Legislature(2013 - 2014)BARNES 124

03/20/2014 01:00 PM House TRANSPORTATION


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ HB 378 DRIVER LICENSING TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= HB 371 STATE LAND AND MATERIALS TELECONFERENCED
Moved CSHB 371(TRA) Out of Committee
                HB 371-STATE LAND AND MATERIALS                                                                             
                                                                                                                                
1:03:14 PM                                                                                                                    
                                                                                                                                
CHAIR P. WILSON announced that  the first order of business would                                                               
be HOUSE  BILL NO. 371, "An  Act providing for the  Department of                                                               
Transportation and  Public Facilities to hold  the surface estate                                                               
of certain state land; relating  to the transfer of certain state                                                               
land and  materials from the  Department of Natural  Resources to                                                               
the Department  of Transportation  and Public Facilities  for the                                                               
construction or  maintenance of the  state highway  system, state                                                               
airports, and state public buildings  and facilities; relating to                                                               
the  lease  or  sale  of certain  marine  or  harbor  facilities;                                                               
relating  to  the   lease  or  disposal  by   the  Department  of                                                               
Transportation and  Public Facilities of  rights-of-way, property                                                               
interests, or improvements that  are no longer required; relating                                                               
to the  grant of certain  easements over submerged state  land to                                                               
the  federal  government; relating  to  the  transfer of  certain                                                               
maintenance  stations   on  the  James  Dalton   Highway  to  the                                                               
Department of  Transportation and Public Facilities;  relating to                                                               
the conveyance of land for  right-of-way purposes from the Alaska                                                               
Railroad  Corporation to  the  Department  of Transportation  and                                                               
Public Facilities; and providing for an effective date."                                                                        
[Version C adopted 3/18/14 was before the committee].                                                                           
                                                                                                                                
1:04:30 PM                                                                                                                    
                                                                                                                                
KIM  RICE, Deputy  Commissioner, Department  of Transportation  &                                                               
Public  Facilities (DOT&PF)  summarized the  bill.   She reminded                                                               
members that the department has  worked very closely with the DNR                                                               
on  this bill  and the  bill has  been refined  as testimony  was                                                               
given.  The  purpose of this bill is to  clarify, streamline, and                                                               
remove duplicate processes  in DOT&PF & DNR.  The  DOT&PF and the                                                               
DNR   sometimes   have   duplicate  authority   -   DOT&PF   over                                                               
transportation  facilities  and  DNR  for  vacant  unappropriated                                                               
lands, as  well as  resource authority  the DOT&PF  doesn't have.                                                               
Therefore, the  DOT&PF can do many  of the same things,  but what                                                               
has  happened over  time is  that  the DNR  may not  be aware  of                                                               
actions the DOT&PF has taken or duplication in law has occurred.                                                                
                                                                                                                                
MS.  RICE said  that  bill  works to  remove  the redundancy  and                                                               
clarify  the process,  part  of which  is  to streamline  project                                                               
delivery and part of it as  it relates to the public with respect                                                               
to  land disposals.   Once  the DOT&PF  is willing  to give  up a                                                               
small remnant or  a road has been moved, the  property owner must                                                               
go to both the DOT&PF and the  DNR.  For DNR, the land represents                                                               
a  very small  piece of  land in  comparison to  other DNR  land.                                                               
Property  owners  sometimes  get  lost in  the  process  and  are                                                               
harmed.   Third, the DOT&PF  would like to  resolve bureaucracies                                                               
in terms  of how the  department manages  transportation material                                                               
sites.   The  DOT&PF does  not want  to manage  all the  material                                                               
sites.  She assured members that  DNR will still have the ability                                                               
to give  the public material out  of the pits and  manage them in                                                               
the same  way, but the DNR  will consult with DOT&PF  on the ones                                                               
used for  transportation purposes.   She  concluded that  this is                                                               
the overview of HB 371.                                                                                                         
                                                                                                                                
1:07:12 PM                                                                                                                    
                                                                                                                                
MS.  RICE offered  to cover  the acquisition  process to  shorten                                                               
project delivery,  Mr. Bennett will  discuss improvements  on the                                                               
land disposals  and how to  help neighboring properties,  and Mr.                                                               
Lynch will discuss the material sites.                                                                                          
                                                                                                                                
MS. RICE explained  that some questions have  arisen with respect                                                               
to  property rights.   She  referred  to flow  chart in  members'                                                               
packets [entitled "Typical  DOT&PF Project Development Process"].                                                               
She recalled  some comments  that DOT&PF  is project  centric and                                                               
DNR is land centric, which is  true; however, the projects are on                                                               
DNR's land  and the DOT&PF builds  access to the land.   Further,                                                               
in managing  lands DNR has  typically been more focused  on their                                                               
functions and often is less aware  of the DOT&PF's process to get                                                               
a  project delivered.    The  flow chart  does  not include  how,                                                               
where,  or why,  but starts  with project  delivery.   The orange                                                               
circles  or  clouds  represent  each  time  the  DOT&PF  formally                                                               
touches the public.                                                                                                             
                                                                                                                                
