Legislature(2005 - 2006)BUTROVICH 205

03/02/2006 08:30 AM JUDICIARY


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ SB 298 TRUSTS: CHALLENGES; CLAIMS; LIABILITIES TELECONFERENCED
Moved CSSB 298(JUD) Out of Committee
+ HB 92 UNIV. OF ALASKA & NONPROFIT CORP STOCK TELECONFERENCED
Heard & Held
+ HB 318 LIMITATION ON EMINENT DOMAIN TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
= SB 284 SENTENCING FOR ALCOHOL-RELATED CRIMES
Moved CSSB 284(JUD) Out of Committee
= SB 249 REPORTING BAIL AND RELEASE INFORMATION
Moved CSSB 249(JUD) Out of Committee
                    ALASKA STATE LEGISLATURE                                                                                  
              SENATE JUDICIARY STANDING COMMITTEE                                                                             
                         March 2, 2006                                                                                          
                           8:42 a.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Ralph Seekins, Chair                                                                                                    
Senator Charlie Huggins, Vice Chair                                                                                             
Senator Gene Therriault                                                                                                         
Senator Hollis French                                                                                                           
Senator Gretchen Guess                                                                                                          
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
SENATE BILL NO. 249                                                                                                             
"An Act relating to criminal justice information."                                                                              
     MOVED CSSB 249(JUD) OUT OF COMMITTEE                                                                                       
                                                                                                                                
SENATE BILL NO. 284                                                                                                             
"An Act  relating to  sentencing  for the commission  of a  felony                                                              
while under the influence of alcohol."                                                                                          
     MOVED CSSB 284(JUD) OUT OF COMMITTEE                                                                                       
                                                                                                                                
CS FOR HOUSE BILL NO. 92(JUD)                                                                                                   
"An  Act  relating  to the  purchase  of  interests  in  nonprofit                                                              
corporations by the University of Alaska."                                                                                      
     HEARD AND HELD                                                                                                             
                                                                                                                                
SENATE BILL NO. 298                                                                                                             
"An  Act relating  to loans  from  trust property;  relating to  a                                                              
trustee's power  to appoint  the principal of  a trust  to another                                                              
trust;   relating   to   challenges  to,   claims   against,   and                                                              
liabilities of  trustees, beneficiaries,  and creditors  of trusts                                                              
and  of trusts  and  estates;  relating to  individual  retirement                                                              
accounts  and plans;  relating to  certain trusts  in divorce  and                                                              
dissolutions  of   marriage  situations;  and  providing   for  an                                                              
effective date."                                                                                                                
     MOVED CSSB 298(JUD) OUT OF COMMITTEE                                                                                       
                                                                                                                                
CS FOR HOUSE BILL NO. 318(FIN) am                                                                                               
"An Act limiting the exercise of eminent domain."                                                                               
     HEARD AND HELD                                                                                                             
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                              
BILL: SB 249                                                                                                                  
SHORT TITLE: REPORTING BAIL AND RELEASE INFORMATION                                                                             
SPONSOR(s): SENATOR(s) FRENCH                                                                                                   
                                                                                                                                
01/23/06       (S)       READ THE FIRST TIME - REFERRALS                                                                        
01/23/06       (S)       JUD                                                                                                    
02/15/06       (S)       JUD AT 8:30 AM BUTROVICH 205                                                                           
02/15/06       (S)       Heard & Held                                                                                           
02/15/06       (S)       MINUTE(JUD)                                                                                            
03/01/06       (S)       JUD AT 8:30 AM BUTROVICH 205                                                                           
03/01/06       (S)       Scheduled But Not Heard                                                                                
                                                                                                                                
BILL: SB 284                                                                                                                  
SHORT TITLE: SENTENCING FOR ALCOHOL-RELATED CRIMES                                                                              
SPONSOR(s): SENATOR(s) THERRIAULT                                                                                               
                                                                                                                                
02/13/06       (S)       READ THE FIRST TIME - REFERRALS                                                                      
02/13/06       (S)       JUD, FIN                                                                                               
02/28/06       (S)       JUD AT 8:30 AM BUTROVICH 205                                                                           
02/28/06       (S)       Heard & Held                                                                                           
02/28/06       (S)       MINUTE(JUD)                                                                                            
03/01/06       (S)       JUD AT 8:30 AM BUTROVICH 205                                                                           
03/01/06       (S)       Heard & Held                                                                                           
03/01/06       (S)       MINUTE(JUD)                                                                                            
                                                                                                                                
BILL: HB 92                                                                                                                   
SHORT TITLE: UNIV. OF ALASKA & NONPROFIT CORP STOCK                                                                             
SPONSOR(s): REPRESENTATIVE(s) KELLY                                                                                             
                                                                                                                                
