Legislature(2001 - 2002)
03/15/2001 08:10 AM House CRA
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE COMMUNITY AND REGIONAL AFFAIRS
STANDING COMMITTEE
March 15, 2001
8:10 a.m.
MEMBERS PRESENT
Representative Kevin Meyer, Co-Chair
Representative Carl Morgan, Co-Chair
Representative Andrew Halcro
Representative Drew Scalzi
Representative Lisa Murkowski
Representative Gretchen Guess
Representative Beth Kerttula
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
HOUSE BILL NO. 156
"An Act relating to municipal debt for development and
redevelopment projects."
- MOVED HB 156 OUT OF COMMITTEE
HOUSE BILL NO. 135
"An Act relating to municipal fees for certain police protection
services."
- HEARD AND HELD
HOUSE BILL NO. 145
"An Act making a civil remedy available to the state or a
municipality against persons who make false claims for, or
certain misrepresentations regarding, state or municipal money
or other property; and providing for an effective date."
- SCHEDULED BUT NOT HEARD
PREVIOUS ACTION
BILL: HB 156
SHORT TITLE:MUNICIPAL DEBT FOR DEVELOPMENT PROJECTS
SPONSOR(S): REPRESENTATIVE(S)MCGUIRE
Jrn-Date Jrn-Page Action
02/28/01 0462 (H) READ THE FIRST TIME -
REFERRALS
02/28/01 0462 (H) CRA
03/15/01 (H) CRA AT 8:00 AM CAPITOL 124
BILL: HB 135
SHORT TITLE:MUNICIPAL FEES: POLICE & FIRE SERVICES
SPONSOR(S): REPRESENTATIVE(S)GUESS
Jrn-Date Jrn-Page Action
02/21/01 0386 (H) READ THE FIRST TIME -
REFERRALS
02/21/01 0386 (H) CRA
02/21/01 0387 (H) REFERRED TO COMMUNITY &
REGIONAL AFFAIR
03/15/01 (H) CRA AT 8:00 AM CAPITOL 124
WITNESS REGISTER
REPRESENTATIVE LESIL McGUIRE
Alaska State Legislature
Capitol Building, Room 418
Juneau, Alaska 99801
POSITION STATEMENT: Testified as the sponsor of HB 156.
TOM KLINKNER, Attorney
Birch, Horton, Bittner, and Cherot
1127 West 7th Avenue
Anchorage, Alaska 99501-3399
POSITION STATEMENT: Offered information on HB 156.
ANNA FAIRCLOUGH, Member
Anchorage Assembly
PO Box 771112
Eagle River, Alaska
POSITION STATEMENT: As a member of the Anchorage Assembly, she
supported HB 156.
ALAN TESCHE, Member
Anchorage Assembly
1032 G St
Anchorage, Alaska 99501
POSITION STATEMENT: Urged support of HB 156.
LIEUTENANT RAY MILLER
Fairbanks Police Department
656 7th Ave.
Fairbanks, Alaska 99701
POSITION STATEMENT: Testified in support of HB 135.
DICK TREMAINE, Member
Anchorage Assembly
(No address provided.)
POSITION STATEMENT: Testified on HB 135.
JIM BALDWIN, Assistant Attorney General
Governmental Affairs Section
Civil Division(Juneau)
Department of Law
PO Box 110300
Juneau, Alaska 99811-0300
POSITION STATEMENT: Answered questions regarding HB 135.
ACTION NARRATIVE
TAPE 01-12, SIDE A
Number 0001
CO-CHAIR KEVIN MEYER called the House Community and Regional
Affairs Standing Committee meeting to order at 8:10 a.m.
Representatives Meyer, Halcro, Scalzi, Murkowski, and Guess were
present at the call to order. Representatives Morgan and
Kerttula arrived as the meeting was in progress. The committee
took two brief at-eases due to technical difficulties.
HB 156-MUNICIPAL DEBT FOR DEVELOPMENT PROJECTS
CO-CHAIR MEYER announced that the first order of business would
be HOUSE BILL NO. 156, "An Act relating to municipal debt for
development and redevelopment projects."
Number 0190
REPRESENTATIVE LESIL McGUIRE, Alaska State Legislature,
testified as the sponsor of HB 156. She explained that "Title
29 authorizes municipalities to create redevelopment agencies
for the purpose of developing and redeveloping land." This
specific statute encourages development and redevelopment. She
related her understanding that this statute has been dormant for
a number of years, which is, in part, due to the "cloud" in the
current language. The problematic language is the following:
"but only if additional security in the form of a letter of
credit or equal security is also pledged". She noted that Mr.
Klinkner, an attorney who specializes in bonds, is online.
