Legislature(2005 - 2006)CAPITOL 120

01/11/2006 01:00 PM House JUDICIARY


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01:10:32 PM Start
01:10:43 PM HB318
02:36:17 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ HB 318 LIMITATION ON EMINENT DOMAIN TELECONFERENCED
Heard & Held
HB 318 - LIMITATION ON EMINENT DOMAIN                                                                                         
                                                                                                                                
1:10:43 PM                                                                                                                    
                                                                                                                                
CHAIR McGUIRE announced that the  only order of business would be                                                               
HOUSE  BILL NO.  318, "An  Act limiting  the exercise  of eminent                                                               
domain."                                                                                                                        
                                                                                                                                
1:11:20 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  WILSON  moved  to adopt  the  proposed  committee                                                               
substitute  (CS)  for  HB   318,  Version  24-LS1083\Y,  Bullock,                                                               
1/11/06, as the work draft.   There being no objection, Version Y                                                               
was before the committee.                                                                                                       
                                                                                                                                
CHAIR  McGUIRE, speaking  as one  of the  bill's prime  sponsors,                                                               
relayed that  HB 318 was created  in response to the  recent U.S.                                                               
Supreme Court  case, Kelo  v. City  of New  London, in  which the                                                             
court said  that a  local ordinance  in Connecticut  allowing for                                                               
eminent  domain to  be used  to take  private property  could, in                                                               
fact,  be used  to  take  property from  one  private entity  and                                                               
transfer it  into the  hands of another  private entity  for mere                                                               
economic development purposes.   She indicated that  she did like                                                               
the fact that in the Kelo  decision, the court upheld the ability                                                             
of  states  and  local  governments to  decide  their  own  rules                                                               
regarding eminent  domain, allowing them to  continue controlling                                                               
their own  areas.  However,  the part  of the Kelo  decision that                                                             
was disturbing  to the  public, she surmised,  was the  idea that                                                               
one's own  private property could  be seized merely  for economic                                                               
development  purposes.   She characterized  this  concept as  one                                                               
foreign  to Americans,  who  would  not think  that  such was  an                                                               
appropriate  use of  eminent domain  "taking"  by a  governmental                                                               
entity.                                                                                                                         
                                                                                                                                
CHAIR  McGUIRE relayed  that HB  318 is  intended to  clarify the                                                               
uses of  eminent domain in  the state of  Alaska.  In  working on                                                               
the bill, she remarked, a  lot of interesting issues have arisen,                                                               
such  as  how  to  reconcile private  property  rights  with  the                                                               
state's subsurface  rights and constitutional mandate  to develop                                                               
Alaska's  natural  resources  for  the  maximum  benefit  of  all                                                               
Alaskans, or  how to reconcile  private property rights  with the                                                               
desire to promote recreational opportunities.   She mentioned the                                                               
coastal trail in  her district as one such example  of the latter                                                               
situation,  adding  that  this  topic  has  generated  a  lot  of                                                               
discussion   in   her   district   because   it   would   involve                                                               
approximately 80 different  "takings" of some type  - through the                                                               
use of  eminent domain -  unless people  decide to give  up their                                                               
property voluntarily.                                                                                                           
                                                                                                                                
CHAIR  McGUIRE  said  that  the  bill  attempts  to  address  the                                                               
question of,  "if it  is inappropriate  to take  private property                                                               
for mere economic development purposes,  how appropriate is it to                                                               
take  private  property  for mere  recreational  purposes."    In                                                               
conclusion, she  said she  is open  to suggestions  for improving                                                               
the bill.                                                                                                                       
                                                                                                                                
1:16:02 PM                                                                                                                    
                                                                                                                                
CRAIG  JOHNSON, Staff  to  Representative  Lesil McGuire,  Alaska                                                               
State  Legislature,  indicated  that  the  bill  is  intended  to                                                               
address two  issues.  The  first being whether it  is appropriate                                                               
to take  a person's private  property for economic gain,  and the                                                               
second  being  whether  it  is appropriate  to  take  a  person's                                                               
private residence  for the recreational opportunities  of another                                                               
person.  The bill is not  intended to either increase or decrease                                                               
the  power of  eminent  domain, he  remarked, acknowledging  that                                                               
eminent domain does have appropriate uses.                                                                                      
                                                                                                                                
MR. JOHNSON  said that because  of the  ruling in the  Kelo case,                                                             
approximately  13 pieces  of eminent  domain legislation  are now                                                               
before  the federal  government,  ranging  from a  constitutional                                                               
amendment  prohibiting the  use  of eminent  domain for  economic                                                               
use, to a  House bill that would take  economic development funds                                                               
away  from  any state  or  [local]  government entity  that  uses                                                               
eminent  domain for  economic gain.    He explained  that HB  318                                                               
precludes the use of eminent  domain for economic gain, clarifies                                                               
that the  government is prohibited  from using eminent  domain to                                                               
take a  person's primary domicile for  recreational purposes, and                                                               
attempts to define the term "primary domicile."                                                                                 
                                                                                                                                
