Legislature(2001 - 2002)
02/28/2001 01:35 PM Senate CRA
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SB 48-MUNICIPALITIES:INCORP/PROPERTY VALUATION
CHAIRMAN TORGERSON said Mary Jackson would explain the changes the
amendment makes to SB 48.
MARY JACKSON, staff to Chairman Torgerson, explained that the first
change appears in the title and would now read as follows:
"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."
Section 1 is all new and the language addresses legislative
purpose. Subsections (a) and (b) are relevant to newly inserted
section 6. Subsection (c) is relevant to new subsections 3 and 5.
Section 2 has no changes.
Section 3 is new and inserts, on page 3, line 4, "or third class"
to amend AS 29.05.031(a).
Section 4 has no changes.
Section 5 is a new section and it repeals AS 29.05.031(b), which
prohibits formation of third class boroughs.
Section 6 is new and it directs the Department of Community and
Economic Development to submit a proposal to the Local Boundary
Commission (LBC) by September 30,2001 to divide the unorganized
borough into separate unorganized boroughs, taking into account,
for constitutional purposes, population, geography, economy, and
transportation. Within the first ten days of the next legislative
session, the LBC will submit their recommendations for boroughs.
Section 7 is new and was recommended by Legislative Legal staff. It
gives notice to the revisor
r of statutes to change statutes as necessary when the unorganized
borough becomes unorganized boroughs.
Number 91
SENATOR AUSTERMAN asked whether the CS changed the intention of
creating new boroughs with sufficient tax bases to ensure their
ability to collect taxes and pay for their portion of school
systems.
MS. JACKSON said it did not; that it adds to the bill by forming
boroughs but they are still unorganized until they complete the LBC
process.
CHAIRMAN TORGERSON added that the CS removes the prohibition for
third class boroughs.
KEVIN WARING, Chairman of the Local Boundary Commission, said that
he had just received the amended bill and hasn't reviewed it with
commission members so he is commenting for himself.
The commission has previously reported to the legislature that the
single unorganized borough doesn't comply with standards outlined
in Article 10, section 3 of the Constitution. Adding Section 6,
which deals with formation of unorganized boroughs from the
unorganized borough will, most probably, bring support from the LBC
but he did think that the time frame might be too short when public
hearings and additional staff work are considered.
Number 206
He felt less comfortable commenting on restoring the option of
creating new third class boroughs without having had the
opportunity to consult with the commission members. It is
conceivable that they will not support this addition.
Constitutional language and Article 10, section 1, says that there
is to be a maximum of local self-government and a minimum of
governmental units and this implies that boroughs are to be
regarded as regional and general-purpose units of governance. The
Haines third class borough came from special circumstances in the
1960s. If third class boroughs were formed perhaps making them
transitional to a second class would be acceptable.
CHAIRMAN TORGERSON appreciated the comments on third class boroughs
but reminded Mr. Waring that the recommendation comes from the
commission. Currently the LBC may not recommend creation of a third
class borough. However, reinstating this classification recognizes
that there may be areas that fall between those that clearly cannot
collect taxes and support a government and should therefore remain
unorganized and those able to support a second class form of
government.
MR. WARING said he wanted to discuss whether commission members
welcome the opportunity to create third class boroughs or feel that
they are better served by not having that option. He understands
that the LBC wouldn't be required to approve third class boroughs.
CHAIRMAN TORGERSON wanted to make it clear that this provision
isn't a mandate for third class borough formation. He also fully
appreciated the fact that Mr. Waring couldn't speak for the LBC at
this time.
PAT POLAND, Division of Community and Business Development Director
for the Department of Community and Economic Development, informed
committee members that he had just received the draft bill that
morning and would send comments after a full review.
CHAIRMAN TORGERSON said the bill would be held in committee because
the CS was finished late the previous day and this didn't provide
ample opportunity for review and comment. It would be heard again
on March 7. He asked Mr. Poland about his opinion on the time line.
MR. POLAND said his department would probably want to consult with
the LBC to determine their comfort level with the model borough
boundaries. This would dictate whether the time line is realistic
or not.
STEVE VAN SANT, State Assessor with the Department of Community and
Economic Development, was asked to explain Section 2 of the bill
that deals with full and true value of taxable real and personal
property. First, this section allows municipalities or potential
municipalities to exclude from valuation, AF4356 (oil and gas)
properties within their boundaries if a property tax is not levied.
There are some areas of the state that would have to levy a
property tax if the oil and gas property was figured into their
full and true value and they were required to pay a 4-mil
equivalency on that amount. "What that does, is it just takes money
out of the state's right pocket and keeps a little for the
municipality and puts the remaining back in the state's left
pocket. The state actually loses money on that deal." Excluding oil
and gas value allows communities the opportunity to look at
different types of taxes to come up with the 4-mill equivalency.
New language in Section 2 concerning detachment of areas from a
municipality from full and true value determinations stems from the
two year funding lag for schools and he has no quarrel with that.
CHAIRMAN TORGERSON asked for a motion.
SENATOR PHILLIPS made a motion to adopt 22-LS0025\S Cook as a
working draft for SB 48. There were no objections.
CHAIRMAN TORGERSON said the bill would be heard again on March
7,2001.
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