REPRESENTATIVE McGUIRE informed the committee that the bond
underwriters already go through a process that determines what
security is required with respect to the issuance of bonds. The
[type of security required] is largely determined by the market
at that time. She pointed out that a letter would not be
required in every case. Therefore, HB 156 would remove the
"cloud" from the language and place the power [in regard to
security] in the hands of the bond underwriters. She noted that
the concept of tax increment financing is used in many other
states. She informed the committee that her sponsor statement
and letters of support are included in the packet.
Number 0513
REPRESENTATIVE KERTTULA related her understanding that this
would only happen in certain areas.
REPRESENTATIVE McGUIRE replied yes and clarified that it is a
local control mechanism.
REPRESENTATIVE KERTTULA also related her understanding that this
has always been allowed, although additional security was
required.
REPRESENTATIVE McGUIRE replied yes.
REPRESENTATIVE KERTTULA asked if there is any danger in not
requiring the additional security.
REPRESENTATIVE McGUIRE noted that she had asked that question.
She related her understanding that the process of bond
underwriting must occur before the issuance of any bond.
Therefore, the bond underwriters will review the method of
security that is in place. She said that requiring 100 percent
"securitization" is not reasonable and is not required or done
in most cases. She pointed out, "The sideboards are there
through the process and through the market."
Number 0653
REPRESENTATIVE HALCRO mentioned that two years ago the
legislature passed investment tax credits for municipalities
that redevelop dilapidated properties. He inquired as to how HB
156 would work with that investment tax credit. He also asked
if there was any possibility that the two would come into
conflict.
REPRESENTATIVE McGUIRE said that she was not familiar with the
specifics of that bill and statute. She related her belief that
the concepts are separate; however, she could envision a
situation that would result in overlap. Representative McGuire
indicated that one [tax increment] deals with the initial tax
implications while the other deals with the later tax
implications.
REPRESENTATIVE SCALZI read the language from Section 1(b)
regarding the definition of "tax increment." He posed a
situation in which the property value decreased and the
increment would go down. He was unsure how a negative [amount]
could be attributed to a payment.
REPRESENTATIVE McGUIRE deferred to Mr. Klinkner. However, she
pointed out that typically this would refer to development and
redevelopment, which increases the value of the property.
Number 0891
REPRESENTATIVE MURKOWSKI referred to the sponsor statement,
which says, "Removing the existing language will remove a
potential cloud on the tax increment bond issue." However,
Representative Murkowski said she believes that keeping the
language in doesn't cloud the issue but rather adds an,
essentially, unnecessary requirement because an appropriate form
of security already has to be established.
REPRESENTATIVE McGUIRE said that she had a conversation with
Mike Scott, General Manager, Municipal Light & Power, who
remarked that this language has placed a cloud on financing.
This language is unclear to bond underwriters and seems to
require 100 percent "securitization." She agreed that
Representative Murkowski is correct in that [HB 156] removes an
unnecessary and somewhat arbitrary requirement. Representative
McGuire informed the committee that there have been attempts to
use this language for its intended purpose, but the current
language is problematic. Furthermore, Mr. Scott has told her
that the language is clear and thus [the bond underwriters]
can't just make the decision.
REPRESENTATIVE MURKOWSKI reiterated that the current statutory
language is very clear.
REPRESENTATIVE McGUIRE mentioned that she believes there have
been attempts to interpret the language otherwise. This
legislation attempts to broaden this and place the power in the
hands [of the bond underwriters].
Number 1160
TOM KLINKNER, Attorney, Birch, Horton, Bittner, and Cherot,
testified via teleconference. He informed the committee that he
has been working with the Anchorage Downtown Partnership and the
Municipality of Anchorage on various means of financing downtown
development projects. During that process this statute came to
his attention. He also informed the committee that he was
involved in the drafting of [AS 29] some 10 or 15 years ago.
Originally, the statute was designed to provide a state block
that would mesh with a federal tax code provision that allows
the issuance of tax exempt bonds for redevelopment projects.
These projects are mainly projects that are governmentally
owned.
MR. KLINKNER turned to the earlier question regarding this
legislation's relationship with the tax relief for
rehabilitating properties. Mr. Klinkner said that although the
two are separate, they are complimentary. He explained that the
tax credit/relief is aimed at privately-owned property while
this statute is aimed at financing governmentally-owned property
that would support private development.
MR. KLINKNER agreed with Representative McGuire's explanation.
He said:
The amendment proposed here is to delete language in
the statute that adds a requirement above and beyond
what is required, simply for the issuance of the bonds
or to meet the federal tax exemption criteria. It has
two ... adverse effects. One is: it imposes,
arbitrarily, and in each case the requirement for
additional security, which may not be necessary in the
judgment of the market in a particular financing. And
second, because of the reference to "or equal
security" in the statute it imposes an ambiguity as to
what constitutes equal security and if the letter of
credit isn't desirable what alternatives would be
permitted to meet the statutory requirements.
