SB 128-BOROUGH INCORPORATION  8:38:00 AM MR. DAVE STANCLIFF, staff to Senator Therriault, introduced SB 128. The adjustment in statutory language is constitutional. 8:39:39 AM MR. STANCLIFF informed currently when a group of people propose a boundary change, the Local Boundary Commission (LBC) may or may not consider it, but if the government proposes a boundary change, the LBC must consider it. 8:41:15 AM MR. STANCLIFF researched the intent back to the founders of the Alaska Constitution. 8:43:03 AM MR. STANCLIFF quoted from Senator Vic Fisher: "The borough, as visualized here, is even more than just a unit of local government; it is also a unit for carrying out what otherwise is carried out as state functions. We (indisc) visualize that the state will force boroughs to organize since we feel they should be set up on such a basis that there would be enough inducement for each to organize." 8:45:18 AM MR. STANCLIFF asserted SB 128 does not restrict the ability of the LBC to consider any local change brought before it. 8:47:09 AM MR. STANCLIFF aired government should originate with the people, and especially with regards to borough formation and boundary changes. 8:48:38 AM MR. DARROLL HARGRAVES, chairman, Local Boundary Commission, testified against SB 128. The members of the LBC are not interested in working fulltime to advocate anything. They respond to petitions and legistrative mandates. It is not their purpose to look for borough planning and forming. The precedent has been set in establishing boroughs and cities and should be protected. 8:51:23 AM MR. HARGRAVES continued some people resist borough formation. Most of the population is in a local borough that was mandated by the Legislature. Delegate Barry White expressed optimism that the State of Alaska would offer incentives for borough formation. 8:54:13 AM The eight boroughs of Fairbanks, Mat-Su, Anchorage, Kenai Peninsula, Kodiak Island, Sitka, Juneau and Ketchikan take in nearly 7 out of every 8 Alaskan citizens. 8:55:38 AM The 1972 Legislature mandated that each second-class city with at least 400 residents should be reclassified as a first class city. 8:57:32 AM MR. HARGRAVES added the LBC has concerns that SB 128 is unconstitutional. 8:58:25 AM SENATOR GENE THERRIAULT advised Mr. Hargraves there would still be two methods of borough formation, the difference being elected officials are involved in the process. 9:00:03 AM CHAIR SEEKINS asked Mr. Hargraves to clarify his opening remarks. MR. HARGRAVES explained the LBC typically does not wage campaigns in regards to legislative matters. The LBC does not typically seek to organize boroughs. The LBC responds to petitions by having hearings. In this case, the LBC opposes SB 128 as it is seen as a negative for statewide policy. CHAIR SEEKINS asked whether the LBC has ever initiated a borough formation. MR. HARGRAVES replied no. Requests always come to them in the form of an initiative or a local option. 9:02:28 AM CHAIR RALPH SEEKINS expressed concern with Mr. Hargraves' use of the words "typically" and "for the most part." SENATOR GRETCHEN GUESS asked Senator Therriault the process for when two communities want to form a borough and asked how SB 128 would contribute to the process. SENATOR THERRIAULT said there are currently citizen groups in the Delta Junction area who are using the Title 29 route. SENATOR GUESS asked whether SB 128 would prohibit anyone from forming a borough. th SENATOR THERRIAULT answered no. The April 5 opinion from Ms. Tamara Cook says, "The bill does not prohibit the Local Boundary Commission from considering a borough corporation requested of it by any entity if it chooses to do so." 9:05:04 AM SENATOR HOLLIS FRENCH asked the option for the LBC should a member of the Department of Community & Economic Development (DCED) come to them and suggest a location for borough formation. MR. STANCLIFF answered the commission would have total discretion. SENATOR THERRIAULT referenced a 1959 attorney general opinion that quoted a section of statute that was repealed. "Since the commission may consider any local government boundary or any proposed local boundary change, it exercises other powers as prescribed by law. It shall present proposed local government boundaries or local government boundary changes to the Legislature during the first ten days of every session." In previous statute it differentiated between a local boundary and a local boundary change. No borough has ever been formed under Title 44 as a local boundary change. That methodology has never been used in the State of Alaska. 9:08:04 AM SENATOR CHARLIE HUGGINS asked Mr. Hargraves whether he was involved in the Valdez initiative. MR. HARGRAVES answered the LBC has not received a petition from Valdez. Some communities in that area have petitioned to become a borough. SENATOR HUGGINS asked for clarification that the LBC is not currently working on anything that would include Valdez. MR. HARGRAVES asserted the LBC is not currently working on anything to do with Valdez. 9:10:18 AM CHAIR SEEKINS asked whether Mr. Hargraves knew of any activity regarding the Valdez area. MR. HARGRAVES answered local municipalities are always looking at the expansion of boundaries but that doesn't become LBC activity. There is an old petition that was presented to the LBC but he couldn't say what has been done. Nothing is in front of the LBC today in regards to Valdez. 9:12:17 AM BOB HICKS, vice chair, LBC, testified in opposition of SB 128. Local political decisions do not usually create proper boundaries. Boundaries should be established at the state level. Article 10 Section 12 of the Alaska Constitution implements that policy. It creates the LBC and it devotes three sentences to creating the legislative review process. The last sentence provides for local option elections as an alternative method to the legislative review. 9:14:59 AM MR. HICKS continued the Alaska Supreme Court has ruled twice on this in the past and they said the Section 12 legislative review method coexists with all the other processes established by law. Section 12 is independent of the other processes. SB 128 amends the present statute to say that a boundary change may not be construed to include borough incorporation for purposes of petitions originating from any of three legal sources. That is different from the way it was originally advertised in the press releases. He wondered why SB 128 doesn't address all boundary changes. 9:17:17 AM MR. HICKS maintained SB 128 is susceptible to two different interpretations. One is that the LBC cannot consider a borough incorporation request. Government originates with the people. SB 128 disenfranchises every political subdivision in the state from requesting boundary incorporation. SB 128 limits the borough incorporation process now only to the local option election. The Alaska Supreme Court has repeatedly recognized the constitutional policy that local political decisions do not create proper boundaries. SB 128 will repeal the legislative review method. SB 128 will leave all future boundaries solely to local elections. For these reasons, SB 128 will be declared unconstitutional. 9:19:53 AM SENATOR FRENCH asked Mr. Hicks his interpretation of the word "change" in Section 12. 9:22:41 AM MR. HICKS said creation of a borough results in a boundary change in the same way that the two Alaska Supreme Court decisions say that disillusion of a corporation results in a boundary change under Section 12. A boundary change exists as soon as an organized borough is created. 9:25:01 AM SENATOR GUESS referenced Ms. Tamara Cook's memo, which stated "The bill does not prohibit the LBC from considering borough incorporation requested of it by any entity if it chooses to do so." She asked Mr. Stancliff whether there was anything in the current statute that instructs the commission on which petitions to consider. MR. STANCLIFF said the latitude constitutionally clearly rests with the constitution to set the conditions and the standards and the criteria. There is nothing in the Legislature that suggests a stronger directive. He advised he has detailed email communications from LBC staff. 9:27:32 AM CHAIR SEEKINS asked for copies of the communication. He held SB 128 in committee.