MR. JOHNSON  also explained that  since the year 2000,  41 states                                                               
have used eminent domain to  take private property for commercial                                                               
use,  ranging  from  2,100  cases   in  Florida  to  5  cases  in                                                               
Louisiana.   Currently 13  states have  47 pieces  of legislation                                                               
pending  regarding  eminent domain  -  ranging  from an  absolute                                                               
moratorium on  its use for  economic development,  to instituting                                                               
"one-year stays" - though Alaska  is the only state attempting to                                                               
address the  issue of using  eminent domain for  recreational use                                                               
purposes.                                                                                                                       
                                                                                                                                
MR. JOHNSON  opined that Alaska  must go on record  as addressing                                                               
this issue  or face the loss  of federal funds.   He relayed that                                                               
the Anchorage  Assembly recently adopted a  local law prohibiting                                                               
the taking of private property  for recreational use, but offered                                                               
his belief that this issue should  also be addressed for the rest                                                               
of  the  state.    He offered  his  understanding  that  although                                                               
Version  Y  changes the  bill  substantially,  those changes  all                                                               
revolve around the  issue of defining what  constitutes a primary                                                               
domicile; the bill  still attempts to protect the  use of eminent                                                               
domain  in appropriate  situations,  such as  those that  involve                                                               
resource development.                                                                                                           
                                                                                                                                
1:22:50 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  ANDERSON asked  how  many other  bills have  been                                                               
introduced to address the issue of eminent domain.                                                                              
                                                                                                                                
MR. JOHNSON said  that there are six bills  with language similar                                                               
to  HB 318,  and  offered his  belief that  by  working with  the                                                               
sponsors  of  those other  bills,  everyone's  concerns could  be                                                               
addressed via one bill that can then be used as the vehicle.                                                                    
                                                                                                                                
REPRESENTATIVE  GARA said  his main  concern is  that HB  318 may                                                               
have unintended  consequences.   He said he  would like  to leave                                                               
the question  of whether to allow  the use of eminent  domain for                                                               
recreational use  purposes to local officials,  and asked whether                                                               
the  Alaska  State  Constitution  allows the  taking  of  private                                                               
property for private commercial development.                                                                                    
                                                                                                                                
1:26:45 PM                                                                                                                    
                                                                                                                                
PETER PUTZIER, Senior  Assistant Attorney General, Transportation                                                               
Section,  Civil  Division  (Juneau),  Department  of  Law  (DOL),                                                               
offered his  understanding that  in the  Kelo decision,  the U.S.                                                             
Supreme Court  was applying Connecticut state  law.  Furthermore,                                                               
[in  Alaska], the  authority to  use eminent  domain must  exist,                                                               
property can only be taken for  a legitimate public use, and that                                                               
[public] use  must be recognized  under statute.  Whether  or not                                                               
and how far  the concept of public use can  be expanded, however,                                                               
is still an open question, he  posited.  In response to a further                                                               
question, he  surmised that it  would be  an open question  as to                                                               
whether  the Alaska  State Constitution  allows "a  taking to  be                                                               
transferred to a private person."                                                                                               
                                                                                                                                
1:29:23 PM                                                                                                                    
                                                                                                                                
DON  BULLOCK, Attorney,  Legislative  Legal Counsel,  Legislative                                                               
Legal and  Research Services,  Legislative Affairs  Agency (LAA),                                                               
explained  that  Article  I,  Section 18,  of  the  Alaska  State                                                               
Constitution says  that private  property shall  not be  taken or                                                               
damaged  for public  use  without just  compensation.   He,  too,                                                               
noted  that in  the Kelo  decision,  it was  determined that  the                                                             
situation involved  taking property  for a reasonable  public use                                                               
as  that term  was defined  in Connecticut.   House  Bill 318  is                                                               
attempting to define  the parameters of public use  in Alaska, he                                                               
remarked,  adding that  current statute  does contain  a list  of                                                               
traditional public uses.                                                                                                        
                                                                                                                                
MR. PUTZIER  characterized Version Y  as an improvement  over the                                                               
original  bill; for  example, it  includes  some exceptions  that                                                               
attempt to  protect most  of the public  uses for  eminent domain                                                               
that are already explicitly recognized by the legislature.                                                                      
                                                                                                                                
1:32:30 PM                                                                                                                    
                                                                                                                                
MR.  PUTZIER,  to  highlight  some  of  the  changes  offered  by                                                               
Version Y, noted  that Section 1 now  contains legislative intent                                                               
and findings  language, and that  Section 2 now attempts  to more                                                               
narrowly target the perceived problem.   The legislature does not                                                               
necessarily want  to allow  the taking  of a  private landowner's                                                               
property  for  the purpose  transferring  it  to another  private                                                               
entity.  The original bill  used the term "economic development",                                                               
but it  was determined  that such  a term  might be  construed as                                                               
being overbroad, particularly given  that most projects involving                                                               
eminent domain will have an economic development component.                                                                     
                                                                                                                                
