Legislature(2001 - 2002)

02/06/2001 08:08 AM CRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
HB  16-HOME RULE COMMUNITIES                                                                                                  
                                                                                                                                
CO-CHAIR MORGAN announced  that first order of  business would be                                                               
SPONSOR SUBSTITUTE  FOR HOUSE  BILL NO. 16,  "An Act  relating to                                                               
cities  incorporated   under  state   law  that  are   home  rule                                                               
communities; and providing for an effective date."                                                                              
                                                                                                                                
Number 0072                                                                                                                     
                                                                                                                                
REPRESENTATIVE  FRED DYSON,  Alaska  State Legislature,  sponsor,                                                               
informed  the   committee  that   the  constitution   includes  a                                                               
directive  to  the  legislature to  promulgate  legislation  that                                                               
would encourage  communities to organize  under state law.   That                                                               
process  was never  really completed.   He  noted that  the Local                                                               
Boundary Commission's  reports illustrate the "spotty"  record in                                                               
this  area.    Furthermore, more  communities  have  disorganized                                                               
themselves in recent years.  He  pointed out that the current law                                                               
contains many disincentives  to organization.  For  example, if a                                                               
community organizes  as a first  class borough, that  borough has                                                               
to perform education financing and planning functions.                                                                          
                                                                                                                                
REPRESENTATIVE DYSON  explained that  SSHB 16 would  allow second                                                               
class cities  to organize  as second  class communities  and such                                                               
communities would be able to write  its own charter.  The goal is                                                               
to allow communities  to organize in, virtually,  any way desired                                                               
and  to  assume  the   responsibilities  the  community  desired.                                                               
Therefore,   Representative  Dyson   indicated   his  hope   that                                                               
communities would choose innovative ways of organizing.                                                                         
                                                                                                                                
REPRESENTATIVE  DYSON informed  the  committee  that the  sponsor                                                               
substitute  is a  more comprehensive  piece of  legislation [than                                                               
what was offered last year] because  SSHB 16 does a better job of                                                               
identifying  all  the statutes  that  speak  to communities  this                                                               
size.    He   also  informed  the  committee   that  last  year's                                                               
legislation passed the House 37-0,  but was stalled in the Senate                                                               
during the last days of  the session.  Representative Dyson noted                                                               
that  in  Senate  Finance  last year,  someone  objected  to  the                                                               
legislation because it  didn't force these communities  to have a                                                               
tax  base.    However,  Representative Dyson  didn't  share  that                                                               
objection.   He noted  that the Alaska  Municipal League  and the                                                               
Southeast Conference have endorsed SSHB 16.                                                                                     
                                                                                                                                
Number 0597                                                                                                                     
                                                                                                                                
REPRESENTATIVE  GUESS  inquired as  to  how  SSHB 16  related  to                                                               
Senator  Wilken's  bill  that  deals   with  the  Local  Boundary                                                               
Commission.                                                                                                                     
                                                                                                                                
REPRESENTATIVE  DYSON said,  "In one  sense, it  only relates  in                                                               
that it  provides ...  another, and I  think, a  very attractive,                                                               
option for smaller communities to organize under."                                                                              
                                                                                                                                
CO-CHAIR MEYER  inquired as to  the difference between  home rule                                                               
communities, home rule cities, and home rule boroughs.                                                                          
                                                                                                                                
REPRESENTATIVE  DYSON  answered   that  currently,  second  class                                                               
cities  cannot  write their  own  charter,  which SSHB  16  would                                                               
allow.  This legislation would  extend most of the privileges and                                                               
options of  a first class borough  or city to a  small community.                                                               
However, he deferred to Ms. Cook for the specifics.                                                                             
                                                                                                                                
