Legislature(2005 - 2006)CAPITOL 124

02/24/2005 08:00 AM COMMUNITY & REGIONAL AFFAIRS


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ HB 133 LOCAL BOUNDARY COMMISSION REGS & POWERS TELECONFERENCED
Heard & Held
= HB 25 REFUND OF FISH BUSINESS TAX TO MUNIS
<Bill Hearing Canceled>
= HB 121 SERVICE AREAS IN SECOND CLASS BOROUGHS
Moved CSHB 121(CRA) Out of Committee
Bills Previously Heard/Scheduled
                    ALASKA STATE LEGISLATURE                                                                                  
    HOUSE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE                                                                   
                       February 24, 2005                                                                                        
                           8:07 a.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Kurt Olson, Co-Chair                                                                                             
Representative Bill Thomas, Co-Chair                                                                                            
Representative Gabrielle LeDoux                                                                                                 
Representative Mark Neuman                                                                                                      
Representative Sharon Cissna                                                                                                    
Representative Woodie Salmon                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Pete Kott                                                                                                        
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 133                                                                                       
"An Act relating to incorporation  of boroughs and to regulations                                                               
of  the  Local  Boundary  Commission  to  provide  standards  and                                                               
procedures   for   municipal   incorporation,   reclassification,                                                               
dissolution,   and  certain   municipal  boundary   changes;  and                                                               
providing for an effective date."                                                                                               
                                                                                                                                
     - HEARD AND HELD                                                                                                           
                                                                                                                                
HOUSE BILL NO. 121                                                                                                              
"An Act  relating to consolidating or  abolishing certain service                                                               
areas in second class boroughs."                                                                                                
                                                                                                                                
     - MOVED CSHB 121(CRA) OUT OF COMMITTEE                                                                                     
                                                                                                                                
HOUSE BILL NO. 25                                                                                                               
"An  Act  relating  to  the sharing  of  fisheries  business  tax                                                               
revenue  with  municipalities;  and providing  for  an  effective                                                               
date."                                                                                                                          
                                                                                                                                
     - BILL HEARING CANCELED                                                                                                    
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: HB 133                                                                                                                  
SHORT TITLE: LOCAL BOUNDARY COMMISSION REGS & POWERS                                                                            
SPONSOR(S): REPRESENTATIVE(S) COGHILL                                                                                           
                                                                                                                                
02/09/05       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/09/05       (H)       CRA, STA                                                                                               
02/16/05       (H)       SPONSOR SUBSTITUTE INTRODUCED                                                                          
02/16/05       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/16/05       (H)       CRA, STA                                                                                               
02/24/05       (H)       CRA AT 8:00 AM CAPITOL 124                                                                             
                                                                                                                                
BILL: HB 121                                                                                                                  
SHORT TITLE: SERVICE AREAS IN SECOND CLASS BOROUGHS                                                                             
SPONSOR(S): COMMUNITY & REGIONAL AFFAIRS                                                                                        
                                                                                                                                
02/02/05       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/02/05       (H)       CRA, STA                                                                                               
02/15/05       (H)       CRA AT 8:00 AM CAPITOL 124                                                                             
02/15/05       (H)       Heard & Held                                                                                           
02/15/05       (H)       MINUTE(CRA)                                                                                            
02/24/05       (H)       CRA AT 8:00 AM CAPITOL 124                                                                             
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
RYNNIEVA MOSS, Staff                                                                                                            
to Representative John Coghill                                                                                                  
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Presented SSHB 133 on behalf of the                                                                        
sponsor, Representative Coghill.                                                                                                
                                                                                                                                
DAN BOCKHORST, Staff                                                                                                            
to the Local Boundary Commission                                                                                                
Division of Community Advocacy                                                                                                  
Department of Commerce, Community, & Economic Development                                                                       
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Expressed concerns with SSHB 133.                                                                          
                                                                                                                                
BOB HICKS, Vice Chair                                                                                                           
Local Boundary Commission (LBC)                                                                                                 
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified that Sections 1-2 of SSHB 133 are                                                                
patently unconstitutional.                                                                                                      
                                                                                                                                
DARROLL HARGRAVES, Chair                                                                                                        
Local Boundary Commission                                                                                                       
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Expressed concerns with SSHB 133.                                                                          
                                                                                                                                
ROBERT KALLIO                                                                                                                   
Fairbanks, Alaska                                                                                                               
POSITION  STATEMENT:   During discussion  of SSHB  133, expressed                                                               
concerns with the aggregate voter method of annexation.                                                                         
                                                                                                                                
DAVE THOMAS                                                                                                                     
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of SSHB 133.                                                                          
                                                                                                                                
LARRY MEUNIER                                                                                                                   
Fairbanks, Alaska                                                                                                               
POSITION  STATEMENT:   During discussion  of SSHB  133, expressed                                                               
concerns with the aggregate voter method of annexation.                                                                         
                                                                                                                                
VICKY PADDOCK                                                                                                                   
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:   During  discussion of  SSHB 133,  urged the                                                               
committee  not to  take  away  her ability  to  choose [where  to                                                               
live].                                                                                                                          
                                                                                                                                
KAREN SAVERDA                                                                                                                   
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  Urged the committee to pass SSHB 133.                                                                      
                                                                                                                                
JOE CARLSON                                                                                                                     
Fairbanks, Alaska                                                                                                               
POSITION  STATEMENT:   Testified  that if  SSHB  133 can  provide                                                               
protection against [large government], then he is all for it.                                                                   
                                                                                                                                
TIM JOYCE, Mayor                                                                                                                
City of Cordova                                                                                                                 
Cordova, Alaska                                                                                                                 
POSITION  STATEMENT:   Testified that  passage of  SSHB 133  will                                                               
prevent any  future borough formation except  in special interest                                                               
areas.                                                                                                                          
                                                                                                                                
ALAN LEMASTER                                                                                                                   
Gakona, Alaska                                                                                                                  
POSITION STATEMENT:   Encouraged the  committee not to  pass SSHB
133,  but to  draft  legislation  that would  work  and not  have                                                               
constitutional challenges.                                                                                                      
                                                                                                                                
VICTOR FISCHER                                                                                                                  
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:   Speaking as a member  of the Constitutional                                                               
Convention and the Alaska  Territorial Legislature, expressed the                                                               
hope that the committee wouldn't act on SSHB 133.                                                                               
                                                                                                                                
VIOLA JERREL, Ph.D                                                                                                              
Homer, Alaska                                                                                                                   
POSITION  STATEMENT:   During discussion  of SSHB  133, expressed                                                               
concerns with the LBC and its regulations.                                                                                      
                                                                                                                                
CRAIG FLEENER                                                                                                                   
Council of Athabascan Tribal Governments                                                                                        
Fort Yukon, Alaska                                                                                                              
POSITION  STATEMENT:   During discussion  of SSHB  133, expressed                                                               
concerns with the current LBC regulations.                                                                                      
                                                                                                                                
FREDRICK SHEEN, President                                                                                                       
Delta Junction Chamber of Commerce                                                                                              
Delta Junction, Alaska                                                                                                          
POSITION STATEMENT:  Testified in support of SSHB 133.                                                                          
                                                                                                                                
DICK SHULTZ                                                                                                                     
Tok, Alaska                                                                                                                     
POSITION  STATEMENT:    Testified   that  SSHB  133  should  move                                                               
forward.                                                                                                                        
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
                                                                                                                                
CO-CHAIR  BILL THOMAS  called the  House  Community and  Regional                                                             
Affairs  Standing  Committee  meeting  to order  at  8:07:27  AM.                                                             
Representatives Olson,  Thomas, LeDoux,  Neuman, and  Salmon were                                                               
present at the  call to order.  Representative  Cissna arrived as                                                               
the meeting was in progress.                                                                                                    
                                                                                                                                
