Legislature(1999 - 2000)

04/12/1999 01:50 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
HOUSE BILL NO. 133                                                                                                              
"An Act relating to municipal service areas and                                                                                 
providing for voter approval of the formation,                                                                                  
alteration, or abolishment of certain service areas;                                                                            
and providing for an effective date."                                                                                           
VICE CHAIR CON BUNDE explained that HB 133 would amend AS                                                                       
29.35.450 to support local control by clearly identifying                                                                       
who should vote on the abolishment and alternation of a                                                                         
service area under three scenarios:                                                                                             
 * Abolishment of a service area.                                                                                               
Subject to approval by the majority of the voters                                                                               
residing in that service area.                                                                                                  
* Abolishment and replacement of a service area.                                                                                
Must be approved separately by a majority of                                                                                    
voters inside an existing service area and by a                                                                                 
majority of voters residing in the proposed                                                                                     
service area but outside the existing service                                                                                   
* Alteration of a service area or combining it with                                                                             
another service area.                                                                                                           
Must be approved, separately by a majority of                                                                                   
voters who vote on the question and who reside in                                                                               
each of the service areas or in a proposed service                                                                              
area affected by the proposal.                                                                                                  
Representative Bunde concluded that the legislation would                                                                       
settle a long time debate about who is entitled to vote                                                                         
during the creation, alteration or abolishment of a service                                                                     
area.  He urged the Committee's favorable support.                                                                              
Representative Grussendorf asked, if there was an area                                                                          
where people did not want the service to be provided, would                                                                     
the State then be placed in an "obligated" situation.  Co-                                                                      
Chair Therriault noted that in Fairbanks, a school bus will                                                                     
not travel on a road which is not being maintained.                                                                             
Representative Bunde added, subdivision roads are not                                                                           
thoroughfares and there would be no obligation for the                                                                          
State to maintain these services.                                                                                               
Representative J. Davies recalled that there is a provision                                                                     
in the Alaska State Constitution, Title 29 which addresses                                                                      
the formation of service areas.  He recommended that the                                                                        
Committee revisit the logic of that constitutional                                                                              
provision.  He questioned if the proposed legislation would                                                                     
be inconsistent with that provision because it provides for                                                                     
people living in an existing service area to prohibit the                                                                       
annexation of another area by voting "no".  In the past,                                                                        
the State has allowed city assemblies to decide if and when                                                                     
annexation should go forward.                                                                                                   
Co-Chair Mulder read to the Committee, Article 10, Section                                                                      
5 of the Alaska State Constitution:                                                                                             
"A new service area shall not be established if                                                                                 
consistent with the purposes of this article, the new                                                                           
service area could be provided by an existing service                                                                           
area by incorporation as a city or annexation of a                                                                              
PATTI SWENSON, STAFF, REPRESENTATIVE CON BUNDE, emphasized                                                                      
that the bill is about "abolishment and alteration" and not                                                                     
new services. She added that there are over 200 service                                                                         
areas in Alaska and that 120 of them are in the Fairbanks                                                                       
area.  The legislation would allow people to vote to                                                                            
abolish, replace or alter a service area, giving themselves                                                                     
differential tax rates.                                                                                                         
Representative J. Davies agreed that the issue of                                                                               
differential maintenance has been a problem, however, the                                                                       
language of the bill would allow the formation of new                                                                           
service areas.  Currently, the assemblies do have the power                                                                     
to make that decision and the people do have the ability to                                                                     
comment on it through their assembly members.                                                                                   
CHRIS BIRCH, (TESTIFIED VIA TELECONFERENCE), ANCHORAGE,                                                                         
spoke in support of HB 133.  He noted that service areas                                                                        
involve a lot of time and energy but they are government                                                                        
working at a "grass roots" level.  He urged support of the                                                                      
BROOKS CHANDLER, (TESTIFIED VIA TELECONFERENCE), GIRDWOOD,                                                                      
testified in support of the legislation.  He noted that his                                                                     
service area encompassed road, parks, recreation and fire                                                                       
protection areas.  He viewed the proposed legislation as                                                                        
implementing an unenforceable compact made at the time of                                                                       
unification to provide a level of service and control from                                                                      
property tax dollars.  Mr. Chandler commented that Girdwood                                                                     
would appreciate the bill be adopted in order to provide                                                                        
for the protection of services.                                                                                                 
JIM NORCROSS, (TESTIFIED VIA TELECONFERENCE), MAT-SU,                                                                           
voiced his support of the legislation.  He commented that                                                                       
