Legislature(2001 - 2002)

02/14/2001 01:43 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                  HOUSE FINANCE COMMITTEE                                                                                       
                     February 14, 2001                                                                                          
                          1:43 PM                                                                                               
                                                                                                                                
TAPE HFC 01 - 26, Side A                                                                                                        
TAPE HFC 01 - 26, Side B                                                                                                        
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Williams called the House  Finance Committee meeting                                                                   
to order at 1:43 PM.                                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Eldon Mulder, Co-Chair                                                                                           
Representative Bill, Co-Chair                                                                                                   
Representative Con Bunde, Vice-Chair                                                                                            
Representative Eric Croft                                                                                                       
Representative John Davies                                                                                                      
Representative Richard Foster                                                                                                   
Representative John Harris                                                                                                      
Representative Bill Hudson                                                                                                      
Representative Ken Lancaster                                                                                                    
Representative Jim Whitaker                                                                                                     
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Carl Moses                                                                                                       
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Representative Fred  Dyson; Pat Davidson,  Director, Division                                                                   
of  Legislative  Audit; John  Pearson,  Economic  Development                                                                   
Planner, Hyder;  James Bibb, Alaska  Chapter of  the American                                                                   
Institute   of  Architects;   Catherine  Reardon,   Director,                                                                   
Division of  Occupational Licensing, Department  of Community                                                                   
and  Economic  Development; Heather  Brakes,  Staff,  Senator                                                                   
Therriault;  Tamara  Cook, Director,  Legislative  Legal  and                                                                   
Research  Services,   Legislative  Affairs   Agency;  Patrick                                                                   
Kalen, American  Congress on  Surveying and Mapping,  Juneau;                                                                   
Mike Tibbles, Staff, Representative Therriault;                                                                                 
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Glenn Marunde, Tok;                                                                                                             
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 16     "An  Act  relating  to  cities  incorporated  under                                                                   
          state law that are home rule communities."                                                                            
                                                                                                                                
          CSSSHB 16 (CRA) was REPORTED out of Committee with                                                                    
          a "do pass" recommendation and with fiscal impact                                                                     
          note by the Department of Law, dated 2/07/01.                                                                         
                                                                                                                                
CSSB 9(L&C)                                                                                                                     
          "An  Act  extending  the termination  date  of  the                                                                   
          State   Board  of   Registration  for   Architects,                                                                   
          Engineers,  and  Land  Surveyors; relating  to  the                                                                   
          temporary member  of that board; and  providing for                                                                   
          an effective date."                                                                                                   
                                                                                                                                
          CSSB  9(L&C) was  heard and  HELD in Committee  for                                                                   
          further consideration.                                                                                                
                                                                                                                                
SB 10     "An Act extending the termination date of the                                                                         
          Board of Public Accountancy."                                                                                         
                                                                                                                                
          SB  10 was  REPORTED out  of Committee  with a  "do                                                                   
          pass"   recommendation   and  with   a  "do   pass"                                                                   
          recommendation  and with new fiscal impact  note by                                                                   
          the   Department   of    Community   and   Economic                                                                   
          Development.                                                                                                          
HOUSE BILL NO. 16                                                                                                             
                                                                                                                                
     "An Act relating to cities incorporated under state law                                                                    
     that are home rule communities."                                                                                           
                                                                                                                                
REPRESENTATIVE FRED  DYSON, sponsor, spoke in  support of the                                                                   
legislation.  House  Bill 16  is  similar  to HB  255,  which                                                                   
passed the House  37 to 0 in the previous  year. He explained                                                                   
that  the  legislation  failed  to pass  the  Senate  Finance                                                                   
Committee, due  to concerns  regarding local school  support.                                                                   
He  maintained that  the bill  would  facilitate and  empower                                                                   
local   communities   to   organize   and   encourage   self-                                                                   
determination.  It  suspends disincentives  and  extends  the                                                                   
capacity  of  communities  to  write  their  own  charter  or                                                                   
municipal  Constitution.  Communities  could pick  and  chose                                                                   
responsibilities. Currently, communities  that want to become                                                                   
a second  class city  must first organized  as a  first class                                                                   
city and then  make the move toward second  class status. The                                                                   
legislation would eliminate this process.                                                                                       
                                                                                                                                
