Legislature(1995 - 1996)
03/03/1995 01:35 PM House FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
MARCH 3, 1995
1:35 P.M.
TAPE HFC 95 - 39, Side 1, #000 - end.
TAPE HFC 95 - 39, Side 2, #000 - end.
TAPE HFC 95 - 40, Side 1, #000 - #540.
CALL TO ORDER
Co-Chair Mark Hanley called the House Finance Committee
meeting to order at 1:35 P.M.
PRESENT
Co-Chair Hanley Representative Kohring
Co-Chair Foster Representative Martin
Representative Mulder Representative Kelly
Representative Brown Representative Parnell
Representative Grussendorf Representative Therriault
Representative Navarre was not present for the meeting.
ALSO PRESENT
Representative Jerry Mackie; Mike Greany, Director,
Legislative Finance Division; Sybil Davis, Self, Juneau;
Joan Jackson, (Testified via teleconference), Artist,
Cordova; Jenetta Wakefield, (Testified via teleconference),
Fairbanks; Robert Juettner, (Testified via teleconference),
Administrator, Aleutians East Borough; Tim Wilson,
(Testified via teleconference), Executive Director, Alaska
Council on the Arts, Anchorage; Dale Bondurant, (Testified
via teleconference), Kenai; Wells Williams, (Testified via
teleconference), Planning Director, City and Borough, Sitka;
Jim Barnett, (Testified via teleconference), City Attorney,
City of Whittier; Nico Bus, Director, Division of
Administrative Services, Department of Natural Resources;
Nancy Hemenway, Aid, Representative Carl Moses.
SUMMARY
HB 20 An Act relating to rights in certain tide and
submerged land.
HB 20 was HELD in Committee for further
consideration.
HB 79 An Act allowing the Department of Natural
Resources to quitclaim land or interests in land,
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including submerged or shore land, to a
municipality to correct errors or omissions of the
municipality when inequitable detriment would
result to a person due to that person's reliance
upon the errors or omissions of the municipality.
CS HB 79 (FIN) was reported out of Committee with
"no recommendations" and with two zero fiscal
notes by the Department of Community and Regional
Affairs dated 2/03/95 and the Department of
Natural Resources dated 2/03/95.
HB 106 An Act relating to art in public places
requirements and the art in public places fund.
HB 106 was HELD in Committee for further
consideration.
HOUSE BILL 106
"An Act relating to art in public places requirements
and the art in public places fund."
SYBIL DAVIS, SELF, JUNEAU, testified in support of keeping
the 1% for art. Representative Parnell asked if public
buildings had been funded for art prior to the 1%
allocation. Ms. Davis responded that the 1% for art would
insure that some aspect of aesthetics would be placed into
each public facility which did not exist before the
mandatory allocation.
JOAN JACKSON, (TESTIFIED VIA TELECONFERENCE), ARTIST,
CORDOVA, urged the Committee not to pass HB 106 and pleaded
for continued support of art in public places.
JENETTA WAKEFIELD, (TESTIFIED VIA TELECONFERENCE),
FAIRBANKS, echoed that art daily enriches peoples lives who
use public buildings. She urged the Committee to not adopt
HB 106.
Representative Brown referenced the summary of an amendment
to HB 106. [Attachment #1]. The amendment provides an
alternative approach which would offer the private sector
incentives to fund the Percent for Art Program. She pointed
out her support of the current program, noting that it has
been important and valuable. Representative Brown
recommended using another approach which would work the art
percentage into the bidding process, while emphasizing that
the amendment would provide greater accountability. All
Percent for Art Funds would be disbursed through the Art in
Public Places Fund, making it easier to track and report on
procurement activity. Because so many departments now have
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construction authority, the current process makes it very
difficult to track projects and compliance. The amendment
would solve that problem.
TIM WILSON, (TESTIFIED VIA TELECONFERENCE), EXECUTIVE
DIRECTOR, ALASKA COUNCIL ON THE ARTS, ANCHORAGE, spoke to
the bid preference approach. He noted that the amendment
does have merit and warrants consideration by the Arts
Council. He requested that the amendment be referred to
subcommittee in order to provide more time to consider the
effects. He elaborated that members of the Arts Council are
currently being elected and the issue deserves the new
body's consideration.
