
services, and  the responsibilities of  each body.   The Quinhagak                                                              
situation is  done on a contractual  basis and thus is  subject to                                                              
renegotiation  each  year  and  is   approved  by  the  respective                                                              
councils.   He explained  that if Quinhagak  moved to a  home rule                                                              
status,  it  would allow  them  to  embody  the substance  of  the                                                              
current agreement  in a charter  agreement that would  be approved                                                              
by the community at large.  It could  also be subject to change by                                                              
the local voters.   Therefore, he believed the  credibility of the                                                              
Quinhagak approach would be enhanced.                                                                                           
                                                                                                                                
Number 2032                                                                                                                     
                                                                                                                                
REPRESENTATIVE JOULE  asked if Mr.  Bockhorst had  any suggestions                                                              
with regard to the name of this new entity.                                                                                     
                                                                                                                                
DAN BOCKHORST, Local Boundary Commission,  Division of Municipal &                                                              
Regional   Assistance,   Department   of  Community   &   Economic                                                              
Development, commented  that Ms.  Vandor's concern with  regard to                                                              
calling this  entity something other  than a city government  is a                                                              
legitimate concern.   With regard  to the Representative  Halcro's                                                              
suggestion  of  the  name  "limited   home  rule  city,"  that  is                                                              
certainly an  option.  As Ms.  Vandor indicated, the  intention of                                                              
HB 255 is clear, and the technical  aspects can be addressed in an                                                              
easy manner.                                                                                                                    
                                                                                                                                
REPRESENTATIVE  DYSON thanked  Mr. Poland  and Mr. Bockhorst,  who                                                              
had been very  cooperative on this issue.  He  reiterated that the                                                              
proposed CS is largely the work of Mr. Poland and Mr. Bockhorst.                                                                
                                                                                                                                
CO-CHAIRMAN HARRIS  announced that he  would hold HB 255  in order                                                              
to   determine the  name that best  alleviates the  aforementioned                                                              
concerns.  Furthermore, a fiscal note is pending.                                                                               
                                                                                                                                
REPRESENTATIVE DYSON  encouraged the committee to  brainstorm on a                                                              
possible  name.   He  indicated that  the word  "city"  has to  be                                                              
included   in  the   name  in   order  to   avoid  the   potential                                                              
constitutional problem.                                                                                                         
                                                                                                                                
REPRESENTATIVE  MURKOWSKI requested that  the committee  obtain an                                                              
opinion  from  Ms.  Cook  once a  solution  has  been  determined,                                                              
especially  since  this legislation  is  not  going to  the  House                                                              
Judiciary Committee.                                                                                                            
                                                                                                                                
Number 1778                                                                                                                     
                                                                                                                                
CO-CHAIRMAN    HARRIS   announced    that    he   would    appoint                                                              
Representatives Murkowski, Dyson  and Kookesh to a subcommittee to                                                              
deal with this issue.                                                                                                           
                                                                                                                                
[HB 255 was held over.]                                                                                                         
                                                                                                                                
ADJOURNMENT                                                                                                                     
                                                                                                                                
There being  no further business  before the committee,  the House                                                              
Community  &  Regional  Affairs  Standing  Committee  meeting  was                                                              
adjourned at 9:25 a.m.                                                                                                          

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