1:09:09                                                                                                                         
                                                                                                                                
MS.  RICE  related  the DOT&PF's  informal  process  is  ongoing.                                                               
Beginning  with  the  State  Transportation  Improvement  Program                                                               
(STIP), all  state or  federally funded  projects go  through the                                                               
STIP process.  Thus the  STIP contains all projects regardless of                                                               
the  funding type.   This  process requires  an extensive  public                                                               
process and  once finalized a project  undergoes an environmental                                                               
process.    Most  projects  are   federally  funded  so  National                                                               
Environmental Policy  Act of 1969  (NEPA), is mandated,  but even                                                               
though  state-funded projects  don't  require it,  NEPA tends  to                                                               
affect every  project.  For  example, she referred to  the Elmore                                                               
Road  project in  Anchorage.    This project  was  a $40  million                                                               
totally  state   funded  project   with  1,000  feet   of  bridge                                                               
constructed -  mostly for mitigation -  over federally controlled                                                               
U.S.  Army   Corps  of   Engineers  (USACE)   permit  facilities.                                                               
However, the  state performed a  NEPA document parallel  with the                                                               
design process.   In fact, she has never observed  a process that                                                               
did  not require  NEPA's  involvement.   The  NEPA process  could                                                               
range  from  a checklist  to  a  full-blown formal  Environmental                                                               
Impact Statement (EIS), depending on  the input received from all                                                               
of the agencies  the DOT&PF contacts during the  process.  During                                                               
the  NEPA  process,  engineers  analyze  alternatives  that  will                                                               
physically meet the purpose,  including material source, consider                                                               
costs,  and discuss  the project  with the  regulators, including                                                               
the Alaska  Department of Fish &  Game, the DNR, and  the USACE -                                                               
the  bottom right  shows the  list of  permitting and  regulatory                                                               
agencies.                                                                                                                       
                                                                                                                                
1:11:45 PM                                                                                                                    
                                                                                                                                
MS.  RICE  explained that  the  type  of public  process  becomes                                                               
apparent.  For  example, the DOT&PF uses a  checklist when paving                                                               
a road  whereas other projects can  be very extensive.   Once the                                                               
DOT&PF  gets through  the  public process,  the  project goes  to                                                               
final design.   In a state-funded process the  DOT&PF may perform                                                               
the design work  using a parallel process.   The federal agencies                                                               
can  use  each  other's  documents for  making  decisions.    For                                                               
example, if  the FHWA is in  agreement with the USACE,  the Corps                                                               
will  use the  federal document  so  the agency  doesn't have  to                                                               
recreate  the  document.    The   process  can  include  historic                                                               
properties  or  any number  of  a  long list  of  considerations.                                                               
Although the  communities have been  involved, at this  point the                                                               
DOT&PF  must  get  a  local  government  concurrence  and  begins                                                               
mapping  the rights-of-way  and identifies  the DNR  land needed.                                                               
However, the DNR's analysis can hold  up the process due to their                                                               
backlog.   Thus, the  DOT&PF can  certify a  project or  wait for                                                               
another year  or two for DNR's  approval.  One purpose  of HB 371                                                               
is to allow  DNR to honor the process and  the DOT&PF's decision-                                                               
making process  to transfer the  land.  She acknowledged  that it                                                               
might sound like  a "land grab" but actually the  bill allows one                                                               
agency  to use  another state  agency's process  to transfer  the                                                               
land without starting the process anew.                                                                                         
                                                                                                                                
1:15:46 PM                                                                                                                    
                                                                                                                                
JOHN BENNETT, Right-of-way Chief,  Northern Region, Department of                                                               
Transportation &  Public Facilities  (DOT&PF), explained  the DNR                                                               
has   worked  to   adopt  uniform   language  across   the  three                                                               
authorities  of aviation,  highways  and public  facilities.   As                                                               
just discussed  the DOT&PF and  DNR have  overlapping authorities                                                               
that sometimes  results in an  unsolvable problem.   For example,                                                               
the DOT&PF holds a highway easement  at Eureka Lodge on the Glenn                                                               
Highway easement  and DNR  owns the underlying  fee estate.   The                                                               
departments  have  identified  the   problem  that  an  adjoining                                                               
property  owner has  encroached in  the right-of-way  with sewage                                                               
lagoons.   One solution  would be  for the  DOT&PF to  vacate the                                                               
easement, but  to do so  would only pass  the problem on  to DNR.                                                               
The DNR was unable to resolve  the matter with a preference right                                                               
sale.    Thus,  no  solution  was  available  under  the  current                                                               
statutory language and the property  owner is basically "left out                                                               
in cold."  This bill would  solve this problem since DOT&PF would                                                               
be vested  with the fee  simple title  for the surface  estate in                                                               
the  existing  transportation  facilities.     With  the  uniform                                                               
language  the  DOT&PF  could  dispose of  the  fee  simple  title                                                               
interest to this  property owner without needing  to involve DNR.                                                               
This  would protect  the state's  interest by  ensuring the  same                                                               
types of reservations,  such as the mineral  estate, are reserved                                                               
just as it would be under a DNR land disposal process.                                                                          
                                                                                                                                
