Legislature(2001 - 2002)

02/26/2001 02:05 PM House FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                  HOUSE FINANCE COMMITTEE                                                                                       
                     February 26, 2001                                                                                          
                         2:05 P.M.                                                                                              
                                                                                                                                
TAPE HFC 01 - 33, Side A                                                                                                        
TAPE HFC 01 - 33, Side B                                                                                                        
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Williams called the House  Finance Committee meeting                                                                   
to order at 2:05 PM.                                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Bill Williams, Co-Chair                                                                                          
Representative Con Bunde, Vice-Chair                                                                                            
Representative Eric Croft                                                                                                       
Representative John Davies                                                                                                      
Representative Carl Moses                                                                                                       
Representative Richard Foster                                                                                                   
Representative John Harris                                                                                                      
Representative Bill Hudson                                                                                                      
Representative Ken Lancaster                                                                                                    
Representative Jim Whitaker                                                                                                     
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Eldon Mulder                                                                                                     
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Ken Taylor,  Director, Division  of Habitat and  Restoration,                                                                   
Department  of  Fish  and  Game;  Rod  Arno,  Alaska  Outdoor                                                                   
Council, Palmer;  Jeff Bush, Deputy Commissioner,  Department                                                                   
of  Community  and  Economic  Development;  Marjorie  Vandor,                                                                   
Assistant  Attorney  General, Governmental  Affairs  Section,                                                                   
Department of  Law; Kevin  Ritchie, Alaska Municipal  League,                                                                   
Alaska Council  of Mayors,  Juneau; Patricia Swenson,  Staff,                                                                   
Representative Con Bunde.                                                                                                       
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Ocie  Adams,   Road  Service  #17,  Matsu;   Dale  Bondurant,                                                                   
Soldotna                                                                                                                        
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 13     An Act relating to municipal service areas and                                                                        
          providing for voter approval of the formation,                                                                        
          alteration, or abolishment of certain service                                                                         
          areas.                                                                                                                
                                                                                                                                
          CS HB 13 (JUD) was reported out of Committee with                                                                     
          a "do pass" recommendation and with a fiscal note                                                                     
          by the Department of Community & Economic                                                                             
          Development dated 1/31/01.                                                                                            
                                                                                                                                
HB 61     An Act authorizing the commissioner of fish and                                                                       
          game to award grants for habitat restoration or                                                                       
          enhancement projects; and providing for an                                                                            
          effective date.                                                                                                       
                                                                                                                                
          HB 61 was reported out of Committee with a "do                                                                        
          pass" recommendation and with a fiscal note by the                                                                    
          Department of Fish & Game dated 1/16/01.                                                                              
                                                                                                                                
HB#61                                                                                                                           
HOUSE BILL NO. 61                                                                                                             
                                                                                                                                
     An Act authorizing the commissioner of fish and game to                                                                    
     award grants for habitat restoration or enhancement                                                                        
     projects; and providing for an effective date.                                                                             
                                                                                                                                
KEN TAYLOR,  DIRECTOR, DIVISION  OF HABITAT AND  RESTORATION,                                                                   
DEPARTMENT  OF FISH AND  GAME, advised  that the  legislation                                                                   
would authorize  the Commissioner  of the Department  of Fish                                                                   
and Game to award grants for habitat  restoration activities.                                                                   
                                                                                                                                
Mr. Taylor noted that under the  bill, the Commissioner would                                                                   
have express  authority to directly  award grants  to restore                                                                   
and improve  fish and wildlife  habitats in Alaska.   Current                                                                   
law  necessitates the  Department  to channel  money  through                                                                   
other  agencies, which  causes delays  and adds  considerable                                                                   
administrative costs.                                                                                                           
                                                                                                                                
Mr.  Taylor  stated  that an  increasing  amount  of  federal                                                                   
funding  is available  to restore fish  habitat and  passage.                                                                   
There are  many opportunities  to use the funds  particularly                                                                   
in  the more  developed  areas of  the State.    Many of  the                                                                   
opportunities are  found on private land on  some of Alaska's                                                                   
most productive fish streams such  as the Kenai River.  Since                                                                   
the inception of the Kenai River  50/50 Cost Share project in                                                                   
1995,   the  Department   has   approved   160  projects   to                                                                   
rehabilitate  some 9,600  feet  of riverbank  and to  protect                                                                   
more than  15,700 feet of  the Kenai  River.  But  more money                                                                   
could have  been directly targeted  to those projects  if the                                                                   
U.S.  Fish  and Wildlife  Service  were  not paid  their  11%                                                                   
administrative  fee  cost for  channeling  the  funds to  the                                                                   
State.   Direct  grant  authority  for the  Department  could                                                                   
eliminate the need to use the federal agency.                                                                                   
                                                                                                                                
