Legislature(1995 - 1996)
03/10/1995 01:45 PM House FIN
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE BILL NO. 20
"An Act relating to rights in certain tide and
submerged land."
Work Draft for HB 20, #9-LS0118\G, dated 2/3/95 was adopted
during the 3/3/95 meeting of the House Finance Committee.
JILL PARSONS, MAT-SU BOROUGH testified via the
teleconference network. She stated that the Mat-Su Borough
supports HB 20 without modification.
Representative Martin expressed concern with the effect of
changing tidelands on municipal boundaries. He referred to
a dispute in Gustavus over ownership of newly formed land.
RON SWANSON, DIRECTOR, DIVISION OF LANDS, DEPARTMENT OF
NATURAL RESOURCES responded to questions by Representative
Martin. He explained that only federal land would be
available for selection under the Alaska Native Claims
Settlement Act. He discussed the status of new land
developed as a result of natural forces. He explained that
the process of determining ownership of new land due to
natural forces is complicated and technical.
In response to a question by Representative Therriault, Mr.
Swanson clarified that the addition of "shore lands" would
capture navigable inland lands in the Fairbanks North Star
Borough. He noted that revenue derived from shore lands is
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minimal. He added that the Department has not emphasized
obtaining revenue from shore lands. He observed that an
increase in the tourism industry could result in revenue for
the state or municipalities derived from shore lands. He
stressed that the Department did not anticipate raising
revenues from small privately owned and used docks.
Representative Brown MOVED to adopt Amendment 1 (Attachment
1). Co-Chair Hanley OBJECTED for purpose of discussion.
Representative Brown explained that Amendment 1 would
clarify that subsurface interests are reserved to the state.
She noted that the sponsor did not object to Amendment 1.
There being NO OBJECTION, Amendment 1 was adopted.
Representative Brown provided members with Amendment 2
(Attachment 2). She explained that the amendment deletes
"or sale" on page 2. line 21. She stressed that the intent
is not to allow municipalities to select large amounts of
tidelands for resale into private ownership. She
acknowledged that submerged lands and tidelands are
important for public access. She stressed that the Public
Trust Doctrine will be more easily enforced if the lands
stay in state or municipal ownership. Municipalities could
still lease lands under long term leases.
Representative Grussendorf expressed concern that the lack
of ownership could prevent private business interests from
securing financing. Mr. Swanson observed that the trend in
Western states is to only lease tidelands. He assured
Representative Grussendorf that long term leases, up to 99
years, take care of the economic concerns of the banks. He
emphasized that leases allow the state to respond to Public
Trust Doctrine concerns. Most leases run from 20 to 55
years.
Representative Mulder noted that municipal ownership of
these lands would expand the municipal tax base. He spoke
in support of HB 20.
Representative Martin questioned if "or sale" should also be
deleted in section 1. He spoke in support of placing land
in the "hands of the public."
Representative Brown explained that section 1 affects a
variety of actions and activities by the Department of
Natural Resources. Mr. Swanson agreed that the Department
would be adversely affected by the deletion of "or sale" in
section 1.
Representative Grussendorf clarified that a municipality can
levy taxes on leases.
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Representative Brown noted that there is oil and gas
potential on much of Alaska's coast. She questioned if it
makes sense to allow private ownership of surface rights in
areas that the state may need for production facilities or
other structures.
Representative Brown MOVED to adopt Amendment 2.
Representative Martin OBJECTED. A roll call vote was taken
on the MOTION.
IN FAVOR: Grussendorf, Kelly, Mulder, Therriault, Brown,
Hanley
OPPOSED: Martin, Kohring
Representatives Navarre, Parnell and Foster were absent for
the vote.
The MOTION PASSED (6-2).
Representative Brown provided members with Amendment 3
(Attachment 3). She noted that the amendment would add "and
tidelands" on page 2, line 27 after "waters". She stated
that the amendment would maintain access to tidelands and
clarify that municipalities would assure access to tidelands
is provided. Representative Brown MOVED to adopt Amendment
3. There being NO OBJECTION, it was so ordered.
Representative Brown provided members with Amendment 4
(Attachment 4). She explained that the amendment addresses
how shore fisheries leases would be affected by the
transfers. The amendment would take land under lease out of
the transfer. She noted that there is no specific
classification of "shore fisheries development". She stated
that the intent is to not disrupt existing commercial
relationships between set-netters and the state and to
maintain the status quo in respect to those interests.
In response to a question by Co-Chair Hanley, Mr. Swanson
clarified that land can be conveyed to a municipality
subject to the lease. Leases may also be excluded from the
conveyance. If the land is subject to the lease the
municipality would have control of the lease and could do
what they wish with the land when the lease expires. The
Public Trust Doctrine only covers public access. He
expressed concern that a broad interpretation would prevent
land issuances to a municipality for other uses within the
area of the lease. He noted that the intent is to only
protect the actual lease site.
Representative Brown asked if there are fishermen operating
without a lease.