HB 133-LOCAL BOUNDARY COMMISSION REGS & POWERS                                                                                
                                                                                                                                
8:08:10 AM                                                                                                                    
                                                                                                                                
CO-CHAIR THOMAS announced that the  first order of business would                                                               
be SPONSOR  SUBSTITUTE FOR HOUSE  BILL NO. 133, "An  Act relating                                                               
to  incorporation of  boroughs and  to regulations  of the  Local                                                               
Boundary  Commission  to  provide standards  and  procedures  for                                                               
municipal   incorporation,  reclassification,   dissolution,  and                                                               
certain  municipal   boundary  changes;  and  providing   for  an                                                               
effective date."                                                                                                                
                                                                                                                                
CO-CHAIR  THOMAS announced  that  SSHB 133  wouldn't be  reported                                                               
from committee today.                                                                                                           
                                                                                                                                
8:08:23 AM                                                                                                                    
                                                                                                                                
RYNNIEVA  MOSS,  Staff  to Representative  John  Coghill,  Alaska                                                               
State Legislature, presented  SSHB 133 on behalf  of the sponsor,                                                               
Representative Coghill.   This legislation is  about fairness and                                                               
it  guarantees that  people  will be  involved  in forming  local                                                               
governments,  she  said.    Ms.  Moss  specified  that  SSHB  133                                                               
guarantees that when a proposal  is submitted to the legislature,                                                               
it  has  already been  reviewed  by  those  in  the area  [to  be                                                               
annexed].   Furthermore,  the legislation  requires at  least one                                                               
public hearing  and an election.   The legislature  also requires                                                               
that the proposal  must be approved by the voters  prior to being                                                               
submitted to  the legislature.   Ms.  Moss highlighted  that SSHB
133 addresses  a gray area  with regard  to the use  of aggregate                                                               
votes versus  votes that are  described in statute.   The statute                                                               
specifies that there  will be a vote of the  people who are going                                                               
to  be  annexed  and  a  vote  of  the  people  in  the  existing                                                               
municipality.   However,  a regulation  specifies that  the Local                                                               
Boundary  Commission   (LBC)  can  take  an   aggregate  [of  the                                                               
aforementioned  two votes]  and a  majority approval  would allow                                                               
the  annexation to  occur.   The  aforementioned  is contrary  to                                                               
statute.                                                                                                                        
                                                                                                                                
8:10:33 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE LEDOUX  inquired as  to the  history of  this with                                                               
regard  to the  LBC; and  asked if  there have  been a  number of                                                               
instances involving [the aggregate vote].                                                                                       
                                                                                                                                
MS. MOSS  related her understanding  that the LBC has  never used                                                               
an aggregate vote, although it  has been the source of discussion                                                               
in the Fairbanks  area.  This legislation specifies  that the LBC                                                               
won't institute regulations contrary to statute.                                                                                
                                                                                                                                
8:11:38 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE LEDOUX  expressed concern that regulations  can be                                                               
contrary to statute.                                                                                                            
                                                                                                                                
MS. MOSS said she was surprised as well.                                                                                        
                                                                                                                                
8:12:15 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE NEUMAN spoke  in favor of SSHB 133.   He suggested                                                               
that perhaps  new boroughs haven't formed  because people haven't                                                               
had a say in their communities.                                                                                                 
                                                                                                                                
8:13:03 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SALMON  inquired as to  how SSHB 133  would impact                                                               
the current statute.                                                                                                            
                                                                                                                                
MS. MOSS  clarified that SSHB  133 doesn't impact the  statute at                                                               
all.    She   pointed  out  that  AS   29.06.040  specifies  that                                                               
[annexation] must  be approved  by a majority  of votes  of those                                                               
residing in  the area being  proposed to be annexed  or detached.                                                               
However, the regulation  refers to approval by a  majority of the                                                               
aggregate  votes of  those  who  vote in  the  area proposed  for                                                               
annexation as  well as  those who vote  in the  annexing borough.                                                               
This legislation merely adds language  in AS 44.33 that specifies                                                               
the LBC has to adopt  regulations, standards, and procedures that                                                               
comply with existing statutes.                                                                                                  
                                                                                                                                
REPRESENTATIVE  SALMON  posed  a  situation  in  which  Fairbanks                                                               
annexed another  area.   He inquired  as to how  the vote  in the                                                               
area  proposed   for  annexation  would  be   compared  with  the                                                               
[annexing borough].                                                                                                             
                                                                                                                                
MS. MOSS answered that there would  have to be a majority vote in                                                               
favor of the annexation from each group.                                                                                        
                                                                                                                                
8:15:18 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SALMON  inquired  as  to  what  occurs  when  the                                                               
annexing borough receives  a majority of votes while  the area to                                                               
be annexed doesn't.                                                                                                             
                                                                                                                                
MS. MOSS  clarified that  the statute  specifies that  both votes                                                               
[that of  the annexing area and  the area to be  annexed] have to                                                               
approve  the proposed  annexation  by a  majority  in each  area,                                                               
otherwise the annexation wouldn't occur.                                                                                        
                                                                                                                                
8:15:48 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE LEDOUX said  she is inclined to  support SSHB 133.                                                               
However, she inquired  as to whether Alaska's  current law allows                                                               
commissions  to overrule  statute, which  she characterized  as a                                                               
larger problem.                                                                                                                 
                                                                                                                                
MS. MOSS informed the committee  that an interim project is going                                                               
to be  to review other  regulations and whether they  comply with                                                               
statute.                                                                                                                        
                                                                                                                                
8:16:29 AM                                                                                                                    
                                                                                                                                
CO-CHAIR OLSON  asked whether  the Homer  annexation a  few years                                                               
ago was an aggregate vote.                                                                                                      
                                                                                                                                
MS. MOSS said that she didn't know.                                                                                             
                                                                                                                                
CO-CHAIR  OLSON   related  his   understanding  that   the  Homer                                                               
annexation was  ambiguous enough  that a  lawsuit is  still going                                                               
on.                                                                                                                             
                                                                                                                                
8:17:34 AM                                                                                                                    
                                                                                                                                
DAN BOCKHORST,  Staff to the Local  Boundary Commission, Division                                                               
of  Community  Advocacy,  Department of  Commerce,  Community,  &                                                               
Economic   Development   (DCCED),   explained  that   the   Homer                                                               
annexation was  a legislative  review annexation  processed under                                                               
Article X, Section 12 of  the constitution.  Therefore, the Homer                                                               
annexation didn't involve an aggregate vote or any vote.                                                                        
                                                                                                                                
8:18:08 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SALMON  inquired  as  to the  process  the  Homer                                                               
annexation followed.                                                                                                            
                                                                                                                                
MR. BOCKHORST  reiterated that the Homer  annexation followed the                                                               
proceeding set out in the  constitution [under Article X, Section                                                               
12].   The constitutional proceeding  has been used in  excess of                                                               
125 times  to initiate annexation or  other boundary proceedings.                                                               
Mr.  Bockhorst  explained   that  the  constitutional  proceeding                                                               
requires an initiation  of a petition by the  local government or                                                               
some  other group  of  citizens.   Under  this  process there  is                                                               
extensive  public  notice  of  the filing  of  the  petition  and                                                               
opportunity  for   interested  parties   to  file   comments  and                                                               
responsive briefs on the proposal  to which the petitioner has an                                                               
opportunity to respond.  The department  and the staff of the LBC                                                               
are  required  to  prepare a  preliminary  report  examining  the                                                               
petition, the  responsive briefs,  the reply  briefs, as  well as                                                               
any  independent analysis  and  investigation.   The  preliminary                                                               
report is  subject to a  minimum of  four weeks of  public review                                                               
and  comments.    After  consideration of  the  comments  on  the                                                               
preliminary report, the department issues  the final report.  The                                                               
LBC is required by law to go to  the area in question and hold at                                                               
least one public hearing.  The  LBC has the opportunity to modify                                                               
the petition  if it  finds it compelling  to do so.   If  the LBC                                                               
approves  the  petition  and  the  petition  is  for  legislative                                                               
review, the full legislative review  would occur during the first                                                               
10 days of the regular session.   The legislature can then review                                                               
the petition  for a 45-day period.   If both houses  don't reject                                                               
the proposal, the proposal would take effect, he explained.                                                                     
                                                                                                                                
