Legislature(2007 - 2008)BARNES 124
03/22/2007 08:00 AM House COMMUNITY & REGIONAL AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| HB185 | |
| HB152 | |
| HB202 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 185 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 152 | TELECONFERENCED | |
| += | HB 202 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE
March 22, 2007
8:02 a.m.
MEMBERS PRESENT
Representative Anna Fairclough, Co-Chair
Representative Gabrielle LeDoux, Co-Chair
Representative Nancy Dahlstrom
Representative Mark Neuman
Representative Kurt Olson
Representative Sharon Cissna
Representative Woodie Salmon
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
HOUSE BILL NO. 185
"An Act relating to certain municipal service areas that provide
road services."
- HEARD AND HELD
HOUSE BILL NO. 152
"An Act establishing a renewable energy fund and describing its
uses and purposes."
- MOVED CSHB 152(CRA) OUT OF COMMITTEE
HOUSE BILL NO. 202
"An Act relating to the community revenue sharing program; and
providing for an effective date."
- MOVED HB 202 OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: HB 185
SHORT TITLE: MUNICIPAL ROAD SERVICE AREAS
SPONSOR(s): REPRESENTATIVE(s) COGHILL
03/12/07 (H) READ THE FIRST TIME - REFERRALS
03/12/07 (H) CRA, TRA
03/22/07 (H) CRA AT 8:00 AM BARNES 124
BILL: HB 152
SHORT TITLE: ESTABLISHING A RENEWABLE ENERGY FUND
SPONSOR(s): REPRESENTATIVE(s) HARRIS
02/26/07 (H) READ THE FIRST TIME - REFERRALS
02/26/07 (H) CRA, FIN
03/06/07 (H) CRA AT 8:00 AM BARNES 124
03/06/07 (H) Heard & Held
03/06/07 (H) MINUTE(CRA)
03/20/07 (H) CRA AT 8:00 AM BARNES 124
03/20/07 (H) Heard & Held
03/20/07 (H) MINUTE(CRA)
03/22/07 (H) CRA AT 8:00 AM BARNES 124
BILL: HB 202
SHORT TITLE: COMMUNITY REVENUE SHARING
SPONSOR(s): COMMUNITY & REGIONAL AFFAIRS
03/14/07 (H) READ THE FIRST TIME - REFERRALS
03/14/07 (H) CRA, FIN
03/20/07 (H) CRA AT 8:00 AM BARNES 124
03/20/07 (H) Heard & Held
03/20/07 (H) MINUTE(CRA)
03/22/07 (H) CRA AT 8:00 AM BARNES 124
WITNESS REGISTER
CAROL BEECHER, Legislative Intern
to Representative John Coghill
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HB 185 on behalf of the sponsor,
Representative Coghill.
RENE BROKER, Attorney
Fairbanks North Star Borough
Fairbanks, Alaska
POSITION STATEMENT: Testified in support of HB 185.
RANDY FRANK, Member
Fairbanks North Star Borough Assembly
Fairbanks North Star Borough
Fairbanks, Alaska
POSITION STATEMENT: During hearing of HB 185, answered
questions.
MIKE BLACK, Director
Division of Community Advocacy
Department of Commerce, Community, & Economic Development
Anchorage, Alaska
POSITION STATEMENT: During hearing of HB 185, answered
questions.
SANDRA WILSON
Fairbanks, Alaska
POSITION STATEMENT: Testified in opposition to HB 185.
TAMMIE WILSON
North Pole, Alaska
POSITION STATEMENT: Testified in opposition to HB 185.
LUKE HOPKINS, Presiding Officer
Fairbanks North Star Borough Assembly
Fairbanks North Star Borough
Fairbanks, Alaska
POSITION STATEMENT: During hearing of HB 185, highlighted the
public processes available for comment.
RYNNIEVA MOSS, Staff
to Representative John Coghill
Alaska State Legislature
Fairbanks, Alaska
POSITION STATEMENT: During hearing of HB 185, answered
questions.
JENNIFER YUHAS, Special Assistant
to the Mayor
Fairbanks North Star Borough
Fairbanks, Alaska
POSITION STATEMENT: Testified in support of HB 185.
CHARISSE MILLET, Staff
to Representative John Harris
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Spoke on behalf of the sponsor of HB 152,
Representative Harris.
REPRESENTATIVE PAUL SEATON
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Explained his suggested amendment,
Conceptual Amendment 1, to HB 202.
ACTION NARRATIVE
CO-CHAIR ANNA FAIRCLOUGH called the House Community and Regional
Affairs Standing Committee meeting to order at 8:02:13 AM.
Representatives Fairclough, LeDoux, and Dahlstrom were present
at the call to order. Representatives Olson, Cissna, and Salmon
arrived as the meeting was in progress.
HB 185-MUNICIPAL ROAD SERVICE AREAS
8:02:48 AM
CO-CHAIR FAIRCLOUGH announced that the first order of business
would be HOUSE BILL NO. 185, "An Act relating to certain
municipal service areas that provide road services."
8:02:58 AM
CAROL BEECHER, Legislative Intern to Representative John
Coghill, Alaska State Legislature, provided the following
statement:
The bill before you today, House Bill 185, provides
boroughs with a means of altering existing road
service area boundaries to ensure taxpayer fairness
among residents of service areas. A service area is a
taxing jurisdiction within a borough that has been
established to provide special services, such as road
maintenance or fire protection. These services are
requested and approved by voters residing within a
specific area. State law permits borough residents
living outside a service area to use service area
roads for their sole or legally required access.
