Legislature(1999 - 2000)
03/20/2000 01:45 PM House FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
March 20, 2000
1:45 P.M.
TAPE HFC 00 - 73, Side 1
CALL TO ORDER
Co-Chair Therriault called the House Finance Committee
meeting to order at 1:45 p.m.
PRESENT
Co-Chair Mulder Representative Foster
Co-Chair Therriault Representative Grussendorf
Vice Chair Bunde Representative Moses
Representative Austerman Representative Phillips
Representative J. Davies Representative Williams
Representative G. Davis was absent from the meeting.
ALSO PRESENT
Peter Torkelson, Staff, Representative Dyson; John Pearson,
Economic Development Planner, Hyder.
TESTIFIED VIA TELECONFERENCE
Pat Poland, Director, Division of Municipal and Regional
Assistance, Department of Community and Economic
Development; Dan Bockhurst, Local Boundary Commission,
Department of Community and Economic Development.
SUMMARY
HB 255 "An Act relating to villages; and providing for an
effective date."
CSHB 255 (CRA) was REPORTED out of Committee with
a "do pass" recommendation and with fiscal impact
note by the Department of Law, dated 2/25/00.
HB 361 "An Act relating to charges for state services;
requiring that fees levied by resource agencies
for designated regulatory services be based on the
actual and reasonable direct cost of providing the
services, except in the case of certain negotiated
or fixed fees; relating to negotiated or fixed
fees of resource agencies; relating to invoices
for designated regulatory services; establishing a
petition process regarding fees charged by
resource agencies for regulatory services; and
providing for an effective date."
HB 361 was postponed until 1:30 p.m., 3/21/00.
CSSB 7(FIN) am
"An Act relating to the University of Alaska and
university land, and authorizing the University of
Alaska to select additional state land."
SB 7 was held over to 8:30 a.m., 3/21/00.
HOUSE BILL NO. 255
"An Act relating to villages; and providing for an
effective date."
REPRESENTATIVE FRED DYSON, SPONSOR explained that the intent
of HB 255 is to make it easier for small communities to
organize and stay organized. He observed that there is a
constitutional mandate to encourage communities to organize
under state law. He explained that the legislation extends
second class cities the privilege of writing their own
charter. Under existing law, a first class city can write
their charter or constitution and do anything that is not
precluded by state law. A second class city can only do that
which is allowed by state law. The legislation gives a "home
rule community" the ability to form their kind of government
and define their scope of responsibilities. He observed that
five communities have disorganized, while only 3 have
organized in the last few years.
Vice Chair Bunde questioned what the downside of the
legislation would be. Representative Dyson responded that
some communities might have a false hope that they can
organize before they are able.
PETER TORKELSON, STAFF, REPRESENTATIVE DYSON noted that
there are some critical distinctions between first class
cities, second class cities and home rule communities, which
might facilitate a small community to organize. All home
rule cities are school districts. Second class cities are
not school districts. Home rule cities are currently
required to zone and plat their land as part of their
formation. The legislation would make it permissive but not
required for home rule communities. Financial reporting
requirements also differ. Home rule municipalities are
required to do a full financial audit each year. Second
class cities are required to file a statement of accounts.
Home rule communities would only be required to file a
statement of accounts.
Representative Grussendorf noted that there is a third class
city that organized for the purpose of providing education.
Mr. Torkelson reiterated that home rule communities would
not have educational standing or responsibilities.
Representative J. Davies asked if home rule communities
would be eligible for municipal assistance and revenue
sharing. Mr. Torkelson responded that they would be
eligible.
Vice Chair Bunde noted they would be included in municipal
assistance and revenue sharing, but would not be required to
have a local tax base. Mr. Torkelson noted that they would
be able to tax and acknowledged that they would not have a
requirement to tax.
Representative Foster observed that there are seven villages
in the Bethel area that dissolved their governments in favor
of organizing as tribal governments under the Indian
Reorganization Act (IRA).
Representative Dyson observed that culturally based entities
cannot be recognized as a state governmental entity. Mr.
Torkelson stressed that nothing would prohibit a group of
people living in an area from forming a home rule community.
They would have to follow state guidelines.
Co-Chair Therriault observed that there is an upper limit of
a 2 percent tax:
Levy of an ad valorem tax by a home rule community or
second class city may not exceed two percent of the
assessed value of the property taxed".
Representative Dyson clarified that this conforms to
existing law and is consistent with current second class
cities.
Representative Foster referred to an email from Richard
Burton (copy on file.) He questioned if a village could form
its own court. Mr. Torkelson explained that a home rule
community would not have judicial power.
Representative J. Davies questioned if there is a limit on
sales taxes. Co-Chair Therriault did not think that there is
a limit on sales taxes.
PAT POLAND, DIRECTOR, DIVISION OF MUNICIPAL AND REGIONAL
ASSISTANCE, DEPARTMENT OF COMMUNITY AND ECONOMIC DEVELOPMENT
testified via teleconference in support of the legislation.
The legislation gives communities the maximum amount of
flexibility to arrive at solutions to their problems. It
also continues the second class city concept by extending
flexibility.
Mr. Poland reiterated that all of the provisions, including
tax limitations are consistent with existing law for second
class cities. Municipalities can exceed the tax cap to pay
off bonds. There is no limitation on sales tax.
