Legislature(2005 - 2006)SENATE FINANCE 532

01/17/2006 09:00 AM FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
SB 55 AGRICULTURAL LAND
Heard & Held
HB 217 FULL & TRUE VALUE OF TAXABLE MUNI PROP.
Heard & Held
Bills Previously Heard/Scheduled
9:49:33 AM                                                                                                                    
                                                                                                                                
                                                                                                                                
     SENATE BILL NO. 55                                                                                                         
     "An Act instructing the commissioner of natural resources to                                                               
     issue a patent for the remaining interest in certain state                                                                 
     land to the owner of the agricultural rights to that land."                                                                
                                                                                                                                
                                                                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
AMY  SEITZ, Staff  to  sponsor of  the  bill, Senator  Tom  Wagoner,                                                            
testified that  this legislation was introduced to  settle ownership                                                            
of a parcel  of land near the community  of Hope. The Miller  family                                                            
homesteaded 27  acres and leased grazing rights on  another 15 acres                                                            
from the federal  government. During the 1964 earthquake,  18 of the                                                            
acres owned by the Miller  family became part of a riverbed and were                                                            
unsuitable  for use.  The federal  government compensated  this loss                                                            
of 17 acres  with one acre  of federal land.  The State deemed  this                                                            
exchange  unfair and  leased grazing  rights on  15 acres of  Forest                                                            
Service  land   to  the  family.   These  rights  were  amended   to                                                            
agricultural  rights in 1978. However,  the family should  have full                                                            
rights to this land.                                                                                                            
                                                                                                                                
Ms. Seitz informed  that a statutory provision is  required to allow                                                            
the conveyance  of this property. Former Senator John  Torgerson had                                                            
sponsored  similar legislation  during his  tenure. The legislation                                                             
before the  Committee is limited  to the one  parcel of land  and it                                                            
contains detailed provisions for the exchange.                                                                                  
                                                                                                                                
9:52:40 AM                                                                                                                    
                                                                                                                                
Senator Bunde  asked the  total dollar amount  of the proposed  land                                                            
sale and  whether the  proceeds would  be deposited  into the  State                                                            
general fund or the Lands Disposal Account fund.                                                                                
                                                                                                                                
9:53:05 AM                                                                                                                    
                                                                                                                                
Ms. Seitz  assumed  the monies  would be  deposited  to the  general                                                            
fund.  The  final  price  would not  be  determined  until  a  final                                                            
appraisal was completed.                                                                                                        
                                                                                                                                
9:53:26 AM                                                                                                                    
                                                                                                                                
DICK MYLIUS,  Acting Director, Division  of Mining, Land  and Water,                                                            
Department of  Natural Resources, testified via teleconference  from                                                            
an offnet  location  that the  value of  the property  would not  be                                                            
assessed if  and until this legislation  passed. The proceeds  would                                                            
be  deposited  to  the Land  Disposal  Fund  account  and  would  be                                                            
utilized for other land disposal activities.                                                                                    
                                                                                                                                
9:54:19 AM                                                                                                                    
                                                                                                                                
Senator Bunde surmised  that the amount of the fiscal note should be                                                            
indeterminate rather than zero.                                                                                                 
                                                                                                                                
9:54:33 AM                                                                                                                    
                                                                                                                                
Senator Bunde assumed that  the cost to process the sale of the land                                                            
would not exceed the selling price.                                                                                             
                                                                                                                                
9:54:55 AM                                                                                                                    
                                                                                                                                
Mr. Mylius replied that  the fiscal note could be amended to reflect                                                            
an  indeterminate  amount.  The  expense  would  be  less  than  the                                                            
proceeds from the sale.                                                                                                         
                                                                                                                                
9:55:13 AM                                                                                                                    
                                                                                                                                
FRANK MILLER  testified via  teleconference  from Kenai that  he and                                                            
his  sister  are  co-owners  of  the  property   in  question.  They                                                            
inherited   the  land  from   their  parents.   He  supported   this                                                            
legislation, as it would  solve problems encountered for many years.                                                            
Currently  the property  could not  be subdivided  and subsequently                                                             
passed along to their children.                                                                                                 
                                                                                                                                
9:56:20 AM                                                                                                                    
                                                                                                                                
ROSWITHA  MILLER testified  via teleconference  from  Kenai also  in                                                            
support of this bill. She is married to Frank Miller.                                                                           
                                                                                                                                
9:56:40 AM                                                                                                                    
                                                                                                                                
CHARLES  GRAHAM testified  via  teleconference  from  Kenai, as  the                                                            
spouse of Linda  Miller, Frank Miller's  sister and co-owner  of the                                                            
property. This legislation  is necessary to resolve the title to the                                                            
property.                                                                                                                       
                                                                                                                                
9:57:14 AM                                                                                                                    
                                                                                                                                
Senator Bunde  spoke to efforts of the community of  Hope to attract                                                            
new  families  in  order  to  continue  its  school  operations.  He                                                            
understood  that the intent of transferring  ownership of  this land                                                            
is to allow the property  to be subdivided. He asked the possibility                                                            
that this could assist the community's goal.                                                                                    
                                                                                                                                
