Legislature(2001 - 2002)
04/17/2002 01:45 PM Senate CRA
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ALASKA STATE LEGISLATURE
SENATE COMMUNITY & REGIONAL AFFAIRS COMMITTEE
April 17, 2002
1:45 p.m.
MEMBERS PRESENT
Senator John Torgerson, Chair
Senator Alan Austerman
Senator Georgianna Lincoln
Senator Pete Kelly
MEMBERS ABSENT
Senator Randy Phillips
COMMITTEE CALENDAR
SENATE BILL NO. 359
"An Act relating to organization grants for mergers,
consolidations, or unifications involving third class boroughs."
MOVED SB 359 OUT OF COMMITTEE
HOUSE BILL NO. 312
"An Act relating to the delay of the reduction of supplementary
public school funding; and providing for an effective date."
MOVED HB 312 OUT OF COMMITTEE
CS FOR HOUSE BILL NO. 455(CRA)
"An Act relating to the assessment of certain agricultural land
for purposes of municipal taxation; and providing for an
effective date."
MOVED CSHB 455(CRA) OUT OF COMMITTEE
CS FOR HOUSE BILL NO. 296(CRA)
"An Act relating to mergers and consolidations of
municipalities."
MOVED SCS CSHB (CRA) OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
SB 359 - No previous action to record.
HB 312 - No previous action to record.
HB 455 - No previous action to record.
HB 296 - See CRA minutes dated 4/10/02.
WITNESS REGISTER
Robert Venables
Box 50
Haines, AK 99827
POSITION STATEMENT: Testified on SB 359
Randy Ruaro
Staff to Representative William K. Williams
Alaska State Capitol, Room 515
Juneau, AK 99801-1182
POSITION STATEMENT: Introduced HB 312
Representative Gretchen Guess
Alaska State Capitol, Room 112
Juneau, AK 99801-1182
POSITION STATEMENT: Testified on HB 312
Eddy Jeans
Department of Education &
Early Development
th
801 W 10 St.
Juneau, AK 99801-1894
POSITION STATEMENT: Testified on HB 312
Peter Fellman
Staff to Representative John Harris
Alaska State Capitol, Room 513
Juneau, AK 99801-1182
POSITION STATEMENT: Introduced HB 455
Steve Van Sant
State Assessor
Department of Community & Economic Development
th
550 W. 7 Ave Suite 1770
Anchorage, AK 99701-4589
POSITION STATEMENT: Testified on HB 455
ACTION NARRATIVE
TAPE 02-9, SIDE A
CHAIRMAN JOHN TORGERSON called the Senate Community & Regional
Affairs Committee meeting to order at 1:45 p.m. Present were
Senators Kelly, Austerman and Chairman Torgerson. Senator Lincoln
arrived shortly.
SB 359-MUNICIPAL ORGANIZATION GRANTS
CHAIRMAN TORGERSON announced the legislation was introduced at
the request of the City and Borough of Haines. It is actually a
finance matter on whether or not the state should help defray the
cost of mergers and consolidation. The language mirrors what is
in existing statute for boroughs to incorporate. There are
expenses associated when a municipality "merges up" and the state
should probably be a part of that.
ROBERT VENABLES testified on behalf of the Haines City Manager,
Marco Pignalberi and the community of Haines. He read the
following into the record:
I have lived in Haines since 1984 and have been
involved in numerous projects and committees on behalf
of the City of Haines, the Haines Borough and the
Haines Chamber of Commerce. But the most important
community project to date in Haines is consolidation.
For the Haines community, consolidation is the first
step toward achieving a home rule government. SB 359 is
a measure that will help us transition from two
disparate local governments into one home rule
government.
Haines has the only third-class borough in the State of
Alaska. It was designed as a compromise mechanism to
allow for school funding after the citizens of Haines
voted three times against forming a first or second
class borough. While the third class borough form of
government seemed to work for some time, it was just a
matter of time before its inadequacies caught up with
it. And now, when there is a desire to consolidate the
two governments, we find that the task before us is
quite daunting.
What has evolved in Haines is two very incompatible
systems of government. This community of 2,418 people
has two legislative bodies (Assembly & Council), two
mayors, two planning commissions (five if you count the
two service area boards and the state's responsibility
in the outlying areas of the borough) with separate
comprehensive plans, two legal systems, two financial
systems, two personnel systems and two very different
computer systems that do not integrate with each other.
At our local election, last October, the voters elected
new mayors and implemented a city-manager form of
government. This has removed many of the contentious
personalities and issues that caused consolidation to
fail in 1998 by three votes. Our two mayors and city
manager have worked hard to forge a spirit of
cooperation that better represents the community's best
interests. It is the consensus of all our political
leaders that one local government can serve Haines
better than the current two governments. This holds
great promise for the passing of consolidation.
The Local Boundary Commission approved the Haines
consolidation proposal last week and the division of
elections has scheduled the vote for consolidation to
be held on June 25, 2002. Transitional funding will be
needed in order to accomplish the consolidation effort
in a timely and professional manner. It is a
significant challenge to maintain government operations
while simultaneously changing every aspect of
operations. Our plan is to use consulting expertise to
merge our systems of accounting and finance, taxes,
legal and code revisions, comprehensive planning,
platting and zoning, computers and information
technology and personnel.
