SB 208 - VOTER APPROVAL OF SERVICE AREA CHANGES CHAIRMAN MACKIE brought SB 208 before the committee as the final order of business. SENATOR SEAN PARNELL, prime sponsor of SB 208, said the legislation establishes the mechanism by which service areas are created, altered and abolished. Special services, by statute, include services not provided on an area wide or non-area wide basis or a higher or different level of service than that provided on an area wide or non-area wide basis. He pointed out that throughout Alaska there are approximately 200 service areas, and in these areas, the local residents assess themselves to pay for a particular service. SB 208 amends AS 29.35.450 to strengthen local control by prohibiting a borough or municipality from altering or abolishing service Ares without a majority vote of those people most affected. Senator Parnell said SB 208 prescribes a majority vote mechanism under three scenarios: (1) When a governing body wants to abolish a service area, the decision is subject to the approval by the majority of the voters residing in the service area. (2) When a governing body wants to abolish and replace a service area with a larger service area, it must be approved separately by a majority of voters inside the existing service area and by a majority of the voters in the proposed service area, but outside the existing service area. (3) When a governing body wants to alter a service or combine it with another service area, this action must 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. Senator Parnell advised that the bills is supported by many service area boards around the state, and he urged the committee's support of the legislation. Number 460 CHAIRMAN MACKIE asked for an example of the kinds of services within a service area that would have to approved before they could be abolished or changed. SENATOR PARNELL said the two primary service areas around the state are road service areas and fire service areas. Number 488 SENATOR PHILLIPS asked Senator Parnell if this legislation was an attempt to opt out of the present police protection. SENATOR PARNELL responded that right now Anchorage has area wide police cover and powers and there is nothing that can be done at this point to change that short of a majority vote of the whole area. His interest is the road service areas. He said his goal is to maximize local self control and maximum self determination, while maintaining the current number of local governmental units. Number 528 DAN BOCKHORST, a local government specialist with the Department of Community & Regional Affairs in Anchorage, testifying via teleconference from Anchorage, stated the department views SB 208 as being inconsistent with four fundamental principles of local government in Alaska. These relate to not just urban areas but rural areas as well, and not just unified municipal governments but other types of borough governments. Mr. Bockhorst said Alaska's Constitution provides for maximum local self-government with regard to both home rule and general law of municipal governments. In the department's view, SB 208 diminishes local self-government by imposing restrictions under state law on the manner in which service areas may be formed, altered and abolished. He said evidence shows that Alaska's Constitutional Convention delegates intended that jurisdiction over service areas was to be vested in the assembly to assure a unified overview of all functions exercised by service areas. Addressing the second issue, Mr. Bockhorst said Alaska's Constitution calls for minimum numbers of local government units and these include service areas. SB 208 limits the ability of local governments to abolish, combine, or otherwise alter certain service areas which in turn restricts the ability of local governments to comply with the constitution. Alaska's Constitution prohibits the creation of new service areas if the desired new service can be provided by an existing service area. This provision applies to consolidation and expansion of service areas, not just the addition of new powers to be exercised within existing service areas. SB 208 would restrict the ability of local governments to apply with that constitutional provision. The last concern relates to the provision in Alaska's Constitution for home rule municipal governments. Alaska's provisions for municipal home rule are broader than those of any other state, and the Alaskans that drafted the municipal home rule provisions of the Constitution believed that the Legislature should have the authority to deny local exercise of specific powers when there was an overriding state interest. They also assumed, however, that the Legislature would not act to limit home rule powers except under such special circumstances. Mr. Bockhorst said the department does feel that in this case there is an overriding state interest in this matter. Number 553 CHAIRMAN MACKIE asked if passage of this legislation would create any problems with the proposed Haines annexation, and MR. BOCKHORST responded that it would not. TAPE 98-2, SIDE B Number 586 SENATOR PHILLIPS commented that there about 30,000 people in his district that are mostly satisfied with the way the service area concept is working, and their biggest fear is the Anchorage area taking over these service areas. SENATOR PARNELL related there are 18 road service areas in his district and each one of them has a board. If the assembly were to come in and assert its own road powers, it would put the residents on a different fee structure and take it out of their hands for controlling the costs and the quality of the road service maintenance that is now being provided. Number 540 CHAIRMAN MACKIE asked if by a vote of the assembly they could automatically take over these services, or is there a mechanism in the charter right now that would require a vote or some sort of approval within that service area should the assembly attempt to do that. SENATOR PARNELL responded that it was a good question, but he didn't know the direct answer to it. SENATOR PHILLIPS added that he thought if the assembly decided to that, it would have to go on the ballot for an area wide vote, and that's where the problem comes in because there aren't a sufficient amount of numbers to stem the tide if they really want to do it. SENATOR WILKEN concluded that the legislation before the committee would preclude the problem Senator Phillips was talking about. Number 522 KEVIN RITCHIE, Executive Director, Alaska Municipal League, stated the League does not have an opinion on the legislation. He said it is a very complex issue and the League has not had time to poll all its members on the pros and cons of the legislation, but they hope to have that completed soon. He added that when a home rule power is taken away it is a very serious thing to do and it needs a lot of consideration. Number 505 There being no further testimony on SB 208, CHAIRMAN MACKIE asked for the will of the committee. SENATOR DONLEY moved that SB 208 be passed out of committee with individual recommendations. Hearing no objection, it was so ordered.