Legislature(2001 - 2002)
02/27/2002 01:33 PM Senate CRA
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
SENATE COMMUNITY & REGIONAL AFFAIRS COMMITTEE
February 27, 2002
1:33 p.m.
MEMBERS PRESENT
Senator John Torgerson, Chair
Senator Randy Phillips
Senator Georgianna Lincoln
Senator Pete Kelly
MEMBERS ABSENT
Senator Alan Austerman
COMMITTEE CALENDAR
SENATE BILL NO. 323
"An Act relating to the mandatory incorporation of certain
boroughs in the unorganized borough; and providing for an
effective date."
HEARD AND HELD
SENATE BILL NO. 264
"An Act relating to a reimbursement program for municipal bonds,
notes, or other indebtedness incurred for school construction;
and providing for an effective date."
MOVED SB 264 OUT OF COMMITTEE
SENATE BILL NO. 278
"An Act requiring a good faith effort to purchase property before
that property is taken through eminent domain; and providing for
an effective date."
MOVED SB 278 OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
SB 323 - No previous action to record.
SB 264 - No previous action to record.
SB 278 - No previous action to record.
WITNESS REGISTER
Senator Gary Wilken
Alaska State Capitol, Room 514
Juneau, AK 99801-1182
POSITION STATEMENT: Sponsor of SB 323
Jerry Burnett
Staff to Senator Lyda Green
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Introduced SB 264
Eddy Jeans
Finance Manager
Department of Education &
Early Development
801 W 10 St.
Juneau, AK 99801-1894
POSITION STATEMENT: Testified on SB 264
Kim Ognisty
Staff to Senator Torgerson
Alaska State Capitol, Room 427
Juneau, AK 99801-1182
POSITION STATEMENT: Introduced SB 278
Phil Evans
P.O. Box 85103
Fairbanks, AK 99708
POSITION STATEMENT: Testified on SB 278
ACTION NARRATIVE
TAPE 02-4, SIDE A
CHAIRMAN JOHN TORGERSON called the Senate Community & Regional
Affairs Committee meeting to order at 1:33 p.m. Present were
Senators Lincoln, Phillips, Kelly and Chairman Torgerson.
SB 323-MANDATORY INCORPORATION OF BOROUGHS
SENATOR GARY WILKEN sponsor of SB 323 read the following sponsor
statement into the record:
The Mandatory Borough Act of 2002 recognizes that there
are six regions in Alaska that meet most, if not all,
the standards for borough incorporation, and sets in
motion a procedure to create six new boroughs by
January 1, 2005. The identified areas have the
financial capability and stable populations needed to
provide a local government with the power to plan,
support local schools, and levy and collect taxes.
Senate Bill 323 allows the residents in the identified
six locations to initiate borough incorporation
proposals, hold extensive public hearings, and work
closely with the Local Boundary Commission to determine
the desired borough structure until the January 1, 2005
deadline. However, if a borough is not incorporated
within each of the six regions by the stated timeframe,
the following areas will be incorporated as second-
class boroughs:
Copper River Basin Region
Glacier Bay Region
Prince of Wales Island Region
Prince William Sound Region
Upper Tanana Basin Region
Wrangell/Petersburg Region
Through the formation of these six boroughs, local
residents, many for the first time, will be able to
financially support their neighborhood schools. In
addition, several school districts will be consolidated
to enhance efficiencies and economies of scale.
Alaska's K-12 public education system will benefit from
the additional financial help and thus Alaska's
students will benefit.
The best government is the government closest to the
people. Senate Bill 323 continues what the framers of
the Alaska State Constitution commenced over forty
years ago, and by forming these six boroughs, it
provides a way for local area residents to help with
their children's education.
I respectfully request your consideration and support
for this legislation.
SENATOR WILKEN called member's attention to the chart in their
packets titled, "Standards for Borough Incorporation." [A copy of
the chart is available in the committee file.] The chart lists 11
standards that need to be met for borough incorporation and he
believes the six areas have already fulfilled 9 of those
standards. The process that starts with the committee meeting
will answer the questions regarding the final two standards,
which are "Financial/Human Resources" and "Similar Geography."
