Legislature(1995 - 1996)
04/17/1996 01:12 PM House JUD
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 154 - REGULATORY TAKING OF PRIVATE PROPERTY REPRESENTATIVE VIC KOHRING gave a brief overview as reiteration of what this bill encompasses. Generally HB 154 requires that government compensates private property owners if the property owner has experienced a loss in economic value as a result of a restriction imposed on this private property. He referred to a work draft in front of the committee which contains changes which were the result of previous testimony heard. In the spirit of compromise they have tried to work with those parties who expressed concerns. There were numerous points of contention on this bill by individuals, representatives and regulatory agencies. He felt as though these concerns have been sufficiently addressed in the work draft before the committee and asked the committee to adopt it as the new Committee Substitute. Number 2210 REPRESENTATIVE KOHRING outlined nine specific changes to this legislation and reviewed them for the committee. First, they replaced "governmental entities," with "state regulatory agency, which removed boroughs, municipalities and cities from the government agencies to which this legislation would apply. Second, they replaced "government action" and inserted "permit, certification, approval, or other authorization required for proposed land use." The original language was too vague. Third, they changed the "time for bringing action" from five years to three years. Fourth, they changed the compensation value to fair market value. They felt as though determining the issue of property value and the resulting loss of compensation should be settled in the courts, rather than a person simply having an appraisal done. Fifth, they removed "forest products" from the definition of real property. This would remove the annual permitting for timber buffer zones from being affected. They also removed the language, "interest in real property," which dealt with a situation with limited entry permits. This clause wouldn't necessarily deal with an actual, physical piece of property which someone has lost value in. REPRESENTATIVE KOHRING continued. Sixth, they changed the loss in value threshold from 20 percent to 30 percent. Seventh, the section entitled, "Principles for Government Action" was removed. This section said that assertions of threats to public health and safety were not enough to justify a taking. Eighth, the section entitled, "Inaccessible Property" was removed. This section said that compensation had to be paid for a loss of access that created a loss in value of more than 20 percent. Ninth, and lastly, the section entitled, "Adjustment of Value for Property Tax," was removed. This section said that municipalities must adjust the valuation of the property for taxation purposes. Under the new version, a person will be allowed to appeal the tax valuation using existing methods. Number 2499 REPRESENTATIVE AL VEZEY made a motion to move CSHB 154 as the committee's working document. There being no objection it was so moved. TAPE 96-54, SIDE B Number 030 DOUG YATES testified by teleconference from Anchorage on HB 154. He stated that in his opinion this legislation was an effort to dismantle basic community protections, however, the sponsor's wish to (indisc. - poor transmission) with a single purpose to turn back the clock on decades of vital health, safety and environmental protections. The underlying rational for this bill is found in business and private interest who have deemed protection inconvenient with their economic bottom line. He pointed out that this radical interpretation of property rights has been consistently rejected by the courts. He reminded the committee that before a "takings" bill in Colorado went down to defeat, the Denver Post warned that the measure "may appear innocuous, but it's actually an attempt to negate the conduct of health, safety and environmental regulations by saddling the enforcement agencies with untenable costs." MR. YATES stated that this bill is not needed, over-reaching and very costly to implement. He asked the sponsor why there is not a fiscal note attached to it. On the federal side, SB 605, a "takings " proposal has been estimated to cost the public $28 billion dollars over seven years. HB 154 is a crass and nutty attempt which threatens the ability of a community to engage in responsible government and to successfully conserve it's resources, protect it's heritage, develop it's economy and protect it's property. He urged the committee to hold this bill, it's a waste of the legislature's time and an affront to the citizens of Alaska. Number 100 STAN THOMPSON testified by teleconference from Kenai on HB 154. He stated that he came to speak in favor of this legislation and had with him a work copy dated 1/25/96 and he thought this was a great bill. Today, however, he received the work draft dated 4/31/96 now before the committee and found an entirely different bill with most of it's value gone. As he understood it, the bill only relates to state government takings with no effect on municipal takings, in other words no longer affecting takings of cities and boroughs. It has no teeth. He felt as though this legislation should address both these entities. Mr. Thompson said he'd still testify in favor of this legislation since an eighth of a loaf is better than none at all. STEVE CONN, Executive Director, Alaska Public Interest Research Group testified on HB 154. He stated that this group deals with the problems of consumers throughout the state. He did note the substantial work that was done on this legislation from it's original draft. It has moved clearly from a broad ideological