Number 0755                                                                                                                     
                                                                                                                                
TAM  COOK, Director,  Legislative  Legal  and Research  Services,                                                               
Legislative Affairs  Agency, Alaska State  Legislature, explained                                                               
that the home rule community proposed  in SSHB 16 would be a type                                                               
of  city distinct  from  a  borough.   Currently,  there are  the                                                               
following  city classifications:   home  rule  city, first  class                                                               
city, and  second class  city.   The first  and the  second class                                                               
cities  are  referred  to  as  general law  cities  as  they  can                                                               
exercise "the  powers that are specifically  conferred by statute                                                               
upon them."   The home rule  city, by charter, is  able to decide                                                               
what  authority  it will  assume.    With  respect to  home  rule                                                               
municipalities,  there are  fewer  statutes  that are  mandatory.                                                               
Under SSHB 16, the home  rule option is, essentially, extended to                                                               
the smaller community that would  not have to meet the population                                                               
requirements.    She  explained that  currently,  the  home  rule                                                               
community has been  held as a more  sophisticated municipality in                                                               
Alaska in that  Alaska's home rule communities tend  to be larger                                                               
with a  more complex  form of  government.   Ms. Cook  said, "The                                                               
notion behind this bill, as I  understand it, is that there is no                                                               
inherent  reason  why  you  couldn't  have  a  charter  that  ...                                                               
provided  for  a simpler,  more  fundamental  form of  government                                                               
rather than  a more complex form  of government.  So,  the notion                                                               
is that  we extend the right  to individuals to largely  form the                                                               
sorts of  government functions  that they  want to  see performed                                                               
through the  charter option."   She presumed that [the  home rule                                                               
community's] charter  would be much  more limited than  a charter                                                               
of an area such as Anchorage.                                                                                                   
                                                                                                                                
REPRESENTATIVE  DYSON added  that SSHB  16 does  not require  the                                                               
same  auditing  requirements as  those  required  of first  class                                                               
cities and  boroughs.  This  legislation only requires  an annual                                                               
statement of accounts, which significantly  reduces the burden on                                                               
the community.                                                                                                                  
                                                                                                                                
Number 0983                                                                                                                     
                                                                                                                                
CO-CHAIR  MEYER  asked  Representative  Dyson  how  important  he                                                               
believes the [requirement to have a] tax base is.                                                                               
                                                                                                                                
REPRESENTATIVE DYSON related his  belief that mandatory taxes and                                                               
mandatory   responsibilities  are   a   major  disincentive   [to                                                               
organization],  which  is  in opposition  to  the  constitution's                                                               
[directive].                                                                                                                    
                                                                                                                                
CO-CHAIR  MEYER asked  if these  communities without  a tax  base                                                               
would be financially dependent on federal and state funding.                                                                    
                                                                                                                                
REPRESENTATIVE  DYSON  replied,  "By   and  large."    Under  the                                                               
existing   law,  a   couple  of   different  classifications   of                                                               
organizing  would lose  some of  the state  and federal  funding.                                                               
However, he believed those disincentives had been eliminated.                                                                   
                                                                                                                                
REPRESENTATIVE  SCALZI  turned  to  the  issue  of  pass  through                                                               
grants.   He  asked if  the [home  rule community]  would be  the                                                               
entity that  would accept  grants or  would the  grant go  to the                                                               
borough that the community was inside.                                                                                          
                                                                                                                                
Number 1130                                                                                                                     
                                                                                                                                
MS. COOK specified that it depends  upon the program.  Once there                                                               
is  a municipal  form of  government  it becomes  easier for  the                                                               
state,  in  some ways,  to  make  specific  grants to  that  area                                                               
because they  have a  formal structure.   There  are a  number of                                                               
grants that  go to municipalities  that are outside  of programs.                                                               
There  are  also  programs  that provide  an  ongoing  source  of                                                               
revenue  and  aid  to  the  various  classes  of  municipalities.                                                               
Furthermore,   there  are   statutes  that   address  grants   to                                                               
incorporated   entities.     She   explained   that  [home   rule                                                               
communities]  would be  incorporated  under state  law and  would                                                               
qualify for  special grants.  As  an aside, Ms. Cook  pointed out                                                               
that  a second  class city  may or  may not  be located  within a                                                               
borough.   Currently,  there are  a fair  number of  second class                                                               
cities  that are  outside of  boroughs, which  would be  the only                                                               
government that  would exist in that  area.  She noted  that some                                                               
accommodations  have   been  made   so  that  other   groups  can                                                               
participate in state aid, although that can become awkward.                                                                     
                                                                                                                                
MS. COOK  turned to the programs  of state aid that  exist.  Many                                                               
of these  programs are  formula programs,  such that  the borough                                                               
receives the  money and distributes  it, per its  prerogative, to                                                               
the cities.   She indicated  that the aforementioned  process may                                                               
be how  it would work if  a home rule community  existed within a                                                               
borough.    However,  not  every  program  is  like  that.    For                                                               
instance, some programs offer [funding]  to each individual city.                                                               
In such programs, the aid going  to the borough is based upon the                                                               
population  of the  borough minus  the residents  of the  cities.                                                               
Ms.  Cook  noted  that  currently,   there  is  revenue  sharing,                                                               
municipal  assistance,  and the  capitol  project  program.   The                                                               
capitol  project  program  is also  available  to  unincorporated                                                               
communities.   She  noted that  there are  several programs  that                                                               
provide  aid to  unincorporated  communities.   Therefore,  those                                                               
areas that  would seek home  rule community status  would forfeit                                                               
some  aid in  exchange for  qualifying for  a slightly  different                                                               
program.  Ms. Cook presumed that  all these matters would have to                                                               
be considered  as part of a  local decision as to  whether or not                                                               
to incorporate.                                                                                                                 
                                                                                                                                