These residents derive a direct benefit equal to
residents within the service area yet they can refuse
to contribute to the cost of construction or
maintenance of these roads by voting down any
annexation attempt. These state mandated annexation
votes typically fail as individuals are reluctant to
join a service area when they can instead use these
maintained roads for free. HB 185 amends state law by
allowing a service area to annex property that uses
its roads for their sole or legally required access
without a separate vote of the property to be annexed.
A second issue arises where residents of a service
area are required to pay into a service area even
though they do not utilize the service roads for
access to their property. Service areas, however, are
often reluctant to vote to remove property from the
service area because it effectively raises taxes on
the remaining property owners. HB 185 amends state
law by allowing a borough assembly to exercise its
judgment to alter, by ordinance, a service area
boundary to exclude a property that does not use
service area roads as its sole or legally required
access.
8:05:20 AM
REPRESENTATIVE DAHLSTROM commented that she likes the intent of
HB 185 and hopes it moves from committee today.
8:06:07 AM
RENE BROKER, Attorney, Fairbanks North Star Borough, related
support for HB 185. She pointed out that road service areas are
formed on the central principle of taxpayer fairness such that
those who receive the special services provided by a road
service area pay for the cost of those special services.
However, under current law in Fairbanks it has inadvertently
resulted in two substantial deviations from the aforementioned
principle. Firstly, under current law neighboring property can
use service area roads for access to their homes and businesses
while not paying anything to construct or maintain the road.
The aforementioned becomes particularly egregious and difficult
when the free use differs substantially from the service areas
own use in number or type. For example, a gravel hauling
business that significantly degrades the roads. Secondly,
citizens sometimes have to pay to maintain roads that they no
longer use. She explained that occasionally development around
an existing service area changes the use pattern. However,
under the current system, despite the change in use a citizen in
such a situation would have to continue to pay taxes to the
service area. Both inequities can be fixed only if taxpayers
are willing to vote against their own financial interest.
Therefore, the Fairbanks North Star Borough strongly supports HB
185 because it permits municipalities to remedy both problems by
altering service area boundaries but only to the extent
necessary to ensure compliance with the underlying principle
that those who receive the special services pay the cost.
8:08:48 AM
REPRESENTATIVE NEUMAN referred to page 2, lines 19-23, which
excludes a vote by the people residing in the subdivision
proposed to be added to a road service area if the road service
area roads are the only access to the subdivision. He asked if
the people in an existing service area are able to vote on an
annexation.
MS. BROKER replied yes, adding that the people in the existing
service area don't want to have additional property foisted on
them. The people of the road service area need to determine
whether requiring people who use [the roads maintained by the
road service area] for free makes sense because it may not
always be a good financial decision for the existing road
service area to take on that additional obligation of the added
property.
REPRESENTATIVE NEUMAN posed a situation in which one travels
from subdivision A to get to subdivision B, the new subdivision,
the residents of subdivision A would get to vote on that.
MS. BROKER replied yes, because those in subdivision A are
providing the roads and are impacted by the traffic.
Furthermore, subdivision A should be able to vote on the
annexation of subdivision B because were subdivision B to be
annexed, subdivision A would have to pay for the roads within
subdivision B.
8:10:47 AM
CO-CHAIR LEDOUX related her discomfort because it seems that
there will be those who will be grouped in a service area who
won't be able to vote on the matter. She asked if a road
service area could be gated and charge for its use. She
recalled that there's a community in Kodiak that wanted the
borough to construct a bridge. Since the borough wasn't
interested, the community constructed the bridge with a gate and
charged for its use. Therefore, she questioned whether there
are ways to address this matter.
MS. BROKER pointed out that service areas are part of the
borough and thus [the roads in service areas] are publicly
dedicated roads for which taxpayer money within the service area
goes to pay for the road. However, it's a different scenario if
it's a private road. Ms. Broker stated that publicly dedicated
roads can't be gated or blocked and only allow certain people to
travel on them.
CO-CHAIR LEDOUX inquired as to why a person who spends the night
in the road service area would not have to pay for the road
service area.
MS. BROKER said that [getting to people in the aforementioned
situation] would require monitoring and invasiveness that [the
borough] isn't willing to do. "What we're trying to do is
establish a rule that says if ... you ... by location of your
property use that road in the same exact manner, for access to
your property, as the people in the service area, then you
should be put on the same basis as the people in the service
area in terms of payment."
CO-CHAIR LEDOUX suggested that perhaps the problem is the road
service area itself in that if these are public roads with
public use, perhaps everyone in the borough should have to pay
for them.
8:14:37 AM
REPRESENTATIVE NEUMAN returned to his earlier example with
subdivision A and subdivision B and asked if a vote taken by the
people in subdivision A is an advisory vote or a binding vote.
MS. BROKER answered that it's a binding vote. The borough
assembly can't add the property without the approval of
subdivision A road service area.
8:16:06 AM
CO-CHAIR LEDOUX inquired as to how road service areas come to
exist in the first place.
MS. BROKER explained that road service areas begin with a
citizens' petition that goes to the assembly. Upon approval
from the assembly, there's an election. The problem is that as
communities develop, subdivisions and properties develop around
an existing road service area that was formed 20 years ago.
8:17:21 AM
RANDY FRANK, Member, Fairbanks North Star Borough Assembly,
echoed Ms. Broker's testimony that this legislation is about
fairness. He, too, opined that this situation has arisen since
Fairbanks doesn't have road powers. He related his belief that
road service areas are a great system that needs a bit of
tweaking in order to make the situation fair.
8:18:20 AM
MS. BROKER, in response to Representative Olson, informed the
committee that in Fairbanks there are about 107 road service
areas.
8:19:03 AM
REPRESENTATIVE NEUMAN asked if HB 185 will impact organized
areas that are looking to combine road service areas.
