Legislature(2023 - 2024)BELTZ 105 (TSBldg)
04/18/2023 01:30 PM Senate COMMUNITY & REGIONAL AFFAIRS
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| Audio | Topic |
|---|---|
| Start | |
| SB79 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 79 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
SENATE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE
April 18, 2023
1:35 p.m.
MEMBERS PRESENT
Senator Forrest Dunbar, Chair
Senator Elvi Gray-Jackson
Senator Jesse Bjorkman
Senator Cathy Giessel
MEMBERS ABSENT
Senator Donald Olson, Vice Chair
COMMITTEE CALENDAR
SENATE BILL NO. 79
"An Act relating to the reclassification of first class cities
as second class cities; and providing for an effective date."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: SB 79
SHORT TITLE: RECLASSIFICATION OF FIRST CLASS CITIES
SPONSOR(s): SENATOR(s) BISHOP
02/24/23 (S) READ THE FIRST TIME - REFERRALS
02/24/23 (S) CRA, EDC
04/18/23 (S) CRA AT 1:30 PM BELTZ 105 (TSBldg)
WITNESS REGISTER
SENATOR CLICK BISHOP, District R
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Sponsor of SB 79.
CHEYENNE DIBERT, Staff
Senator Click Bishop
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented the sectional analysis on SB 79.
NILS ANDREASSEN, Executive Director
Alaska Municipal League
Juneau, Alaska
POSITION STATEMENT: Gave invited testimony in support of SB 79.
JEDEDIAH SMITH, Local Government Specialist
Division of Community and Regional Affairs
Department of Commerce, Community and Economic Development
Anchorage, Alaska
POSITION STATEMENT: Answered questions on SB 79.
ED MARTIN, Jr., representing self
Kenai, Alaska
POSITION STATEMENT: Testified in opposition to SB 79.
ACTION NARRATIVE
1:35:27 PM
CHAIR FORREST DUNBAR called the Senate Community and Regional
Affairs Standing Committee meeting to order at 1:35 p.m. Present
at the call to order were Senators Gray-Jackson, Bjorkman, and
Chair Dunbar. Senator Giessel arrived during the meeting.
SB 79-RECLASSIFICATION OF FIRST CLASS CITIES
1:36:11 PM
CHAIR DUNBAR announced the consideration of SENATE BILL NO. 79
"An Act relating to the reclassification of first class cities
as second class cities; and providing for an effective date."
CHAIR DUNBAR stated this is the introductory hearing of this
bill in this committee.
1:36:43 PM
SENATOR CLICK BISHOP, District R, Alaska State Legislature,
Juneau, Alaska, sponsor of SB 79, stated that the House
companion bill is House Bill 69. He summarized the sponsor
statement:
[Original punctuation provided.]
Senate Bill 79 Sponsor Statement
Reclassification of First-Class Cities
Senate Bill 79 will give first-class cities, that
have fallen below the required 400 resident standard
for becoming and maintaining a first-class city, a way
to reclassify themselves as a second-class city.
The 2022 annual report by the Local Boundary
Commission to the legislature states that "A community
must have a population of more than 400 to incorporate
as a first-class city" and says, "there is no
mechanism that automatically reclassifies a community
if the population drops below that threshold."
Tanana, for example, once had the tax base and
was able to run as a first-class city; however, the
population has dropped significantly to where the
community can no longer do so. A member of the Tanana
City Council contacted the Local Boundary Commission
in February 2022 to ask how to reclassify themselves
from a first-class city to a second-class one. Senate
Bill 79 will help them do it.
SENATOR BISHOP explained that the City of Tanana no longer has
the tax base to function as a first-class city due to a
population decline, making it difficult for the city to fund a
school. The Tanana school was formerly under the Yukon-Koyukuk
School District's (YKSD) jurisdiction. The two school districts
agreed to bring the school back under the Yukon-Koyukuk
jurisdiction.
1:39:10 PM
CHEYENNE DIBERT, Staff, Senator Click Bishop, Alaska State
Legislature, Juneau, Alaska, presented the sectional analysis on
SB 79:
[Original punctuation provided.]
Senate Bill 79 Sectional Analysis Reclassification of
First-Class Cities
Section 1
AS 29.04. Classification of Municipalities
Adds a new section relating to reclassification of
first-class cities with less than 400 permanent
residents:
(a) Allows a first-class city with a population of
less than 400 persons to be reclassified as a
second-class city if the council submits a written
request to the Local Boundary Commission.
(b) Gives the commission 10 days after receiving the
request to notify the council that the city is
eligible for reclassification if the agency
verifies that the population is less than 400
people.
(c) Gives the council 30 days after being notified by
the commission that the city is eligible for
reclassification to reject it. If the council
rejects the reclassification, it may not petition
the agency for one year. If the council does not
reject the reclassification, then the
reclassification takes effect after the date of
notification of eligibility.
Section 2
Effective date
Provides an immediate effective date.
1:40:57 PM
NILS ANDREASSEN, Executive Director, Alaska Municipal League
(AML), Juneau, Alaska, gave invited testimony in support of SB
79. He said this bill is a great way for local governments to
exert local control over decisions affecting their communities.
The proposed reclassification provides an expedited method for
community leaders to meet the needs of their communities and be
responsive to fairly critical changes when populations drop
below statutory classification thresholds. AML is supportive of
this methodology for reclassifying first-class cities as second-
class cities.
1:42:43 PM
SENATOR BJORKMAN asked why the proposed reclassification is the
right tool to fix the problem of combining school districts.