REPRESENTATIVE SCALZI  clarified that he was  primarily referring                                                               
to federal  pass through grants.   He  assumed that if  a borough                                                               
still  has  to handle  pass  through  grants, the  borough  would                                                               
assume any liability  from such.  He said, "I  was curious to the                                                               
follow  through if  this home  rule community,  with no  tax base                                                               
presumably, was going to pick up  these grants and have this work                                                               
performed,  who  would  hold  the  liability  on  some  of  those                                                               
things."   Representative Scalzi  related his  understanding that                                                               
Ms. Cook's answer  was that [the liability] would  be specific to                                                               
the type of grant.                                                                                                              
                                                                                                                                
MS.  COOK indicated  that with  regard to  federal programs,  her                                                               
comments are largely speculative.   Currently, the municipal code                                                               
is organized  such that the  powers assumed on an  areawide basis                                                               
by  a   borough  [cannot  be   exercised]  by  the  city.     She                                                               
acknowledged that  there is  always that question  as to  how the                                                               
powers and  the jurisdictional obligation  will be  split between                                                               
two types  of local government  that share territory.   She said,                                                               
"This  bill doesn't  particularly address  that relationship  nor                                                               
does  it create  the tension  that  exists now,  with respect  to                                                               
borough and  any type  of class  of city that  it has  within its                                                               
boundaries."   Ms.  Cook informed  the committee  that there  are                                                               
mechanisms by  which the  borough can  shift responsibility  to a                                                               
city, if it so  chooses and vice versa.  Generally,  if a city is                                                               
located within  a borough that  is exercising a type  of areawide                                                               
power, then the city doesn't  have the authority to exercise that                                                               
power.   Therefore,  the  grants dealing  with  such power  would                                                               
[probably] have to  go to the municipality that has  the power to                                                               
perform  the function.    In  summary, Ms.  Cook  stated that  it                                                               
wouldn't  be any  different than  the  current relationship  that                                                               
boroughs have with the cities within their jurisdiction.                                                                        
                                                                                                                                
Number 1490                                                                                                                     
                                                                                                                                
REPRESENTATIVE  DYSON informed  the committee  that there  are 75                                                               
communities that are not incorporated  and are receiving aid.  He                                                               
expressed   his  hope   that   many   of  these   [unincorporated                                                               
communities]   would  choose   to  organize   under  state   law.                                                               
Representative  Dyson noted  that he  has been  intrigued by  the                                                               
innovation  of  some  communities  around the  state.    He  used                                                               
Quinhagak as an example.                                                                                                        
                                                                                                                                
CO-CHAIR MORGAN  pointed out that  SSHB 16 has an  effective date                                                               
of  July  1, 2002,  and  that  the bill  necessitates  conforming                                                               
legislation  if this  bill passes.   He  asked if  the conforming                                                               
legislation would be cumbersome or is it a housekeeping matter.                                                                 
                                                                                                                                
