CSSSHB 133(JUD) AM-MUNICIPAL BOUNDARY CHANGES/ COMMISSION    3:45:46 PM CHAIR THERRIAULT announced HB 133 to be up for consideration. REPRESENTATIVE JOHN COGHILL, sponsor of HB 133, explained that the bill proposes changes to procedures for the Local Boundary Commission (LBC). It would change the LBC ability to propose petitions, amend petitions, deal with incorporations, and take public testimony. Section 1 requires that the LBC provide public notice before amending a petition so that the public is included. Section 2 calls for two public hearings for incorporation rather than just one. Section 3 deals with the ability for people to vote on a proposed annexation. A current LBC regulation mandates an aggregate vote on proposed annexations and this change is to protect those in the proposed annexing area. As proposed, there would be a vote in the municipal area that wants to annex and a vote in the area that is proposed for annexation. This change encourages public dialogue, he asserted. Section 4 relates to LBC regulations and the need for accord with Title 29, which asserts legislative authority and forces participation in the dialogue. REPRESENTATIVE COGHILL mentioned that he had an amendment relating to detachments. 3:52:01 PM SENATOR KIM ELTON posed a hypothetical situation related to the Greens Creek annexation by the City and Borough of Juneau. If just two voters resided in the Greens Creek area, he asked if one of the two voters could have stopped the annexation process under proposed Section 3. REPRESENTATIVE COGHILL acknowledged that property owners would have to agree on the annexation. SENATOR ELTON commented that one public hearing might suffice in an area that has just two voters and asked if there isn't a need for an "escape hatch" to avoid such a scenario. REPRESENTATIVE COGHILL replied he would need to ponder that circumstance. SENATOR ELTON suggested that the problem comes from the wording. He questioned whether a property owner would qualify to vote without being a resident of the area. CHAIR THERRIAULT pointed out that property ownership isn't a qualification for voting in an area. SENATOR ELTON asked if a majority vote in both the annexing and the annexed areas would be required for detachments. REPRESENTATIVE COGHILL said yes. Obviously it could be quite contentious, which is why he didn't address detachments initially. However, if the voters residing in an area aren't able to choose the form of government, he would question whether they are well served. 3:59:38 PM MARK HICKEY, Lobbyist for the Lake and Peninsula Borough, testified in support of HB 133. Providing background on the two methods that the LBC has to deal with annexations and detachments, he explained that Section 2 is current law and deals with local action. The alternative method provides for legislative review and requires legislative action to deny within 45 days. Local action is addressed in Section 3 and is a scenario that the Lake and Peninsula Borough has faced several times. Without the change proposed in Section 1, Lake and Peninsula Borough residents could face a hostile takeover and have no opportunity to vote on the issue. Under Section 1 voters in both areas would have to affirm the action. Addressing Senator Elton's question, he said it's complicated but there is a legislative review component to the LBC that is provided for in the Alaska State Constitution and the proposed change in Section 3 doesn't eliminate that. 4:03:34 PM SENATOR HUGGINS asked for an interpretation of page 2, line 21. MR. HICKEY replied that is existing law and his understanding is that a municipality may request a boundary change to include adjacent property that it owns. SENATOR HUGGINS asked if that creates a problem for the areas he represents. MR. HICKEY said no. CHAIR THERRIAULT asked if he has an opinion on the proposed amendment relating to detachments on page 2, line 16. MR. HICKEY offered the view that the amendment makes sense. 4:07:04 PM JOHN HOZEY, City Manager for the City of Valdez, suggested the following amendment to Title 29.05.031: In setting boundaries of a proposed borough or unified municipality, consideration shall be given to assisting administrative or corporate boundaries and to drainage basins or other regional geographic features. Such corporate and administrative boundaries may be considered, however such boundaries may not be entitled to any presumption in the determination of appropriate boundaries under subsection (a) of this section. MR. HOZEY explained that the amendment deals with the fact that inordinate weight is assigned to the model borough boundaries. CHAIR THERRIAULT asked the sponsor if he had discussed the proposed amendment with Mr. Hozey. REPRESENTATIVE COGHILL said yes and although the suggestion is good it is beyond the scope of the bill at this point. 4:11:24 PM DAN BOCKHORST, Staff to the Local Boundary Commission, advised that he was available to answer technical questions. He noted the Chair Hargraves had provided a written statement to the committee. CHAIR THERRIAULT asked if any issues that were raised needed clarification. MR. BOCKHORST suggested that there is significant misunderstanding related to the model borough boundaries and how they were created. He asked that the record reflect that he did not agree with the characterization that inordinate weight is given to the model boundaries and that it has been an impediment to borough formation. Calling Senator Elton's suggestion relating to the number of public hearings practical, he clarified that his reading of Section 2 is that it only applies in the event that the LBC submits a borough incorporation petition to the Legislature under the terms of Article X, Section 12. Therefore the hypothetical situation for the Green's Creek annexation would not have applied. 4:15:00 PM CHAIR THERRIAULT asked if he would comment on the suggestion to add the word "detachment" on page 2, line 16. MR. BOCKHORST replied the commission has no objection. CHAIR THERRIAULT moved conceptual Amendment 1 on behalf of the sponsor to include detachments. Offering a conceptual amendment would provide the drafters the ability to provide conforming language. SENATOR ELTON objected to ask whether the LBC suggested the language. REPRESENTATIVE COGHILL replied Mr. Hargraves brought it up and it would provide consistency. SENATOR ELTON agreed that consistency is good, but suggested that this would create a very high threshold for a detachment because it would remove property from the tax base. CHAIR THERRIAULT offered the counter argument that there could be property tax value but delivery of services is difficult to cover with the amount that is raised from the property tax. SENATOR ELTON maintained his objection to Amendment 1. CHAIR THERRIAULT asked for a roll call vote. Conceptual Amendment 1 passed with Senators Wagoner, Huggins and Chair Therriault voting yea and Senator Elton voting nay. CHAIR THERRIAULT noted that Legislative Finance has determined it's possible to zero the fiscal note and he would like to vote on that action separate from the bill. He asked for the will of the committee. Wagoner motioned to report SCS CSSSHB 133(STA) from committee with individual recommendations. There being no objection, it was so ordered. CHAIR THERRIAULT informed the sponsor that the amendment would trigger a title change. CHAIR THERRIAULT asked for a motion on a zero fiscal note. SENATOR WAGONER moved that a zero fiscal note for SCS CSSSHB 133(STA) be prepared and forwarded from committee with the bill. There being no objection, the motion carried.