Legislature(2005 - 2006)CAPITOL 124

02/15/2005 08:00 AM COMMUNITY & REGIONAL AFFAIRS


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ HB 27 MUNI PROP TAX EXEMPTION FOR POLICE HOMES TELECONFERENCED
Heard & Held
*+ HB 121 SERVICE AREAS IN SECOND CLASS BOROUGHS TELECONFERENCED
Heard & Held
Bills Previously Heard/Scheduled
                    ALASKA STATE LEGISLATURE                                                                                  
    HOUSE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE                                                                   
                       February 15, 2005                                                                                        
                           8:04 a.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Kurt Olson, Co-Chair                                                                                             
Representative Bill Thomas, Co-Chair                                                                                            
Representative Pete Kott                                                                                                        
Representative Gabrielle LeDoux                                                                                                 
Representative Mark Neuman                                                                                                      
Representative Sharon Cissna                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Woodie Salmon                                                                                                    
                                                                                                                                
OTHER LEGISLATORS PRESENT                                                                                                     
                                                                                                                                
Representative John Coghill                                                                                                     
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
HOUSE BILL NO. 121                                                                                                              
"An Act relating to consolidating or abolishing certain service                                                                 
areas in second class boroughs."                                                                                                
                                                                                                                                
     - HEARD AND HELD                                                                                                           
                                                                                                                                
HOUSE BILL NO. 27                                                                                                               
"An Act relating to an optional exemption from municipal                                                                        
property taxes on certain residences of law enforcement                                                                         
officers."                                                                                                                      
                                                                                                                                
     - HEARD AND HELD                                                                                                           
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: HB 121                                                                                                                  
SHORT TITLE: SERVICE AREAS IN SECOND CLASS BOROUGHS                                                                             
SPONSOR(S): COMMUNITY & REGIONAL AFFAIRS                                                                                        
                                                                                                                                
02/02/05       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/02/05       (H)       CRA, STA                                                                                               
02/15/05       (H)       CRA AT 8:00 AM CAPITOL 124                                                                             
                                                                                                                                
BILL: HB  27                                                                                                                  
SHORT TITLE: MUNI PROP TAX EXEMPTION FOR POLICE HOMES                                                                           
SPONSOR(S): REPRESENTATIVE(S) CHENAULT, GRUENBERG                                                                               
                                                                                                                                
01/10/05       (H)       PREFILE RELEASED 12/30/04                                                                              
01/10/05       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/10/05       (H)       CRA, FIN                                                                                               
02/15/05       (H)       CRA AT 8:00 AM CAPITOL 124                                                                             
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
KACI SCHROEDER, Staff                                                                                                           
to Representative Thomas                                                                                                        
House Community and Regional Affairs Standing Committee                                                                         
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Presented HB 121.                                                                                          
                                                                                                                                
RENE BROKER, Attorney                                                                                                           
Fairbanks North Star Borough                                                                                                    
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  During hearing of HB 121, answered                                                                         
questions.                                                                                                                      
                                                                                                                                
BONNIE WILLIAMS, Legislative Liaison                                                                                            
Fairbanks North Star Borough Assembly                                                                                           
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  During hearing of HB 121, provided                                                                         
information related to Fairbanks.                                                                                               
                                                                                                                                
RANDY FRANK, Chair                                                                                                              
Road Service Area Committee                                                                                                     
Fairbanks North Star Borough Assembly                                                                                           
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  During hearing of HB 121, answered                                                                         
questions.                                                                                                                      
                                                                                                                                
RYNNIEVA MOSS, Chair                                                                                                            
Road Commission                                                                                                                 
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  Testified on HB 121.                                                                                       
                                                                                                                                
KEVIN RITCHIE, Executive Director                                                                                               
Alaska Municipal League (AML)                                                                                                   
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified on HB 121.                                                                                       
                                                                                                                                
REPRESENTATIVE MAX GRUENBERG                                                                                                    
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Spoke as the co-prime sponsor of HB 27.                                                                    
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
                                                                                                                                
CHAIR KURT OLSON called the  House Community and Regional Affairs                                                             
Standing   Committee   meeting   to    order   at   8:04:16   AM.                                                             
Representatives LeDoux,  Neuman, Olson,  and Thomas  were present                                                               
at the  call to order.   Representatives Kott and  Cissna arrived                                                               
as the meeting was in progress.                                                                                                 
                                                                                                                                
HB 121-SERVICE AREAS IN SECOND CLASS BOROUGHS                                                                                 
                                                                                                                                
8:04:50 AM                                                                                                                    
                                                                                                                                
CO-CHAIR OLSON announced  that the first order  of business would                                                               
be  HOUSE BILL  NO. 121,  "An  Act relating  to consolidating  or                                                               
abolishing certain service areas in second class boroughs."                                                                     
                                                                                                                                
8:05:18 AM                                                                                                                    
                                                                                                                                
CO-CHAIR THOMAS moved to adopt  CSHB 121, Version 24-LS0396\Y, as                                                               
the working  document.  There  being no objection, Version  Y was                                                               
before the committee.                                                                                                           
                                                                                                                                