The consolidation of the Haines Borough and the City of
Haines will be in the best interests of the State of
Alaska. Having one government in Haines, instead of
two, will create efficiencies in the interactions
between the State of Alaska and Haines. It will relieve
the state government of the responsibility of providing
some of the local services while promoting the maximum
level of local self-government.
The Local Boundary Commission is on record supporting
both the creation of new borough governments and good,
sound local governmental units. Current law (AS
29.05.190) provides funding for new boroughs and
unified municipalities. A borough consolidated from a
third-class borough and a city is not eligible for
funds at this time. Many governmental experts believe
this to be an oversight.
Both the City of Haines and the Haines Borough have
endorsed the consolidation effort and are working
together to insure that it has the best chance to
succeed. We would ask the committee's assistance in
making this hope a reality.
There was no further testimony.
CHAIRMAN TORGERSON asked for the will of the committee.
SENATOR AUSTERMAN made a motion to move SB 359 and attached
fiscal notes and individual recommendations.
There being no objection, it was so ordered.
HB 312-SUPP. PUBLIC SCHOOL FUNDING/YOUTH ACADEMY
RANDY RUARO, legislative staff to Representative William K.
William, introduced the legislation. Eddy Jeans was available to
answer questions on the fiscal notes and Representative Gretchen
Guess was available to answer questions on funding for the Alaska
Challenge Youth Academy.
He said he would address Sections 1 and 3 of the bill that have
the affect of suspending, for the fiscal year FY 03, the erosion
of the supplemental funding floor that was created by SB 36. The
reason for the one year suspension is that by next January, the
Legislature should have received a new study of school district
cost factors. It is anticipated that the study would provide
Legislators with a base of information upon which to make
decisions on school funding for FY 04.
Section 3 makes it clear that the suspension of the erosion for
FY 03 does not affect the funding reductions that have already
been made in FY 00, FY 01 and FY 02.
SENATOR LINCOLN wanted to hear from Representative Guess about
the Alaska Youth Academy Challenge Program.
REPRESENTATIVE GRETCHEN GUESS said she helped create Section 2 of
the bill. The Youth Academy Challenge Program is run out of the
Division of Military and Veteran's Affairs and is a joint program
with the federal government to provide educational and vocational
services to at-risk youth. These are youths over the age of 16
who have dropped out of school. Their mornings are spent learning
basic reading, writing and computing skills to prepare the youths
for their GED testing. Afternoons are spent on vocational
activities. It is basically a boot camp for youths and has been
very successful.
This part of the bill sets up a funding structure. They get a
certain number of dollars per student; the federal funding that
they receive is subtracted and what is left is the general fund
dollar amount that would need to be authorized. They have never
been funded per cadet and this sets up the structure based on the
number of cadets in the program.
SENATOR LINCOLN referred to the fiscal note and asked if the
$334,000.00 was general fund dollars. Her second question was
whether the Department of Education and Early Development
supported that portion of the legislation.
REPRESENTATIVE GUESS replied that Nico Bus from the Department of
Military and Veteran's Affairs was available to go over the
fiscal note, but she thought $349,000.00 would be required in
addition to the federal allocation. In response to the second
question, she said the Department of Education and Early
Development is very supportive of the program and recognizes the
importance of providing the program stable funding. This isn't a
school, it's a program and therefore belongs in the Department of
Military and Veteran's Affairs but the school is very supportive.
SENATOR KELLY noted that this is a $65,000.00 increase over the
budget because there were some general funds "taken out of both
sides."
SENATOR LINCOLN said, "65?"
SENATOR KELLY replied, "If this budget were to pass. As it sits,
the fiscal note is correct, but if the budget were to pass, as
is, it would represent about a $65,000.00 increase."
SENATOR AUSTERMAN said there were two different fiscal notes from
the Department of Education and Early Development, both dated the
same day, and he wondered whether Mr. Jeans would come forward
and briefly explain them.
EDDY JEANS, Finance Manager for the Department of Education,
explained there were two fiscal notes because there were two
budget components that are affected by the legislation. One is
the foundation program that has the $334,000.00 fiscal note and
the second component is the schools for the handicapped where the
allocation for the Challenge Youth Program will sit in the
department's budget.
SENATOR AUSTERMAN comment inaudible.
SENATOR KELLY question inaudible.
MR. JEANS said he wasn't sure what Senator Kelly meant by
"reducing the federal funds" but on the cover of the fiscal note
for the Challenge Program you could see the calculation for the
entitlement for them and from that they subtracted the dollars
that are currently allocated to the federal government for that
program to come up with the additional state allocation.
SENATOR KELLY said you're not actually taking away federal funds;
you're using that as your formula.
MR. JEANS replied that was correct, it's very similar to the
foundation program. They calculate an entitlement then they make
adjustments for federal dollars.
CHAIRMAN TORGERSON commented this bill was a finance measure and
although he didn't think it had much chance for survival, he
didn't think it was appropriate to hold it in this committee.
