ALASKA STATE LEGISLATURE
SENATE STATE AFFAIRS STANDING COMMITTEE
March 30, 2017
3:34 p.m.
MEMBERS PRESENT
Senator Mike Dunleavy, Chair
Senator David Wilson
Senator Cathy Giessel
Senator John Coghill
Senator Dennis Egan
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
SENATE JOINT RESOLUTION NO. 2
Proposing an amendment to the Constitution of the State of
Alaska relating to an appropriation limit.
- HEARD & HELD
SENATE BILL NO. 77
"An Act relating to service areas in second class boroughs; and
providing for an effective date."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: SJR 2
SHORT TITLE: CONST AM: APPROPRIATION LIMIT
SPONSOR(s): STATE AFFAIRS
01/27/17 (S) READ THE FIRST TIME - REFERRALS
01/27/17 (S) STA, JUD, FIN
02/14/17 (S) STA AT 3:30 PM BUTROVICH 205
02/14/17 (S) Heard & Held
02/14/17 (S) MINUTE(STA)
03/02/17 (S) STA AT 3:30 PM BUTROVICH 205
03/02/17 (S) Heard & Held
03/02/17 (S) MINUTE(STA)
03/30/17 (S) STA AT 3:30 PM BUTROVICH 205
BILL: SB 77
SHORT TITLE: SECOND CLASS BOROUGH SERVICE AREAS
SPONSOR(s): MICCICHE
03/03/17 (S) READ THE FIRST TIME - REFERRALS
03/03/17 (S) CRA, STA
03/16/17 (S) CRA AT 3:30 PM BELTZ 105 (TSBldg)
03/16/17 (S) Heard & Held
03/16/17 (S) MINUTE(CRA)
03/21/17 (S) CRA AT 3:30 PM BELTZ 105 (TSBldg)
03/21/17 (S) Moved SB 77 Out of Committee
03/21/17 (S) MINUTE(CRA)
03/22/17 (S) CRA RPT 4DP 1NR
03/22/17 (S) DP: BISHOP, MACKINNON, GARDNER, HOFFMAN
03/22/17 (S) NR: STEDMAN
03/30/17 (S) STA AT 3:30 PM BUTROVICH 205
WITNESS REGISTER
DANIEL GEORGE, Staff
Senator Mike Dunleavy
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Provided an overview of the committee
substitute for SJR 2.
RACHEL HANKE, Staff
Senator Peter Micciche
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Provided an overview of SB 77.
LARRY PERSILY, Chief of Staff to Borough Mayor
Kenai Peninsula Borough
Soldotna, Alaska
POSITION STATEMENT: Testified in support of SB 77.
ACTION NARRATIVE
3:34:13 PM
CHAIR MIKE DUNLEAVY called the Senate State Affairs Standing
Committee meeting to order at 3:34 p.m. Present at the call to
order were Senators Giessel, Wilson, Egan, and Chair Dunleavy.
SJR 2-CONST AM: APPROPRIATION LIMIT
3:34:57 PM
CHAIR DUNLEAVY announced the consideration of Senate Joint
Resolution (SJR) 2.
3:35:03 PM
SENATOR GIESSEL moved to adopt the committee substitute (CS) for
SJR 2, version: 30-LS0123\M.
CHAIR DUNLEAVY objected for discussion purposes.
3:35:26 PM
DANIEL GEORGE, Staff, Senator Dunleavy, Alaska State
Legislature, Juneau, Alaska, paraphrased the following
"Explanation of Changes" document for the Senate CS for SJR
2(STA), version: 30-LS0123\M:
Page 1, line 1: The bill title is clarified to reflect
that the Constitution will be amended in two places,
due to the addition of an applicability section within
the CS. Article IX, Section 16, Appropriation Limit is
a revision of an existing section; and Article XV,
Section 30, Application of Appropriation Limit is a
new section.
Page 1, line 7: Changes the appropriation limit from
four billion two hundred fifty million dollars to four
billion three hundred million dollars.
Page 1, lines 12- 13: Adds receipts of the Alaska
permanent fund which are appropriated to the Alaska
Permanent Fund Corporation to the list of
appropriations exempt from the limit.
Page 2, lines 6-7: Clarifies the language of the bill
to explain that the revenue limit excludes an
appropriation that is duplicating the authorization to
expend funds from another appropriation.
Page 2, lines 21-25: Adds a new section to clarify
that the appropriation limit would apply to
appropriations made for FY2020, and thereafter.
3:36:31 PM
SENATOR COGHILL joined the committee meeting.
3:37:03 PM
CHAIR DUNLEAVY removed his objection. He announced that seeing
no other objection, the CS for SJR 2, version M was adopted.
He explained that his intent is to move slowly on SJR 2 and make
changes prior to moving the resolution to the next committee. He
addressed page 1, lines 7-8 and noted that an issue regarding
the base that will be used to calculate the appropriation limit
will be continually discussed. He set forth that his office has
addressed the base-formula component in terms of percentage-of-
inflation and population. He added that committee members will
receive "interesting data" from a recent poll that the Alaska
Chamber of Commerce commissioned Dittman Research that addressed
a spending cap.
MR. GEORGE pointed out that a high-level calculation worksheet
is available to committee members which shows how the base
number in the bill was determined.
CHAIR DUNLEAVY held SJR 2 in committee.
3:40:18 PM
At ease.