8:05:33 AM                                                                                                                    
                                                                                                                                
KACI SCHROEDER,  Staff to Representative Thomas,  House Community                                                               
and   Regional   Affairs   Standing   Committee,   Alaska   State                                                               
Legislature,  explained  that  when  the  state  revenue  sharing                                                               
program was in  place, residents of subdivisions  outside of city                                                               
limits  were  allowed  to  establish   local  service  area  road                                                               
commissions.   The commissions were  funded with  revenue sharing                                                               
funds.  Now  the revenue sharing program doesn't  exist and these                                                               
local  service area  road  commissions don't  have  the funds  to                                                               
adequately  maintain  the  roads.   Therefore,  these  roads  are                                                               
deteriorating and  passage is becoming difficult.   Ms. Schroeder                                                               
reminded the committee  that these service areas are  part of the                                                               
borough,  which  means  that  the   borough  bears  the  ultimate                                                               
financial responsibility for these  road service areas.  However,                                                               
the boroughs  can't assess a  boroughwide tax  and apply it  to a                                                               
specific  road  service area.    This  legislation allows  second                                                               
class  boroughs to  consolidate  or dissolve  service areas  that                                                               
aren't functioning  or are  functioning below  minimum standards,                                                               
while  protecting service  areas that  adequately tax  themselves                                                               
and maintain their roads.                                                                                                       
                                                                                                                                
8:07:16 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE LEDOUX asked if this  legislation will do anything                                                               
to ameliorate  the situation  in which  the road  [service areas]                                                               
don't  receive funds  to  [maintain] the  roads,  which leads  to                                                               
unsafe conditions.                                                                                                              
                                                                                                                                
MS. SCHROEDER  opined that the  intent is  to work with  the road                                                               
service  areas to  get services  out there,  but when  that isn't                                                               
possible the borough  wants to alleviate its  liability for those                                                               
[unsafe] roads.                                                                                                                 
                                                                                                                                
REPRESENTATIVE  LEDOUX asked  if the  legislation alleviates  the                                                               
borough's liability  for the safety  hazards in the roads;  or is                                                               
the purpose  of this  legislation to not  allow the  road service                                                               
area to  contract for services,  not pay for those  services, and                                                               
leave borough on the hook for payment of those.                                                                                 
                                                                                                                                
MS. SCHROEDER deferred to Rene Broker.                                                                                          
                                                                                                                                
8:08:43 AM                                                                                                                    
                                                                                                                                
RENE BROKER,  Attorney, Fairbanks  North Star  Borough, explained                                                               
that the  borough has  a number  of sources  of liability  when a                                                               
road service area isn't functioning  and doesn't have funds.  She                                                               
informed the  committee that there  are service areas  that don't                                                               
have   commissioners,  and   therefore   can't  legally   conduct                                                               
business.    Furthermore,  there  are safety  issues  when  roads                                                               
aren't   maintained  or   aren't   properly   maintained.     The                                                               
aforementioned  are two  primary  sources of  liability that  the                                                               
[Fairbanks North Star Borough] hopes to address.                                                                                
                                                                                                                                
8:09:17 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE LEDOUX asked  whether the borough will  be able to                                                               
take  over the  maintenance of  these road  service areas  if the                                                               
road service areas are abolished.                                                                                               
                                                                                                                                
MS. BROKER replied  no, and clarified that  currently the borough                                                               
only  exercises  road powers  through  the  service areas.    The                                                               
aforementioned is  why [the Fairbanks North  Star Borough through                                                               
this  legislation]   is  seeking   the  right  to   dissolve  and                                                               
consolidate service areas.  She  mentioned that dissolution would                                                               
be a last resort.                                                                                                               
                                                                                                                                
8:10:27 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE NEUMAN  inquired as  to who would  ultimately take                                                               
care of these roads if it isn't the borough's responsibility.                                                                   
                                                                                                                                
BONNIE  WILLIAMS,  Legislative   Liaison,  Fairbanks  North  Star                                                               
Borough  Assembly, informed  the committee  that currently  there                                                               
are over  300 miles of roads  inside of the Fairbanks  North Star                                                               
Borough that  aren't in  road service areas,  but are  outside of                                                               
the  city [limits]  and  aren't  state roads.    These roads  are                                                               
maintained happenstance by  those living along the roads.   If  a                                                               
road  service area  were dissolved,  whatever length  of road  in                                                               
that road  service area would be  added to the 300  miles.  Those                                                               
roads  wouldn't be  maintained unless  someone volunteered  to do                                                               
so, she said.                                                                                                                   
                                                                                                                                
8:11:53 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  CISSNA  asked if  there  has  been a  history  of                                                               
problems with  transportation due to the  inability to [maintain]                                                               
the roads.                                                                                                                      
                                                                                                                                
MS.  WILLIAMS  said  it  depends upon  one's  perspective.    She                                                               
recalled when she lived on a road  that was not in a road service                                                               
area.  In that neighborhood a  couple of people had a backhoe and                                                               
a  snowplow and  when they  felt like  it, they  plowed.   In the                                                               
beginning those  in the  area did  okay, but  as time  passed and                                                               
usage continued the  roads began to deteriorate.   Therefore, the                                                               
neighborhood  eventually joined  an existing  road service  area.                                                               
She  noted,  "Some  people in  our  borough  are  extraordinarily                                                               
independent-minded and  they may  have lived  on roads  like this                                                               
for 20,  30, 40 years  and they think it's  just fine, and  so we                                                               
leave them alone."                                                                                                              
                                                                                                                                
8:13:54 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE NEUMAN inquired  as to how many  people this would                                                               
impact.  He also inquired as to any negative impacts of this.                                                                   
                                                                                                                                
MS.  WILLIAMS explained  that if  HB  121 passes,  in an  unusual                                                               
circumstance in  which there are  no active commissioners  and no                                                               
tax  approved  by the  voters  in  the  road service  area,  [the                                                               
borough] will give  the area one last chance  to consolidate with                                                               
another road  service area  or to  tax itself.   If one  of those                                                               
options  isn't  chosen,  the borough  would  dissolve  the  [road                                                               
service  area].   At the  moment,  the borough  can't dissolve  a                                                               
[road  service area]  and  thus  the liability  is  that [of  the                                                               
borough].                                                                                                                       
                                                                                                                                
