Legislature(1995 - 1996)
02/16/1996 01:07 PM House JUD
| Audio | Topic |
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE JUDICIARY STANDING COMMITTEE
February 16, 1996
1:07 p.m.
MEMBERS PRESENT
Representative Brian Porter, Chairman
Representative Joe Green, Vice Chairman
Representative Con Bunde
Representative Bettye Davis
Representative Al Vezey
Representative Cynthia Toohey
Representative David Finkelstein
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
HOUSE BILL NO. 154
"An Act requiring the Department of Law to provide guidelines
regarding unconstitutional state and municipal takings of private
real property; relating to the taxation of private real property
taken unconstitutionally by state or municipal action; establishing
a time limit for bringing an action for an unconstitutional state
or municipal taking of private real property; and providing for an
effective date."
- HEARD AND HELD
HOUSE BILL NO. 316
"An Act relating to civil liability for false claims and improper
allegations or defenses in civil practice; and providing for an
effective date."
- SCHEDULED BUT NOT HEARD
PREVIOUS ACTION
BILL: HB 154
SHORT TITLE: REGULATORY TAKING OF PRIVATE PROPERTY
SPONSOR(S): REPRESENTATIVE(S) KOHRING, Rokeberg, Kott, Kelly,
Vezey, Martin, Barnes, Ogan, G.Davis, James, Mulder, Foster
JRN-DATE JRN-PG ACTION
02/03/95 237 (H) READ THE FIRST TIME - REFERRAL(S)
02/03/95 237 (H) CRA, JUD, FIN
02/16/95 (H) CRA AT 01:00 PM CAPITOL 124
02/16/95 (H) MINUTE(CRA)
02/21/95 (H) CRA AT 01:00 PM CAPITOL 124
02/21/95 (H) MINUTE(CRA)
03/01/95 550 (H) COSPONSOR(S): ROKEBERG
03/09/95 (H) CRA AT 01:00 PM CAPITOL 124
03/09/95 (H) MINUTE(CRA)
03/16/95 (H) CRA AT 01:00 PM CAPITOL 124
03/16/95 (H) MINUTE(CRA)
03/24/95 919 (H) COSPONSOR(S): KOTT
03/25/95 (H) CRA AT 01:00 PM CAPITOL 124
03/25/95 (H) MINUTE(CRA)
04/20/95 (H) CRA AT 01:00 PM CAPITOL 124
04/20/95 (H) MINUTE(CRA)
04/21/95 1421 (H) CRA RPT CS(CRA) NT 1DP 1DNP 2NR 1AM
04/21/95 1421 (H) DP: VEZEY
04/21/95 1422 (H) DNP: ELTON
04/21/95 1422 (H) NR: AUSTERMAN, IVAN
04/21/95 1422 (H) AM: KOTT
04/21/95 1422 (H) INDETERMINATE FISCAL NOTE (LAW)
04/21/95 1422 (H) 2 FISCAL NOTES (CRA, DNR)
04/21/95 1422 (H) REFERRED TO JUDICIARY
11/21/95 (H) JUD AT 10:00 AM JUNEAU LIO
01/08/96 2382 (H) COSPONSOR(S): KELLY, VEZEY, MARTIN
01/09/96 2396 (H) COSPONSOR(S): BARNES
01/10/96 2404 (H) COSPONSOR(S): OGAN, G.DAVIS
01/11/96 2418 (H) COSPONSOR(S): JAMES, MULDER
01/19/96 (H) JUD AT 01:00 PM CAPITOL 120
01/19/96 (H) MINUTE(JUD)
01/31/96 2586 (H) COSPONSOR(S): FOSTER
02/02/96 (H) JUD AT 01:00 PM CAPITOL 120
02/02/96 (H) MINUTE(JUD)
02/16/96 (H) JUD AT 01:00 PM CAPITOL 120
WITNESS REGISTER
REPRESENTATIVE VIC KOHRING
Alaska State Legislature
State Capitol, Room 428
Juneau, AK 99801
Telephone: (907) 465-2186
POSITION STATEMENT: Sponsor of HB 154
PEGGY LaGRONE, Legislative Staff
to Representative Kohring
Alaska State Legislature
Capitol Building, Room 428
Juneau, AK 99801
Telephone: (907) 465-2186
POSITION STATEMENT: Testified on HB 154
TOM PITMAN, Municipal Assessor
Municipality of Anchorage
632 West 6th Avenue
Anchorage, Alaska 99501
Telephone: (907) 343-6779
POSITION STATEMENT: Testified on HB 154
STEVE VAN SANT, State Assessor
Division of Municipal and Regional Assistance
Department of Community and Regional Affairs
333 West 4th Avenue, Suite 319
Anchorage, Alaska 99501
Telephone: (907) 269-4500
POSITION STATEMENT: Testified on HB 154
PAT CARLSON, Assessor
City of Kodiak
1417 Ismailov Street
Kodiak, Alaska 99615
Telephone: (907) 486-9353
POSITION STATEMENT: Testified on HB 154
SARA HANNAN, Executive Director
Alaska Environmental Lobby
P.O. Box 22151
Juneau, Alaska 99801
Telephone: (907) 463-3366
POSITION STATEMENT: Testified against HB 154
JIM VOTEBERG, Assistant City Manager
City of Ketchikan
334 Tongass Avenue
Ketchikan, Alaska 99901
Telephone: (907) 225-3111
POSITION STATEMENT: Testified on HB 154
CHARLES McKEE
P.O. Box 24305
Anchorage, Alaska 99524
POSITION STATEMENT: Testified on HB 154
JON ISAACS, Member
Alaska Chapter, American Planning Association;
Member, Alaska Municipal League
308 G Street, Number 313
Anchorage, Alaska 99501
Telephone: (907) 274-9719
POSITION STATEMENT: Testified on HB 154
PAM LaBOLLE, President
Alaska State Chamber of Congress
217 Second Street, Number 201
Juneau, Alaska 99801
Telephone: (907) 586-2323
POSITION STATEMENT: Testified in support of HB 154
ANN RESCH, Departmental Attorney
Municipality of Anchorage
632 West Sixth Avenue
Anchorage, Alaska 99501
Telephone: (907) 343-4545
POSITION STATEMENT: Testified on HB 154
LISA BLACHER
536 Park Street, Apartment E
Juneau, Alaska 99801
Telephone: (907) 463-3715
POSITION STATEMENT: Testified against Hb 154
JANICE ADAIR, Director
Division of Environmental Health
Department of Environmental Conservation
555 Cordova Street
Anchorage, Alaska 99501
Telephone: (907) 269-7644
POSITION STATEMENT: Testified on HB 154
GERON BRUCE, Legislative Liaison
Office of the Commissioner
Department of Fish and Game
P.O. Box 25526
