Legislature(1999 - 2000)
02/24/2000 03:37 PM Senate STA
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SENATE STATE AFFAIRS COMMITTEE
February 24, 2000
3:37 p.m.
MEMBERS PRESENT
Senator Jerry Ward, Chairman
Senator Lyda Green
Senator Randy Phillips
Senator Kim Elton
MEMBERS ABSENT
Senator Gary Wilken
COMMITTEE CALENDAR
CS FOR HOUSE BILL NO. 133(FIN)(efd fld)
"An Act relating to municipal service areas and providing for voter
approval of the formation, alteration, or abolishment of certain
service areas."
-MOVED SCS FOR CS FOR CSHB 133 (STA) OUT OF COMMITTEE
Legislative confirmation hearing for Andrea Jacobson of Ketchikan
to Alaska Public Offices Commission (APOC)
-SCHEDULED BUT NOT HEARD
SENATE BILL NO. 262
"An Act relating to motor vehicle license plates for disabled
persons."
-HEARD AND HELD
PREVIOUS SENATE COMMITTEE ACTION
CSHB 133 (FIN)(efd fld) - No previous Senate action
SB 262 - No previous Senate action
WITNESS REGISTER
Representative Con Bunde
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Sponsor of CSHB 133 (FIN)(efd fld).
Mr. Chuck Hosack
Deputy Director
Division of Motor Vehicles
Department of Administration
3300 B Fairbanks
Anchorage, AK 99503
POSITION STATEMENT: Opposes SB 262.
Mr. Scott Sell
P.O. Box 111949
Anchorage, AK 99511
POSITION STATEMENT: Supports CSHB 133 (FIN)(efd fld).
Mr. Brook Chandler
P.O. Box 263
Girdwood, AK 99587
POSITION STATEMENT: Supports CSHB 133 (FIN)(efd fld).
Mr. Randy Clendaniel
North Pole Road Commissioner
3045 Taxi Lane B
North Pole, AK 99705
POSITION STATEMENT: Supports CSHB 133 (FIN)(efd fld).
Mr. Mike Prax
Fairbanks North Star Borough Assembly
1015 Meadow Rue
North Pole, AK 99705
POSITION STATEMENT: Supports CSHB 133 (FIN)(efd fld).
Mr. Mike Craft
1391 Pickering Drive
Fairbanks, AK 99709
POSITION STATEMENT:
Mr. Ladd McBride
Chairman Cripple Creek Road service area
P.O. Box 83567
Fairbanks, AK 99708
POSITION STATEMENT: Supports CSHB 133 (FIN)(efd fld).
Mr. Larry Soden
P.O. Box 61328
Fairbanks, AK 99706
POSITION STATEMENT: Supports CSHB 133 (FIN)(efd fld).
Mr. Tim Biggane
P.O. Box 53274
North Pole, AK 99705
POSITION STATEMENT: Opposes SCS CSHB 133 (FIN)(efd fld).
Ms. Nadine Hargesheimer
Fairbanks North Star Borough Mayors Office
P.O. Box 71267
Fairbanks, AK 99707
POSITION STATEMENT: Supports CSHB 133 (FIN)(efd fld).
Ms. Nancy Webb
Fairbanks North Star Borough Assembly
469 Panorama Drive
Fairbanks, AK 99712
POSITION STATEMENT: Supports CSHB 133 (FIN)(efd fld).
Mr. Jack Brown
Kenai Borough Assembly
P.O. Box 7073
Nikiski, AK 99635
POSITION STATEMENT: Supports CSHB 133 (FIN)(efd fld).
Mr. Daniel Gregory
P.O. Box 8508
Nikiski, AK 99635
POSITION STATEMENT: Supports CSHB 133 (FIN)(efd fld).
Mr. Preston Williams
General Delivery
Kenai, AK 99611
POSITION STATEMENT: Supports CSHB 133 (FIN)(efd fld).
Mayor John Williams
City of Kenai
210 Fidalgo Street, Suite 200
Kenai, AK 99611
POSITION STATEMENT: Supports CSHB 133 (FIN)(efd fld).