Mr. Wilson commented that the proposed amendment would
effect how the Percent for Art procurement would be
implemented. He noted that currently, 75% of all projects
for public art are done by Alaskan artists and that there is
preference given to Alaskan artists. That percentage rate
was based on the actual executions of commissions and not
the income generated.
Representative Martin voiced his legal concerns in limiting
the program to only Alaskan artists. Representative Brown
advised that the amendment did not represent any interest
group and that she provided the changes as suggested in the
amendment in order to save the program although she
supported the current program.
Mr. Wilson noted before the 1% art allocation funding in
public buildings, there was little activity and
participation in the arts. The law has provided a public
art incentive and with extra attention provided to
participate by municipalities and corporations in the
private sector.
HOUSE BILL 79
"An Act allowing the Department of Natural Resources to
quitclaim land or interests in land, including
submerged or shore land, to a municipality to correct
errors or omissions of the municipality when
inequitable detriment would result to a person due to
that person's reliance upon the errors or omissions of
the municipality."
REPRESENTATIVE JERRY MACKIE advised that HB 79 was
introduced at the request of the City of Skagway in order to
correct a long standing land ownership problem in Skagway.
Fifty years ago a dike was constructed along the Skagway
River to protect the town from flooding. Over the years,
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the area between the original river bank and the dike has
been reclaimed and subdivided by the city with lots sold and
built upon. The city did not have a clear title to the
land. Hence, the title for subsequent private property
owners is also clouded. Not only are the owners'
investments and improvements at risk, but bank financing for
further improvements or sales are foreclosed.
Representative Mackie pointed out that the Department of
Natural Resources (DNR) has unsuccessfully sought an
administrative remedy for the problem. HB 79 would add the
needed provision by allowing the director of the Division of
Lands, the discretion to quitclaim land to a municipality to
correct past errors and omissions. The director could also
set any terms or conditions that deemed appropriate for the
transaction. Furthermore, land title transferred to a
municipality in that manner would be counted against the
municipality's general land grant entitlement from the
State.
Representative Mackie distributed a map diagraming the
referenced dike area. [Attachment #2].
Representative Grussendorf advised the Committee that Andrew
Pekovich, Manager, Southeast Region, Department of Natural
Resources, suggested reducing the sunset on the proposed
legislation. Representative Mackie commented that Amendment
Representative Brown asked how subsurface interests would be
affected by the proposed legislation.
NICO BUS, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES,
DEPARTMENT OF NATURAL RESOURCES, commented that the
subsurface rights would not be effected or transferred. He
added, that information was based on a conversation he had
with Ron Swanson, Director, Division of Lands. Mr. Bus
offered to provide the Committee a letter explaining the
concern.
Co-Chair Hanley asked if other municipalities would qualify
under the dispensation proposed in the legislation.
Representative Mackie stated that to date there are no
others, although, the legislation was written such that if
another municipality in the State experienced the same
problem, and then approached DNR, meeting the criteria, the
problem could be addressed.
Representative Therriault MOVED to adopt Amendment #1.
There being NO OBJECTION, it was adopted. Discussion
followed among Committee members and Mr. Bus regarding
submerged lands classification by the State.
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Representative Foster MOVED to adopt CS HB 79 (FIN) out of
Committee with individual recommendations and with the
accompanying fiscal notes.
CS HB 79 (FIN) was reported out of Committee with "no
recommendations" and with zero fiscal notes by the
Department of Community and Regional Affairs dated 2/03/95
and the Department of Natural Resources dated 2/03/95.
HOUSE BILL 20
"An Act relating to rights in certain tide and
submerged land."
NANCY HEMENWAY, STAFF TO REPRESENTATIVE CARL MOSES,
testified in support of HB 20. She stated that leases are
cumbersome, costly to obtain and the terms of the leases
vary widely, all of which are onerous to small communities.
She added that it is difficult to obtain G.O. bonding
without fee simple title of a minimum of a fifty-five year
lease on the land. First class and home rule cities
incorporated prior to 4/01/64 were given the ability to have
lands conveyed to them at the time that A.S. 38.320 was
established; municipalities incorporated after that date
cannot. The proposed legislation would provide them parity.
Ms. Hemenway remarked that similar legislation had been
introduced last year (HB 398) by Representative Olberg. HB
20 would allow the State to convey tide and submerged land
to municipalities as long as the municipality has applied
for the conveyance.