Juneau, Alaska 99811-5526
Telephone: (907) 465-6143
POSITION STATEMENT: Testified on HB 154
TERRY DUSZYNSKI, Member
Alaska Homebuilders Association
1464 Birchwood Drive
Fairbanks, Alaska 99709
Telephone: (907) 479-3324
POSITION STATEMENT: Testified on HB 154
ACTION NARRATIVE
TAPE 96-21, SIDE A
Number 000
CHAIRMAN BRIAN PORTER called the House Judiciary committee meeting
to order at 1:07 p.m. Members present at the call to order were
Representatives Porter, Bunde, Toohey, and Vezey.
HB 154 - REGULATORY TAKING OF PRIVATE PROPERTY
CHAIRMAN PORTER announced the agenda was a continuation of the
hearing on HB 154 "An Act requiring the Department of Law to
provide guidelines regarding unconstitutional state and municipal
takings of private real property; relating to the taxation of
private real property taken unconstitutionally by state or
municipal action; establishing a time limit for bringing an action
for an unconstitutional state or municipal taking of private real
property; and providing for an effective date." He said an
additional committee substitute was available, work draft 9-
LSO602\H. He added that HB 154 would not be moved from the
committee today. He then asked the sponsor of the work draft to
come forward and testify on the new committee substitute.
Number 199
REPRESENTATIVE VIC KOHRING, sponsor of HB 154, gave an overview of
the bill. He said HB 154 was filed in response to concerns of
private property owners who, through regulations, have had their
property taken from them or have had restrictions placed on them as
to the use of their property reducing its economic value. The
intent of HB 154 is to require that the property owner is
compensated by the government if government restrictions and
regulations diminish the economic value of their property.
Representative Bettye Davis and Representative Joe Green arrived at
1:11 p.m.
REPRESENTATIVE KOHRING said this is the fourth House Judiciary
Committee hearing on HB 154, including two meetings held in the
interim. He referred to a letter dated January 26, 1996, available
in the committee packet, from Craig Tillery. He said responses to
each concern have been incorporated, as much as possible, into CSHB
154. He said these changes include removing the language regarding
compensation, as it was viewed to be unconstitutional. Language
referring to the economic analysis was also removed, as it was seen
to be cost prohibitive and require a fiscal note.
REPRESENTATIVE KOHRING said language was included in HB 154
incorporating a threshold amount of 20 percent of economic loss
before property owners could file a claim, to avoid proliferation
of litigation.
Number 430
REPRESENTATIVE KOHRING said HB 154 changed the interest rate from
the London Interbank Rate to the Twelfth Federal Reserve District
Rate. This rate is used when a claim is awarded as a result of a
taking and interest would be compounded from the time the economic
loss occurred on top of that award.
Number 469
REPRESENTATIVE KOHRING said a correction to avoid double
compensation on access was also incorporated. This correction
would avoid situations where a plaintiff could receive monetary
compensation for loss and also require the government to provide
access to their property.
Number 508
REPRESENTATIVE KOHRING said wording was added to make it clear that
HB 154 is not retroactive, only cases filed after the time that HB
154 became law, if that were to happen, would be applicable.
Number 560
REPRESENTATIVE BETTYE DAVIS requested that the Alaska Municipal
League letter be addressed.
REPRESENTATIVE KOHRING remarked that this letter is dated February
16, 1996, and he had not seen it. He deferred the question to his
staff person, Peggy LaGrone.
Number 597
PEGGY LaGRONE, Legislative Staff to Representative Kohring, said
she had not had time to review this letter.
REPRESENTATIVE DAVID FINKELSTEIN referred to the letter from Craig
Tillery, and asked for a copy of the verbal responses in regards to
Mr. Tillery's concerns, prepared by Representative Kohring.
Number 797
TOM PITMAN, Municipal Assessor, Municipality of Anchorage,
testified via teleconference from Anchorage. He said he just
received a copy of the work draft version of HB 154. He expressed
concern over issues concerning evaluation and timing. He said
under HB 154, a property owner has up to five years to claim his
property has lost value to which a value adjustment must be
incorporated within that loss. He listed the difficulties with
this time frame such as the fact that in Anchorage they do mass
appraisals and those direct records are kept for three years, not
five. He said a property owner could claim state property loss,
under the current system, to could make a valuation on the loss of
that property over the course of five years. He cited an example
where a driveway is broken as a result of roadway construction,
under HB 154 he might not make that claim for five years and be
able to access the property damage over the course of those five
years.