8:19:23 AM
MIKE BLACK, Director, Division of Community Advocacy, Department
of Commerce, Community, & Economic Development (DCCED), said
that if an assembly or council was trying to combine a service
area it would require a vote. He said that he wasn't sure that
this [legislation] would have a substantial impact on most
communities.
8:19:45 AM
REPRESENTATIVE NEUMAN noted that the Mat-Su Borough is reviewing
combining some road service areas in order to gain efficiencies
and [economies of scales]. He asked if anything in HB 185 would
impact the [road service areas in the Mat-Su Borough].
MR. BLACK related his understanding that Section 1 [paragraph]
(2) would apply in the Mat-Su Borough. He questioned whether
the vote would be required in the Mat-Su Borough. If a vote was
required in the Mat-Su Borough, it would impact their ability to
combine the road service areas.
8:21:16 AM
SANDRA WILSON informed the committee that currently she lives on
a private road and a subdivision has been constructed in front
of her property. One vote was held regarding forming a road
service area, which was voted down basically because those on
the private road voted against it. She related that most likely
the road service area will take another vote to create their own
road service area. If HB 185 passes, the subdivision would be
allowed to form a road service area and once doing so force
those on the private road to become part of it because it would
be the only access for the residents of the private road. She
noted that when the subdivision was constructed, "they pushed
through our road that we used to have and there's now currently
a house sitting on it." Therefore, the subdivision has blocked
the other access out for those on the private road. Ms. Wilson
concluded by relating her opposition to HB 185.
8:22:29 AM
REPRESENTATIVE CISSNA pointed out that the committee packet
includes an amendment that would seem to address the
aforementioned situation.
CO-CHAIR FAIRCLOUGH mentioned that the amendment is requested by
the sponsor.
8:23:10 AM
TAMMIE WILSON testified in opposition to HB 185. She informed
the committee that sometimes subdivisions are built in front of
areas with existing roads, which forces them to be included [in
a road service area] without a vote. The aforementioned seems
to provide road powers to the borough, to which she was opposed.
Furthermore, those who don't want to be included but are forced
to be part of a road service area can adversely impact the road
service area. For instance, such individuals could force a
dissolution vote or attempt to decrease the mill rate such that
the roads can't be serviced. She then highlighted that in the
Fairbanks area there are many public and private roads. The
private roads are those that were constructed in the 1950s or
1960s but were never dedicated. She related that in her own
situation if the road service area [in the subdivision in front
of her property] was established, the front section would be
maintained while the remaining private portions of the road
wouldn't. However, residents on the private road would be
required to pay the same amount [as those in the subdivision].
Such situations are occurring throughout the borough. With
regard to fairness, she emphasized that such would mean that
everyone [paying into a road service area] would have their
roads maintained no matter the designation of the road. She
expressed concern with regard to taking away an individual's
ability to vote as it can cause more problems. Therefore, she
urged the committee to vote against HB 185.
8:25:00 AM
MS. TAMMIE WILSON, in response to Representative Dahlstrom,
clarified that Sandra Wilson is her daughter. However, she
emphasized that others are facing similar situations as she and
her daughter. In further response to Representative Dahlstrom,
Ms. Tammie Wilson explained that the private road was
constructed in the 1950s. She informed the committee that her
deed specifies that the private road is her access in and out.
After living on the property and maintaining the road for a few
years, one day she came to find that her access was cut off and
a new road was built. She said that she basically had no say on
the aforementioned. The access now available is through a
subdivision, which is a public maintained road. If that
subdivision chose to become a road service area, the area could
choose to take a vote and leave those on the private road out of
the initial vote and later force those on the private road to be
included in the road service area. She opined that it's not
fair that an area could vote to become a road service area and
then add extra roads later.
8:27:24 AM
REPRESENTATIVE DAHLSTROM surmised that Ms. Tammie Wilson is also
discussing quality of lifestyle.
MS. TAMMIE WILSON clarified that her concern is that there are
individuals who have lived on roads that they have maintained
for 20-40 years. However, because there is so much construction
in the [Fairbanks area] large plots of land are purchased and
change access. Ms. Tammie Wilson reiterated that she has to go
through a subdivision to access her property. She then
reiterated her concern that [those in the subdivision] will
force those on the private road into something without a vote.
This results in a financial obligation that's based on the value
of the home. In order to reach fairness of road service, there
should be a straight fee rather than basing it on the value of
the home. She opined that there are many problems with road
service areas.
REPRESENTATIVE DAHLSTROM asked whether those on the private road
had any conversations regarding the possible purchase of the
parcel that's now a subdivision.
MS. TAMMIE WILSON answered that the option wasn't available
because the builder wants to build houses on the six river lots.
In response to Co-Chair Fairclough, she specified that her house
sits on five acres.
8:29:46 AM
CO-CHAIR LEDOUX, recalling that Ms. Tammie Wilson's deed
originally provided for access, questioned how the private road
wasn't given access when the subdivision was built.
MS. TAMMIE WILSON related that she has been trying to find out
how the borough, through its platting division, was able to give
permission to the builder to cut off access to the private road.
However, she said that she hasn't been able to get an answer.
8:30:39 AM
REPRESENTATIVE NEUMAN asked if under HB 185 Ms. Tammie Wilson
could be annexed into the road service area.
MS. BROKER related her understanding that Ms. Tammie Wilson
lives off a private road, and thus she couldn't be annexed in to
the road service area because Ms. Tammie Wilson would have to
have public road access to her property as a legal standard for
being placed in a road service area. Ms. Broker informed the
committee that private roads that haven't been publicly
dedicated aren't included in road service areas because taxpayer
money can't be spent on private roads.
8:31:31 AM
CO-CHAIR LEDOUX related her understanding that Ms. Tammie Wilson
had access to her property through a private road and the
borough seemed to say that she will continue to have access,
except that it will be through a different road. However,
someone is planning on paying for and maintaining the different
road.