the individual road service area residents are better                                                                           
capable to determine what is needed to maintain their                                                                           
roads.  He feared that if a local borough decided that                                                                          
there was an emergency, they could spend road service funds                                                                     
without approval.  Mr. Norcross urged the Committee's                                                                           
support of the legislation.                                                                                                     
In response to Representative Austerman's query,                                                                                
Representative Bunde replied that in previous committee                                                                         
hearings, only one person had testified against the                                                                             
proposed legislation.                                                                                                           
HANK HOVE, (TESTIFIED VIA TELECONFERENCE), MAYOR,                                                                               
FAIRBANKS, testified in support of the legislation.  He                                                                         
stated that if passed, the bill would allow the City of                                                                         
Fairbanks to consolidate some of their road service areas.                                                                      
It has become inefficient and difficult to manage road                                                                          
service areas and costs are higher than they might be under                                                                     
the service proposed in the legislation.  He pointed out                                                                        
that the legislation would offer an opportunity to                                                                              
consolidate service areas, which has not occurred in the                                                                        
past because the conditions of roads in the various service                                                                     
areas were not comparable.                                                                                                      
Mayor Hove noted that under the terms of the proposed                                                                           
legislation, a taxation scheme would be established for the                                                                     
purpose of supporting roads.  He agreed that the bill was                                                                       
sufficient, as it is at this time, however, legal counsel                                                                       
has advised that an additional change to AS 29.60.080 would                                                                     
be advantageous adding "or a service area".  He urged                                                                           
passage of the bill.                                                                                                            
Representative J. Davies agreed with the inclusion of                                                                           
Section 4, although, asked if the addition of Section 3                                                                         
would impede consolidation if a service area voted no                                                                           
approval.  Mayor Hove replied that the "hope" was that                                                                          
language could create a circumstance in which approval                                                                          
would be more readily granted.  Representative J. Davies                                                                        
acknowledged the "hope", but argued if that could act as a                                                                      
possible impediment.  Mayor Hove agreed that was a                                                                              
Representative J. Davies questioned if adopting Section 4                                                                       
and excluding Section 3 would accomplish the concerns.                                                                          
Mayor Hove commented that Section 3 was part of the                                                                             
original SB 208 presented last session.                                                                                         
Representative J. Davies MOVED to AMEND the bill                                                                                
conceptually by removing Section 3.  Representative Bunde                                                                       
Representative J. Davies asserted that most concerns were                                                                       
addressed in Section 4 of the bill.  Section 3 speaks to a                                                                      
situation that has only occurred a couple of times in the                                                                       
State. Representative J. Davies additionally suggested that                                                                     
Section 3 was unconstitutional within the existing statute.                                                                     
Representative Bunde understood why Representative J.                                                                           
Davies would want to retain the section which addresses the                                                                     
needs in Fairbanks, however, Representative Bunde believed                                                                      
that would be inconsistent with passage of the bill.  He                                                                        
noted that it would be "good government" to not allow a                                                                         
larger area to dominate a smaller area.                                                                                         
A roll call vote was taken on the motion to amend.                                                                              
IN FAVOR:  Grussendorf, J. Davies, Mulder                                                                                       
OPPOSED: G. Davis, Foster, Kohring, Williams,                                                                                   
Austerman, Bunde, Therriault                                                                                                    
Representative Moses was not present for the vote.                                                                              
The MOTION FAILED (3-7).                                                                                                        
Representative Foster MOVED to report CS HB 133 (FIN) out of                                                                    
Committee with individual recommendations and with the                                                                          
accompanying fiscal note. There being NO OBJECTION, it was                                                                      
so ordered.                                                                                                                     
CS HB 133 (FIN) was reported out of Committee with a "do                                                                        
pass" recommendation and with a zero fiscal note by the                                                                         
Department of Community and Regional Affairs dated 3/31/99.                                                                     
HOUSE BILL NO. 161                                                                                                              
"An Act relating to reduction in payments to                                                                                    
individuals under certain benefit programs; and                                                                                 
providing for an effective date."                                                                                               
Co-Chair Therriault restated that HB 161 would allow program                                                                    
administrators to reduce payments in benefit programs to                                                                        
match the appropriate level of funding.  It would allow the                                                                     
Legislature and Administration to deal with reductions in                                                                       
revenue and increases to recipients in a simple and                                                                             
practical manner.                                                                                                               
He explained that current circumstances require that                                                                            
payments be made at a prescribed level without reference to                                                                     
appropriation.  If the enrollment exceeds affordable levels,                                                                    
managers would be allowed to manage within the appropriated                                                                     
