Legislature(2001 - 2002)
04/25/2002 01:40 PM House TRA
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+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE TRANSPORTATION STANDING COMMITTEE
April 25, 2002
1:40 p.m.
MEMBERS PRESENT
Representative Vic Kohring, Chair
Representative Beverly Masek, Vice Chair
Representative Drew Scalzi
Representative Peggy Wilson
Representative Albert Kookesh
MEMBERS ABSENT
Representative Scott Ogan
Representative Mary Kapsner
COMMITTEE CALENDAR
HOUSE BILL NO. 500
"An Act relating to the advance acquisition of real property for
public purposes."
- MOVED CSHB 500(TRA) OUT OF COMMITTEE
PREVIOUS ACTION
BILL: HB 500
SHORT TITLE:ADVANCE ACQUISITION OF REAL PROPERTY
SPONSOR(S): TRANSPORTATION
Jrn-Date Jrn-Page Action
02/27/02 2407 (H) READ THE FIRST TIME -
REFERRALS
02/27/02 2407 (H) CRA, TRA
04/04/02 (H) CRA AT 8:00 AM CAPITOL 124
04/04/02 (H) -- Meeting Canceled --
04/11/02 (H) CRA AT 8:00 AM CAPITOL 124
04/11/02 (H) Heard & Held
04/11/02 (H) MINUTE(CRA)
04/16/02 (H) CRA AT 8:00 AM CAPITOL 124
04/16/02 (H) <Bill Postponed to 4/23/02>
04/16/02 (H) TRA AT 1:00 PM CAPITOL 17
04/16/02 (H) <Bill Canceled>
04/23/02 (H) CRA AT 8:00 AM CAPITOL 124
04/23/02 (H) Moved CSHB 500(CRA) Out of
Committee
MINUTE(CRA)
04/23/02 3100 (H) CRA RPT CS(CRA) 2DP 1DNP 3NR
04/23/02 3100 (H) DP: SCALZI, MEYER; DNP:
HALCRO;
04/23/02 3100 (H) NR: KERTTULA, MURKOWSKI,
MORGAN
04/23/02 3101 (H) FN1: ZERO(DOT)
04/23/02 (H) TRA AT 1:00 PM CAPITOL 17
04/23/02 (H) Heard & Held
04/23/02 (H) MINUTE(TRA)
04/25/02 (H) TRA AT 1:30 PM CAPITOL 17
WITNESS REGISTER
MIKE KRIEBER, Staff
to Representative Vic Kohring
Alaska State Legislature
Capitol Building, Room 24
Juneau, Alaska 99801
POSITION STATEMENT: Provided information on HB 500 on behalf of
the House Transportation Standing Committee, sponsor, and
answered questions.
DENNIS POSHARD, Legislative Liaison
Office of the Commissioner
Department of Transportation & Public Facilities
3132 Channel Drive
Juneau, Alaska 99801-7898
POSITION STATEMENT: Proposed an amendment to HB 500.
ACTION NARRATIVE
TAPE 02-12, SIDE A
Number 0001
CHAIR VIC KOHRING called the House Transportation Standing
Committee meeting to order at 1:40 p.m. Members present at the
call to order were Representatives Wilson, Masek, Kookesh, and
Kohring. Representative Scalzi arrived as the meeting was in
progress.
HB 500-ADVANCE ACQUISITION OF REAL PROPERTY
CHAIR KOHRING announced that before the committee was HOUSE BILL
NO. 500, "An Act relating to the advance acquisition of real
property for public purposes." [Before the committee was CSHB
500(CRA).]
Number 0117
MIKE KRIEBER, Staff to Representative Vic Kohring, Alaska State
Legislature, testified on behalf of the House Transportation
Standing Committee, sponsor of HB 500. He reminded members that
the bill concerns the advance acquisition of right-of-way
through the [use of] "eminent domain." The bill would still
require all eminent domain cases to be heard through the court
process. It doesn't provide any "declaration of takings
authority" for any of the entities. The only thing the bill
changes is to provide for advance acquisition further in advance
of what is typically viewed as authority under eminent domain.
He told the committee that eight other states have similar
authority.
MR. KRIEBER informed members that the bill was closely
scrutinized in the [House Community and Regional Affairs
Standing Committee], where changes were made to provide for a
hold-harmless clause. This hold-harmless clause would require
the purchasing entity to sell the property back to its original
owner at the price for which it was acquired, if it had not been
used for the stated purpose within 20 years. This would prevent
a purchasing entity from speculating on land, and would provide
some compensation for the original owner's lost opportunity to
develop the property.
Number 0285
REPRESENTATIVE KOOKESH asked if the heirs of the original
property owner would have the same opportunity to purchase the
land at the original price [in the event of the original owner's
death].
MR. KRIEBER answered that the option would be made available to
heirs as well.