Representative Whitaker noted  that he was a co-sponsor on HB                                                                   
255.  He reiterated  that  home  rule communities  under  the                                                                   
legislation would  not be required  to tax. He  questioned if                                                                   
communities are  required to provide  any services  under the                                                                   
legislation.                                                                                                                    
                                                                                                                                
TAMARA  COOK,   DIRECTOR,  LEGISLATIVE  LEGAL   AND  RESEARCH                                                                   
SERVICES, LEGISLATIVE AFFAIRS  AGENCY provided information on                                                                   
the  legislation. She  explained that  communities would  not                                                                   
have any obligations. Home rule  communities would be treated                                                                   
similarly to current  second-class cities, which  do not have                                                                   
a taxing  requirement. Home rule  communities would  have the                                                                   
same  tax limitation  that  applies to  second-class  cities.                                                                   
Their ability  to tax would  be limited  to 2 percent  of the                                                                   
assessed property value.                                                                                                        
                                                                                                                                
Representative  Dyson reiterated  that home rule  communities                                                                   
would be able to write their own charters.                                                                                      
                                                                                                                                
Vice-Chair Bunde  clarified that  they would not  be required                                                                   
to  tax, but  would  be  allowed to  tax  if they  wanted  to                                                                   
provide support for  their schools. Ms. Cook  noted that home                                                                   
rule communities cannot be a school district. If a second-                                                                      
class  city  or  home rule  community  is  located  within  a                                                                   
borough the  borough itself is  the school district.  If they                                                                   
are  outside of  a  borough they  would be  part  of a  Rural                                                                   
Education Attendance  Area (REAA). The legislation  would not                                                                   
change their status as a REAA.  They would not have the power                                                                   
to provide  education. The statutes  are specific as  to what                                                                   
forms a school district. A home  rule community cannot become                                                                   
a school  district. A municipality  that raises  tax revenues                                                                   
must use  the power  to tax  as it is  authorized. A  second-                                                                   
class borough is a school district.                                                                                             
                                                                                                                                
Co-Chair  Williams  noted  that   there  are  many  types  of                                                                   
government. Ms.  Cook agreed and  noted that there  are seven                                                                   
forms of  government. Co-Chair  Williams questioned  what the                                                                   
bill   would   offer  that   the   current  forms   do   not.                                                                   
Representative  Dyson responded  that  the legislation  would                                                                   
allow  local governments  to write  their  own charter.  This                                                                   
privilege  is  current  given  to boroughs  and  first  class                                                                   
cities, but not to second-class cities.                                                                                         
                                                                                                                                
Representative Hudson questioned  how the legislation affects                                                                   
the taxing authority. Ms. Cook  noted that section 18 on page                                                                   
6 inserts existing law that currently applies to second-                                                                        
class  cities. This  addresses property  taxation. A  second-                                                                   
class city  has the ability  to levy  a property tax,  not to                                                                   
exceed  2 percent of  assessed value.  Home rule  communities                                                                   
would be given the same taxing authority.                                                                                       
                                                                                                                                
Representative Hudson asked how  the joint services agreement                                                                   
would  be established.  Ms.  Cook  responded  that home  rule                                                                   
communities would  be subject to the same rules  as any group                                                                   
of people  that try to organized  a form of  government. They                                                                   
must go through the Local Boundary  Commission. A petition to                                                                   
organize must be  submitted and must include a  charter to be                                                                   
voted  on. The  Local  Boundary  Commission must  approve  or                                                                   
reject  the petition.  The  Local Boundary  Commission  could                                                                   
also  elect  to  modify  the  petition.  The  Local  Boundary                                                                   
Commission  determines if it  meets the  standards and  is in                                                                   
the  best interest  of the  state  of Alaska.  Representative                                                                   
Dyson  surmised  that  areas would  organize  to  their  best                                                                   
advantage.  He stressed  that  the legislation  would  delete                                                                   
disincentives.                                                                                                                  
                                                                                                                                
