Legislature(1995 - 1996)
02/20/1995 01:35 PM CRA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SENATE COMMUNITY & REGIONAL AFFAIRS COMMITTEE February 20, 1995 1:35 p.m. MEMBERS PRESENT Senator John Torgerson, Chairman Senator Randy Phillips, Vice Chairman Senator Tim Kelly Senator Fred Zharoff Senator Lyman Hoffman MEMBERS ABSENT COMMITTEE CALENDAR -- PRESENTATION BY DARROLL HARGRAVES, CHAIRPERSON ALASKA LOCAL BOUNDARY COMMISSION SENATE BILL NO. 16 "An Act relating to the University of Alaska and university land, authorizing the University of Alaska to select additional state public domain land, and defining net income from the University of Alaska's endowment trust fund as 'university receipts' subject to prior legislative appropriation." SENATE BILL NO. 56 "An Act relating to rights in certain tide and submerged land." PREVIOUS SENATE COMMITTEE ACTION SB 16 - No previous action to record. SB 56 - No previous action to record. WITNESS REGISTER Darroll Hargraves, Chairperson Alaska Boundary Commission 333 W. 4th Ave., Suite 220 Anchorage, AK 99501 Senator Steve Frank State Capitol Juneau, AK 99801-1182 POSITION STATEMENT: Prime Sponsor of SB 16 Wendy Redman, Vice President of University Relations University of Alaska 910 Yukon Drive Fairbanks, AK 99775-2388 POSITION STATEMENT: Offered information in support of SB 16 Fred Klouda Alaska Sport Fishing Association 6324 Air Guard Road Anchorage, AK 99502 POSITION STATEMENT: Opposes SB 16 Rick Smeriglio HCR 64, Box 565 Seward, AK 99664 POSITION STATEMENT: Opposes SB 16 Brian Rogers P.O. Box 80690 Fairbanks, AK99708 POSITION STATEMENT: Offered information on SB 16 Charity Green, Student Kenai Peninsula College 34820 College Drive Soldotna, AK POSITION STATEMENT: Testfied in support of SB 16 Senator Loren Leman State Capitol Juneau, AK 99801-1182 POSITION STATEMENT: Prime Sponsor of SB 56 Sarah Hannan, Executive Director Alaska Environmental Lobby P.O. Box 22151 Juneau, AK 99801 POSITION STATEMENT: Has concerns with SB 56 John Baker, Assistant Attorney General Department of Law 1031 W. 4th Ave., Suite 200 Anchorage, AK 99501-1994 POSITION STATEMENT: Testified on SB 56 Bob Juettner Administrator Aleutians East Borough P.O. Box 439 Sand Point, AK 99661 POSITION STATEMENT: Testified in support of SB 56 Cliff Eames Alaska Center for the Environment 519 West 8th Ave., #201 Anchorage, AK 99501 POSITION STATEMENT: Testified against SB 16 & SB 56 Ron Swanson, Director Division of Land Department of Natural Resources P.O. Box 107005 Anchorage, AK 99510-7005 POSITION STATEMENT: Testified in support of SB 56 with changes Jerry McCune 211 4th St., Suite 112 Juneau, Alaska 99801 POSITION STATEMENT: Testified in support of SB 16 & SB 56 ACTION NARRATIVE TAPE 95-3, SIDE A Number 001 ¶CHAIRMAN TORGERSON called the Senate Community & Regional Affairs Committee meeting to order at 1:35 p.m. He stated the first order of business would be a presentation by the Local Boundary Commission, and he noted the Commission's recommendations for the dissolution of five inactive cities in the state were submitted to the Legislature in the first ten days of the session. These dissolutions will automatically take effect within 45 days after the presentation, unless disapproved by a resolution passed by a majority of both bodies of the Legislature. He noted that his office has checked with each of the senator's staff for the cities in their districts that the Local Boundary Commission has recommended for dissolution, and Senators Admas, Hoffman and Lincoln have expressed no opposition. DARROLL HARGRAVES, Chairman of the Local Boundary Commission, addressed the committee over the teleconference network from Ketchikan. He introduced commission members Myrtle Johnson, Toni Salmeir, Frances Hallgren and Dr. Hugh Fate, who were participating via teleconference from various locations in the state. Mr. Hargraves explained that the Local Boundary Commission's duties include acting on proposals for: municipal incorporation; annexation; detachment; dissolution; merger; consolidation; and reclassification of cities. Staff support to the Commission is provided by the Department of Community & Regional Affairs. Summarizing the 1994 activities, Mr. Hargraves said the commission held 16 meetings and approved petitions for: incorporation of the City Egegik; annexation to the City of Sand Point; and dissolutions of the cities of Atmautluak, Kaisigluk, Newtok, Tununak and Tuluksak. He noted the incorporation of the City of Egegik remains subject to approval by the local voters, and the dissolution of the five cities is subject to review by the Legislature. The Commission also reconsidered the northwest boundary of the Lake & Peninsula Borough