MS.   COOK  said   she  didn't   believe  that   [the  conforming                                                               
legislation] would  be cumbersome  nor did  she believe  that the                                                               
conforming legislation  would be voluminous.   Ms. Cook explained                                                               
that Sections  1 and  2 of  SSHB 16  include the  two definitions                                                               
that she felt  had to be dealt  with in this bill.   However, the                                                               
bill does  not address the  numerous areas, outside of  Title 29,                                                               
where there are references  to municipalities, their relationship                                                               
with cities, and,  in some cases, their  participation in various                                                               
programs.   She  said that  she needed  to review  those statutes                                                               
[outside  of  Title  29]  and  determine how  this  new  type  of                                                               
municipality  can participate  in those  programs.   She informed                                                               
the committee that  due to the sponsor's desire to  keep the bill                                                               
focused, the additional  sections [outside of Title  29] would be                                                               
technical in  nature.  Therefore,  if SSHB  16 were to  pass, the                                                               
effective date  would be  delayed in  order to  allow time  for a                                                               
conforming bill  to amend  all the  relevant sections  outside of                                                               
Title 29.   She pointed out that  Section 24 of SSHB  16 does not                                                               
give Legal Services  any discretion regarding how  to amend those                                                               
sections  because the  language specifies  that [these  home rule                                                               
communities]  will be  treated  like second  class  cities.   The                                                               
conforming legislation will be submitted  to the House and Senate                                                               
Rules  Committees  for  introduction  and  the  legislature  will                                                               
review those technical amendments.   The legislature may elect to                                                               
make some policy  choices and request changes.   Therefore,  this                                                               
approach allows  the legislature to  debate SSHB 16 on  the basis                                                               
of its  merits, without  the weight  of how  these municipalities                                                               
will be impacted  by the other provisions.   Then the legislature                                                               
could review the  conforming legislation next session.   Ms. Cook                                                               
indicated  her belief  that these  communities, because  of their                                                               
small size  and limited resources,  probably ought to  be treated                                                               
as second  class cities  rather than first  class cities  or home                                                               
rule cities.   Thus, she  guessed that the legislature  would not                                                               
want to change 90 percent of the bill.                                                                                          
                                                                                                                                
Number 1946                                                                                                                     
                                                                                                                                
REPRESENTATIVE  KERTTULA  asked what  would  happen  if there  is                                                               
conflicting legislation.                                                                                                        
                                                                                                                                
MS.  COOK explained  that  the statutes  provide  the Revisor  of                                                               
Statutes with  a considerable amount  of discretion  in rewriting                                                               
the law.   The revisor  is not supposed to  rewrite the law  in a                                                               
manner  that  changes  the  effect.    However,  when  there  are                                                               
conflicting  statutes [the  revisor rewrites  them to  the extent                                                               
they can be resolved].  In  the case of an absolute conflict, the                                                               
revisor creates a  revisor's bill and offers  the legislature the                                                               
opportunity to make  a resolution, which is done  by enactment of                                                               
law.   She noted that  [the revisor] cannot fix  legislation that                                                               
is seriously in conflict.                                                                                                       
                                                                                                                                
MS.  COOK turned  to SSHB  16 and  the possibility  that SSHB  16                                                               
would pass without subsequent  passage of conforming legislation.                                                               
In such  a case, Ms.  Cook said she  believes that the  home rule                                                               
communities  would  qualify  as   home  rule  municipalities  for                                                               
purposes of  most of  the other statutes  [outside of  Title 29].                                                               
Although that  may not  be the  desired result, it  may not  be a                                                               
conflict either.  Ms. Cook  remarked that it would be unfortunate                                                               
to have this classification of  municipality treated in ways that                                                               
would  have policy  effects that  no  one had  thought of,  which                                                               
would be the  worst [result] of not having a  piece of conforming                                                               
legislation.   She  related her  belief  that some  of the  other                                                               
statutes that apply to home  rule cities, in particular, ought to                                                               
be extended  to these sorts  of small communities that  might not                                                               
have the  taxing ability to  carry out the function.   Therefore,                                                               
she felt that  there is a need for a  second piece of legislation                                                               
in this  case and hopefully,  conflict will  be avoided.   If the                                                               
second piece of legislation  [the conforming legislation] doesn't                                                               
pass, then the  solution would be to delay the  effective date of                                                               
SSHB 16  one additional year.   Therefore,  SSHB 16 would  be law                                                               
and  the  effective  date  could be  amended  if  the  conforming                                                               
legislation  was problematic.   Ms.  Cook informed  the committee                                                               
that SSHB 16  doesn't conflict, in any way that  she is aware of,                                                               
with Senator Wilken's bill.                                                                                                     
                                                                                                                                
Number 2138                                                                                                                     
                                                                                                                                
JOHN   PEARSON,  Hyder   Economic   Development  Planner,   Hyder                                                               
Community Association  (HCA), testified that the  Hyder Community                                                               
Association supports  SSHB 16.   He  mentioned that  in Southeast                                                               
Alaska there would, from his  count, be about 13 communities that                                                               
would  qualify  to  [organize  as  prescribed]  under  the  bill,                                                               
although he  indicated that maybe  only two or  three communities                                                               
other than Hyder  that would take advantage  of this legislation.                                                               
Mr. Pearson informed  the committee that Hyder,  the most eastern                                                               
point in Alaska,  is a small community of 131  residents.  Hyder,                                                               
a  true boarder  town, shares  the border  with Stewart,  British                                                               
Columbia, Canada.                                                                                                               
                                                                                                                                