Mr.  Taylor  emphasized  that  the legislation  was  a  cost-                                                                   
effective way to continue efforts  on private and public land                                                                   
to rehabilitate,  improve  and protect  the State's  valuable                                                                   
fish and wildlife habitats.                                                                                                     
                                                                                                                                
Representative  Harris  asked  if  the wording  used  in  the                                                                   
proposed legislation was that  which had passed the Senate or                                                                   
the House during last session.                                                                                                  
                                                                                                                                
Mr.  Taylor  replied  that  the  bill  before  the  Committee                                                                   
contained the wording  as passed by the House.   He clarified                                                                   
that the Senate added language  that would make the grants at                                                                   
the  concurrence of  the board  of  fisheries or  game.   The                                                                   
House Committee stated  that there should be  a separation of                                                                   
authority from  this body from  the Boards.  The  boards have                                                                   
no fiscal power  over the Department.  When the  bill came to                                                                   
the House Finance Committee last  year, the language that had                                                                   
been inserted by the Senate was removed.                                                                                        
                                                                                                                                
ROD ARNO, ALASKA OUTDOOR COUNCIL,  PALMER, voiced support for                                                                   
HB 61 from Alaska Outdoor Council (AOC).                                                                                        
                                                                                                                                
Representative Hudson MOVED to  report HB 61 out of Committee                                                                   
with  individual recommendations  and  with the  accompanying                                                                   
fiscal note.  There being NO OBJECTION, it was so ordered.                                                                      
                                                                                                                                
HB  61  was  reported  out of  Committee  with  a  "do  pass"                                                                   
recommendation and  with a fiscal  note by the  Department of                                                                   
Fish and Game dated 1/16/01.                                                                                                    
                                                                                                                                
HOUSE BILL NO. 13                                                                                                             
                                                                                                                                
     An Act relating to municipal service areas and                                                                             
     providing for voter approval of the formation,                                                                             
     alteration, or abolishment of certain service areas.                                                                       
                                                                                                                                
REPRESENTATIVE  CON BUNDE  noted  that Alaska's  Constitution                                                                   
provides  for  maximum  local  self-government  and  for  the                                                                   
creation,  alteration,   or  abolishment  of   service  areas                                                                   
subject  to the  provisions of  law.   AS 29.35.450  codifies                                                                   
those   Constitutional   provisions   and   establishes   the                                                                   
mechanism  by which service  areas are  created, altered  and                                                                   
abolished.                                                                                                                      
                                                                                                                                
Vice-Chair Bunde  pointed out  that Alaska has  approximately                                                                   
200 service  areas; in  these areas  the local residents  use                                                                   
private  contractors   for  necessary  services   and  assess                                                                   
themselves to pay for a desired level of service.                                                                               
                                                                                                                                
HB  13 amends,  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, which would be                                                                       
          subject to approval by the majority of the voters                                                                     
          residing in that service area.                                                                                        
                                                                                                                                
     *    Abolishment and replacement of a service area,                                                                      
          which  would be approved  separately by  a majority                                                                   
          of voters inside an  existing service area and by a                                                                   
          majority  of the  voters residing  in the  proposed                                                                   
          service  area  but  outside  the  existing  service                                                                   
          area.                                                                                                                 
                                                                                                                                
     *    Alternation of service area or combining it with                                                                    
          another  service  area,  which could  be  approved,                                                                   
          separately,  by a majority  of the 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.                                                                                             
                                                                                                                                
Vice-Chair  Bunde  commented that  the  proposed  legislation                                                                   
would  settle a long  time debate  about who  is entitled  to                                                                   
vote during  the creation,  alternation  or abolishment  of a                                                                   
service area.                                                                                                                   
                                                                                                                                
