02/21/2002 08:08 AM House CRA
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ALASKA STATE LEGISLATURE
HOUSE COMMUNITY AND REGIONAL AFFAIRS
STANDING COMMITTEE
February 21, 2002
8:08 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. 358
"An Act relating to an optional exemption from municipal
property taxes for certain land from which timber is harvested
and for certain improvements used in or necessary to the harvest
of timber."
- MOVED CSHB 358(CRA) OUT OF COMMITTEE
HOUSE JOINT RESOLUTION NO. 39
Disapproving the Local Boundary Commission recommendation
regarding the annexation of territory to the City of Homer.
- FAILED TO MOVE HJR 39 OUT OF COMMITTEE
HOUSE JOINT RESOLUTION NO. 18
Proposing amendments to the Constitution of the State of Alaska
relating to certain municipal annexations."
- HEARD AND HELD
PREVIOUS ACTION
BILL: HB 358
SHORT TITLE:EXEMPTION FROM PROPERTY TAX: TIMBER
SPONSOR(S): REPRESENTATIVE(S)CHENAULT
Jrn-Date Jrn-Page Action
01/25/02 2067 (H) READ THE FIRST TIME -
REFERRALS
01/25/02 2067 (H) CRA
02/19/02 (H) CRA AT 8:00 AM CAPITOL 124
02/19/02 (H) Heard & Held
MINUTE(CRA)
02/19/02 (H) MINUTE(CRA)
02/21/02 (H) CRA AT 8:00 AM CAPITOL 124
BILL: HJR 39
SHORT TITLE:DISAPPROVE HOMER BOUNDARY CHANGES
SPONSOR(S): COMMUNITY & REGIONAL AFFAIRS
Jrn-Date Jrn-Page Action
02/13/02 2232 (H) READ THE FIRST TIME -
REFERRALS
02/13/02 2232 (H) CRA
02/13/02 2232 (H) REFERRED TO CRA
02/21/02 (H) CRA AT 8:00 AM CAPITOL 124
BILL: HJR 18
SHORT TITLE:CONST.AMENDMENT:MUNICIPAL ANNEXATIONS
SPONSOR(S): REPRESENTATIVE(S)SCALZI
Jrn-Date Jrn-Page Action
02/26/01 0436 (H) READ THE FIRST TIME -
REFERRALS
02/26/01 0436 (H) CRA, JUD, FIN
02/26/01 0436 (H) REFERRED TO CRA
02/21/02 (H) CRA AT 8:00 AM CAPITOL 124
WITNESS REGISTER
REPRESENTATIVE MIKE CHENAULT
Alaska State Legislature
Capitol Building, Room
Juneau, Alaska 99801
POSITION STATEMENT: Noted that he was agreeable to the changes
[incorporated in CSHB 358].
KEVIN WARING, Chairperson
Local Boundary Commission
550 West Seventh Avenue, Suite 1770
Anchorage, Alaska 99501-3510
POSITION STATEMENT: Answered questions in relation to
Representative Scalzi's draft resolution [HCR 27].
ABIGAIL FULLER
PO Box 2845
Homer, Alaska 99603
POSITION STATEMENT: Expressed concerns with HJR 18, although
she viewed it as a step in the right direction.
PETE ROBERTS
PO Box 1134
Homer, Alaska 99603
POSITION STATEMENT: Expressed concerns with HJR 18, although he
viewed it as a step in the right direction.
LINDA RIENHART
PO Box 834
Homer, Alaska 99603
POSITION STATEMENT: Testified that she didn't believe it's
appropriate to disenfranchise anyone.
JIM RIENHART
PO Box 834
Homer, Alaska 99603
POSITION STATEMENT: Testified on HJR 18.
DORIS CABANA
Alaskans Opposed to Annexation
PO Box 607
Homer, Alaska 99603
POSITION STATEMENT: Testified on HJR 18.
VI JERREL, Ph.D.
Alaskans Opposed to Annexation
PO Box 938
Homer, Alaska 99603
POSITION STATEMENT: Testified in opposition to HJR 18.
ALEX FLYUM
267 Cityview Avenue
Homer, Alaska 99603
POSITION STATEMENT: Testified in opposition to HJR 18.