8:14:50 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  LEDOUX  asked if  HB  121  could force  one  road                                                               
service area that wants to continue  as it is to consolidate with                                                               
another road  service area that wants  to tax itself in  order to                                                               
improve its roads.                                                                                                              
                                                                                                                                
MS. WILLIAMS  opined that the  joining of two road  service areas                                                               
should be undertaken carefully.                                                                                                 
                                                                                                                                
8:15:31 AM                                                                                                                    
                                                                                                                                
RANDY FRANK, Chair, Road Service  Area Committee, Fairbanks North                                                               
Star   Borough  Assembly,   confirmed  that   such  would   be  a                                                               
possibility were HB  121 passed.  However, part  of another piece                                                               
of legislation would change the way  in which a road service area                                                               
can tax itself,  which alleviates that problem  because it allows                                                               
for differential  taxation between  different parts of  a service                                                               
area.                                                                                                                           
                                                                                                                                
8:16:58 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  OLSON  asked  if  this  is being  handled  as  a  local                                                               
improvement district  (LID) with the borough  participating or is                                                               
it 100 percent from the road service area.                                                                                      
                                                                                                                                
MS.  WILLIAMS explained  that the  road  commissioners work  with                                                               
neighbors  and, through  an  election,  independently decide  the                                                               
mill  rate.   The road  [service area]  prepares the  budget, the                                                               
assembly  approves  it, and  the  road  service area  works  with                                                               
borough purchasing to select a  contractor(s) and oversee what is                                                               
done.                                                                                                                           
                                                                                                                                
CO-CHAIR  OLSON  surmised  then  that  the  borough  provides  no                                                               
matching funds.                                                                                                                 
                                                                                                                                
MS.  WILLIAMS confirmed  that the  borough  provides no  matching                                                               
funds, but merely provides administrative assistance.                                                                           
                                                                                                                                
8:17:59 AM                                                                                                                    
                                                                                                                                
RYNNIEVA  MOSS, Chair,  Road Commission,  related  that the  road                                                               
commission with which  she is affiliated works quite  well.  This                                                               
legislation was  introduced because, by statute,  the legislature                                                               
placed  a liability  on boroughs  for  road service  areas.   The                                                               
language  in HB  121,  she highlighted,  was  written to  protect                                                               
those service areas doing their job correctly.                                                                                  
                                                                                                                                
8:19:53 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE CISSNA expressed concern  with the language at the                                                               
end  of [Section  1].   She  related her  understanding that  the                                                               
aforementioned  language  seems  to  specify  that  it  takes  "a                                                               
majority of the  people who live in both the  area that is taking                                                               
in  the service  area and  the people  that live  in the  service                                                               
area."  "So,  in other words, you  can be forced, if  in fact you                                                               
happen  to be  in  the  minority of  the  service  area, but  not                                                               
otherwise," she surmised.                                                                                                       
                                                                                                                                
MS.  MOSS suggested  that Representative  Cissna is  confusing HB                                                               
121 with  HB 133  regarding the Local  Boundary Commission.   Ms.                                                               
Moss clarified  that HB  121 deals with  road service  areas that                                                               
could be  dissolved by the  borough assembly without  an election                                                               
when a road service area isn't functioning properly.                                                                            
                                                                                                                                
REPRESENTATIVE CISSNA directed attention  to the language "voters                                                               
reside".                                                                                                                        
                                                                                                                                
MS.  MOSS explained  that the  new language,  the underlined  and                                                               
bold language,  specifies that such  an election doesn't  have to                                                               
occur if the road service area isn't functioning.                                                                               
                                                                                                                                
8:22:13 AM                                                                                                                    
                                                                                                                                
KEVIN  RITCHIE,  Executive   Director,  Alaska  Municipal  League                                                               
(AML),   echoed   earlier   comments  that   municipalities   and                                                               
assemblies  must  address the  road  system  as  a whole.    This                                                               
legislation provides the [borough the  ability to take action] if                                                               
there is a problem within the  service area that causes a problem                                                               
for the entire road system.                                                                                                     
                                                                                                                                
8:24:16 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  LEDOUX   surmised  then   that  if  there   is  a                                                               
dysfunctional  service area  that's abolished,  the borough  uses                                                               
taxes from  throughout the entire  borough to fix the  problem in                                                               
the road service area.                                                                                                          
                                                                                                                                
MR. RITCHIE deferred to Ms. Broker.                                                                                             
                                                                                                                                
8:24:57 AM                                                                                                                    
                                                                                                                                
MS.  BROKER  clarified  that  the   borough  is  prohibited  from                                                               
spending  areawide and  nonareawide tax  dollars on  road service                                                               
areas.  Therefore, if a road  service area is dissolved, it would                                                               
join the  300 miles of area  in the Fairbanks North  Star Borough                                                               
that aren't maintained or maintained only by private citizens.                                                                  
                                                                                                                                
8:25:21 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  LEDOUX said  she  didn't understand  what HB  121                                                               
does to take  anyone off the hook for liability  when it comes to                                                               
inadequately maintained roads.                                                                                                  
                                                                                                                                
MS. BROKER reiterated that the  borough has the liability because                                                               
the service area  exists.  The borough, through  the road service                                                               
area, has undertaken the duty  to maintain and construct roads in                                                               
the road  service area.   Once that road service  area dissolves,                                                               
that  duty  also  dissolves because  the  [Fairbanks  North  Star                                                               
Borough] doesn't have areawide or nonareawide road powers.                                                                      
                                                                                                                                
