Legislature(1993 - 1994)

03/29/1994 01:00 PM CRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
              HOUSE COMMUNITY AND REGIONAL AFFAIRS                             
                       STANDING COMMITTEE                                      
                         March 29, 1994                                        
                            1:00 p.m.                                          
  MEMBERS PRESENT                                                              
  Representative Harley Olberg, Chairman                                       
  Representative Jerry Sanders, Vice Chair                                     
  Representative Con Bunde                                                     
  Representative Ed Willis                                                     
  Representative John Davies                                                   
  Representative Bill Williams                                                 
  MEMBERS ABSENT                                                               
  Representative Cynthia Toohey                                                
  COMMITTEE CALENDAR                                                           
  SB 330:   "An Act relating to water quality enhancement,                     
            water supply, wastewater, and solid waste grants;                  
            the Alaska clean water fund; the establishment of                  
            the Alaska clean water account, the Alaska                         
            drinking water account; and providing for an                       
            effective date."                                                   
            PASSED FROM COMMITTEE WITH INDIVIDUAL                              
  SB 294:   "An Act relating to canned salmon classics; and                    
            providing for an effective date."                                  
            PASSED FROM COMMITTEE WITH INDIVIDUAL                              
  *HB 502:  "An Act relating mandated municipal activities or                  
            HEARD AND HELD OVER                                                
  (* First public hearing)                                                     
  WITNESS REGISTER                                                             
  KELLY GOODE, Legislative Aide                                                
  Senator Rick Halford                                                         
  Capitol Building, Room 111                                                   
  Juneau, AK  99801-1182                                                       
  Phone: 465-4958                                                              
  POSITION STATEMENT:  Staff to Senator Halford, Prime Sponsor                 
                       of CSSB 330                                             
  KEITH KELTON, Director                                                       
  Division of Facility Construction and Operation                              
  410 Willoughby Ave., 1st floor                                               
  Juneau, AK  99801                                                            
  Phone: 465-5180                                                              
  POSITION STATEMENT:  Supported CSSB 330                                      
  TERRY OTNESS, Legislative Aide                                               
  Senator Robin Taylor                                                         
  Capitol Building, Room 30                                                    
  Juneau, AK  99801-1182                                                       
  Phone: 465-3873                                                              
  POSITION STATEMENT:  Staff to Senator Taylor, Prime Sponsor                  
                       of SB 294                                               
  PATRICK WILSON, Plant Manager                                                
  Icicle Seafoods                                                              
  P.O. Box 1147                                                                
  Petersburg, AK  99833                                                        
  Phone: 772-4294                                                              
  POSITION STATEMENT:  Supported SB 294                                        
  REPRESENTATIVE MARK HANLEY                                                   
  Alaska State Legislature                                                     
  Capitol Building, Room 515                                                   
  Juneau, AK  99801-1182                                                       
  Phone: 465-4939                                                              
  POSITION STATEMENT:  Prime Sponsor of HB 502                                 
  DANIEL MOORE, Capital Budget Officer                                         
  Municipality of Anchorage                                                    
  632 W. 6th Street                                                            
  Anchorage, AK  99519                                                         
  Phone: 343-4496                                                              
  POSITION STATEMENT:  Supported HB 502                                        
  SCOTT BRAND-ERICKSON, Attorney                                               
  Municipality of Anchorage                                                    
  632 W. 6th Street                                                            
  Anchorage, AK  99519                                                         
  Phone: 343-4496                                                              
  POSITION STATEMENT:  Supported HB 502 with conceptual                        
  KENT SWISHER, Executive Director                                             
  Alaska Municipal League                                                      
  217 Second Street, Suite 200                                                 