MICHAEL KENNEDY
844 Ocean Dr. Loop
Homer, Alaska 99603
POSITION STATEMENT: Expressed concerns with HJR 18, although he
viewed it as a step in the right direction.
ACTION NARRATIVE
TAPE 02-8, SIDE A
Number 0001
CO-CHAIR CARL MORGAN called the House Community and Regional
Affairs Standing Committee meeting to order at 8:08 a.m.
Representatives Morgan, Meyer, Halcro, Scalzi, and Guess were
present at the call to order. Representatives Murkowski and
Kerttula arrived as the meeting was in progress.
HB 358-EXEMPTION FROM PROPERTY TAX: TIMBER
CO-CHAIR MORGAN announced that the first order of business would
be HOUSE BILL NO. 358, "An Act relating to an optional exemption
from municipal property taxes for certain land from which timber
is harvested and for certain improvements used in or necessary
to the harvest of timber."
CO-CHAIR MORGAN noted that there is a committee substitute [CS]
that incorporates the amendments adopted at the prior hearing.
Number 0078
REPRESENTATIVE SCALZI moved to adopt CSHB 358 [Version 22-
LS1250\C] as the working document. There being no objection,
CSHB 358, Version C, was before the committee.
REPRESENTATIVE SCALZI explained that currently Native
corporations are exempt from [municipal] property taxes.
However, if there are timber sales from Native land, the
aforementioned exemption would be eliminated. If the change
[incorporated in the CS] doesn't pass, the [Native] lands will
fall under a new tax jurisdiction and a disincentive to
harvesting the [infested] timber will be created. He emphasized
the need to allow the emergency fire timber sales to take place.
The change [incorporated in the CS] would allow the taxes to be
deferred. He noted that [this tax deferment] is a local option.
REPRESENTATIVE MIKE CHENAULT, Alaska State Legislature, speaking
as the sponsor, announced that he was agreeable to the changes.
Number 0303
REPRESENTATIVE GUESS moved to report CSHB 358 out of committee
with individual recommendations and the accompanying zero fiscal
note. There being no objection, CSHB 358(CRA) was reported from
the House Community and Regional Affairs Standing Committee.
The committee took a brief at-ease from 8:14 a.m. to 8:16 a.m.
HJR 39-DISAPPROVE HOMER BOUNDARY CHANGES
CO-CHAIR MEYER announced that the next order of business would
be HOUSE JOINT RESOLUTION NO. 39, Disapproving the Local
Boundary Commission recommendation regarding the annexation of
territory to the City of Homer.
CO-CHAIR MEYER explained that HJR 39 is a resolution that
disapproves the Local Boundary Commission's (LBC)
recommendation. If HJR 39 is approved, then the committee would
be disapproving the LBC's decision. If HJR 39 isn't approved,
then the LBC's recommendation is being approved. Co-Chair Meyer
noted those folks that were available to answer any questions.
Number 0478
REPRESENTATIVE SCALZI commented that [the Homer annexation] is a
contentious issue, which he believes has received good dialogue
with the various parties. Representative Scalzi acknowledged
that being the local representative for Homer, he couldn't
escape his input in regard to the outcome. He also acknowledged
that the legislature often defers to the local representative.
However, he pointed out that when an annexation comes before the
LBC, the LBC is the disinterested, unbiased, third party. The
LBC's recommendation is reviewed by the legislature in order to
determine whether the process was followed correctly. He
emphasized that the legislature has the final review not the
representative from the impacted area. Therefore, he felt that
this should be a committee decision. Although he said that he
could go either way on this matter, he said he believes the
decision should be in the best interest of the state.
Furthermore, if HJR 39 is approved, he hoped that there would be
good justification in the "Whereas" clauses. He noted that when
he reviewed other [annexations] that have been vetoed, there was
little to no evidence why.
Number 0745
REPRESENTATIVE MURKOWSKI agreed with Representative Scalzi's
comments in regard to the need to justify a rejection of the
annexation. She noted that she has consistently heard that
although the LBC may have acted within its jurisdiction,
improvements are necessary in order to avoid such a contentious
annexation. However, annexations by nature are contentious.