MR. PUTZIER noted  that [Version Y] includes a  procedure to deal                                                               
with  situations  in  which  the  state  does  want  to  transfer                                                               
property  acquired through  eminent domain  to a  private entity.                                                               
Section  3  of  Version  Y stipulates  that  such  transfers  are                                                               
allowed,  but  only  if  there  is  written  concurrence  of  the                                                               
commissioners of  the Department of Natural  Resources (DNR), the                                                               
Department of  Transportation &  Public Facilities  (DOT&PF), the                                                               
Department  of   Commerce,  Community,  &   Economic  Development                                                               
(DCCED),  and  the Department  of  Military  & Veterans'  Affairs                                                               
(DMVA).   Furthermore, Section  3 of  Version Y  contains several                                                               
exceptions  to  the general  rule  of  "no transfers  of  private                                                               
property to a private person,"  and these exceptions are included                                                               
in  the  bill  with  the intent  of  maintaining  eminent  domain                                                               
practices as they currently exist.                                                                                              
                                                                                                                                
1:36:10 PM                                                                                                                    
                                                                                                                                
MR. PUTZIER  then described the  exceptions, which are  listed in                                                               
proposed AS  09.55.240(d)(1)-(6).   The first  exception involves                                                               
situations  in which  the landowner  consents,  either before  or                                                               
after a  condemnation proceeding has  been filed, to  the taking.                                                               
The  second  exception involves  situations  in  which a  private                                                               
person  has  been  expressly authorized  via  statute  to  either                                                               
exercise the  power of eminent  domain or to receive  an interest                                                               
in land  acquired by the exercise  of eminent domain.   The third                                                               
exception involves  situations in which the  transferred property                                                               
would be used for a private  way of necessity to permit essential                                                               
access for extraction or use  of resources, and this exception is                                                               
actually stated in Article VIII,  Section 18, of the Alaska State                                                               
Constitution.                                                                                                                   
                                                                                                                                
MR.   PUTZIER  relayed   that  the   fourth  exception   involves                                                               
situations  in which  the  property is  transferred  to a  person                                                               
available for public  hire to transport freight  or passengers by                                                               
motor vehicle, watercraft, aircraft, or  railroad car.  The fifth                                                               
exception involves  situations in which the  acquisition is used,                                                               
in  part, for  leasing property  to a  private person  or private                                                               
business that occupies  a portion of public property  or a public                                                               
facility  such as  an  airport, port,  or  public building;  this                                                               
exception  is  intended to  preclude  the  argument that  eminent                                                               
domain cannot  be exercised for  those kinds of facilities.   The                                                               
final  exception  involves  property  that is  transferred  to  a                                                               
person by oil and gas lease under AS 38.05.180.                                                                                 
                                                                                                                                
MR. PUTZIER relayed that subsection  (e) of proposed AS 09.55.240                                                               
speaks  to the  aforementioned issue  of recreational  facilities                                                               
and projects,  stipulating that the  power of eminent  domain may                                                               
not  be  used  to  acquire such  facilities  or  projects  unless                                                               
written concurrence of the commissioners  of the DNR, the DOT&PF,                                                               
the  DCCED, and  the DMVA  is obtained;  this exception  would be                                                               
available should any  unforeseen situations arise in  which it is                                                               
determined that  such a  taking should occur.   Reading  from the                                                               
following   provisions,    he   indicated   that    proposed   AS                                                               
09.55.240(e)(1)-(2)  attempts  to  define  what  a  "recreational                                                               
facility    or    project"    is,   and    that    proposed    AS                                                               
09.55.240(e)(3)(A)-(H) provides a listing of what it is not.                                                                    
                                                                                                                                
MR.  PUTZIER relayed  that proposed  AS 09.55.240(f)  states that                                                               
eminent  domain  would not  be  allowed  in  order to  acquire  a                                                               
person's  abode that  is used  as a  dwelling place,  or property                                                               
within a 1,000  linear feet of such an abode,  for the purpose of                                                               
a recreational  facility or  project, and  then specifies  how an                                                               
abode  may qualify  for this  prohibition.   He  then noted  that                                                               
proposed  AS  09.55.240(g)  provides  a  definition  of  "private                                                               
person" for the purpose of proposed AS 09.55.240.                                                                               
                                                                                                                                
1:44:22 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GARA suggested  leaving the  "recreational issue"                                                               
aside in  order to consider the  question of whether it  might be                                                               
sufficient to  simply say, "never  to a private person  or entity                                                               
unless  it's   necessary  for  a  resource   development  project                                                               
approved by the state."                                                                                                         
                                                                                                                                
CHAIR McGUIRE concurred with the  concept of simply stating under                                                               
what circumstances eminent domain may not be used.                                                                              
                                                                                                                                
1:48:06 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  PAUL  SEATON,  Alaska  State  Legislature,  asked                                                               
whether  "private person"  would include  an entity  such as  the                                                               
Alaska Railroad Corporation (ARRC).                                                                                             
                                                                                                                                
MR. JOHNSON indicated that the  existence of entities such as the                                                               
ARRC  could  potentially  cause  a problem  should  the  bill  be                                                               
simplified to address only resource development projects.                                                                       
                                                                                                                                