9:57:44 AM                                                                                                                    
                                                                                                                                
Mr.  Graham acknowledged  the  possibility,  although  he could  not                                                            
provide a  definitive answer.  Currently the  property could  not be                                                            
subdivided. The intent is to share the land with family members.                                                                
                                                                                                                                
9:58:21 AM                                                                                                                    
                                                                                                                                
Mr. Miller  shared that  his daughter  would like  to reside  on the                                                            
property, which has necessitated  resolution to the ownership issue.                                                            
He admitted  that the  decision as  to whether  she would assist  in                                                            
increasing the student body was not his to make.                                                                                
                                                                                                                                
9:58:48 AM                                                                                                                    
                                                                                                                                
Senator  Stedman assumed  that this  transaction  would not  include                                                            
subsurface rights.                                                                                                              
                                                                                                                                
9:59:03 AM                                                                                                                    
                                                                                                                                
Ms. Seitz responded  that as with any land disposal,  the subsurface                                                            
rights would be retained by the State.                                                                                          
                                                                                                                                
9:59:27 AM                                                                                                                    
                                                                                                                                
Senator Stedman  supported  this bill. However,  he did not  support                                                            
establishment  of a precedent of providing compensation  for coastal                                                            
properties  in which useable  land was eliminated.  He spoke  to the                                                            
global   warming  phenomena   causing  significant   ice  melt   and                                                            
subsequent   changes  to  mean  high   tide  marks.  Although   this                                                            
legislation  is specifically  directed  to land lost  because  of an                                                            
earthquake,  he  cautioned  against   the precedent   that  property                                                            
boundaries  could be expanded but  not reduced from natural  causes.                                                            
                                                                                                                                
10:00:41 AM                                                                                                                   
                                                                                                                                
Senator Stedman explained  that property located in an area in which                                                            
the  land plate  was  sinking  could be  reduced  in size.  If  that                                                            
property  were  located in  an  area in  which  the high  tide  mark                                                            
receded, the amount of property could increase.                                                                                 
                                                                                                                                
10:01:20 AM                                                                                                                   
                                                                                                                                
Mr. Mylius replied that  such coastal occurrences would not apply to                                                            
this parcel  because the property  is inland. The initial  land that                                                            
was lost in the  earthquake became a part of the Turnigan  Arm water                                                            
body.                                                                                                                           
                                                                                                                                
Mr. Mylius  also affirmed  that the  subsurface  rights of the  Hope                                                            
property would be retained by the State.                                                                                        
                                                                                                                                
10:02:08 AM                                                                                                                   
                                                                                                                                
Senator Bunde  noted that the provisions  of this legislation  would                                                            
be repealed at the end  of the current year and could not be applied                                                            
in other situations.                                                                                                            
                                                                                                                                
10:02:22 AM                                                                                                                   
                                                                                                                                
Senator   Olson  asked  the   relevancy  of   this  legislation   to                                                            
communities experiencing extensive erosion.                                                                                     
                                                                                                                                
10:02:48 AM                                                                                                                   
                                                                                                                                
Mr.  Mylius  responded  that erosion  is  not  the issue  with  this                                                            
parcel.  A  well-established  principle  exists  regarding  boundary                                                            
changes caused  by erosion.  Compensation is  not provided  in these                                                            
instances  that  occur  gradually.  Because the  earthquake  was  an                                                            
immediate occurrence, compensation  was warranted. Loss from a flash                                                            
flood could be another exception.                                                                                               
                                                                                                                                
10:04:35 AM                                                                                                                   
                                                                                                                                
Senator Olson  asked the number of other landowners  affected by the                                                            
1964 earthquake who received compensation.                                                                                      
                                                                                                                                
10:04:50 AM                                                                                                                   
                                                                                                                                
Mr.  Mylius replied  that  many property  owners  in Anchorage  were                                                            
granted  parcels on  the Anchorage  Hillside after  their low  lying                                                            
land slipped into Turnigan  Arm. Land was also granted for land lost                                                            
in Girdwood, Portage  and Kachemak Bay. Few properties  in Hope were                                                            
affected.                                                                                                                       
                                                                                                                                
10:05:29 AM                                                                                                                   
                                                                                                                                
Senator  Olson  asked why  the  Department  anticipated  that  other                                                            
property  owners affected  by the earthquake  would not qualify  for                                                            
compensation under the provisions of this bill.                                                                                 
                                                                                                                                
10:05:44 AM                                                                                                                   
                                                                                                                                
Mr.  Mylius  responded  that  most  of  the originally  compensated                                                             
property  owners  were  granted  fee  simple   rights.  The  Millers                                                            
received  agricultural  rights  to  National  Forest  land  that  is                                                            
subject to limited  applicability. Also, the federal  government was                                                            
the grantor  of the  other properties.  The rights  to the  property                                                            
addressed  in this  legislation  were awarded  to the  Millers  as a                                                            
substitution  for the compensation  the federal  government  did not                                                            
award.                                                                                                                          
                                                                                                                                
10:07:02 AM                                                                                                                   
                                                                                                                                
Co-Chair  Green  ordered  the bill  HELD  in  Committee to  await  a                                                            
revised fiscal note.                                                                                                            
                                                                                                                                

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