01/21/05       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/21/05       (H)       EDU, HES                                                                                               
04/05/05       (H)       EDU AT 11:00 AM CAPITOL 106                                                                            
04/05/05       (H)       Heard & Held                                                                                           
04/05/05       (H)       MINUTE(EDU)                                                                                            
04/06/05       (H)       HES REFERRAL WAIVED                                                                                    
04/06/05       (H)       JUD REFERRAL ADDED AFTER EDU                                                                           
04/07/05       (H)       EDU AT 11:00 AM CAPITOL 106                                                                            
04/07/05       (H)       -- Meeting Canceled --                                                                                 
04/12/05       (H)       EDU AT 11:00 AM CAPITOL 106                                                                            
04/12/05       (H)       Moved CSHB 92(EDU) Out of Committee                                                                    
04/12/05       (H)       MINUTE(EDU)                                                                                            
04/14/05       (H)       EDU AT 11:00 AM CAPITOL 106                                                                            
04/14/05       (H)       -- Meeting Canceled --                                                                                 
04/18/05       (H)       EDU RPT CS(EDU) NT 1DP 5NR                                                                             
04/18/05       (H)       DP: LYNN;                                                                                              
04/18/05       (H)       NR: THOMAS, WILSON, GATTO, SALMON,                                                                     
                         NEUMAN                                                                                                 
04/18/05       (H)       JUD AT 1:00 PM CAPITOL 120                                                                             
04/18/05       (H)       Scheduled But Not Heard                                                                                
04/19/05       (H)       JUD AT 1:00 PM CAPITOL 120                                                                             
04/19/05       (H)       Heard & Held                                                                                           
04/19/05       (H)       MINUTE(JUD)                                                                                            
04/22/05       (H)       JUD AT 1:00 PM CAPITOL 120                                                                             
04/22/05       (H)       Moved CSHB 92(JUD) Out of Committee                                                                    
04/22/05       (H)       MINUTE(JUD)                                                                                            
04/26/05       (H)       JUD RPT CS(JUD) NT 1DP 6NR                                                                             
04/26/05       (H)       DP: MCGUIRE;                                                                                           
04/26/05       (H)       NR:     KOTT,    GRUENBERG,     ANDERSON,                                                              
                         DAHLSTROM, COGHILL, GARA                                                                               
04/28/05       (H)       TRANSMITTED TO (S)                                                                                     
04/28/05       (H)       VERSION: CSHB 92(JUD)                                                                                  
05/01/05       (S)       READ THE FIRST TIME - REFERRALS                                                                        
05/01/05       (S)       HES                                                                                                    
02/09/06       (S)       HES REFERRAL WAIVED                                                                                    
02/09/06       (S)       JUD REFERRAL ADDED                                                                                     
03/02/06       (S)       JUD AT 8:30 AM BUTROVICH 205                                                                           
                                                                                                                                
BILL: SB 298                                                                                                                  
SHORT TITLE: TRUSTS: CHALLENGES; CLAIMS; LIABILITIES                                                                            
SPONSOR(s): SENATOR(s) SEEKINS                                                                                                  
                                                                                                                                
02/14/06       (S)       READ THE FIRST TIME - REFERRALS                                                                        
02/14/06       (S)       L&C, JUD                                                                                               
02/23/06       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
02/23/06       (S)       Moved SB 298 Out of Committee                                                                          
02/23/06       (S)       MINUTE(L&C)                                                                                            
02/27/06       (S)       L&C RPT  3DP                                                                                           
02/27/06       (S)       DP: BUNDE, SEEKINS, STEVENS B                                                                          
03/02/06       (S)       JUD AT 8:30 AM BUTROVICH 205                                                                           
                                                                                                                                
BILL: HB 318                                                                                                                  
SHORT TITLE: LIMITATION ON EMINENT DOMAIN                                                                                       
SPONSOR(s): REPRESENTATIVE(s) MCGUIRE,  HOLM, HAWKER                                                                            
                                                                                                                                