  Juneau, AK  99801                                                            
  Phone: 586-1325                                                              
  POSITION STATEMENT:  Supported HB 502 and conceptual                         
  PREVIOUS ACTION                                                              
  BILL:  SB 330                                                                
  SHORT TITLE: WATER QUALITY FUNDS AND GRANTS                                  
  SPONSOR(S): SENATOR(S) HALFORD; REPRESENTATIVE(S) Mackie                     
  JRN-DATE     JRN-PG               ACTION                                     
  02/14/94      2834    (S)   READ THE FIRST TIME/REFERRAL(S)                  
  02/14/94      2834    (S)   CRA, FIN                                         
  02/24/94      2958    (S)   CRA RPT  3DP                                     
  02/24/94      2958    (S)   ZERO FISCAL NOTE PUBLISHED(DEC)                  
  02/24/94              (S)   CRA AT 9:00 AM BUTROVICH RM 205                  
  02/24/94              (S)   MINUTE(CRA)                                      
  03/12/94              (S)   FIN AT 10:00 AM SENATE FIN 518                   
  03/14/94      3187    (S)   FIN RPT  CS  6DP   SAME TITLE                    
  03/14/94      3188    (S)   PREVIOUS ZERO FN APPLIES (DEC)                   
  03/16/94              (S)   RLS AT 00:00 AM FAHRENKAMP                       
                              ROOM 203                                         
  03/16/94              (S)   MINUTE(RLS)                                      
  03/18/94      3268    (S)   RULES RPT  CS AND CAL 4DP 1NR                    
                              SAME TITLE                                       
  03/18/94      3268    (S)   PREVIOUS ZERO FN APPLIES (DEC)                   
  03/18/94      3271    (S)   READ THE SECOND TIME                             
  03/18/94      3271    (S)   RLS  CS ADOPTED UNAN CONSENT                     
  03/18/94      3271    (S)   ADVANCED TO THIRD READING UNAN                   
  03/18/94      3271    (S)   READ THE THIRD TIME                              
                              CSSB 330(RLS)                                    
  03/18/94      3272    (S)   PASSED Y15 N- E5                                 
  03/18/94      3272    (S)   EFFECTIVE DATE SAME AS PASSAGE                   
  03/18/94      3278    (S)   TRANSMITTED TO (H)                               
  03/21/94      2895    (H)   READ THE FIRST TIME/REFERRAL(S)                  
  03/21/94      2895    (H)   CRA, FINANCE                                     
  03/21/94      2916    (H)   CROSS SPONSOR(S):  MACKIE                        
  03/29/94              (H)   CRA AT 01:00 PM CAPITOL 124                      
  BILL:  SB 294                                                                
  SHORT TITLE: PETERSBURG CANNED SALMON CLASSIC                                
  SPONSOR(S): SENATOR(S) TAYLOR; REPRESENTATIVE(S) Grussendorf                 
  JRN-DATE     JRN-PG               ACTION                                     
  02/11/94      2788    (S)   READ THE FIRST TIME/REFERRAL(S)                  
  02/11/94      2788    (S)   CRA, FIN                                         
  02/24/94      2958    (S)   CRA RPT  1DP 2NR                                 
  02/24/94      2958    (S)   ZERO FISCAL NOTE PUBLISHED(REV)                  
  02/24/94              (S)   CRA AT 9:00 AM BUTROVICH RM 205                  
  02/24/94              (S)   MINUTE(CRA)                                      
  03/12/94              (S)   FIN AT 10:00 AM SENATE FIN 518                   
  03/14/94      3187    (S)   FIN RPT  6DP                                     
  03/14/94      3187    (S)   PREVIOUS ZERO FN (REV)                           
  03/14/94              (S)   RLS AT 0:00 AM FAHRENKAMP                        
                              RM 203                                           
  03/14/94              (S)   MINUTE(RLS)                                      
  03/16/94      3243    (S)   RULES RPT  4CAL 1NR 3/16/94                      
  03/16/94      3244    (S)   READ THE SECOND TIME                             
  03/16/94      3245    (S)   ADVANCED TO THIRD READING UNAN                   
  03/16/94      3245    (S)   READ THE THIRD TIME  SB 294                      
  03/16/94      3245    (S)   PASSED Y15 N3 E1 A1                              
  03/16/94      3245    (S)   EFFECTIVE DATE SAME AS PASSAGE                   
  03/16/94      3251    (S)   TRANSMITTED TO (H)                               
  03/18/94      2862    (H)   READ THE FIRST TIME/REFERRAL(S)                  
  03/18/94      2862    (H)   COMMUNITY & REGIONAL AFFAIRS                     
  03/18/94      2885    (H)   CROSS SPONSOR(S):  GRUSSENDORF                   
  03/29/94              (H)   CRA AT 01:00 PM CAPITOL 124                      
  BILL:  HB 502                                                                
  SHORT TITLE: MANDATED MUNICIPAL SERVICES                                     
  SPONSOR(S): REPRESENTATIVE(S) HANLEY                                         
  JRN-DATE     JRN-PG               ACTION                                     
  02/14/94      2382    (H)   READ THE FIRST TIME/REFERRAL(S)                  
  02/14/94      2382    (H)   CRA, FINANCE                                     
  03/22/94              (H)   CRA AT 01:00 PM CAPITOL 124                      
  03/29/94              (H)   CRA AT 01:00 PM CAPITOL 124                      
  ACTION NARRATIVE                                                             
  TAPE 94-15, SIDE A                                                           
  Number 000                                                                   
  CHAIRMAN HARLEY OLBERG called the meeting to order at 1:06                   
  p.m.  He noted for the record Representatives Willis, Davies                 
  and Bunde were present and stated a quorum was present.                      