MR. PITMAN said the evaluation procedure of HB 154 causes
additional problems. He said under HB 154, a property owner can
chose their appraiser, or even act as their own appraiser. Mr.
Pitman said the municipalities and the state must go along with
this appraisal, under HB 154, and most likely that appraisal would
be done based on the worst case scenario, not to mention the
difficulty estimating the value of certain things which have no
appreciable value. He said the definition of takings in HB 154 can
include anything.
Number 830
STEVE VAN SANT, State Assessor, Division of Municipal and Regional
Assistance, Department of Community and Regional Affairs,
testified via teleconference from Anchorage. He referred to
Section 29.45 regarding the appeal process for property owners. He
said HB 154 creates a different standard which circumvents the
existing appeal process. The current process is that the owner
goes before a Board of Equalization and then on to the superior
court if they were not satisfied with a decision. He said the
provisions of HB 154 create a different category of taxpayers
whereby their appraisal is made by an independent appraiser and
needs to be taken by the county under an average of value for
property taxation. He said this will cause problems for the
community accessor due to Section 29.45.
Number 920
PAT CARLSON, Assessor, Kodiak Island Borough, and president of the
Alaska Association of Accessors, testified via teleconference from
Kodiak. He mentioned that Representative Kohring, when discussing
the committee substitute, did not refer to the changes in Title 29.
This section has nothing to do with takings legislation, it makes
the municipal assessment the determination of the average from a
private accessors and the court assessment determination. He
reiterated the difference in accessing, plus the difficulty of
factoring in the five year time period. He said 34.51.98(b) should
be deleted.
MR. CARLSON said he is in philosophical agreement with reimbursing
property owners for delays in the use of their property due to
bureaucratic delays or partial takings and said it is good public
policy to compensate people for those losses.
Number 1058
SARA HANNAN, Executive Director, Alaska Environmental Lobby (AEL),
was next to testify. She said AEL was a coalition of 20 Alaskan
environmental groups with a collective membership spread throughout
the state in virtually every election district. She was advised by
lawyers that she works with to support HB 154, as more
environmental victories are found in courtrooms than in front of
policy making bodies. She said, in a gesture of good policy
making, she was not going to support HB 154 and she was going to
address the issue from her former perspective as a high school
civics teacher.
MS. HANNAN said the United States Constitution as well as the
Alaska State Constitution guarantees government responsibilities,
one of those responsibilities is that the government cannot take
property without compensation. She said 200 years of judicial
proceedings leave some confusing outcomes and have left people
unhappy with the judicial outcome of their contested claim to
government. She said these outcomes do not mean that the law has
failed, or that the government is taking property without
compensation. She said, every single case of property ownership
that has a government takings threat against it, probably has some
very specific facts associated with it which need to be considered,
especially when you are talking about changing a broad policy.
MS. HANNAN said examples that she has followed, that have been
given in description of HB 154 in the last year, have included
cases that have gone to the Alaska Supreme Court where people have
been concerned about the municipal regulations that would require
set backs from the river front. She said those are valid concerns,
but the state legislature is probably not the place to remedy them.
Number 1204
MS. HANNAN said, if the state's administrative procedures act is
not efficiently dealing with appeals by citizens who are dealing
with government agencies, let's give them more money to do their
job and make their job more efficient, to make sure the laws are
carried out. She said Alaska is a state that has social conflict.
The state has collectively decided that municipal governments
probably have the right and should take the responsibility to
regulate where liquor stores are located, if and when that liquor
should operate. Under HB 154, a municipal government would no
longer be able to afford to go dry. Any city, in this state, that
wanted to put out of business a liquor store could not afford to do
so. She added that if that liquor store wasn't there, but a
property owner said he was thinking of getting a permit to start
operating next year, then it would be considered a takings under HB
154. She referred to Representative Kohring's memo of April 20,
1995, in response to who determines the highest and best value of
the land, Representative Kohring responded, that it should be the
property owner. He said the most profitable use of property is the
best decided by the person who owns it." Ms. Hannan said if your
liquor store was not there and your municipality decided to go dry,
she said you still have a right to claim that someday you were
going to open up a liquor store and get rich. She said these types
of government actions, as dictated by state policy, take away
control from local governments.
Number 1284
MS. HANNAN discussed the issue of retroactivity by saying that no
law is retroactive. She said HB 154 would change municipal and
state directions as to what is in the best interest of the state.
She said potential situations can not be answered. These
situations are complex and probably need a variety of deliberative
discussions, some of which need to be done within the legal
community, within the judicial branch and with the policy makers.
Number 1319
MS. HANNAN said HB 154 is bad policy and added that she didn't
think the state of Alaska has a real problem with takings. The
state supreme court only had one case brought forth, since
statehood, on takings and the person who brought forth the case
won.
Number 1338
REPRESENTATIVE CON BUNDE wanted clarification that, her testimony
said, HB 154 would prohibit any planning and zoning.
Number 1347
MS. HANNAN said HB 154 does not prohibit planning and zoning, but
requires that the agency demonstrate a high burden of public health
and safety. She said, currently, if the municipality of Anchorage
decided to regulate health and safety in one way and zone for it,
there is no burden to go and prove a legal responsibility. HB 154
establishes a burden higher than the current burden that is imposed
now, which also creates additional cost burdens.
