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CSSB 48(CRA): "An Act relating to the determination of full and true value of taxable municipal property for purposes of calculating funding for education and certain other programs, to incorporation of third class boroughs, to incorporation of certain boroughs in the unorganized borough and annexation of portions of the unorganized borough to boroughs and unified municipalities, and to the formation of separate unorganized boroughs; and providing for an effective date."

00 CS FOR SENATE BILL NO. 48(CRA) 01 "An Act relating to the determination of full and true value of taxable municipal 02 property for purposes of calculating funding for education and certain other programs, 03 to incorporation of third class boroughs, to incorporation of certain boroughs in the 04 unorganized borough and annexation of portions of the unorganized borough to 05 boroughs and unified municipalities, and to the formation of separate unorganized 06 boroughs; and providing for an effective date." 07 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 08 * Section 1. The uncodified law of the State of Alaska is amended by adding a new section 09 to read: 10 LEGISLATIVE PURPOSE. (a) It is the purpose of the legislature to carry out the 11 directive contained in art. X, sec. 3, Constitution of the State of Alaska, which provides, in 12 part, "The entire State shall be divided into boroughs, organized or unorganized." 13 (b) The unorganized borough is divided into several unorganized boroughs to enable

01 the state to provide critical services on a more carefully controlled regional basis, to facilitate 02 the gathering of information that reflects regional differences, and to separately track state 03 expenditures and revenues in each of the unorganized boroughs. 04 (c) Permitting the incorporation of third class boroughs serves the purpose of 05 encouraging formation of organized boroughs by increasing options for the types of borough 06 government available to address unique local needs. 07 * Sec. 2. AS 14.17.510(a) is amended to read: 08 (a) To determine the amount of required local contribution under 09 AS 14.17.410(b)(2) and to aid the department and the legislature in planning, the 10 Department of Community and Economic Development, in consultation with the 11 assessor for each district in a city or borough, shall determine the full and true value of 12 the taxable real and personal property in each district in a city or borough. If there is 13 no local assessor or current local assessment for a city or borough school district, then 14 the Department of Community and Economic Development shall make the 15 determination of full and true value from information available. In making the 16 determination, the Department of Community and Economic Development shall be 17 guided by AS 29.45.110. However, the full and true value of taxable real and 18 personal property in any area detached shall be excluded from the determination 19 of the full and true value of the municipality from which the property was 20 detached for the two years immediately preceding the effective date of the 21 detachment. Also, in making the determination for a municipality that is a 22 school district or for a city that is within a borough school district, the assessed 23 value of property taxable under AS 43.56 shall be excluded if a municipal tax is 24 not levied under AS 29.45.080 in that school district. The determination of full and 25 true value shall be made by October 1 and sent by certified mail, return receipt 26 requested, on or before that date to the president of the school board in each city or 27 borough school district. Duplicate copies shall be sent to the commissioner. The 28 governing body of a city or borough that is a school district may obtain judicial review 29 of the determination. The superior court may modify the determination of the 30 Department of Community and Economic Development only upon a finding of abuse 31 of discretion or upon a finding that there is no substantial evidence to support the

01 determination. 02 * Sec. 3. AS 29.05.031(a) is amended to read: 03 (a) An area that meets the following standards may incorporate as a home rule, 04 first class, [OR] second class, or third class borough, or as a unified municipality: 05 (1) the population of the area is interrelated and integrated as to its 06 social, cultural, and economic activities, and is large and stable enough to support 07 borough government; 08 (2) the boundaries of the proposed borough or unified municipality 09 conform generally to natural geography and include all areas necessary for full 10 development of municipal services; 11 (3) the economy of the area includes the human and financial resources 12 capable of providing municipal services; evaluation of an area's economy includes 13 land use, property values, total economic base, total personal income, resource and 14 commercial development, anticipated functions, expenses, and income of the proposed 15 borough or unified municipality; 16 (4) land, water, and air transportation facilities allow the 17 communication and exchange necessary for the development of integrated borough 18 government. 19 * Sec. 4. AS 44.33 is amended by adding a new section to article 11 to read: 20 Sec. 44.33.830. Incorporation or annexation of unorganized areas. (a) In 21 addition to other methods for incorporation and annexation provided by law, an area 22 of the unorganized borough may be incorporated as a first class, second class, or third 23 class borough or annexed to an existing borough or unified municipality under (b) - (f) 24 of this section. AS 44.33.814 - 44.33.828 apply to actions taken by the commission 25 under this section. 26 (b) The Department of Community and Economic Development shall 27 determine which areas of the unorganized borough reasonably appear to satisfy 28 standards for borough incorporation or for annexation to an existing borough or 29 unified municipality. By November 30 of each year, the department shall present to 30 the Local Boundary Commission a list of those areas that reasonably appear to satisfy 31 standards for borough incorporation or for annexation to an existing borough or