  Number 028                                                                   
  SB 330 - WATER QUALITY FUNDS AND GRANTS                                      
  KELLY GOODE, STAFF TO SENATOR HALFORD, stated  "By way of                    
  background, in 1987 Senator Halford sponsored by request of                  
  DEC (Department of Environmental Conservation), the Alaska                   
  Clean Water Fund.  This year DEC came again to Senator                       
  Halford and asked him to sponsor the bill before you.  The                   
  bill (SB 330) received one change...it's a Rules Committee                   
  substitute and it did not affect the actual bill, it                         
  affected the existing language in the law.  It was a very                    
  simple change and it changed the word `guaranteeing' to the                  
  words `collateral security' on page 3, line 16.  That was                    
  the only change made in the Senate from the original                         
  Number 060                                                                   
  AND OPERATION, said  "We want to thank the Senator for                       
  introducing this piece of legislation...  This bill affects                  
  two statutes.  It's our municipal matching grants program,                   
  which builds water and sewage treatment facilities to a 50                   
  percent matching ratio with incorporated communities and it                  
  affects the Alaska Clean Water Fund.  That is a loan program                 
  which currently provides money, primarily from the federal                   
  government, to build wastewater facilities through a loan                    
  provision, again to incorporated communities.  The                           
  amendments to the loan fund are to get us positioned to take                 
  advantage of upcoming federal legislation.  There's three                    
  competing bills in U.S. Congress right now which will                        
  establish a similar water loan program to the wastewater                     
  program.  This amendment to our statute, if passed, would                    
  allow us to be in the position to accept and administer the                  
  federal program, assuming it's adopted this year...                          
  Basically, what both of these provisions are attempting to                   
  do, is make it easier for Alaskan communities to obtain                      
  funding for building water and sewage treatment plants.  I'm                 
  talking about incorporated communities primarily, first                      
  class are the one's that have been able to take advantage of                 
  it.  Some of these changes will be able to accommodate some                  
  of the larger second class communities as well."                             
  Representative Sanders joined the committee at 1:10 p.m. and                 
  Representative Williams at 1:11 p.m.                                         
  MR. KELTON continued, "The actual bill has 17 sections to                    
  it.  The first five sections relate to the matching grants                   
  programs.  Basically we're accomplishing two things in this                  
  change.  The existing statute has been around since 1972 and                 
  has been amended probably a half a dozen times for various                   
  legislative add-ons and program changes from the federal                     
  law.  It's become very convoluted and redundant.  So one of                  
  the major emphasis is to rewrite that and streamline it...as                 
  well as cleaning a major provision.  When the bill was first                 
  adopted back in 1972, it was to address the federal EPA                      
  (Environmental Protection Agency) construction grants                        
  program that at that time provided 75 percent grant funding                  
  to communities to build wastewater facilities.  The EPA                      
  program is long since history, but the provision still                       
  remains in our statutes related to that.  That provision                     
  says, `State funding can be no more than half of the                         
  nonfederal participation.'  So when they have 75 percent                     
  federal funding, that meant the remaining 25 was split                       
  equally between the state and local government.  Since that                  
  program was now gone, we've created a set of circumstances                   
  where communities are really not interested in trying to get                 
  the federal dollars...  So we are recommending that the                      
  federal limitation be taken out of the statute and say,                      
  `State money can be matched by either local or federal                       
  dollars up to any limit that they can obtain.'  So they'll                   
  go out and seek as many federal dollars as they can.  We                     
  think that that will actually save the state money in the                    
  long run...  The other provision that we're actively looking                 
  for change on:  The 50 percent matching grants provisions in                 
  this bill had been applied uniformly to all communities,                     
  regardless of size.  That has posed a problem for the                        
  smaller communities.  Generally, a community under 1,000 has                 
  no ability to raise the 50 percent match that's been                         
  associated with this program.  So we're proposing and these                  
  percentages are strictly a starting point, anybody who wants                 
  to propose alternatives is certainly welcome to do so.                       
