Legislature(2003 - 2004)

04/14/2004 01:34 PM Senate CRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
        SB 382-EMINENT DOMAIN/REPLAT OF BOUNDARY CHANGES                                                                    
                                                                                                                                
CHAIR BERT  STEDMAN announced SB  382 to be up  for consideration                                                               
and noted that there was a committee substitute.                                                                                
                                                                                                                                
SENATOR  THOMAS WAGONER  made  a  motion to  adopt  CSSB 382,  \H                                                               
version as  the working  document. There  being no  objection, it                                                               
was so ordered.                                                                                                                 
                                                                                                                                
RICHARD SCHMITZ,  aide to Senator  John Cowdery, stated  that the                                                               
representatives from the Department of  Law and the Department of                                                               
Transportation and  Public Facilities  (DOT/PF) were  better able                                                               
to explain the bill.                                                                                                            
                                                                                                                                
PETER  PUTZIER,  assistant   attorney  general  representing  the                                                               
Department of Transportation &  Public Facilities, explained that                                                               
the  bill  is  the  result of  Anchorage  court  cases  regarding                                                               
eminent domain.  One case  concerned the  Kenai River  Bridge and                                                               
the other the C Street Project in Anchorage.                                                                                    
                                                                                                                                
The court challenges suggested that  DOT didn't have condemnation                                                               
authority  based  on  an interpretation  of  the  eminent  domain                                                               
statute, AS 09.55.275. The argument is that:                                                                                    
                                                                                                                                
     In  1975  when  the  statute was  passed,  it  was  the                                                                    
     legislative  intent   back  then  to  require   DOT  or                                                                    
     municipalities  when they  acquire  right-of-way to  go                                                                    
     through  the exact  same  subdivision approval  process                                                                    
     that a developer  would have to go  through even though                                                                    
     the  two  processes  are, as  you  can  imagine,  quite                                                                    
     distinct. On  the one hand  you've got a  developer who                                                                    
     is  going to  be  putting  interior streets,  lighting,                                                                    
     sewer  and so  on. On  the other  hand you've  got this                                                                    
     right-of-way process  that involves odd  shaped parcels                                                                    
     where you don't have any of those same considerations.                                                                     
                                                                                                                                
     Kenai,  Municipality  of  Anchorage,  Matanuska-Susitna                                                                    
     Borough,  I  believe the  City  and  Borough of  Juneau                                                                    
     although I'm  not sure, most of  these communities have                                                                    
     a  specific ordinance  particular  to the  right-of-way                                                                    
     acquisition  process   and  it  says  to   DOT  or  the                                                                    
     municipality 'If  you want preliminary  replat approval                                                                    
     follow  this  process  particular to  the  right-of-way                                                                    
     acquisition.'  And the  argument that's  being made  in                                                                    
     court is  that that process  set up in  these different                                                                    
     towns is  unconstitutional and contrary  to legislative                                                                    
     intent  back in  1975  in AS  09.55.275.  This bill  is                                                                    
     meant to correct that.                                                                                                     
                                                                                                                                
Sitka, the  City and  Borough of  Juneau, Ketchikan,  Kodiak, the                                                               
Matanuska  Susitna Borough,  and  the  Municipality of  Anchorage                                                               
have been contacted regarding their  views on the issue. The City                                                               
and Borough  of Juneau  raised a concern  that the  initial draft                                                               
was ambiguous  regarding the scope  of regulatory power  given to                                                               
DOT for drafting regulations to  address this issue. As a result,                                                               
they  clarified  that DOT's  intent  is  specifically to  eminent                                                               
domain  and the  right-of-way  acquisition process.  There is  no                                                               
intent for  DOT to  venture into  general zoning  and subdivision                                                               
lines. The  \H version is  meant to restrict  what DOT may  do by                                                               
regulation and all  but Anchorage have responded  and agreed with                                                               
the changes.  The Municipality of Anchorage  is still circulating                                                               
the  draft, "but  they are  keenly  aware of  this issue  because                                                               
they've been litigating it now for many months."                                                                                
                                                                                                                                