8:21:46 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE NEUMAN pointed out that  Article III of the Alaska                                                               
State  Constitution  specifies  "that  in areas  not  subject  to                                                               
majority  vote."    However,  AS  29.06.040(c)(1)  specifies,  "a                                                               
proposed  annexation  and  detachment   must  be  approved  by  a                                                               
majority of votes on the question  cast by voters residing in the                                                               
area  proposed to  be  annexed or  detached".   Therefore,  there                                                               
seems to be [conflict] between the constitution and statute.                                                                    
                                                                                                                                
MR.  BOCKHORST confirmed  that there  are a  number of  different                                                               
procedures by  which municipal governments can  initiate boundary                                                               
changes.   He reminded the  committee that Article X,  Section 12                                                               
authorizes   legislative   review   boundary  changes,   and   AS                                                               
29.06.040(c)  sets  out  an alternative  procedure  dealing  with                                                               
local action annexations in which  votes are held.  Mr. Bockhorst                                                               
informed the  committee that he  has served  as staff to  the LBC                                                               
for 25 years.  During the  course of that time, the vast majority                                                               
of annexations to city or  borough governments with a significant                                                               
number  of citizens  have typically  used the  legislative review                                                               
process.   The  local option  election  process has  been used  a                                                               
small  number of  times.   He highlighted  the other  options for                                                               
local  option  annexations  set  out in  AS  29.06.040(c).    For                                                               
instance, in an area in which  100 percent of the property owners                                                               
and 100  percent of  the registered voters  want to  petition for                                                               
annexation, that  can be done.   The aforementioned  is typically                                                               
used for  a small number or  parcels, such as 1-2  lots adjoining                                                               
an existing city.   He recalled an instance in  which the City of                                                               
Palmer did  a series of  40 annexations using  the aforementioned                                                               
method by which  all the property owners  and registered resident                                                               
voters had to  petition for annexation.  Ultimately,  the City of                                                               
Palmer  realized that  the aforementioned  method isn't  the most                                                               
efficient  and   effective  way   to  deal   with  [annexations].                                                               
Therefore,  the  City  of Palmer  pursued  a  legislative  review                                                               
annexation.    Mr.  Bockhorst  highlighted  that  the  particular                                                               
circumstances  of  a community  would  dictate  the procedure  it                                                               
would use.                                                                                                                      
                                                                                                                                
REPRESENTATIVE NEUMAN  surmised then  that the  area [requesting]                                                               
the  annexation is  the  group that  decides  which procedure  to                                                               
follow.                                                                                                                         
                                                                                                                                
MR. BOCKHORST  clarified that  the petitioner,  which could  be a                                                               
local  government  or a  group  of  citizens, makes  the  initial                                                               
determination as to the process it  wants to pursue.  However, in                                                               
the  course  of considering  the  petition  that process  can  be                                                               
amended.  Therefore, Representative Neuman is correct.                                                                          
                                                                                                                                
8:26:32 AM                                                                                                                    
                                                                                                                                
MR.  BOCKHORST, in  further  response  to Representative  Neuman,                                                               
stated that  there is substantial opportunity  for individuals to                                                               
express  their  views on  annexation  during  the course  of  the                                                               
consideration of  the proposal  before the LBC.   He  opined that                                                               
the LBC's  procedures are  well designed to  provide for  a well-                                                               
informed decision on the part  of the LBC, local officials, local                                                               
citizens, and  the legislature.  Certainly,  the Homer annexation                                                               
was very contentious,  but the legislature itself,  the House and                                                               
Senate Community and Regional  Affairs Standing Committees, spent                                                               
a great  deal of  time deliberating on  the issue  and ultimately                                                               
agreed with the LBC.                                                                                                            
                                                                                                                                
REPRESENTATIVE  NEUMAN surmised  then that  the people  who don't                                                               
want to be annexed have no legal grounds to [oppose annexation].                                                                
                                                                                                                                
MR. BOCKHORST reiterated that  the constitution allows annexation                                                               
without  a vote  of  the  people, just  as  the constitution  has                                                               
allowed the  legislature to create borough  governments without a                                                               
vote.   However, there  is not an  absolute guarantee  that there                                                               
must or will be a vote on any municipal boundary change.                                                                        
                                                                                                                                
8:29:52 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE LEDOUX inquired  as to the instances  in which the                                                               
LBC has used the aggregate method.                                                                                              
                                                                                                                                
MR. BOCKHORST answered that the  aggregate voter method has never                                                               
been utilized to  the point the LBC has rendered  a decision on a                                                               
proposal.  He informed the  committee that pending before the LBC                                                               
is  an  annexation proposal  by  the  City  of Petersburg.    The                                                               
aforementioned petition  is in  the stage in  which there  is the                                                               
opportunity for  public comment.   This is the first  instance in                                                               
which [the aggregate vote] process  has been used, although other                                                               
prospective petitioners have expressed  interest in this process.                                                               
Mr.  Bockhorst clarified  earlier  testimony  by specifying  that                                                               
there  is no  provision in  the  AS 29.06.040  that provides  for                                                               
separate votes  in the municipal government  proposing annexation                                                               
and  the  area proposed  for  annexation.    With regard  to  the                                                               
aggregate  vote method,  Mr. Bockhorst  related  that during  the                                                               
course of the Homer annexation,  some citizens in Homer expressed                                                               
interest in using the aggregate vote method.                                                                                    
                                                                                                                                
8:32:35 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SALMON inquired as to the LBC's view of SSHB 133.                                                                
                                                                                                                                
MR. BOCKHORST deferred to the chair of the LBC.                                                                                 
                                                                                                                                
8:33:02 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  OLSON  inquired as  to  the  situation in  Valdez,  and                                                               
related  his  understanding  that  the  [Valdez  petition]  could                                                               
[occur] without  the vote of  either [the  area to be  annexed or                                                               
the annexing area].                                                                                                             
                                                                                                                                
MR. BOCKHORST  informed the committee  that no petition  has been                                                               
filed  for  incorporation  of  a  borough  government  in  Prince                                                               
William Sound.   However,  the City of  Whittier has  initiated a                                                               
process  that  could  lead  to  the  filing  of  a  petition  for                                                               
incorporation  of  a  borough government  using  the  legislative                                                               
review process.   The aforementioned  could result in  the filing                                                               
of a petition and a proposal to the legislature for review.                                                                     
                                                                                                                                
CO-CHAIR OLSON  surmised, "We could  end up in a  situation where                                                               
the tail is wagging the dog, with no vote."                                                                                     
                                                                                                                                
MR. BOCKHORST said it's a complex  issue that should be placed in                                                               
the  context of  local government  in Alaska.   The  Alaska State                                                               
Constitution  calls for  the division  of the  entire state  into                                                               
boroughs.   "The  Framers of  the  constitution clearly  intended                                                               
that areas  that had  ... administrative  and fiscal  capacity to                                                               
organize would  do so," he related.   In fact, over  the 46 years                                                               
of statehood, the legislature, without  a vote of the people, has                                                               
provided  for the  creation of  borough governments  in which  84                                                               
percent of Alaskans  live today.  He reminded  the committee that                                                               
in  1972, the  legislature  provided that  any second-class  city                                                               
government  with 400  residents  or more  would automatically  be                                                               
classified as a first class city.                                                                                               
                                                                                                                                
8:36:05 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE LEDOUX returned attention to AS 29.06.040(c)(1).                                                                 
                                                                                                                                
MR.  BOCKHORST   clarified  that   AS  29.06.040(c)(1)   must  be                                                               
considered  in   context  of  Article   X,  Section  12   of  the                                                               
constitution,  which  recognizes  two   very  distinct  types  of                                                               
proceedings  that  can  come  before   the  LBC.    One  type  of                                                               
proceeding is  the earlier discussed  legislative review  and the                                                               
other type  is the local  option action  in which voters  have an                                                               
opportunity to "have some say in  the matter."  The statute deals                                                               
with  local action  proceedings.   Article X,  Section 12  of the                                                               
constitution provides the LBC express  authority, subject to law,                                                               
to  establish additional  procedures  for  local action  boundary                                                               
changes.   He  related that  AS 29.06.040(c)(1)  in its  entirety                                                               
provides that  the LBC is  obligated by statute and  permitted by                                                               
the  constitution  to  establish   procedures  for  local  action                                                               
boundary  changes.   Those procedures  must  include, but  aren't                                                               
limited to, the provisions of AS 29.06.040(c)(1)-(3).                                                                           
                                                                                                                                