MS. BROKER highlighted that the borough doesn't extinguish
private road rights, which Ms. Tammie Wilson could've enforced
in law. Ms. Broker explained that the borough approved a
subdivision/subdivider who constructed publicly dedicated roads
by the borough. The aforementioned is all the borough did and
the borough didn't extinguish any private right, she opined.
8:33:32 AM
LUKE HOPKINS, Presiding Officer, Fairbanks North Star Borough
Assembly, pointed out that during the aforementioned situations
there are a number of opportunities for comment during the
public process, including during road service areas meetings.
8:34:35 AM
CO-CHAIR FAIRCLOUGH surmised that Ms. Tammie Wilson feels that
she's been left out of part of the process.
MR. HOPKINS commented that Ms. Tammie Wilson can come forward
and testify and has. He related his understanding that Ms.
Tammie Wilson's situation is regarding a private road and a
publicly dedicated road that now ties into a public road on the
other side of the subdivision that was platted. Mr. Hopkins
opined that the portion of the road Ms. Tammie Wilson had used
could "still be there" if she and other property owners wanted
to take it up with the current land owners.
CO-CHAIR FAIRCLOUGH asked if there's a notification process for
what's proposed today such that the impacted property owners and
service area occupants would be notified.
MR. HOPKINS replied yes. Depending upon the action, there is
public notice, notice at the service district level, and
assembly level discussions prior to any action.
8:36:13 AM
CO-CHAIR LEDOUX posed a situation in which a road service
district is formed by a group who wants its formation and who
then annex in an area in which residents didn't want it. She
further posed that the annexation may be based on the argument
that those in the area being annexed into the road service area
are benefiting from it.
MR. HOPKINS explained that when a service district formed, it
comes before the assembly after going through a public process.
Once the service district is formed, the individuals in the area
are allowed to vote. There is a public process during which any
individual is allowed to comment. With regard to a platting
issue for a subdivision prior to the formation of a road service
district, such an issue goes to the platting board for which
there is public notice and comment. Ultimately, the assembly
takes final action after the election. Therefore, the public
has ample opportunity to comment, he opined.
CO-CHAIR LEDOUX pointed out that only those within a certain
discrete area would be allowed to vote on the formation of a
road service area. Therefore, one could form the road service
district around those wanting it and not include those likely to
vote against the road service area, and then want to annex them
afterward. However, only those in the initial geographic area
of the road service area could vote.
MR. HOPKINS noted his agreement that such could occur, but he
again reiterated that there are many opportunities to review and
act upon any misjudgments.
8:39:56 AM
REPRESENTATIVE OLSON suggested exploring the possibility of
consolidated road service areas.
8:40:36 AM
REPRESENTATIVE NEUMAN posed a situation in which a subdivision
is built in an existing road service area. He asked if those on
the road connecting the new subdivision would be allowed to vote
whether those in the new subdivision can use [the roads] in the
existing road service area.
MR. BLACK said that he would need more time to review such a
situation.
MS. BROKER pointed out that if property is developed within a
road service area, no vote is required.
8:41:49 AM
RYNNIEVA MOSS, Staff to Representative John Coghill, Alaska
State Legislature, explained that if a subdivision is already
within an existing road service area, then that property is
already being taxed a mill rate for road services.
REPRESENTATIVE NEUMAN related his assumption that there would be
an increase in road service area taxes in order to maintain the
additional roads, although there may only be a few new
[residents of the subdivision].
MS. MOSS explained that a road service area has a certain amount
of road miles. She likened a road service area to a subdivision
because it's platted and has boundaries. Those within the road
service area's boundaries are taxed a mill rate to provide funds
to maintain roads. The only concern with regard to adding
property to a road service area would be the expense of
maintaining the new roads in the road service area. Ms. Moss
said that she didn't foresee a large increase in the mill rate
to the existing road service area if only adding six homes. Ms.
Moss specified that it really depends upon the road miles being
annexed into the road service area.
8:44:01 AM
REPRESENTATIVE CISSNA associated herself with Representative
Olson's comments.
8:45:00 AM
REPRESENTATIVE OLSON asked if there are some small service areas
[in the Fairbanks area].
MS. MOSS said that could be the case, although she said she
isn't familiar with all the road service areas in the borough.
MS. BROKER confirmed that there are some small road service
areas. She recalled that there is a road service area that's a
quarter-mile long.
8:45:56 AM
MS. MOSS related that the Fairbanks North Star Borough has made
a large effort to deal with its road service areas over the last
couple of years.
8:46:43 AM
JENNIFER YUHAS, Special Assistant to the Mayor, Fairbanks North
Star Borough, related support for HB 185 on behalf of the mayor
of the Fairbanks North Star Borough.
8:47:01 AM
CO-CHAIR FAIRCLOUGH, upon determining no one else wished to
testify, closed the public hearing.
8:47:47 AM
MR. FRANK explained that road service areas came into existence
in the 1970s due to the borough's lack of road powers. The road
service areas used the government as a vehicle to collect taxes
and oversee the maintenance and building of roads within
subdivisions. The aforementioned worked well until there were
hundreds of road service areas. He noted that it's difficult
for people to agree on like conditions for roads. The problem
is further exacerbated by the fact that for one road service
area to join another, a vote is required. He pointed out that
some are reluctant to join road service areas and don't really
see a benefit to doing so. Currently, there are a handful of
contractors who perform the maintenance on these roads. Often
these contractors [provide service to a geographic] cluster of
road service areas in order to provide cheaper service.