Representative  Harris asked  about the  input received  from                                                                   
the Municipalities of Anchorage  and Fairbanks assemblies and                                                                   
those mayors.                                                                                                                   
                                                                                                                                
Vice-Chair  Bunde  noted  that  the  Anchorage  Assembly  had                                                                   
passed a  resolution supporting the  bill.  The  two previous                                                                   
Anchorage mayors and the current one oppose the bill.                                                                           
                                                                                                                                
Representative  Harris  inquired   regarding  the  opposition                                                                   
voiced from Fairbanks.                                                                                                          
                                                                                                                                
Vice-Chair Bunde explained that  message has been mixed.  The                                                                   
previous  mayor did support  the bill,  however, the  current                                                                   
one is in opposition to it.                                                                                                     
                                                                                                                                
Representative Whitaker referenced  Page 2, Lines 19 - 22, as                                                                   
that language  relates to  fire service areas.   He  asked if                                                                   
the effect  of that  wording could  eliminate a fire  service                                                                   
area.                                                                                                                           
                                                                                                                                
Vice-Chair Bunde  responded that the 6% had  been placed into                                                                   
the body of  the bill for the  benefit of those that  live in                                                                   
fire service areas.  He noted  that because there are so many                                                                   
small fire  service areas  that the  bill writers thought  it                                                                   
would  be burdensome  to have  a  new election  every time  a                                                                   
couple of houses wanted to enter into a service area.                                                                           
                                                                                                                                
Representative  Croft asked  if Section  3 covered only  fire                                                                   
and roads.  He understood that  the origin of the dispute was                                                                   
in the covering of police services.                                                                                             
                                                                                                                                
Vice-Chair Bunde  explained that was "past"  history and that                                                                   
the  police protection  issue  was one  of  the issues  under                                                                   
consideration  six years  ago.  That  concern passed  through                                                                   
the  Alaska Supreme  Court.   The  Courts  decided that  even                                                                   
though there was a charter between  the borough residents and                                                                   
the  Municipality of  Anchorage, the  greater concern  rested                                                                   
with public safety.  The charter did not prevail.                                                                               
                                                                                                                                
Representative  Croft asked  if the  legislation would  solve                                                                   
the Hillside  area concerns  since it  did not cover  police.                                                                   
Vice-Chair Bunde  reiterated that  the police protection  was                                                                   
not included in the proposed legislation.                                                                                       
                                                                                                                                
Representative  Croft asked why  the legislation  was limited                                                                   
to  road and  fire  service.   Vice-Chair  Bunde stated  that                                                                   
those areas basically pay for their own services.                                                                               
                                                                                                                                
Representative  Davies  argued   that  there  are  sewer  and                                                                   
lighting service  areas that pay  for their own power  in the                                                                   
Fairbanks area.                                                                                                                 
                                                                                                                                
Representative  Croft  pointed  out that  the  original  bill                                                                   
indicated that  the legislation would  only apply to  the 2nd                                                                   
Class Boroughs with a population under 60,000.                                                                                  
                                                                                                                                
Vice-Chair  Bunde  explained that  most  of  these are  small                                                                   
service areas and there was concern  that it would affect the                                                                   
constitutionality  of the  bill.   He  chose  to remove  that                                                                   
language.                                                                                                                       
                                                                                                                                
Co-Chair Williams  inquired if  the Governor's veto  concerns                                                                   
had been addressed in the proposed legislation.                                                                                 
                                                                                                                                
Vice-Chair  Bunde advised that  the constitutionality  issues                                                                   
have  been  discussed at  length.    He interjected  that  he                                                                   
believed  that the  legislation was  constitutional and  that                                                                   
the  specifics  had been  addressed  in the  House  Judiciary                                                                   
Committee.                                                                                                                      
                                                                                                                                
Co-Chair   Williams  understood   that  Ketchikan   would  be                                                                   
affected by  the bill.   He pointed out  that there  are some                                                                   
residents that do  not want consolidation.   He believed that                                                                   
the legislation would help that portion of the community.                                                                       
                                                                                                                                
Vice-Chair  Bunde emphasized  that the  bill could  encourage                                                                   
consolidation  and  that it  would  not impact  the  boundary                                                                   
issues.  He noted that all residents  would have the right to                                                                   
vote.  He  pointed out that  half the residents of  the State                                                                   
live  in   Anchorage.     Vice-Chair  Bunde  questioned   why                                                                   
residents in  Juneau should want  to vote on  issues relative                                                                   
to Anchorage.   He  suggested that  would indicate  that your                                                                   
interests were not protected.                                                                                                   
                                                                                                                                