Number 1383
REPRESENTATIVE BUNDE asked whether she felt a high burden of proof
was needed to prevent arbitrary decisions.
Number 1390
MS. HANNAN said that if the municipal government is making
arbitrary and capricious decisions, then those people should be
booted out of office. She said you can't legislate good judgement,
but the money used to operate local governments come from the
state. She said if the state is squandering this money, by
building layer and layer of bureaucracy, then the state is not
doing its job to make clear, just and efficient laws. She said, in
most cases, what appears to be arbitrary decisions is just a
bureaucrat trying to carry out a policy decision that was made by
a policy body. She said if the policy is wrong, then the problem
should come back to the policy body.
Number 1458
REPRESENTATIVE AL VEZEY clarified that Ms. Hannan only knew of one
case regarding takings to go before the state supreme court. He
said, "I have been at the supreme court twice regarding takings."
He said he knew of hundreds of cases. He asked her to identify
which case she was referring to.
MS. HANNAN said the only case the Department of Law (DOL) could
tell her about was State of Alaska versus Steve Noye.
REPRESENTATIVE VEZEY said there are several cases per year
regarding takings and these cases have a broad scope of what they
cover. He cited a case in Fairbanks which has been in court for 15
years regarding the North Star Borough's zoning.
Number 1505
MS. HANNAN said it was shameful that a court case could remain
unresolved for 15 years and added that there is a big symptom that
something is wrong in the judicial branch and suggested that
perhaps the state doesn't have the money to deal with the solution.
She said she didn't believe HB 154 was a remedy for this problem.
Number 1519
CHAIRMAN PORTER clarified that the takings provision of the state
constitution has been interpreted to mean 95 percent. He then
mentioned that HB 154 changes this amount to 20 percent of the
value and asked Ms. Hannan if she had another number or if she felt
there should not be any change to current law.
Number 1552
MS. HANNAN said she was not an attorney and was hesitant to throw
out a number because of the judicial precedent for what kinds of
numbers evoke resolution. She suggested that in a system where you
are provided a right to have a jury of your peers and you can
convince 12 Alaskans that the government has done you wrong and you
deserve a monetary compensation, then you are due that
compensation. She said the constitutional provision is for the
land itself, not the house or your business interest. She added
that when you try and legislate for those things that are not the
property itself but items on the property, then specifics from each
case must be identified. She did not venture to guess what
precedents have already been set in Alaska court for when we do or
do not compensate. She said Alaskans have demonstrated fairness to
the average person and if there have been rulings against citizens
in taking cases, then there must have been individual facts per
case that have set up the judicial precedents. She said HB 154
does not address the 35 years of judicial precedent.
Number 1642
REPRESENTATIVE JOE GREEN asked if the committee is moving in the
right direction with the new committee substitute.
Number 1671
MS. HANNAN responded that she didn't believe HB 154 could be
"tweaked" enough. She said HB 154 adds another pile of red tape,
another layer of bureaucracy and 20 years of litigation. She did
not see that HB 154 would provide any remedy for someone who has
been suing the state of Alaska for 15 years. She said none of the
constituents of AEL want to see government capriciously take
property. The constituents want efficient government in this
state. She said HB 154 offers layers of bureaucracy and delayed
resolution to problems. If the problem is that the state is not
compensating people who are losing property, the state must make
sure that the money is there to pay them through the legislature
appropriations of money.
Number 1765
REPRESENTATIVE VEZEY asked if Ms. Hannan said the state does not
compensate people for improvements to real property.
Number 1745
MS. HANNAN said, if she did, she misspoke in the legal context.
She cited the classic example of condemning your property to put in
a highway, in this case the government must compensate you for the
house and the property. She said the government might not
compensate you for a rose hedge, which for you was considered a
valuable loss.
REPRESENTATIVE VEZEY said he hoped Ms. Hannan's testimony would not
be taken too seriously because it does not represent the legal
case. He then thanked Ms. Hannan for her testimony.
Number 1775
JIM VOTEBERG, Assistant City Manager, City of Ketchikan, testified
via teleconference from Ketchikan. He said he just received a copy
of the work draft for HB 154, and because of this, his comments
would be focused on the original draft. He read from a statement,
"although the city of Ketchikan has not fully evaluated the effects
of HB 154, a preliminary review brings to the attention the
following concerns; the proposed legislation would require that all
ordinances which impose a restraint on private property have the
least possible effect on the property which is necessary to
accomplish public ordinance. The term restraint on private
property is broadly defined as including any action or restriction
that limits the use of the private property. This language would
appear to severely limit the ability of government to adopt zoning
and building codes without compensating property owners for the
proposed diminished value.
The ordinance would also limit lease powers to only those
situations where action must be taken to respond to real and
substantial threat of (indiscernible) to the extent necessary. Any
action which would impose a restraint on private property must be
accompanied by a full analysis of total of (indiscernible) effect
or the ordinance and of the economic effect of all alternatives.
Private property is a broadly defined as even motor vehicles
(indiscernible) for example, the city of Ketchikan park
requirement." He said HB 154 seems to be a reaction to
environmental regulation and the effect this regulation has on
property owners. He said these are federal regulation that
directly or indirectly go through the state agencies that mandate
these laws. He added that HB 154 would be ineffectual remedy for
these regulations.