CHAIR STEDMAN referred to the  two lawsuits and commented that if                                                               
the plaintiffs prevail, then:                                                                                                   
     The state would  be forced to go through  a replat like                                                                    
     at  a  regular municipality  or  city,  which would  be                                                                    
     going  through the  planning  and  zoning commission  -                                                                    
     having  hearings  and then  going  on  up to  the  city                                                                    
     council or  the assembly  for final approval  - subject                                                                    
     to all appeals in that process. Is that correct?                                                                           
                                                                                                                                
MR. PUTZIER said  that's true, but DOT is already  required to go                                                               
through whatever process the municipality  has. The real issue is                                                               
the   allegation   that   the  process   that   these   different                                                               
municipalities  have is  unconstitutional  in  that they  deviate                                                               
from  the normal  subdivision process,  which  entails a  lengthy                                                               
hearing process  that is subject  to appeal rights as  they apply                                                               
to local  zoning standards. Typically, the  process for right-of-                                                               
way acquisition is a bit more streamlined.                                                                                      
                                                                                                                                
SENATOR  ELTON said  it's clear  that this  gets to  some of  the                                                               
statutory  issues, but  he  didn't think  it was  a  fix for  the                                                               
remnant  constitutional   issue.  The  bill  has   a  retroactive                                                               
effective  date,   but  if   the  constitutional   issues  aren't                                                               
addressed then  the points raised  by the lawsuits are  still out                                                               
there.                                                                                                                          
                                                                                                                                
MR.  PUTZIER  thought  that the  intent  section,  combined  with                                                               
deleting the  last sentence  of AS  09.55.275, would  address the                                                               
points raised in court.                                                                                                         
     I  think  striking  that  last   sentence  is  a  clear                                                                    
     indication  from  the  Legislature that  it  was  never                                                                    
     intended to  have an identity  of process put  in place                                                                    
     such as being  suggested. Back in '75  when the statute                                                                    
     was put in  passed, the concern was that  DOT was doing                                                                    
     these projects without  consulting with municipalities.                                                                    
     I think the  Legislature meant, the intent  was to make                                                                    
     DOT consult  and submit  their plans  to municipalities                                                                    
     for comment and  DOT has been doing that  and it's been                                                                    
     working     out     relatively    harmoniously     with                                                                    
     municipalities  across  the  state.  The  arguments  in                                                                    
     court, I think,  just take the intent too  far when you                                                                    
     say the  Legislature was trying to  demand a particular                                                                    
     process.  It's  that  problem   that  we're  trying  to                                                                    
     correct right now.                                                                                                         
                                                                                                                                
SENATOR  ELTON  asked  if  that  means  that  the  constitutional                                                               
problem goes away with the change in statute.                                                                                   
                                                                                                                                
MR.  PUTZIER  hesitated and  said  he  wasn't  sure there  was  a                                                               
constitutional issue.                                                                                                           
     And  I'm  sorry  if  I  misspoke  earlier.  There's  an                                                                    
     argument  being made  that the  ordinances violate  the                                                                    
     statute because  the statute,  the allegation  is being                                                                    
     made,  is a  demand  for a  particular  process. If  we                                                                    
     change  the  statute,  I think  that  would  solve  the                                                                    
     problem  or the  argument  of the  ordinances being  in                                                                    
     conflict  with the  statute. DOT  can only  conduct its                                                                    
     eminent  domain proceedings  if it  strictly abides  by                                                                    
     the requirements of the statutes.                                                                                          
                                                                                                                                
SENATOR  ELTON  acknowledged that  he  might  have misheard,  but                                                               
earlier in  the presentation he  though that he heard  mention of                                                               
unconstitutional and contrary  to statute. He then  said he would                                                               
like  to  hear from  the  Department  of  Law about  making  this                                                               
retroactive, which would wipe out the lawsuits.                                                                                 
                                                                                                                                