Representative  Hudson questioned  if  the legislation  would                                                                   
affect  tribal/state  relations. Representative  Dyson  noted                                                                   
that  the legislation  was  written before  the  state/tribal                                                                   
question   became  an   issue.  He  was   hopeful  that   the                                                                   
legislation would have a positive effect on the issue.                                                                          
                                                                                                                                
Co-Chair  Mulder referred  to section  18 and questioned  why                                                                   
second-class  cities  were  limited   to  2  percent  of  the                                                                   
assessed value of  local property taxes. Ms.  Cook noted that                                                                   
second-class  cities have  been restricted  to the 2  percent                                                                   
limit since  before 1985.  She observed that  it is  a policy                                                                   
decision.                                                                                                                       
                                                                                                                                
Representative Lancaster referred  to section 19(3). He asked                                                                   
why  a  population of  less  than  750  was chosen.  He  also                                                                   
questioned if  the legislation  would affect revenue  sharing                                                                   
and municipal assistance.                                                                                                       
                                                                                                                                
Ms.  Cook  explained  that  revenue   sharing  and  municipal                                                                   
assistance  is   generally  available   to  all   classes  of                                                                   
municipalities. Unincorporated  communities also  qualify for                                                                   
some benefits. If an unincorporated  area organized under the                                                                   
legislation it would probably  find itself eligible for a set                                                                   
of state  benefits that  it currently  is not qualified  for,                                                                   
however  it would  be disqualified  for  other benefits.  She                                                                   
noted  that the  provision in  section 19(3)  is in  existing                                                                   
law.                                                                                                                            
                                                                                                                                
Representative Croft  concluded that the legislation  asks if                                                                   
second-class cities should be allowed to write a charter.                                                                       
                                                                                                                                
Vice-Chair  Bunde  noted  that   fish  traps  are  considered                                                                   
property. In response to a question  by Vice-Chair Bunde, Ms.                                                                   
Cook clarified that the vote would  be among the residents of                                                                   
the area that is petitioning to organize.                                                                                       
                                                                                                                                
Representative  Dyson clarified  that  the legislation  would                                                                   
affect about 75 or 80 communities.                                                                                              
                                                                                                                                
GLENN MARUNDE,  TOK spoke  in support of  HB 16.  He stressed                                                                   
that it  could be  a stepping-stone  to a more  sophisticated                                                                   
form of government.                                                                                                             
                                                                                                                                
JOHN PEARSON,  ECONOMIC DEVELOPMENT  PLANNER, HYDER  spoke in                                                                   
support  of HB  16. He  noted that  13 or  14 communities  in                                                                   
Southeast  Alaska would  be affected  and thought  that 3  of                                                                   
these would  take advantage  of the  legislation. He  pointed                                                                   
out that Hyder is the only true  border town in Alaska. Hyder                                                                   
currently has no  form of government, but there  is an active                                                                   
community  association that  oversees  activities that  would                                                                   
normally   be   under   government.   The   Hyder   Community                                                                   
Association  operates  a  library,   oversees  snow  removal,                                                                   
operates a  visitor center and  museum during the  summer and                                                                   
applies for various grants as  a non-profit organization. The                                                                   
community   receives   funding   from   the   Department   of                                                                   
Transportation and Public Facilities  for snow removal. Hyder                                                                   
also receives  funding for  space leased  for the school  and                                                                   
forest  service  office.  Hyder has  an  aggressive  planning                                                                   
process. A  bottled water processing  plant will open  in the                                                                   
next month.                                                                                                                     
                                                                                                                                
Representative   John  Davies   asked  why   Hyder  did   not                                                                   
incorporate  under second-class  city provision. Mr.  Pearson                                                                   
explained   that  Hyder's  population   has  been   unstable.                                                                   
Stability  in   the  community   has  brought  a   change  of                                                                   
attitudes.   Representative  John   Davies  noted   that  the                                                                   
legislation allows  the writing of  a charter. He  asked what                                                                   
would be left  out of a charter  that would be required  of a                                                                   
second-class city. Mr. Pearson  noted that there is fear over                                                                   
taking  on  the  responsibility  for  education,  police  and                                                                   
platting (platting  would not  be required). The  legislation                                                                   
would  allow  Hyder  to pursue  other  funding  programs  and                                                                   
bonding. This  could allow a  joint effort for  projects such                                                                   
as the inter island ferry.                                                                                                      
                                                                                                                                