Therefore, combining of road service areas to achieve a cheaper
per mile cost is already occurring, without the government being
involved. A few years ago, a road service area committee was
established to discuss the problems in the road service areas as
well as problems boroughwide. The legislation before the
committee today passed through that process. In fact, HB 185
was unanimously passed by the road service area committee as
well as the assembly.
8:50:56 AM
REPRESENTATIVE CISSNA commented on the difficulties of growing
communities. She questioned whether [DCCED] might have ideas to
develop good statewide legislation. She opined that it's
horrible to envision the Mat-Su Valley with this situation.
8:52:21 AM
CO-CHAIR FAIRCLOUGH related that her request for feedback from
the Municipality of Anchorage as well as local road service
areas resulted in the following two questions on which she would
like Ms. Broker to comment. The first question is that the
primary issue raised in HB 185 is whether the new clause on page
2, line 19, is constitutional. She explained that Anchorage has
a charter amendment requiring a vote of both service areas.
Therefore, she wasn't sure whether the language could be
permissive because it creates a possible conflict in Anchorage's
charter, which may be the case in other areas of the state as
well. The second question is in regard to other communities
that may have other charter amendments requiring votes in and
out of service areas.
REPRESENTATIVE OLSON related that he would have the Kenai
Peninsula Borough's road service manager review the impact this
legislation will have on other portions of the state.
8:54:02 AM
REPRESENTATIVE DAHLSTROM commented that the Chugiak-Eagle River
road board has been run quite efficiently, and thus she said
they would be able to answer any questions.
8:54:40 AM
CO-CHAIR FAIRCLOUGH related that HB 185 has been [reviewed] by
the [Chugiak-Eagle River] road board and there doesn't seem to
be a conflict. However, the city as a whole is reviewing the
legislation in relation to its charter.
8:55:17 AM
CO-CHAIR LEDOUX stated that she is somewhat sympathetic to those
being forced into a road service area without having the ability
to vote on it.
CO-CHAIR FAIRCLOUGH reminded the committee that the sponsor has
provided the committee with an amendment. She asked if the
committee wanted to take up the amendment now or when the
legislation is taken up at its next hearing.
8:55:54 AM
REPRESENTATIVE NEUMAN related that he didn't want to take up the
amendment until he has had an opportunity to speak with some of
his constituents.
8:56:10 AM
REPRESENTATIVE CISSNA suggested that it may be appropriate to
have the sponsor speak to the amendment in order to provide the
committee with an explanation.
8:58:00 AM
REPRESENTATIVE DAHLSTROM moved that the committee adopt
Amendment 1, which read [original punctuation provided]:
Page 2, lines 19-27
(3) to require approval by the voters residing in a
propertysubdivision proposed to be added to a road
service area if roads maintained by the service area
provide the only access to the propertysubdivision or
provide access to the propertysubdivision that is
required by the subdivision plat or by other
regulation or ordinance;"
(4) to change in the boundaries of a road service area
to exclude a propertysubdivision that does not rely on
the use of roads maintained by the service area for
the property'ssubdivision's only access or for access
to the property that is required by the subdivision
plat or by other regulation or ordinance.
REPRESENTATIVE NEUMAN objected.
8:58:14 AM
MS. BEECHER explained that the purpose of the amendment is to
address a situation in which there is a rock pit from which rock
is being hauled through a subdivision. "So, it would not only
be then a subdivision that would have to pay into your road
service if that's what they were using as their exclusive use,
but also property," she further explained.
8:58:57 AM
REPRESENTATIVE DAHLSTROM withdrew her motion to adopt Amendment
1.
REPRESENTATIVE DAHLSTROM moved to adopt CSHB 185, Version 25-
LS0687\E, Cook, 3/21/07, as the working document. There being
no objection, Version E was before the committee.
REPRESENTATIVE DAHLSTROM then moved that the committee adopt
Amendment 1 [text provided previously].
REPRESENTATIVE NEUMAN objected for discussion purposes.
8:59:48 AM
MS. BEECHER explained that Amendment 1 addresses a situation in
which a property, such as a rock pit, uses a road service area
as its access to the rock pit. She further explained, "Since a
subdivision is specific to an area that is building residential
areas, this would also include those kinds of situations where
they would then have to pay for a road service area that they
were accessing and using."
CO-CHAIR LEDOUX inquired as to how Amendment 1 differs from
Version E.
MS. BEECHER answered that Amendment 1 provides a broader
statement than the narrow definition of a subdivision and thus
includes property. In further response to Co-Chair LeDoux, Ms.
Beecher said that she was merely using a rock pit as an example
of something that wouldn't qualify as a subdivision, but would
use a road service area as its direct access. Furthermore, such
use would wear the roads and the rock pit wouldn't have to pay
for that use or maintenance because it wouldn't qualify as a
subdivision.
9:01:42 AM
REPRESENTATIVE DAHLSTROM withdrew Amendment 1. There being no
objection, it was so ordered.
9:01:53 AM
CO-CHAIR FAIRCLOUGH announced that HB 185 would be held over.
HB 152-ESTABLISHING A RENEWABLE ENERGY FUND
9:02:03 AM
CO-CHAIR FAIRCLOUGH announced that the next order of business
would be HOUSE BILL NO. 152, "An Act establishing a renewable
energy fund and describing its uses and purposes." Co-Chair
Fairclough reminded the committee that before it is Version V.
The committee took a brief at-ease.
9:04:36 AM
CHARISSE MILLET, Staff to Representative John Harris, Alaska
State Legislature, speaking on behalf of the sponsor,
Representative Harris, clarified that nuclear power isn't
covered under HB 152.
9:05:02 AM
REPRESENTATIVE NEUMAN asked if the feasibility studies could be
covered.
MS. MILLET answered that the sponsor is reviewing whether that's
a possibility.
