03/27/1995 10:40 AM Senate FIN

  CS FOR HOUSE BILL NO. 79(FIN)                                                
                                                                               
       An Act allowing the Department  of Natural Resources to                 
       quitclaim  land   or  interests   in  land,   including                 
       submerged or shore  land, to a municipality  to correct                 
       errors   or   omissions   of   the  municipality   when                 
       inequitable detriment would  result to a person  due to                 
       that person's reliance upon the  errors or omissions of                 
       the municipality.                                                       
                                                                               
  Co-chairman Halford directed  that CSHB 79 (Fin)  be brought                 
  on for  discussion.   Representative Jerry  Mackie, sponsor,                 
  came  before committee.  He explained  that the bill relates                 
  to   a  50-year-old   problem  that   occurred  at   Skagway                 
                                                                               
                                                                               
  immediately after World War  II.  The river was  eroding the                 
  front portion of the  city, and the Army Corps  of Engineers                 
  constructed a dike.  The city subsequently backfilled behind                 
  the dike and  subdivided and sold  the property.  Owners  of                 
  the lots now have  clouded title which raises problems  when                 
  one attempts to sell or transfer  a lot.  The community high                 
  school  is  also located  on  the  property.   The  Dept. of                 
  Natural Resources has been unable to rectify the problem.  A                 
  statutory fix is thus  necessary.  The bill contains  an 18-                 
  month sunset provision  which allows  a window within  which                 
  the Dept.  of Natural  Resources could  fix the  problem for                 
  Skagway.  That window would then cease to exist.                             
                                                                               
  Representative Mackie referenced  a map of the  area showing                 
  the 10 to 12 lots impacted by the bill.  He  reiterated that                 
  the mistake                                                                  
  was  made by the community prior  to statehood, zoning laws,                 
  etc.   Skagway has  had perpetual problems  with the  issue.                 
  Both the Dept. of Natural Resources  and the city of Skagway                 
  requested the proposed bill.                                                 
                                                                               
  Senator  Randy  Phillips  asked that  the  Dept.  of Natural                 
  Resources contact communities  to ensure that no  others are                 
  experiencing  a   problem  similar   to  that   at  Skagway.                 
  Representative  Mackie  advised  that  Skagway  has  not yet                 
  reached its entitlement.  Land impacted by the proposed bill                 
  would apply toward that cap.                                                 
                                                                               
  Senator Zharoff  acknowledged that  similar legislation  had                 
  been before  the legislature  for a  number of  years.   The                 
  issue was discussed in Senate Resources, and an amendment to                 
  resolve the problem was included in another bill.                            
                                                                               
  Co-chairman  Halford  asked if  the  bill would  cover other                 
  municipalities.  Representative Mackie responded negatively.                 
  Co-chairman  Frank noted that his concern at the time Senate                 
  Resources  amended  Senator  Leman's  bill  was  "the  broad                 
  application  of  the  opportunity to  control  submerged  or                 
  tidelands."    He  then voiced  his  understanding  that the                 
  proposed   bill   reflects   a   "limited  application   for                 
  tidelands."  Representative Mackie concurred.                                
                                                                               
  In  response to  an  additional  question  from  Co-chairman                 
  Halford, Representative  Mackie  advised that  Skagway is  a                 
  first class city which has not received its full entitlement                 
  from the state.  Co-chairman Halford said he would feel more                 
  comfortable  had  Senate Resources  reviewed  the bill.   He                 
  again sought assurance  that the  legislation would have  no                 
  other application than to Skagway.                                           
                                                                               
  NICO  BUS, Legislative Liaison,  Dept. of Natural Resources,                 
  came before committee.   He said  that the department  would                 
  contact  the various municipalities.  He  added that, to the                 
  best of his knowledge, no other municipality qualifies under                 
                                                                               
                                                                               
  the terms of the bill.  Co-chairman Frank asked what feature                 
  of the  bill limits  it to  Skagway.   Representative Mackie                 
  voiced his understanding that as  the bill is drafted,  with                 
  the criteria laid out, no  other municipalities have brought                 
  similar  problems  to  the   department's  attention.    The                 
  department  has  attempted to  resolve  the problem  for ten                 
  years.  It was determined that the only way to do so was per                 
  the wording in the present bill.  Co-chairman Halford voiced                 
  concern that language  within the bill would lead  people to                 
  believe that if they relied on an error by any municipality,                 
  the Dept. of  Natural Resources is authorized  to "give them                 
  the  state  land to  make up  the problem."   The  bill only                 
  applies to  the entitlement, if an entitlement  remains.  If                 
  the  municipality  has no  remaining  entitlement,  the bill                 
  still works. Co-chairman Frank  suggested limiting the  bill                 
  to first class cities.                                                       
                                                                               
  Senator Phillips asked  how the  Dept. of Natural  Resources                 
  determined no other  communities would be involved.  Mr. Bus                 
  explained that the Dept. of  Community and Regional Affairs,                 
  Alaska Municipal League, and Dept. of Natural Resources have                 
  all been involved in both the issue and numerous legislative                 
  hearings over a number of years.   There has been sufficient                 
  public   process   but   no   feedback   from   "any   other                 
  municipalities."                                                             
                                                                               
  Co-chairman  Frank MOVED  to delete the  word "municipality"                 
  and insert  "first class  city" in  lieu thereof  throughout                 
  subsection (11) on pages 3 and 4.   Other members raised the                 
  issue of a possible title  change to the House  legislation.                 
  Co-chairman Frank voiced his belief  that the wording change                 
  would  be  consistent  with title  language  referring  to a                 
  municipality. Co-chairman  Halford called for  objections to                 
  the amendment.  None were forthcoming, and the amendment was                 
  ADOPTED for incorporation within a  Senate Finance Committee                 
  Substitute.                                                                  
                                                                               
  Senator Randy  Phillips MOVED  that SCS  CSHB 79  (Fin) pass                 
  from   committee   with   individual   recommendations   and                 
  accompanying  zero  fiscal  notes.   Several  scenarios  for                 
  changing  the   wording  within   subsection  (11)   without                 
  impacting the title were suggested  by Co-chairman Frank and                 
  Senator Rieger.  Co-chairman  Halford subsequently suggested                 
  that a legal opinion be obtained.  Senator Phillips withdrew                 
  his motion for passage,  and the bill was HELD  in committee                 
  pending receipt of the above-noted opinion.                                  
                                                                               
  ADJOURNMENT                                                                  
                                                                               
  The meeting was adjourned at approximately 11:05 a.m.