8:39:49 AM                                                                                                                    
                                                                                                                                
MS. MOSS  said that  in her earlier  testimony she  confused this                                                               
with service  area annexation requirements.   However, [allowing]                                                               
only  those  who  would  be   annexed  [to  vote]  is  even  more                                                               
troublesome.    She  pointed out  that  the  existing  regulation                                                               
allows those  in the  existing municipality  the ability  to vote                                                               
and to dilute the vote of the people in the area to be annexed.                                                                 
                                                                                                                                
8:40:40 AM                                                                                                                    
                                                                                                                                
BOB HICKS, Vice Chair, Local  Boundary Commission (LBC), informed                                                               
the  committee that  he spent  a  30-year career  as an  attorney                                                               
specializing  in   municipal  law.    He   further  informed  the                                                               
committee that he  has worked with the LBC for  a number of years                                                               
on behalf  of municipalities, and  even assisted in  the drafting                                                               
of some  of the LBC's regulations  in the 1980s.   Mr. Hicks said                                                               
he  will  discuss  some  of  the technicalities  of  the  law  in                                                               
Sections  1-2.   He  characterized Section  3 of  SSHB  133 as  a                                                               
matter of  legislative discretion.   Sections 1-2 are  of serious                                                               
concern, he  opined.  Section  1 prohibits the LBC  from amending                                                               
or imposing  any conditions on  a petition to incorporate  a city                                                               
or borough  government.   If the  aforementioned becomes  law, he                                                               
questioned why  the LBC  would ever  hold a  public hearing  on a                                                               
petition  because  no  matter  the  wishes  of  the  people,  the                                                               
petition  couldn't   be  changed.     Under   the  aforementioned                                                               
proposal, every  respondent in the region,  with any constructive                                                               
change, goes  unheard.  "There  isn't even a shadow  of democracy                                                               
in  that kind  of  a  process," he  charged.    In contrast,  the                                                               
scenario created  by the framers  of the constitution  in Article                                                               
X,  Section  12,  clearly  says, "the  commission  or  board  may                                                               
consider   any  proposed   local  government   boundary  change".                                                               
However, SSHB 133  proposes to change the  aforementioned to say,                                                               
"the  commission may  consider only  the proposed  local boundary                                                               
change  in the  petition and  nothing  more or  less and  nothing                                                               
different."   This,  he opined,  is  a blatant  violation of  the                                                               
constitution,  contrary to  the delegates  of the  Constitutional                                                               
Convention,  and  flies in  the  face  of  the plain  English  of                                                               
Article X, Section 12.                                                                                                          
                                                                                                                                
MR.  HICKS turned  attention  to  Section 2  of  SSHB 133,  which                                                               
specifies that the LBC can't  submit a proposal for incorporation                                                               
of  a borough  for legislative  review unless  the voters  in the                                                               
proposed  area have  first approved  that incorporation.   Again,                                                               
the aforementioned  is in  conflict with  Article X,  Section 12.                                                               
He  questioned why  one would  bother  to submit  a proposal  for                                                               
incorporation to the  legislature for review if  the local voters                                                               
are allowed to  have approval beforehand.   As indicated earlier,                                                               
Article  X,  Section  12, provides  two  separate  procedures:  a                                                               
legislative  review process  and  a local  action  process.   The                                                               
legislative  review specifies  how the  procedure will  occur and                                                               
does not say that  the procedure can be changed by  law or by the                                                               
legislature.  The next part of  Article X, Section 12, provides a                                                               
general  statement  that the  LBC  can  establish procedures  for                                                               
local  action  elections,  which, the  constitution  specifically                                                               
says are subject  to law.  Therefore, the  legislature can create                                                               
any kind  of voter  or regional participation  it desires  in any                                                               
local  action petition  and  thus the  legislature  can make  the                                                               
changes  in  the  aggregate  voting  regulation.    However,  the                                                               
legislature  doesn't have  the power  to  change the  legislative                                                               
process.    He  characterized  the   democratic  process  in  the                                                               
legislative review  procedure as  being more detached  because it                                                               
isn't necessarily a direct vote.                                                                                                
                                                                                                                                
MR. HICKS  related that if SSHB  133 is enacted as  written, then                                                               
Article X, Section 12, will read as follows:                                                                                    
                                                                                                                                
     The  commission may  no  longer  consider any  proposed                                                                    
     change,  but shall  consider  only  the exact  boundary                                                                    
     change  described in  the petition  without regard  for                                                                    
     glaring errors  and omissions,  and without  regard for                                                                    
     the  advice and  the  opinions of  anyone  else in  the                                                                    
     effected  community.    Local  action  and  legislature                                                                    
     review processes are hereby  merged into one procedure.                                                                    
     The commission may not present  proposed changes to the                                                                    
     legislature   during  the   first   10   days  of   any                                                                    
     legislative session,  unless the proposed  changes have                                                                    
     first been approved by voters in the effected area.                                                                        
                                                                                                                                
MR. HICKS,  in conclusion,  submitted that  Sections 1-2  of SSHB
133 are patently unconstitutional.                                                                                              
                                                                                                                                
8:48:14 AM                                                                                                                    
                                                                                                                                
DARROLL HARGRAVES,  Chair, Local  Boundary Commission,  said that                                                               
he  will  address  policy  concerns  regarding  SSHB  133.    Mr.                                                               
Hargraves  paraphrased  from   the  following  written  testimony                                                               
[original punctuation provided]:                                                                                                
                                                                                                                                
     As noted  in the bill  analysis, Section 1 of  the bill                                                                    
     expressly prohibits the LBC  from amending and imposing                                                                    
     conditions   on   a   petition  to   incorporate   city                                                                    
     governments and  borough governments.   To  remove such                                                                    
     authority would  render the  incorporation of  city and                                                                    
     borough government  particularly rigid proceedings.   A                                                                    
     petition could only be approved or denied.                                                                                 
                                                                                                                                
     If  there  were a  fatal  error  in  a proposal  -  for                                                                    
     example,  a borough  assembly  apportionment plan  that                                                                    
     does not  meet the  equal representation  provisions of                                                                    
     the State and  U.S. Constitutions - the  LBC would have                                                                    
     no  alternative  but  to  deny  the  petition.    Under                                                                    
     existing law,  the petitioners would be  precluded from                                                                    
     resubmitting a  substantially similar proposal  for two                                                                    
     years.                                                                                                                     
                                                                                                                                
     Experience  has clearly  demonstrated that  flexibility                                                                    
     is needed in carrying out the  duties of the LBC.  That                                                                    
     is  why  the  legislature  has  long  provided  express                                                                    
     statutory  authority for  the Commission  to amend  and                                                                    
     impose conditions for all matters  that come before the                                                                    
     LBC.        That    includes   proposals    for    city                                                                    
     reclassification  and  each   of  the  six  fundamental                                                                    
     boundary   changes    that   come   before    the   LBC                                                                    
     (incorporation,  annexation,  detachment,  dissolution,                                                                    
     merger, and consolidation).                                                                                                
                                                                                                                                
     Section  1 of  the  bill would  impose great  obstacles                                                                    
     with   regard  to   city   and  borough   incorporation                                                                    
     proposals.  Additionally, ...,  we believe that Section                                                                    
     1 has substantial legal flaws.                                                                                             
                                                                                                                                
     Section  2 of  the bill  would  only allow  the LBC  to                                                                    
     submit  a  legislative   review  borough  incorporation                                                                    
     proposal if the  voters of the area  first approved the                                                                    
     proposal.                                                                                                                  
                                                                                                                                
