Legislature(1999 - 2000)
04/12/1999 01:50 PM FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= 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 area. * 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 city". 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 bill. 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 possibility. 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 OBJECTED. 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 program. Representative Foster MOVED to report CS HB 161 (FIN) out of Committee with individual recommendations and the accompanying fiscal note. Representative J. Davies OBJECTED. 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.