and the final action is that the boundaries will stay as they are. Activities currently pending before the Commission include: dissolution of the City of Akiak; detachment of 5,400 square miles from the Fairbanks North Star Borough; incorporation of the 10,000 square mile North Pole Borough; and the reconsideration of the incorporation of the City of Pilot Point. Mr. Hargraves noted that the Commission's annual report to the Legislature addressed several policy issues which include: growing interest in borough detachment; growing interest in dissolution of cities; the lack of limitations on the authority of municipalities to levy certain taxes; and the lack of compensation for the Commission. Mr. Hargraves outlined two suggestions for legislation to enable the state to deal more effectively with dissolution of cities. The first is to permit traditional councils to hold title to real property, and the second is to broaden the law concerning succession to assets, liabilities and duties of a dissolved municipality. Mr. Hargraves pointed out that concerns continue to be expressed over the lack of limits on the authority of municipalities to levy fsales taxes. The Commission offers no proposals to limit such authority, however, it wishes to ensure that the Legislature is aware of the concerns being expressed. In his concluding comments, Mr. Hargraves said the Commission has, in the past, urged the Legislature to provide compensation for services rendered by the members of the Commission, and the legislation has advanced to different levels, but it has never passed. He noted that if members of the Commission were compensated at $150 per day for an estimated 25 meetings per year, the total fiscal note for the compensation would be $18,750. Number 230 SENATOR TORGERSON asked if committee members had questions for Mr. Hargraves or any of the other Commission members. Hearing none, he thanked Mr. Hargraves for his overview on the Local Boundary Commission and its activities. SCRA - 2/20/95 SB 16 INCREASE LAND GRANT TO UNIV. OF ALASKA Number 246 SENATOR TORGERSON introduced SB 16 as the next order of business. SENATOR STEVE FRANK, prime sponsor of SB 16, noted the same legislation was passed by the Senate the previous session, but failed to come to a vote on the House floor during the final hours of that session. The legislation would allow the University of Alaska to select one million acres of unencumbered land from the State of Alaska. The University previously received 112,000 acres of land, which is small by comparison to most of the rest of the western public land states. Some universities in states with much smaller state land grants, such as New Mexico and Oklahoma, have received up to one million acres. SENATOR FRANK believes the legislature should follow through on the intent of the Congressional Moral Act of 1862, which granted states the right to receive public lands to support universities, by increasing the grant to the University and to allow them to develop the lands in a responsible manner and benefit from the revenues that they can generate. With the decline in the state's general fund revenues, providing the University a greater land grant and an opportunity for more revenues from land development would let the University continue to meet its mission with a more diversified financial system of support, he stated. SENATOR FRANK stated the legislation contains adequate protection for the state, and he urged its favorable consideration by the committee. Number 290 SENATOR KELLY asked if there are differences between the bill passed by the Senate last year and this version. SENATOR FRANK said the final version passed by the Senate last year decreased the amount of the land grant from one million acres to 500,000 acres. SB 16 increases it back to the original one million acres. SENATOR R. PHILLIPS commented that he is more favorable to the 500,000 acre figure. Number 332 SENATOR ZHAROFF noted that on a map of Prince of Wales Island, he observed that the community of Whale Pass has a couple of subdivisions and University land is identified within those subdivisions. He asked how the University acquired parts of those subdivisions. SENATOR FRANK answered that those lands are probably part of the existing 112,000 acres granted. Number 350 WENDY REDMAN, Vice President, University Relations, University of Alaska, speaking to other differences between last year's legislation and SB 16, directed attention to page 8, line 9, subsection (n). It provides that if the University is not actively managing the land to provide income within a 10-year period of time, DNR can recover title to those lands. The other change was made in Section 5, on page 8. It