MR. VOTEBERG said the city of Ketchikan, while understanding the
frustrations resulting in the seemingly endless amount of
environmental legislation, is not convinced that HB 154 will
provide regulatory relief. The city of Ketchikan encourages this
committee to make the appropriate changes to meet the goal of HB
154.
Number 1915
CHARLES McKEE testified via teleconference from Anchorage. He
asked the committee to look on page 3, the provisions regarding
health and safety. He said he investigated these provisions in
regards to his investigation of the state due to an injury he
received from commercial fishing. He said he is still waiting for
compensation and he felt he shouldn't have to deal with dubious
characters in order to achieve small increments of money in order
to continue to prove his case.
Number 2095
JON ISAACS, Member, Alaska Chapter, American Planning Association;
and member, Alaska Municipal League, testified via teleconference
from Anchorage. He said in the past his organization has worked
with the legislature to develop legislation. His organization
agrees wholeheartedly with the intent of HB 154 in regards to the
taking of property by both state and local governments. He said,
despite the good intentions of HB 154, it misses the intended
target. He said he just received the committee substitute and said
that there is a broad based definition of government action under
consideration which includes building codes, the statute of
limitations to file a claim, (indiscernible) uncertainty to local
government, plus additional community concerns about
(indiscernible) loss of value. He felt HB 154 will have a great
cost to property owners who (indiscernible) more frequently. The
municipality will have more unspecified claims in regards to HB
154. Citizens will have greater concerns of how the community will
be developed. He concluded that good legislation can be developed
if all parties work in cooperation to develop language.
Number 2159
CHAIRMAN PORTER said the information Mr. Isaacs sent is located in
the committee packet and said the sponsor is aware of his offer to
help.
Number 2231
PAM LaBOLLE, President, Alaska State Chamber of Congress (ASCC),
was next to testify. She said her organization represents 70,000
employees out of 700 member businesses as well as 6,000 members of
business members of local chambers. She said a mission of her
organization is to create a climate in Alaska that is conducive to
a strong, private sector economy. She read from a statement:
"I am here today to speak in support of HB 154. Reform of the
present regulatory system is one of the highest priorities of the
ASCC. Our resolution on this matter asks the legislature and the
administration to create a regulatory and economic environment
supportive of business development that encourages businesses to
locate and grow in Alaska.
"There are now 9,507 pages of regulations in the Alaska
Administrative Code book. I noted yesterday, by the way, in
Senator Stevens comments that in 1995 alone the federal executive
branch issued 67,500 pages of regulations at the federal level.
They nearly all restrict, prescribe, dictate, assign, or impose the
will of government on the public. I believe we all recognize the
need for rules and guidelines to help the public and its government
agencies achieve the intended purpose of a law. However, I am not
aware of any law that has been passed by this state's legislative
body, past or present, that, in its intent, gave the state the
right to deprive property owners of their property without just
compensation. Can you imagine what the headlines might have been
...`Alaskan's required by law to donate property needed by local or
state government,' and I hope we never will see a law passed like
that.
"However, regulations are more subtle than that, and there aren't
enough watchdog groups in existence to have closely monitored the
development of the tens of thousands of regulations contained in
that 9,507 pages if the Alaska Administrative Code Book. As a
result, over the years government has encroached a little bit here,
prescribed a little bit there, until the agencies of our government
have come to accept it as their established right to take whatever
they need from an individual, `for the good of the people'...or the
flora, or the fauna, or the fish or fowl.
"In all this testimony, I have not heard anyone dispute the fact
that this is happening. All I have heard is that the government
needs to take or diminish the value of private property from time
to time, for any one of a variety of reasons, and if they were
required to compensate the owners for their loss, the costs would
be astronomical. Doesn't that mean that the costs to the
individuals who are not being compensated are also astronomical?
"To condone the taking of private property through regulatory
action, without compensation for the experienced loss, is to
discourage business development and economic growth and will
discourage businesses to locate and grow in Alaska. Regulatory
restrictions can keep a business from managing the resources they
paid good and fair money to acquire. When restrictions are
considered to be necessary, the regulators should be required to
weigh the loss to the property owners against the need for the
restriction, and then be willing to pay for what they are taking.
Before the owner acquired the property, he had to consider if it
was affordable, and gather the needed money to pay for it. How
then, is it fair that government can take part of it, or reduce its
value, without considering if they can afford to pay for it . If
the owner had to borrow money to purchase the property, his lender
still has to be paid. And the owner will be expected to pay taxes
on the property he owns, but cannot use.
"Faced with government costs we already know we can't afford, it's
hard to consider an action that could result in higher costs still.
But no one is saying that this law should be retroactive, or that
the government must pay for what it has already taken. What we are
saying is that the taking of property without compensation goes
against our constitutional rights, and it must stop. From this
point forward, governments must have this thought as their highest
consideration. If they can't afford it, they shouldn't take it."
Number 2419
REPRESENTATIVE B. DAVIS asked for a clear cut example of where
property was taken, from Ms. LaBolle's representative base of
70,000 people, and where they were not compensated for their loss.
Number 2437
MS. LaBOLLE said she did not have any examples with her, but cited
examples given during hearings on HB 154 this summer. She said
some examples included restrictions on the use of property. She
said there are subtle examples of takings and listed an example
regarding the inclusion of a buffer zone restricting timber
harvest.
TAPE 96-21, SIDE B
Number 000
REPRESENTATIVE B. DAVIS asked if HB 154 will reduce the amount of
regulations and if enforcement and cost would fall back to the
municipalities.