MR. KLINKNER related his belief that the deletion of this
language would leave the decisions to the bond marketplace,
which is the appropriate place for these decisions to be made.
Number 1375
REPRESENTATIVE MURKOWSKI asked if Mr. Klinkner believes the
current language has prevented the use of tax increment
financing.
MR. KLINKNER replied, "I believe it has." However, he noted
that it isn't the only factor determining whether the tax
increment financing will work in a specific case. The language
is an additional hurtle, which he believes has discouraged use
of the statute.
Number 1438
MR. KLINKNER, in response to Representative Halcro, said that
this [tax increment] would not be available to private
investors. The way that the remainder of the statute is
structured as well as the way the federal tax exemption
provision is structured limits the use [of the tax increment] to
publicly-owned property or projects.
REPRESENTATIVE HALCRO said, "I'm not quite sure how this ...
process is going to play out if it is a publicly funded or if
it's a public undertaking, a government undertaking, that's
going to support private development." He requested an example
of a project for which this would apply.
MR. KLINKNER specified that this would apply to new or improved
infrastructure that would make an area more attractive for
private development. He identified the construction of a public
building or facility, such as a convention center, that would
encourage private development. He explained that the area that
would potentially be subject to the increment would be
determined by the local governing body when the financing is
approved. Therefore, a line would be drawn around an area,
including the publicly-owned property that may be financed with
the bonds as well as the surrounding privately-owned property
that would increase in value as a result of the public
investment. He said, "That's where the increment would come
from."
REPRESENTATIVE McGUIRE thanked Mr. Klinkner for his time.
Number 1620
ANNA FAIRCLOUGH, Member, Anchorage Assembly, informed the
committee that she is a representative of the Legislative Body
of the Anchorage Assembly. As an assembly member, she noted her
[constituent's] support of HB 156. The assembly has not taken a
specific position on HB 156, although she was confident that the
assembly could pass a specific bill of support. Ms. Fairclough
related her appreciation of having the opportunity to have local
control and creative financing. This [legislation] is a tool
that will allow the Municipality of Anchorage to work well for
redevelopment of particular areas in the city. She noted that
she does serve on the Convention Center Task Force. In
conclusion, Ms. Fairclough said she would appreciate the
committee's support of HB 156.
REPRESENTATIVE HALCRO recalled that after the passage of the
investment tax credit there was debate regarding how to apply
some of these tax credits. He mentioned the Mark Marlowe
project. He recalled there being a question as to whether [the
Mark Marlowe project] was a good use of tax dollars and whether
this would shift the tax burden to other taxpayers.
Representative Halcro asked if a similar argument could happen
with the use of this [tax increment] program.
MS. FAIRCLOUGH related her understanding of the Anchorage
Convention Center and those involved. She said "they" would use
the hotel tax to provide the payment dollars to subsidize the
project. Ms. Fairclough emphasized, "We are trying in every way
possible, with all tools possible, to have it a zero personal
property tax effect in the City of Anchorage." For the record,
Ms. Fairclough noted that she was in opposition to the Marlowe
project going forward because she wanted to [ensure] that the
assembly establish how it would [specify] and apply the law
fairly to everyone.
REPRESENTATIVE MURKOWSKI reiterated her understanding that this
is not a new tool, but rather [the bill] is making it more
workable for the municipality.
MS. FAIRCLOUGH answered in the affirmative. With this [bill],
the convention center will not have to address a larger hurtle.
Number 1901
ALAN TESCHE, Member, Anchorage Assembly, testified via
teleconference. Mr. Tesche, from the perspective of the
district he represents, concurred with Ms. Fairclough's
[remarks]. He noted his agreement with Mr. Klinkner that HB 156
would remove a potential obstacle to the use of this financing.
He said he believes that the passage of HB 156 will allow this
type of financing to be more attractive in the private
marketplace. Mr. Tesche pointed out that even with the passage
of HB 156, the private bond market will determine the specific
terms and conditions regarding how particular projects will be
financed through the issuance of these bonds. Therefore, this
is in the interest of the public.
MR. TESCHE addressed how [HB 156] would work. In downtown
Anchorage there are, in his view, a number of properties that
are underdeveloped. For example, there are a number of
properties around the McKay Building that could be used for much
more intensive commercial and residential use. Although such
projects require intensive private capital, they also require
additional public improvements such as parking garages.
Therefore, enactment of HB 156, which would make tax increment
financing easier for public projects, would ease the way for
public/private partnerships. Mr. Tesche remarked that this is
exciting for him in that [HB 156] provides a more attractive
financing tool that would benefit communities throughout the
state. He informed the committee that the use of tax increment
financing is supported by the Anchorage Downtown Partnership,
the Legislative Program of the [Anchorage] Municipal Assembly,
the Alaska Municipal League, the Anchorage Economic Development
Corporation, and Municipal Light & Power. In conclusion, Mr.