  We're trying to target this legislation a little closer to                   
  the governor's matching grants bill.  So what we're                          
  proposing is communities under 1,000 would only have to come                 
  up with a 15 percent local match.  And communities between                   
  1,000 and 5,000 would have a 30 percent local match.                         
  Anything over 5,000, the percentage would stay the same.                     
  This would enable a lot of the smaller communities to be                     
  able to take advantage of the state's program to build their                 
  water and sewer system.  The larger communities have never                   
  had a problem.  The smaller communities are served by the                    
  Village Safe Water Program.  There's been a group of                         
  communities between 1,000 and 5,000 that really had                          
  difficulty in financing their sanitation improvements..."                    
  Number 210                                                                   
  MR. KELTON concluded, "The rest of the bill starting from                    
  section 6 through 13 addresses the Alaska Clean Water Fund                   
  and...there was an existing bill passed in '87...that                        
  allowed us to take advantage of the loan program waste water                 
  facility.  Basically, all we're doing now, other than some                   
  cleanup amendments under that statute, would be authorizing                  
  the state to adopt a program to administer the federal                       
  program on water supply loans should it pass this                            
  congressional session...  We strongly endorse this bill as a                 
  mechanism for providing financial alternatives for funding                   
  that aren't currently available."                                            
  Number 230                                                                   
  REPRESENTATIVE CON BUNDE asked about the specific funding                    
  sources of a water and sewer project in Kake.                                
  MR. KELTON replied, "In this particular case, they had a                     
  $500,000 appropriation from the state before they ever went                  
  and found the federal dollars.  It was a $1,000,000 project                  
  and as soon as they got a half a million dollars in federal                  
  dollars, they had $250,000 from the state that they couldn't                 
  spend, so they couldn't build the project.  They had to go                   
  out and obtain additional dollars or else give up the state                  
  money and in this case, they had no way of obtaining                         
  additional funds.  What happened in this case, $250,000 of                   
  the state's (dollars) were reappropriated and went through                   
  the Division of Administration's matching grants program so                  
  they could match the state dollars.  There's a real                          
  prohibition against seeking the federal dollars because it                   
  has always been easier to get the state dollars.  We're                      
  trying to reverse that..."                                                   
  REPRESENTATIVE BUNDE concurred, "That trend is going to                      
  Number 269                                                                   
  REPRESENTATIVE JOHN DAVIES asked, "Clean Water Fund, Clean                   
  Water Account, Drinking Water Fund, Drinking Water Account,                  
  could you help me understand the relationship between                        
  MR. KELTON replied, "When the legislation for the Clean                      
  Water Account and fund was first established, it was the                     
  legislature's desire to establish first, a program that                      
  would allow us to use the federal dollars and that is the                    
  fund.  In addition to that, it was desired by the                            
  legislature to establish a separate account that, should the                 
  legislature want to appropriate money to a loan program that                 
  went beyond the federal match requirement.  And the problem                  
  with doing it all under the fund, is the constitutional                      
  prohibition against having the dedicated revenue source.  We                 
  can have a dedicated fund, as long as we're doing it in                      
  compliance with the federal law.  Since they wanted to go                    
  further than the federal law, and by doing that they had to                  
  set up a separate account to go further than the federal law                 
  where the interest from loan repayments would not come back                  
  to the account, but would go back to the general funds.                      