statement regarding the subject of "takings" and the fifth amendment to an attempt to drive it's concepts forward in instrumental form. However, this legislation is still loaded with problems. He asked the committee to reflect on these even as they sponsor this legislation. MR. CONN suggested that this legislation will be a fundamental drag on the ability of the state to do the right job, even a job that everybody could agree that they should be doing. On a day to day basis his conception of state government is not that it's overly intrusive, but that it's essentially non-functional when it comes to consumer protection. He suggested that this bill is an error and it should not go forward because largely the fundamental problem with state government is non-functional. This being the case, he went further to say that, words in this draft are left undefined that would be fodder for the attorneys and the board system, such as "substantial evidence." If the bill is an attempt to ham string government in the performance of it's duties he felt as though it will succeed in this. Number 550 ANTHONY CRUPI, Alaska Environmental Lobby testified on HB 154. He stated that the Alaska Environmental Lobby has already presented their testimony in opposition to this legislation. The Lobby feels as though the recent changes to the bill is an attempt to address the important concerns with this legislation, but they still believe that this legislation itself is fatally ill. No matter how big the band-aid they put on it, the Lobby felt as though they wouldn't be able to save the patient. MR. CRUPI noted that instead of improving government, "takings" legislation such as this bill threatens to cost the state of Alaska many millions of dollars by making government less efficient and more costly. There will also be assessment costs, litigation fees and staggering costs of compensating property owners who claim a "taking." Who will fund these costs? The taxpayers money will be used to fund legions of attorneys and pay thousands of claims. Under the fifth amendment of the constitution property owners have the right to seek just compensation through judicial process if they feel as though their property has been unjustly taken by the government. The lobby feels as though courts are the proper places for such claims to be heard on their individual merits. MR. CRUPI added that no legislative blanket can cover the entire spectrum of individual possibilities envisioned by this legislation. Modern Democratic government has protected the rights of property owners throughout time. This bill would destroy the careful balance between rights and responsibilities. It would undermine regulations which protect public health and safety and the environment. For these reasons the lobby opposes HB 154. Number 560 TOM BOUTIN, State Forester, Division of Forestry, Department of Natural Resources testified on HB 154. He stated that he had just had a chance to read the Committee Substitute and noted that it is a much changed bill from the original. Based on this, the fiscal note from the department would be much smaller as well. He said he still had questions of the sponsor, such as the issue with the removal of "forest products," and related language used such as "crop" to describe forest products. He mentioned the Forest Practices Act which the state has the test of "significant harm" incorporated in it. If any part of the act would not cause significant harm the land owner has the right to come to the state and demand that the Forest Practices Act, any part of it be waived if significant harm won't be caused. The State Forester has to grant this if significant harm can't be shown. MR. BOUTIN noted that how this significant harm fits with the phrase in the Committee Substitute of significant, irrefutable harm he truly didn't know. Another question which came to mind in Section 5, "this Act does not apply to statutes, regulations, ordinances in effect, on the date before the effective date of the Act." He noted that this clearly does get to the issue of the Forest Practices Act with it's regulations which have already been enacted, however, the department does having on-going regulations. For instance, the Forest Practices Act exempts land owners including the state, but especially private land owners in having to do re-forestation in the case of a salvage sale. Land owners have now asked the state what this means. They have gone through the public testimony. He explained that they are about ready to finalize some regulations which would define one, what a salvage sale is for purposes of a private land owner not wanting to do re- forestation and two, how in the notification the landowner has to submit to the state that it would have to have substantial evidence submitted to the state to show that it is a salvage sale. It seemed to him that this regulation may run into a problem if this Committee Substitute was already law. He said he would talk to the Department of Law. Number 550 PAM LABEAU, President, Alaska State Chamber of Commerce testified on HB 154. Ms. LaBeau stated that the Chamber supported the original version of this legislation and they are disappointed that it's been weakened to the extent that it has. She stated that they were part of the idealogy that an eighth of a loaf is better than none. She urged the committee to pass this legislation. Number 309 REPRESENTATIVE FINKELSTEIN made a motion to move amendment number 1 as follows: Page 5, line 5: Delete "30" Insert "60" He explained that this was the threshold where the provision takes affect. Representative Vezey objected for discussion purposes. REPRESENTATIVE FINKELSTEIN felt as though an individual would have to loose over the majority of