Mr. William Green
Deputy Municipal Attorney
Municipality of Anchorage
Anchorage, AK 99501
POSITION STATEMENT: Opposes CSHB 133 (FIN)(efd fld).
Ms. Loretta Brown
Chief of Staff, Senator Ward
Alaska State Capitol
Juneau, AK 99801
POSITION STATEMENT: Presented SB 262.
ACTION NARRATIVE
TAPE 00-03, SIDE A
Number 001
CHAIRMAN WARD called the Senate State Affairs Committee to order at
3:37 p.m. Present were Senators Green, Phillips, Elton, and Ward.
The first order of business to come before the committee was CSHB
133 (FIN)(efd fld).
CSHB 133 (FIN)(efd fld)-VOTER APPROVAL OF SERVICE AREA CHANGES
REPRESENTATIVE BUNDE, sponsor of CSHB 133 (FIN)(efd fld), explained
there are people in Alaska who want smaller government, more
efficient government, less expensive government, more local
control, and value privatization.
CSHB 133 (FIN)(efd fld) states that service areas that will be
absorbed or combined with another service area require a majority
vote from both entities. Some larger entities might try to
takeover a smaller entity, and the service area being absorbed
doesn't have a vote in the process. This will have a serious
impact on road service areas that are paid for by the public who
want an increase in service. The public willingly taxes itself so
it can have increased service. They hire private contractors, they
get better service and quicker response because they go through a
private contractor.
Another portion of CSHB 133 (FIN)(efd fld) addresses more
efficiency in government. Fairbanks would like to consolidate its
service areas to achieve administrative savings. CSHB 133
(FIN)(efd fld) will allow Fairbanks to consolidate service areas
and allow its residents to tax themselves at differential rates.
He gave some different examples of service areas around the
Fairbanks area.
Number 372
MR. RANDY CLENDANIEL, North Pole Road Commissioner, stated since
1982 the total raised has been close to 1.25 mills. There is a new
subdivision going in on the south side, different materials have
been used in that subdivision. Both service areas should be using
the same type of materials. The new service area should have
additional mill rate to offset the cost for a period of time.
REPRESENTATIVE BUNDE asked if he was in support of CSHB 133
(FIN)(efd fld).
MR. CLENDANIEL replied yes.
SENATOR PHILLIPS asked if 1.25 mills was for operating and
maintenance costs, or for capital and maintenance.
MR. CLENDANIEL stated the 1.25 mills was used for capital and
maintenance.
MR. MIKE PRAX, Fairbanks North Star Borough Assembly, stated it
supports CSHB 133 (FIN)(efd fld). CSHB 133 (FIN)(efd fld) gives
citizens the right to their own destiny. If a service area is
compelled to accept another service area without the ability to
vote, its recourse is to object to the Assembly. People are
willing to pay for a service if they can see they will receive the
service they pay for. Some State areas are so large that
maintenance takes twice as long than in service areas.
CSHB 133 (FIN)(efd fld) protects existing service areas, gives the
service areas the ability to set differential rates within a
service area and maintains fairness.
Number 726
MR. MIKE CRAFT, developer in Fairbanks, asked why property owners
who are levied a tax rate don't have the ability to vote on service
areas. The Borough has a problem with road power issues that no
one wants to confront. The Borough could assist service areas in
the acquisition of rights of way. There are places in Fairbanks
where the road rights of way were not wide enough, or grades were
not good. Service areas and developers can't do anything about
those situations because of the right of way issues.
Smaller service areas are paying a much higher rate to the Borough
for administrative fees relative to the budget. When combining
service areas, tax rates are uneven, so all service areas don't
share the same financial burden.
SENATOR PHILLIPS stated most of those issues need to be settled at
local government levels. Senator Phillips gave statistics on
Chugiak and Eagle River community councils. Senator Phillips told
Mr. Craft he could use the Chugiak/Eagle River Road Board as a
model.
MR. LADD MCBRIDE, Chairman of Cripple Creek Road service area,
stated he does support CSHB 133 (FIN)(efd fld). Larger service
areas don't always mean cheaper costs. It may mean keeping a
separate set of accounting books. People need to know if the
contractors hired will be able to handle the amount of work given
to them.
