Legislature(2001 - 2002)
02/26/2001 02:05 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
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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