Representative Hudson noted that  Hyder is providing a lot of                                                                   
services without  the ability to raise income.  He noted that                                                                   
the  legislation  would  allow  the  assessment  of  property                                                                   
taxes.  Mr. Pearson  noted that  there  are few  jobs in  the                                                                   
community. Revenues from the bottling  plant would be used to                                                                   
better the life of those in Hyder.                                                                                              
                                                                                                                                
(TAPE CHANGE, HFC 01 - 26, SIDE 2)                                                                                            
                                                                                                                                
Co-Chair Mulder stated that he  thought that the tax levee in                                                                   
section 18 should  be raised to a more reasonable  level, but                                                                   
did  not  want  to  lessen  the   legislation's  chances  for                                                                   
passage.                                                                                                                        
                                                                                                                                
Representative  John  Davies   asked  what  requirements  for                                                                   
forming  a  second-class  city  would  prevent  organization.                                                                   
Representative  Dyson emphasized  that the legislation  would                                                                   
allow small  communities to chose  a form of  government that                                                                   
reflects their  historic and cultural way of  doing business.                                                                   
Most disincentives have been financial.                                                                                         
                                                                                                                                
Representative Harris  clarified that boroughs  and home rule                                                                   
cities have  a 3 percent  or 30 mil  cap level.  He suggested                                                                   
that the cap could be changed to 3 percent.                                                                                     
                                                                                                                                
Representative Dyson added that  a full-blown audit would not                                                                   
be required.                                                                                                                    
                                                                                                                                
Representative  Foster  MOVED   to  report  SSHB  16  out  of                                                                   
Committee with the accompanying fiscal note                                                                                     
                                                                                                                                
CSSSHB  16 (CRA) was  REPORTED  out of Committee  with  a "do                                                                   
pass"  recommendation  and with  fiscal  impact  note by  the                                                                   
Department of Law, dated 2/07/01.                                                                                               
SENATE BILL NO. 10                                                                                                            
                                                                                                                                
     "An Act extending the termination date of the Board of                                                                     
     Public Accountancy."                                                                                                       
                                                                                                                                
SENATOR THERRIAULT,  sponsor, spoke in  support of SB  10. He                                                                   
noted that the legislation would  extend the termination date                                                                   
of the Board of Public Accountancy.  The Board was audited by                                                                   
the  Legislative  Budget  and   Audit  Committee.  The  audit                                                                   
concluded  that  the Board  should  be reestablished  and  is                                                                   
necessary to protect the public welfare.                                                                                        
                                                                                                                                
CATHERINE   REARDON,  DIRECTOR,   DIVISION  OF   OCCUPATIONAL                                                                   
LICENSING, DEPARTMENT  OF COMMUNITY AND ECONOMIC  DEVELOPMENT                                                                   
stated that  the Division provides  technical support  to the                                                                   
Board and is in support of the bill.                                                                                            
                                                                                                                                
Representative Foster MOVED to  report SB 10 out of Committee                                                                   
with the accompanying fiscal note.                                                                                              
                                                                                                                                
MIKE TIBBLES,  STAFF, REPRESENTATIVE WILLIAMS noted  that the                                                                   
fiscal  note needs  to be  amended. He  explained that  bills                                                                   
that extend sunset dates should  have the cost of the program                                                                   
listed in the accompanying fiscal note.                                                                                         
                                                                                                                                
In response  to a question  by Vice-Chair Bunde,  Ms. Reardon                                                                   
clarified that the Board if self-sustaining.  The fiscal note                                                                   
revision  would show  expenditures  that are  already in  the                                                                   
operating  budget. Mr.  Tibbles noted  that it  is not  a new                                                                   
statutory  requirement.  Ms.  Reardon  agreed  that  the  new                                                                   
fiscal note would only show expenditures  that are already in                                                                   
the operating budget.                                                                                                           
                                                                                                                                