Representative   Hudson  referenced   the  Alaska   Municipal                                                                   
League's (AML) response, that  the legislation could increase                                                                   
the  costs  to local  areas.    He inquired  if  the  sponsor                                                                   
anticipated  those  costs  to  increase.    Vice-Chair  Bunde                                                                   
responded  that  there  would  not  be  a  cost  change.  The                                                                   
elections  are  scheduled  to be  held  at  the time  of  any                                                                   
regular  scheduled   election  with   not  much   extra  work                                                                   
expected.                                                                                                                       
                                                                                                                                
OCIE  ADAMS, (TESTIFIED  VIA  TELECONFERENCE),  REPRESENTING-                                                                   
ROAD SERVICE #17,  MATSU, testified that the  legislation was                                                                   
important  to the  voters.   He  commented  that people  feel                                                                   
powerless  over what government  does  and that the  proposed                                                                   
legislation would address those  concerns. He emphasized that                                                                   
consolidation  is  important  to  the Mat-Su  Borough.    The                                                                   
people  should be  able to  decide  how much  of their  money                                                                   
should be placed  into projects that need to  be completed in                                                                   
their service area.   He voiced support for  the changes made                                                                   
to  the legislation,  which he  believed would  help it  pass                                                                   
with the public's support.                                                                                                      
                                                                                                                                
JEFF BUSH, DEPUTY  COMMISSIONER, DEPARTMENT OF  COMMUNITY AND                                                                   
ECONOMIC  DEVELOPMENT,  testified   that  the  Administration                                                                   
opposes  the  legislation.     He  noted  that  the  Governor                                                                   
continues  to maintain  all his  previous  objections to  the                                                                   
legislation  from last  year's veto.   Mr.  Bush pointed  out                                                                   
that Administration particularly  opposes Section 3; however,                                                                   
they do not oppose  Section 4.  Section 4,  which would allow                                                                   
for differential tax rates within a service area.                                                                               
                                                                                                                                
Mr.  Bush  emphasized  that  there is  a  legal  question  as                                                                   
indicated by the Department of  Law.  Counsel for the City of                                                                   
Anchorage  has noted that  they assume  that the  legislation                                                                   
would prove to  be unconstitutional.  The  Attorney General's                                                                   
office  has commented  that  the legislation  raises  serious                                                                   
constitutional  questions.   The  bill purports  to have  the                                                                   
State impose  upon boroughs,  a limitation  of their  powers,                                                                   
which  would not  necessarily protect  the State's  interest.                                                                   
Alaska  currently  has  a  system  of  government,  which  is                                                                   
suppose to  create a central power  at the local level.   The                                                                   
value  of the  Constitution  determines  where  the power  is                                                                   
suppose  to  reside.    From a  policy  perspective  that  is                                                                   
currently  appropriate placement  and given  that, the  power                                                                   
should reside  within boroughs at  the local level.  The bill                                                                   
would provide a "sub-division"  of the borough. He maintained                                                                   
that a service area should not  have a governmental function.                                                                   
The  Administration  does  not   believe  that  it  would  be                                                                   
appropriate to give service areas that authority.                                                                               
                                                                                                                                
Mr. Bush stressed that in order  to pass the bill, there must                                                                   
exist  an overriding  "State"  interest.   He reiterated  the                                                                   
serious problems  with constitutionality of  the legislation.                                                                   
A borough  can limit itself  and restrict itself  through its                                                                   
charter from  changes in service  areas.  The question  is if                                                                   
it is  appropriate for the  State to impose that  requirement                                                                   
upon those entities.                                                                                                            
                                                                                                                                
Mr.  Bush stated  that up  in the  Senate for  consideration,                                                                   
there are  bills relating  to boroughs  and the formation  of                                                                   
such  an entity.   Those  considerations are  based upon  the                                                                   
premise that  it is appropriate  for small communities  to be                                                                   
organized into boroughs. The central  government and power at                                                                   
the  local level  should reside  at  the borough  level.   He                                                                   
stated that the Administration concurs with that position.                                                                      
                                                                                                                                