Teshce urged the committee to support HB 156.
Number 2159
REPRESENTATIVE MURKOWSKI remarked that the legislature should do
all possible to encourage good financing mechanisms.
Furthermore, when obstacles are discovered, the legislature
should fix the problem so that it can be used as originally
intended. She commented that HB 156 seems to facilitate the use
of a good tool and thus she supported Representative McGuire's
efforts.
REPRESENTATIVE HALCRO associated his comments with those of
Representative Murkowski. Representative Halcro noted his
support of [HB 156].
REPRESENTATIVE McGUIRE commented that this [legislation allows]
local communities and state government to work together.
Representative McGuire thanked those involved in this matter.
CO-CHAIR MEYER said that in his experience with the assembly,
this [bill] will help with the convention center and other
public projects.
Number 2315
REPRESENTATIVE MURKOWSKI moved to report HB 156 out of committee
with individual recommendations and the accompanying zero fiscal
note. There being no objection, HB 156 was reported from the
House Community and Regional Affairs Standing Committee.
The committee took a brief at-ease from 9:48 a.m. to 9:50 a.m.
HB 135-MUNICIPAL FEES: POLICE & FIRE SERVICES
Number 2238
CO-CHAIR MEYER announced that the next order of business would
be HOUSE BILL NO. 135, "An Act relating to municipal fees for
certain police protection services." He noted that he and
Representative Guess are co-sponsors of HB 135.
REPRESENTATIVE GUESS, testifying as a co-sponsor of HB 135,
explained that HB 135 allows municipalities to access fees for
excessive use of police services for residential property
owners. For example, the municipality could decide that there
could be ten free police visits a month, but that the eleventh
visit would result in a charge. This is aimed at some of the
troubled properties who aren't being responsible. This
legislation would allow a lien on the property, if the
municipality so chooses. The municipality would define
excessive and the process. The legislation does exclude
domestic violence calls from being charged.
Number 2443
REPRESENTATIVE MURKOWSKI moved to adopt CSHB 135, Version
LS0421\F, Cook, 3/9/01, as the working document before the
committee. There being no objection, CSHB 135, Version F, was
before the committee.
REPRESENTATIVE MURKOWSKI related her understanding that this
legislation would leave the determination of reasonable fines
and how that is assessed to the individual municipality.
REPRESENTATIVE GUESS agreed with that understanding. She said,
"All it does is give them a tool; they can choose to use it or
not use it, it's not mandated."
REPRESENTATIVE SCALZI asked if this is necessary. He also asked
whether this can [already] be done by ordinance or code.
REPRESENTATIVE GUESS answered that currently, it is questionable
whether the municipality can do this. However, this legislation
makes it clear with guidelines.
CO-CHAIR MEYER remarked that he believes the municipality
probably already has the power to do this, but this legislation
makes it clear.
REPRESENTATIVE GUESS interjected that [currently] the
municipality doesn't have the power to impose a lien, which
would be allowed under this legislation.
Number 2562
REPRESENTATIVE KERTTULA expressed concern for those property
owners who are in the process of the eviction of a tenant. She
suggested that the legislation include a sideboard that when a
fee is imposed, a municipality must take into account if an
owner is in the process of eviction.
REPRESENTATIVE GUESS noted that [she and Co-Chair Meyer] had
spoken with Tam Cook, Director, Legal and Research Services
Division, Legislative Affairs Agency, Alaska State Legislature,
who thought such was somewhat difficult. Representative Guess
reiterated that the idea is to provide the municipality with a
tool to work with their communities and residential owners in
order to create a system. She indicated that if the committee
desired such an exemption that it could be worked on, although
Ms. Cook recommended leaving that to the municipality.
REPRESENTATIVE KERTTULA suggested inserting on page 1, line 7,
after "property" the following language: "and shall take into
account what attempts are being [made]". She clarified that it
would not be required as an exemption but rather such attempts
would have to be taken into account.
CO-CHAIR MEYER said that he would make note of that and [the
committee could discuss it] after the testimony.
Number 2679
REPRESENTATIVE MURKOWSKI highlighted that this legislation only
applies to owners of residential real property. Therefore, she
inquired as to how this would work in the commercial world.
REPRESENTATIVE GUESS answered that this [legislation] would not
cover the commercial entities. She noted that there was
discussion on that matter, which identified one of the problems
as incentives. In some situations that happen in bars, one
would not want to create a disincentive for the bar to call the
police. Representative Guess said, "We just didn't know how it
would work in this situation. So, we decided to just focus it
on the residential property." However, if the committee thinks
that it is important to [include commercial property], then it
could be considered.