     The  framers  of   Alaska's  Constitution  expressed  a                                                                    
     preference  for voluntary  borough incorporation.   The                                                                    
     LBC shares  that preference.  However,  those who wrote                                                                    
     our  Constitution  recognized   that  the  State  could                                                                    
     compel a region  to incorporate if that  region had the                                                                    
     administrative and  fiscal capacity to do  so, but took                                                                    
     no initiative  to organize.   (See:  Borough Government                                                                    
     in Alaska,  Thomas Morehouse and Victor  Fischer, p. 61                                                                    
     - 62 (1971).                                                                                                               
                                                                                                                                
     In  1963, the  State  Legislature  established a  clear                                                                    
     policy that  areas with the  capacity to  organize must                                                                    
     do  so.     The  1963  Legislature   mandated  boroughs                                                                    
     encompassing eight regions and  more than 80 percent of                                                                    
     all  Alaskans.   Voters  in  those  eight regions  were                                                                    
     given no choice as to whether they would organize.                                                                         
                                                                                                                                
     Nine years  later, the  State Legislature  instituted a                                                                    
     similar  policy by  mandating  that every  second-class                                                                    
     city  with  at  least 400  residents  be  reclassified,                                                                    
     without  a vote,  to first-class  city status.   First-                                                                    
     class cities  in the unorganized borough  have the same                                                                    
     duties and  obligations as boroughs.   Thus, the effect                                                                    
     of  the 1972  Act  was similar  to  the 1963  Mandatory                                                                    
     Borough Act.                                                                                                               
                                                                                                                                
     Section 2  of SSHB 133  represents a clear  reversal of                                                                    
     the  legislative policies  of 1963  and 1972.   If  the                                                                    
     Legislature  now chooses  to annul  those long-standing                                                                    
     policies,  it could  generate fundamental  questions of                                                                    
     fairness among  the 84 percent  of Alaskans  that today                                                                    
     live  in  boroughs  that were  formed  under  the  1963                                                                    
     Mandatory  Borough Act.   The  same  issue exists  with                                                                    
     regard  to  residents  of  cities  in  the  unorganized                                                                    
     borough that  were reclassified without  voter approval                                                                    
     by the 1972 Mandatory City Reclassification Act.                                                                           
                                                                                                                                
     Section  3  of  the  bill  is  apparently  intended  to                                                                    
     nullify  the  aggregate  voter  method  of  annexation.                                                                    
     That  method  was  established by  the  LBC  under  its                                                                    
     constitutional   authority  to   "establish  procedures                                                                    
     whereby  boundaries may  be adjusted  by local  action"                                                                    
     (Article X,  Section 12, Constitution  of the  State of                                                                    
     Alaska) and  the Commission's statutory duty  to do so.                                                                    
     It is unclear,  however, whether Section 3  of the bill                                                                    
     actually accomplishes that end.                                                                                            
                                                                                                                                
     The  aggregate  voter  method  of  annexation  provides                                                                    
     local  governments and  resident's additional  tools to                                                                    
     seek  boundary changes.    Some  local governments  and                                                                    
     some local residents prefer that  method to others.  If                                                                    
     that  option  is  eliminated, petitioners  will  likely                                                                    
     rely  on  the  legislative review  method  of  boundary                                                                    
     change, which provides for no local vote.                                                                                  
                                                                                                                                
     Section 4  of the  bill nullifies any  proposal pending                                                                    
     before the LBC that does  not comply with the new terms                                                                    
     of  this bill.    As noted,  I  have questions  whether                                                                    
     Section 3  actually accomplishes what it  is apparently                                                                    
     intended.   Moreover, a  petition for  annexation using                                                                    
     the aggregate voter method  is currently pending before                                                                    
     the LBC.   I question  whether Section 4 runs  afoul of                                                                    
     the  prohibition  in  Article  I,  Section  15  of  our                                                                    
     Constitution that prohibits the  passage of any ex post                                                                    
     facto law.                                                                                                                 
                                                                                                                                
8:56:52 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   NEUMAN  expressed   concern   with  Mr.   Hicks'                                                               
statement that  SSHB 133 doesn't  provide a shadow  of democracy.                                                               
Representative Neuman opined that  this legislation allows people                                                               
being incorporated into areas to speak.                                                                                         
                                                                                                                                
8:57:55 AM                                                                                                                    
                                                                                                                                
ROBERT KALLIO informed the committee that he is a resident of                                                                   
the area on the Elliot Highway proposed to be annexed.  Mr.                                                                     
Kallio provided the following testimony:                                                                                        
                                                                                                                                
     The only issue I wish  to address is the aggregate vote                                                                    
     regulation  of the  Local  Boundary  Commission.   This                                                                    
     hearing  is  not  about borough  organization,  but  is                                                                    
     about  annexation only.    And this  is  the only  real                                                                    
     issue  that I  am concerned  about.   I  would like  to                                                                    
     thank Mr.  Coghill and Mr.  Harris for  having realized                                                                    
     the  unfairness of  the aggregate  vote section  of the                                                                    
     Local   Boundary   Commission   regulation.      Recent                                                                    
     statements  made   by  Mr.   Jim  Whitaker,   Mayor  of                                                                    
     Fairbanks  North Star  Borough, that  he would  use the                                                                    
     aggregate  vote  section  as  the  method  to  annex  a                                                                    
     relatively  low populated  area  in  order to  generate                                                                    
     between  $8-$9 million  in  real  estate taxes,  mainly                                                                    
     from  the  oil,  gas,   and  mining  industries,  while                                                                    
     showing complete disregard for  the actual residents of                                                                    
     this area is truly unfair.   This aggregate vote method                                                                    
     truly represents fraud by  allowing a densely populated                                                                    
     borough to  annex any  low populated  area deemed  as a                                                                    
     target.    A population  of  any  target area  must  be                                                                    
     allowed  to vote  if they  wish to  be annexed  ... and                                                                    
     that vote  must count and must  not only be part  of an                                                                    
     aggregate  vote, which  greatly  out  numbers the  area                                                                    
     residents to  be annexed.   The current  aggregate vote                                                                    
     regulation  of the  Local  Boundary  Commission ...  is                                                                    
     quite  similar  to   pre-war  Germany's  annexation  of                                                                    
     Czechoslovakia  and Poland  ....   We  are supposed  to                                                                    
     have  a government  of the  governed, not  a government                                                                    
     that dictates  to the  governed.   Let those  people in                                                                    
     the area  proposed to be annexed  vote yes or no  to be                                                                    
     annexed  or not.   This  aggregate vote  method is  not                                                                    
     fair, it is not moral, and it is not right.                                                                                
                                                                                                                                
9:00:46 AM                                                                                                                    
                                                                                                                                
DAVE THOMAS  informed the committee  that he, too, lives  in [the                                                               
area on the  Elliot Highway proposed to be annexed].   Mr. Thomas                                                               
related his support  of SSHB 133.  He  recalled earlier testimony                                                               
that this is a complex issue,  but he suggested that such is said                                                               
as a befuddlement.                                                                                                              
                                                                                                                                
9:02:10 AM                                                                                                                    
                                                                                                                                
LARRY MEUNIER suggested  that if Sections 1-2 of SSHB  133 are of                                                               
legal concern,  perhaps they  need to be  reviewed.   Mr. Meunier                                                               
expressed  concern with  the aggregate  vote  [method], which  he                                                               
characterized  as  a  means of  annexation  without  those  being                                                               
annexed  having a  say.   Addressing  the  aggregate vote  method                                                               
doesn't  take  anything away  from  the  LBC's ability  to  alter                                                               
portions of the proposal.                                                                                                       
                                                                                                                                
9:04:41 AM                                                                                                                    
                                                                                                                                
VICKY  PADDOCK informed  the  committee that  she  lives in  Joy,                                                               
Alaska  because it's  the Last  Frontier.   She related  that she                                                               
hauls  her own  water  and cuts  her own  wood  and nature  walks                                                               
through her  yard.   Ms. Paddock emphasized  that she  chose this                                                               
way of life  and lives [in Joy] because she  can't afford to live                                                               
in town.  Furthermore, she said  she enjoys her freedom and peace                                                               
in Joy.   Ms. Paddock opined  that Mayor Whitaker is  "out there"                                                               
for the larger  entities, such as the oil and  gas entities.  She                                                               
recalled that Mayor  Whitaker has said that  the [Fairbanks North                                                               
Star Borough] is  in the black, and therefore  she questioned why                                                               
the  borough  needs  [to  annex]   this  small  community.    She                                                               
predicted that  as soon as  [Joy] is  annexed, the people  in the                                                               
area will lose their homes because  of their inability to pay the                                                               
taxes.   Ms.  Paddock concluded  by urging  the committee  to not                                                               
take away her [ability] to choose [where to live].                                                                              
                                                                                                                                