Although Representative Murkowski remarked that this should be
viewed as an opportunity to provide constructive guidance, she
was at a loss as to where to start an outline [of improvements]
as mentioned by Representative Scalzi. She related her belief
that the City of Homer could've done better "leg work" at the
beginning of the process.
Number 0982
REPRESENTATIVE GUESS agreed with the previous two speakers. She
related her belief that the standards were met and the final
decision was probably the correct decision. However, she
believes the process was flawed. She said she believes that the
council overreached and was sloppy in requesting the 25 square
miles. Moreover, the public process was poor. Representative
Guess emphasized that the [LBC] should've returned to the city
when the [petition] was changed to 4.5 square miles. However,
she wasn't sure how to go about fixing the process. She stated
her belief that the [change to the] 4.5 square miles was
correct.
Number 1153
REPRESENTATIVE HALCRO remarked that the greatest part of this
discussion is that the process worked. He acknowledged that one
side to this issue is regarding whether [the process was] legal,
which it was determined to be. There is also the social side to
this issue. Representative Halcro said that one has to question
whether one more public hearing would've helped when one
considers the large picture and the public's involvement. He
couldn't see that another public hearing would've made a
difference. He remarked that the 4.5 square miles [of annexed]
land is justified. Therefore, Representative Halcro said he
believes that the committee should say that although there are
some changes that should be made, those are another discussion.
In this case, the process worked, he reiterated.
Number 1314
REPRESENTATIVE KERTTULA echoed the earlier comments regarding
the difficulty of this decision. She noted that Dan Bockhorst,
Staff, LBC, provided her with case law regarding the
constitution and the constitutional minutes when the decision
was made to create this process, which made her realize that
this is something the legislature is supposed to resolve.
Although she really cared about the individuals involved, she
found that the cases highlight that there is a public interest
in the way that the state is managed as well as its land. She
referred to Wasilla's past when the best farmland in the state
was paved over for strip malls.
REPRESENTATIVE KERTTULA said that she, too, couldn't point to
anything that the municipality did that was illegal. However,
she did believe there was a better way to manage public hearings
and such, which she believes the LBC recognizes because it is
putting in place a regulation to resolve some of those issues.
Although she agreed with Representative Halcro that the process
worked, she didn't believe that the ends justify the means. She
expressed concern over what she viewed as punishment. She
announced that until the vote is taken, she wasn't sure how she
would vote.
Number 1593
REPRESENTATIVE SCALZI remarked, "I'd like to whack the city
myself." However, he agreed with Representative Kerttula that
punishment isn't the legislature's role. In regard to the 25
square mile boundary, Senator Torgerson has said that he
wouldn't support [the annexation] without a vote.
Representative Scalzi recalled that at the time he said he
wouldn't support the 25 square miles, but would wait to review
the LBC's [decision]. What the LBC presented, annexation of 4.5
square miles, was reasonable.
REPRESENTATIVE SCALZI referenced a draft resolution that he
provided to the committee. He proposed that this draft
resolution from the committee would be directed to the LBC and
urge the LBC to promote standards and regulations that would
provide a preliminary judgment on some of these ridiculous
petitions. Therefore, the city or municipality would have to do
their homework on the matter. He noted that Kevin Waring, LBC,
helped draft this draft resolution. He hoped that the committee
would review this draft resolution regardless of the outcome
with HJR 39.
REPRESENTATIVE SCALZI, in response to Co-Chair Meyer, related
his belief that HB 13 is a separate issue entirely and shouldn't
be incorporated into HJR 39.
Number 1858
CO-CHAIR MORGAN remarked that he agreed with everyone's comments
thus far. He also agreed that the process worked. He noted
that he, too, would have to make the decision when the time
comes.
CO-CHAIR MEYER noted that he was torn as well. He pointed out
that this has been a long process and thus there will be no
public testimony taken today. He also noted his respect for the
citizens of Homer in regard to the manner in which they
conducted themselves throughout this process. Co-Chair Meyer
echoed earlier testimony regarding the notion that 4.5 square
miles is a reasonable annexation. Furthermore, when looking at
the map of that area, [the 4.5 square acres] is a densely
populated area, and it looks as if it is a part of the City of
Homer. He concluded that there should be some resolution to
this.