8:26:05 AM                                                                                                                    
                                                                                                                                
MR. FRANK  added that another  part of  the problem is  that some                                                               
property within  road service  areas don't  use the  road service                                                               
area  road,  but  are  taxed  by the  road  service  area.    The                                                               
aforementioned people  would like to  [not be included  in those]                                                               
road service areas  because they don't use the  road service area                                                               
roads.   In  order to  alleviate that  concern, there  must be  a                                                               
positive vote by the existing  road service area and the property                                                               
owner.  Mr.  Frank predicted that the road  service area wouldn't                                                               
allow such because  the road service area needs all  the money it                                                               
can obtain.   Therefore, he  said he  would like the  ability for                                                               
those property owners  to be released from the  road service area                                                               
by an action of the assembly.                                                                                                   
                                                                                                                                
8:27:31 AM                                                                                                                    
                                                                                                                                
MR.  RITCHIE suggested  that it's  also  important to  be in  the                                                               
hands  of the  assembly  when  a small  road  service area  can't                                                               
afford  to   maintain  itself  and   may  need   to  consolidate.                                                               
Sometimes  the assembly,  acting with  [specified] criteria,  can                                                               
serve the good of the entire community.                                                                                         
                                                                                                                                
8:28:50 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  OLSON pointed  out that  [the  committee packet  should                                                               
include] two letters of support  from the mayor and the presiding                                                               
officer of the Fairbanks North Star Borough.                                                                                    
                                                                                                                                
8:29:17 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE CISSNA  inquired as  to the  latitude of  the road                                                               
service  area  to  exist,  if  it  so  wishes,  when  the  larger                                                               
community doesn't want it to exist.                                                                                             
                                                                                                                                
MS.  BROKER explained  that  if  a road  service  area is  taxing                                                               
itself and functioning as it  should, the borough assembly has no                                                               
ability to effect  that road service area.   The borough assembly                                                               
can  only effect  or dissolve  a road  service area  if the  road                                                               
service area  is not  performing its  services and  duties, which                                                               
passes on the liability to all borough taxpayers.                                                                               
                                                                                                                                
8:30:54 AM                                                                                                                    
                                                                                                                                
MS. BROKER, in response to  Representative Cissna, clarified that                                                               
when a road  service area votes to become such  it undertakes the                                                               
duty and responsibility of constructing  and maintaining roads in                                                               
that road service  area.  The aforementioned has  to be performed                                                               
in a safe manner, she commented.                                                                                                
                                                                                                                                
REPRESENTATIVE CISSNA inquired as to who decides the standard.                                                                  
                                                                                                                                
MS. BROKER  opined that the  standard is negligence.   The intent                                                               
is to only protect the liability of the borough, she specified.                                                                 
                                                                                                                                
8:32:56 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE CISSNA  asked if  HB 121  leaves recourse  for the                                                               
road service area  at odds with that interpretation.   Can a road                                                               
service  area sue  in an  attempt  to resolve  the conflict,  she                                                               
asked.                                                                                                                          
                                                                                                                                
MS. BROKER reminded the committee that  this will be an action by                                                               
ordinance by the  borough assembly.  Therefore, there  would be a                                                               
public  hearing  and  work  session,  which  would  provide  many                                                               
opportunities for residents to testify.                                                                                         
                                                                                                                                
8:34:05 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  NEUMAN  asked if  the  borough  has any  existing                                                               
taxing mechanism  to address this.   Representative Neuman stated                                                               
that his  concern is in regard  to public safety and  the ability                                                               
for fire  trucks and  other emergency  vehicles to  traverse over                                                               
the roads that aren't maintained.                                                                                               
                                                                                                                                
MS.  WILLIAMS highlighted  that under  state statutes  and voter-                                                               
approved  initiatives [the  Fairbanks North  Star Borough]  has a                                                               
tax cap.   Therefore, if those in a road  service area choose not                                                               
to  tax  themselves, the  borough  is  prohibited from  providing                                                               
funds from other sources to  fund the necessary maintenance.  She                                                               
explained that  in order to eliminate  the [borough's] liability,                                                               
the borough needs  a mechanism by which it can  dissolve the road                                                               
service area.                                                                                                                   
                                                                                                                                
8:35:34 AM                                                                                                                    
                                                                                                                                
CO-CHAIR OLSON  inquired as to how  many of the 100  road service                                                               
areas are currently functioning.                                                                                                
                                                                                                                                
MS.  WILLIAMS  specified  that   [in  the  Fairbanks  North  Star                                                               
Borough]  there are  107 road  service  areas, of  which two  are                                                               
without commissioners.   She noted  that at an  upcoming election                                                               
two road service  areas will be voting on whether  to implement a                                                               
tax.                                                                                                                            
                                                                                                                                
CO-CHAIR OLSON surmised that there  isn't a significant number of                                                               
[problem road service areas].                                                                                                   
                                                                                                                                
MS. WILLIAMS  agreed, but  emphasized that  it's a  real problem.                                                               
She related  that it would  take only  one accident in  which the                                                               
borough is the "deep pocket" with an outstanding liability.                                                                     
                                                                                                                                
8:36:25 AM                                                                                                                    
                                                                                                                                
CO-CHAIR THOMAS  inquired as to  why the road service  areas have                                                               
become defunct.                                                                                                                 
                                                                                                                                
MS.  WILLIAMS  reminded  the  committee  that  the  road  service                                                               
commissioners are  volunteers.   In practice,  someone volunteers                                                               
and ends  up doing [road maintenance]  for 10-20 years.   After a                                                               
while, those  volunteers burn out  or move  away and no  one else                                                               
volunteers.                                                                                                                     
                                                                                                                                