9:07:24 AM                                                                                                                    
                                                                                                                                
KAREN  SAVERDA  informed  the  committee  that  she,  too,  is  a                                                               
resident  of Joy,  Alaska.   She  related her  own experience  in                                                               
which she was able to make a life  and own property [in Joy] on a                                                               
widow's pension.   The mistakes  that may  have been made  in the                                                               
past by  government with regard  to [consolidation  and taxation]                                                               
should  stop,  she  stated.   Since  the  [Fairbanks  North  Star                                                               
Borough] is  in the black,  she, too, questioned why  the borough                                                               
can't manage  its money and do  without hers.  She  said that she                                                               
didn't  want to  lose the  lifestyle she  has worked  so hard  to                                                               
achieve and that  she enjoys.  Ms. Saverda opined  that she has a                                                               
right to  vote when  someone wants  to [tax]  her property.   She                                                               
urged the  committee to pass  SSHB 133 so  that she can  vote [on                                                               
these annexation matters] and continue her lifestyle in Alaska.                                                                 
                                                                                                                                
9:11:42 AM                                                                                                                    
                                                                                                                                
JOE CARLSON related that he  is probably the largest landowner in                                                               
the [Joy]  area.  Mr.  Carlson echoed the earlier  testimony with                                                               
regard to  the rural lifestyle that  he tries to maintain.   This                                                               
legislation  is trying  to provide  people a  tool, he  surmised.                                                               
However, he said  he didn't want to be part  of large government.                                                               
Mr. Carlson  stated that  [those in  the Joy/Livengood  area] are                                                               
looking for  help because  they feel  they're being  oppressed by                                                               
large [government].  If SSHB  133 can provide protection [against                                                               
large government],  then he said  he's all  for it.   Mr. Carlson                                                               
recalled that in 1989 the  Fairbanks North Star Borough wanted to                                                               
annex  the area,  but somehow  the LBC  said "no."   Mr.  Carlson                                                               
stated  that  he  spends  all  his  money  in  the  borough,  and                                                               
therefore he questioned why it needed more of his money.                                                                        
                                                                                                                                
9:15:17 AM                                                                                                                    
                                                                                                                                
TIM  JOYCE,   Mayor,  City  of  Cordova,   paraphrased  from  the                                                               
following written testimony [original punctuation provided]:                                                                    
                                                                                                                                
     William   Egan  expressed   the   view  that   boroughs                                                                    
     represented a  "better form of  local government."   In                                                                    
     1963, Governor  Egan signed  the Mandatory  Borough Act                                                                    
     into  law.    This  created  8  boroughs,  which  today                                                                    
     encompasses  almost  84%  of  the  state's  population.                                                                    
     These people did not vote  to form a borough, but those                                                                    
     borough  governments have  been  working  fine for  the                                                                    
     past 42 years.                                                                                                             
                                                                                                                                
     A  borough is  an important  if not  essential tool  to                                                                    
     respond  to  the impacts  of  low  levels of  education                                                                    
     funding and  in dealing with continued  cuts in funding                                                                    
     for  local governments,  i.e. revenue  sharing.   It is                                                                    
     also  the most  effective  means  to address  important                                                                    
     regional  planning  and  economic  development  issues.                                                                    
     Borough formation represents good  public policy from a                                                                    
     statewide perspective in several important aspects.                                                                        
          1. It fosters greater compliance with the equal                                                                       
     protection clause of Article 1,  Section 1 of the state                                                                    
     constitution.    Specifically,  it would  increase  the                                                                    
     extent  to which  citizens  of  Alaska have  comparable                                                                    
     obligations to support local services.                                                                                     
          2. Article 10, Section 1 of the state                                                                                 
     constitution   encourages  borough   formation.     The                                                                    
     constitutional  concept  of   municipal  government  in                                                                    
     Alaska   is  predicated   upon  the   presumption  that                                                                    
     organized  boroughs  will   exist  wherever  areas  are                                                                    
     capable of supporting them.                                                                                                
          3. Creation of boroughs would dramatically ease                                                                       
     the  financial  burdens on  the  state.   For  example,                                                                    
     education  costs for  the state  would decline  because                                                                    
     local   contributions   required  of   borough   school                                                                    
     districts would increase.                                                                                                  
                                                                                                                                
     In 1988,  the city  of Valdez  organized a  PWS [Prince                                                                    
     William Sound]  Borough Feasibility  Study Group.   The                                                                    
     group  hired Darbyshire  &  Associates  to conduct  the                                                                    
     study,  which was  completed  in April  of  1988.   The                                                                    
     conclusions  reached  by  the study  indicated  that  a                                                                    
     basic  borough exercising  only mandatory  powers is  a                                                                    
     very viable proposition for residents of the area.                                                                         
                                                                                                                                
     Another  study  was  conducted   for  PWS  by  Northern                                                                    
     Economics, ResourcEcon  and Darbyshire &  Associates in                                                                    
     1997, which concluded  that the people of  PWS would be                                                                    
     better  served  by leaders  who  are  proactive in  the                                                                    
     matter  of borough  formation  rather  than waiting  to                                                                    
     react  to  other  borough annexation  requests  or  the                                                                    
     state legislature. yy                                                                                                      
                                                                                                                                
     Requiring  a vote  on every  borough  formation can  be                                                                    
     likened to  an annexation  into a  city.   Those people                                                                    
     that are outside  the city limits reap  the benefits of                                                                    
     schools, libraries,  roads and more, yet  pay little or                                                                    
     nothing  in  taxes to  support  those  services.   They                                                                    
     resist  annexation  to  avoid paying  those  taxes  and                                                                    
     would certainly vote against it.   In 1992, the City of                                                                    
     Cordova  passed   a  resolution  requesting   to  annex                                                                    
     population developments  near the  old city.   In 1993,                                                                    
     the Local  Boundary Commission approved  the annexation                                                                    
     and  passed  that  recommendation along  to  the  state                                                                    
     legislature, which  approved it by  legislative review.                                                                    
     No vote was cast in this annexation.                                                                                       
                                                                                                                                
     The same  issues arise with borough  formation, but can                                                                    
     be taken  one step  further.   When local  officials in                                                                    
     some areas are strongly  opposed to being included with                                                                    
     other  communities in  regional  boroughs, their  views                                                                    
     are likely shared by many of  the voters in the area as                                                                    
     well.   Thus, voters  in parochial or  special interest                                                                    
     areas  would  most  times dictate  the  outcome  of  an                                                                    
     election, in  effect preventing any  borough formation.                                                                    
     Passage  of  HB 133  will  prevent  any future  borough                                                                    
     formation except in special  interest areas, which will                                                                    
     insure that  only small special interest  boroughs will                                                                    
     ever  form in  the  future, which  is  contrary to  the                                                                    
     ideas of the framers of the state constitution.                                                                            
                                                                                                                                
9:19:45 AM                                                                                                                    
                                                                                                                                
ALAN  LEMASTER recalled  reading that  there is  consideration in                                                               
Juneau to provide some incentive  for areas to form boroughs with                                                               
$5 million in seed money and  half of the state lands being given                                                               
to the  boroughs.   He asked  if the committee  has heard  of the                                                               
aforementioned and whether it's going anywhere.                                                                                 
                                                                                                                                
CO-CHAIR THOMAS answered  that Mr. LeMaster was  referring to the                                                               
LBC's [suggestion]  for an incentive  to encourage  the formation                                                               
of boroughs, but noted that nothing has happened.                                                                               
                                                                                                                                