9:05:33 AM
REPRESENTATIVE DAHLSTROM moved to report CSHB 152, Version 25-
LS0413\V, Kane, 3/20/07, out of committee with individual
recommendations and the accompanying fiscal notes. There being
no objection, CSHB 152(CRA) was reported from the House
Community and Regional Affairs Standing Committee.
The committee took an at-ease from 9:06 a.m. to 9:08 a.m.
HB 202-COMMUNITY REVENUE SHARING
9:09:00 AM
CO-CHAIR FAIRCLOUGH announced that the final order of business
would be HOUSE BILL NO. 202, "An Act relating to the community
revenue sharing program; and providing for an effective date."
9:09:24 AM
CO-CHAIR LEDOUX moved, for discussion purposes, that the
committee adopt Conceptual Amendment 1, labeled 25-LS0489\K.2,
Cook, 3/21/07, which read:
Page 1, lines 1 - 2:
Delete all material and insert:
""An Act relating to the community dividend
income program, to the community dividend income
account, and to transfers of money from the earnings
reserve to the community dividend income account; and
providing for an effective date.""
Page 1, line 4, through page 4, line 2:
Delete all material and insert:
"* Section 1. AS 29.60 is amended by adding new
sections to read:
Article 11. Community Dividend Income Program.
Sec. 29.60.850. Amount of community dividend
income payments. (a) Each fiscal year, the department
shall distribute the amount appropriated under
AS 37.13.147(b) from the community dividend income
account for the community dividend income program as
community dividend income payments under this section.
The basic community dividend income payment for a
fiscal year equals
(1) $250,000 for a borough or unified
municipality;
(2) $75,000 for a reserve eligible under
AS 29.60.860(a) or a city;
(3) $25,000 for an unincorporated community
in a borough or unified municipality eligible under
AS 29.60.860; and
(4) $25,000 for an unincorporated community
in the unorganized borough eligible under
AS 29.60.860(a).
(b) If the amount appropriated for a fiscal year
under AS 37.13.147(b) from the community dividend
income account
(1) exceeds $60,000,000, but is not more
than $70,000,000, each payment
(A) under (a)(1) of this section is
increased by $50,000;
(B) under (a)(2) of this section is
increased by $15,000; and
(C) under (a)(3) of this section is
increased by $5,000;
(2) exceeds $70,000,000, each payment under
(a)(1) - (3) of this section is further increased by
the amounts specified in (1)(A) - (C) of this
subsection for each increment of at least $10,000,000
in excess of $70,000,000.
(c) If the amount appropriated for a fiscal year
is not sufficient to fully fund all the basic
community dividend income payments under (a) of this
section, the amount paid to each recipient shall be
reduced on a pro rata basis so that the entire amount
appropriated is distributed.
Sec. 29.60.860. Unincorporated community
eligibility. (a) The department, with advice from the
Department of Law, shall determine whether there is,
in each reserve or unincorporated community, an
incorporated nonprofit entity or a Native village
council that will agree to receive and spend the
community revenue sharing payment for the benefit of
the reserve or unincorporated community. The
department may make the payment for an unincorporated
community located in a borough or unified municipality
only to the municipality as provided in (b) of this
section. If there is more than one qualified entity in
a reserve or unincorporated community located in the
unorganized borough, the department shall pay the
dividend to the entity that the department finds most
qualified to receive and spend the money. The
department may not make a payment for a reserve or an
unincorporated community unless the incorporated
nonprofit entity or Native village council waives
immunity from suit for claims arising out of
activities of the corporation or council related to
the payment. A waiver of immunity from suit under this
subsection must be on a form provided by the
Department of Law. If there is not a qualified
incorporated nonprofit entity or Native village
council in a reserve or unincorporated community that
is willing to receive and spend the community revenue
sharing payment for the benefit of the reserve or
unincorporated community, that reserve or
unincorporated community is not eligible for the
payment, and the payment may not be made.
(b) The department may make a community revenue
sharing payment on behalf of an unincorporated
community in a borough or unified municipality only to
the municipality for payment by the municipality to an
incorporated nonprofit entity or Native village
council that has been approved by the assembly. The
department must have written evidence of the assembly
approval. The assembly may only approve an
incorporated nonprofit entity or Native village
council that provides at least three of the following
services within the unincorporated community that are
generally available to all residents of the
unincorporated community:
(1) fire protection;
(2) emergency medical;
(3) water and sewer;
(4) solid waste management;
(5) public road or ice road maintenance;
(6) public health;
(7) search and rescue.
Sec. 29.60.879. Definitions. In AS 29.60.850 -
29.60.879,
(1) "reserve" means a place that is
organized under federal law as an Indian reserve that
existed before enactment of 43 U.S.C. 1618(a) and is
continued in existence under that subsection;
(2) "unincorporated community" means a
place that is not incorporated as a city, is not a
reserve, and in which 25 or more persons reside as a
social unit.
* Sec. 2. AS 37.13.140 is amended to read:
Sec. 37.13.140. Income. Net income of the fund
includes income of the earnings reserve account
established under AS 37.13.145, but does not include
income of the community dividend income account
established under AS 37.13.147. Net income of the fund
shall be computed annually as of the last day of the
fiscal year in accordance with generally accepted
accounting principles, excluding any unrealized gains
or losses. Income available for distribution equals 21
percent of the net income of the fund for the last
five fiscal years, including the fiscal year just
ended, but may not exceed net income of the fund for
the fiscal year just ended plus the balance in the
earnings reserve account described in AS 37.13.145.
* Sec. 3. AS 37.13 is amended by adding a new
section to read:
Sec. 37.13.147. Community dividend income
account. (a) The community dividend income account is
established as a separate account in the fund. Money
in the account shall be invested in investments
authorized under AS 37.13.120 and the income shall be
retained in the fund.