REPRESENTATIVE MURKOWSKI expressed curiosity as to whether any
of the communities across the state try to impose "an emergency
response charge on a commercial establishment, recognizing that
they're contributing to some problems." Representative
Murkowski agreed that [the legislation] shouldn't discourage
establishments from calling; however, there are some that aren't
being responsible neighbors.
CO-CHAIR MEYER related his belief that assembly members would
testify that they do have ways of dealing with problem bars. He
also related his belief that this legislation will help deal
with the absentee landlord situation.
REPRESENTATIVE GUESS expressed the hope that a reporting system
will be established so that an absentee landlord would know what
is going on at their property.
Number 2810
REPRESENTATIVE HALCRO informed the committee that three years
ago he served on the Mayor's Budget Advisory Committee and sat
on a subcommittee that reviewed alternative revenue for the
city. He said, "This subject came up." At that time, the
concern from the [Mayor's Budget Advisory Committee] was that
the lower income areas typically receive the majority of police
protection. Therefore, the question was: "Is it fair to punish
those folks in low income areas because they call?"
Representative Halcro also informed the committee that he has
been charged for his home alarm having false alarms. Therefore,
he asked if the city already has the ability to do this.
REPRESENTATIVE GUESS reiterated that this [subject] was not very
clear and thus this legislation would make it clear in statute.
CO-CHAIR MEYER said that Representative Halcro's question would
be answered through testimony.
REPRESENTATIVE KERTTULA asked if this legislation would cover
the state, such as the Alaska Housing Finance Corporation (AHFC)
and low income housing. She related her belief that it seems
that this legislation would cover those.
CO-CHAIR MEYER said that he didn't know, but indicated that Mr.
Tesche may know.
REPRESENTATIVE GUESS responded by saying that she would guess
that those entities, AHFC and low income housing, would be
covered by this legislation because they are a residential
property owner.
Number 2951
LIEUTENANT RAY MILLER testified via teleconference. He noted
his support of this bill. He pointed out that the City of
Fairbanks has some ordinances [the nuisance property ordinance]
that somewhat (indisc.) this issue. (Indisc.). He informed the
committee that in a 13-month period, the Fairbanks Police
responded to one residence 70 times, of which 12 responses dealt
with drug use and at least two shootings. Over that 13-month
period, officers spent more than 80 man-hours there.
TAPE 01-12, SIDE B
LIEUTENANT MILLER continued, "... a number of incidences at the
same address to contact a property owner and explain to them
that there's a problem with their location and offer them the
opportunity to work with us to try to solve the problem there.
We've been able to use that in a couple of instances very
effectively to shut down business properties or cleanup the
property." He noted that the ordinance does have safeguards
regarding the minimum number of times [the police department
responds] before people are contacted. He pointed out that the
ordinance is designed to obtain the cooperation of the
landowner. However, the ordinance doesn't allow the police
department to recover its associated costs.
LIEUTENANT MILLER mentioned that Fairbanks does have an
emergency response ordinance for Driving While Intoxicated (DWI)
cases from which the costs can be recovered. He explained that
if [the police department] has an emergency response associated
with a DWI arrest, then the person arrested receives a bill for
the police department's time, ambulance time, fire truck [time],
or any emergency response that was generated. If that person
fails to pay the bill, their permanent fund dividend (PFD) is
attached, which is an effective tool. Furthermore, the process
is rather seamless because an individual officer merely has to
report the amount of emergency response time that is then
[compiled] and reported to the city attorney who takes care of
all the billing.
REPRESENTATIVE MURKOWSKI inquired as to what would happen if the
individual causing the problem is the tenant rather than the
owner of the property. She asked if any notice that the tenant
is causing problems is given to the owner.
LIEUTENANT MILLER clarified that there are two distinct
ordinances. One ordinance is the response for DWI. The other
ordinance is the nuisance property ordinance that doesn't have a
cost recovery mechanism, although it does allow civil action
against a property owner. That process begins with a letter,
which enumerates the problem, to the property owner.
REPRESENTATIVE MURKOWSKI said that she assumed the tenant is
also notified.
LIEUTENANT MILLER related his belief that the [nuisance
property] ordinance is specifically directed at the property
owner.
REPRESENTATIVE HALCRO inquired as to who would set the fine
structure.
LIEUTENANT MILLER explained that with the DWI ordinance, the
cost is determined by the cost assessed by the departments. In
further response to Representative Halcro, Lieutenant Miller
said that cost recovery associated with the DWI ordinance has
been successful due to the ability to attach the PFD if the
individual doesn't pay. He noted that at the time of arrest the
individual receives notification that he or she will receive a
bill for the services.
Number 2756
REPRESENTATIVE SCALZI surmised that the [police] department
would make a recommendation to the assembly regarding the number
of calls that would cause a fine to be implemented.