MS. NANCY WEBB, Fairbanks North Star Borough Assembly, stated CSHB
133 (FIN)(efd fld) is a good idea. Consolidation would help
Fairbanks work out difficulties. Passing CSHB 133 (FIN)(efd fld)
and a revenue sharing component for a gas tax increase (CSHB 59)
would provide tools for the assemblies to encourage constituents to
work together and have larger service areas. Service areas are the
closest Fairbanks has to community councils.
SENATOR PHILLIPS stated people in his area are willing to tax
themselves because they see the service. Senator Phillips offered
to talk with Ms. Webb at a later time about those issues.
Number 1226
MR. WILLIAM GREEN, Deputy Municipal Attorney for the Municipality
of Anchorage, stated CSHB 133 (FIN)(efd fld) adversely affects the
Municipality of Anchorage as a home rule municipality.
In 1998 this same type of bill was before the legislature SB 208
and CSHB 365. The Anchorage municipal assembly passed a resolution
strongly opposing both bills. CSHB 133 (FIN)(efd fld) is a
mandatory imposition of restrictions on local home rule powers.
Fairbanks is a second class borough and has restrictions that the
Municipality of Anchorage does not. CSHB 133 (FIN)(efd fld)
reduces the constitutional purpose of maximizing local self
government. If the voters in the Municipality of Anchorage wish to
change the system, they have the power to do that.
SENATOR PHILLIPS asked if the Municipality of Anchorage voted on SB
208 and CSHB 365 in 1998.
MR. GREEN replied yes.
SENATOR PHILLIPS stated the Chugiak/Eagle River assembly members
voted "no" on the resolution. The greater part of Anchorage is
mandating what Chugiak and Eagle River can do. Chugiak and Eagle
River assemblies are requesting self determination.
REPRESENTATIVE BUNDE said this is going to be an area where
reasonable people disagree. CSHB 133 (FIN)(efd fld) does limit the
power of assemblies and gives the power to the people who are being
taxed, the concept of limiting these powers is not new. It is
already in statute under home rule limitations.
SENATOR ELTON asked what happens to police protection if CSHB 133
(FIN)(efd fld) passes.
MR. GREEN stated if CSHB 133 (FIN)(efd fld) passes nothing would
happen to police protection, it is now a single service area.
REPRESENTATIVE BUNDE said that was correct.
SENATOR ELTON asked if there were new powers being given to service
areas.
REPRESENTATIVE BUNDE said there are no new powers being given.
SENATOR PHILLIPS stated Chugiak and Eagle Rivers fear that the
greater part of Anchorage is mandating certain services. Chugiak
and Eagle River need self determination.
SENATOR ELTON asked if this battle needs to be fought between the
voters and the borough, instead of the State stepping in.
SENATOR PHILLIPS said the State is just being the referee, because
Chugiak and Eagle River only represent 15 percent of the
population.
Number 1610
MR. SCOTT SELL, Board Supervisor for Birchtree/Elmore Limited Road
Service Area and Vice President of Rabbit Creek Community Council,
stated they support CSHB 133 (FIN)(efd fld). In Anchorage, some
assembly members want to get rid of limited road service areas, and
charge those people a higher tax for less service.
MR. PRESTON WILLIAMS stated he supports CSHB 133 (FIN)(efd fld).
But stated objection to Section 3 of CSHB 133 (FIN)(efd fld)
pertaining to fire service protection areas. Mr. Williams is a
board member of a fire service area. At one time there were five
service areas, the assembly voted to create one large service area,
with one appointed board without a vote from the public. Fire
departments have been neglected, there are many fire departments
within service areas that are located in boroughs.
CHAIRMAN WARD said he has a proposed amendment that will address
that issue.
MR. BROOK CHANDLER, Chairman of Girdwood Board of Supervisors, said
Girdwood is a service area for road maintenance, fire protection
services, and for parks and recreation services. Girdwood supports
CSHB 133 (FIN)(efd fld) as a community. CSHB 133 (FIN)(efd fld)
allows a greater degree of protection from Anchorage to decide who
maintains roads.
Girdwood enjoys the degree of independence it has as a service
area, and the discretion it has to request amounts to be included
in the Girdwood budget to give the level of services it wants to
have.