Representative  Davies asked  if there  was a  Constitutional                                                                   
provision contained  indicating that no new  service area can                                                                   
be created if that service area does not want it to happen.                                                                     
                                                                                                                                
Vice-Chair   Bunde  responded   that  the  legislation   only                                                                   
addresses  existing service  areas  and does  not permit  the                                                                   
formation of new ones.                                                                                                          
                                                                                                                                
MARJORIE  VANDOR,  ASSISTANT ATTORNEY  GENERAL,  GOVERNMENTAL                                                                   
AFFAIRS  SECTION,  DEPARTMENT  OF  LAW,  advised  that  there                                                                   
exists a provision  within the Constitution,  which addresses                                                                   
the limitation  of when to  create a  new service area.   She                                                                   
acknowledged that this bill would  not have an affect on that                                                                   
provision.                                                                                                                      
                                                                                                                                
Representative  Davies   commented  that  in   the  Fairbanks                                                                   
Borough,  there are  situations  that come  up regarding  the                                                                   
road service areas.   There exist served and  unserved areas.                                                                   
The intent is  that they organize and have  a general service                                                                   
area  in order  to  get away  from "passing  the  hat".   The                                                                   
question  that arises  most often  is if a  new service  area                                                                   
could be  formed or should they  be annexed into  an existing                                                                   
service  area.     He  stated   that  was  the   most  common                                                                   
circumstance.                                                                                                                   
                                                                                                                                
Representative  J.  Davies  continued   noting  the  concerns                                                                   
voiced  by  the  people  in  the   Fairbanks  district.    He                                                                   
acknowledged   that  Section   4  was   important  to   those                                                                   
residents.   The Fairbanks  Assembly has  stipulated  that if                                                                   
residents  are opposed,  then  it should  not be  undertaken.                                                                   
There exist 136 fire service areas  in the Fairbanks Borough.                                                                   
                                                                                                                                
Ms. Vandor explained that that  service areas are set up when                                                                   
there are  different types  of services  needed for  specific                                                                   
communities.   She  did not  know  if there  was a  different                                                                   
service existing between all the  various service areas.  She                                                                   
assumed  that the Assembly  would maintain  the authority  to                                                                   
form the  necessary service areas.   Ms. Vandor  acknowledged                                                                   
that  she was  not familiar  with  the Fairbanks  ordinances;                                                                   
however, within  a borough, the  service areas do not  have a                                                                   
separate legal right to challenge  the borough.  They are not                                                                   
a legal entity  separate from the borough.   The service area                                                                   
is a part of the borough.                                                                                                       
                                                                                                                                
Representative Davies stated that  the Assembly does have the                                                                   
authority to "direct"  service areas at this time.   He asked                                                                   
if  this legislation  was adopted,  would  the Assembly  lose                                                                   
that right.                                                                                                                     
                                                                                                                                
Ms. Vandor acknowledged that they  would lose the right since                                                                   
Fairbanks is a Second Class Borough.                                                                                            
                                                                                                                                
Representative  Davies spoke to  the level  of taxation.   He                                                                   
asked if  the tax  level would continue  to be determined  by                                                                   
local  assemblies.   Ms. Vandor  stated that  it would.   She                                                                   
noted that  the assemblies would  also continue  to establish                                                                   
the mil rate.                                                                                                                   
                                                                                                                                
Representative    Whitaker   asked    the    Administration's                                                                   
opposition to Section 3.                                                                                                        
                                                                                                                                
Ms. Vandor  advised that  home-built communities  are  not to                                                                   
set  themselves  up as  little  sovernities from  the  State.                                                                   
When there  is a  matter of  local concern  and when  dealing                                                                   
with a charter  provision, which predates legislation,  it is                                                                   
important to look to the "organic"  law of the home rule.  In                                                                   
a concurring  opinion from  the Jefferson  Case, it  has been                                                                   
indicated  that  the  Legislature  cannot  disregard  that  a                                                                   
charter establishes items at the local level.                                                                                   
                                                                                                                                
Representative  Whitaker  questioned  at  which  point  would                                                                   
local control be final.                                                                                                         
                                                                                                                                
Ms. Vandor replied  that local control will  determine how to                                                                   
deal with each individual service area.                                                                                         
                                                                                                                                