Number 2069
REPRESENTATIVE MURKOWSKI informed the committee that when people
stopped by her office, she asked whether the 4.5 square miles
should be annexed. Every person she spoke with conceded that
that the 4.5 square miles was reasonable to annex. If this
annexation is rejected, two years from now the committee could
be reviewing the approval of the same 4.5 square mile
annexation. On the other hand, if the committee agrees that the
annexation is reasonable, she questioned whether it would be
fair for the citizens to have to go through the process again,
only to get the same result.
REPRESENTATIVE HALCRO thanked Representative Scalzi for all the
research he has done on this issue. Representative Halcro noted
that during the LBC's history there have been 120 annexations, 9
of which have been vetoed by the legislature, and 7 of those 9
have returned in the next few years with little modification.
Representative Halcro related his belief that there is no need
to put the citizens of Homer through this for another year or
two. Representative Halcro commented that he was impressed with
the city councilmen who announced that they would resign and run
again in order to protect the voting voice of [those in the
annexed area].
Number 2273
REPRESENTATIVE GUESS returned to Representative Halcro's comment
regarding whether one more public hearing would've helped. She
said she feels that it would have helped, although she didn't
think the lack of another public hearing is a reason to reject
the resolution. She pointed out that when there is a
significant change in the [annexed area], there should be a
public hearing. When dealing with boundary changes, one should
move through the process very carefully.
CO-CHAIR MEYER asked if the Representative Scalzi wanted his
draft resolution to come forward as a committee resolution
regardless of the outcome of HJR 39.
REPRESENTATIVE SCALZI answered yes. Representative Scalzi read
the draft resolution into the record. [Please refer to HCR 27.]
CO-CHAIR MEYER related his belief that [HCR 27] addresses some
of the issues and concerns mentioned by the committee. Although
[HCR 27] wouldn't help the current situation, it would help
future annexations.
REPRESENTATIVE HALCRO recalled that the [LBC] comes before this
committee every year to provide an overview of the LBC's
activities of the year. He also recalled that the overview
seems to always include suggestions of needed clarifications to
state law. Therefore, he asked whether any of the vagueness in
state law clouded this public process issue. He also asked if
there is anything that can be done legislatively to address
these problems.
Number 2650
KEVIN WARING, Chairperson, Local Boundary Commission, testified
via teleconference. In regard to [HCR 27], he didn't believe
that any clarification of law is required. Mr. Waring pointed
out that the LBC does receive "flawed" petitions. Petitions
that are procedurally flawed can be returned. Furthermore,
petitions that are contrary to laws or the constitution can be
returned as well. In the years of the commission's existence,
petitions that have weak facts or petitions that may not be
supportable by the standards aren't returned without going
through the entire process. Mr. Waring related his
understanding that [HCR 27] establishes a circuit breaker that
would allow the LBC to return a petition that the commission has
deemed to not be supported by facts or is seriously at odds with
the standards without going through the entire process.
Therefore, the local government could amend the petition and
resubmit it. Mr. Waring remarked that he believes it isn't a
question as to whether the LBC has statutory powers but rather
would the commission pursue the step of adopting regulations and
standards. Mr. Waring stated that this would be a welcome step
forward as the LBC is always looking to improve the process. He
said he believes that [HCR 27] would result in an improvement.
If [HCR 27] was passed, he expected that the LBC would report
[to the legislature] regarding what it has done to move in the
direction of [HCR 27].
Number 2800
REPRESENTATIVE MURKOWSKI inquired as to how Mr. Waring would
define "substantively deficient" [which is the language included
in HCR 27].
MR. WARING answered that the language would be defined in the
regulations. He related his belief that "substantively
deficient" would mean [the petition] didn't have the facts. He
presumed that the LBC would adopt standards and there would be a
process by which the staff would evaluate a petition against the
standards. If the staff suggested that the LBC review the
petition, he envisioned a "mini-hearing" whereby the petition is
reviewed against the standards. If the LBC found that the facts
were weak, then the commission may make the decision to return
the petition so that the petitioner would have the opportunity
to review and perhaps revise the petition. In further response
to Representative Murkowski, Mr. Waring agreed that there is a
difference between a return of a petition versus a rejection of
a petition. Rejection has consequences that prevent the
petitioner from returning the petition for some time.
