CSSSHB 133(JUD) AM - MUNICIPAL BOUNDARY CHANGES/ COMMISSION   CHAIR GARY STEVENS announced the next order of business to be HB 133. 1:39:34 PM RYNNIEVA MOSS, Aide to Representative Coghill, stated that she had an amendment, which would accommodate the petition that the City of Petersburg has been working on for some time. She explained that the Petersburg petition is by aggregate vote and without the proposed amendment this legislation would stop that particular petition process. CHAIR GARY STEVENS called a brief at ease at 1:40:58 PM. [Due to technical difficulties no recording occurred for HB 133 between 1:40:58 PM and 2:02:00 PM. The full, uninterrupted audio for HB 133 may be found at the end of the recording between 5:56:40 PM and 6:21:37 PM.]  SENATOR STEDMAN motioned to adopt amendment 1.   24-LS0512\IA.2 Cook 10/31/05 A M E N D M E N T 1 OFFERED IN THE SENATE TO: CSSSHB 133(JUD) am Page 3, lines 15 - 20: Delete all material. Insert "the effective date of this Act and that has been initiated before the effective date of this Act remains valid and subject to AS 29.05.100(a), AS 29.06.040(c), AS 44.33.812(a), and regulations adopted under those provisions, as those provisions and regulations read on the day before the effective date of this Act."   There being no objection, Amendment 1 was adopted. MS. MOSS explained that the amendment deals with a pending but not completed petition. If a petition is pending on the effective date the old rules would apply. CHAIR GARY STEVENS called on Fairbanks Mayor Thompson. STEVE THOMPSON, Fairbanks Mayor, said he had three concerns with the bill and he had stated them during the previous hearing. 1. History: Some of the earliest lawsuits in Fairbanks were over annexations and the same probably holds true in Anchorage. Nonetheless, local adjacent annexations do in fact work out to be the best for the communities. 2. Fairbanks has run out of property and is looking at adjacent areas amounting to between 500 and 1,000 acres for community expansion. The borough would like to improve the area to the point that it could be developed as an industrial area or a housing subdivision. Under the proposed legislation, if just one person lived in an area and he or she voted no that would effectively put an end to the expansion. 3. Services: In Fairbanks 30,000 people live inside the city limits, but 80,000 people live in the immediate area. Jobs are inside the city limits so about 50,000 people travel into the community where they work every day. They expect to have police, fire and ambulance protection and they want the roads plowed and maintained. However, those 50,000 people provide none of the funding that it takes to provide the services. Many people coming into town to work in the community work for employers in buildings that are tax- exempt. The Fairbanks Memorial Hospital, the federal building, state court house, borough buildings, school district headquarters, and schools are all big employers of people that live outside the city and the city is left with no way to recover any costs. Annexing the immediate areas around the town that really are part of the community would help solve the problem. MAYOR THOMPSON referenced testimony from the previous hearing in which Ms. Moss said that people living outside the city limits contribute by buying drivers licenses and such things. He asserted that the city sees none of that money. People living outside the city pay nothing toward general city operation or for police, fire or public safety officials. Those things must be considered when trying to restrict sensible annexation and growth. In conclusion he said that annexation can take place in about five different ways and border annexation simply makes sense. CHAIR GARY STEVENS called on Mr. Roberts from Homer. PETE ROBERTS, President, Citizens Concerned About Annexation, said Mayor Thompson has some good points but he misses major points in the American system. In particular, he's missing the importance of the citizen, he said. He related what happened in Homer when politicians decided to triple the size of the original city. Neither the citizens of Homer nor the people in the area to be annexed were adequately informed or included in the process, which resulted in a major and costly fight. He opined that the people living in the area to be annexed need to be a part of the process and the city needs to offer those people something other than just a tax bill. In Homer sales taxes account for two-thirds of the general revenue budget so anybody who says the "out-of-towners" don't shoulder a burden and provide for the cost of running services in the area is sorely mistaken, he said. MR. ROBERTS urged passage of SB 133. CHAIR GARY STEVENS asked Mike Black if he had testimony. MIKE BLACK, Director, Division of Community Advocacy, Department of Commerce, Community & Economic Development (DCCED), said he would summarize the May 6, 2005 letter he sent to Chair Stevens. [Copy in file.] MR. BLACK advised that DCCED has a somewhat different interpretation of the bill than the sponsor. DCCED characterizes HB 133 as providing the Local Boundary Commission (LBC) with another option for conducting local action elections in relation to municipal annexations. The provisions described in Section 3 of AS 29.06.040(c) provide a list of methods for conducting local action elections and HB 133 adds the provision that a majority of the votes cast by voters residing in the annexing municipality may be required for approval. The department views all the provisions set forth in AS 29.06.040(c) as being independent of one another and it is confident of the interpretation based upon the historical record of the use of Section 3 provisions related to LBC actions. Referencing Section 5 he said there was an issue with the Petersburg petition, but it was addressed with the amendment. [24-LS0512\IA.2] However, under the DCCED interpretation it wouldn't have affected Petersburg because the proposal only provides another option. Based upon DCCED's interpretation of the bill, the department has no objection, he said. CHAIR GARY STEVENS asked for his response to Mayor Thompson's concern that one person could stop economic development in an annexation. MR. BLACK replied he would have some of those same concerns if the department had interpreted the bill to mean that a municipality could not annex an area based on the vote of the people in the area to be annexed. "Certainly that would put a severe restriction upon the ability of the municipality to provide services to areas and still get some reimbursement for the use of those services. However, I don't believe that this bill will present that problem," he concluded. CHAIR GARY STEVENS called on Mr. Lemaster. ALAN LEMASTER, Gakona resident, explained that Copper Valley is surrounded by Valdez, Delta, and Mat-Su all of which are either a borough or looking at becoming a borough. He stated concern with the bill for reasons that are different than the previous testimony. The local REAA is large and if the bill were to pass it's conceivable that the area could be "cherry-picked to death up here." It would be extremely problematic if the pipeline and pump station were picked up by another borough and the rest of the area were left to become something on its own. He said he has discussed the concern with the LBC and they have said he's not too far off the mark. MS. MOSS said she'd like to respond to several statements. She suggested that the situation in the Copper Valley wouldn't change with passage of HB 133. Under existing law Mr. Lemaster's concerns could be realized. Referencing the LBC interpretation of Section 3, she directed attention to page 2, line 22. Following the third provision at the end of line 22 is the word "and". The legislative drafting manual says that "and" or "or" should be included only between the last two items in a list and not between each item. Therefore, each item should be read as though it is a comma and the word "and" that is just before the last item is inclusive. Most of the roads in Fairbanks are maintained by DOT and the people who live 40 to 50 miles from Fairbanks have, for the most part, built their own homes over a period of time. A good many of those people also live on fixed incomes. If the borough were allowed to annex property all the way to the Yukon River and begin charging property tax, many of those people would lose their homes. She concluded, " Mayor Thompson - I understand his concerns, but what this bill is dealing with is an aggregate vote regulation that is not covered statutorily. In fact it is contrary to statute." CHAIR GARY STEVENS called a brief at ease. MS. MOSS asked that the bill be moved to the Senate State Affairs Committee. Senator Therriault had similar legislation moving through the process and she wanted him to have the opportunity to review the legislation. CHAIR GARY STEVENS said he appreciated her comments and he was sure that the State Affairs Committee would have legitimate concerns. However, the Community and Regional Affairs Committee also has responsibility in what happens to communities. CHAIR GARY STEVENS held CSSSHB 133(JUD) AM in committee.