Next he noted the "Model Borough Boundaries" pamphlet found in
committee packets. Maps of the six areas referred to above are
shown with current Rural Education Attendance Area (REAA)
Boundaries and the model or proposed boundaries. [A copy of the
pamphlet can be found in the bill file.]
For a year he has been asking the unorganized area whether they
can help with K-12 education thereby relieving some of the burden
placed on organized Alaska. Three areas of the state have stepped
forward to do just that, but many areas of the state have chosen
to ignore his request. This legislation asks those areas why they
can't help. Given the amount of data available, he believes there
is no reason not to start the process to analyze whether these
six areas have the capability and capacity for government.
He asked members to examine the State of Alaska Local Boundary
Commission January 2001 booklet titled, "The Need to Reform State
Laws Concerning Borough Incorporation and Annexation." [A copy
can be found in the bill file.] In particular, he asked members
to read pages 7-20 then refer to page 10 and match the seven
bulleted paragraphs to the appendix. It says that since 1963
Alaska has grown in population and wealth and it is time to
revisit the idea of incorporations of local government and bring
back the concept that the best government is the one that is
closest to the people.
According to their annual publication, the Alaska Municipal
League supports this concept and each year the Local Boundary
Commission issues a report that talks about organization of
unincorporated areas and how the Legislature might be able to
eliminate some of the disincentives of incorporation and bring
government close to the people.
He closed by saying this is the start of a very important piece
of legislation and his office is ready to work on it and discuss
it with all people that are affected.
SENATOR PHILLIPS said there is another way of accomplishing the
same thing. Instead of passing bills, the Legislature can sit in
joint session and act as the Assembly for the unorganized areas.
Because this bill has several more committees of referral and it
might not pass, he asked whether they shouldn't pursue this other
avenue.
SENATOR WILKEN thought that was a good question, but his approach
has been to have the patience to do the work correctly.
Obviously, there are areas of the state that have the capacity to
fund education and have a minimal second-class borough level of
government whereby they are able to choose the degree to which it
affects the population. This hasn't worked very well so this is
another step. His problem with the full Legislature sitting as
the Assembly is that it doesn't recognize the capacity of
different areas of the state and is therefore an unfair approach.
He isn't after those areas that aren't able to support
government, rather he wants those areas that are capable of
helping themselves to step forward and help themselves. It's
better to take a reasoned analysis, through the parts of the law
that says, "Can you help yourselves?" That is what this bill
suggests.
SENATOR LINCOLN informed Senator Wilken that the individuals in
her district don't necessarily feel that having a borough
actually creates a government that is closer to them and would
therefore change how they do business in their area. She keeps
hearing people ask, "How are we going to pay for that?" When she
looks at some of the six target areas she doesn't see how they
can afford government. There is an ongoing discussion, and she
has confidence that the people will create new boroughs when they
feel they have the economy to support one. She doesn't want to
say, "You shall…" because that isn't necessarily the best form of
government either.
With talk of budgetary cuts and considering the current fiscal
gap, she asked how the cost of the bill could be justified.
SENATOR WILKEN replied the concept of saying, "You shall…" is not
quite correct. There are 11 standards in law that an area must
qualify under in order to become a borough. Few people would ever
vote to become a borough but he believes that borough
incorporation has increased the quality of life in the state. He
knows Interior Alaska is better off with the Fairbanks North Star
Borough than without because "Overall, 84% of the people have
benefited by borough incorporation."
The push for incorporation began with education reform. In his
area, they ask the people for a 4-mil tax equivalent so they can
get education dollars from the state. This year the people in
organized Alaska are paying $154 million to have the benefit of
incoming state money for their education. Because unorganized
Alaska is paying nothing, he can safely say the people he
represents are subsidizing education in the unorganized areas of
Alaska. This is acceptable for those areas that are not able to
pay, but it is not acceptable for those areas that can pay but
won't.
The fiscal note is not important when you consider that this has
more than a one or two year focus. It is a generation issue that
will, over time, improve certain unorganized areas in the state
just as it has in the North Star Borough.
SENATOR LINCOLN had difficulty with the criteria used and took
issue with the term "mandatory" that was used in the title. She
said there was a resources meeting the previous day that
discussed mining and approximately 90 percent of the presenters
presented the development of resources in Bush Alaska. That is a
form of payment for services to education and other state
programs. The statement that they aren't paying anything is in
error.