1:18:17 PM                                                                                                                    
                                                                                                                                
MR.  BENNETT pointed  out one  other issue  is the  land disposal                                                               
language in AS  35 requires DOT&PF to dispose of  any excess land                                                               
to the person the department had  obtained the land from, but the                                                               
party  may no  longer be  available.   He questioned  whether the                                                               
person would  even have any  interest in obtaining  the property.                                                               
Yet another  party may want  the land, would really  benefit from                                                               
the land, and is willing to  pay the fair market value.  However,                                                               
under  the  current  statutes  the   state  cannot  sell  to  the                                                               
interested party.  This bill would solve that problem, he said.                                                                 
                                                                                                                                
MR. BENNETT pointed out another  scenario, in which the state may                                                               
not have  acquired an entire property  but just a thin  strip for                                                               
road widening.   If the  road ends  up being relocated,  it makes                                                               
sense that the excess strip would  go back to the original owner.                                                               
In fact, to  do anything else would "land lock"  the parcel.  The                                                               
proposed language  would solve these  types of problems  and make                                                               
the state's disposal process much more efficient.                                                                               
                                                                                                                                
1:21:20 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  ISAACSON   asked  whether  he  was   speaking  to                                                               
Sections 4 and  5, which relates to DNR.   He suggested that this                                                               
might be a global application.                                                                                                  
                                                                                                                                
MR. BENNETT answered  that the revisions would be  to Sections 2,                                                               
4,  and 10,  which specifically  addresses the  disposal language                                                               
for  airports,  highways, and  public  facilities.   While  these                                                               
provisions address the DOT&PF's  current statutes, Sections 1, 6,                                                               
and 9  that vests  fee simple title  for the  existing facilities                                                               
will  now allow  DOT&PF to  dispose of  the excess  lands without                                                               
involving  the DNR.    In  response to  a  question, Mr.  Bennett                                                               
clarified  that Sections  2, 4,  and 10  relate to  DOT&PF's land                                                               
disposal  for rights-of-way  for airports,  highways, and  public                                                               
facilities.                                                                                                                     
                                                                                                                                
MR. BENNETT, in  response to a question, referred  to Sections 1,                                                               
6, and  9 that clarify  the overlapping authorities that  DNR and                                                               
DOT&PF  have on  existing airport,  highway, and  public facility                                                               
properties.    For  example,  the DOT&PF  only  has  an  easement                                                               
interest  on the  Glenn Highway  so  the aforementioned  sections                                                               
would  vest fee  simple  title to  DOT&PF so  it  can manage  the                                                               
disposal by itself.                                                                                                             
                                                                                                                                
CHAIR P. WILSON  reiterated that these are very  small parcels of                                                               
land  and DNR  has  more  important parcels  to  contend with  so                                                               
delays often occur.                                                                                                             
                                                                                                                                
1:24:07 PM                                                                                                                    
                                                                                                                                
MR.  BENNETT  agreed  that  this  would  speed  up  the  process;                                                               
however,  some projects  exist  in which  the  department hits  a                                                               
roadblock  and cannot  accomplish under  the existing  language -                                                               
for  example,  the  Eureka  Lodge  project.   In  response  to  a                                                               
comment, he  agreed that  the DOT&PF and  the DNR  cannot resolve                                                               
the issues with the Eureka Lodge under the current language.                                                                    
                                                                                                                                
1:24:50 PM                                                                                                                    
                                                                                                                                
SEAN LYNCH,  Assistant Attorney General,  Transportation Section,                                                               
Department of  Law (DOL), reviewed  Section 13, which  relates to                                                               
DOT&PF's material  sales contract  exemption.  He  explained that                                                               
Section 13 is an amendment to  DNR's Alaska Land Act.  Currently,                                                               
AS 38.05.030  provides various  exemptions to  DNR's rules.   For                                                               
example, the DOT&PF has a  long list of exemptions, including the                                                               
railroad and the  University of Alaska.  This  language creates a                                                               
new  subsection   [h]  that  would  exempt   the  material  sales                                                               
contracting  requirements for  DOT&PF's use  of its  pits.   When                                                               
DOT&PF develops a road  with cut-and-fill construction, sometimes                                                               
a deficit in  the fill exists.  The DOT&PF  would open a material                                                               
site to  obtain extra  fill.   When the  project is  finished the                                                               
material  site  contains  the overburden  and  the  site  remains                                                               
available for later extraction of  gravel, which are the material                                                               
sites  under question.  Under DNR's  Alaska Lands  Act authority,                                                               
the  DNR  can sell  materials  from  state-owned material  sites.                                                               
This  specific  rule  applies  to   DOT&PF's  sites  since  DOT's                                                               
material  sites  are  state  owned.     He  characterized  it  as                                                               
overlapping  authority,  but  when DOT&PF  enters  into  material                                                               
sites it  must go  to DNR  to obtain  a material  sales contract.                                                               
Under the bill, Section 13  relieves DNR of the responsibility of                                                               
entering into contracts with DOT&PF.                                                                                            
                                                                                                                                
