SB 136-MUNICIPAL ROAD SERVICE AREAS  CSHB 185(CRA)-MUNICIPAL ROAD SERVICE AREAS  CHAIR KOOKESH announced the consideration of SB 136. GRIER HOPKINS, staff to Senator Thomas, sponsor of SB 136, said that the bill would be substituted by its partner bill from the other body, HB 185. CHAIR KOOKESH asked if a committee substitute would be introduced to combine the two bills. MR. HOPKINS said that he hadn't heard so. CHAIR KOOKESH announced the committee would hear SB 136 and HB 185 simultaneously. He didn't intend to move either today. SENATOR COWDERY commented that the House bill would be more appropriately dealt with. CHAIR KOOKESH agreed. 1:35:24 PM CAROL BEECHER, staff to Representative Coghill, sponsor of HB 185, said the bill provides boroughs with a means of altering existing road service area boundaries to ensure taxpayer fairness among residents of service areas. A service area is a taxing jurisdiction within a borough that has been established to provide special services such as road maintenance or fire protection. These services are requested and approved by voters residing within a specific area. State law permits borough residents living outside a service area to use service area roads for their sole or legally required access. These residents derive a direct benefit equal to residents within the service area, yet they can refuse to contribute to the costs of construction or maintenance of these roads by voting down any annexation attempt. These state mandated annexation votes typically fail as individuals are reluctant to join a service area when they can instead use these maintained roads for free. HB 185 amends state law by allowing a service area to annex property that uses its roads for their sole or legally required access without a separate vote of the property to be annexed. A second issue arises where residents of a service area are required to pay into a service area even though they do not utilize the service area roads for access to their property. Service areas, however, are often reluctant to vote to remove property from the service area because it effectively raises taxes on the remaining property owners. HB 185 amends state law by allowing a borough assembly to exercise its judgment to alter, by ordinance, a service area boundary to exclude a property that does not use service area roads as its sole or legally required access. 1:37:26 PM SENATOR COWDERY asked if the last paragraph of the bill means that the borough can make a ruling on the issue. MS. BEECHER replied yes, and referenced a part of the bill that will allow a property owner not using the service area roads to be removed from the area so as to not pay for a service they're not using. SENATOR COWDERY replied that the issue seems to be creating a statewide law to address a local problem. MS. BEECHER replied that Anchorage has reported similar problems. 1:38:59 PM SENATOR OLSON asked if other areas of the state were having similar problems with the service areas. MS. BEECHER replied that other districts were having issues of the same sort. SENATOR OLSON asked for the bill's effect on commercial road users. 1:39:46 PM MS. BEECHER said that if a property is not using the service area as a sole or legally required access, they could petition to be removed from the area. CHAIR KOOKESH asked if there is any opposition to the bill. MS. BEECHER replied that there was someone in the audience who wanted to testify. 1:40:39 PM SANDRA WILSON, representing herself, said that the bill is unfair; it bases the amount people pay for their road services on the worth of their houses. The bill was written for Fairbanks, and it's not a solution for issues statewide. She gave several examples of ways the borough might abuse or improperly use the bill. 1:42:24 PM SENATOR COWDERY asked for clarification of a point made by Ms. Wilson. MS. WILSON replied that tax amounts should be set, not based on house worth. SENATOR COWDERY asked for her thoughts on vacant lots. MS. WILSON said that currently the tax is based on mill rates for property value. SENATOR COWDERY said that the public uses the road whether they live there or not. MS. WILSON replied that was correct. 1:43:29 PM SENATOR WIELECHOWSKI asked if Ms. Wilson was questioning the fairness of tax payments, and said that the bill doesn't address that issue. MS. WILSON agreed, but said that the bill doesn't make the issue any fairer. SENATOR WIELECHOWSKI said that there may be certain people using an area without paying for it, and they should do so. MS. WILSON said that everyone in the district should pay the same amount. SENATOR WIELECHOWSKI said that the bill has nothing to do with that issue, and clarified that he was talking about whether people should pay or not. 1:44:54 PM SENATOR OLSON said that if there's only one driver then it doesn't matter how many cars they own. MS. WILSON explained that taxes should depend on how many people in a home drive. SENATOR OLSON said that that logic isn't common regarding property taxes. MS. WILSON said that a gallon of milk costs the same for everyone. SENATOR OLSON replied that the logic isn't the same. MS. WILSON replied that all boroughs determine taxes in different ways, and the bill isn't a solution for the whole state. 