SENATOR BISHOP replied that if the problem could have been fixed
any way other than through the Local Boundary Commission, he
would have. He expressed his understanding that this is the
vehicle that has to be used. He pointed out that the legislature
did the same thing last year for the Rampart School in the Yukon
Flats School District (YFSD). With the mutual agreement of YKSD
and YFSD and their respective school boards, the legislature
passed a bill allowing the Rampart School to become part of the
YKSD through a regional educational attendance area boundary
change. SB 79 is the only way to accomplish the mission for
Tanana.
1:44:12 PM
CHAIR DUNBAR asked about the main differences between first-
class and second-class cities and whether this reclassification
would impact other issues.
MS. DIBERT answered that the community tax base funds schools in
first-class cites, whereas the state funds schools in second-
class cities. The City of Tanana no longer has the tax base to
fund its school. The state would fund the school district if
Tanana were reclassified as a second-class city.
SENATOR BISHOP added that the Tanana school would be in the
Yukon-Koyukuk School District jurisdiction if the city
reclassifies as a second-class city.
CHAIR DUNBAR sought confirmation that local contributions and
state dollars fund first-class cities.
MS. DIBERT replied yes.
SENATOR BISHOP expressed his understanding that Tanana had a
cash flow shortage. They had to assign some teacher housing to
leverage their cash flow and make them whole. The City of
Tanana's finances are tight, and they worked with the Yukon-
Koyukuk School District this year on the issue.
1:46:17 PM
SENATOR BJORKMAN asked whether the YKSD would provide a local
contribution if the Tanana City School District joined it or if
YKSD was within a regional educational attendance area (REAA).
MS. DIBERT answered that by law, a second-class city does not
have to provide a tax contribution.
1:46:49 PM
SENATOR BISHOP chimed in that Tanana brings benefits to the
table even with this new arrangement. The Tanana school is on
biomass, so the heating bills are lower than in other rural
communities, and it is on city water and sewer.
CHAIR DUNBAR asked whether some of the City of Tanana's school
funding would go to the YKSD.
SENATOR BISHOP replied that it could be in kind or in lieu of
fees from the Yukon-Koyukuk School District back to the city for
water and sewer.
1:47:32 PM
SENATOR GRAY-JACKSON asked, besides school issues, whether there
were any other differences between first-class and second-class
cities.
JEDEDIAH SMITH, Local Government Specialist, Local Boundary
Commission, Department of Commerce, Community and Economic
Development (DCCED), Anchorage, Alaska, answered that in the
context of this bill, the fundamental difference between a
first-class and a second-class city in an unorganized borough is
the power to operate a school district. A first-class city is
obligated to do so, and a second-class city is prohibited from
doing so. He said other major differences are:
- A first-class city is required to conduct a single audit for
financial purposes, whether in a borough or an unorganized
borough. A second-class city generally may adopt a certified
financial statement depending on grant funding eligibility and
how much it spends.
- Title 29 indicates a first-class city shall have planning and
platting powers, whereas a second-class city may exercise those
powers.
1:50:07 PM
SENATOR BJORKMAN said that in his experience with organized
boroughs, first-class boroughs and cities can vote themselves
significant powers and authorities, whereas second-class may
not. He wondered whether the same applies to first-class and
second-class cities within an unorganized borough.
MR. SMITH replied yes, that is correct. He said another
fundamental difference for boroughs is that the powers are
vested with the city council in a first-class city as opposed to
a second-class city. He expressed his belief that this is not
the same for cities.
1:51:27 PM
CHAIR DUNBAR opened public testimony on SB 79.
1:51:46 PM
SENATOR GIESSEL joined the meeting.
1:51:52 PM
ED MARTIN, Jr., representing self, Kenai, Alaska, testified in
opposition to SB 79, stating this is a backdoor way to skirt
current law. He said that if a community lacks sufficient
population for a tax base, it must size down. He recalled that a
road to Tanana was recently constructed. He said his company
built an airport there in the early 1980s. If this community
cannot support itself with an airport and a road, it is
unconscionable that the community continue under its current
status. The City of Tanana should be deemed a second-class city
by virtue of law. He referenced statehood and mineral rights and
suggested committee members needed to understand the
ramifications of this bill.
1:54:31 PM
CHAIR DUNBAR closed public testimony and held SB 79 in
committee.
CHAIR DUNBAR said the public may submit written testimony to
senate.community.and.regional.affairs@akleg.gov.
1:55:07 PM
There being no further business to come before the committee,
Chair Dunbar adjourned the Senate Community and Regional Affairs
Standing Committee meeting at 1:55 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 01 - SB 79 ver A.PDF |
SCRA 4/18/2023 1:30:00 PM |
SB 79 |
| 02 - SB 79 Sponsor Statement.pdf |
SCRA 4/18/2023 1:30:00 PM |
SB 79 |
| 03 - SB 79 Sectional Analysis.pdf |
SCRA 4/18/2023 1:30:00 PM |
SB 79 |
| 04 - SB 79 Supporting Document-2022 Local Boundary Commission Annual Report.pdf |
SCRA 4/18/2023 1:30:00 PM |
SB 79 |
| 05 - SB 79 Supporting Document-City of Tanana Letter 02.23.23.pdf |
SCRA 4/18/2023 1:30:00 PM |
SB 79 |
| 06 - SB 79 Supporting Document-Tanana School Board Resolution 02.07.23.pdf |
SCRA 4/18/2023 1:30:00 PM |
SB 79 |
| 07 - SB 79 Supporting Document-Yukon-Koyukuk School District-Tanana School Summary.pdf |
SCRA 4/18/2023 1:30:00 PM |
SB 79 |
| 08 - SB 79 - FN DCCED; DCRA.pdf |
SCRA 4/18/2023 1:30:00 PM |
SB 79 |