1:27:46 PM                                                                                                                    
                                                                                                                                
CHAIR  P.  WILSON related  her  understanding  that the  pits  in                                                               
question are DOT&PF's pits.                                                                                                     
                                                                                                                                
MR. LYNCH  answered that  the DOT&PF's  highway and  airport pits                                                               
were   opened  by   DOT&PF.     In  fact,   DOT&PF  carries   the                                                               
environmental permits.   When  third party  sales occur,  the DNR                                                               
consults with  DOT&PF on any  intended sales and  DOT&PF provides                                                               
the permittee with the environmental  conditions necessary to use                                                               
DOT&PF's pits.   He acknowledged  that a private  developer might                                                               
open a  DOT&PF site for  a subdivision.   When finished,  the DNR                                                               
would have  another pit, but  the vast  majority of the  pits are                                                               
DOT&PF's pits.                                                                                                                  
                                                                                                                                
1:29:05 PM                                                                                                                    
                                                                                                                                
MR. LYNCH  pointed out that  two main concerns have  been raised.                                                               
First, Section 13  would give carte blanche authority  to use any                                                               
state-owned pit.   There are  two reasons  this is not  the case.                                                               
First, this  bill would amend  the Alaska  Land Act.   Thus, this                                                               
bill provides  an instruction to  DNR that DOT&PF is  exempt from                                                               
the contracting requirements  under AS 38.05.550 -  38.05.565.  A                                                               
list of  pits open for  material sales contracting  is maintained                                                               
and this exemption would only  apply to approximately 500 pits in                                                               
the  state on  the  list.   However,  this  bill  does not  amend                                                               
DOT&PF's  statutes or  give them  any additional  authority since                                                               
the  bill would  only  provide  DNR with  an  exemption from  the                                                               
material  sales contracts  for DOT&PF's  use of  these pits.   In                                                               
response to a  comment, he agreed that  this provision eliminates                                                               
DNR's role in the transaction.                                                                                                  
                                                                                                                                
1:30:50 PM                                                                                                                    
                                                                                                                                
MR.  LYNCH  further  explained  that  DOT&PF  currently  has  the                                                               
authority over its rights-of-way and  facilities.  The bill would                                                               
remove  one step  in the  overlapping authority  between the  two                                                               
departments, although  DOT&PF would still act  under its existing                                                               
authority.                                                                                                                      
                                                                                                                                
CHAIR P. WILSON suggested that this could save time and money.                                                                  
                                                                                                                                
1:31:19 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  KREISS-TOMKINS   asked  for   clarification  that                                                               
Section 13 would  only apply to the 500 pits  associated with the                                                               
Alaska Lands Act.                                                                                                               
                                                                                                                                
MR. LYNCH  read subsection  (h), "Notwithstanding  the provisions                                                               
in AS  38.05.550 - 38.05.56 ...."   The DNR issues  contracts for                                                               
the pits  under the aforementioned  statutes.   Secondly, concern                                                               
was expressed that the DOT&PF  would compete with the North Slope                                                               
oil  and gas  users.   He responded  that aside  from the  Dalton                                                               
Highway the DOT&PF doesn't have any  reason or authority to go to                                                               
North Slope  development areas to seek  materials.  Additionally,                                                               
the pits  in question are the  developers' pits and are  not open                                                               
for third-party sales.   So any North Slope pit  that is open for                                                               
a specific DNR  project is not one of the  pits that DNR conducts                                                               
its third-party  sales.  This  essentially relieves DNR  the duty                                                               
to issue third  party sales under its existing  third party sales                                                               
contract provisions.                                                                                                            
                                                                                                                                
1:33:12 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KREISS-TOMKINS  read an excerpt from  Mr. Mylius's                                                               
letter dated  March 12, 2014,  which read, in part,  "First, many                                                               
gravel pits  on state land are  developed by and the  gravel sold                                                               
to private developers, municipalities,  and other state agencies,                                                               
federal agencies or others."   He asked whether that statement is                                                               
inaccurate if  the 500 pits  are DNR pits originally  as provided                                                               
in statute.                                                                                                                     
                                                                                                                                
MR.  LYNCH answered  no.   Actually,  DNR is  authorized to  sell                                                               
materials  from  DOT&PF's pits  so  DOT&PF  uses and  third-party                                                               
sales occur  from these  pits.  He  characterized them  as shared                                                               
use permits.   The DOT&PF and DNR both coordinate  these sales so                                                               
problems  have  not  arisen.     He  also  recalled  concern  was                                                               
expressed about  the depletion  of pits, which  thus far  has not                                                               
been a problem.  In fact,  this bill wouldn't change the quantity                                                               
of  materials.    Finally, DNR's  ability  to  waive  contracting                                                               
requirements does  not in any  way cutoff third-party use  of the                                                               
pits.                                                                                                                           
                                                                                                                                
1:35:00 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  KREISS-TOMKINS  related  his  understanding  that                                                               
Section 13  doesn't restrict  DOT&PF so  the department  can take                                                               
whatever  material they  need from  the  pits since  DNR will  no                                                               
longer be  the manager.   He further  understood this  bill would                                                               
simplify the  process.  He  asked what would protect  the private                                                               
vendor  or sale  on  pre-existing  sales once  DNR  is no  longer                                                               
involved.                                                                                                                       
                                                                                                                                