SB 77-SECOND CLASS BOROUGH SERVICE AREAS
3:41:27 PM
CHAIR DUNLEAVY called the committee back to order and announced
the consideration of Senate Bill (SB) 77.
3:42:02 PM
RACHEL HANKE, Staff, Senator Peter Micciche, Alaska State
Legislature, Juneau, Alaska, sponsor of SB 77 provided the
following overview:
Senate Bill 77 adds one paragraph to [Alaska Statutes]
Title 29 which would allow second-class boroughs to
establish non-taxable service areas within state-
highway corridors where no voters reside; this will
result in more consistent and effective emergency
services which are often life-saving. Currently these
areas rely heavily on volunteer-based services.
Passage of this bill will give second-class boroughs
the freedom to provide these emergency services with
no cost to the state.
3:43:03 PM
LARRY PERSILY, Chief of Staff to Borough Mayor, Kenai Peninsula
Borough, Soldotna, Alaska, testified in support of SB 77 and
explained the need for the legislation from the borough's
perspective as follows:
As Senator Micciche's office has explained to you,
this is a unique problem on the Kenai Peninsula
Borough. We have about 100 miles of highway, Seward
and Sterling highways, heavily traveled, year-round
average of 3,000 to 4,000 vehicles a day with summer
peaks of 8,000 to 9,000 vehicles a day. The Kenai
Borough does not have area-wide emergency services
powers. We rely on volunteers for Moose Pass, Cooper
Landing, Hope Highway, Central Emergency Services in
Sterling and Soldotna to do the best they can to cover
that heavily trafficked area. The last two years there
have been almost 200-personal injuries from vehicle
accidents.
What this would allow is for the Kenai Borough a local
option, it allows second-class boroughs, by ordinance
by their assembly, to create an emergency-services
service area literally only along a state-highway
corridor; no taxable property in that corridor-service
area, no property taxation, no private property
owners, it would just be on the highway corridor, in
this case Sterling and Stewart highways, it's DOT
right-of-way and it's mostly federal land that would
give a local option if HB 148 or SB 77 were to pass
the Kenai Peninsula Borough Assembly in public
meetings, public comment, would have the option of
setting up this service area deciding how to pay for
it.
The mayor's proposal is to use federal funds that the
borough receives payment-in-lieu-of-taxes (PILT) and
those federal funds come to the borough in-lieu-of-
property-taxes on the federal lands which underlie the
highway, which is where we would put this highway
corridor. Certainly, if this bill were to pass, the
mayor was to propose it, the borough assembly to
approve it, and use federal funds that is being used
elsewhere in the budget, the borough is going to have
to decide, the borough assembly and administration,
where they would cut to make those funds available,
they are already being spent, federal PILT dollars
going into the general fund, but that would be at the
borough's responsibility.
We have reached out, there are six-second-class
boroughs in the state: Kenai, Ketchikan Gateway
Borough, Kodiak Island Borough, Aleutians East,
Bristol Bay, Fairbanks, and the Matanuska-Susitna
Borough; there are no objections from any of the six.
For example, the Matanuska-Susitna Borough has area-
wide-emergency services authority as it is, so it is a
moot issue to them. In the Aleutians East, their
response was, "I would be happy to have roads," not an
issue for them.
3:46:10 PM
SENATOR COGHILL addressed the Fairbanks North Star Borough and
asked if a disparity will be created by the bill.
MR. PERSILY explained that he has spoken with the Fairbanks
North Star Borough and they did not have an objection to the
bill. He pointed out that Kenai Peninsula Borough's situation is
different because there is no private ownership and no taxable
property in the service area on the highway corridor.
3:48:16 PM
SENATOR COGHILL noted that in addressing the bill with his staff
that an issue would occur within municipal boundaries.
MR. PERSILY answered correct. He specified that the bill is not
an opportunity for the Kenai Peninsula Borough to expand and
take over parts of Anchorage. He explained that the service area
would stop at the Central Emergency Services District which is
Sterling and Soldotna.
3:49:10 PM
SENATOR COGHILL remarked that the legislation may provoke
thought in others. He said the emergency medical services'
response time probably could be shortened significantly.
MR. PERSILY replied that not only is the response time
addressed, but the time taken for long callouts. He pointed out
that a callout from Cooper Landing could take as long as 4 to 6
hours. He said the intent is not build new stations or buying
new equipment. He specified that the objective is to coordinate
and manage callouts, make sure there is backup, and make sure
there is adequate staff when long callouts occur.
3:50:14 PM
SENATOR GIESSEL noted that the service area in question used to
be in her district. She pointed out that the other factor with
Cooper Landing are the aging volunteers and the significant
concern about new volunteers. She remarked that the more the
volunteer staff can be bolstered, the better for all the
travelers. She pointed out that public safety must be provided
because Anchorage-based drivers and tourists travel extensively
to the Kenai Peninsula every summer.
3:50:53 PM
CHAIR DUNLEAVY noted that the Richardson Highway was mentioned
in previous testimony and specified that the bill only pertains
to boroughs and not unorganized areas even if the organized
areas have highways.
MR. PERSILY answered correct. He specified that the bill only
applies to the six unorganized, second-class boroughs.
3:51:15 PM
CHAIR DUNLEAVY held SB 77 in committee.
3:51:50 PM
There being no further business to come before the committee,
Chair Dunleavy adjourned the Senate State Affairs Standing
Committee at 3:51 pm.