SENATOR WILKEN disagreed that the resources in a particular area
belong to the people that live in that area. He believes that the
resources in the state are the property of all the people of
Alaska. That the resources come from a particular area provides
no claim to that area of the state when you're talking about a
local contribution to match people that are paying a property
tax.
Areas that are not incorporated by 2005 will then be incorporated
as second class boroughs under this Act but they must first come
before the Legislature and they must also satisfy the best
interest standard. "It is top down, but it brings people to the
table to talk about what is in their best interest and today,
that is very difficult to do."
CHAIRMAN TORGERSON asked whether he thought he could accomplish
this by 2005.
SENATOR WILKEN said he doesn't know. He's comfortable with the
fact that it will take time. It's important to get the process
started.
CHAIRMAN TORGERSON said his point goes to ensure that due
diligence is done before the deadline.
There was no further testimony.
The bill was held in committee.
SB 264-MUNICIPAL BOND REIMBURSEMENT
JERRY BURNETT, Staff to Senator Lyda Green, introduced the bill
and read the following sponsor statement into the record:
Senate Bill 264 would authorize 70 percent state
reimbursement for $113 million dollars of school
projects that are funded by voter authorized debt
issued by local government. The authorization would be
distributed among school districts in the following
manner; $50 million for projects in Anchorage, $15
million for projects in Fairbanks, $13 million for
projects in Mat-Su, $10 million for projects in Kenai
and $25 million for projects in smaller school
districts in organized Alaska. The amounts are intended
to equal $1,000 in projects per student rounded to the
nearest million dollars in each district.
Debt reimbursement is one of the methods that have been
used to fund school construction in Alaska for a number
of years. Debt reimbursement has a unique advantage
over other financing methods in that it allows for
maximum local involvement and input in the decision of
which specific projects should be funded. Municipal
debt reimbursement insures that the projects funded in
a school district are the highest priority of the
voters in that district. Projects need to meet state
standards for approval but do not need to be funded in
the state's priority order.
SB 264 is not intended to serve as a complete school
funding package. School districts in unorganized Alaska
cannot use debt reimbursement. Individual school
projects are often larger than the authorization in SB
264 for any school district. Other funding methods,
such as general obligation debt, must be used for most
school construction and major maintenance in Alaska.
Municipal debt reimbursement is, however, the best
method for many school districts to build and maintain
the facilities most important to the people in their
community.
EDDY JEANS, Finance Manager for the Department of Education and
Early Development, said he was available to answer questions. For
the record, he wanted to state that the Legislature has done a
fine job at funding school construction the last two years and
they have followed the department's priority list. He clarified
that this bill would only fund school construction projects in
municipal school districts once there is both voter and
department approval.
SENATOR LINCOLN said she realizes this is for organized Alaska,
but wanted to know how this affects the Kasayulie Case in which
the judge said that schools in the unorganized areas are treated
unfairly in terms of bonding for school projects. She asked
specifically what this bill does to correct that discrepancy.
MR. JEANS said he isn't a lawyer and can't make any specific
comments, but the judge has been looking at the appropriations
the Legislature has been making in the last two years and has
looked favorably on the mechanisms. Additionally, he was pleased
that the Legislature has followed the department's list. He
expected the judge to continue to watch through this session and
that is why the Governor introduced his funding proposal, which
follows the department's priority list and includes municipal and
rural school districts.
SENATOR LINCOLN said she didn't hear an answer to her question so
she restated it.
MR. JEANS said this piece of legislation does not provide any
funding for rural education attendance areas that do not have the
capacity to bond. It provides a funding mechanism for municipal
school districts that have bonding capacity.
SENATOR LINCOLN asked if the department is supportive of this
legislation knowing about the judge's analysis.
MR. JEANS said he has not had that conversation with the
governor's office. The Governor has submitted his own legislation
that funds the department's priority list for both urban and
rural school districts.
CHAIRMAN TORGERSON stated for the record, "So it won't go
unchallenged, I do not agree with the judge's case on Kasayulie.
We proved, by numbers, that he was using the wrong set of
numbers. The facts in point are not correct so, therefore, his
ruling is not correct."