(b) The corporation shall calculate and request
an appropriation for each fiscal year from the
community dividend income account of an amount that
equals five percent of the year-end market values of
the account, averaged over the preceding three fiscal
years. The amount requested may be appropriated from
the account to the Department of Commerce, Community,
and Economic Development for community dividend income
payments under AS 29.60.850 - 29.60.879, or money may
be appropriated in any amount for any public purpose.
Nothing in this subsection creates a dedicated fund.
* Sec. 4. The uncodified law of the State of Alaska
is amended by adding a new section to read:
TRANSITION. (a) After the transfers under
AS 37.13.145(b) and (c), on July 1, 2007, the Alaska
Permanent Fund Corporation shall transfer
$1,000,000,000 from the earnings reserve account to
the community dividend income account (AS 37.13.147)
established in sec. 3 of this Act.
(b) Notwithstanding AS 37.13.147(b), the Alaska
Permanent Fund Corporation may not request an
appropriation from the community dividend income
account for fiscal year 2008. The amount the
corporation requests for fiscal year 2009 equals the
year-end market value of the account for fiscal year
2008. The amount the corporation requests for fiscal
year 2010 equals the year-end market value of the
account averaged over the preceding two fiscal years.
* Sec. 5. This Act takes effect July 1, 2007."
CO-CHAIR LEDOUX related that she has offered Representative
Seaton, sponsor of Conceptual Amendment 1, the ability to
discuss Conceptual Amendment 1. However, she announced that she
doesn't support Amendment 1.
9:10:46 AM
REPRESENTATIVE PAUL SEATON, Alaska State Legislature, related
that he is very supportive of revenue sharing and community
dividends. However, he expressed concern that the mechanism for
funding is problematic since Legislative Finance is predicting
that the state will be in a deficit situation next year and in a
deficit situation in the state's cash account through 2017 when
the gasline is anticipated. He opined that it's unlikely that
the legislature will divert approximately 6 percent of its total
revenue stream. Therefore, Conceptual Amendment 1 provides a
different revenue stream to fund the community dividend program.
The idea is to utilize the Amerada Hess fund, which is within
the permanent fund but can't be used for personal dividends.
The notion is to add more money to the Amerada Hess fund that
could be "streamed out" on a 5 percent of market value (POMV),
"which the House passed by two-thirds to put it on a
constitutional amendment several years ago, but that was to do
the entire permanent fund. This amendment simply looks at the
Amerada Hess fund as well as some additional funds. However,
there was some resistance to utilizing Amerada Hess funds
because some members feel that revenue stream is necessary for
capital expenditures. This [amendment] takes money from the
earnings reserve and leaves it there, while establishing a new
account within the permanent fund to generate revenue with a
spin off of 5 POMV to fund the community dividend program.
Representative Seaton said this is important because the
governor has included $48 million in her budget, but it hasn't
been included in the House's budget.
9:14:06 AM
REPRESENTATIVE NEUMAN surmised that Representative Seaton's
proposal would still take money from the earnings reserve of the
permanent fund dividend.
REPRESENTATIVE SEATON noted his agreement that all previous
programs said that money would be taken from the earnings
reserve to be placed in the general fund. However, Conceptual
Amendment 1 doesn't do that as it merely establishes an account
within the earnings reserve from which money generated from that
account could be utilized by the legislature. The
aforementioned would be decided by the legislature each year,
although it wouldn't remove a significant amount of money to be
placed in the general fund. Representative Seaton pointed out
that his proposal would remain in the permanent fund and be
managed by the permanent fund, but the 5 POMV structure would be
used on the account. In further response to Representative
Neuman, Representative Seaton clarified that his proposal
doesn't take $1 billion out of the earnings reserve but rather
establishes an account within the earnings reserve of the
permanent fund from which spin off funds would be calculated and
could be appropriated by the legislature. "This deposit does
not remove money from the earnings reserve, it simply
establishes another account similar to Amerada Hess within the
permanent fund," he clarified.
9:16:45 AM
CO-CHAIR LEDOUX surmised that this proposed account does impact
the permanent fund dividend.
REPRESENTATIVE SEATON replied yes, and noted that he has a
spreadsheet from the Permanent Fund Corporation relating the
impact. He offered to review it for the committee.
9:17:09 AM
REPRESENTATIVE DAHLSTROM recalled that the governor has made
statements pertaining to funding for various municipal issues
while being clear on her position with regard to the permanent
fund dividend. Therefore, Representative Dahlstrom said that
she doubted that the legislature would receive the governor's
support for [the proposal embodied in Conceptual Amendment 1].
Although there are various feelings and interpretations
regarding Amerada Hess, the previous legislature found it to be
a revenue stream. However, she opined that creating what's
proposed in Conceptual Amendment 1 is troubling and probably
won't be supported by this administration. Furthermore,
Representative Dahlstrom said that she can't support Conceptual
Amendment 1 because of her commitment to not spend permanent
fund money without a vote of the people.
9:19:08 AM
REPRESENTATIVE CISSNA recalled the years in which the
legislature has been reviewing how to finance state government
in the face of deficits. For a number of years, endowments
were considered. She asked if that's essentially what
Conceptual Amendment 1 proposes in that it takes the increases
in value of a percentage of funds [within the permanent fund].
She related her understanding that the corpus of the account
wouldn't be touched.