MR. LYNCH  answered that this coordination  currently happens and                                                               
will continue  to happen between the  agencies.  He said  DNR and                                                               
DOT&PF  coordinate  this  since   the  third  parties  will  have                                                               
environmental conditions.  For example,  parties can't change the                                                               
water flow  in the pit  due to the Clean  Water Act.   The permit                                                               
outlines the conditions of use,  such as identifying the area the                                                               
third  party can  use and  the area  the DOT&PF  will use  in the                                                               
shared  usage.    This  effort  will  continue  to  happen.    He                                                               
confirmed if  there is a valid  existing right or a  future right                                                               
it would still fall under the same program.                                                                                     
                                                                                                                                
1:36:53 PM                                                                                                                    
                                                                                                                                
WYN  MENEFEE, Chief  of Operations,  Central Office,  Division of                                                               
Mining, Land  and Water, Department  of Natural  Resources (DNR),                                                               
explained  that  the  pits  being   referred  to  are  designated                                                               
material sites  under AS  38.05.550.  The  current law  says that                                                               
the state  must designate a site  in order to sell  material from                                                               
the site  to the public.   Thus the department will  go through a                                                               
public  written decision  identifying  that  the department  will                                                               
sell materials  for a  certain number  of years  up to  a certain                                                               
amount.  Further, the decision  outlines that the department will                                                               
conduct multiple  material sale contracts  at the site.   The DNR                                                               
will issue  material site contracts  and does not need  to public                                                               
notice  each of  the  contracts.   The  contracts  are issued  to                                                               
anyone who asks for material so long as it is available.                                                                        
                                                                                                                                
MR.  MENEFEE made  a slight  correction to  Mr. Lynch's  comments                                                               
since very  few of the sites  are sole-purpose sites and  the DNR                                                               
sells to  multiple individuals.   Even on  North Slope  sites the                                                               
DNR sells to multiple people from  the same pit.  He acknowledged                                                               
that the  DNR may have one  operator who is the  primary operator                                                               
responsible  for permitting.   He  agreed with  Mr. Lynch  on the                                                               
coordination, such that if the  DOT&PF is the pit operator anyone                                                               
else  coming into  the pit  would  be subservient  to the  permit                                                               
holder.  This  helps prevent violations on  compliance with water                                                               
discharge, whether it is for DOT&PF,  an oil and gas operator, or                                                               
anyone else  who opened the pit.   In response to  a question, he                                                               
answered that the DNR has  dual management authority on the pits.                                                               
Under  the  bill  the  DNR  would not  tell  DOT&PF  it  needs  a                                                               
contract, but the DNR would manage  the pits and authorize use to                                                               
other entities.  This management  would be done under concurrence                                                               
of the DOT&PF.  He highlighted  that the bill puts DOT&PF in "top                                                               
dog" authority.   If  the DNR decides  to issue  another contract                                                               
the department would consult with DOT&PF for approval.                                                                          
                                                                                                                                
1:38:59 PM                                                                                                                    
                                                                                                                                
CHAIR P.  WILSON offered her  belief that the biggest  concern is                                                               
when people  want to know if  a third party has  [a material site                                                               
contract] for  a certain amount  of material, whether  the DOT&PF                                                               
can deny the material.                                                                                                          
                                                                                                                                
MR.  MENEFEE answered  that the  DOT&PF would  have the  right to                                                               
take whatever quantity  of material it needs, but  he related his                                                               
understanding that  if the DOT&PF  wanted material it  would need                                                               
to pay  the third party.   He suggested Mr. Lynch  could describe                                                               
this in  more detail.   The existing contracts would  not prevent                                                               
DOT&PF from taking all the material.                                                                                            
                                                                                                                                
CHAIR P. WILSON asked for further clarification.                                                                                
                                                                                                                                
MR. LYNCH explained that take  Article 1, Section XVI of Alaska's                                                               
Constitution provides a  private property right so if  there is a                                                               
contract for the material DOT&PF  avoid taking it; however, if it                                                               
was  a   necessity  the  DOT&PF   would  reimburse   the  private                                                               
contractor.                                                                                                                     
                                                                                                                                
1:41:46 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE FEIGE  related his  understanding that  Section 13                                                               
of  HB   371  indicates  DOT&PF   would  use  the   material  for                                                               
construction  and   maintenance  of  facilities  the   DOT&PF  is                                                               
constructing or  operating.  He  asked, in DNR's  experience, for                                                               
any other uses the materials would  be sold for and to what types                                                               
of entities would buy them.                                                                                                     
                                                                                                                                
MR. MENEFEE answered that homeowners  may want material for their                                                               
driveways,  road, building  construction, renewable  energy or  a                                                               
whole  realm of  construction projects.   The  DNR sells  gravel,                                                               
sand,  riprap used  on habitat  projects or  boat launches.   The                                                               
department also has  hard rock that could be  used for decorative                                                               
housing walls, and  a whole slew of reasons exist  why people buy                                                               
materials from state land.                                                                                                      
                                                                                                                                