REPRESENTATIVE  SEATON  said  his  concern is  that  the  current                                                               
version of the bill doesn't  appear to make a distinction between                                                               
quasi-governmental  agencies,  such as  the  ARRC  or the  Alaska                                                               
Industrial   Development  and   Export  Authority   (AIDEA),  and                                                               
"private person."                                                                                                               
                                                                                                                                
MR.  PUTZIER  clarified  that proposed  AS  09.55.240(d)(2)  does                                                               
provide  an exception  for certain  private persons  to whom  the                                                               
power of eminent  domain has already been given,  and is intended                                                               
to  address  situations involving  the  ARRC  or the  AIDEA,  for                                                               
example.                                                                                                                        
                                                                                                                                
CHAIR McGUIRE  noted that proposed  AS 09.55.240(g) -  located on                                                               
page 5, lines  23-24 - says:  "In this  section, 'private person'                                                               
means a person that is not  a public corporation as defined in AS                                                               
45.77.020 or a government as defined  in AS 11.81.900."  She also                                                               
noted that proposed  AS 29.35.030(d) - located on page  6, line 9                                                               
-  says:   "In this  section,  'private person'  has the  meaning                                                               
given  in AS  09.55.240."    Thus, she  surmised,  the bill  does                                                               
attempt  to provide  a distinction  between "private  person" and                                                               
entities such as the ARRC and the AIDEA.                                                                                        
                                                                                                                                
REPRESENTATIVE SEATON referred  to the language on  page 3, lines                                                               
30-31, and page 4, line 1,  - which says, "the private person has                                                               
been  expressly  authorized by  statute  either  to exercise  the                                                               
power  of eminent  domain,  or  to receive  an  interest in  land                                                               
acquired by  the exercise  of eminent  domain" -  and said  he is                                                               
trying to figure  out who such a "private person"  would be other                                                               
than the aforementioned entities.                                                                                               
                                                                                                                                
1:52:50 PM                                                                                                                    
                                                                                                                                
CHAIR  McGUIRE explained  that in  including  such language,  the                                                               
thought was  that in the  future there may  be an as  yet unknown                                                               
private  entity  or private  person  that  should be  allowed  to                                                               
obtain  private property  via eminent  domain.   She acknowledged                                                               
that her  initial concern with  such language is that  it appears                                                               
to be  a catchall  phrase that  could be used  to get  around the                                                               
intent of the  bill, but she mentioned that in  speaking with the                                                               
drafter, he  made the point  that including escape valves  in the                                                               
legislation might be appropriate.   She also pointed out that the                                                               
commissioners  referred  to  in  proposed AS  09.55.240  are  not                                                               
immediately accountable to the public.                                                                                          
                                                                                                                                
REPRESENTATIVE  SEATON  offered  his  understanding  that  [some]                                                               
local  municipalities have  an absolute  prohibition against  the                                                               
use of eminent domain to  convey property from one private person                                                               
to  another.     He  asked   whether  the   aforementioned  state                                                               
commissioners  have "veto  power" over  a municipality's  eminent                                                               
domain rules.                                                                                                                   
                                                                                                                                
CHAIR McGUIRE  indicated that the  difference in  standards being                                                               
proposed, via  Version Y, for  the State and municipalities  is a                                                               
concern of hers, and should be addressed.                                                                                       
                                                                                                                                
REPRESENTATIVE GARA  noted that the  aforementioned commissioners                                                               
take direction  from the governor  and, thus, one  governor could                                                               
direct   the  commissioners   to  view   eminent  domain   issues                                                               
differently  than   another  governor   would  so  direct.     He                                                               
reiterated  that  he  would  like to  simplify  the  bill,  again                                                               
suggesting that  they limit the  transfer of private  property to                                                               
private individuals  via eminent  domain to  resource development                                                               
projects.    He  remarked  that  he  can't  think  of  any  other                                                               
circumstance  in  which the  legislature  would  want to  give  a                                                               
private entity  the ability  to take  private property  away from                                                               
another private entity.                                                                                                         
                                                                                                                                
MR.  PUTZIER  suggested  that  another  such  circumstance  might                                                               
involve the use of eminent  domain by utilities, but acknowledged                                                               
that  utilities  already  have  the  power  to  exercise  eminent                                                               
domain, and that this power is statutorily granted.                                                                             
                                                                                                                                
REPRESENTATIVE  GARA pointed  out that  the current  law on  that                                                               
issue would not have to be changed via the bill.                                                                                
                                                                                                                                
MR. PUTZIER maintained his point that  those who would be, or who                                                               
currently are,  exempted from the  prohibitions proposed  via the                                                               
bill should be expressly included in the bill as being exempted.                                                                
                                                                                                                                
1:59:04 PM                                                                                                                    
                                                                                                                                
MR.  BULLOCK,  referring  to  Representative  Seaton's  question,                                                               
noted that in Kelo, the land  was being transferred to a "private                                                             
non-profit entity"  that was established  prior to the case.   So                                                               
even though the property being  transferred was not considered to                                                               
be "blighted" -  a traditional reason for using  eminent domain -                                                               
the  local government  had already  considered New  London to  be                                                               
economically blighted  and so formed a  "development corporation"                                                               
to see how the economy of the  area could be turned around.  This                                                               
corporation  developed   a  plan,  presented  it   to  the  local                                                               
government, which  then transferred  the power of  eminent domain                                                               
to the  corporation, which was  defined as a  "private non-profit                                                               
entity".  The corporation then  went about purchasing property in                                                               
conjunction with the plan it had developed.                                                                                     
                                                                                                                                