LIEUTENANT MILLER mentioned that the Fairbanks nuisance
ordinance was modeled after the Portland [, Oregon] nuisance
ordinance. He said that [the Fairbanks ordinance says that
responding] three times in six months would result in written
notification to the individual.
Number 2692
ALAN TESCHE, Member, Anchorage Assembly, testified via
teleconference. Mr. Tesche remarked that this subject matter is
not something he is proud of because he has some of these
[nuisance properties] in his district. However, he agreed that
something should be done about it. Mr. Tesche praised the
sponsors of HB 135 as the bipartisan cooperation is refreshing.
MR. TESCHE turned to the need for this ordinance. In regard to
whether municipalities can already do this now, Mr. Tesche said,
"The short answer to that is a definite maybe." Under the
current law, it is unclear how far municipalities can go,
especially if the desire is to make some of these charges, first
and foremost, liens with respect to municipal taxes. The bill
would make it clear that [a nuisance property ordinance] is
authorized by the legislature.
MR. TESCHE then turned to the question of the problem that HB
135 attempts to fix. He explained a typical situation that
occurred about 100 yards from his home. In this case, an
absentee landlord, a bank, owned a condominium that was being
rented to an individual with a disability and a drug problem.
This individual was basically running a crack house out of his
apartment. Only after about a year of considerable effort was
the landlord, the bank, convinced to take action under the
Landlord Tenant [Act] laws. Mr. Tesche emphasized that what was
lacking was a clear statute or ordinance that could illustrate
to the bank that an excessive amount of police activity had
occurred at this property. With such an statute, that problem
could have probably been solved a year in advance. Mr. Tesche
pointed out that often the tenant won't do anything in response
to the neighbors who are often afraid of the tenant.
Furthermore, the landlord's typical response is that he or she
didn't know what was going on and if the landlord did know what
was going on, they often point to the complexity of Alaska's
landlord tenant law. Therefore, he believes a remedy would
result in a different situation.
MR. TESCHE turned to the question as to whether this legislation
is a revenue-generating measure. He emphasized that he hoped it
is not a revenue-generating measure because he didn't believe it
was appropriate to use law enforcement to raise revenue. In
regard to whether this would apply to the state, Mr. Tesche said
that it would apply to the state if the state owned residential
property, although there could be a specific exemption in the
local ordinance. He related his belief that the concern that
this could be unfairly applied to the state could be addressed
in the local ordinance.
Number 2450
MR. TESCHE addressed the question regarding why this
[legislation] shouldn't apply to commercial properties. Mr.
Tesche said, "I would like to see how this thing works by
addressing the most serious part of the problem and that is the
local neighborhood crack house that is operated out of a
residence in a residential neighborhood." Certainly, some of
the larger commercial establishments [have had numerous calls
for service]. For example, Chilkoot's had 800 calls for service
last year, each of which probably cost, in response costs, the
Anchorage Police Department (APD) $100-$200. Therefore,
Chilkoot's occupies a substantial amount of APD's $30 million a
year budget. Nonetheless, Mr. Tesche agreed with the earlier
comment that imposing a charge on Chilkoot's through a
commercial ordinance would deter that establishment from calling
the police. Therefore, Mr. Tesche expressed his preference to
address the problem that exists in residential neighborhoods
first, although this could perhaps speak to commercial
properties later.
Number 2372
MR. TESCHE continued by addressing the question regarding
whether this would be fair to landowners who have rights as
well. Property owners have rights to not be forced to pay
excessive fees for local services that they [already] pay for
through their real property taxes. Mr. Tesche related his
belief that "yes" [this legislation would be fair to
landowners]. He said he believes that the legislature can trust
local governments, assemblies, and city councils that choose to
pass an ordinance, as authorized by HB 135, to do so in a manner
that is fair to both neighborhoods and property owners. He
reminded the committee that local ordinances are approved after
public notice and public hearing. He remarked, "Our
constituents are a lot closer to us, at a local level, than they
are to Juneau, in terms of their access to us and their ability
to make sure that we don't stray far from responsible
legislation."
MR. TESCHE noted that he would probably be involved in drafting
a local ordinance in Anchorage. He specified that there are two
critical features that must be included in order to make the
local ordinance work. First, there must be "actual notice to
the landlord." Actual notice should be used so that the
landlord knew that something is occurring on their property.
Second, the ordinance must show that the landlord failed to take
reasonable corrective action because there is no desire to
penalize the landlord who is cooperating. In conclusion, Mr.
Tesche encouraged the legislature to leave the specifics of
these ordinances to the local governing bodies.
Number 2206
CO-CHAIR MORGAN related his view that this bill will deal with
"houses of ill repute," drug dealers, and troublemakers.
However, what would happen in the case of a nosey neighbor who
would call. He asked if this would effect the resident or the
nosey neighbor.