MR. FRANK interjected that most  of these road service areas were                                                               
formed in  early 1980s when a  lot of state money  was available.                                                               
Now that  the state  funding isn't  available, the  [residents of                                                               
the] road  service areas may  choose not  to tax themselves.   He                                                               
noted that Fairbanks has an anti-tax history.                                                                                   
                                                                                                                                
8:38:01 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  THOMAS related  that he  comes  from an  area that  was                                                               
afraid to tax itself for a  fire service area, until a few houses                                                               
burned  and the  City  of Haines  refused to  send  firemen to  a                                                               
service area  without insurance and  protection for  the firemen.                                                               
Co-Chair Thomas stated that he supported service areas.                                                                         
                                                                                                                                
MR. FRANK  agreed that service areas  are a good tool  for people                                                               
who want to help themselves.                                                                                                    
                                                                                                                                
8:39:02 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE LEDOUX said she had  no problem with the abolition                                                               
of a  service area not  acting as  such.  However,  she expressed                                                               
concern  that HB  121  allows for  consolidation  of two  service                                                               
areas.   If  one service  area  wants to  function while  another                                                               
doesn't, she said she wouldn't force the two to consolidate.                                                                    
                                                                                                                                
MR. FRANK informed  the committee that in the  past, the assembly                                                               
had  the  ability to  consolidate  service  areas no  matter  the                                                               
desire  of  the service  area.    However, that  was  problematic                                                               
because of  money from the  existing service area being  spent on                                                               
the  annexed service  area, which  is  a classic  case of  income                                                               
redistribution.   The  aforementioned  was addressed  with a  law                                                               
allowing differential taxation levels.                                                                                          
                                                                                                                                
8:42:16 AM                                                                                                                    
                                                                                                                                
MR. FRANK,  in response to Representative  LeDoux, clarified that                                                               
the aforementioned law passed a few years ago.                                                                                  
                                                                                                                                
REPRESENTATIVE  LEDOUX  posed  a  situation  in  which  one  road                                                               
service  district that  taxed itself  and was  spending prudently                                                               
was  consolidated  with a  road  service  that  didn't.   In  the                                                               
aforementioned situation, the money could  go for projects in the                                                               
service area that didn't [tax itself or spend prudently].                                                                       
                                                                                                                                
MR.  FRANK said  that he  didn't believe  so and  highlighted the                                                               
ability for there to be differential taxation.                                                                                  
                                                                                                                                
MS. BROKER  maintained that those  service areas that  don't want                                                               
to be such  won't be consolidated.  However,  those small service                                                               
areas without a tax base still  wanting to be a service area will                                                               
probably consolidate  in order to  share expenses.   She reminded                                                               
the committee  that the  commissioners of  the service  areas are                                                               
making the decisions regarding where to spend the money.                                                                        
                                                                                                                                
8:45:43 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE CISSNA  expressed interest in knowing  how service                                                               
areas  work in  communities  besides  Fairbanks.   Representative                                                               
Cissna said  that she wouldn't want  to pass a law  that effected                                                               
one  community  in  a  way   that  took  away  options  in  other                                                               
communities.                                                                                                                    
                                                                                                                                
8:46:47 AM                                                                                                                    
                                                                                                                                
CO-CHAIR OLSON  related that his  district consolidated  into one                                                               
boroughwide road service area, which has seemed to work well.                                                                   
                                                                                                                                
8:47:01 AM                                                                                                                    
                                                                                                                                
MR. RITCHIE informed the committee  that at AML's subcommittee of                                                               
its legislative  committee meeting, a number  of communities were                                                               
represented.    He related  that  the  road service  areas  don't                                                               
impact all  boroughs the same.   The  two boroughs that  are most                                                               
dependent  on road  service areas  are the  Fairbanks and  Mat-Su                                                               
boroughs.  With regard to  whether this legislation could be used                                                               
to  treat people  inequitably, Mr.  Ritchie related  the need  to                                                               
trust in the local governing  authority.  However, at the moment,                                                               
the boroughs'  hands are  tied, and therefore  HB 121  allows the                                                               
assembly to  step in, under  certain cases,  for the good  of the                                                               
community.                                                                                                                      
                                                                                                                                
8:50:40 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE NEUMAN  asked if  the borough can  [stop providing                                                               
service]  to those  road service  areas  from which  it feels  it                                                               
isn't receiving enough money.                                                                                                   
                                                                                                                                
MR. RITCHIE reiterated earlier testimony  that currently the only                                                               
way  road powers  can be  executed in  Fairbanks is  through road                                                               
service areas.   In the case in  which a road service  area is at                                                               
the end of a  road and the road service area  can't afford to tax                                                               
itself, the  road service area  might look to another  with which                                                               
to consolidate  in order to reduce  costs to the extent  it could                                                               
afford  to  provide  services.   In  response  to  Representative                                                               
Neuman, Mr. Ritchie said he didn't  believe such an area could be                                                               
treated unfairly.                                                                                                               
                                                                                                                                
MS. MOSS  clarified that HB  121 is about a  liability, involving                                                               
service areas, that  the state has placed on boroughs.   If those                                                               
in a service  area won't tax themselves and don't  keep the roads                                                               
safe, the  borough is  held liable for  that road  service area's                                                               
negligence.   The legislation  specifies that  if a  road service                                                               
area  is negligent,  the borough  can  come in  and dissolve  the                                                               
service area in order to dissolve the liability.                                                                                
                                                                                                                                
8:53:46 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE LEDOUX asked whether HB  121 would be as effective                                                               
if the  legislation said the  borough "may dissolve"  the service                                                               
area without "consolidation" language.                                                                                          
                                                                                                                                