MR.  PEARSON informed  the committee  that Hyder  has no  form of                                                               
government and  the responsibilities  for the general  welfare of                                                               
the  community is  under  the oversight  of  the Hyder  Community                                                               
Association,  which is  an  extremely active  group.   The  Hyder                                                               
Community   Association,  a   nonprofit  501-3C,   provides  fire                                                               
services,  emergency  services,  a library,  and  maintenance  of                                                               
about 12  miles of  road per  a contract  with the  Department of                                                               
Transportation &  Public Facilities  (DOT&PF).   Furthermore, the                                                               
community takes  care of plowing the  snow on side streets.   The                                                               
Hyder  community also  operates a  visitor's center  and a  small                                                               
museum  in the  summer months.    The community  also oversees  a                                                               
small harbor  [with] float plane  facilities.  He noted  that the                                                               
community fully participates with  the Community Overall Economic                                                               
Development  Process.   The [community]  also  applies and  seeks                                                               
funds from various sources.                                                                                                     
                                                                                                                                
Number 2416                                                                                                                     
                                                                                                                                
MR. PEARSON  indicated that he would  use Hyder as an  example of                                                               
the potential  of small communities  in Alaska.  He  informed the                                                               
committee that  in the  past three  years Hyder  has aggressively                                                               
attempted  to create  year round  jobs.   During  this time,  the                                                               
Hyder Bottled Waterworks was developed  and is now in the process                                                               
of  employing the  first of  41 new  jobs in  the community.   He                                                               
explained  that Hyder  Bottled  Waterworks  will manufacture  the                                                               
bottles,  fill  the bottles,  and  build  the pallets  [that  the                                                               
bottles will be  shipped on].  This has been  done with community                                                               
funds   and    some   help   from   the    Economic   Development                                                               
Administration; there has been no help from the state.                                                                          
                                                                                                                                
MR. PEARSON  said he felt that  SSHB 16 would provide  Hyder with                                                               
the opportunity to  organize and take on  new responsibilities as                                                               
well as take  on major responsibilities, such as  the creation of                                                               
facilities  to receive  small cruise  ships, barges,  and perhaps                                                               
marine ferries.   However, there  is one problem [with  SSHB 16],                                                               
which is  the reference to  schools.   This year Hyder  started a                                                               
one  room  schoolhouse  that  has   12  students.    Mr.  Pearson                                                               
reiterated  that SSHB  16 provides  an excellent  opportunity for                                                               
small communities,  such as Hyder,  to improve life.   He offered                                                               
to  work with  Representative  Dyson  on SSHB  16  and urged  the                                                               
committee's support of the bill.                                                                                                
                                                                                                                                
Number 2639                                                                                                                     
                                                                                                                                
CO-CHAIR  MEYER inquired  as to  the source  of funds  that Hyder                                                               
receives.                                                                                                                       
                                                                                                                                
MR. PEARSON  explained that Hyder  would apply to  state programs                                                               
that are available to nonprofits.   There are many programs, such                                                               
as the block grant program,  that Hyder would like to participate                                                               
in,  but  cannot  at  this  time.     He  noted  that  Hyder  has                                                               
participated in [DCED's]  mini grant program as well  as the U.S.                                                               
Forest  Service's occasional  funding.    Furthermore, the  Hyder                                                               
community building, which  was built by the  community, has space                                                               
that is  leased to the  U.S. Forest  Service and thus  revenue is                                                               
generated for  Hyder.  He  informed the committee that  the Hyder                                                               
Bottled   Waterworks   plant   revenue  will   be   directed   to                                                               
improvements to Hyder,  such as restoring some  of the historical                                                               
buildings  in the  community.   He also  noted Hyder's  desire to                                                               
match all of its federal dollars (indisc.).                                                                                     
                                                                                                                                
CO-CHAIR MEYER  inquired as to  how the Hyder  Bottled Waterworks                                                               
facility was funded.  He asked  if people gave what they could or                                                               
did the funding came from taxation.                                                                                             
                                                                                                                                
MR. PEARSON  replied that  there was no  taxation.   He explained                                                               
that every  time that  Hyder had  extra money, it  put it  in the                                                               
bank.   That  savings amounted  to  about $300,000.   Then  Hyder                                                               
approached  the Economic  Development  Association, who  [offered                                                               
assistance].   The community  pitched in and  actually dug  a 600                                                               
foot trench  for the water  line to the Hyder  Bottled Waterworks                                                               
facility  last Thanksgiving.   Mr.  Pearson noted  the incredible                                                               
amount of volunteerism, even from the Canadians.                                                                                
                                                                                                                                