  That's the reason for having the two distinctions.  All                      
  we've done in the Drinking Water portion of this is to                       
  duplicate the parallel structure that was already                            
  established under the Clean Water Account and fund.  Should                  
  it be the desire of the legislature not to maintain the                      
  account provisions of this, that would be an easy matter to                  
  strike both of those provisions...(as) state dollars are                     
  probably not going to ever be available to capitalize that                   
  account anyway, so it would probably be of no major                          
  consequence if those two sections were struck.  The only                     
  thing is if we were ever in a position where it wanted to be                 
  funded, you wouldn't have the mechanism to do it.  It                        
  doesn't cost us anything to leave."                                          
  REPRESENTATIVE DAVIES said, "So the funds are in fact                        
  dedicated funds under the authority of the federal                           
  MR. KELTON said, "That is correct.  There's approximately                    
  $62 million in the Clean Water Fund between state and                        
  federal dollars.  There is nothing available currently in                    
  the Drinking Water Fund."                                                    
  Number 322                                                                   
  CHAIRMAN OLBERG asked, "Is this the money that's                             
  appropriated and generically called Village Safe Water?  Is                  
  this the fund it processes through?"                                         
  MR. KELTON said, "No sir, that is an entirely separate                       
  program.  Village Safe Water Program are funds that come                     
  directly to the Department (of Environmental Conservation)                   
  for administration in village Alaska.  These funds are                       
  primarily to benefit the larger urban communities.  I should                 
  have mentioned one thing...on the loan program for the                       
  drinking water fund and account, one of the things that we                   
  see as a useful use for that money is to build water                         
  filtration systems for any place in the state that needs                     
  them.  The Clean Water Act requires that all surface waters                  
  be filtered.  This is posing some significant financial                      
  hardships on some of the larger seafood processing areas                     
  such as Unalaska, Kodiak, Cordova that all use surface                       
  waters.  By having this loan provision available, we will be                 
  able to provide them low interest loans to comply with this                  
  unfunded federal mandate."                                                   
  Number 348                                                                   
  REPRESENTATIVE BUNDE asked, "The Alaska Clean Water                          
  Account...is that a dedicated fund and how does that mesh                    
  with the prohibition against dedicated funds?"                               
  CHAIRMAN OLBERG said, "It's a separate account.  The general                 
  fund of the state of Alaska is made of probably hundreds of                  
  REPRESENTATIVE DAVIES pointed out, "The legislature can                      
  appropriate it for any purpose whatsoever."                                  
  Number 379                                                                   
  REPRESENTATIVE DAVIES moved that CSSB 330 be moved from                      
  committee with individual recommendations.  There were no                    
  Chairman Olberg called a brief at ease from 1:26 p.m. to                     
  1:27 p.m., when he brought forth SB 294.                                     
  SB 294 - PETERSBURG CANNED SALMON CLASSIC                                    
  Number 395                                                                   
  OF SB 294, stated "We introduced this legislation at the                     
  request of the Petersburg Chamber of Commerce.  The                          
  Petersburg Chamber last year implemented a `canned salmon                    
  classic' whereby the person who comes closest to guessing                    
  the number of cases packed by the canneries, wins.  The                      
  chief purpose of the legislation is to allow for the                         
  promotion of Petersburg and the canned salmon industry.                      
  Receipts are used to fund the prize, of course, finance the                  
  Chamber of Commerce operations and hopefully, if this                        
  passes, with enough funds to fund a scholarship, as well.                    
  Currently, under regulation there is a 50 cent per ticket                    
  limitation on these types of affairs and this would remove                   
  this limitation.  This limitation would prevent the chamber                  
  to raise the price of tickets to $2 and allow it to join                     
  other state-sanctioned classics such as the Nenana Ice                       
  Classic.  Tickets would be sold throughout Southeast Alaska;                 
  it's been endorsed by most of the communities.  In fact,                     
  most of the communities have agreed to allow ticket sales in                 
  their communities.  And the Alaska Trollers Association                      
  supports this legislation."                                                  
  CHAIRMAN OLBERG asked, "You say the ticket limit is 50                       
  cents?  Doesn't the Nenana Ice Classic charge two dollars                    
  per ticket?"                                                                 
  MR. OTNESS said, "Right.  To go above that limitation you                    
  need to have this type of statutory sanction."                               
  testified via teleconference in support of SB 294.  He said,                 
  "I am also the Chairman of the Canned Salmon Classic and I'm                 
  the treasurer here of the Chamber.  Last year we kicked this                 
  idea off.  The main reason was to draw attention to                          
  Petersburg...and we were positively received last year...                    
  We hope this Canned Salmon Classic will draw attention to                    
  the seafood industry...  We're hoping to raise funds for                     
  scholarships for graduating high school students..."                         
  Number 469                                                                   
  REPRESENTATIVE BILL WILLIAMS moved to pass SB 294 out of                     
  committee with individual recommendations.  There were no                    
  Chairman Olberg called an at ease from 1:33 p.m. to 1:35                     
  p.m., when he brought forth HB 502.                                          
  HB 502 - MANDATED MUNICIPAL SERVICES                                         
  Number 486                                                                   
  testified saying, "Basically, what the bill does is says,                    
  `after the effective date of this act, anything that we pass                 
  on to local governments we should fund.'  It's a good                        
  policy, I think, because just like the federal government                    
  keeps mandating things to us and doesn't pass on the                         
  funding, the state has a similar policy of doing it to local                 
  communities and it's easy for us to pass these things on.                    