MS. LaBOLLE didn't think HB 154 would take away regulations, and
added that every time laws are passed, more regulations are
installed. She said, just because it has been wrong in the past,
it doesn't mean that the future should compound those wrongs.
REPRESENTATIVE B. DAVIS said she doesn't want any government agency
to continue the wrongs, but she didn't want it to impact the
municipalities. She advocated for a bill that would be enforceable
and not cost the state a lot of money. She asked for some examples
to be sent to her in writing regarding those takings.
MS. LaBOLLE said no one wants to increase the cost to state
government, but the costs to individuals must be addressed. She
said HB 154 states that agencies have to work through a process
before they take property. She said her organization finds nothing
unreasonable about asking the government to proceed in a rational
manner and look for other options besides taking property.
Number 097
REPRESENTATIVE VEZEY referred to various examples of takings
including the Wetlands Act, zoning cases, and he again cited the
Fairbanks case. He said the Fairbanks case involved a piece of
property that the city was going to condemn, but before they did,
they rezoned the area, so the condemned building had minimal value.
Number 134
REPRESENTATIVE VEZEY said the essence of HB 154 was that agencies
and municipalities would chose to avoid takings so they wouldn't
have to pay. He said HB 154 encourages government to conduct
themselves in a manner that is less expensive to both government
and private individuals.
Number 157
MS. LaBOLLE said this issue is critical to the ASCC.
Number 164
REPRESENTATIVE GREEN asked if HB 154 would encourage speculation.
Number 177
MS. LaBOLLE said she didn't think property owners would seek profit
by working against governmental agencies.
Number 192
ANN RESCH, Deputy Municipal Attorney, Municipality of Anchorage,
testified via teleconference from Anchorage. She said, as opposed
to the first draft of HB 154, she does not condemn all sections of
the committee substitute. She said she is opposed to the section
regarding the law of takings and the too broad reference to
government actions. She said she was happy that a threshold was
incorporated into HB 154, but felt that 20 percent was too low.
She said that among appraisers a 10 percent, of fair market value,
fell within the margin of error.
Number 265
MS. RESCH said that typical replanning and zoning actions could
constitute takings.
Number 280
MS. RESCH said she was pleased that HB 154 assessment did not
include damage prior to the passing of HB 154. She expressed
concern over the taking definition in its inclusion of the word,
"temporary" as this might lead to an increase in litigation. She
said there might be litigation as a result of every aspect of this
bill. She remarked on that a reduction from ten years to five
years for statutory limitations was a positive inclusion within HB
154.
Number 343
REPRESENTATIVE FINKELSTEIN clarified that Ms. Resch had been
working on condemnation cases in Anchorage for eight years. He
then asked how many of those cases were dealt with internally and
how many of them went through the court process.
Number 378
MS. RESCH said these cases are rarely settled out of court and in
court a third of the existing cases are settled. She said,
settlement in terms of dollar amounts, before they got to her,
would be unusual. She added that there might be a settlement
provision in the regulatory process where both planners and the
applicant work something out.
Number 408
REPRESENTATIVE BUNDE referred to her comment that 20 percent would
be too low of a threshold and asked if she had a recommended
number.
Number 423
MS. RESCH suggested a systematic approach to the amount, determined
by the different amounts set by appraisals, seen in condemnation
cases. She said the Department of Law (DOL) could review their
files to see what kind of disparity is seen. She cited the example
where the state went to trial and the state offered $11,000, the
litigant wanted $1 million, and the result was $15,000. She added
that 10 percent is seen to be a natural variation (indiscernible
due to overlapping voices) common in appraisers. She asked what
this 20 percent variation would mean in practice and said she would
have to look more at it to have an idea of a percentage.
Number 486
LISA BLACHER was next to testify. She said she was a resident and
a property owner in Southeast Alaska. She said that HB 154 could
offer her the opportunity to make millions of dollars, but despite
that fact, she does not support HB 154. She viewed ownership of
property as a right and a responsibility. She said there are
safeguards in place that help everyone and she wants to ensure that
those are kept in place. She thinks there are provisions in place
that protect private property from government suppression. She
said if that system is not working properly there are steps that
can be implemented to make the system work better. She said if
opportunities are given to challenge any government action, there
will be a process gridlock, monetary costs to the state and
development of problems in areas of health and safety within the
communities.
Number 560
MS. BLACHER said a similar legislation regarding private property
rights initiative was passed in the state of Washington, later
repealed by Referendum 48 this past fall. She said the University
of Washington Institute for Public Policy made a detailed economic
analysis of the costs of this legislation. This study determined
that the costs for assessment would be millions of dollars and
compensation would result in expenditures of $11 billion per year.
MS. BLACHER said HB 154 will bankrupt the state of Alaska and
result in litigation. She referred to the original takings case to
which the sponsor built HB 154 in response to. She said Steve Noye
was not able to build the number of subdivisions he wanted because
the sewage disposal was not adequate with the Department of
Environmental Conservation (DEC). His subdivision would have
discharged untreated sewage into the Katchamak Bay. She questioned
a bill which used this example as the reason for its submission.
MS. BLACHER said she discussed HB 154 with a lawyer who told her
that she and her neighbors could stand to make millions from this
legislation. She didn't think HB 154 was wise or prudent and she
was against it.
Number 654
REPRESENTATIVE BUNDE asked how she felt HB 154 could result in
millions of dollars in regards to her property.
MS. BLACHER cited examples such as building a hotel or a garbage
incinerator where she is prevented from doing so by regulation, HB
154 would allow her to sue.