Therefore, it seems punitive to not allow the opportunity to
reject a petition without allowing the petitioner to make the
fix.
Number 2916
REPRESENTATIVE SCALZI noted the discussion of a possibility of a
percentage that must be met in relation to the standard. He
asked if [the LBC] would consider a guideline in the standards
in order to be clear that the municipality has to be within a
certain standard of reason.
MR. WARING answered that he wasn't sure that a percentage would
work. He pointed out that statute governing the LBC mandates
that the LBC accept and consider petitions. He explained that
the regulatory standards would include specific guidelines that
would be of use to potential petitioners. He hoped that if
there were standards of that sort that the LBC might never have
to utilize this authority. Therefore, warning of the
consequences might motivate the petitioner to do the job
correctly initially.
TAPE 02-8, SIDE B
The committee took an at-ease from 8:59 a.m. to 9:07 a.m.
CO-CHAIR MEYER announced that the committee has decided to
[sponsor] the draft resolution [HCR 27].
Number 2957
REPRESENTATIVE SCALZI moved to report HJR 39 out of committee
with individual recommendations and the accompanying fiscal
notes.
REPRESENTATIVE HALCRO objected.
REPRESENTATIVE HALCRO clarified that the committee is voting on
whether to move HJR 39 out of committee. Therefore, a
[majority] of yes votes would move HJR 39 out of committee and a
[majority] of no votes would fail to move HJR 39 out of
committee.
A roll call vote was taken. Representative Morgan voted for
moving HJR 39 out of committee. Representatives Guess,
Kerttula, Halcro, Murkowski, Meyer, and Scalzi voted against
moving HJR 39 out of committee. Therefore, HJR 39 failed to
move out of the House Community and Regional Affairs Standing
Committee by a vote of 1:6.
The committee took an at-ease from 9:11 a.m. to 9:14 a.m.
HJR 18-CONST.AMENDMENT:MUNICIPAL ANNEXATIONS
CO-CHAIR MEYER announced that the final order of business before
the committee would be HOUSE JOINT RESOLUTION NO. 18, Proposing
amendments to the Constitution of the State of Alaska relating
to certain municipal annexations."
Number 2759
ABIGAIL FULLER testified via teleconference. Although Ms.
Fuller remarked that HJR 18 is a step in the right direction,
she still had some concerns. She pointed out that in an
annexation the rights of the people effected are important. The
Homer annexation illustrates that the Local Boundary Commission
(LBC) is capable of trimming a too large annexation down to a
reasonable size. However, the Homer annexation also
demonstrates that the LBC has a complete disregard for the
citizens and thus this area [of the annexation process] needs
amending. Ms. Fuller said, "I feel any annexation of a settled
area requires a vote. Anything less violates the basic founding
principles or our country." She pointed out that placing a 10
percent limit on who is allowed to vote would be problematic
because it would violate the equal protection clause.
Therefore, Ms. Fuller suggested that HJR 18 be redrafted in
order to mesh with HB 13 of last year. She suggested:
It should say that any city annexation that effects a
borough service area would require a vote. What this
would do is prohibit legislative review annexations
for cases where the people outside the city are
already getting the services they want through a
borough government. In this situation there is no
need to force anyone into the city regardless of what
a certain state commission thinks. Annexation can
wait until the city can offer the outsiders a good
enough deal that they will vote for it.
Therefore, forced annexations in the more settled areas would be
restricted while perhaps encouraging borough formation in the
remainder. She viewed this as a step toward eventually doing
away with the legislative review method entirely.