1:46:42 PM SENATOR WIELECHOWSKI asked which districts the bill doesn't work for. MS. WILSON replied that a gentleman from Kenai who testified in a previous meeting pointed out how it would not work for his area. SENATOR WIELECHOWSKI said that in his understanding it worked fine. He asked if there's a way the city of Fairbanks could fix the issue without changing the bill. MS. WILSON said that the issue needs to be addressed locally. SENATOR WIELECHOWSKI asked how that could be done. MS. WILSON replied that a local ordinance could be used. SENATOR WIELECHOWSKI pointed out that the issue is governed by state law. MS. WILSON said that road service methods change for each borough. 1:47:56 PM SENATOR WIELECHOWSKI said that a local solution would be preferable, but it appears that state law does not allow for that. SENATOR COWDERY said that state law was in place when the original areas were annexed. He added that he sympathizes with the Fairbanks people, and the issue is local. SENATOR OLSON asked for clarification on the issue. 1:49:11 PM SENATOR WIELECHOWSKI repeated that a local solution would be ideal, but he's not convinced there is one available. CHAIR KOOKESH said that there was a representative from the Fairbanks North Star borough available for questions. 1:49:51 PM RENEE BROKER, attorney for the Fairbanks North Star borough, clarified that the bill imposes a fair standard making property owners eligible for movement into or out of a service area based on road use. The bill is fully supported by Fairbanks service areas because a property should belong to the service area in which the owner drives. The legislation restores constitutional rights for altering service boundaries logically, and the bill is following state law. The amount of tax paid for different- sized families is not an issue that can be fixed in this bill. The borough worked with the municipality of Anchorage on the bill because of similar problems in that area. The problem is not only urban. 1:54:27 PM SENATOR WIELECHOWSKI said that there had been testimony that the issue should be resolved at a local level, and asked if that was possible. MS. BROKER replied that it absolutely is not, and gave an example of why. 1:55:20 PM SENATOR COWDERY asked if road service areas were changed within statute. MS. BROKER replied that was correct. 1:55:57 PM TAMMY WILSON, representing herself, said that the issue could be taken care of locally; when subdivisions are created they have to be stringently planned. Before they're approved, they should be dealt with in terms of road service areas. The issue isn't one that should be solved in hindsight. She explained that she lives on a private road in Fairbanks that's not maintained, yet the city wants to put her into a road service area; she explained the process she went through to try to not become part of a service area, and how she should not have been included in the road service area. She added that most of the examples of affected areas were small groups of houses; she has heard that a lot of the issue is because gravel pits are springing up behind subdivisions. She suggested adding a simple definition of private versus public road to the bill. 2:00:53 PM SENATOR WIELECHOWSKI said that he finally understood the issue, and asked how the private road maintenance was funded. MS. WILSON replied that they collect money door-to-door and maintain the road themselves. SENATOR WIELECHOWSKI said that he understood her concern, and asked for clarification on the effects of the bill on her road. MS. WILSON replied the bill shows that the borough doesn't even understand what they should and should not include in road service areas. 2:02:37 PM SENATOR WIELECHOWSKI said that it seems that individual road maintenance fees would go down if more people lived on the road and paid the same amount of taxes. MS. WILSON replied that everyone pays the same amount for road maintenance. She added that the other point of the issue is that there's no distinction between a private and public road in the bill or anywhere in state law. 2:04:33 PM ED MAHONEY, representing himself, said that he heard that his language of concern was taken out of the bill, and if that was the case he had no further problem with the bill. If it was not, he would maintain his opposition. CHAIR KOOKESH said that the committee would hold HB 185 [CSHB 185(CRA)] and SB 136.