Number 688
REPRESENTATIVE CYNTHIA TOOHEY said that most of the regulations she
cited were examples of regulations in place before the property was
bought.
MS. BLACHER said this was true, but pointed out that if regulations
came up for reauthorization they were fair game.
REPRESENTATIVE TOOHEY said she was not addressing that, but the use
of the property as you buy it.
Number 726
REPRESENTATIVE VEZEY said Ms. Blacher is referring to existing
conditions that are applicable under HB 154. He asked from her to
state, from this day forward, what was she anticipating the
government would do for her to make her a millionaire.
MS. BLACHER said, it is what she is not allowed to do in existing
regulations, that under HB 154, that she will sue. She said Mr.
Noye is not allowed to build 15 subdivisions under existing
regulations and that is why HB 154 was developed.
Number 765
CHAIRMAN PORTER said it is his perceived intent of HB 154 that it
would not afford anyone the opportunity to sue in regards to
existing regulations.
Number 780
MS. BLACHER said HB 154 is complicated and encouraged the committee
to look at the University of Washington study to help understand
the complexities.
Number 799
CHAIRMAN PORTER said the Washington legislation was similar to the
first draft of HB 154 and that the bill has been revised and will
probably be revised further.
Number 827
JANICE ADAIR, Director, Division of Environmental Health,
Department of Environmental Conservation, was next to testify. She
said the focus of HB 154 is off. She added that the 9,000 plus
pages of regulations mentioned are all based in statute and the
result of bills passed by the legislature. She said when those
bills were submitted they did so to correct a wrong, a perceived
wrong or to forestall some wrong from happening.
Number 865
MS. ADAIR referred to a statute that requires obtaining a solid
waste permit before those wastes are disposed of and said that
although HB 154 does not relate to regulations currently on the
books it does not restrict questioning the permit actions that are
taken, based on regulations. She said if someone wanted to put a
solid waste permit in Turnagain, and DEC denied the permit, she
asked which property has been devalued. She said these regulations
were incorporated to prevent individual action which would harm the
public.
Number 904
MS. ADAIR said if DEC denied a permit for an incinerator in south
Anchorage it might harm the person wishing to develop it, but if a
permit was issued then it would harm the other property owners in
that area. She said it is difficult to make governmental action
decisions with the intention of protecting the health, welfare and
property values of adjoining pieces of property. She said the
fiscal notes prepared by DEC are not monetary amounts that come to
the agency, but money that goes around the economy. She said money
is given by those individuals developing property to someone who is
developing that plan is an economic circle.
Number 965
MS. ADAIR said the inspection and maintenance requirements in
Anchorage and Fairbanks do not result in money to the agency, but
rather it is money that goes out to the garages and sent to the
municipality in order to have those tests done. She said the state
regulations help drive an economic circle.
Number 980
CHAIRMAN PORTER asked what happens in a situation whereby the
interests of two people, or more, are opposed to each other.
Number 1005
MS. ADAIR said this situation would result in a court case on a
consistent basis. She said, in reality, HB 154 hurts economic
development in the state of Alaska because of the difficulties
involved in issuing permits.
Number 1019
REPRESENTATIVE BUNDE asked about the hesitation to issue a permit.
Number 1033
MS. ADAIR said the safe, bureaucratic approach of not issuing a
permit would result in a court case, because whoever wanted that
permit would feel devalued under HB 154.
Number 1044
CHAIRMAN PORTER cited examples where there would be two sides with
equal feelings of devaluation.
Number 1069
REPRESENTATIVE TOOHEY asked if these situations were in places that
were un-zoned.
Number 1076
MS. ADAIR said she is not aware of how zoning laws are impacted by
HB 154. She said there are not that many communities within the
state with good zoning laws. She added that many times DEC is
asked to be the zoning entity and although an attempt is made to
avoid this, in many cases it is the defacto result.
Number 1113
REPRESENTATIVE FINKELSTEIN asked in regards to the regulations that
are and are not covered in Section 7 of HB 154, whether some of the
regulations are changeable. He added that regulations are modified
as technology within the industry changes.
Number 1205
MS. ADAIR agreed that the regulations are modified as new
information is obtained.
Number 1216
REPRESENTATIVE FINKELSTEIN remarked that regulations are going to
be applied to people and that Section 7 does not solve the problem.
Number 1229
GERON BRUCE, Legislative Liaison, Office of the Commissioner,
Department of Fish and Game (DF&G), was next to testify. He said
his department testified previously on HB 154 and he was going to
attempt to avoid repeating what had already been said. He said the
state constitution reserves fish and wildlife for the common use of
the people whether it occurs on private land, state or federal
land. He said it is from that constitutional mandate, that the
regulations and statutes were formed, giving the DF&G authority.
He said these resources are important in terms of economics as well
as in other respects.
Number 1297
MR. BRUCE said HB 154 causes concern to DF&G in regards to page
four, Section 34.50.160, because it states that DF&G cannot require
an owner of private property to provide or pay for studies, maps,
et cetera used in the governmental entity's decisions to adopt a
regulation or ordinance relating to private property. He mentioned
that one of the statutes passed, in Title 16, 16.05.870 requires
that anyone conducting an activity in a fish stream to provide
plans and work with the department to show that the activity is not
detrimental to the fish. He said DF&G undergoes a review and a
permitting process under that authority and said that only a
fraction of 1 percent are disapproved out of 600 or so permit
applications. He said this process is conducted in a satisfactory
fashion through the use of maps, proposals, et cetera provided by
the permit applicants so that it can be used by DF&G to make the
permitting decision. He said under HB 154, DF&G would have to
develop their own studies and plans which is not practical. He
said HB 154 would create continued friction with applicants with
whom the DF&G has had a good, working relation.