requires the University to establish substantially similar regulations for mineral entry, location, and leasing procedures. Number 400 SENATOR R. PHILLIPS questioned a possible conflict between subsection (n) and Section 5. SENATOR FRANK acknowledged that there is and said they will try to find a better way to address it. He said the whole message to the University is to go ahead and develop these lands, but it needs to have language that is workable. WENDY REDMAN added that concern has been expressed on the possibility of the University flooding the market with land, and she agreed that this provision needs to be worked on. She has had discussions with DNR on Section 5 and they have given her some ideas of language changes that would be better for the University and also address the major concern of the mining industry. Number 415 SENATOR HOFFMAN asked if land taken back will be deducted permanently from the amount of land conveyed to the University, or will the University be allowed to select lands in another area. WENDY REDMAN responded it is her understanding is that there is no reselection provision so it is permanently lost. Number 430 SENATOR ZHAROFF asked, in the case of a legal dispute over the land, if the University or the state handles the matter. SENATOR FRANK answered that the state has the final word and that there is no opportunity for the University to take the state to court. Number 445 SENATOR HOFFMAN asked what the rationale was for reducing the figure to 500,000 acres in last year's legislation. SENATOR FRANK answered that he didn't think there was a specific rationale. Number 460 SENATOR KELLY inquired who takes precedence over the University in terms of selecting land. SENATOR FRANK replied that full authority is given to the commissioner of DNR to make those million acres subordinate to any other state interest. Number 490 SENATOR TORGERSON directed attention to some proposed amendments to SB 16 and SENATOR FRANK offered the following overview: Page 4, line 4: Clarifies that the University lands would be considered public lands as they are already in law. Page 7, line 5: Clarifies that earnings from oil and gas development are subject to the permanent fund royalties and bonuses language. Page 7, line 29 and page 8, line 1: Decreases the time frame to make it a more efficient process for the conveyance of the lands. Page 8, lines 5 & 6: Clarifies that the state will bear the cost of recording all documents and deeds. Page 9, line 28: Clarifies that after conveyance if they were to sell the land or put it into mineral production, etc., that the requirement for customary and traditional uses doesn't follow with it after conveyance. Page 9, line 31: Clarifies that until any conveyance is made the property can continue to be used for customary and traditional uses and provides tort immunity to the University except in cases of gross negligence or reckless or intentional misconduct, etc. Page 10, lines 7-12 and line 28: Clarifying language. Number 546 SENATOR KELLY referred to the amendment to page 7, line 28, and asked if it means that the University will be selling some of the land. WENDY REDMAN answered that it is there hope that they would be eventually selling the land to make money for the University. She added that in the past they have improved and converted some of their land into homesites and then sold it for tidy profits. She also clarified that the land conveyed to the University is not subject to taxation until such time as it is sold to private ownership. SENATOR FRANK added that he believes it is the University's intent to get into the actually selling of any this land in a very small and limited fashion, and it is not designed to be a major portion of their overall program. TAPE 95-3, SIDE B Number 001 SENATOR TORGERSON announced that the committee would take testimony on SB 16 over the teleconference network. FRED KLOUDA, testifying from Anchorage and representing the Alaska Sport Fishing Association, stated that with the lack of state control over fish and game resources, they are against conveying land out of public ownership. Number 035 CLIFF EAMES, testifying from Anchorage and representing the Alaska Center for the Environment, voiced their opposition to SB 16 and the transfer of these lands out of general public ownership. They oppose the increased fragmentation of Alaska's land ownership and the severely reduced opportunities for the citizens of Alaska to determine how Alaska's public lands should be managed. He cited numerous problems connected to the transfer of lands to the Mental Health Lands Trust. Number 090 RICK SMERIGLIO, a resident of Moose Pass, testified in opposition to SB 16. He said