MR. LEMASTER opined  that in the event SSHB 133  passed, it would                                                               
be  years, possibly  even decades,  before areas  such as  Copper                                                               
Valley would become boroughs.   Mr. LeMaster announced that he is                                                               
opposed to  [his area] becoming  a borough.   He opined  that the                                                               
only option  [for the Copper  Valley], if  it doesn't want  to be                                                               
annexed into another  borough, is to create its own  borough.  He                                                               
said  that putting  [annexation] to  a  vote will  result in  the                                                               
[annexation]  being  voted down,  which  is  an advantage.    Mr.                                                               
LeMaster said  that he disagrees  with the provision  whereby the                                                               
LBC would be restricted from  providing any assistance in the way                                                               
of   review  or   change   in  a   proposal.     Therefore,   the                                                               
aforementioned portion  of the legislation has  to be eliminated,                                                               
he said.  The LBC, the experts  on these matters, must be kept in                                                               
the loop.   He indicated that those living in  Copper Valley live                                                               
in  the  area  for  the  same  reasons  as  those  in  Joy.    In                                                               
conclusion,  Mr. LeMaster  encouraged the  committee to  not pass                                                               
SSHB 133, but  to draft legislation that would work  and not have                                                               
constitutional challenges.                                                                                                      
                                                                                                                                
9:24:58 AM                                                                                                                    
                                                                                                                                
VICTOR  FISCHER   spoke  as  a   member  of   the  Constitutional                                                               
Convention and  the Alaska Territorial Legislature.   Mr. Fischer                                                               
paraphrased  from  the   following  written  testimony  [original                                                               
punctuation provided]:                                                                                                          
                                                                                                                                
     Mr.  Chairman,  as  you probably  know,  I  have  spent                                                                    
     almost  55  years  on issues  of  local  government  in                                                                    
     Alaska.   And  I  was a  member  of the  Constitutional                                                                    
     Convention;  I   was  a  member  of   the  last  Alaska                                                                    
     Territorial Legislature;  back in the 80s,  I served in                                                                    
     the Alaska State Senate.                                                                                                   
                                                                                                                                
     I   have   continued   to  be   concerned   about   the                                                                    
     Constitution, about the  implementation, in particular,                                                                    
     of the local  government article.  I think,  of all the                                                                    
     parts   of  the   Constitution  that   have  not   been                                                                    
     adequately  dealt  with,  it is  the  local  government                                                                    
     article.  I  might say that HB 133 would  be a big step                                                                    
     backward from  where we  are today -  and today  we are                                                                    
     not where we should be.                                                                                                    
                                                                                                                                
     I  don't  want  to   address  the  specific  issues  of                                                                    
     annexation right now, I would  be glad to get into that                                                                    
     some other time.                                                                                                           
                                                                                                                                
     One  of  the  key  elements  of  the  local  government                                                                    
     article of the Constitution was  the division of all of                                                                    
     Alaska   into  separate   boroughs   -  organized   and                                                                    
     unorganized.                                                                                                               
                                                                                                                                
     Through  early actions  and inactions  after statehood,                                                                    
     we have ended  up with a series  of organized boroughs.                                                                    
     Reference   has   been   made  to   those   that   were                                                                    
     incorporated  by  legislative  action.   We've  had  an                                                                    
     equal  number  of  boroughs that  were  established  as                                                                    
     organized  by  local  action -  by  desire  of  regions                                                                    
     throughout  Alaska to  become  organized.   There  were                                                                    
     various reasons for ....                                                                                                   
                                                                                                                                
     We  have very  effectively  functioning  boroughs.   We                                                                    
     have a  whole series  of home-rule  boroughs exercising                                                                    
     the  ultimate authorities  of self-government.   And  I                                                                    
     would say that if you did  put borough status to a vote                                                                    
     in all of these, I have  a hunch that all of them would                                                                    
     vote to  keep the borough status  rather than reverting                                                                    
     to  the amorphous  unorganized borough  that really  is                                                                    
     not a creature of self-government whatsoever.                                                                              
                                                                                                                                
     The  initial concept  was, again,  that all  of Alaska,                                                                    
     including  unorganized areas,  would be  established as                                                                    
     boroughs.   Many  would  remain  unorganized, but  they                                                                    
     would  allow  the  people  in  the  particular  area  a                                                                    
     measure   of  self-governance,   of  participation   in                                                                    
     planning for  their particular  region in  the delivery                                                                    
     of coordinated  delivery of State  services and  so on.                                                                    
     We can discuss this for hours - so I will not do it.                                                                       
                                                                                                                                
     I mainly want  to emphasize that the time  right now is                                                                    
     to help  make the  local government system  work rather                                                                    
     than undermine  it.   And I think  that SSHB  133 would                                                                    
     undermine the existing effort to  make something out of                                                                    
     the local government system of Alaska.                                                                                     
                                                                                                                                
     The   Local   Boundary   Commission   was   established                                                                    
     specifically   for   the   purpose   of   rationalizing                                                                    
     boundaries  in Alaska.   It  was  established with  the                                                                    
     realization that  it takes a  State level body  to look                                                                    
     at  Alaska, to  look at  issues more  than local  self-                                                                    
     interest  -  and  look  at  boundary  issues  from  the                                                                    
     standpoint of what  is best for all of the  people of a                                                                    
     region;  what is  in the  interest of  the State.   And                                                                    
     therefore,  limiting the  jurisdiction and  the ability                                                                    
     of the Boundary  Commission to be effective  would be a                                                                    
     very, very negative step -  a horrendous step backward.                                                                    
     And as Hicks said in  the beginning - my first reaction                                                                    
     was exactly the same language  - that the provisions in                                                                    
     Sections 1  and 2 are patently  unconstitutional.  They                                                                    
     go   against  every   intent   of  the   Constitutional                                                                    
     Convention;  they  go  against   the  language  of  the                                                                    
     Constitution, and against all  the court decisions that                                                                    
     have  been  rendered  regarding the  authority  of  the                                                                    
     Local Boundary Commission in  making changes and making                                                                    
     proposals to the legislature.                                                                                              
                                                                                                                                
     I hope that  you will not act on House  Bill 133, and I                                                                    
     truly hope  that you will  devote some real  solid time                                                                    
     to looking  at all of  Alaska -  to looking at  it from                                                                    
     the  standpoint  of  the basic  responsibility  of  the                                                                    
     Community and  Regional Affairs Committee to  help make                                                                    
     the system work rather than undermining the system.                                                                        
                                                                                                                                
      And if I can be of any help whatsoever, I am at your                                                                      
     disposal.                                                                                                                  
                                                                                                                                
9:32:00 AM                                                                                                                    
                                                                                                                                
VIOLA  JERREL, Ph.D,  disagreed with  Mr. Bockhorst's  testimony.                                                               
The  current and  previous  LBC, she  opined,  have dictated  and                                                               
exceeded  its authority  under the  Alaska and  US constitutions.                                                               
She discussed the need for due  process of law.  She charged that                                                               
those in Homer were robbed of  the right to vote [during the last                                                               
annexation]  and   that  annexation   is  still   being  opposed.                                                               
Alaskans Opposed  to Annexation, a  group which she  helped form,                                                               
hired Attorney  Robert C. Erwin,  who is a former  Alaska Supreme                                                               
Court justice.   Mr. Erwin  issued a legal opinion  regarding the                                                               
right to  vote under  statute.   She turned  attention to  AS 29,                                                               
which refers to  the requirement of annexation to  be approved by                                                               
a majority of  the voters [in a vote] cast  by voters residing in                                                               
the area  proposed to be annexed.   She charged that  the City of                                                               
Homer annexation was illegal.   Dr. Jerrel related her opposition                                                               
to the  LBC regulations regarding  the aggregate vote  method and                                                               
the approval of  the majority of the voters in  the annexing area                                                               
when annexing an uninhabited territory.   Dr. Jerrel reviewed her                                                               
extensive  education.    She  went  on  to  emphasize  that  this                                                               
annexation  process  is  all  wrong  and the  LBC  has  too  much                                                               
authority.  Dr. Jerrel recalled  a November hearing in Homer when                                                               
audio was  so bad  and people  weren't being  heard.   She opined                                                               
that  the LBC  doesn't  listen to  the people,  but  only to  Mr.                                                               
Bockhorst.   She  suggested that  when considering  SSHB 133,  it                                                               
would help  to consider  3 AAC  110.010 and 3  AAC 110.990.   Dr.                                                               
Jerrel  related  her  belief  that  the  [LBC's]  conditions  for                                                               
annexation aren't  legal.  She  then highlighted  the limitations                                                               
of advocacy,  which she said discourages  people from responding.                                                               
Dr. Jerrel  related how the  LBC has misinformed the  public with                                                               
regard to taking testimony.   In response to Co-Chair Thomas, Dr.                                                               
Jerrel agreed  to fax any  information she  had on this  topic to                                                               
the   committee.     Dr.  Jerrel   then  mentioned   16  American                                                               
Jurisprudence  2d, [section]  256, which  generally provides  all                                                               
information on constitutional rights.                                                                                           
                                                                                                                                