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TAMARA COOK, DIRECTOR, LEGISLATIVE LEGAL SERVICES,
LEGISLATIVE AFFAIRS AGENCY stated that there are people
operating set-net sites without leases. She questioned if a
narrow interpretation would leave out people who are fishing
without a lease or prevent future leases.
Representative Mulder noted problems on the Kenai Peninsula
in regards to set-net fishers without leases.
Mr. Mulder explained that limited entry permits in the state
will not change. He noted that it is not mandatory for
fishermen to have a lease from the state. He emphasized
that the lease protects against other fishermen using the
site. Where there is no lease in place, the first net in
the water wins. The Department of Fish and Game decides
where fishing can take place.
Representative Therriault observed that the first net in the
water gets the spot only pertains to that fishing season. A
lease protects the spot for future years.
Mr. Swanson noted that 12,000 to 13,000 thousand set-net
fishers have leases out of 2,000 thousand. There are
another 300 applications. Only about 300 fishers have not
applied for a lease.
Members were provided with Amendment 5 by Representative
Mulder (Attachment 5.) Amendment 4 states that "land is not
subject to a shore fisheries lease," while Amendment 5
states that "land is not classified for shore fisheries
development." Mr. Swanson explained that the use of "shore
fisheries development" in Amendment 5 would broaden the
language. He noted that Amendment 5 could encompass a
larger area of land than the lease area. He expressed
concern that the surrounding land which is under "shore
fisheries development" could be closed to issuances for
other uses.
Co-Chair Hanley noted that municipal leases could be issued
for areas conveyed from the state. Mr. Swanson added that
each municipality could run the program differently.
Currently, the program is consistent with the Department of
Fish and Game and the Department of Natural Resources. The
program only pays for itself.
Representative Brown pointed out that "shore fisheries
development" is not defined in statute. Mr. Swanson spoke
in support of Amendment 4.
Representative Therriault pointed out that statutes provide
that the state only charge the amount needed to cover the
administration of the leases. He emphasized that the
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leases, while they do not drive very much revenue, are
"worth big dollars." The leases are for six years. Yearly
revenues from the leases amount to $180.0 thousand dollars.
Leases are assignable and are generally transferred with the
permit.
Co-Chair Hanley noted that there are some set-net sites on
the Kenai that people would pay $20.0 to $30.0 thousand
dollars a year to utilize.
In response to a question by Representative Therriault, Mr.
Swanson clarified that current lease holders are given
preference for renewal.
REPRESENTATIVE CARL MOSES, the bill sponsor, questioned if
Amendment 4 is necessary. He maintained that set-net leases
are not enforceable. He suggested that a set-net lease
would not stand in the way of a major dock facility which is
needed by the public. He felt that the amendment would
complicate the issue. Representative Therriault disagreed
that the lease would not be enforceable.
Co-Chair Hanley asked if it would be possible to transfer
land to a municipality, yet retain state control of shore
fisheries leases.
Mr. Swanson stated that land can be conveyed to
municipalities with the retention of shore fisheries
management by the state. He suggested that the land may be
conveyed to municipalities subject to state administration
of shore fisheries lease under AS 38.05.082.
(Tape Change, HFC 95-44, Side 1)
Ms. Cook stated that, if the state conveys land to a
municipality and retains control of an existing lease, the
state's interest in managing the lease remains until the
chain of renewal is broken. Mr. Swanson stated that the
state could retain the right to issue new leases with the
concurrence of the municipality of conveyance. He
emphasized that shore fisheries leases are generally
utilized during short seasons.
Mr. Swanson interpreted the amendment to provide that
revenue derived from the lease would go to the state. Co-
Chair Hanley noted that the potential revenue is
substantial.
Representative Moses reiterated that a shore fisheries lease
would not stand in the way of a major project. Co-Chair
Hanley pointed out that leases constitute development and
occupation according to HB 20. A municipality could, for
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the purpose of acquiring specific set-net sites, utilize the
legislation to acquire all the land in their community for
the purpose of raising revenues. He stressed that policy
issues still need to be debated. Representative Moses
pointed out that an exclusive right of fishery cannot be
granted.
Mr. Swanson observed that shore fisheries leases are
enforceable. He emphasized that the lease only gives the
right to fish. No property interest is conveyed. Once land
is conveyed to the municipality the state cannot issue new
leases. He stressed that areas not currently under lease
are not competing areas to the high fisheries.
Representative Brown spoke in support of Amendment 4. She
stressed that the amendment would allow some lands to be
transferred while preserving existing shore leases with the
state. Representative Brown MOVED to adopt Amendment 4.
There being NO OBJECTION, it was so ordered.
Representative Mulder WITHDREW Amendment 5.
Representative Brown provided members with Amendment 6
(Attachment 6). She noted that the amendment defines what
land is open to municipal application. The amendment
states that "land is within or immediately adjacent to the
boundaries of the municipality." She stressed that a
municipality could apply for land that is not even close to
the municipality which could lead to the defacto annexation
of the area by the municipality. She pointed to an attempt
by the Municipality of Juneau to acquire land not adjacent
to the municipality for the purpose of annexing a mine site.