Number 2672
PETE ROBERTS testified via teleconference. Although Mr. Roberts
urged review of [HJR 18], he felt that the entire process misses
the point. This is a discussion about people, Mr. Roberts
emphasized. Although this constitutional amendment is a step in
the right direction, he, too, felt that the 10 percent was
problematic. He pointed out that when one lives in an adjoining
city, one has voting rights, but those in an adjoining borough
or unorganized territory have no voting rights. "There's
something wrong with this," he said. This resolution doesn't
really address this matter either. He urged the committee to
look at this from the citizen's point of view.
Number 2587
LINDA RIENHART testified via teleconference. She began by
saying that she agreed with the prior two comments. She said,
"I believe the basic issue is not percentages -- how many people
it's fair to disenfranchise. I believe it's not fair to
disenfranchise a single person."
JIM RIENHART testified via teleconference. Mr. Rienhart said,
"What I heard this morning was you people saying that you
recognize that slavery is wrong, but those who have slaves can
keep them."
Number 2537
DORIS CABANA, Alaskans Opposed to Annexation, testified via
teleconference in opposition to the 10 percent or anything
similar because she viewed it as rewarding the city. She noted
that she would be one of the 900 that won't have a voice. Ms.
Cabana provided remarks in reference to the Homer annexation.
She informed the committee that Robert Erwin, Attorney, Alaskans
Opposed to Annexation, notes in his petition for reconsideration
[of the Homer annexation] that "Alaska Statute 29.35.450(e)
requires a vote of the people effected in eliminating a
substantial portion of borough service area established for
roads, fire protection, parks, and recreation. It is presumed
that whenever the legislature enacts a provision it has in mind
previous statutes relating in the same manner and should be
construed together." She indicated that the aforementioned
quotation was from Haughlin (ph) v. Inlandboatmen's Union of the
Pacific. Ms. Cabana charged that the City [of Homer] has been
forgotten and the 900 citizens have been forgotten as well.
Number 2382
DR. VI JERREL, Ph.D., Alaskans Opposed to Annexation, testified
via teleconference. Dr. Jerrel announced that she opposed HJR
18 because the 10 percent isn't constitutional. She expressed
the need for the people in the area proposed for annexation to
be allowed to vote. She charged that [HJR 18] violates the
constitutional right to due process, as well as equal protection
under the law. Furthermore, [HJR 18] violates civil rights
[under the U.S. Constitution], as well as the Ninth Amendment.
Dr. Jerrel, Ph.D., announced opposition to "this entire thing"
as well as the proposed annex petition by the City of Homer. In
conclusion, Dr. Jerrel, Ph.D. expressed the need to have the
entire annexation process changed.
Number 2244
ALEX FLYUM testified via teleconference. He mentioned that he
has four businesses in Homer where he also owns seven or eight
parcels of property. Mr. Flyum spoke in opposition to HJR 18.
Mr. Flyum related his belief that "we are in the process of
trying to cut state expenses, not add more ... by hiring more
people to do this." He said that he believes that the process
with the LBC takes [already addresses] everything.
MICHAEL KENNEDY testified via teleconference. Although Mr.
Kennedy agreed that [HJR 18] is a start in the right direction,
he failed to see the logic in the 10 percent. He said, "I just
heard your committee approve an annexation that covers 25
percent in population and area. And so, if you're going to
approve something at 25 percent, I fail to see the logic of
putting forward a resolution when you're going to require a vote
of the people by 10 percent." He maintained that if HJR 18 is
to be supported, then the committee would have to deny the City
of Homer's annexation petition and allow Homer to start over and
put the petition to a vote.
Number 2074
REPRESENTATIVE SCALZI informed everyone that HJR 18 was drafted
by he and Senator Torgerson as a means to [start discussion] and
indicate to the LBC that there are some inadequacies in the
petition process. He noted that the 10 percent is a starting
point. In regard to why [the committee] would approve the
current Homer annexation if [the committee] feels that 10
percent is adequate, Representative Scalzi pointed out that [the
committee] is playing by the current rules under which there is
no percentage.
CO-CHAIR MEYER announced that the public hearing on HJR 18 would
be closed. He also announced that HJR 18 would held.
REPRESENTATIVE SCALZI agreed.
ADJOURNMENT
There being no further business before the committee, the House
Community and Regional Affairs Standing Committee meeting was
adjourned at 9:32 a.m.
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