the value of some property. "This is only in cases where we're talking about a law that we've passed that we sat and weighed, we, meaning legislative history, which we didn't pass them all. The decisions been made with public input, public testimony on what to be done. The balances of government have already been used. If we find out there that there's, we don't believe that public interest is being served that the public goal being reached is not worthy of any impact it might have on any individual person we can change the law. We can go and re-write the law, we can set it up in some way that impact doesn't exist, but the whole basic point of this kind of governmental action is to try to balance the needs of all people. There is going to be some loss. This is just a matter of you think that loss ought to register. I think that the impact on the community as a whole is much more important than the impact on the individual. This is the 90 percent that gets used sometimes. This is an attempt to be in the middle." Number 700 REPRESENTATIVE KOHRING voiced his objections to what Representative Finkelstein suggested. He felt as though the amount of 60 percent is too large. They went from an initial no threshold to 20 percent and now it's set at 30 percent. He felt as though this was reasonable. He also spoke to the individual who owns the piece of property which is the subject of regulatory restrictions and many times individuals who put their life investment into this property, to extent this was set on a 60 percent loss would be unfair. CHAIRMAN PORTER asked if there was any further discussion regarding this amendment. He then asked for a roll call vote. Representatives Bunde, Green, Vezey, Toohey and Porter voted no. Representative Finkelstein voted yes. Amendment number one failed. Number 750 REPRESENTATIVE FINKELSTEIN then presented amendment number two as follows: Page 5, line 4 after "property" Insert ", unless the action is necessary to avoid or correct a public or private nuisance" Page 5, line 7 after "property" Insert ", unless the action is necessary to avoid or correct a public or private nuisance" REPRESENTATIVE FINKELSTEIN explained that this related to the issue of public and private nuisance. There's been a long history as to what a nuisance is and this standard pre-dates all of the state and federal laws. The concept is that someone's in a neighborhood who's smelting slag iron. This amendment doesn't empower anymore someone to establish a party as a nuisance, but if they're established as a nuisance they shouldn't be awarded for any loss of the use of their property. They've already been found to be a nuisance and one that needs to be abated. He used the example of shutting down someone's drug house and possibly having to compensate them. This type of activity is a nuisance just as ones related to fouling up the smells, sounds or activities in the neighborhood. Number 835 REPRESENTATIVE VEZEY objected for purposes of discussion. Number 840 REPRESENTATIVE KOHRING stated that he didn't have any particular opposition to this amendment. CHAIRMAN PORTER spoke against the amendment, especially to the idea that this would provide an avenue for getting rid of crack houses. He stated that there are provisions for this type of thing and it has been enhanced recently by the legislature. About the slag business. If they put an investment on their property and meet all the required permitting, one of the ways they are additionally harassed is for them to receive and deal with nuisance suits. With this in mind he didn't feel as though he could support this amendment. REPRESENTATIVE VEZEY stated that if it's in the public's interest to eliminate any sort of nuisance by requiring the taking of someone's property, he felt as though the public should be willing to compensate the owner for the loss. REPRESENTATIVE FINKELSTEIN offered that this amendment doesn't affect whether a nuisance suit will be filed or what the outcome of the suit will be. The point Representative Vezey makes is in regards to the existing concept of a nuisance suit. He has never heard of anyone who's been found to be a nuisance and then gets compensated even under existing law. If someone is found to be a nuisance they shouldn't be receiving compensation for this nuisance. CHAIRMAN PORTER asked if there were any other discussion regarding this amendment and then asked for a roll call vote. Representatives Green, Vezey, Toohey, Bunde and Porter voted no. Representative Finkelstein voted yes. Amendment number two failed. Number 1007 REPRESENTATIVE VEZEY made a motion to move CSHB 154 for the House Judiciary Committee with individual recommendations and attached fiscal note. REPRESENTATIVE FINKELSTEIN objected. To restate his concerns, he pointed out that there was a lot of discussion during the previous hearing. He felt as though the sponsor has made a serious effort to reduce some of the concerns by various parties. Some concerns still exist, but in a slightly smaller arena. Although he appreciated the efforts taken he still felt as though this legislation wouldn't be in the public interest. He felt as though this blanket approach to every law, circumstance and resource is so far reaching they have no idea of what the impacts fiscally would be and no idea what the effect would be on the common good. Number 1115 CHAIRMAN PORTER requested a roll call vote. Representatives Vezey, Toohey, Bunde, Green and Porter voted yes. Representative Finkelstein voted no. CSHB 154 was moved from the House Judiciary Committee as noted. Chairman Porter asked the sponsor in light of the amendments to provide new fiscal notes for presentation to the finance committee.
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