People thought that if Girdwood was unified with Anchorage,
Girdwood would never be required to accept services from outside
the community without Girdwood's consent by way of vote. Mr.
Chandler also wanted the last sentence in Section 3 of CSHB 133
(FIN)(efd fld) deleted.
MR. LARRY SODEN, Road Commissioner for Edanella Heights service
area, stated support for CSHB 133 (FIN)(efd fld). His service area
was to merge with another service area. The other service area
didn't want to merge with the Edanella Heights service area because
the roads in Edanella were unpaved.
The people are very happy with the level of service provided, they
tax themselves approximately one mill. The tax paid is enough to
cover costs of services. Giving road service areas the maximum
flexibility to decide about their futures will be a step forward.
Number 2024
MR. DANIEL GREGORY, Nikiski Fire Department, supports CSHB 133
(FIN)(efd fld) but opposes the last sentence in Section 3. Fire
departments that lie within service areas need the same protection
as those that are not in service areas.
MR. TIM BIGGANE, Fire Chief of Fairbanks North Star Borough, was in
support of CSHB 133 (FIN)(efd fld) until the Senate amendment was
proposed.
MS. NADINE HARGESHEIMER, Fairbanks North Star Borough Mayor's
Office, said the Borough supports CSHB 133 (FIN)(efd fld) along
with the exemption of fire service areas. Deleting the last
sentence within Section 3 would be problematic for the Fairbanks
North Star Borough.
Number 2199
MR. JACK BROWN, Kenai Borough Assembly Member, said within the
district there are five service areas that all support CSHB 133
(FIN)(efd fld). CSHB 133 (FIN)(efd fld) allows people to have the
level of service they want. CSHB 133 (FIN)(efd fld) allows people
to support consolidation if they choose. Mr. Brown stated support
for the proposed amendment.
REPRESENTATIVE BUNDE, the sponsor of CSHB 133 (FIN)(efd fld),
stated that the police protection issue has been addressed. The
Municipality of Anchorage opposes CSHB 133 (FIN)(efd fld) because,
from its perspective, it believes local assemblies should determine
decisions by ordinance. Most people testifying believe if the
local governments are going to tax people for service, those people
should have a vote.
REPRESENTATIVE BUNDE said CSHB 133 (FIN)(efd fld) strengthens a
statute that describes a voting mechanism. If a local assembly
wants to abolish a service area, it will require a majority vote of
those people within the service area. If a local assembly wants to
alter the boundaries it requires a vote of the people affected, and
the majority surrounding the area. If a local assembly wants to
combine a service area it requires a majority vote from both
entities involved.
He acknowledge that people in Fairbanks expressed concern about the
fire service issue.
TAPE 00-03, SIDE B
Number 2343
REPRESENTATIVE BUNDE continued. Road service has high operational
and maintenance costs but fire service is a matter of serving two
or three more homes, so it will not have the local tax impact that
will be caused by absorbing 20 miles of road. Nikiski and
Fairbanks have different views than his district. Nikiski needs a
vote before fire service areas can be changed.
CHAIRMAN WARD asked if the Anchorage Assembly or Anchorage Caucus
had a position on CSHB 133 (FIN)(efd fld).
REPRESENTATIVE BUNDE said not to his knowledge.
SENATOR PHILLIPS moved to adopt Amendment number 1, that would
delete the last sentence in Section 3 of CSHB 133 (FIN)(efd fld).
Without objection, Amendment number 1 was adopted.
Number 2230
MAYOR JOHN WILLIAMS, City of Kenai, replied the State is always
looking for better ways for local government to handle its own
concerns. Mayor Williams said he is uncertain about the amendment
and how it will effect Kenai.
SENATOR PHILLIPS moved SCS for CS for HB 133 (STA) out with
individual recommendations. SENATOR ELTON objected. The motion
carried with Senators Phillips, Green, and Ward voting "Yea," and
Senator Elton voting "Nay."
SB 262-DISABLED PLATES FOR LEASED VEHICLES
Number 2085
MS. LORETTA BROWN, aide to the Senate State Affairs Committee,
presented SB 262 for the sponsor, Senator Ward. At this time
leased vehicles are considered owned by a commercial entity.