Moose Pass is a small unincorporated community on the road system that has traditional or recreational use of their private and public lands, as well as a proud tradition of public input. He noted that because of ANCSA (Alaska Native Claims Settlement Act), municipal entitlement, the Mental Health Trust settlement, a lot of the good land in their area has been selected already, and he fears that with another conveyance to the University, Moose Pass will get targeted again. Number 150 RON SWANSON, Director, Division of Lands, Department of Natural Resources, stated he was present in Anchorage to answer questions. Number 155 BRIAN ROGERS, formerly Vice President for Finance at the University of Alaska, addressed issues raised earlier in the meeting. In response to Senator Zharoff's inquiry concerning University land on Prince of Wales Island, he said those subdivisions were received in 1982 as a result of settlement of claims by the University when the state took land away from the University under the Municipal Entitlement Act. Responding to Senator Hoffman's inquiry for examples of some of the University's income from lands, Mr. Rogers related that last year the University earned $10 million, against expenses of around $800,000 for land management. The major activities have been timber, subdivision lands, oil and gas, and commercial leases. He noted the Board of Regents' policy on land favors the University retaining ownership and leasing the land in most circumstances. However, he added that it is not appropriate for subdivisions and for certain commercial development and it is in the University's best interest to sell those lands. In response to Senator Kelly's question on what takes precedence over the University in selecting land, Mr. Rogers said any land that has already been identified by the Legislature for parks, refuges or is otherwise designated by the Legislature is not available to the University for selection under SB 16. Number 230 CHARITY GREEN, a student at the Kenai Peninsula College, pointed out that at the Board of Regents' most recent meeting, they voted to eliminate the consolidation cap and to increase tuition, which, she said, will have a drastic impact on all of the University's campuses. She added that with the budget shortfalls, the students recognize that they have to do their part. She voiced support for SB 16 and urged its passage which, she said, will show the legislators are still concerned about the university's problems and the students' needs. Number 270 JERRY MCCUNE, President, United Fishermen of Alaska, stated support for SB 16, but he does have concerns with certain areas of it, such as the amount of acreage to be conveyed. He suggested extending the time frame for the Board of Regents to adopt policies for an annual plan for management and disposition of university land, as well as limiting where the University might be able to sell the land. Number 300 SENATOR TORGERSON closed the public hearing on SB 16, bringing it back before the committee. Number 302 SENATOR KELLY moved the following amendments be adopted into a committee substitute. Hearing no objection, it was so ordered. Page 4, line 4 Following last sentence insert: "Provided, however, that land conveyed to the University under AS 14.40.365 shall be treated as other public land and shall be managed in accordance with AS. 14.40.366 and regulations promulgated by the University." Page 7, line 5 Following the semicolon (;) insert "and AS 37.13.010;" Page 7, line 29 Delete the period (.) and insert "within one year of request by the University." Page 8, line 1 Following "resources shall" insert "within one year of request by the University" Page 8, line 5 Delete "execution" and insert "recording" Page 8, line 6 Following the period (.) insert "The State shall bear the cost of recording all documents and deeds." Page 9, line 28 Following "University of Alaska shall" insert ",prior to disposal or conveyance to third parties," Page 9, line 31 Add new section to read as follows: *Sec.