01 unified municipality, together with the department's analysis supporting its 02 conclusions regarding the incorporation or annexation standards for each of the areas. 03 By November 30 of each year, the commission shall select areas from the list provided 04 by the department that the commission determines may warrant incorporation or 05 annexation. By March 31 of the following year, the department shall prepare a 06 petition for borough incorporation or for annexation of each of the areas selected by 07 the commission. The department shall conduct at least one public meeting in each 08 area for the purpose of gathering information needed to prepare the petition. The 09 department shall provide public notice when the petition has been prepared, make 10 copies of the petition available, and provide any interested person with the opportunity 11 to submit written comments on the petition. After considering the comments, the 12 department may amend the petition. The department shall file the original petition or, 13 if amended, the amended petition with the commission. 14 (c) Upon receipt of a petition filed under (b) of this section, the Local 15 Boundary Commission shall hold at least one public hearing in or near the area 16 proposed for incorporation or annexation. Following the hearing, the commission may 17 amend the petition and may impose conditions on the incorporation or annexation. If 18 the commission determines that the incorporation or annexation meets applicable 19 standards under the state constitution as well as those established by law and 20 commission regulation and is in the best interests of the state, it may accept the 21 petition. Otherwise, it shall reject the petition. Each incorporation or annexation 22 approved by the commission shall be submitted to the legislature under AS 44.33.828 23 and takes effect as provided in that section. 24 (d) Regulations of the Local Boundary Commission filed under authority of 25 other provisions of law that apply to incorporation and annexation petitions and that 26 deal with the form and content of petitions, public notice of the filing of petitions, 27 service of petitions, opportunity to file responsive briefs, amendment of petitions, 28 notice and conduct of hearings, conduct of decisional sessions, and reconsideration 29 apply to the preparation and consideration of petitions under this section to the extent 30 they may be applied without conflicting with this section. The Local Boundary 31 Commission may adopt regulations providing additional standards and procedures for

01 incorporations or boundary changes under this section and to carry out the purposes of 02 this section. 03 (e) When a proposal for incorporation of an area under this section becomes 04 effective, the Local Boundary Commission shall immediately notify the director of 05 elections. Within 30 days after notification, the director of elections shall order an 06 election in the area for initial borough officials. The election shall be held under 07 AS 29.05.120 not less than 30 nor more than 90 days after the date of the election 08 order. The election order must specify the dates during which nomination petitions for 09 election of initial officials may be filed. AS 29.05.130 - 29.05.150, 29.05.190 - 10 29.05.210, and AS 29.65.030 apply to boroughs incorporated under this section. 11 (f) When a proposal under this section for annexation of an area in the 12 unorganized borough becomes effective, the borough or unified municipality to which 13 the area is annexed shall receive an additional general grant land entitlement equal to 14 10 percent of the maximum total acreage of vacant, unappropriated, unreserved land 15 within the boundaries of the area annexed. Additional general grant land entitlements 16 under this subsection are subject to AS 29.65.030 - 29.65.140 to the extent that those 17 provisions can be made applicable. The borough or unified municipality to which the 18 area is annexed is also entitled to an organization grant under AS 29.05.190, and, for 19 purposes of applying that section, the effective date of the annexation shall be treated 20 as though it were the date of incorporation. 21 * Sec. 5. AS 29.05.031(b) is repealed. 22 * Sec. 6. The uncodified law of the State of Alaska is amended by adding a new section to 23 read: 24 FORMATION OF UNORGANIZED BOROUGHS. The Department of Community 25 and Economic Development shall, by November 30, 2001, submit a proposal to the Local 26 Boundary Commission to divide the entire area of the unorganized borough into separate 27 unorganized boroughs, taking into account population, geography, economy, and 28 transportation in each of the proposed unorganized boroughs. The Local Boundary 29 Commission shall submit each proposed unorganized borough it approves to the legislature 30 during the first 10 days of the Second Session of the Twenty-Second Alaska Legislature for 31 consideration under art. X, sec. 12, Constitution of the State of Alaska.

01 * Sec. 7. The uncodified law of the State of Alaska is amended by adding a new section to 02 read: 03 CONFORMING STATUTORY CHANGES. If separate unorganized boroughs are 04 formed under sec. 6 of this Act, after formation of the unorganized boroughs, the revisor of 05 statutes shall correct the statutes that refer to the single unorganized borough so that they refer 06 to the unorganized boroughs. 07 * Sec. 8. This Act takes effect immediately under AS 01.10.070(c).