Aplicants for handicap and/or disabled veterans plates are exempted
from paying both the registration fees and taxes; therefore the
free plates may not be used in conjunction with a commercially
owned vehicle.
SB 262 adds the words "or leased" and "owned or leased" to Section
1 of AS 28.10.181 (d) and to Section 2 of AS 28.10.421 (d)(3).
Adding this language will allow handicapped and/or disabled
veterans to place their license plates on a leased personal
vehicle.
In DMV's analysis, the fiscal note claims 5500 vehicles are
registered to disabled persons throughout the State. 20 percent of
new vehicles are leased, so 20 percent of those were applied to the
disabled population. Ms. Brown said she disagrees with that
calculation, but explained that is how the fiscal note was written.
CHAIRMAN WARD stated when he spoke with a disabled person who
leased a vehicle, he was under the assumption that he had ownership
in the vehicle. CHAIRMAN WARD said the fiscal note was of great
concern to him.
Number 1891
MR. CHUCK HOSACK, Deputy Director of Division of Motor Vehicles,
replied under Alaska statute, responsibility for paying
registration fees and taxes is placed on the owner of the vehicle.
Leased vehicles are owned by a commercial company that makes a
profit through letting others use its vehicles. The owner pays
commercial fees like for any other vehicle; rental cars, taxis,
etc. A commercial vehicle is often overlooked when people lease a
vehicle and use it for personal use.
The person leasing the vehicle has no ownership rights or interest
in the vehicle. The vehicle is registered in the name of the
leasing company. The State does not place any requirements on that
person to pay fees, and the State does not charge that person any
fees or taxes.
In a lease all costs are negotiated just like a sale. It is normal
practice in a lease agreement to let the lessee pay the
registration fees for the leasing company. This is a contract
arrangement between the company and the lessee.
SB 262 is directing Division of Motor Vehicles (DMV) to eliminate
a fee that is not charged to the individual. SB 262 exempts the
leasing company from paying the registration fees, and this creates
an inequity in fees between the company and other commercial
vehicles. DMV opposes SB 262.
If the disabled individuals want the handicapped license plates on
the vehicle for parking privilege, there is a handicapped parking
permit available at no charge.
In the fiscal note Mr. Hosack did not list operating costs, since
the vehicles are listed through the State in another form. If SB
262 passed there would be added complexities to the registration
system. The vehicles would have to be identified separately from
all other commercial vehicles.
There will be a revenue loss if these companies are exempted from
paying the higher fees. The number of leased vehicle leaving the
showroom floor is growing, however the fiscal note was calculated
with a conservative amount.
CHAIRMAN WARD stated people forget the handicapped tag that hangs
from the mirror. Could disabled plates be put on a leased vehicle
they will own? Is there no ownership with the lessee and a leased
vehicle?
MR. HOSACK stated during the lease they have no ownership in the
vehicle, that comes after the lease term is up and then the option
to buy comes into play.
SENATOR GREEN said the ability to turn the vehicle back
unilaterally is what distinguishes the vehicle from being
purchased.
SENATOR ELTON stated if you lease a vehicle it is not your asset,
as opposed to a purchased vehicle becoming your asset.
CHAIRMAN WARD asked how that works with a leased vehicle.
SENATOR ELTON stated it comes into play at the end of the lease
agreement.
SENATOR GREEN asked if there is a different level of liability for
persons leasing a vehicle from persons buying a vehicle.
MR. HOSACK stated the handicapped tag placed on the mirror can be
recognized in any state within the U.S.
SENATOR ELTON asked if the tag could be taped to the windshield.
MR. HOSACK said just as long as the tag is displayed in the
windshield, taping may solve some of the problems.
SENATOR PHILLIPS suggested that a bulletin be sent to car dealers
throughout the State asking them to explain the leasing agreement
more clearly so people will not get confused about ownership.
Number 1328
MR. HOSACK stated that DMV contributes to the dealer association
quarterly newsletter this is one way of putting the bulletin out.
CHAIRMAN WARD announced the bill would be held in committee. The
meeting was adjourned a 4:50 p.m.
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