Discussion ensued in regards to the wording of the
amendment. Representative Grussendorf suggested the use of
"contiguous." Representative Brown amended her amendment to
insert "contiguous" and delete "immediately adjacent".
Representative Brown MOVED to adopt Amendment 6. There
being NO OBJECTION, it was so ordered.
Representative Brown provided members with Amendment 7
(Attachment 7). She explained that the amendment is in
response to concerns regarding the potential for oil and gas
subsurface interests. Amendment 7 inserts "or required to
support a best interest finding". She noted that page 2,
lines 23 and 24 states that: "A conveyance under this
section may contain only those restrictions required by law,
including AS 38.05.127 and (b) of this section." She
asserted that the right to develop the subsurface, as
necessary, must be protected. She maintained that the
legislation is not flexible enough to allow the subsurface
lessee to have the right to develop the surface as needed to
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produce the subsurface oil or minerals.
Representative Moses did not feel the amendment was
necessary.
Mr. Swanson stated that AS 38.05.127 only covers access to
and along water bodies. He agreed that the amendment may
not be necessary but emphasized that valid state interest
concerns would be covered by the amendment.
Representative Brown MOVED to adopt Amendment 7. There
being NO OBJECTION, it was so ordered.
Representative Brown provided members with Amendment 8
(Attachment 8).
GERON BRUCE, LEGISLATIVE LIAISON, DEPARTMENT OF FISH AND
GAME explained that there are 31 areas that the Legislature
has designated as special areas because of their high fish
and wildlife, habitat and use values. Most areas were
designated upon the urging of the public and are multiple
use areas. Uses are contingent upon the protection of the
habitat. Areas are jointly managed by the Department of
Fish and Game and the Department of Natural Resources. The
amendment would ensure that any decision to convey lands
from these designated areas is a joint decision by the
Department of Fish and Game and the Department of Natural
Resources. There are approximately 1.2 million acres of
tidelands or submerged lands in designated special use
areas.
Representative Grussendorf spoke in support of Amendment 7.
In response to a question by Representative Kelly, Mr.
Swanson clarified that these areas are currently jointly
managed. In response to a question by Co-Chair Hanley, Mr.
Bruce clarified that there are other statutory designations
covered by (b) that are not game refuges, game sanctuaries,
or critical habitat areas.
In response to a question by Representative Kelly, Mr.
Swanson stated that the Department of Fish and Game and the
Department of Natural Resources would want to scrutinize the
conveyance of designated special use land.
Representative Brown MOVED to adopt Amendment 8.
Representative Therriault OBJECTED. A roll call vote was
taken on the MOTION.
IN FAVOR: Brown, Grussendorf
OPPOSED: Kelly, Kohring, Therriault, Hanley
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Representatives Martin, Mulder, Navarre, Parnell and Foster
were absent for the vote.
The MOTION FAILED (2-4).
In response to a question by Representative Therriault,
Representative Moses stated that he would prefer that the
addition of "shore lands" was handled in another bill.
Representative Brown summarized that lands will be conveyed
based on a proposed use. She questioned if a municipality
is free to change the land use after the conveyance. Mr.
Swanson assumed that the conveyance would be fee simple,
without any covenants or restrictions outside of the Public
Trust Doctrine or best interest finding.
Representative Grussendorf noted that municipalities can
determine the use of land through lease. Mr. Swanson added
that municipalities would also have lease enforcement
authority. Representative Brown stated that her concerns
were alleviated by the adoption of Amendment 2.
Representative Therriault MOVED to report CSHB 20 (FIN) out
of Committee with individual recommendations and with the
accompanying fiscal notes. Co-Chair Hanley noted that the
Department of Natural Resources' fiscal note was upgraded
from $50.0 to $100.0 thousand dollars.
NICO BUS, ACTING DIRECTOR, DIVISION OF SUPPORT SERVICES,
DEPARTMENT OF NATURAL RESOURCES explained that the fiscal
note was updated after realizing the consequences of the
legislation. He observed that the Department has $1.0
million dollars in lease revenue. He estimates that
approximately 10 percent of the revenue will be lost to
municipalities.
Representative Brown asked if there would be an increase in
workload. Mr. Bus clarified that no new positions will be
needed to administer the new authority. He emphasized that
staff that formerly handled leases would be available to
handle the conveyances. There is a one time $6.0 thousand
dollar expense to cover the Land Administration System
casetype.
There being NO OBJECTION, CSHB 20 (FIN) was adopted with the
accompanying fiscal notes.
CSHB 20 (FIN) was reported out of Committee with "no
recommendation" and with three fiscal impact notes, one by
the Department of Fish and Game, two by the Department of
Natural Resources (one published date, 2/3/95; and with a
zero fiscal note by the Department of Community and Regional
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Affairs, dated 2/3/95.
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