Legislature(1995 - 1996)
03/03/1995 01:35 PM FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= 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, 1 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 2 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, 3 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. 4 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). 5 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 6 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 7 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 8 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]. 9 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.