9:41:14 AM                                                                                                                    
                                                                                                                                
CRAIG   FLEENER,  Council   of  Athabascan   Tribal  Governments,                                                               
informed  the committee  that the  Council  of Athabascan  Tribal                                                               
Governments is a consortium of the  10 tribes in the Yukon Flats.                                                               
He said  that he would  discuss his concerns with  annexation and                                                               
what it means  for those in the Yukon Flats.   Mr. Fleener stated                                                               
that since Mayor Whitaker expressed  interest in annexing land in                                                               
the Yukon  Flats up  to the  south bank of  the Yukon  River, the                                                               
people  in the  area  have  been living  in  fear.   Mr.  Fleener                                                               
related that  no one in  the Yukon Flats supports  being annexed.                                                               
He  likened   the  proposed   [Fairbanks]  annexation   to  being                                                               
colonized  by  rich  neighbors  who see  potential  oil  and  gas                                                               
development.   The [rich neighbors]  want to seize that  [oil and                                                               
gas]  wealth  from the  Yukon  Flats  and  provide little  or  no                                                               
services.    Although the  proposed  annexation  would leave  the                                                               
majority of the  Yukon Flats' communities out  of the annexation,                                                               
[the people in the  area] own a lot of land on  the south bank of                                                               
the  Yukon   River.     He  opined  that   if  the   current  LBC                                                               
[regulations]  are left  as they  are, there  will be  annexation                                                               
without representation.                                                                                                         
                                                                                                                                
MR. FLEENER  turned to the  intent of  the framers of  the Alaska                                                               
Sate Constitution.   He related  his belief that the  framers had                                                               
the notion  that many  Alaskans would be  wealthy with  things to                                                               
export from all  over Alaska.  However, that isn't  the case.  In                                                               
fact, the Yukon Flats area has  the second lowest income level in                                                               
the state,  and therefore the  area wouldn't  be able to  pay the                                                               
taxes required [were  the area to be annexed].   Furthermore, the                                                               
Yukon Flats is  not an exporter of goods.   Mr. Fleener said that                                                               
he  didn't believe  the  notion that  all  [areas] should  become                                                               
boroughs is  a good model.   He stated  that the Fort  Yukon area                                                               
doesn't  have the  revenue to  support its  own borough  or being                                                               
included in  the expansion  of another  borough.   In conclusion,                                                               
Mr.  Fleener  opined  that  those   in  an  area  of  a  proposed                                                               
annexation need to have say on any such proposal.                                                                               
                                                                                                                                
9:45:22 AM                                                                                                                    
                                                                                                                                
MR.  FLEENER, in  response  to  Representative Salmon,  explained                                                               
that  the area  within  which the  Council  of Athabascan  Tribal                                                               
Governments  works is  about 55,000  square miles,  including the                                                               
Venetie Reservation.   Around  the [55,000  square miles]  is the                                                               
Yukon  Flats National  Wildlife  Refuge,  Yukon Charlie  National                                                               
Park and Preserve,  and some Bureau of Land Management  land.  He                                                               
noted that there are no roads leading into the Yukon Flats.                                                                     
                                                                                                                                
9:46:57 AM                                                                                                                    
                                                                                                                                
FREDRICK SHEEN,  President, Delta  Junction Chamber  of Commerce,                                                               
announced  that he  is in  favor of  SSHB 133.   He  informed the                                                               
committee  that  he  is  a  commissioner  of  a  borough  charter                                                               
commission in  Delta Junction that  has just completed  a charter                                                               
and is just  moving toward a petition.  At  this point, there are                                                               
no legal  grounds to stop  an annexation  of the Pogo  gold mine,                                                               
which is a  key component of the charter.   Mr. Sheen related his                                                               
belief that the LBC  has too much power and a  vote of the people                                                               
is necessary.                                                                                                                   
                                                                                                                                
9:48:23 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  NEUMAN surmised  that Mr.  Sheen is  in favor  of                                                               
SSHB 133  because he feels  that the  area's ability to  grow its                                                               
own local government would be imposed upon.                                                                                     
                                                                                                                                
MR. FREDRICK agreed.                                                                                                            
                                                                                                                                
9:49:07 AM                                                                                                                    
                                                                                                                                
DICK SHULTZ, former  Senator, remarked that the  system is broken                                                               
and needs to be fixed.   He related his belief that Mr. Bockhorst                                                               
is  part of  the problem.   Mr.  Shultz recalled  discussions and                                                               
notes with some  of the survivors of  the constitutional framers,                                                               
specifically Jack  Coghill, which  significantly differ  from Mr.                                                               
Fisher's interpretation.   Mr. Shultz disagreed  with the earlier                                                               
testimony that  [SSHB 133] is  unconstitutional.   In conclusion,                                                               
Mr. Shultz emphasized that SSHB 133 should move forward.                                                                        
                                                                                                                                
9:52:34 AM                                                                                                                    
                                                                                                                                
MR. SHULTZ,  in response to  Representative Neuman,  informed the                                                               
committee that he served in  the legislature from 1982-1992.  Mr.                                                               
Shultz opined that  there are some good things  happening in this                                                               
legislature, in  particular reviewing allowing  unorganized areas                                                               
to remain unorganized  if they so choose.  He  related his belief                                                               
that the  constitution clearly specifies  the right for  areas to                                                               
remain  unorganized.   Mr.  Shultz  turned  attention to  Senator                                                               
Bunde's  head   tax  legislation,   and  opined  that   those  in                                                               
unorganized boroughs would prefer to  pay their fair share rather                                                               
than be included in an additional layer of government.                                                                          
                                                                                                                                
9:54:22 AM                                                                                                                    
                                                                                                                                
MR.  FISHER clarified  the he  didn't say  or imply  that all  of                                                               
Alaska  should  become organized  boroughs.    He said  that  the                                                               
constitution, the  record, and  his statements  have been  to the                                                               
effect that  Alaska is to be  divided in levels of  organized and                                                               
unorganized boroughs with maximum local participation.                                                                          
                                                                                                                                
9:55:59 AM                                                                                                                    
                                                                                                                                
CO-CHAIR THOMAS closed public testimony and held SSHB 133.                                                                      
                                                                                                                                
HB 121-SERVICE AREAS IN SECOND CLASS BOROUGHS                                                                                 
                                                                                                                                
9:56:16 AM                                                                                                                    
                                                                                                                                
CO-CHAIR THOMAS announced that the  final order of business would                                                               
be  HOUSE BILL  NO. 121,  "An  Act relating  to consolidating  or                                                               
abolishing certain service areas in second class boroughs."                                                                     
                                                                                                                                
9:56:41 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  OLSON  moved  to  report CSHB  121,  Version  24-                                                               
LS0396\Y, out  of committee with individual  recommendations [and                                                               
the accompanying fiscal  notes].  There being  no objection, CSHB
121(CRA)  was  reported from  the  House  Community and  Regional                                                               
Affairs Standing Committee.                                                                                                     
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no  further business before the  committee, the House                                                               
Community  and Regional  Affairs Standing  Committee meeting  was                                                               
adjourned at 9:57:05 AM.                                                                                                      
                                                                                                                                
                                                                                                                                

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