1:43:29 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  ISAACSON asked  whether the  North Slope  Borough                                                               
might  have competing  claims  for  the land  itself.   He  asked                                                               
whether specific language needed to be added.                                                                                   
                                                                                                                                
MR. MENEFEE answered  that this isn't just  applicable to Section                                                               
13 but to any  transfers to DOT&PF.  He honed  in on the question                                                               
the committee  is getting to,  which is  that if the  borough has                                                               
asked  for municipal  entitlement on  the lands,  and the  DOT&PF                                                               
asked for land to  be transferred - under Sections 3,  5, and 8 -                                                               
but  the  borough has  selected  the  land for  entitlement,  the                                                               
entitlement  would  be  subservient   to  DOT&PF's  needs.    For                                                               
example, if  DOT&PF indicates  it needs  an airport  and material                                                               
site,  the DNR  would likely  deny the  municipal entitlement  at                                                               
this  time.   Conceivably,  once  the  project was  finished  the                                                               
DOT&PF  could give  DNR  the land,  which  could subsequently  be                                                               
given to a municipality.   However, it is likely the municipality                                                               
decided  to  select   the  land  for  revenue   generation.    He                                                               
acknowledged there is a tension  and competition for the land and                                                               
this  bill does  put  DOT&PF in  first place.    Thus, DNR  would                                                               
adjust the municipal entitlement  program to consider this aspect                                                               
as municipalities make land selections.                                                                                         
                                                                                                                                
1:46:25 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  ISAACSON  related   his  understanding  that  the                                                               
DOT&PF's  intent is  for public  need and  necessity.   He stated                                                               
that anything DOT&PF  uses the land for would result  in a public                                                               
benefit so the borough or other third party will also benefit.                                                                  
                                                                                                                                
MR.  LYNCH, using  the example  of  the material  sites at  Happy                                                               
Valley and Franklin  Bluff, said that once  DOT&PF receives sites                                                               
and develops the  sites as DOT&PF's maintenance  stations that it                                                               
will  take an  extra  step from  DNR to  designate  the sites  as                                                               
available for  material sales.   He recalled  a specific  list of                                                               
sites where the public can  receive materials.  He suggested that                                                               
if DNR  added those sites  as designated sites,  the municipality                                                               
could receive  the materials  along with  any other  third party.                                                               
To his  knowledge the  aforementioned material  sites are  not on                                                               
the designated material site lists.                                                                                             
                                                                                                                                
1:47:59 PM                                                                                                                    
                                                                                                                                
MR.  MENEFEE  said  there  is   a  difference  between  municipal                                                               
entitlements  and  individuals  just receiving  material  through                                                               
material  sale contracts.   Municipal  entitlements ask  for full                                                               
fee simple interest  in the land so there is  competition in that                                                               
aspect.   As Mr.  Lynch described,  which is  also correct,  if a                                                               
municipality or  borough just needs  material it could come  to a                                                               
material  site designation.   Since  the  departments have  joint                                                               
management authority under  the bill, he asserted  that DNR could                                                               
still designate a site per  concurrence from the DOT&PF and could                                                               
sell material to the borough with  concurrence of the DOT&PF.  If                                                               
the DOT&PF  didn't need all the  material, the DNR could  sell it                                                               
to the borough,  just as it would for any  other entity which has                                                               
happened in  the past.   Thus, there  are two  different aspects:                                                               
the  municipal   entitlement  program  and  the   material  sales                                                               
contracts, he said.                                                                                                             
                                                                                                                                
1:49:15 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  ISAACSON  related   his  understanding  that  the                                                               
DOT&PF's priority is due to the  specific purpose such as a road,                                                               
airport, or  public facility  that benefits  the borough  and the                                                               
public.    The municipality  shouldn't  be  making money  at  the                                                               
expense  of everyone  else.   He  said, "We're  not just  talking                                                               
about  the State  of  Alaska's DOT&PF  'grabbing  land' for  some                                                               
future purpose."   He  understood the DOT&PF  would be  using the                                                               
land for a  specific purpose.  Thus, the bill  would not preclude                                                               
a  subdivision of  the state  from making  revenue.   Instead, it                                                               
sets up the priority that benefits everyone in Alaska.                                                                          
                                                                                                                                
MR. MENEFEE  offered his belief  that is correct.   He understood                                                               
that it  would be  DOT&PF's intent to  provide a  public benefit.                                                               
He  said he  cannot  speak for  the boroughs  as  to whether  the                                                               
DOT&PF should be in the top position.                                                                                           
                                                                                                                                
CHAIR  P. WILSON  remarked that  the  committee has  not had  any                                                               
comments from boroughs.  No one has complained, she said.                                                                       
                                                                                                                                
1:51:04 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KREISS-TOMKINS  moved to  the second point  in the                                                               
letter.  He read, "DOT use  may also not be the most economically                                                               
valuable use  of the  land and  DNR will  therefore not  have the                                                               
ability  to deny  a DOT  request  even if  there is  a higher  or                                                               
better use of the land, such  as land needed by a school district                                                               
or for  a public  school."   He asked  whether any  examples that                                                               
might validate this  scenario or if this is  a purely theoretical                                                               
concern.                                                                                                                        
                                                                                                                                