Number 0327
REPRESENTATIVE MASEK moved to adopt Amendment 1, 22-LS0610\J.1,
Utermohle, 4/24/02, which read:
Page 1, line 1, following "purposes":
Insert "; and authorizing pipeline carriers to
exercise the power of eminent domain for pipeline
purposes"
Page 6, line 17, following "future public":
Insert "utility"
Page 6, line 19, following "public":
Insert "utility"
Page 6, line 23, following "public":
Insert "utility"
Page 6, following line 27:
Insert a new bill section to read:
"* Sec. 12. AS 42.06 is amended by adding a new
section to article 7 to read:
Sec. 42.06.601. Eminent domain. (a) A
pipeline carrier may exercise the power of eminent
domain for pipeline uses including present pipeline
uses or for advance acquisition for reasonably
foreseeable future pipeline uses. This section does
not authorize the use of a declaration of taking.
(b) If a pipeline carrier does not use all or a
portion of land acquired for advance acquisition for a
future pipeline use as authorized under (a) of this
section for pipeline purposes within 20 years
following the acquisition of the land or if the
pipeline carrier sells all or a portion of land
acquired for advance acquisition for a future pipeline
use as authorized under (a) of this section, the
pipeline carrier shall offer the land to the person,
or the person's successor in interest, from whom the
land was acquired at the same price that the pipeline
carrier paid the person when the land was acquired.
If only a portion of the land acquired for advance
acquisition for a future pipeline use is available to
the former owner of the land under this subsection,
the pipeline carrier shall prorate the price of the
land to be sold based on the original price of the
land and the proportion that the amount of land
available for sale bears to the total amount of land
originally acquired."
Renumber the following bill sections accordingly.
Number 0335
REPRESENTATIVE KOOKESH objected for purposes of discussion.
REPRESENTATIVE MASEK explained that Amendment 1 would specify
which entities have the power of eminent domain; it would make
pipeline carriers and public utilities equal with respect to
their ability to carry out eminent domain in the acquisition of
properties for the public good. She noted that oversight of the
pipeline carriers is done by the Regulatory Commission of Alaska
(RCA). A judge would still have to rule on whether the
acquisition of property was in the public's interest in each
specific case. Representative Masek suggested that with the
prospect of a natural-gas pipeline running through the state,
and increased interest in natural-gas extraction by small,
independent companies around the state, this amendment would be
in the best interest of the state and the public. She asked for
unanimous consent.
Number 0420
REPRESENTATIVE KOOKESH posited that the power of eminent domain
resides in the state. He asked what would happen if the
pipeline were built by a private company; how could a private
company be given the power of eminent domain?
Number 0432
MR. KRIEBER replied that AS 09[.55.240] gives authority to
various types of utilities, whether privately or publicly owned.
REPRESENTATIVE KOOKESH said he appreciated that, but pointed out
the current discussion in Alaska about whether a private company
or the state would build and own the [proposed gas] pipeline.
MR. KRIEBER cited AS 09[.55.240, paragraph (12)] as identifying
the purposes of eminent domain. He told the committee AS
42.05[.631] deals with eminent domain for utilities, and AS
42.06 deals with eminent domain for pipelines. Both are
regulated by the RCA. Both share the same requirement of a
certificate of public convenience and need. The amendment would
modify the wording concerning eminent domain for both public
utilities and pipelines, so that they are identical.
Number 0589
REPRESENTATIVE SCALZI offered his understanding that [eminent
domain] authority is given by a municipality or the state to a
public utility.
MR. KRIEBER pointed out that a "public utility" can be privately
owned. The authorization of a monopoly is given in exchange for
regulation by the RCA. Mr. Krieber cited examples.
REPRESENTATIVE SCALZI remarked, "We're only speaking of right-
of-ways in terms of public utilities."
MR. KRIEBER agreed and said eminent domain authority is given to
utilities.
REPRESENTATIVE SCALZI interjected, "Through those right-of-way
easements."
MR. KRIEBER disagreed, saying that is a separate section of law.
He pointed to the existing law in AS 42.05.631.
REPRESENTATIVE SCALZI read in part from AS 42.05.631, "for
public utility uses". He said, "'for public utility uses' are
in the corridors and in the right-of-ways."
MR. KRIEBER noted that the bill is for advance acquisition of
right-of-way through eminent domain. He called it a "cart and
horse issue."
REPRESENTATIVE SCALZI said it may be, but eminent domain for
pipeline purposes may be outside of corridors or rights-of-way.
Number 0710
MR. KRIEBER said the act of eminent domain is to condemn private
property for public use, to create a public use easement or
right-of-way. If the right-of-way already exists, then eminent
domain doesn't come into play.
REPRESENTATIVE SCALZI said he hoped the language in the bill
would mirror what is done with regard to public utilities.
MR. KRIEBER said that is the case, and mentioned modifications
for future use.
REPRESENTATIVE SCALZI asked what modifications Mr. Krieber was
speaking of.
MR. KRIEBER referred to Section 10 of the bill and its
underlined wording. He said that would be the new language
added to public utility authority for advance acquisition
through eminent domain.
REPRESENTATIVE SCALZI asked where the [amendment] came from.
Number 792
REPRESENTATIVE MASEK said Chair Kohring was the sponsor of the
bill [although the House Transportation Standing Committee
officially sponsored it], and the amendment was hers.