MR.  BULLOCK  added,  "The  situation  in  New  London  had  been                                                               
jumpstarted  by  [Pfizer, Inc.,]  deciding  to  build a  research                                                               
facility there, and so they looked  at ... that as the trigger to                                                               
start this development  project."  Most of the people  in the New                                                               
London situation voluntarily  sold their land, but  the Kelo case                                                             
arose when  some people did not  want to give up  the property on                                                               
which  they'd  grown  up.    To recap,  in  the  Kelo  case,  the                                                             
authority  to exercise  eminent domain  had been  delegated to  a                                                               
private  corporation;  he remarked  that  in  Alaska, the  Alaska                                                               
Housing Finance Corporation  (AHFC) is a similar  entity that has                                                               
been granted similar powers.                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON asked,  then, whether  the bill  is really                                                               
accomplishing  anything,  particularly  given that  the  bill  is                                                               
stipulating that eminent  domain can be used in the  same type of                                                               
circumstances as  occurred in the  Kelo case.  He  suggested that                                                             
it  might be  better if  the legislature  were to  simply pass  a                                                               
resolution saying  that the legislature would  look unkindly upon                                                               
the taking of private property for private development.                                                                         
                                                                                                                                
MR. BULLOCK  offered his understanding  that the  questions being                                                               
addressed  via HB  318 are,  "what constitutes  public use,"  and                                                               
"who  is going  to  define it."   The  bill  currently takes  the                                                               
approach of saying what isn't  public use, and if such guidelines                                                               
are not provided by the  legislatures, he warned, then individual                                                               
guidelines as to  what constitutes public use will  be created by                                                               
whichever  organization   or  local  government  is   looking  to                                                               
exercise  the  power  of  eminent  domain.    In  response  to  a                                                               
question, he  relayed that  existing law  addresses the  issue of                                                               
utilities exercising the power of eminent domain.                                                                               
                                                                                                                                
REPRESENTATIVE GARA suggested, then, that  the bill be altered to                                                               
simply provide  a new subsection  to current law that  says, "And                                                               
except where  otherwise provided  by statute, eminent  domain may                                                               
not  [be used]  ... to  transfer  private land  from one  private                                                               
person to another private person."                                                                                              
                                                                                                                                
MR. PUTZIER  offered his  belief that Version  Y does  just that,                                                               
and then  read portions  of the bill.   He  acknowledged, though,                                                               
that the bill is a work in progress.                                                                                            
                                                                                                                                
2:05:51 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE COGHILL said  it would be interesting  to find out                                                               
the  rationale  used  regarding  the  language  currently  in  AS                                                               
29.35.030,  which   addresses  the  use  of   eminent  domain  by                                                               
municipalities   and  second   class  cities,   particularly  the                                                               
language pertaining  to citizens voting  on the issue  of whether                                                               
[a second class  city] can exercise the power  of eminent domain.                                                               
He indicated  that he  wants to  ensure that  the power  of using                                                               
eminent domain  to take  property is not  abused by  a government                                                               
entity, and that  he is not sure that placing  that decision with                                                               
the aforementioned  commissioners is necessarily the  best way of                                                               
preventing such  abuse.  He  relayed that  he does tend  to agree                                                               
with the exceptions in the  bill, but pointed out that exceptions                                                               
tend to  multiply and therefore  may not actually keep  the scope                                                               
narrow.                                                                                                                         
                                                                                                                                
REPRESENTATIVE WILSON  opined that the bill  should contain solid                                                               
[parameters/guidelines],  but because  commissioners change  from                                                               
administration  to administration,  leaving certain  decisions up                                                               
to  a  group  of  commissioners may  not  accomplish  this  goal;                                                               
similar  circumstances could  end  up  being treated  differently                                                               
based on what a given group of commissioners decides.                                                                           
                                                                                                                                
REPRESENTATIVE  COGHILL remarked  on  the large  amount of  power                                                               
Alaska's executive branch wields,  and referred to the governor's                                                               
ability to appoint department commissioners as an example.                                                                      
                                                                                                                                
2:08:55 PM                                                                                                                    
                                                                                                                                
MR. BULLOCK  suggested that the  committee consider  the question                                                               
of  what  effect  allowing  commissioners   to  make  a  decision                                                               
regarding  eminent  domain  would   have  on  the  Administrative                                                               
Procedure Act (APA).                                                                                                            
                                                                                                                                
REPRESENTATIVE BOB  LYNN, Alaska  State Legislature,  referred to                                                               
what he termed "the coal  bed methane [CBM] situation," and noted                                                               
that the topic  of eminent domain has raised a  lot interest, and                                                               
opined that this topic should be addressed at this time.                                                                        
                                                                                                                                