Number 2899                                                                                                                     
                                                                                                                                
CO-CHAIR MEYER related his understanding  that SSHB 13 would help                                                               
Hyder create jobs.                                                                                                              
                                                                                                                                
MR.  PEARSON replied  yes.   Mr. Pearson  informed the  committee                                                               
that  Hyder  has had  discussions  with  Prince of  Wales  Island                                                               
regarding  an inter-island  ferry, which  could be  possible with                                                               
the passage  of SSHB 16 as  it would allow Hyder  to organize and                                                               
thus seek funding [bonding].                                                                                                    
                                                                                                                                
CO-CHAIR MEYER inquired as to who  would be liable if a volunteer                                                               
gets hurt.                                                                                                                      
                                                                                                                                
MR. PEARSON  answered that HCA  would be  liable.  He  noted that                                                               
HCA is well-insured.  In  further response to Co-Chair Meyer, Mr.                                                               
Pearson said  that there  is no  sewer system  in Hyder  and thus                                                               
outhouses and septic  tanks are still in use, which  is still the                                                               
case with water.                                                                                                                
                                                                                                                                
CO-CHAIR MEYER expressed concern  with bottling water and selling                                                               
it nationwide.                                                                                                                  
                                                                                                                                
MR.  PEARSON  remarked  that  [the  water  industry]  is  closely                                                               
controlled and regulated.                                                                                                       
                                                                                                                                
TAPE 01-8, SIDE B                                                                                                               
                                                                                                                                
Number 3004                                                                                                                     
                                                                                                                                
KEVIN RITCHIE,  President, Alaska Municipal League,  came forward                                                               
to  testify.    Alaska  is  a diverse  place  and  there  is  not                                                               
necessarily  a lack  of governments  in the  unorganized borough;                                                               
however,  the coordination  between  those  governments is  often                                                               
very  important.   This  bill  provides an  option  or tool  that                                                               
communities  can  utilize  to  increase  the  ability  to  govern                                                               
themselves  in a  way that  is  appropriate for  them, which  AML                                                               
believes is important.   In reference [to the notion  that] a tax                                                               
base [is an  important] condition for being  a municipality, many                                                               
communities don't really  have what is considered a tax  base.  A                                                               
community gets a tax base  by becoming coordinated in the efforts                                                               
to develop one and thus  increasing the ability to govern oneself                                                               
is   important.     From  a   purely  economic   standpoint,  the                                                               
legislature is,  under the constitution, the  governing body, the                                                               
assembly,  for the  unorganized borough.   Therefore,  this is  a                                                               
responsibility of the  legislature.  He said, "To  the extent you                                                               
can  promote  local self  government  of  any kind,  you're  [the                                                               
legislature] going to be ultimately  assisting the state in being                                                               
able to most efficiently make  sure those services are provided."                                                               
He pointed out that the economy  of Alaska is so intertwined that                                                               
most of the  urban areas are the center of  commerce because they                                                               
provide  services  and  goods  to  areas  throughout  the  state.                                                               
Therefore,  the  extent to  which  those  areas thrive,  commerce                                                               
increases and everyone benefits.                                                                                                
                                                                                                                                
MR. RITCHIE  noted that  most of  the bill  is placing  the words                                                               
"home  rule  community" into  various  parts  of  Title 29.    He                                                               
referred to page  3, where two sentences are inserted:   "a first                                                               
class city  may adopt a  charter and become  a home rule  city; a                                                               
second class  city may  adopt a  charter and  become a  home rule                                                               
city."  He explained that for  some reason, which [AML] could not                                                               
ever determine, if  a second class city wanted to  be a home rule                                                               
city, that  second class city first  had to become a  first class                                                               
city and  then become a  home rule city.   This [SSHB  16] simply                                                               
removes  an impediment  to a  community deciding  to come  a home                                                               
rule city, which is a good thing.                                                                                               
                                                                                                                                