REPRESENTATIVE SEATON said Representative Cissna is basically
correct. In the past, the [legislature] reviewed taking the
entire permanent fund and creating a POMV endowment, which
would've utilized a portion of the principle and that would've
required voter [approval]. However, the earnings are available
to the legislature for appropriation and by statute the
legislature appropriates up to 50 percent of the earnings,
averaged over five years, to pay for the permanent fund
dividend. The legislature hasn't utilized the earnings,
although there have been times when it has taken the earnings
and re-deposited that into the principle. Conceptual Amendment
1 doesn't propose any of those and doesn't eliminate a future
legislature's option because it can always remove the account or
appropriate the account. Generally, when the legislature
establishes a program that spins off money, it reappropriates
the funds if the program is working well. Representative Seaton
pointed out that this [proposed] fund isn't sweepable. He
characterized this proposal as the most protected manner in
which to have something without having a dedicated fund, which
is prohibited by Alaska's constitution.
REPRESENTATIVE CISSNA related her experience that the
legislature has continually declined to put monies aside for
revenue sharing. She asked in what way this would be an
improvement over other revenue sharing suggestions.
REPRESENTATIVE SEATON opined that he didn't believe most
legislators would set aside 6 percent of the state's revenue
stream when facing predictions of 10 years of deficit spending.
Under the proposal embodied in Conceptual Amendment 1 money can
be appropriated by the legislature, but it doesn't take the
deposit out of the permanent fund and thus continues to be
managed by the Permanent Fund Corporation.
9:24:01 AM
CO-CHAIR FAIRCLOUGH observed that there is a great divide on
this issue and the funding stream. She asked if the committee
is interested in hearing a point-by-point review of the
amendment.
REPRESENTATIVE NEUMAN said that he can't support Conceptual
Amendment 1 without voter approval.
REPRESENTATIVE DAHLSTROM related that she doesn't believe it
would be worth the committee's time to review Conceptual
Amendment 1. She reiterated that she can't support the
amendment.
9:24:55 AM
CO-CHAIR LEDOUX withdrew Conceptual Amendment 1. There being no
objection, it was so ordered.
REPRESENTATIVE SEATON thanked the committee for allowing him to
bring the proposal forward. He then drew attention to page 1,
line 22 through page 2, line 8, [of Conceptual Amendment 1] and
noted the lack of indexing the base community allotments to
increase funding.
9:26:25 AM
REPRESENTATIVE CISSNA opined that revenue sharing just has to
happen. Although touching the general fund never seems to fly,
she hoped that people will remember that there are other
alternatives.
9:27:20 AM
REPRESENTATIVE NEUMAN related his belief that considerable
amounts from the general fund have been spent on revenue sharing
programs throughout the state. He specified that such funds
have come through discretionary funds and capital funds.
9:28:35 AM
CO-CHAIR LEDOUX moved to report HB 202 out of committee with
individual recommendations and the accompanying fiscal notes.
REPRESENTATIVE OLSON objected, noting that the legislation has
the following two problems: the funding source and the fiscal
note. Representative Olson related his support for revenue
sharing, but opined that HB 202 isn't the appropriate vehicle.
He mentioned that he had provided an amendment to the sponsor
that would've had a $32-$34 million fiscal note, but that he
wouldn't offer it.
9:29:52 AM
REPRESENTATIVE CISSNA asked if Representative Olson is thinking
of introducing legislation on this matter.
REPRESENTATIVE OLSON answered, "Not at this time, no." In
further response to Representative Cissna, Representative Olson
indicated that he wouldn't offer his alternative as an amendment
on the House floor, but offered to provide it to Representative
Cissna.
9:30:16 AM
REPRESENTATIVE DAHLSTROM related her understanding that the
House Finance Committee is reviewing other avenues [to fund
revenue sharing].
9:30:40 AM
REPRESENTATIVE NEUMAN said that he will allow HB 202 to pass
from the House Community and Regional Affairs Standing Committee
for discussion in the House Finance Committee, although he
doesn't totally agree with the funding sources and amounts.
CO-CHAIR LEDOUX related her understanding that the House Finance
Committee is studying the issue of revenue sharing and a vehicle
is necessary. The funding source and percentage, she opined,
will be left to the House Finance Committee.
9:31:45 AM
REPRESENTATIVE OLSON commented that he won't be offering his
amendment or alternative legislation because he doesn't have the
time to do it correctly.
9:32:07 AM
CO-CHAIR FAIRCLOUGH related her understanding that [the House
Finance Committee members] are looking for a vehicle for revenue
sharing, but it doesn't mean that it will be from the
operational side of the budget. As pointed out earlier, it's
difficult to find a dedicated revenue stream when 80 percent or
more of the state's budget is based on oil prices and declining
oil production. She mentioned her great empathy for the desire
to create a stabilized stream and will support HB 202 moving
forward. However, she noted her agreement with Representative
Olson regarding the percentage. She highlighted that 2 percent
is much more in line with the revenue sharing brought forward by
the House Finance Committee in a previous year.
9:34:10 AM
CO-CHAIR LEDOUX said that the 6 percent sends a strong message
and the House Finance Committee can do what it will based on the
financial information it has.
9:34:31 AM
REPRESENTATIVE SALMON related his support for HB 202.
9:34:54 AM
REPRESENTATIVE DAHLSTROM noted her agreement with Co-Chair
Fairclough as the intent of HB 202 is worthy, although she
anticipated changes in the House Finance Committee.
REPRESENTATIVE OLSON maintained his objection.
9:35:24 AM
A roll call vote was taken. Representatives Dahlstrom, Neuman,
Cissna, Salmon, LeDoux, and Fairclough voted in favor of
reporting HB 202 from committee. Representative Olson voted
against it. Therefore, HB 202 was reported out of the House
Community and Regional Affairs Standing Committee by a vote of
6-1.
9:35:58 AM
ADJOURNMENT
There being no further business before the committee, the House
Community and Regional Affairs Standing Committee meeting was
adjourned at 9:36:04 AM.
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