MR. MENEFEE  responded that  is what happens  when the  DNR makes                                                               
decisions on whether to designate a  site to sell materials.  The                                                               
standard the department will undergo  is a best interest decision                                                               
or what is  in the best interest  of the state.   This bill would                                                               
remove the  decision process.   He  envisioned a  situation might                                                               
arise  that would  need to  be resolved  in a  different fashion.                                                               
For example,  if a new  pipeline is  being built and  material is                                                               
needed  that  DOT&PF  also  needs that  normally  the  DNR  would                                                               
wrestle the two  interests and try to accommodate both.   If not,                                                               
the department  would identify one  as being more  important than                                                               
the other.   Under the bill, if the DOT&PF  asks for the material                                                               
site  then the  DNR would  not issue  the decision.   Of  course,                                                               
DOT&PF must evaluate the benefit  through the department's public                                                               
process.   In the event  some higher better interest  was brought                                                               
to  the  governor's attention,  the  governor  might suggest  the                                                               
department's  use isn't  a good  idea.   He  characterized it  as                                                               
being  a different  type of  process and  not one  the DNR  would                                                               
normally take.                                                                                                                  
                                                                                                                                
CHAIR  P. WILSON  suggested that  legislators  would likely  make                                                               
comments  if  it  related  to   a  pipeline.    Either  way,  she                                                               
anticipated that there would be ways to intervene.                                                                              
                                                                                                                                
1:54:03 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KREISS-TOMKINS asked for  any specific examples in                                                               
which  DOT&PF  requested an  easement  or  right-of-way that  DNR                                                               
found was not highest and best use.                                                                                             
                                                                                                                                
MR. MENEFEE cannot  recall any denial although one  request for a                                                               
potential  corridor  arose.    Over time  land  was  conveyed  to                                                               
municipalities and  the initial purpose  was defeated due  to how                                                               
segmented the  corridor became.   The DNR worked with  DOT&PF and                                                               
the DNR  closed the  case since  it didn't  make sense  any more.                                                               
That was the only instance he could recall, he said.                                                                            
                                                                                                                                
1:55:40 PM                                                                                                                    
                                                                                                                                
MR.  BENNETT reported  that he  served 30  years as  right-of-way                                                               
chief  for  the  Northern  Region  and  he  could  not  recall  a                                                               
situation in which  an application to DNR for  a right-of-way was                                                               
denied.   He  said the  reality  is that  DOT&PF provides  public                                                               
infrastructure  for transportation  in  the state.    In all  the                                                               
competing instances,  whether it is  for a school or  a pipeline,                                                               
the projects rely on the  DOT&PF to provide the infrastructure to                                                               
provide access  to those sites.   He envisioned it would  need to                                                               
be  a very  important priority  before one  could consider  other                                                               
types of projects.                                                                                                              
                                                                                                                                
MR. MENEFEE acknowledged  that at certain times the  DNR has gone                                                               
back  to  DOT&PF  to  identify   other  interests  the  DNR  must                                                               
accommodate.     In  those  instances   the  DOT&PF   has  either                                                               
reconditioned the  application to  adjust to  the other  needs or                                                               
the department has  withdrawn its application.  Once  the DNR has                                                               
brought concerns forward, instead  of denying the application, it                                                               
has  highlighted  the concerns.    The  DOT&PF might  adjust  the                                                               
project's size but DNR works diligently to find solutions.                                                                      
                                                                                                                                
1:57:53 PM                                                                                                                    
                                                                                                                                
MS.  RICE added  she  discovered  the DOT&PF  is  not good  about                                                               
contacting  the  Division of  Mine,  Land,  and Water  since  the                                                               
DOT&PF  would  not  know  if  someone  applied  with  DNR.    She                                                               
emphasized that  this is something  the DOT&PF will add  into the                                                               
process so the DOT&PF will  know any concerns or applications the                                                               
DNR may  have earlier in the  timeframe.  She reiterated  that is                                                               
the DOT&PF's intent.                                                                                                            
                                                                                                                                
CHAIR P.  WILSON remarked that  is important  and she is  glad to                                                               
have that on the record.                                                                                                        
                                                                                                                                
1:58:43 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  FEIGE referred  to Section  16 of  HB 371,  which                                                               
grants reciprocal easement rights.   He asked for a brief history                                                               
and background and the reasons to do so.                                                                                        
                                                                                                                                
MR. LYNCH referred to Version C.   The first sentence was removed                                                               
and  second sentence  incorporates the  reciprocal exchange.   He                                                               
highlighted that  a reciprocal  exchange has  been agreed  to but                                                               
not  all  of  the  easements  have  transferred  from  the  state                                                               
government to the federal government.   The first sentence mimics                                                               
the federal  statutes and  language was  removed to  clarify that                                                               
DNR  was not  being asked  to take  any action.   This  provision                                                               
would  authorize the  DNR to  extend  the term  of the  easements                                                               
beyond the five  year regulatory limitation upon  a best interest                                                               
finding by the DNR's commissioner.                                                                                              
                                                                                                                                