Co-Chair Therriault asked what criticisms remain. Mr. Poland
felt that the legislation had dealt with the majority of
concerns. He noted that there are still some concerns in
regards to education powers. The legislation clarifies that
home rule communities and home rule cities are different
entities.
In response to a question by Representative J. Davies, Mr.
Poland explained that there was a strong desire to identify
home rule communities as a separate entity. Any local
government, particularly one that wants to have taxing
authority has to be a municipal government. Municipal
governments can only be called city or boroughs. The
legislation conforms to existing law.
In response to a question by Representative Foster, Mr.
Poland observed that the legislation does not change the
taxing authority.
Co-Chair Therriault questioned if there were a fiscal note
from the Department of Community and Economic Development.
Mr. Poland observed that the Department of Community and
Economic Development did not feel that a fiscal note was
necessary. He reiterated support by the Department of
Community and Economic Development.
JOHN PEARSON, ECONOMIC DEVELOPMENT PLANNER, HYDER spoke in
support of the legislation. Hyder is an unincorporated
community of about 130 residents, located on the
Alaska/British Columbia Border. Hyder shares the border with
the Canadian community of Stewart British Columbia,
population 700. He maintained that Hyder is Alaska's only
real international border community and should be considered
as Alaska's Front Door. The shortest distance between any
point in Alaska and the Lower 48 is at Hyder.
Mr. Pearson observed that Hyder views HB 255 as a major step
forward for the community and other small unincorporated
communities around Alaska that want to expand their role and
responsibility for services to local residents without
having to "go broke".
Hyder is not a school district. Students travel daily to
Canada for school.
Mr. Pearson emphasized that the Hyder Community Association
has a good management record. The Community Association
oversees:
*The fire department and emergency services;
*Operation of a community library that is open five
days per week;
*Operation of a summer operated community museum;
*Provides snow removal on the side streets of the
community;
*Operates a summer visitor center;
*Oversees a community weatherization program;
*Oversees a community solid waste program;
*Oversees the State of Alaska small boat harbor and
float plane facilities;
*Contracts with the Department of Transportation and
Public Facilities to maintain the state; and
*Handles the application process and administration of
grant opportunities.
Mr. Pearson highlighted one of Hyder's accomplishments in
stimulating economic growth. The past two years the
community had an opportunity to get involved in the bottled
water business. At the moment Hyder is building a bottled
water plant in the community that will employ 41 year around
positions. He emphasized that HB 255 would have helped Hyder
provide the financial package. The project has the ability
to bring Hyder's unemployment to zero in one year. He
concluded that the legislation would help small communities.
Vice Chair Bunde observed that the legislation would allow
the community to be eligible for municipal revenue sharing.
Mr. Pearson emphasized that the legislation would give Hyder
the ability to secure loans and to bond. The ability to
secure loans and bond would allow Hyder to work with other
communities to develop ferry service. A number of programs
are not available to Hyder as a Community Association.
Representative Phillips questioned if the state of Alaska
reimburses Canada for attendance of Hyder students in
Canadian schools. Mr. Pearson stated that the state does
reimburse Canada. The program has been in existence for a
long time.
Mr. Pearson provided further information regarding the
water-bottling project. Additional economic benefit would be
derived through the local production of pallets used in
shipping the water. Bottle production will also occur in
Hyder and provide an additional 15 jobs.
In response to a question by Co-Chair Mulder, Mr. Pearson
noted that the product would be called Alaska Chill.
Co-Chair Mulder questioned if the bill's title should be
narrowed.
Representative J. Davies questioned if there had been
discussions regarding an upper limit on the number of
persons in a home rule community. He expressed concern that
areas with good economic opportunity to support local
schools could forego those opportunities.
Mr. Torkelson observed that there have been discussions
regarding population thresholds on the upper and lower
levels. He noted that communities would not be able to have
their own school districts until they step into the next
level of responsibility by upgrading to a home rule first
class city.
Co-Chair Therriault asked if Representative J. Davies' was
concern that there may be some communities that would never
take the step forward. Representative J. Davies agreed and
pointed out that Delta Junction would be the second richest
school district in the state if it chose to organize.
Co-Chair Therriault stressed that the legislation would at
least bring communities part way toward contributing to
local government. Representative J. Davies noted that the
Local Boundary Commission might have recommendations on ways
to address the issue. He stressed that he supports the
legislation. Representative Dyson stated that he would
support a solution if one were found.
Representative Foster read from the sponsor statement:
A new charter-base home rule community may be the best
option for unincorporated areas that would not be
viable under the second class city model.
He questioned if there were villages in western Alaska that
were not already second class cities. Mr. Poland observed
that there are 50 - 60 communities that have not
incorporated (around the state). He gave examples of
communities that have not incorporated. He thought that
there was at least one village in Representative Foster's
district that had not incorporated.
Co-Chair Therriault observed that there is a small fiscal
impact note from the Department of Law.
Representative Foster MOVED to report CSHB (CRA) out of
Committee with the accompanying fiscal note. There being NO
OBJECTION, it was so ordered.
CSHB 255 (CRA) was REPORTED out of Committee with a "do
pass" recommendation and with fiscal impact note by the
Department of Law, dated 2/25/00.
RECESSED
The meeting was recessed at 2:25 p.m. The meeting was
scheduled to resume at 8:30 a.m.
House Finance Committee 6 3/20/00
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