MR. BULLOCK said that the  comment regarding CBM raises the issue                                                               
of access  to state  resources, which  the state  owns subsurface                                                               
rights  to.   Under  the Alaska  State  Constitution, owning  the                                                               
subsurface  rights  gives  the  state the  right  to  access  the                                                               
property; furthermore,  there are specific statutes  that provide                                                               
for the  compensation of the  owner.   Thus the CBM  situation is                                                               
not an eminent  domain issue, he explained.   "There's still some                                                               
private subsurface ownership on  the Kenai Peninsula, and there's                                                               
also  the  issue of  the  subsurface  ownership by  the  regional                                                               
Native corporations,"  he added, but noted  that generally, under                                                               
common law and  the right to subsurface rights,  whoever owns the                                                               
subsurface  rights  has  the  right   to  enter  for  development                                                               
purposes.                                                                                                                       
                                                                                                                                
REPRESENTATIVE  GRUENBERG opined  that it  is very  important for                                                               
all  the terms  used in  the bill  to be  carefully defined.   He                                                               
characterized the bill as being  designed to engender litigation,                                                               
and warned that if the  legislature doesn't define the terms used                                                               
in the bill, then the courts will.                                                                                              
                                                                                                                                
2:12:33 PM                                                                                                                    
                                                                                                                                
BOB  SHAVELSON,  Executive  Director, Cook  Inlet  Keeper,  after                                                               
relaying  that  his  organization is  a  citizen-based  nonprofit                                                               
group dedicated  to protecting the  Cook Inlet watershed  and the                                                               
life it sustains, said that much  of what he'd intended to say to                                                               
the committee  pertained to the original  version of HB 318.   He                                                               
opined  that a  lot  of  the controversy  arising  from the  Kelo                                                             
decision  stems from  what he  indicated was  U.S. Supreme  Court                                                               
Justice  Clarence Thomas's  characterization that  the court,  in                                                               
the  Kelo  decision,  was  replacing   the  Fifth  Amendment  and                                                             
unseating  public  use  limitations  and replacing  them  with  a                                                               
broader, more permissive public  purpose test for eminent domain.                                                               
Mr. Shavelson  said agrees  with what he  believes to  be Justice                                                               
Thomas's  opinion that  the Fifth  Amendment  should be  strictly                                                               
construed to allow  eminent domain only when  a legitimate public                                                               
use  would be  effectuated and  that the  Kelo decision  went too                                                               
far.                                                                                                                            
                                                                                                                                
MR. SHAVELSON offered  his belief that both  the original version                                                               
of HB 318 and Version Y  carve out two sweeping exceptions to the                                                               
eminent domain  power which  go far  beyond a  simple fix  to the                                                               
Kelo decision  and will  pose serious  concerns for  business and                                                             
recreational interests  in Alaska.   He  offered his  belief that                                                               
simply  fortifying  the   current  statutory  and  constitutional                                                               
public use  test will  address the problems  created in  the Kelo                                                             
decision.  With regard to  the bill's recreational use exception,                                                               
he remarked  that such use  satisfies the public  use limitations                                                               
of the Fifth Amendment and would  add to the quality of life that                                                               
Alaskans have  come to enjoy and  expect, but he sees  no need to                                                               
include such a provision in  statute, particularly given that the                                                               
aforementioned coastal trail issue  has already been addressed at                                                               
the local level.                                                                                                                
                                                                                                                                
MR.  SHAVELSON ventured  that one  of  the issues  raised by  the                                                               
bill's  recreational use  exception is  that it  promotes unequal                                                               
treatment when compared to  other legislatively permissible uses.                                                               
For  example, proposed  AS 09.55.240(a)(6)  would adopt  a public                                                               
policy that  places private property in  jeopardy of condemnation                                                               
for  an   open  pit   mine  but  refuses   to  grant   a  similar                                                               
consideration  for "snow  machines,  sled dog,  or similar  trial                                                               
access."   Such an inconsistency will  undermine private property                                                               
rights and legislatively assert  that takings of private property                                                               
for  mining corporations  is sound  policy while  similar actions                                                               
for access  to trails by Alaskans  is not.  He  suggested that if                                                               
the  legislature  really  wants  to address  this  important  and                                                               
contentious property rights issue, then  the solution would be to                                                               
split estate issues whereby lessees  of mineral resources have an                                                               
absolute  legal right  to access  the surface  estate of  private                                                               
property owners, adding  that this issue recently came  to a head                                                               
in the Matanuska-Susitna [valley] and the CBM debates.                                                                          
                                                                                                                                
REPRESENTATIVE GRUENBERG offered his  understanding that the only                                                               
types of  commercial enterprises  that the  bill covers  would be                                                               
"for  profit" commercial  enterprises, and  thus Mr.  Shavelson's                                                               
organization would not be affected by the bill.                                                                                 
                                                                                                                                
MR.  SHAVELSON  offered  his  belief,   however,  that  the  bill                                                               
addresses the  transfer of  private land  from a  private entity,                                                               
regardless of that entity's profit or nonprofit status.                                                                         
                                                                                                                                
REPRESENTATIVE GRUENBERG asked to  Mr. Shavelson review Version Y                                                               
further.                                                                                                                        
                                                                                                                                