___. AS 14.40 is amended by adding a new section to read: Sec. 14.40.371. TORT IMMUNITY FOR CLAIMS ARISING ON UNIVERSITY LAND NO IMPROVED BY THE UNIVERSITY. The University of Alaska is not liable in tort, except for an affirmative act that constitutes gross negligence or reckless or intentional misconduct, for property damage or for injury to or death of a person who enters or remains on land owned by the University of Alaska; provided that the above exemption from liability does not apply to claims which arise on that portion of those lands which have been improved and actively maintained by the University of Alaska after its receipt of tide thereto. Page 10, lines 7-12 Delete Page 10, line 28 Delete "or" Following "state property," insert "or property owned by the University of Alaska" Number 315 SENATOR KELLY moved that on page 9, line 3, delete "30" and insert "60" in its place. Hearing no objection, the amendment was adopted. SENATOR KELLY moved that on page 4, line 8, change "one million acres" to "two million acres." After brief discussion, he withdrew the amendment. Number 347 SENATOR PHILLIPS moved that on page 4, line 8, change "one million acres" to "500,000 acres. After brief discussion, he withdrew the amendment. SENATOR ZHAROFF voiced his concern of the University selecting land within an area that has not incorporated as a municipality, but when they do incorporate as a municipality, under their entitlement, they should be able to have the opportunity to select land within that area if the University has not done anything with the land. He said he would possibly offer such an amendment in the Finance Committee. Number 430 SENATOR PHILLIPS moved that CSSB 16(CRA) be passed out of committee with individual recommendations. Hearing no objection, it was so ordered. SCRA - 2/20/95 SB 56 RIGHTS IN TIDE/SUBMERGED LAND Number 470 SENATOR TORGERSON brought SB 56 before the committee as the final order of business. SENATOR LOREN LEMAN, prime sponsor of SB 56, said the basic concept of the legislation is to get decision making for tidelands and submerged lands made at the local level instead of at the state level. The bill will provide a mechanism for the Department of Natural Resources to turn these lands over to municipalities who identified tide and submerged lands for development. It provides for four conditions that would have to be met before land could be conveyed to municipalities. Senator Leman pointed out that land conveyed under this bill is still subject to the public trust doctrine, and if a municipality is dissolved, the land would revert to the state. Further, it doesn't affect the general land entitlement of a municipality provided by AS 29.65. Number 530 SENATOR TORGERSON opened the public hearing on SB 56. SARAH HANNAN, Executive Director, Alaska Environmental Lobby, stated their support for the intent of SB 56, but they are concerned that the bill neglects to supply recourse to the state for decisions which must be made in the best interest of the state and the public. There is no availability for the state not to convey the land if it meets the four criteria in the bill. She suggested the bill should provide that if the state could prove that its concerns outweigh the municipality, the commissioner could recommend that the land not be transferred. Other than that, the Lobby supports Senator Leman's attempt to help local governments diversify their economy and develop their economies. Number 622 JOHN BAKER, Assistant Attorney General, Natural Resources Section, Anchorage Attorney General's office, spoke to the public trust doctrine. He said where the Legislature authorizes conveyance of tide and submerged lands, which it has done on a very limited basis since statehood, except in very narrow circumstances those lands are subject to the public trust. That means members of the public can not be absolutely excluded from pursuing public trust uses on those lands. TAPE 95-4, Side A Number 001 BOB JUETTNER, Administrator of the Aleutians East Borough (AEB), testified in support of SB 56 and supports the municipal ownership of tidelands for the following reasons: flood control, costs and equity. A municipality cannot spend G.O. bonds on state-owned lands; it must secure a minimum lease for a five-year period, which is becoming more difficult to do. The second issue is the cost of leasing. A current tideland lease of 4.4 acres has a modest lease fee of $1,100 which represents only one-fifth of the total annual costs. Additional expenses include appraisal costs and the ongoing costs of insurance and bonding requirements. Another issue with the municipalities is the equity issue. First class and home rule cities incorporated prior to 1964 received the fee simple issue to their tidelands. Not only did they receive the title to their tidelines, but any city so incorporated can annex the tideline and still apply for the tideland, anytime after the annexation is approved. Finally, there is the issue of disposable tidelands. AS 38.05.820 (b)(7) states that municipalities that have been incorporated since 1964 shall have reasonable access to public waters. Number 090 CLIFF EAMES, representing the Alaska Center for the Environment (ACE), stated ACE does not support SB 56. He emphasized it is important to retain remaining state lands in state ownership so that all Alaskans have an opportunity to influence