  There are practical problems with how you actually implement                 
  it and I think it's good to get this discussion going.  As a                 
  general policy, it makes a lot of sense and we've talked to                  
  the municipalities; they're supportive, I believe, of this                   
  thing because they continually see us, whether it's the                      
  senior citizen's property tax exemption, which we originally                 
  funded at 100 percent...and of course, in this year's                        
  budget, we're not funding any of it, but they still have to                  
  provide it...and there's lots of other examples.  I think                    
  that municipalities just want to know that if we're going to                 
  mandate something, we're going to pay for it..."                             
  Number 508                                                                   
  REPRESENTATIVE DAVIES said, "Having been a former municipal                  
  assembly member, I appreciate the intent of this, but                        
  Representative Hanley indicated that there were some                         
  problems...and one of them that occurs to me is that perhaps                 
  to be able to distinguish between mandates and fundamental                   
  requirements of local government..."                                         
  REPRESENTATIVE HANLEY said, "The whole intent of this was to                 
  try and get some debate going and answer some of these                       
  questions...I think some of the municipal people will be                     
  able to address some of that... I would also note with a                     
  statute as this is, it's really appropriation power that's                   
  constitutionally mandated to the legislature so it's a                       
  little bit tough on the enforcement side, even with a                        
  statute in here if we choose not to appropriate something,                   
  it may not get appropriated and there may not be recourse                    
  against the state."                                                          
  REPRESENTATIVE BUNDE asked the sponsor "to share your                        
  perspective of the problems that you see."                                   
  REPRESENTATIVE HANLEY said, "Initially, folks had approached                 
  me to do a constitutional amendment for this and I was                       
  concerned...if we work through some of the language in the                   
  statute, it's not in the Constitution.  We're not going to                   
  get required to pay for police protection...people are                       
  providing those services.  So with the statute, there is                     
  more flexibility.  That is the problem, trying to define or                  
  think of circumstances in the future where we might choose                   
  to mandate something that we don't want to fund...  It would                 
  be any new laws enacted after this point.."                                  
  REPRESENTATIVE ED WILLIS asked, "This just applies to                        
  anything in the future?"                                                     
  REPRESENTATIVE HANLEY replied, "It is intended to start from                 
  this point and go forward with new laws rather than try and                  
  address the incredible number of things that local                           
  communities (do)... It was an attempt to say `from this                      
  point forward, we will debate these issues one by one and                    
  say if we're going to require something then we should fund                  
  REPRESENTATIVE WILLIS said, "The Senior Citizen Property Tax                 
  Exemption:  If, for example, suppose the legislature after                   
  the enactment of this particular law decided to lower the                    
  caps to reduce the funding to this program, would the fact                   
  that we changed the caps then put that amended legislation                   
  under the umbrella of this particular bill"?                                 
  REPRESENTATIVE HANLEY said, "It says, `A law enacted that                    
  requires a municipality to perform a new activity or                         
  service' and I would think that would be covered, `or                        
  increase the level of any activity or service.'   So, if you                 
  were lowering the cap, that would I think, be a reduction of                 
  the responsibility..."                                                       
  Number 596                                                                   
  REPRESENTATIVE BUNDE pointed out, "Should we suddenly                        
  establish a new city, then how (would) the traditional                       
  services (yet to be provided) fall under this bill"?                         
  REPRESENTATIVE HANLEY replied, "If somebody chooses to                       
  incorporate then they come under the current mandates that                   
  are already in the statutes so they would also be required                   
  to fulfill whatever level of service, just like these cities                 
  that are already providing that, that would be the current                   
  law.  It's not based on a new city coming into effect, it's                  
  based on the legislature passing a new law to add something                  
  else to any community...  It's not going to exempt things                    
  that have already happened...it's a problem.  It seemed                      
  easier to force the debate into the future, one by one, as                   
  we passed new laws..."                                                       
  CHAIRMAN OLBERG said, "I don't know how it could be any                      
  clearer that we're not going to change anything that's                       
  happened historically.  We're going to act differently after                 
  the effective date of this legislation as far as the state's                 
  relationship with municipalities."                                           
  ANCHORAGE, testified via teleconference in support of HB
  502.  He said, "The municipality, of course, has been                        
  experiencing quite a few mandates, mostly from the federal                   
  level in the past.  There are state mandates...that have                     
  negatively impacted the municipality.  Our primary concern                   
  is...the potential escalation of unfunded state mandates in                  
  the future which would probably be caused as a result of the                 
  state trying to deal with declining revenues...  State                       
  mandates as defined within the language of HB 502                            
  constitutes any law to provide a new activity or service.                    