MR. PUTZIER replied:                                                                                                            
     There  could  be  challenges made  to  that.  There  is                                                                    
     significant  case  law  on  it   and  as  long  as  the                                                                    
     Legislature  - the  general law  is  - as  long as  the                                                                    
     Legislature  clearly expresses  its intent  to make  it                                                                    
     retroactive,  and  if  there  is  no  improper  purpose                                                                    
     behind  it,  that   retroactive  legislation  has  been                                                                    
     upheld  under a  number  of  circumstances. There  are,                                                                    
     theoretically,  challenges that  could be  leveled, but                                                                    
     what  this bill  does  is good.  [It  should not  only]                                                                    
     address the existing litigation,  but also has benefits                                                                    
     obviously five,  ten years down the  road by clarifying                                                                    
     it now.                                                                                                                    
                                                                                                                                
SENATOR  LINCOLN asked  where the  last, [\H  version], committee                                                               
substitute originated.                                                                                                          
                                                                                                                                
CHAIR   STEDMAN  said   it  came   from   the  sponsor's   office                                                               
[Transportation Committee].                                                                                                     
                                                                                                                                
SENATOR LINCOLN said  she asked because the  changes address some                                                               
of the  concerns she expressed  in the  Transportation Committee.                                                               
"Changing the municipal  authority from a may to a  shall on page                                                               
3, line 7,  I think is a  great addition and the  other two parts                                                               
as  well  where  it  includes the  rights  of  municipalities  to                                                               
regulate  the remnant  parcels and  the other  whole new  section                                                               
that was added in Section 3"                                                                                                    
                                                                                                                                
SENATOR WAGONER asked  that John MacKinnon with  DOT come forward                                                               
and tell  him what the fiscal  impact would be if  these projects                                                               
were delayed by at least a year.                                                                                                
                                                                                                                                
JOHN MACKINNON,  deputy commissioner  of transportation  with the                                                               
Department of  Transportation and  Public Facilities,  said there                                                               
would be  considerable additional  expenses if the  projects were                                                               
delayed. "Every  time a  project comes up,  if somebody  wants to                                                               
delay the  project there is  the cost of litigation  and whenever                                                               
we hire the AG's office - they don't come cheap."                                                                               
                                                                                                                                
SENATOR WAGONER asked what the cost  is in the Kenai River Bridge                                                               
in Soldotna  and guesstimated that  it would between $28  and $30                                                               
million.                                                                                                                        
                                                                                                                                
MR. MACKINNON said  that is a $28 million project  and it's ready                                                               
to  advertise in  the middle  of May.  "A delay  of a  year could                                                               
easily be a couple of hundred thousand dollars, easily."                                                                        
                                                                                                                                
SENATOR WAGONER said he wanted that on the record.                                                                              
                                                                                                                                
SENATOR   LINCOLN  asked   if  Fairbanks   had  been   given  the                                                               
opportunity to review and state their views on the bill.                                                                        
                                                                                                                                
MR. MACKINNON told her that Fairbanks hadn't responded.                                                                         
                                                                                                                                
SENATOR ELTON  commented that Anchorage  and Fairbanks  have over                                                               
half the  state's population and  because of that, he  would hope                                                               
that they  would submit  their comments  to the  committee before                                                               
the bill goes to the floor.                                                                                                     
                                                                                                                                
MR.  PUTZIER added  that  the  City and  Borough  of Juneau  also                                                               
wanted him to state the following for the record:                                                                               
     That  DOT  prior  to  enacting  any  regulations  would                                                                    
     coordinate  with  and  afford the  opportunity  to  all                                                                    
     affected  platting authorities  to provide  comments on                                                                    
     the  regulations. DOT  certainly  has  no objection  to                                                                    
     that  and, in  fact, welcomes  the opportunity  to work                                                                    
     together  with  the  platting authorities  in  drafting                                                                    
     those regulations.                                                                                                         
                                                                                                                                
There was no further testimony.                                                                                                 
                                                                                                                                
SENATOR  WAGONER  made  a  motion  to  move  CSSB  382(CRA)  from                                                               
committee  with individual  recommendations  and attached  fiscal                                                               
note. There being no objection, it was so ordered.                                                                              

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