REPRESENTATIVE GUESS informed the committee that she had a nosey
neighbor call animal control on her because the neighbor felt
that Representative Guess was abusing her Bassett Hounds because
they were thin. Representative Guess remarked that hopefully
this legislation will start communication as it did in her case.
However, this is something that the local community would have
to resolve in their ordinance.
MR. TESCHE pointed out that the nosey neighbor situation often
arises in regard to noise violations and animals. He encouraged
caution in drafting the ordinance so that it would address the
more serious situations, such as drugs, alcohol, and vice
crimes. Again, he reiterated the need to trust the local
governing body to balance these considerations.
Number 2024
REPRESENTATIVE SCALZI suggested that if local governing bodies
are going to be trusted, then this option could also apply to
commercial establishments. He emphasized that this is an option
for local governing bodies.
REPRESENTATIVE GUESS stated that she was willing to discuss
that. However, the purpose of the bill was to provide a tool
[to address the problems with residential properties with the
thought that] perhaps the commercial establishments could be
addressed later. Representative Guess remarked that she wasn't
sure that this legislation would get through if commercial
establishments were added.
CO-CHAIR MEYER agreed with Representative Guess that the
addition of commercial establishments would hurt the potential
passage of this legislation. He reiterated the aforementioned
need to try this first with residential properties.
Number 1886
REPRESENTATIVE MURKOWSKI agreed that the definition of
"excessive" and the calculation of the fines should be left to
the local governing body as they draft the ordinance. However,
she expressed concern that the rights of the property owner
should be respected. She pointed out that the legislation
"allows for a lien on the property and this lien is paramount to
all other liens except the municipal lien." Therefore, there is
the potential for this to be significant to the property owner
and thus Representative Murkowski emphasized the need to ensure
that actual notice is provided. She said that she wasn't
comfortable with allowing the individual local governing bodies
the discretion in deciding how the actual notice is provided to
the property owner. Therefore, she expressed the need for the
legislation to include language stating that actual notice has
to be provided to the property owner before imposing such a
lien. The current language does not specify that the owner of
the property receives the actual notice.
MR. TESCHE reiterated that no local ordinance will work without
actual notice and thus he didn't have any objection to using
language to that effect in the legislation. He expressed
concern with that language going further, such that it would
define the number of days of notice and the efforts that
landlords would be permitted to take without being charged.
Dealing with those specifics would result in the committee
drafting the ordinance, which he didn't believe should be done
at the state legislative level.
REPRESENTATIVE MURKOWSKI agreed. The committee could deal with
the notice provision, but what constitutes excessive needs to be
addressed at the local level.
Number 1597
REPRESENTATIVE KERTTULA agreed with placing the actual notice
requirement directly in the statute. She wasn't sure where the
notice would start, [would notice occur] when there is police
contact or when action is taken [the fee is levied].
Representative Kerttula expressed the need for the following
language to be included in the legislation, "The fee may not be
imposed if the owner has taken reasonable actions to correct the
problem." She suggested making it an exception or clearly state
in statute that the municipality must consider whether the
property owner is taking action before the municipality takes
action. Otherwise, she felt that there would be legal problems
later.
MR. TESCHE echoed his earlier comments that Representative
Kerttula's suggestions verge on the actual drafting of the
ordinance. He said that there could be problems with
Representative Kerttula's suggested language because there could
be problems "because ... the argument is going to be, 'Well, as
per the statute, did the owner take reasonable action and what
did this committee today mean when they wrote that into the
statute?'" He predicted that such would be litigated by the
people running the crack houses. Mr. Tesche said that if the
committee wants to attach new requirements into HB 135, he
suggested the following language: "fees may not be charged or
imposed under this statute if owners take prompt, reasonable
corrective measures as defined by local ordinance." That
language would establish the principle that Representative
Kerttula is advancing and refer to the local ordinance where
reasonable would be defined.
Number 1349
DICK TREMAINE, Member, Anchorage Assembly, remarked that he is
encouraged to see this bipartisan effort with more local
control. As a landlord, Mr. Tremaine said that he believes this
is a good idea. With regard to the possibility of the abuse of
power, he pointed out that it is good to consider that [and
realize] that there can always be an abuse of power.
CO-CHAIR MEYER remarked that this is a problem throughout the
City of Anchorage and the entire state.
Number 1159
REPRESENTATIVE KERTTULA commented on the amorphousness of the
"reasonable actions to correct" language. She inquired as to
the option of [requiring] the municipality to consider whether
the [property] owner is in the process of eviction or there
could be an exemption. Representative Kerttula clarified that
her major concern was in regard to a [property owner] already
being in the process of eviction.
MR. TESCHE said that he would be comfortable with general
language that says "reasonable corrective action as defined by a
municipality." He noted that he is trying to keep this from
getting into the Landlord Tenant Act and thus he would opt for
the general language.