  We believe that mandates aren't necessarily bad, however,                    
  when they go unfunded or when there's no agreement to                        
  participate in the funding.  We believe the municipality is                  
  forced to give artificially high priority to these mandates.                 
  As a result of having unfunded mandates, there's an                          
  artificial high priority, takes priority over basic                          
  services.  A municipality must still pay for these out of                    
  increased taxes or, if the funds are not available, services                 
  are then cut.  The municipality believes that as the state                   
  struggles to balance its budget now...the practice of                        
  burdening local governments with unfunded mandates will                      
  increase.  The legislature therefore needs to pass                           
  legislation similar to HB 502 in a timely manner so that                     
  future legislatures will be discouraged from unfairly                        
  burdening local government.  Attached with our testimony is                  
  a list of actual unfunded mandates that have occurred in the                 
  past..."  (A copy of this list may be found in the House                     
  Community and Regional Affairs Committee Room, Capitol Room                  
  126, and after the adjournment of the second session of the                  
  18th Alaska State Legislature, in the Legislative Reference                  
  MR. MOORE continued, "HB 502 is designed to have an                          
  effective date for future mandates.  At this time the                        
  municipality would just like to encourage legislatures to                    
  still work on addressing past unfunded mandates, especially                  
  the senior citizen's property tax exemption.  Our position                   
  is either to provide full funding for it or to at least give                 
  the municipalities the option of opting out of the                           
  program...  This particular example of an unfunded state                     
  mandate is the municipalities greatest example of the degree                 
  to which the state has forced local government to provide                    
  funding for mandate... On a final note...there's about four                  
  points that the municipalities' Department of Law has                        
  brought up...  One is being the way we define the word `law'                 
  in the bill...  Another, deals with who with the state would                 
  actually administer this type of law.  And in addition,                      
  there's other issues in terms of how it gets funded from                     
  year to year..."                                                             
  Number 709                                                                   
  REPRESENTATIVE DAVIES said, "I'm still trying to understand                  
  if we can differentiate between what might be called                         
  fundamental requirements of local government versus mandated                 
  additional requirements that the state government might put                  
  on top of that."                                                             
  TAPE 94-15, SIDE B                                                           
  Number 000                                                                   
  REPRESENTATIVE DAVIES referred to the list provided by the                   
  Municipality of Anchorage.  (A copy of this list may be                      
  found in the House Community and Regional Affairs Committee                  
  Room, Capitol Room 126, and after the adjournment of the                     
  second session of the 18th Alaska State Legislature, in the                  
  Legislative Reference Library.)  He pointed out, "Equipment                  
  and staff time to monitor chlorine levels in pools:  This                    
  would be public swimming pools and spas...  They don't                       
  require that you operate pools, but they require that if you                 
  operate a pool that you do it in a safe manner.  Can you                     
  comment on that kind of a distinction?  That's kind of a                     
  second order mandate, in my view."                                           
  testified via teleconference, "Your questions can be                         
  answered in a similar fashion.  Other states have by                         
  constitutional provision or statute, set out limitations on                  
  mandates.  Two examples, Massachusetts and California have                   
  extended programs in the past classifying whether a                          
  particular service is a fundamentally local government                       
  requirement or a new mandate or with the pool example...and                  
  the suggestion that we would have is, we don't actually know                 
  a quick way to answer all of these questions because they                    
  tend to depend upon the facts and the particular service.                    
  Something that California did that we think would be helpful                 
  would be, if there is either by in the statute or by                         
  regulation work by one of the administrative departments                     
  that can set up the rules for deciding what is a new                         
  service, what is an increase in level of service and to                      
  differentiate what is something that the local government is                 
  deciding to do itself."                                                      
  REPRESENTATIVE DAVIES asked if Mr. Brand-Erickson had the                    
  language from California and for the committee to receive                    
  MR. BRAND-ERICKSON said he would retrieve it for the                         
  REPRESENTATIVE BUNDE asked, "In line 6 of the bill...how                     
  would that affect cost sharing?  Would you read this to say                  
  the state would, should pay a hundred percent or fifty                       
  CHAIRMAN OLBERG said, "If the statute says `we'll give you                   
  half the money to do this if you want to' and you choose to                  
  do it, it's no longer a mandate perhaps."                                    