how that land is managed. The municipalities have had some opportunities for municipal entitlement and if there is a need for more lease processors, ACE would support the providing of additional processors. ACE does not believe this legislation is necessary because the opportunity to lease those lands from the state exists. He reiterated ACE's preference to continue to work with the existing process and not transfer additional land out of state ownership. RON SWANSON, Director of the Division of Lands, Department of Natural Resources (DNR), stated DNR supports SB 56 in concept but has two concerns. DNR strongly feels some discretion should be allowed to the Commissioner and that the burden of proof should be put on the Department, not on the applicant, but they feel it would be inappropriate to require the Commissioner to convey land just because it is suitable for development. MR. SWANSON stated DNR also recommends the deletion of the phrase "for sale" from page 2, line 18. He pointed out that tidelands, shorelands, and submerged lands are all managed under the Public Trust Doctrine. This is a living doctrine that has evolved and continues to evolve over time. Other states and the courts have long found that the sale of these lands, while not necessarily violating the public trust doctrine at the time of sale, may, by its use, violate the doctrine at a later date. SENATOR KELLY asked if DNR's second concern was in regard to the lease, or the sale, or both. MR. SWANSON replied DNR's concern is with the sale. He reiterated DNR supports the ability of the municipalities to lease tide, shore and submerged lands. Number 168 JERRY McCUNE testified on behalf of himself. He described to the committee how a friend of his, in Cordova, after taking incorrect survey readings, built a house. The house is situated on 1 foot of state land so the builder cannot close his loan. SB 56 could correct the situation by conveying that piece of land to the municipality who would convey it to this individual. He discussed a second situation in Cordova, in which the ferry terminal and dock are located in ten feet of water as the result of an earthquake. The ferry is unable to dock there. The dock is used as a launch for fishermen and other boaters. The municipality has been trying to get the rights to that land but is in dispute with the state. SENATOR KELLY asked if the proposed amendment came from DNR. SENATOR TORGERSON answered affirmatively, and added it is already in the companion House bill. SENATOR KELLY questioned whether the Administration might oppose SB 56 if it is not amended. MR.SWANSON replied DNR would oppose SB 56 without the amendments. SENATOR KELLY moved the adoption of the following amendment. Add to Section 1(a): Unless the commissioner finds that the public interest in retaining state ownership of the land clearly outweighs the municipality's interest in obtaining the land, the commissioner shall convey to a municipality tide or submerged land requested by the municipality that is occupied or suitable for occupation and development if the... SENATOR PHILLIPS objected because only one person would be making the determination. A roll call vote was taken with the following result: SENATORS HOFFMAN, KELLY, ZHAROFF, and TORGERSON voted "YEA," and SENATOR PHILLIPS voted "NAY." The motion to adopt the amendment passed. Number 243 SENATOR ZHAROFF commented he concurs with DNR's second concern to delete the phrase "or sale" from page 2, line 18. He moved to amend SB 56 by deleting that phrase. SENATOR TORGERSON asked how that would affect the homeowner in Cordova. SENATOR HOFFMAN asked for Senator Leman's opinion. SENATOR LEMAN stated he preferred to leave the phrase in because of recurring situations like the case in Cordova. SENATOR HOFFMAN noted he was the manager in Bethel for several years, and great strides were taken to obtain public input before land was leased, therefore he felt it is important to give the local government as much discretion as possible. Number 270 SENATOR ZHAROFF withdrew his amendment to delete the phrase "or sale" from page 2, line 18, but he suggested including a letter of intent. SENATOR LEMAN felt that in light of the fact that the Commissioner would have the final approval, he would not have any problem with a letter of intent. SENATOR ZHAROFF commented some municipalities might want to work with this legislation as soon as possible, therefore he suggested adding an immediate effective date. After discussion, SENATOR LEMAN agreed. SENATOR PHILLIPS moved that CSSB 56 (CRA) be passed out of committee with individual recommendations. There being no objection, so ordered. SENATOR TORGERSON adjourned the meeting at 3:27 p.m.