He asked for a motion.
SENATOR AUSTERMAN made a motion to move HB 312 and attached
fiscal notes from committee with individual recommendations.
There being no objection, it was so ordered.
HB 455-MUNICIPAL TAXATION OF AGRICULTURAL LAND
CHAIRMAN TORGERSON stated this was a companion to Senator
Therriault's Senate bill that the committee heard the previous
week. Since the House bill came over it overcame the Senate bill.
PETER FELLMAN, staff to Representative John Harris, said HB 455
is the companion bill to SB 352, but there was a slight change
made by the House. They worked with the Office of the State
Assessor and changed some language on the last page of the bill.
They took out the word, "for farm use in accordance with this
section." and added, "based upon that restricted use." The
assessor thought the bill was acceptable to them with the change.
Alaska already recognizes there are agricultural restricted
lands, fee simple lands and agricultural lands that have a
covenant in this state. Under this legislation, it would free
farmers with agriculturally restricted land from having to apply
for the required annual exemption. They are trying to remove the
requirement because the land is already restricted in the state
and it is cumbersome to fill out an annual request to have the
land reassessed.
SENATOR LINCOLN asked for the approximate difference between the
current tax assessment and what it would be if this bill were
enacted.
MR. FELLMAN replied the assessment would still be made on the
value of the land. This will allow people with agricultural
restricted land to go to the borough assessor's office and make a
case for valuing their land on its agricultural use not on a fee
simple basis.
SENATOR LINCOLN said the bill was intended to reduce the
assessment on lands that are used for farms and that would reduce
the amount of money collected. She asked what the difference
would be because it could have an affect on the borough.
MR. FELLMAN said that would be between the assessor and the
people that own the agriculturally restricted land.
SENATOR AUSTERMAN asked for the assessed value of a piece of land
used for agricultural purposes if it were appraised [assessed] at
$100,000.00 as fee simple land.
MR. FELLMAN replied the law would stay the same for fee simple
land. It requires that if you are using fee simple land as
agricultural land, they you make an annual application and the
state assessor appraises what you are doing then makes a
determination. That wouldn't change under this legislation. This
bill would remove the requirement that agriculturally restricted
land be evaluated on an annual basis.
CHAIRMAN TORGERSON asked Mr. Van Sant whether he had any
comments.
STEVE VAN SANT, State Assessor, explained this bill states that
those people with agriculturally restricted lands will no longer
have to go to the assessors office each year to fill out paper
work to remain in the agricultural tax deferment program.
Hypothetically, someone with agriculturally restricted land could
have some fee simple land that is worth between 3 thousand and 5
thousand dollars per acre. If that land owner is farming that
land and they apply to the assessor on an annual basis for the
deferment, it will be assessed in the neighborhood of 400 dollars
per acre and the remainder of that is being deferred out of the
program. Individuals who have those parcels are paying between
400 and 600 dollars per acre not the 4 thousand to 6 thousand
dollars per acre it might be assessed as fee simple.
SENATOR AUSTERMAN said that process is already going on. He
wanted assurance this bill only removes the requirement for the
annual deferment application.
MR. VAN SANT said that's what it does. Those people with the
agriculturally restricted lands wouldn't have to apply annually
and they would be assessed on the agriculturally restricted
value.
There were no further questions or testimony.
CHAIRMAN TORGERSON asked for the will of the committee.
SENATOR AUSTERMAN made a motion to move HB 455 and attached
fiscal note from committee with individual recommendations.
There being no objection, it was so ordered.
HB 296-MUNICIPAL MERGER AND CONSOLIDATION
CHAIRMAN TORGERSON announced the bill was heard the previous week
and since Mr. Waring from the Local Boundary Commission wasn't
available to testify, the bill was held. Mr. Waring was again
unavailable to comment but members received a copy to his letter
to the Chairman dated April 10, 2002 and a copy is in the bill
file.
CHAIRMAN TORGERSON called attention to the supplemental packet
for HB 296 that contained three amendments. Amendment #1 was
pending from the April 10, 2002 meeting. There was discussion
about changing the amendment to allow a merger to move forward if
one municipality voted to not join in the merger. Proposed
amendment #2 would do that.
He asked for a motion to withdraw amendment #1.
SENATOR AUSTERMAN made a motion to withdraw amendment #1. There
was no objection.
SENATOR AUSTERMAN made a motion to adopt amendment #2, version
\F.4 Cook. There being no objection, amendment #2 was adopted.
CHAIRMAN TORGERSON stated amendment #3, version \F.3 Cook affects
applicability. It doesn't affect any petition that is currently
pending before the Department of Community and Regional Affairs.
SENATOR AUSTERMAN made a motion to adopt amendment #3, version
\F.3 Cook. There being no objection, amendment #3 was adopted.
CHAIRMAN TORGERSON asked for the will of the committee.
SENATOR AUSTERMAN made a motion to move SCS HB 296(CRA).
There being no objection, it was so ordered.
ADJOURNMENT
There being no further business before the committee, the Senate
Community and Regional Affairs Committee meeting was adjourned at
2:10 pm.
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