2:01:32 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  KREISS-TOMKINS related  that  Mr. Mylius  pointed                                                               
out 66  easement sites have been  approved, but 67 have  not.  He                                                               
related  Mr. Mylius's  understanding that  many of  the remaining                                                               
sites  do  not  have  existing   facilities  and  some  are  also                                                               
important access sites.   He asked more  specifically which sites                                                               
comprise the 67 remaining sites.                                                                                                
                                                                                                                                
MR. LYNCH  answered that the  sites are all submerged  land sites                                                               
and  benefit  the  U.S.  Forest  Service  such  as  log  transfer                                                               
facilities, cabins,  and trail  access points.   The  revision to                                                               
Section  16 was  to address  Mr. Mylius's  concern that  the term                                                               
"grant"  might direct  DNR  to make  a decision  on  them so  the                                                               
language was revised  to make it clear that wasn't  the case, but                                                               
was to give DNR the authority.                                                                                                  
                                                                                                                                
2:02:59 PM                                                                                                                    
                                                                                                                                
CHAIR  P. WILSON  interjected Mr.  Mylius's  letter mentions  the                                                               
proposed CS, Version C addressed his concern.                                                                                   
                                                                                                                                
MR.  LYNCH agreed  noting Mr.  Mylius issued  a follow-up  letter                                                               
dated March 19, 2014.                                                                                                           
                                                                                                                                
2:03:04 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  KREISS-TOMKINS  asked  to   double  back  to  the                                                               
previous  questions about  the DOT&PF's  priority on  state land.                                                               
He referred  to the highest and  best use of land,  recalling Mr.                                                               
Menefee mentioned when  other uses or parties  are identified the                                                               
DNR  works  with  DOT&PF  to resolve  the  matter  to  everyone's                                                               
satisfaction.   He  understood  the  purpose of  the  bill is  to                                                               
streamline the  process to  make things  more efficient  and save                                                               
time.    He  asked  whether   the  inter-agency  time  is  mostly                                                               
paperwork "de  rigeur" easements granted  by DNR or if  delays in                                                               
projects are  due to  actively working  with DNR.   He  asked how                                                               
much time  is typically  involved.   More specifically,  he asked                                                               
how much time  is involved if the DOT&PF wants  land and no other                                                               
parties  are  interested as  compared  to  an instance  in  which                                                               
DOT&PF wants  land and other parties  exist and the DNR  works to                                                               
recondition the request.                                                                                                        
                                                                                                                                
MR.  BENNETT  answered that  the  interests  vary in  level  from                                                               
rights-of-way   permits  to   an   interagency  land   management                                                               
assignment which  would be  a stronger  interest for  an airport,                                                               
and as previously discussed, a  material site.  Each is different                                                               
with varying complexity.   He couldn't estimate  a timeframe, and                                                               
it would  also depend  on what is  on DNR's desk  at the  time of                                                               
application.  He hoped to capture  all the concerns of the public                                                               
in  the process  that  Deputy Commissioner  Rice  outlined.   The                                                               
DOT&PF  doesn't want  to end  up in  the situation  in which  the                                                               
DOT&PF has analyzed, mitigated,  and commenced with the right-of-                                                               
way acquisition only to discover  the parcel is being planned for                                                               
a campground.   Although the  DOT&PF has  not yet had  to appeal,                                                               
the DOT&PF  might need to  reinitiate the entire process  to seek                                                               
an  alternative  site.    There  could  be  some  other  options;                                                               
however,  the DOT&PF  believes all  the interests  of the  public                                                               
will be protected  with the DOT&PF's process and  nothing will be                                                               
lost by streamlining the process as the bill presents.                                                                          
                                                                                                                                
2:07:21 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  FEIGE  moved  to report  the  proposed  committee                                                               
substitute  (CS) for  HB 371,  Version C,  out of  committee with                                                               
individual  recommendations and  the  accompanying fiscal  notes.                                                               
There being  no objection, the  CSHB 371 (TRA) was  reported from                                                               
the House Transportation Standing Committee.                                                                                    

Document Name Date/Time Subjects
HB 378 Sponsor Statement.pdf HTRA 3/20/2014 1:00:00 PM
HB 378
HB0378A.pdf HTRA 3/20/2014 1:00:00 PM
HB 378
HB 378 Sectional Analysis.pdf HTRA 3/20/2014 1:00:00 PM
HB 378
HB 371 Smith Letter 2 3-19-14.pdf HTRA 3/20/2014 1:00:00 PM
HB 371
HB_371 Mylius 3-19-14.pdf HTRA 3/20/2014 1:00:00 PM
HB 371
HB371_miliusmillessmith_response3-20-14.pdf HTRA 3/20/2014 1:00:00 PM
HB 371
HB 371 Support Johansen.msg HTRA 3/20/2014 1:00:00 PM
HB 371
HB 371Support M Miller.msg HTRA 3/20/2014 1:00:00 PM
HB 371