01/09/06       (H)       PREFILE RELEASED 12/30/05                                                                              
01/09/06       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/09/06       (H)       JUD, FIN                                                                                               
01/11/06       (H)       JUD AT 1:00 PM CAPITOL 120                                                                             
01/11/06       (H)       Heard & Held                                                                                           
01/11/06       (H)       MINUTE(JUD)                                                                                            
01/25/06       (H)       JUD AT 1:00 PM CAPITOL 120                                                                             
01/25/06       (H)       Heard & Held                                                                                           
01/25/06       (H)       MINUTE(JUD)                                                                                            
02/01/06       (H)       JUD AT 1:00 PM CAPITOL 120                                                                             
02/01/06       (H)       -- Meeting Canceled --                                                                                 
02/03/06       (H)       JUD AT 1:00 PM CAPITOL 120                                                                             
02/03/06       (H)       Moved CSHB 318(JUD) Out of Committee                                                                   
02/03/06       (H)       MINUTE(JUD)                                                                                            
02/06/06       (H)       JUD RPT CS(JUD) NT 3DP 1NR 2AM                                                                         
02/06/06       (H)       DP: WILSON, ANDERSON, MCGUIRE;                                                                         
02/06/06       (H)       NR: GRUENBERG;                                                                                         
02/06/06       (H)       AM: GARA, KOTT                                                                                         
02/09/06       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
02/09/06       (H)       Moved CSHB 318(FIN) Out of Committee                                                                   
02/09/06       (H)       MINUTE(FIN)                                                                                            
02/10/06       (H)       FIN RPT CS(FIN) NT 2DP 3NR 3AM                                                                         
02/10/06       (H)       DP: HAWKER, MEYER;                                                                                     
02/10/06       (H)       NR: KERTTULA, JOULE, WEYHRAUCH;                                                                        
02/10/06       (H)       AM: STOLTZE, HOLM, FOSTER                                                                              
02/21/06       (H)       TRANSMITTED TO (S)                                                                                     
02/21/06       (H)       VERSION: CSHB 318(FIN) AM                                                                              
02/22/06       (S)       READ THE FIRST TIME - REFERRALS                                                                        
02/22/06       (S)       JUD, FIN                                                                                               
03/02/06       (S)       JUD AT 8:30 AM BUTROVICH 205                                                                           
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                              
Senator Hollis French                                                                                                           
Alaska State Capitol                                                                                                            
Juneau, AK 99801-1182                                                                                                           
POSITION STATEMENT:  Sponsor of SB 249                                                                                        
                                                                                                                                
Senator Gene Therriault                                                                                                         
Alaska State Capitol                                                                                                            
Juneau, AK 99801-1182                                                                                                           
POSITION STATEMENT:  Sponsor of SB 284                                                                                        
                                                                                                                                
Dave Stancliff, Legislative Aide                                                                                                
Staff to Senator Therriault                                                                                                     
Alaska State Capitol                                                                                                            
Juneau, AK 99801-1182                                                                                                           
POSITION STATEMENT:  Answered questions regarding SB 284                                                                      
                                                                                                                                
Representative Mike Kelly                                                                                                       
Alaska State Capitol                                                                                                            
Juneau, AK 99801-1182                                                                                                           
POSITION STATEMENT:  Sponsor of HB 92                                                                                         
                                                                                                                                
Dr. Craig Dorman, Vice President of Academic Affairs                                                                            
University of Alaska Statewide System                                                                                           
PO Box 755000                                                                                                                   
Fairbanks, AK 99775                                                                                                             
POSITION STATEMENT:  Testified in support of HB 92                                                                            
                                                                                                                                
Brian Rogers                                                                                                                    
Board of Regents                                                                                                                
University of Alaska Fairbanks                                                                                                  
POSITION STATEMENT:  Testified in support of HB 92                                                                            
                                                                                                                                
Brian Hove, Legislative Aide                                                                                                    
Staff to Senator Ralph Seekins                                                                                                  
Alaska State Capitol                                                                                                            
Juneau, AK 99801-1182                                                                                                           
POSITION STATEMENT:  Introduced SB 298                                                                                        
                                                                                                                                
Beth Chapman, Attorney                                                                                                          
Faulkner Banfield                                                                                                               
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified in support of SB 298                                                                           
                                                                                                                                
Rich Hompesch, Attorney                                                                                                         
Hompesch & Evans                                                                                                                
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of SB 298                                                                           
                                                                                                                                
Dick Thwait, Attorney                                                                                                           
Chairman of the Board                                                                                                           
Alaska Trust Company                                                                                                            
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of SB 298                                                                           
                                                                                                                                
Douglas Blattmachr, President and CEO                                                                                           
Alaska Trust Company                                                                                                            
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of SB 298                                                                           
                                                                                                                                
David Shaftel, Attorney                                                                                                         
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of SB 298                                                                           
                                                                                                                                
Steve Greer, Attorney                                                                                                           
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of SB 298                                                                           
                                                                                                                                
Jonathon Blattmachr                                                                                                             
POSITION STATEMENT:  Testified in support of SB 298                                                                           
                                                                                                                                
Craig Johnson, Legislative Aide                                                                                                 
Staff to Representative Lesil McGuire                                                                                           
Alaska State Capitol                                                                                                            
Juneau, AK 99801-1182                                                                                                           
POSITION STATEMENT: Introduced HB 318                                                                                         
                                                                                                                                
Peter Putzier, Senior Assistant Attorney General                                                                                
Department of Law                                                                                                               
PO Box 110300                                                                                                                   
Juneau, AK  99811-0300                                                                                                          
POSITION STATEMENT: Commented on HB 318                                                                                       
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
CHAIR  RALPH   SEEKINS  called   the  Senate  Judiciary   Standing                                                            
Committee meeting  to order at  8:42:58 AM. Present  were Senators                                                            
Hollis French,  Charlie Huggins,  Gene Therriault, Gretchen  Guess                                                              
and Chair Ralph Seekins.                                                                                                        
                                                                                                                                