resources.  Currently, the only option is to request a                                                                          
supplemental appropriation or shut a program down in the                                                                        
later months of the fiscal year.                                                                                                
HB 161 would provide a reasonable budgetary tool to the                                                                         
Administration and Legislature.  Co-Chair Therriault                                                                            
believed that the legislation would help deal with the                                                                          
State's fiscal realities.                                                                                                       
(Tape Change HFC 99 - 77, Side 1).                                                                                              
Representative Grussendorf pointed out that in some                                                                             
programs, the departments must make a projection.  He asked                                                                     
how supplemental requests would be addressed in these                                                                           
situations.  Co-Chair Therriault replied those                                                                                  
determinations would be made individually in each following                                                                     
year by the full Legislature.                                                                                                   
Representative Grussendorf questioned how Power Cost                                                                            
Equalization (PCE) would be affected by the bill.  Co-Chair                                                                     
Therriault replied that because it currently has statutory                                                                      
pro rata language, this bill would not impact it.                                                                               
Co-Chair Mulder reiterated that the decision to seek a                                                                          
supplemental was driven by the adoption terms of each                                                                           
department's budget.  He stated for the record that it was                                                                      
not the Committee's intention to short-fund budgets for the                                                                     
coming year.  Representative Grussendorf voiced concern for                                                                     
those departments that have to make cost projections.  Co-                                                                      
Chair Therriault agreed that in many programs, that would be                                                                    
a guess.  He pointed out that in the Department of Health                                                                       
and Social Services budget, he would follow it throughout                                                                       
the year making sure when federal help is available, they                                                                       
apply.  He emphasized that dialogue should be continued with                                                                    
the departments throughout the interim.                                                                                         
Representative J. Davies inquired which programs would be                                                                       
scrutinized with passage of the legislation.  Co-Chair                                                                          
Therriault explained that the legislation would be used as a                                                                    
"tool" for the current fiscal year.  He acknowledged the he                                                                     
personally did not intent for it to apply to any specific                                                                       
Representative Foster MOVED to report CS HB 161 (FIN) out of                                                                    
Committee with individual recommendations and the                                                                               
accompanying fiscal note.  Representative J. Davies                                                                             
Representative J. Davies commented that in most of the cases                                                                    
where these issues exist, they are addressed on an on-going                                                                     
basis.  He foresaw possible "mis-use" with the legislation.                                                                     
Representative J. Davies noted that if it was the                                                                               
Committee's intent to "under-fund" a department, that should                                                                    
be indicated in the appropriation, rather than leaving out a                                                                    
fiscal note and expect that department to "get" the message.                                                                    
He reiterated that underfunding should be done up front so                                                                      
that it is fair.  He reiterated that the bill's language                                                                        
provides for misunderstanding and punishment.                                                                                   
Co-Chair Mulder disagreed, suggesting that if this tool is                                                                      
utilized, information would be stipulated up front.                                                                             
Whereas, the only alternative now with these programs is to                                                                     
cut off assistance.  He suggested that the bill would allow                                                                     
short funding evenly throughout the calendar year.  The                                                                         
departments will need to receive clear guidance regarding                                                                       
the intent.                                                                                                                     
Representative J. Davies requested that a conceptual                                                                            
amendment be submitted which would address that concern.                                                                        
The language could state that the Legislature, in cases                                                                         
where there is intent to reduce an appropriation on a pro                                                                       
rata basis, it should be submitted in writing.                                                                                  
Co-Chair Therriault pointed out that there was a MOTION                                                                         
before the Committee to move the bill.  Representative J.                                                                       
Davies stated that his MOTION would AMEND that MOTION.                                                                          
Representative Foster WITHDREW the MOTION to MOVE the bill.                                                                     
Representative J. Davies MOVED that a conceptual amendment                                                                      
be written which would provide for the Legislature to                                                                           
clearly indicate intent to reduce the appropriation on a pro                                                                    
rata basis.  Co-Chair Therriault OBJECTED to the amendment                                                                      
at this time, remarking that he might be persuaded                                                                              
differently once the language of the amendment was drafted.                                                                     
Representative J. Davies WITHDREW his MOTION to adopt the                                                                       
conceptual amendment.                                                                                                           
Representative Foster MOVED to report CS HB 161 (FIN) out of                                                                    
Committee with individual recommendations and the                                                                               
accompanying fiscal note.  There being NO further OBJECTION,                                                                    
it was so ordered.                                                                                                              
CS HB 161 (FIN) was reported out of Committee with "no                                                                          
recommendation" and with a zero fiscal note by the Office of                                                                    
the Governor.                                                                                                                   

Document Name Date/Time Subjects