Number 1481
TERRY DUSZYNSKI, Member, Alaska Homebuilders Association, testified
via teleconference from Fairbanks. He said he supports the concept
of HB 154. He said the attitude of his organization is that
someone purchases land that afterwards is subject to regulation,
causing a devaluation of that land, should certainly be compensated
by the government. He said he hoped that HB 154 would protect
against this loss.
Number 1556
REPRESENTATIVE BUNDE made a hypothetical scenario by which a gold
deposit is found and asked that it be viewed it from the side of
the owner who might not get to tap this resource and from the point
of view of the property owners who complain because of the heavy
ore trucks.
Number 1616
MR. DUSZYNSKI said when the gold deposit was identified would
determine the value of property. If the gold deposit was
discovered after the property was bought, then the property might
not be devalued if he doesn't get the permit.
Number 1694
REPRESENTATIVE GREEN created a different scenario where a gravel
quarry is zoned for an area near homes and a motor speedway is then
built on top of it, he then asked about the conflict of desires in
this situation.
Number 1754
MR. DUSZYNSKI said it depends on a variety of factors.
Number 1829
REPRESENTATIVE FINKELSTEIN said Mr. Duszynski's response to
Representative Bunde's question was reasonable, but added that
there is nothing in HB 154 which states whether or not they had a
permit issued. He said it can be based on what the owner's
intention is in regards to this property. He also raised the issue
of zoning, saying that most of the state is not zoned. He said
every year, different parts of the state decide that they want to
be zoned and find out with all these conflict of interest issues
that the municipality cannot zone and effectively address those
issues.
CHAIRMAN PORTER closed the hearing to testimony from the public.
REPRESENTATIVE FINKELSTEIN said he was confused as to what Section
7 applied to, and added that HB 154 revolves around governmental
actions as defined on page six. The definition of takings are
actions taken by government. He asked how Section 7 ties into that
definition. He said there are some separate provisions that relate
to considerations taken in principle for government action and
other things, he thought that those appear restricted by Section 7,
but it didn't appear that Section 7 had any restriction on the
compensation required for takings and what governmental action
means.
Number 2030
REPRESENTATIVE TOOHEY made a motion to adopt CSHB 154, version 9-
LS0602\H as the working document. Hearing no objections CSHB 154
was the working document before the House Standing Judiciary
Committee.
Number 2082
CHAIRMAN PORTER said it would be helpful if the definition,
referred to by Representative Finkelstein, reflected more of what
his understanding was of the definition. He said he understood
that the definition of governmental action is an unanticipated
prohibition or limitation implemented. He referred to an example
of fisheries.
Number 2180
REPRESENTATIVE VEZEY said the hypothetical examples that were
raised were extraneous. He said, the property rights raised, cited
examples which would cause noise and air pollution and said those
are not property rights issues. He said those are permitting
issues.
Number 2283
REPRESENTATIVE FINKELSTEIN asked if an appraiser were to produce a
valuation stating that they have a property loss of 20 percent or
more under 109.b, because of an increase in heavy ore trucks,
whether or not that loss would be compensated.
Number 2340
REPRESENTATIVE VEZEY said there are certain expectations that you
should account for in your property if you live near a major
thoroughfare and he didn't see how an increase in trucks would be
compensated under HB 154. He said if public agencies decide to
increase their capacity, they might have to take property to expand
which might result in a taking. He said, he didn't understand how
the use of the adjacent property would affect your property
negatively as it was there previously.
Number 2450
REPRESENTATIVE FINKELSTEIN said his example regarded neighborhood
streets not major thoroughfares.
TAPE 96-22, SIDE A
Number 000
REPRESENTATIVE VEZEY said that because you don't own the property,
those regulations, if they change, are not a taking of your
property. He said the state of Alaska has a history of not denying
people access to their property, but added that the state could
deny people access to their property for industrial purposes. He
said a person wishing to develop their property has to come up with
a way of gaining that access through work with a public agency to
create a facility or acquiring additional property rights to
develop their own facility. He said, in the past, the ability to
construct a thoroughfare was easily done.
Number 138
REPRESENTATIVE FINKELSTEIN said that someone is going to have a
claim if they can show that they moved into a residential street
where no industry was going on, find a property appraiser who says
that property owner has lost more than 20 percent of property value
because of the gravel pit.
Number 202
CHAIRMAN PORTER said there didn't appear to be anything in HB 154
which would guarantee compensation.
Number 221
REPRESENTATIVE GREEN cited an example where there was as much as a
30 percent difference in appraisals in homes, unaffected by
externalties. He said this difference creates an area of concern
for him within HB 154.
Number 333
CHAIRMAN PORTER asked the sponsor of HB 154 to try and address the
issues raised in the meeting today. He said, at some time the
issue of the philosophy of HB 154 versus the litigation concern
would arise.
Number 409
CHAIRMAN PORTER said an issue he wished to address is the competing
interest concern. He said if someone wanted to develop a piece of
property and there were no regulations prohibiting it, except for
neighboring property owner's concerns, you create the potential for
litigation. He said HB 154 would be held over and addressed at an
upcoming House Judiciary Committee meeting.
ADJOURNMENT
There being no further business to come before the House Standing
Judiciary Committee, Chairman Porter adjourned the meeting at 2:47
p.m.
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