2:18:12 PM                                                                                                                    
                                                                                                                                
PETER ROBERTS relayed  that he'd headed up the  fight against the                                                               
Homer annexation, and  remarked that the issue  of eminent domain                                                               
is  similar  to   the  annexation  issue  in  that   a  group  of                                                               
politicians can  get together  and decide  the fate  of someone's                                                               
private land and  in that such actions can be  very hard to stop.                                                               
He said he realizes that  eminent domain is necessary for various                                                               
reasons, but  he is very much  against the use of  eminent domain                                                               
in situations such  as occurred in [New London]  because the only                                                               
"public  good"  that  will  come  from such  a  transfer  is  the                                                               
accumulation of  tax revenue and is  not, therefore, justifiable.                                                               
On the  issue of exercising  eminent domain for  recreational use                                                               
purposes, he  suggested that if a  road is a reasonable  thing to                                                               
build [for the public good], then so  too is an access strip.  He                                                               
pointed  out that  in an  urban area,  a trail  might be  labeled                                                               
recreational,  but in  a rural  area,  a similar  trail might  be                                                               
necessary for public access.                                                                                                    
                                                                                                                                
MR. ROBERTS  said he believes  that access  is a valid  reason to                                                               
consider  using  eminent  domain,  and suggested  that  the  bill                                                               
should  undergo further  consideration  before it  is allowed  to                                                               
limit the use  of eminent domain for access  purposes.  Referring                                                               
to Mr. Shavelson's example regarding  a private road to a private                                                               
mine, Mr. Roberts  offered his belief that such  usage of eminent                                                               
domain is less  justifiable as being for the  public benefit than                                                               
would an  access strip  for the purpose  of hunting  and fishing.                                                               
He also posited that the issue  of "land in two estates," such as                                                               
those involving  mineral rights, should  not be addressed  via HB
318, and  indicated that the  original bill's simpler  nature was                                                               
more  acceptable  to him.    "Land  shouldn't  be taken  so  that                                                               
somebody can make  a profit on it," he remarked,  nor should land                                                               
be taken  simply so  that a government  entity can  receive taxes                                                               
from it.                                                                                                                        
                                                                                                                                
MR.  ROBERTS, in  conclusion, opined  that compensation  for land                                                               
taken  via  [eminent]  domain  should be  handled  by  two  local                                                               
private land appraisers;  if that price is not  acceptable to the                                                               
entity attempting to acquire the  land, then the entity should be                                                               
precluded from  proceeding with eminent  domain proceedings.   He                                                               
referred  to  the  provisions regarding  the  four  commissioners                                                               
determining whether certain land  in certain situations should be                                                               
taken via eminent domain, and said  he is very much against those                                                               
provisions  because   forthcoming  decisions  will   change  from                                                               
administration to  administration.   Instead, for those  types of                                                               
situations,  it   should  be  the  legislature   that  makes  the                                                               
decision.                                                                                                                       
                                                                                                                                
2:23:20 PM                                                                                                                    
                                                                                                                                
DANA  OLSON   said  she'd   sent  a   12-page  petition   to  the                                                               
commissioner of  the DNR regarding recreational  use, and offered                                                               
her belief  that the "mineral  entry" exception in Alaska  law is                                                               
[used rarely],  adding that she  does own her own  mineral entry.                                                               
She  said she  feels that  HB 318  will substantially  change the                                                               
Alaska Statehood  Act, and  referred to the  right of  privacy as                                                               
guaranteed  by  the  Alaska  State  Constitution  in  Article  I,                                                               
Section 22,  saying that she would  like to see the  "denials for                                                               
the  right to  revise the  ... state  land use  plans in  writing                                                               
before ... passage," adding that she has requested this change.                                                                 
                                                                                                                                
MS. OLSON offered her understanding  that Senate Bill 196, passed                                                               
in 1987 [as  Chapter 75 SLA 87], specifically says  that right of                                                               
ways shall  be in  land use  plans, and  that HB  318 potentially                                                               
addresses  corridors.   She said  that since  Alaska Survival  v.                                                             
State Department of Natural Resources  was used as a standard for                                                             
a pipeline, she would be  affected by the legislature's action in                                                               
this matter.   "For a  person to  have their property  having one                                                               
standard, and  having a legal  standard of something  else, there                                                               
has to  be a  way to  read law consistently,"  she remarked.   In                                                               
conclusion, she suggested that the  committee has more work to do                                                               
on the bill, and asked that the bill be held over.                                                                              
                                                                                                                                
2:26:07 PM                                                                                                                    
                                                                                                                                
KEVIN  C. RITCHIE,  Executive Director,  Alaska Municipal  League                                                               
(AML), said  he appreciates the  committee's willingness  to work                                                               
with local municipalities  regarding the bill.   He remarked that                                                               
one can't really define good  and bad public takings, adding that                                                               
there are  different situations wherein  the public good  may far                                                               
outweigh  [the negative  effects of]  the taking,  and there  are                                                               
procedures  to make  sure the  taking is  done well.   While  the                                                               
federal government is working on  an eminent domain policy, state                                                               
governments  may well  feel that  the federal  government is  not                                                               
best  suited to  determine policy  for the  states; likewise,  in                                                               
certain  situations,  local  governments   may  feel  that  state                                                               
government is  not best suited  to determine policy at  the local                                                               
level.   Whoever is the arbiter  on these types of  issues should                                                               
be held accountable  to the public; for  example, city assemblies                                                               
are accountable to  the public.  Mr. Ritchie  said that according                                                               
to his  research, the power of  eminent domain in Alaska  has not                                                               
been abused  as occurred in  New London; the system  currently in                                                               
place in Alaska is a good  one, and people can readily access the                                                               
decision-making group in any given eminent domain issue.                                                                        
                                                                                                                                