MS. MOSS  related her belief  that the consolidation  language is                                                               
desired because  there are  many small  service areas  that could                                                               
function  properly  when  receiving   state  money.    Therefore,                                                               
without the state funds consolidation may ease the pain.                                                                        
                                                                                                                                
REPRESENTATIVE LEDOUX  surmised "I  guess it would  alleviate the                                                               
pain  because  somebody in  some  other  service area  that  gets                                                               
consolidated with  it would be having  to pay it."   She asked if                                                               
that would be correct.                                                                                                          
                                                                                                                                
MS. MOSS answered  that she believes it  to be more of  a case of                                                               
consolidating administration.                                                                                                   
                                                                                                                                
8:55:20 AM                                                                                                                    
                                                                                                                                
MR. FRANK added  that some service areas [in  the Fairbanks North                                                               
Star Borough]  are very small, and  therefore consolidation would                                                               
address   a   portion  of   the   borough   fee.     Furthermore,                                                               
consolidation would allow [a service  area] the ability to go out                                                               
to bid  in order to obtain  a better contract price  for the work                                                               
on the roads in the area.                                                                                                       
                                                                                                                                
8:56:52 AM                                                                                                                    
                                                                                                                                
CO-CHAIR OLSON announced that HB 121 would be held over.                                                                        
                                                                                                                                
HB  27-MUNI PROP TAX EXEMPTION FOR POLICE HOMES                                                                               
                                                                                                                                
8:57:04 AM                                                                                                                    
                                                                                                                                
CO-CHAIR OLSON announced  that the final order  of business would                                                               
be HOUSE BILL  NO. 27, "An Act relating to  an optional exemption                                                               
from  municipal  property  taxes  on certain  residences  of  law                                                               
enforcement officers."                                                                                                          
                                                                                                                                
The committee took a brief at-ease from 8:57:14 to 9:04:10.                                                                     
                                                                                                                                
9:04:29 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  THOMAS moved  to adopt  CSHB  27, Version  24-LS0182\F,                                                               
Cook,  2/14/05,  as the  working  document.   [No  objection  was                                                               
stated,  and  therefore Version  F  was  treated as  adopted  and                                                               
before the committee.]                                                                                                          
                                                                                                                                
9:04:39 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE MAX GRUENBERG,  Alaska State Legislature, co-prime                                                               
sponsor, explained that the purpose of  HB 27 is to encourage law                                                               
enforcement  officers to  live in  [high crime  areas].   If [law                                                               
enforcement  officers]  live  in  the area,  law  enforcement  is                                                               
better, he  opined.  Very  few law enforcement officials  live in                                                               
areas  where  additional  police protection  is  most  necessary.                                                               
This legislation  allows municipalities  to pass an  ordinance to                                                               
exempt  a small  amount of  assessed valuation  from the  primary                                                               
physical residence of the law  enforcement officer.  He specified                                                               
that a $10,000 exemption will equate  to about $150 a year, which                                                               
is a modest amount.  Because  of the hold harmless language there                                                               
will be no cost to the state.                                                                                                   
                                                                                                                                
9:07:30 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GRUENBERG  turned to the difference  between HB 27                                                               
and  Version F.   He  pointed out  that the  language "occupy  as                                                               
permanent place  of abode"  on page  1, line  8, of  the original                                                               
legislation  [was  changed in  Version  F  to refer  to  "primary                                                               
permanent place of abode"].  He  explained that the intent was to                                                               
be sure that the exemption wasn't  sought on a vacation home that                                                               
wasn't the  primary place of  abode.  He  noted that some  of the                                                               
language  was   taken  from  AS  29.45.050(r)   that  deals  with                                                               
volunteer firemen and emergency medical services.                                                                               
                                                                                                                                
9:08:55 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KOTT opined that there  seems to be confusion with                                                               
the  use of  the  language "primary  permanent".   He  questioned                                                               
whether there is a nonprimary permanent [place of abode].                                                                       
                                                                                                                                
REPRESENTATIVE GRUENBERG  explained that  one could have  a place                                                               
of abode  at say, Big  Lake.   Although it's permanent,  it's not                                                               
the primary place of abode.                                                                                                     
                                                                                                                                
REPRESENTATIVE  KOTT   asked  if  one  can   have  two  permanent                                                               
residences.   Representative  Kott  said that  "primary place  of                                                               
abode"  seems to  make sense  while "primary  permanent place  of                                                               
abode" seems confusing.                                                                                                         
                                                                                                                                
REPRESENTATIVE GRUENBERG said that it  makes no difference if the                                                               
language "permanent" is eliminated.   He explained that the terms                                                               
"resident"  and "domicile"  are legal  terms.   However, in  this                                                               
statute someone may  interpret it as "residence"  in the ordinary                                                               
sense rather than the legal sense.   He specified that the intent                                                               
is to only  allow an individual one physical place  for which the                                                               
exemption  could be  claimed.    He noted  that  later Version  F                                                               
ratchets down  the exemption further  by specifying that  one may                                                               
only receive a maximum of  two exemptions if [two law enforcement                                                               
officers were married].                                                                                                         
                                                                                                                                
9:12:03 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE NEUMAN suggested that on  page 1, line 8, the word                                                               
"two" should  be deleted.   He inquired  as to who  decides these                                                               
exemptions.                                                                                                                     
                                                                                                                                
REPRESENTATIVE GRUENBERG  said that  sentence:   "If two  or more                                                               
individuals are  eligible for  an exemption  ...." is  taken from                                                               
AS  29.45.050(r).   If a  third person  moved in  [to a  property                                                               
where two law enforcement officers  live], there would already be                                                               
two exemptions.   In  that case [the  individuals] first  in time                                                               
would receive  the exemption.   If  three people  move in  at the                                                               
same time, then  it would be up to the  municipality to determine                                                               
who receives the exemption.                                                                                                     
                                                                                                                                