There was no further testimony.
CHAIRMAN TORGERSON announced it was his intent to move the bill
since it was largely a finance issue.
SENATOR KELLY made a motion to move SB 264 and accompanying
fiscal note from committee with individual recommendations.
There being no objection, SB 264 moved from committee.
SB 278-TAKING PROPERTY BY EMINENT DOMAIN
KIM OGNISTY, Staff to Senator Torgerson, read the following
sponsor's statement into the record:
SB 278 is concerned with the eminent domain and
declaration of taking proceedings in Alaska statute.
The bill introduces a "reasonable and diligent effort"
clause that attempts to place the condemner of land and
the private landholder in an equal negotiating
position. The bill is not trying to remove the
authority of the state to acquire land by eminent
domain or in any way complicate existing proceedings.
Currently, Alaska law does not require the state to
engage in a good faith effort to negotiate with private
landowners. Without an incentive to negotiate, state
officials are free to make only an unreasonable offer
or none at all. They can end discussions at their
caprice and they are under no obligation to take the
landowner seriously. Initiating communication from an
equitable bargaining position will promote productive
negotiations, facilitate dialog over reasonable
concerns and encourage suggestions from all parties
involved. The phrase, "reasonable and diligent effort"
or similar language has been adopted by at least 23
other states. This clause will reduce the amount of
litigation by encouraging more cases to be settled up
front thereby promoting expediency in government.
PHIL EVANS testified via teleconference as the representative and
president of the Northgate Square Mall in Fairbanks. He wanted to
tell about his experience with land taking and then his reaction
to SB 278. He read the following into the record:
The State of Alaska, Department of Transportation
recently took a portion of my commercial property to
use for a road construction project. I would like to
make you aware of the experience I had with them. Prior
to condemnation being filed, the person representing
the state was courteous but misleading in attempting to
convince me to accept the settlement that was
completely unfair. Also prior to the condemnation being
filed, the state appraiser provided no meaningful
information. She was quite insistent about her
authority to be on my property and utilized a space in
a business in the mall for her office. She was
deceptively courteous and misleading in her attempt to
promote an unfair evaluation of the property.
The state did not provide me with a copy of her
completed appraisal record and market data book. I was
unable to settle with the state, based on that
appraisal, because of the compensation being inadequate
and unfair. The appraisal did not fairly set forth the
value of the taking and the consequences to the
remainder property. In the appraisal of my property,
the "before the taking" value was based on the current
use of the property rather than the highest and best
use of that property. The following items were not
fairly considered when analyzing the affects of the
right-of-way taking on my property: loss of parking,
change in highest and best use, decline in market
appeal, change in business use of the property, decline
in market value. But when it became apparent the state
was misleading and unfair in their attempts to reach
settlement, I hired an attorney and an appraiser to
provide me accurate and fair counsel. The state
appraiser concluded that just compensation for the
property taken and damages was $80,000. The appraiser
for Northgate Square and myself concluded the just
compensation for the property taken and damages was
$676,000, eight times more than the state's appraisal.
As a consequence, we proceeded to hearing. Frank King,
an appraiser, was appointed by the state to preside
over the masters hearing. At the conclusion of the
hearing, Mr. King rendered a decision awarding $324,000
for property taken and damages. Although this was
approximately half of the amount sought, I decided
rather than continue with litigation, I would settle.
The state subsequently appealed. The state's decision
to appeal will significantly increase costs not only
for me, but also for the state.
2:05 p.m.
He said SB 278 is encouraging, but he would like to see more
change. He feels the state is able to totally take over private
property with no respect or concern for the rights of the owner.
RON WOLF, Sealaska Corporation Corporate Forester, testified in
favor of the bill. They had some suggestions on the language
concerning how the bill defines "reasonable and diligent effort"
but it could be brought up in the Judiciary Committee.
CHAIRMAN TORGERSON agreed.
There was no further testimony.
SENATOR KELLY made a motion to move SB 278 from committee with
individual recommendations.
There being no objection, SB 278 moved from committee.
CHAIRMAN TORGERSON adjourned the meeting at 2:11 p.m.
| Document Name | Date/Time | Subjects |
|---|