Ms. Hemenway advised that Representative Moses had provided
two changes to the proposed legislation which would tighten
the title and would add an immediate effective date.
Representative Therriault MOVED that the version before the
Committee be the work draft #9-LS0118\G, Cook, 2/23/95.
There being NO OBJECTION, it was adopted.
Representative Brown asked if the sponsor of the bill would
object to a clarification of "subsurface". Ms. Hemenway
stated Representative Moses would not object.
Representative Brown questioned the scope of the public
trust doctrine and how it was defined. Ms. Hemenway
clarified that it would apply to the shoreline as well and
that all public access would be addressed.
(Tape Change, HFC 95-39, Side 2).
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Ms. Hemenway understood that the public trust document would
apply to protecting the public access regardless of
ownership. Representative Martin voiced concern that the
State's assets would be distributed through DNR with the
proposed legislation. Representative Martin and Mr. Bus
discussed the issue of "submerged" lands.
Ms. Hemenway explained that prior to 1964, the State had
conveyed submerged lands to other municipalities. She
assumed that the legislation would occur in the same manner.
She referenced the memo from Legal Counsel which clarifies
that the State reserves mineral rights. Co-Chair Hanley
advised that Representative Brown's amendment would clarify
that mineral rights below the submerged lands would not be
transferred through the proposed legislation.
WELLS WILLIAMS, (TESTIFIED VIA TELECONFERENCE), PLANNING
DIRECTOR, CITY AND BOROUGH OF SITKA, spoke strongly in
support of the proposed legislation. The City and Borough
of Sitka feels that the legislation would be of a
significant benefit. Sitka owns only a small percentage of
the land within the municipal boundaries. He added, the
relationship between DNR and the city is good, regardless,
the municipality is in a better position to manage lands
within their municipality.
The municipality has undertaken a comprehensive planning
process over the past thirteen months involving over two
hundred residents. That planning process will lead to the
development of a more formalized land management program.
This will put Sitka in a better position to balance public
interests.
Mr. Williams pointed out, two specific protections in the
bill:
1. The requirement that tidelands can only be
transferred for a specific purpose; and
2. The requirement that the use is consistent or
compatible with the purpose of the statutory
designation.
Representative Brown commented on her concern with the
municipality's position on the lease versus the sale of the
property and the issue of the protection of public access.
Mr. Williams responded that the municipality strongly
supports the ability to sell the property. His office
handles both tideland leases and tideland sales. There have
been a few instances in which lease provisions have
presented problems for land owners who wish to finance
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substantial infrastructure improvements. It is the
municipality's experience that the public access can be
protected even though tidelands are sold. The public trust
doctrine further provides protection.
Representative Martin voiced concern regarding the ability
of the municipality to tax the land. Mr. Williams replied
that the legislation would be in the financial interest of
the municipality. HB 20 would correct a current inequity
within the state statutes. Through historical events
involving incorporation dates, Sitka was able to take
ownership of a small percentage of the tidelands within the
municipality. The legislation would not allow the
municipality to take ownership of all the tidelands within
the corporate limits. There must be a specific purpose such
as a barge landing or a dock. That purpose must be
consistent with local and state plans.
DALE BONDURANT, (TESTIFIED VIA TELECONFERENCE),
KENAI/SOLDOTNA, commented on his concern with the proposed
legislation. He pointed out that Cook Inlet is surrounded
by the borough. He asserted that lands indicated within the
legislation would be removed from the state's public right
and transferred to private concerns. He said that mining
claims could create problems with local residents. Mr.
Bondurant voiced his opposition to the legislation.
ROBERT JUETTNER, (TESTIFIED VIA TELECONFERENCE),
ADMINISTRATOR, ALEUTIANS EAST BOROUGH, spoke in support of
HB 20. He testified the only tidelands the municipalities
are interested in are lands directly underneath
infrastructure such as dock developments, barge
developments, airport runways, and commercial and waterfront
development. The projects seldom go out more than a few
hundred feet into the water.
The proposed sale or leases have to be consistent with State
and local plans. Municipalities are in a better position to
determine and broker local interests than the State of
Alaska. Communities such as the City and Borough of Sitka
take the protection of high habitat areas and recreation
areas extremely seriously. They would not lease or sell
lands that infringe on those values. Any lease or sale
involves a public hearing process and the municipality
actively encourages individuals with diverse views to
comment during those hearings.