REPRESENTATIVE KERTTULA agreed that seems reasonable.
Number 0989
REPRESENTATIVE HALCRO moved that the committee adopt the
following amendment, Amendment 1:
Page 1, line 14
Insert new subsection (b):
"A fee under (a) of this section may not be levied
unless a certified letter noticing the owner of
violation of the local ordinance has been issued and
the owner has had a reasonable time to respond as
defined by the ordinance."
REPRESENTATIVE MURKOWSKI inquired as to whether Representative
Halcro meant a reasonable time to respond or a reasonable time
to take corrective action.
REPRESENTATIVE HALCRO agreed that the [property] owner should be
given time to respond [and] take corrective action.
REPRESENTATIVE MURKOWSKI posed a situation in which an absent
landlord receives [the municipality's] response and says that
it's his property and he can do with it what he wants. She
asked, "Are we now off the hook?" She surmised that the point
[of this legislation] is to get the [property owner] to take
corrective action.
CO-CHAIR MORGAN interjected his suggestion that the notice be
certified so the [property] owner would have to sign for the
notice.
REPRESENTATIVE KERTTULA pointed out that most court notice does
not require certified notice.
Number 0771
JIM BALDWIN, Assistant Attorney General, Governmental Affairs
Section, Civil Division(Juneau), Department of Law, said that
there have been some difficulties in requiring some certified
notices. Therefore, it may not be appropriate for the bill to
specify how the notice is given. Mr. Baldwin concurred with Mr.
Tesche's comments that this could be worked out at another
level. He pointed out that postal standards and procedures
change more easily than the law. Therefore, Mr. Baldwin
recommended that the legislation be fairly general and allow
flexibility in regard to how the notice is received.
MR. TESCHE concurred and indicated that if there is language
specifying that there has to be certified notice, then the
landlord would avoid accepting any certified mail. That action
would create an absolute defense to any action. Mr. Tesche
reiterated his support of specifying actual notice in the
legislation and leaving the specific definition of the notice to
local governing bodies.
REPRESENTATIVE MURKOWSKI agreed with Mr. Tesche that actual
notice is appropriate.
Number 0571
REPRESENTATIVE GUESS suggested the following language [to be
inserted on page 1, line 14]: "The ordinance shall require
actual notice to residential owners of police contacts and
possible fees." She also suggested inserting the following
language: "The ordinance shall include consideration of prompt
reasonable corrective action as defined by the municipality."
REPRESENTATIVE HALCRO withdrew his amendment, Amendment 1.
REPRESENTATIVE SCALZI asked if this notification was the
notification that goes out prior to a citation or after the
first citation. He asked, "What does the notification actually
mean?"
REPRESENTATIVE GUESS reiterated that the notification would be
left up to the municipalities and would be about police contacts
and the possible fees that would be assessed.
REPRESENTATIVE SCALZI announced that he wouldn't support
Representative Guess' amendment because he trusted the
municipalities to make that decision.
Number 0333
REPRESENTATIVE GUESS moved that the committee adopt her
aforementioned amendment, now Amendment 1.
REPRESENTATIVE SCALZI objected. He referred to Representative
Guess' proposed language that would require actual notice. He
said, "I don't know what exactly that means. To me, its subject
to interpretation by the local municipality as to when the
contacts must take place, how they should take place; is there
going to be a general notification to all property owners?" He
commented on its vagueness. He expressed the need to leave this
to the local governing body.
REPRESENTATIVE KERTTULA disagreed.
REPRESENTATIVE HALCRO said he understands Representative
Scalzi's concerns. This [amendment] sets forth some minimum
parameters for reasonable notification and allows them to
correct the measure.
REPRESENTATIVE KERTTULA mentioned that her husband sits on the
Assembly for the City & Borough of Juneau. She agreed with
Representative Halcro that this set the minimum sideboard.
REPRESENTATIVE MURKOWSKI hoped that this is a conceptual
amendment so that the drafter can finesse the language.
REPRESENTATIVE GUESS agreed that the amendment is conceptual.
A roll call vote was taken. Representatives Murkowski, Guess,
Kerttula, Halcro, Morgan, and Meyer voted for the amendment.
Representative Scalzi voted against the amendment. Therefore,
the amendment was adopted by a vote of 6-1.
TAPE 01-13, SIDE A
REPRESENTATIVE GUESS announced that she would take this
conceptual amendment to the drafters and provide the committee
with an actual amendment when HB 135 is taken up again. She
recommended that anyone having concerns contact her so that it
could be worked out.
CO-CHAIR MEYER announced that HB 135 would be taken up next
Tuesday along with HB 145 and HB 20.
ADJOURNMENT
There being no further business before the committee, the House
Community and Regional Affairs Standing Committee meeting was
adjourned at 9:55 a.m.
| Document Name | Date/Time | Subjects |
|---|