9:14:52 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  NEUMAN  then turned  to  page  2, line  1,  which                                                               
refers to  eligibility requirements  under federal  programs, and                                                               
inquired as to what programs those are.                                                                                         
                                                                                                                                
REPRESENTATIVE  GRUENBERG  said  that these  are  well-recognized                                                               
federal  programs such  as "Renaissance  zones,"  "weed and  seed                                                               
programs," and  neighborhood revitalization  programs.   He noted                                                               
that a number  of areas in Anchorage qualify  for these programs.                                                               
The  local  municipality determines  how  its  ordinance will  be                                                               
crafted, he added.                                                                                                              
                                                                                                                                
REPRESENTATIVE  NEUMAN  questioned  whether the  law  enforcement                                                               
exemption offsets  the higher insurance  rates [the  residents in                                                               
the area] would experience.                                                                                                     
                                                                                                                                
REPRESENTATIVE GRUENBERG  replied no,  which is  why there  is no                                                               
desire for the ordinance to refer  to a "high crime rate" [area].                                                               
He  informed  the  committee  that   the  areas  of  interest  in                                                               
Anchorage  have already  been publicly  designated  as "weed  and                                                               
seed areas."   Representative Gruenberg  turned attention  to the                                                               
third paragraph of Mayor Begich's  letter, which relates that the                                                               
incentive  may need  to be  increased.   Representative Gruenberg                                                               
said he would consider an increase a friendly amendment.                                                                        
                                                                                                                                
9:19:18 AM                                                                                                                    
                                                                                                                                
CO-CHAIR OLSON  inquired as to the  Anchorage Police Department's                                                               
view of this.                                                                                                                   
                                                                                                                                
REPRESENTATIVE GRUENBERG  related that anecdotally  the Anchorage                                                               
Police Department  likes this legislation.   In  further response                                                               
to Co-Chair  Olson, Representative Gruenberg said  he didn't know                                                               
the rough numbers of those law enforcement willing to move.                                                                     
                                                                                                                                
9:20:27 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  CISSNA  related  her  understanding  that  HB  27                                                               
allows municipalities  to decide  whether they want  to implement                                                               
this  program  that  provides a  local  government  incentive  to                                                               
encourage law enforcement  officers to live where  they might not                                                               
choose to live.                                                                                                                 
                                                                                                                                
REPRESENTATIVE GRUENBERG agreed with that understanding.                                                                        
                                                                                                                                
9:21:59 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KOTT turned to the  Muldoon area in Anchorage.  He                                                               
said  he  knew of  very  few  properties  that would  qualify  to                                                               
receive the  $150 exemption.   Representative Kott  expressed the                                                               
need to reevaluate  the exemption amount in order  to attract law                                                               
enforcement  officers  to these  [high  crime]  areas.   He  then                                                               
turned attention to page 1, lines  8-9, regarding two or more law                                                               
enforcement  officers being  eligible  for the  exemption at  the                                                               
same property.   He  posed a  situation in  which two  female law                                                               
enforcement officers purchased a four-plex  and both lived in one                                                               
of the [units], although one  law enforcement officer was married                                                               
to another  male officer.   He inquired  as to who  would qualify                                                               
for the exemption in the aforementioned situation.                                                                              
                                                                                                                                
REPRESENTATIVE  GRUENBERG  explained  that   a  duplex  would  be                                                               
considered one parcel, one assessment.   However, if the property                                                               
was  a  zero  lot  line,  each owner  would  be  entitled  to  an                                                               
exemption.    The maximum  allowed  for  the exemption  of  those                                                               
living  in   a  duplex   is  two  exemptions.     In   regard  to                                                               
Representative  Kott's  first comment,  Representative  Gruenberg                                                               
reiterated that  he would consider  an increase in  the exemption                                                               
amount as a friendly amendment.                                                                                                 
                                                                                                                                
9:27:07 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  THOMAS  referred  to   AS  29.45.050(i)  and  asked  if                                                               
municipalities could  add law enforcement  to the  list receiving                                                               
the [exemption in current statute].                                                                                             
                                                                                                                                
REPRESENTATIVE  GRUENBERG recommended  to use  the format  of the                                                               
legislation because it  requires a certain geographic  area.  The                                                               
substantial subsections  [AS 29.45.050(i) and (a)]  require votes                                                               
of the people, which wasn't included  in HB 27 because the amount                                                               
was smaller.                                                                                                                    
                                                                                                                                
9:29:42 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  THOMAS noted  his  agreement  with Representative  Kott                                                               
regarding  the  size  of the  incentive  necessary  to  encourage                                                               
relocation  [to a  high crime  area].   He  suggested making  the                                                               
incentive worthwhile for someone to take a risk.                                                                                
                                                                                                                                
REPRESENTATIVE GRUENBERG  reiterated that  he would  consider [an                                                               
increase in the amount of the exemption] a friendly amendment.                                                                  
                                                                                                                                
9:30:13 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE NEUMAN suggested adding  the language "with a vote                                                               
of  the  people  through  local  ordinances"  because  the  other                                                               
exemptions do so.  Therefore, the communities would decide.                                                                     
                                                                                                                                
REPRESENTATIVE GRUENBERG characterized such  a change as a policy                                                               
call.    Although  a  smaller incentive  might  not  attract  law                                                               
enforcement  to move,  he indicated  that the  [residents in  the                                                               
area]  may have  concern  with  a larger  incentive  amount.   In                                                               
further   response  to   Representative  Neuman,   Representative                                                               
Gruenberg agreed  that if the  exemption is increased by  a large                                                               
quantity  such  as  $150,000,  then  [the  locals  should  decide                                                               
whether to  offer it].   However, a  more modest increase  in the                                                               
range of $30-$50,000  wouldn't necessarily require a  vote of the                                                               
people.                                                                                                                         
                                                                                                                                