MR. RITCHIE  pointed out  that there  hasn't been  much municipal                                                               
evolution, in  his view.   In 1963  the legislature dealt  with a                                                               
controversial   bill,  a   mandatory  borough   bill,  by   which                                                               
Anchorage, Juneau,  Fairbanks, and Kenai, were  "[dragged] to the                                                               
borough table"  and probably  at that  time somebody  said "well,                                                               
we've  got the  rest  of  the state  to  worry  about with  local                                                               
government, what [when]  do you want to deal with  that ... and I                                                               
think somebody said, ... about  the year 2000."  Therefore, there                                                               
really hasn't  been much thought  towards the evolution  of local                                                               
government in  these types of  issues and  thus he is  glad these                                                               
issues  are being  addressed.   Mr.  Ritchie indicated  agreement                                                               
with earlier comments regarding  [the belief] that the incentives                                                               
for   small  communities   that   are   considering  becoming   a                                                               
municipality or  a home rule  community, in order to  better work                                                               
with  the tribal  council  and the  other  governing bodies,  are                                                               
going  away  quickly.    It  almost doesn't  pay  to  form  as  a                                                               
municipality and it  certainly doesn't pay to form  as a borough.                                                               
As the  disincentives are growing,  the incentives,  like revenue                                                               
sharing, are to the point  where they don't provide much support.                                                               
For example,  a small community  could potentially  receive under                                                               
$20,000 per  year in revenue  sharing, which is a  minimal amount                                                               
of money  to actually conduct any  kind of business at  all.  Mr.                                                               
Ritchie  informed the  committee that  although this  information                                                               
hasn't  been  released  yet,  there   is  a  study  of  how  many                                                               
communities in Alaska  are facing insolvency or  the inability to                                                               
pay their  bills; the number  is very substantial.   He indicated                                                               
that  [the  study  says  that]  as many  as  20  percent  of  the                                                               
municipalities in the  state, largely the small  ones, are having                                                               
a tough time just paying the bills.                                                                                             
                                                                                                                                
Number 2723                                                                                                                     
                                                                                                                                
REPRESENTATIVE  MURKOWSKI  referred  to  the  debate  on  HB  13,                                                               
specifically the debate  on the constitutionality of  some of the                                                               
issues.  That debate prompted  Representative Murkowski to review                                                               
the constitution  regarding the  purpose of local  government and                                                               
make sure  SSHB 16 is  okay, which she  believes to be  the case.                                                               
[The  constitution] provides  for maximum  local self  government                                                               
with  a  minimum of  local  government  units.   Obviously,  this                                                               
[bill]  is providing  for  a maximum  of  local self  government.                                                               
However, she  wondered if  the problem of  "the minimum  of local                                                               
government units"  would result  by extending  this to  home rule                                                               
communities.                                                                                                                    
                                                                                                                                
MR. RITCHIE  responded that his  opinion is  no.  He  pointed out                                                               
that Vic  Fischer, Secretary to  the Local  Government Committee,                                                               
has described the concept that  boroughs fulfill a regional role,                                                               
at some  point in the  evolution of municipal  governments, which                                                               
is a way of minimizing the  number of local government units.  He                                                               
noted  that in  the  Northwest Arctic  Borough,  the North  Slope                                                               
Borough,  and  the  Lake  and  Peninsula  Borough,  the  regional                                                               
government supports  the organized cities and  the communities or                                                               
villages,  which is  a good  way  of coordinating  services in  a                                                               
community.  However, the constitution  does provide for cities as                                                               
well within  boroughs and  thus those cities  may be  in boroughs                                                               
someday.  However, "whether they're  villages or potentially home                                                               
rule communities  or municipalities,  they ...  all fit  into the                                                               
structure ... in my opinion."                                                                                                   
                                                                                                                                
Number 2590                                                                                                                     
                                                                                                                                
SARA  FELIX,  Assistant  Attorney General,  Governmental  Affairs                                                               
Section, Civil Division(Juneau), Department  of Law, informed the                                                               
committee that  she is present  in place  of Margie Vandor.   Ms.                                                               
Felix  said that  she would  be discussing  a technical  problem,                                                               
which was raised  in reference to last year's bill,  HB 255.  She                                                               
pointed out that  Ms. Vandor testified at the  February 12, 2000,                                                               
House Community  and Regional Affairs Standing  Committee meeting                                                               
and noted  that the constitution  says that the  local government                                                               
is to  be in the form  of cities and boroughs.   Furthermore, the                                                               
constitution  specifies  that a  city  is  to  be governed  by  a                                                               
council and  a borough  is to  be governed by  an assembly.   The                                                               
constitution does  not seem  to speak to  a home  rule community.                                                               
She informed the committee that  Ms. Vandor's testimony from last                                                               
year is available on BASIS or she could review that testimony.                                                                  
                                                                                                                                
REPRESENTATIVE MURKOWSKI  asked if  Section 2  of SSHB  16, which                                                               
defines "city"  as including  a home  rule community,  would come                                                               
close to addressing Ms. Vandor's concern.                                                                                       
                                                                                                                                