TAPE HFC 01 - 33, Side B                                                                                                      
                                                                                                                                
Ms. Vandor commented  that cases, which have  come before the                                                                   
Supreme Court,  question whether a  statewide law can  tell a                                                                   
charter  community how  they have  to alter  their home  rule                                                                   
service areas.   That question has not yet  been answered and                                                                   
has  not yet  been addressed  directly by  the State  Supreme                                                                   
Court.  The State  Supreme Court  tends to  be very  specific                                                                   
when  looking   at  charter  provisions  versus   local  law.                                                                   
Those  decisions  are  fact oriented.    She  suggested  that                                                                   
service areas by their nature, should be local concerns.                                                                        
                                                                                                                                
Representative Croft advised that  Article 10, Section 11, is                                                                   
the provision which creates the  constitutional concern.  The                                                                   
question  arises regarding  the  scope of  local issues  that                                                                   
cannot be touched by law.                                                                                                       
                                                                                                                                
Representative Croft  suggested that perhaps  the Legislature                                                                   
could be precluded by the Constitution  from exercising State                                                                   
power in certain areas of local concern.                                                                                        
                                                                                                                                
Co-Chair Williams asked if the  Legislature could provide the                                                                   
power to  abolish the service area  if that were the  will of                                                                   
the people.                                                                                                                     
                                                                                                                                
Ms. Vandor replied  that the Legislature could  for a general                                                                   
municipality.   The concern exists  when dealing with  a home                                                                   
rule chartered  community because in their charter  they deal                                                                   
with  those  particular  matters  and  how  to  handle  their                                                                   
service areas.   She reiterated  that was the area  where the                                                                   
constitutional  conflict exists.   Ms. Vandor indicated  that                                                                   
it is doubtful  to know how  the Supreme Court would  rule on                                                                   
that.                                                                                                                           
                                                                                                                                
Representative Hudson  asked about the applicable  portion of                                                                   
the constitution,  which could be  in doubt for  the proposed                                                                   
legislation.                                                                                                                    
                                                                                                                                
Ms. Vandor explained that would be Article 10, Section 11.                                                                      
                                                                                                                                
Representative Hudson  asked if the Governor's  previous veto                                                                   
had been  placed on that  base.  Ms.  Vandor stated  that was                                                                   
part  of  the concern.    She  added  that last  year,  there                                                                   
existed  the  issue  of  "special  legislation",  which  only                                                                   
affected  and  applied  to  all boroughs  except  one.    She                                                                   
stressed that causes legislation concerns.                                                                                      
                                                                                                                                
KEVIN RITCHIE, ALASKA MUNICIPAL  LEAGUE (AML), ALASKA COUNCIL                                                                   
OF MAYORS, JUNEAU,  referenced the AML hand  out contained in                                                                   
the member's  packets.  [Copy on  File].  He stated  that AML                                                                   
is in opposition  to Section 3 of HB 13.   Section 3 replaces                                                                   
local   control  over   local  service   area  decisions   as                                                                   
envisioned by the framers of the  Alaska Constriction, with a                                                                   
statewide  legislative   mandate.     The  2001   AML  Policy                                                                   
Statement  adopted  by  the  entire  membership  of  the  AML                                                                   
opposes that section.                                                                                                           
                                                                                                                                
Mr.  Ritchie  stated  that  local  government  powers  should                                                                   
enhance local  autonomy and  all the  State mandated  vote on                                                                   
service  area consolidation  and alternation.   He  suggested                                                                   
that assemblies are respectful  of service powers and how the                                                                   
community  wants those  services delivered.   He pointed  out                                                                   
that Fairbanks  had more service  areas than any  other place                                                                   
within the  State.  Mr. Ritchie  advised that there  are many                                                                   
issues, which  need to be  taken into consideration  and that                                                                   
the service area issue is a "broad" concern.                                                                                    
                                                                                                                                
Mr.  Ritchie  summarized  that  AML policy  does  not  oppose                                                                   
Section 4  which gives an optional  tool to each  assembly to                                                                   
set variable rates in service  areas.  He reiterated that AML                                                                   
does oppose Section 3 of the proposed legislation.                                                                              
                                                                                                                                