Co-Chair  Mulder  noted  that  even  though  they  are  self-                                                                   
sustaining the receipts are washed  through the General Fund.                                                                   
The  revenues   currently  show   as  RSS  receipts   support                                                                   
services, which were previously shown as GFPR.                                                                                  
                                                                                                                                
Senator  Therriault concluded  that FY02  would remain  zero,                                                                   
since it is included in the governor's  budget. The out years                                                                   
would show the  expenditures as distributed and  the revenues                                                                   
from fees. The net would be zero.                                                                                               
                                                                                                                                
Ms. Reardon explained that the  Division receives one budget.                                                                   
They will apportion the overhead on the Board.                                                                                  
                                                                                                                                
There  being NO  OBJECTION, SB  10 was  moved from  Committee                                                                   
with a revised fiscal note.                                                                                                     
                                                                                                                                
SB  10  was  REPORTED  out of  Committee  with  a  "do  pass"                                                                   
recommendation and  with a "do pass" recommendation  and with                                                                   
new fiscal  impact note  by the  Department of Community  and                                                                   
Economic Development.                                                                                                           
CS FOR  SENATE BILL NO. 9(L&C)                                                                                                
                                                                                                                                
     "An  Act extending  the termination  date  of the  State                                                                   
     Board  of Registration  for  Architects, Engineers,  and                                                                   
     Land  Surveyors;  relating to  the  temporary member  of                                                                   
     that board; and providing for an effective date."                                                                          
                                                                                                                                
                                                                                                                                
Senator  Therriault,   sponsor,  spoke  in  support   of  the                                                                   
legislation. He  explained that the legislation  would extend                                                                   
the termination date  of the State Board of  Registration for                                                                   
Architects,  Engineers,  and   Land  Surveyors.  Section  one                                                                   
incorporates the extension. Section  two would continue until                                                                   
the year  2005 the temporary  (mining engineer)  board member                                                                   
that was added  in 1998. Expenses for this  member would also                                                                   
be covered by fees.                                                                                                             
                                                                                                                                
Senator Therriault  discussed  recommendations by the  Board.                                                                   
He  noted   that  discussions   have  occurred  regarding   a                                                                   
requirement  for  continuing education.  The  Board  supports                                                                   
continuing  education.  The Legislature  could  set  specific                                                                   
requirements in  statute or give the Board  general authority                                                                   
to  develop   requirements  through  regulation.   The  Board                                                                   
discussed   the   mining   engineer   designated   seat   and                                                                   
recommended  that  it  be  retained.  There has  not  been  a                                                                   
problem filling  the seat. The Board has  adopted regulation-                                                                   
addressing  reciprocity.   He  concluded  that   it  was  not                                                                   
necessary for the regulations to be placed in statute.                                                                          
                                                                                                                                
JAMES  BIBB,  PRESIDNET,  ALASKA   CHAPTER  OF  THE  AMERICAN                                                                   
INSTITUTE OF  ARCHITECTS stated  that his organization  would                                                                   
like to see some options for architects  that are licensed in                                                                   
other states.                                                                                                                   
                                                                                                                                
Ms.  Reardon  stated  that  the  bill  does  not  change  how                                                                   
architects can  be licensed. She  added that the  fiscal note                                                                   
has  a  $3 thousand  dollar  increment.  Representative  John                                                                   
Davies  pointed out  that the  fiscal note  would need  to be                                                                   
revised to show  the cost of the program. Ms.  Reardon stated                                                                   
that she would revise the fiscal note as required.                                                                              
                                                                                                                                
PATRICK  KALEN, AMERICAN  CONGRESS ON  SURVEYING AND  MAPPING                                                                   
spoke in support  of the legislation. He observed  noted that                                                                   
land surveyors  support continuing education. He  stated that                                                                   
he  would like  an  opportunity  to work  with  the Board  on                                                                   
continuing education requirements.                                                                                              
                                                                                                                                
CSSB  9(L&C) was  heard  and HELD  in  Committee for  further                                                                   
consideration                                                                                                                   
ADJOURNMENT                                                                                                                   
                                                                                                                                
The meeting was adjourned at 2:50 p.m.                                                                                          

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