  Number 112                                                                   
  testified in support of HB 502.  He said, "We continue to be                 
  very concerned with this one and appreciative of the                         
  legislation.  Having been party to this kind of debate in                    
  other states and at the national level...I guess I would say                 
  that we would regard HB 502 probably as more of a statement                  
  of legislative policy than a barrier of future enactments...                 
  I think the fact that one would have to go to court to                       
  implement the provisions of HB 502, would tend to militate                   
  against local jurisdictions using it in a frivolous way                      
  because it's not a free procedure...  One thing you might                    
  want to do as a part of strengthening the process, is                        
  strengthen the fiscal note process that you have currently                   
  in place.  Right now that process doesn't kick in until                      
  we're awfully late in the game..."                                           
  REPRESENTATIVE DAVIES said, "I take it what you're                           
  suggesting here is that somehow the fiscal note process                      
  would explicitly be required to take note of fiscal impacts                  
  on the municipalities."                                                      
  MR. SWISHER confirmed this.                                                  
  CHAIRMAN OLBERG suggested a process in which municipalities                  
  could submit fiscal notes.                                                   
  REPRESENTATIVE DAVIES said, "I wonder if Mr. Swisher might                   
  comment on what I call the second order mandate.  The                        
  situation where the state might require a municipality when                  
  they engage in some optional activity, like operating a                      
  swimming pool, that they operate it safely...  Those things                  
  certainly mandate some costs on your part...but that's                       
  something you decide when you choose to operate the pool.                    
  Could a distinction like that be made that would eliminate                   
  that class of thing from this bill"?                                         
  MR. SWISHER said, "That would take some work with the                        
  language.  I think probably it could be.  At least in my                     
  mind there exists a fairly clear distinction between such                    
  things as the capital matching grant program which might                     
  require a mandate, a match from us only if we choose to                      
  participate in it.  So we don't consider it a mandate.  Then                 
  there are a series of things that get further and further                    
  away from clarity...  I think that the impracticality of                     
  pursuing compensation for a relatively minor mandate and one                 
  that normal people might think is probably part of what we                   
  ought to do anyway would be difficult, expensive and                         
  Number 244                                                                   
  REPRESENTATIVE DAVIES said, "I can offer perhaps a more                      
  expensive second order mandate:  The operation of a                          
  municipal landfill.  The state regulations on that can be                    
  fairly expensive and yet they can be equally important to                    
  public health."                                                              
  MR. SWISHER concurred and said, "In some part in that we are                 
  into what I would call a pass through mandate because often                  
  we're dealing with mandates from the federal government                      
  which the state is mandatorily implementing.  I would think                  
  that we could find some language that...would do that, the                   
  kind of things you're thinking about..."                                     
  CHAIRMAN OLBERG reminded the committee, "I think the key                     
  element is that we don't have to address anything we're                      
  already doing, but we would certainly have to craft statutes                 
  more carefully in the future to take all of these things                     
  into consideration and there would have to be some way to                    
  address federal mandates..."                                                 
  Number 280                                                                   
  REPRESENTATIVE DAVIES asked, "That's the question: ...Under                  
  this bill, would we be required to pick up the cost of                       
  federal mandates that are supposed to be passed through to                   
  CHAIRMAN OLBERG said, "Under the wording of this bill,                       
  probably, I'd say, yes..."                                                   
  REPRESENTATIVE DAVIES said, "It seems to me that we might be                 
  able to address this issue by trying to define what I would                  
  call... a fundamental mandate, or clear mandate and what I                   
  would call a second order mandate...  Perhaps we could                       
  define two categories of mandate and the law could require                   
  that we place any new law in one of those two categories and                 
  that would force the debate on whether this was an unfunded                  
  mandate...or some other category..."                                         
  Number 320                                                                   
  CHAIRMAN OLBERG offered to reschedule HB 502 for "next week"                 
  so the committee could "reflect" on the bill.                                
  CHAIRMAN OLBERG adjourned the meeting at 2:12 p.m.                           

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