Representative Brown asked the criteria the Commissioner
would use to determine the mandated directive. Mr. Juettner
referenced Section 4, Page 2, #(c), "....has been approved
for lease to the municipality....". Representative Brown
felt that the description could create a conflict between
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the community and the borough and the State which would be
arguably entitled to the same submerged land.
Representative Brown pointed out that in the statute, the
definition of submerged lands would extend three miles. Mr.
Juettner stated it was not the intention to have the
boundary extend that far, noting that the intent was only
far enough to extend a dock thirty feet and providing enough
space necessary for a rational development.
JIM BARNETT, (TESTIFIED VIA TELECONFERENCE), CITY ATTORNEY,
CITY OF WHITTIER, testified in support of HB 20. The
Department of Transportation and Public Facilities (DOTPF)
is now conducting the Whittier Access Project which is about
to be released. The City of Whittier is trying to respond
to its future and the impact of the access. Entitlement is
limited as is with all second class cities. The issue at
hand for the city is the development of the waterfront area
because after access occurs, tidelands could not be conveyed
in any second class city. The corps of engineers is
actively working on a harbor extension, which is important
for the future development of Whittier. He emphasized that
all of Southcentral Alaska will benefit from the proposed
legislation.
(Tape Change, HFC 95-40, Side 1).
Representative Brown asked if the public trust doctrine
extends to tidelands. She requested a change to Page 2,
Line 27, following "waters" inserting "and tidelands". She
felt that language would allow continued access to public
waters. Mr. Barnett stated that legislation currently
exists which protects the coastal areas. Representative
Brown pointed out that the protection occurs because of the
State ownership.
Mr. Barnett noted that in Title 38, tidelands are included
in the term "public waters". Representative Brown asked if
there would be a problem clarifying the preservation of the
tidelands as well as the navigable waters. Mr. Juettner
noted that navigational services prevents construction along
those waters. Discussion continued regarding tidelands.
Mr. Williams stated that within coastal communities, many of
the important lands for development are the tidelands.
Unlike several communities in the Kenai Borough and the
Matanuska-Susitna Borough, peoples lives in Sitka revolve
around the marine environment. Many of the uplands are
mountainous and the much of the selected lands fall under
the Municipal Land Entitlement Process, and include steep
and undevelopable terrain. As a result, the ability to
obtain tidelands was not to the advantage of the communities
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that do not have coast lines. The legislation would simply
put those communities on equal footing.
Representative Martin recommended that the leasing of State
lands have a time limit placed on it. Mr. Barnett
emphasized that the municipalities are extensions of the
State, although they are a bit more knowledgeable about the
local community needs. He stated that the corps of
engineers are known to be slow. He did not know what would
happen if the corps took longer than five years. He
concluded that the communities created before 1964 would be
authorized to keep the allocations that they receive.
Co-Chair Hanley noted that the land conveyed would be
counted against the municipalities land grant. He voiced
concern for the equity of those communities who had received
their total entitlement and for those communities who now do
not have submerged lands. He asked how the legislation
would affect policies toward set net leases which are
located on some of these lands. Mr. Bus responded that
during the public interest review, those interests would be
taken into consideration. Representative Mulder and
Representative Therriault agreed that a conflict could exist
between the lease holder and property owners.
Representative Brown asked if the intention of the
legislation would provide for current construction under a
State 99-year lease. She asked if that land could now be
assumed by the municipality. Mr. Bus stated it would.
Discussion followed among Committee members regarding the
legal definitions of submerged lands in relationship to
rivers. Co-Chair Hanley requested that information
regarding the impact of encroached settlement rights be
provided to the Committee.
HB 20 was HELD in Committee for further discussion.
Co-Chair Hanley provided the Committee with copies of two
work drafts, noting that they would be read across the House
floor as House Finance legislation:
"An Act relating to reductions in compensation for
state officers and employees; and providing an
effective date."
"An Act relating to endowments of and donations to the
University of Alaska and to the University of Alaska
endowment trust fund; and providing for an effective
date."
[Attachment #4 and #5].
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Representative Brown suggested when offering legislation
submitted by the House Finance Committee should imply that
most of the members support it and participated in it's
inception. She asked for more information and time for
consideration of the proposed legislation.
ADJOURNMENT
The meeting adjourned at 3:35 P.M.
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