2:28:30 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GRUENBERG said  he would like to  know whether the                                                               
issue  is one  of  stopping  "taking" or  one  of paying  private                                                               
owners more.   He noted  that U.S. Supreme Court  Justice Stephen                                                               
G.  Breyer  has  indicated  that  when  he  and  similarly-minded                                                               
jurists analyze  issues, they look at  the practical implications                                                               
of their  actions.  Representative  Gruenberg suggested  that the                                                               
committee should do the same on this issue.                                                                                     
                                                                                                                                
MR. RITCHIE posited  that "that issue" is probably  in the hearts                                                               
of  the people  bringing the  actions; in  the case  of the  Kelo                                                             
situation, it  appeared that  a person  really, really  wanted to                                                               
stay in [her] home.                                                                                                             
                                                                                                                                
REPRESENTATIVE GRUENBERG remarked that  tough cases make bad law,                                                               
and suggested  that perhaps the  Kelo case  could be just  such a                                                             
case.                                                                                                                           
                                                                                                                                
MR.  RITCHIE  relayed that  at  least  three municipalities  have                                                               
adopted  fairly substantial  eminent domain  ordinances and  were                                                               
able to do  so quickly, adding that one of  the advantages at the                                                               
local level  is that errors can  be rectified in a  fairly timely                                                               
manner.   He also noted  that currently, in second  class cities,                                                               
it is the voters who determine issues of eminent domain.                                                                        
                                                                                                                                
2:31:43 PM                                                                                                                    
                                                                                                                                
GARVIN BUCARIA, relayed  that he would be  personally impacted by                                                               
a proposed "2004/2005  Main Street study," described  some of the                                                               
details of  that project,  noting that he  has been  subjected to                                                               
the stress of the possible  ramifications of this proposed study.                                                               
He went on  to describe some of  the steps he has  taken thus far                                                               
and some  of the  possible ramifications for  him.   He suggested                                                               
that there  should be a mechanism  in place that would  allow the                                                               
parties subject to  a taking to negotiate with  the Department of                                                               
Transportation & Public Facilities  (DOT&PF) prior to the routing                                                               
of roads, and  asked the committee to reconsider  the language in                                                               
proposed  AS 09.55.240(a)(4)  and (5)  because he  finds it  very                                                               
hard to accept  that the dumping of mine tailings  is benign.  He                                                               
indicated  that according  to his  understanding  of the  [Alaska                                                               
State] Constitution,  public health is  a major priority  for the                                                               
state, adding  that there are  numerous proposed  mining ventures                                                               
that  may  take priority  over  the  health  and welfare  of  the                                                               
citizens.                                                                                                                       
                                                                                                                                
MR.  BUCARIA  suggested  that the  long-term  health  effects  of                                                               
dumping  places  for  working  mines  and  tailings  need  to  be                                                               
considered.  He  also mentioned that the coalmining  areas in the                                                               
Alaska Range are being subjected  to "acid mine drainage," adding                                                               
that he  fears that mining  operations will have a  severe effect                                                               
on the  state's fish and  wildlife sustained  yield capabilities.                                                               
Thus, he opined,  allowing access for both  public recreation and                                                               
for  factors  that  ameliorate the  stresses  of  development  is                                                               
important.     He   said  he   would   support  the   committee's                                                               
reconsideration of  language pertaining  to recreational  use and                                                               
public access for fishing, hunting, and travel.                                                                                 
                                                                                                                                
2:36:17 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GARA posed the question  of why they would want to                                                               
allow for  the taking of property  from someone in order  to give                                                               
it to a mine that would not provide revenue to the state.                                                                       
                                                                                                                                
MR. BUCARIA,  in response to  another question, read  portions of                                                               
proposed AS  09.55.240(a)(4) and (5) as  those paragraphs pertain                                                               
to mining  operations, and reiterated  that he has  public health                                                               
concerns and quality of life  concerns, and that the Alaska State                                                               
Constitution mandates the state to protect the various values of                                                                
and the quality of life of its citizens.                                                                                        
                                                                                                                                
CHAIR McGUIRE noted that the language in proposed AS                                                                            
09.55.240(a)(4) and (5) is part of existing law.                                                                                
                                                                                                                                
MR. BUCARIA acknowledged that point, but suggested that this                                                                    
issue should still be addressed by the committee, as it is of                                                                   
particular significance to the citizens in the "Iliamna area."                                                                  
                                                                                                                                
[HB 318, Version Y, was held over.]                                                                                             

Document Name Date/Time Subjects