Representative  Croft asked  if  there were  a charter,  that                                                                   
specified  an  established  free  reign  to  abolish  service                                                                   
areas,  would  the legislation  nullify  that  decision.   He                                                                   
believed  that a  charter could  not be  created which  would                                                                   
allow a borough  or municipality to have a  "different" take.                                                                   
Mr. Ritchie agreed on that.                                                                                                     
                                                                                                                                
Representative Foster  MOVED to report CS HB 13  (JUD) out of                                                                   
Committee  with  individual  recommendations   and  with  the                                                                   
accompanying fiscal note.                                                                                                       
                                                                                                                                
Representative  Davies  OBJECTED.    He  MOVED  to  AMEND  by                                                                   
removing Section 3.  Vice-Chair Bunde OBJECTED.                                                                                 
                                                                                                                                
Vice-Chair Bunde  stated that both  portions of the  bill are                                                                   
needed  by some  service areas  to have  the protection  that                                                                   
they want.                                                                                                                      
                                                                                                                                
Representative  Davies maintained that  the vast  majority of                                                                   
concerns with  the legislation  were contained in  Section 3.                                                                   
He  noted  that many  people  are  opposed to  that  section,                                                                   
however, would continue to support Section 4.                                                                                   
                                                                                                                                
Representative Davies  noted that the Fairbanks  Assembly has                                                                   
never forced a  consolidation in service areas.   The current                                                                   
Mayor of Fairbanks  opposes the bill.  The  general situation                                                                   
in Fairbanks  voice concern about  the move.  He  pointed out                                                                   
that  there are  pockets that  benefit and  continue to  vote                                                                   
"no"  on consolidation  of service  areas.   Some people  are                                                                   
benefiting from services and others  are not paying for their                                                                   
services.  They do benefit from  road maintenance that others                                                                   
are paying for.   That is why it should be left  to the local                                                                   
assemblies to make those decisions.   He added that Section 4                                                                   
is  important because  it allows  the  assemblies to  address                                                                   
efficiency concerns.                                                                                                            
                                                                                                                                
Representative  J. Davies reiterated  his support  of Section                                                                   
4, and opposition to Section 3.                                                                                                 
                                                                                                                                
Vice-Chair Bunde maintained his  opposition on the amendment.                                                                   
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR:      Croft, Davies, Lancaster, Moses                                                                                  
OPPOSED:       Whitaker, Bunde, Foster, Harris, Hudson,                                                                         
               Williams                                                                                                         
                                                                                                                                
Co-Chair Mulder was not present for the vote.                                                                                   
                                                                                                                                
The MOTION FAILED (4-6).He                                                                                                      
                                                                                                                                
                                                                                                                                
Representative Foster  MOVED to report CS HB 13  (JUD) out of                                                                   
Committee  with  individual  recommendations   and  with  the                                                                   
accompanying fiscal note.                                                                                                       
                                                                                                                                
Representative  Whitaker  OBJECTED   for  the  purpose  of  a                                                                   
comment.  He advised that there  is a "transcending" argument                                                                   
relating to  the premise  of Article 10,  Section 11,  of the                                                                   
Constitution.   That  section  relates to  the  power of  the                                                                   
borough  to exercise  the  power  of the  people.   It  could                                                                   
relate to  Article 1, Section  2, which relates  specifically                                                                   
to the power of  the people.  He commented  that the question                                                                   
is where that power  is exercised.  He agreed  that the power                                                                   
should  be exercised  with  the rural  district  and that  it                                                                   
should  be  the  power  of  the   people  to  determine  that                                                                   
decision.                                                                                                                       
                                                                                                                                
Representative Whitaker  advised that the  Legislature should                                                                   
consider the argument  inherent to Article 1, Section  2.  He                                                                   
noted  that was  the base  of his  argument.   Representative                                                                   
Whitaker WITHDREW his OBJECTION.                                                                                                
                                                                                                                                
There being NO  further OBJECTION, the bill  was reported out                                                                   
of Committee.                                                                                                                   
                                                                                                                                
CS  HB 13  (JUD) was  reported out  of Committee  with a  "do                                                                   
pass"  recommendation   and  with   a  fiscal  note   by  the                                                                   
Department   of  Community  &   Economic  Development   dated                                                                   
1/31/01.                                                                                                                        
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
The meeting was adjourned at 3:10 P.M.                                                                                          

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