9:32:44 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GRUENBERG,  in further response  to Representative                                                               
Neuman, advised that  if [the incentive] was  [increased] to $40-                                                               
$50,000,  it wouldn't  need  a vote  of the  people.   An  amount                                                               
higher than that would require a vote of the people, he opined.                                                                 
                                                                                                                                
9:33:55 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE CISSNA  asked if  Representative Kott  agrees with                                                               
the $50,000 level.  She then  stated that she would be willing to                                                               
propose an amendment to consider the aforementioned.                                                                            
                                                                                                                                
REPRESENTATIVE  KOTT said  that  he didn't  have  a problem  with                                                               
$50,000.  He related that he  was trying to determine what amount                                                               
would  entice  him  to  move  from his  safe  neighborhood  to  a                                                               
potentially less safe neighborhood.   "Personally, if we're going                                                               
to do it,  I would go to  the max ..., $150,000, that  we give to                                                               
the  seniors  and   the  disabled  veterans,"  he   opined.    He                                                               
acknowledged that such a change would  have to be approved by the                                                               
voters.   He expressed interest  in hearing from  law enforcement                                                               
officers on this matter.                                                                                                        
                                                                                                                                
REPRESENTATIVE  GRUENBERG offered  to  obtain  comments from  law                                                               
enforcement.                                                                                                                    
                                                                                                                                
9:37:21 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KOTT asked whether  the law enforcement already in                                                               
these locations benefit from this legislation as well.                                                                          
                                                                                                                                
REPRESENTATIVE  GRUENBERG  related  that  it's  unlikely  that  a                                                               
senior officer  will move  into one of  these neighborhoods.   He                                                               
expressed  his desire  to attract  new police  officers to  these                                                               
areas  and keep  them  in these  areas.   Therefore,  he said  he                                                               
wanted to provide an incentive to stay in these areas.                                                                          
                                                                                                                                
9:39:14 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  THOMAS noted  his  agreement  with Representative  Kott                                                               
[and  suggested the  following language]  "up to  $150,000".   He                                                               
said  this  is definitely  worth  it.    He  inquired as  to  the                                                               
possibility of  attracting Village Public Safety  Officer (VPSOs)                                                               
and Alaska Department of Fish & Game officers.                                                                                  
                                                                                                                                
REPRESENTATIVE GRUENBERG said those folks would qualify.                                                                        
                                                                                                                                
CO-CHAIR THOMAS related that some  young police officers in rural                                                               
Alaska are  looking at joining federal  [law enforcement] because                                                               
of the  lower retirement years.   However, he surmised  that this                                                               
exemption  may entice  some  of these  young  police officers  in                                                               
rural Alaska to stay in their area.                                                                                             
                                                                                                                                
REPRESENTATIVE GRUENBERG  said that HB  27 may not be  drafted to                                                               
accommodate the areas  in the Bush that  are unorganized boroughs                                                               
because these areas wouldn't qualify  for weed and seed and urban                                                               
development programs.  He said  he would consider an amendment to                                                               
include small  communities under  this legislation as  a friendly                                                               
amendment.                                                                                                                      
                                                                                                                                
9:42:22 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  LEDOUX   suggested  that  the   "law  enforcement                                                               
officers" language could  be problematic if there is  a desire to                                                               
include VPSOs  and rural  areas.   She related  her understanding                                                               
that VPSOs  are considered  peace officers and  there is  a legal                                                               
distinction made  between a peace  officer and a  law enforcement                                                               
officer.                                                                                                                        
                                                                                                                                
REPRESENTATIVE GRUENBERG  turned attention  to page 1,  lines 12-                                                               
13,  which   specifies  that  the   ordinance  can   define  "law                                                               
enforcement  officer"  in  the manner  desired.    Therefore,  he                                                               
opined that Representative LeDoux's concern is addressed.                                                                       
                                                                                                                                
9:43:28 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE NEUMAN  turned attention the language  "that meets                                                               
the eligibility requirements under a  federal program" on page 2,                                                               
and  questioned  whether the  VPSO  programs  would satisfy  such                                                               
requirements.  Therefore, he  suggested rewriting the legislation                                                               
to include VPSOs.  Representative  Neuman also suggested that the                                                               
committee  should  hear  from the  municipalities  regarding  the                                                               
higher amount that has been discussed.                                                                                          
                                                                                                                                
REPRESENTATIVE  GRUENBERG  offered   to  obtain  the  information                                                               
requested.                                                                                                                      
                                                                                                                                
9:44:27 AM                                                                                                                    
                                                                                                                                
CO-CHAIR OLSON announced that HB 27 would be held over.                                                                         
                                                                                                                                
9:44:37 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KOTT inquired as to why paragraph (3) on page 2                                                                  
was added to the legislation.                                                                                                   
                                                                                                                                
REPRESENTATIVE GRUENBERG explained  that [paragraph (3)] provides                                                               
a   municipality  more   flexibility  in   that  it   allows  the                                                               
[exemption]  for a  weed and  seed area  and/or a  specified high                                                               
crime area.                                                                                                                     
                                                                                                                                
[HB 27 was held over.]                                                                                                          
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no further business before the committee, the House                                                                 
Community and Regional Affairs Standing Committee meeting was                                                                   
adjourned at 9:45 a.m.                                                                                                          

Document Name Date/Time Subjects