MS.  FELIX answered,  "I think  that's  a good  step."   However,                                                               
there is  a remaining problem  in Section 21, where  "council" is                                                               
defined.                                                                                                                        
                                                                                                                                
Number 2444                                                                                                                     
                                                                                                                                
REPRESENTATIVE MURKOWSKI  asked if  the deletion of  the language                                                               
in Section  21, "regardless of  the name of that  governing body"                                                           
would make [Ms. Vandor] more comfortable.                                                                                       
                                                                                                                                
MS.  FELIX   answered,  "I'm  not   certain  if  that   would  be                                                               
everything,  but I  think  that  would ...  go  along way  toward                                                               
alleviating the concern."                                                                                                       
                                                                                                                                
REPRESENTATIVE DYSON  deferred to Ms.  Cook in regard  to [DOL's]                                                               
concern.                                                                                                                        
                                                                                                                                
REPRESENTATIVE  DYSON, in  response to  Representative Murkowski,                                                               
answered that he  didn't know why the  aforementioned language in                                                               
Section 21 was included.                                                                                                        
                                                                                                                                
Number 2300                                                                                                                     
                                                                                                                                
The committee took an at-ease from 9:10 to 9:22 a.m.                                                                            
                                                                                                                                
MS. COOK, in response to the  concerns with Section 21, said that                                                               
she agrees that the constitution  requires governing bodies to be                                                               
councils.   However,  SSHB 16  says that  whatever name  is used,                                                               
that "governing body" will be a  council and thus all of the laws                                                               
referring  to  the  council  of  a  city  refer  to  this  group,                                                               
regardless of  the name.   She specified,  "As a legal  matter it                                                               
will be a council.  So,  I don't see that there's, particularly a                                                               
legal problem."   However, she  acknowledged that there may  be a                                                               
semantic problem.   Ms. Cook recalled the same  type of testimony                                                               
last year in  reference to the use of "community."   Further, Ms.                                                               
Cook said, "I  don't think, as a legal  matter, calling something                                                               
a community and stating that as a  matter of law it is a city; it                                                               
seems to me that that solves the legal issue."                                                                                  
                                                                                                                                
REPRESENTATIVE  MURKOWSKI surmised  then  that  if the  governing                                                               
body  of this  home rule  community was  called a  "quorum," then                                                               
that  "quorum"  -  under  Section  21  of  SSHB  16  -  would  be                                                               
considered a  "council" for  the purpose  of the  constitution as                                                               
well as all  the statutes.  Representative  Murkowski related her                                                               
understanding  that  Ms. Cook  considered  [DOL's]  concern as  a                                                               
matter of semantics.                                                                                                            
                                                                                                                                
MS. COOK indicated agreement.                                                                                                   
                                                                                                                                
CO-CHAIR MORGAN asked  if SSHB 16 could be amended  such that the                                                               
failure to  pass the  conforming legislation  would automatically                                                               
trigger a delay in the effective for one year.                                                                                  
                                                                                                                                
MS. COOK replied  yes.  The effective date could  be drafted such                                                               
that SSHB 16, although it will  be enacted, would not take effect                                                               
until conforming legislation takes effect.                                                                                      
                                                                                                                                
CO-CHAIR MORGAN asked if the sponsor  would be amenable to such a                                                               
change.                                                                                                                         
                                                                                                                                
REPRESENTATIVE DYSON replied yes.                                                                                               
                                                                                                                                
MS.  COOK informed  the committee  that it  could do  a committee                                                               
substitute,  [or  a] conceptual  amendment  and  direct that  the                                                               
legislation be prepared as previously stated.                                                                                   
                                                                                                                                
CO-CHAIR  MORGAN   indicated  the  preference  for   a  committee                                                               
substitute.   He  asked if  the committee  was amenable  to that.                                                               
There was  no objection  stated.   Co-Chair Morgan  closed public                                                               
testimony.                                                                                                                      
                                                                                                                                
Number 2039                                                                                                                     
                                                                                                                                
REPRESENTATIVE  MURKOWSKI  moved  to  report  CSSSHB  16  out  of                                                               
committee  with individual  recommendations and  the accompanying                                                               
fiscal  notes.   There  being no  objection,  CSSSHB 16(CRA)  was                                                               
reported  out  of  the  House   Community  and  Regional  Affairs                                                               
Standing Committee.                                                                                                             
                                                                                                                                

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