REPRESENTATIVE SCALZI asked what prompted the amendment, because
the issue was heard in the House Community and Regional Affairs
Standing Committee. He asked why it hadn't come up in that
committee.
MR. KRIEBER said when the original bill was drafted, all of the
eminent domain issues in statute were "pulled up." He
apologized for not recognizing that eminent domain wasn't
specified under the Pipeline Act [AS 42.06].
REPRESENTATIVE SCALZI asked if it was an oversight.
MR. KRIEBER said it hadn't popped up in the original drafter's
review of existing statutes in order to make the modifications.
Number 0902
CHAIR KOHRING said the purpose of the amendment is to help in
the building of a pipeline.
MR. KRIEBER agreed, adding that a potential pipeline-owner
entity would still have to be certificated by the RCA, which
would have to make a finding to issue a certificate of public
convenience and need. Not just any privately owned company can
come forward and [carry out an act of eminent domain]. Rather,
legal findings of fitness, willingness, ability, and public
interest must be made.
Number 0948
REPRESENTATIVE WILSON asked if anyone was against the bill.
Number 0995
REPRESENTATIVE KOOKESH said he was comfortable with transferring
the powers of eminent domain within Alaska statutes and law, but
didn't want to find out later that [the legislature] didn't have
authority to make that transfer.
REPRESENTATIVE KOOKESH withdrew his objection to Amendment 1.
Number 1031
CHAIR KOHRING announced that Amendment 1 was adopted. He
clarified that before the committee was CSHB 500(CRA), as
amended.
Number 1059
DENNIS POSHARD, Legislative Liaison, Office of the Commissioner,
Department of Transportation & Public Facilities (DOT&PF),
testified before the committee. He said he'd understood the
committee's message from the previous meeting, that it wished
the department to consider the concerns of private property
owners. Therefore, the department had come up with language
that might strike a better balance between the state and
property owners on the issue of who receives a benefit from the
increase in property value [in cases of eminent domain].
Sometimes an increase in property value is a mitigating factor
in the department's taking on a large project with a question as
to whether or not it will be completed, he noted.
Number 1130
MR. POSHARD agreed with the notion - when property taken by
eminent domain isn't used in a project - that the property owner
should have the right to reacquire the property. He said the
department didn't like the idea of the original owner's
receiving all of the benefit for the increase in property value,
however, because the state would be losing money. The fair
market value paid by the state could be invested and the
interest realized, in addition to the increase in property
value.
MR. POSHARD therefore suggested changing the language to say,
"the lesser of the fair market value of the land at the time of
the reconveyance, or the amount paid when the property was
acquired, plus simple interest at the rate of 2.5 percent per
year." Under this change, the state could retain some benefit
and invest those funds into other projects, or the previous
owner could be paid fair market value if the land went down in
value. This would strike a balance between the interests of
property owners and the state.
Number 1232
REPRESENTATIVE KOOKESH responded that he wouldn't move or
support the amendment because eminent domain takes property
against the wishes of the owner. He asked, "If the state does
not realize the appreciation of the property, ... so what?" He
told the committee that the original [owner] might have been
able to do other things [with the property] besides let it sit
for 20 years. If the state takes property against the wishes of
the owner, the only entity that should get a benefit is the
owner. He said it would be different if the owner sold the
property of free will. But eminent domain doesn't leave the
owner any choice.
Number 1290
REPRESENTATIVE SCALZI asked Representative Kookesh if his
concern was about the eminent domain itself.
REPRESENTATIVE KOOKESH answered that he was concerned about the
state's wanting to benefit from property 20 years later, when it
has to sell it back to the individual.
REPRESENTATIVE SCALZI pointed out that the property would be
sold back at the original price.
REPRESENTATIVE KOOKESH agreed, but said the owner would also
have to pay interest to the state. "The state condemns at their
peril, and the individual has property taken away from him
against his will," he added.
Number 1333
CHAIR KOHRING asked Mr. Poshard whether there would be a choice
for an original owner to either purchase at original value plus
2.5 percent per year, or at the current fair market value, under
the department's proposed amendment.
MR. POSHARD answered that it would be the lesser of the two. If
the property decreased in value, the department wouldn't require
the original owner to pay more than fair market value.
Number 1387
MR. KRIEBER suggested the committee may wish to consider adding
language which specifies that [the price for the land should be]
the lesser of the price the land was acquired for, or fair
market value, in case the land were to decrease in value. He
mentioned the concern in the House Community and Regional
Affairs Standing Committee about property owners' being harmed.
REPRESENTATIVE SCALZI agreed with Representative Kookesh's
earlier statement against the amendment.
CHAIR KOHRING announced that because of lack of support, the
department's amendment would not be offered at the time.
Number 1567
REPRESENTATIVE MASEK moved to report CSHB 500(CRA), as amended,
out of committee with individual recommendations and the
accompanying fiscal notes. There being no objection, CSHB
500(TRA) was moved out of the House Transportation Standing
Committee.
ADJOURNMENT
There being no further business before the committee, the House
Transportation Standing Committee meeting was adjourned at 2:10
p.m.
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