         SB 249-REPORTING BAIL AND RELEASE INFORMATION                                                                      
                                                                                                                                
8:43:20 AM                                                                                                                    
CHAIR RALPH SEEKINS announced SB 249 to be up for consideration.                                                                
                                                                                                                                
SENATOR  HOLLIS FRENCH  moved CSSB  249 version  G as the  working                                                              
document before the committee.                                                                                                  
                                                                                                                                
CHAIR SEEKINS objected for the purpose of explanation.                                                                          
                                                                                                                                
SENATOR  FRENCH  explained  the   difference  with  the  committee                                                              
substitute  (CS) was on  page 2.  Line 9  added the conditions  of                                                              
parole or probation supervision.                                                                                                
                                                                                                                                
8:44:34 AM                                                                                                                    
CHAIR  SEEKINS  removed  his  objection  and  hearing  no  further                                                              
objections, version 24-LS1490\G was adopted.                                                                                    
                                                                                                                                
SENATOR FRENCH  reported that the  Department of Law (DOL)  was in                                                              
support of the bill.                                                                                                            
                                                                                                                                
CHAIR SEEKINS closed public testimony.                                                                                          
                                                                                                                                
SENATOR GRETCHEN  GUESS moved CSSB 249(JUD) out  of committee with                                                              
individual recommendations  and attached fiscal notes.  Hearing no                                                              
objections, the motion carried.                                                                                                 
                                                                                                                                
CHAIR SEEKINS announced a brief recess at 8:45:59 AM.                                                                         
                                                                                                                                
          SB 284-SENTENCING FOR ALCOHOL-RELATED CRIMES                                                                      
                                                                                                                                
8:47:01 AM                                                                                                                    
CHAIR RALPH SEEKINS announced SB 284 to be up for consideration.                                                                
                                                                                                                                
DAVE STANCLIFF,  Staff to Senator  Gene Therriault,  reported that                                                              
he and  Senator Therriault  worked  with the  drafter to create  a                                                              
committee  substitute  (CS)  to   address  the  issues  raised  in                                                              
earlier hearings.                                                                                                               
                                                                                                                                
SENATOR GENE  THERRIAULT moved CSSB  284 version Y as  the working                                                              
document before the committee.                                                                                                  
                                                                                                                                
CHAIR SEEKINS objected for the purpose of explanation.                                                                          
                                                                                                                                
MR.  STANCLIFF  explained  that  the  CS  accommodates  the  three                                                              
concepts   discussed  previously.   At  the   bottom  of   page  1                                                              
"alcoholic  beverage"   has  been   changed  to  "consumption   of                                                              
alcohol."  The second  change modifies  existing  DUI statutes  to                                                              
bring  the  language  into  conformity with  SB  284.  The  change                                                              
includes  the  term  "consuming  alcohol"  instead  of  "alcoholic                                                              
beverage"  and  the  concept  of   "up  to  the  lifetime  of  the                                                              
defendant" is added.  The last concept is to allow  judges a range                                                              
of  up  to  a  lifetime  ban,  an   option  to  use  as  they  see                                                              
appropriate.                                                                                                                    
                                                                                                                                
8:49:04 AM                                                                                                                    
SENATOR  THERRIAULT  asked  Mr. Stancliff  to  clarify  everything                                                              
that was swept in under the DUI statutes.                                                                                       
                                                                                                                                
MR. STANCLIFF  explained  that after  a person  is convicted  of a                                                              
third  DUI  these  conditions  of   sentencing  would  apply.  The                                                              
sentencing would also  apply for a person with  one DUI conviction                                                              
if it involved a death or serious injury.                                                                                       
                                                                                                                                
SENATOR  THERRIAULT asked  whether  the conditions  of  sentencing                                                              
would apply for  a first time DUI conviction involving  a death or                                                              
serious injury.                                                                                                                 
                                                                                                                                
MR. STANCLIFF said yes.                                                                                                         
                                                                                                                                
CHAIR SEEKINS closed public testimony.                                                                                          
                                                                                                                                
8:51:16 AM                                                                                                                    
SENATOR  THERRIAULT  moved CSSB  284(JUD)  out of  committee  with                                                              
individual recommendations  and attached fiscal notes.  Hearing no                                                              
objections, the motion carried.                                                                                                 
                                                                                                                                
CHAIR SEEKINS announced a brief recess at 8:51:56 AM.                                                                         
                                                                                                                                
          HB 92-UNIV. OF ALASKA & NONPROFIT CORP STOCK                                                                      
                                                                                                                                
8:53:38 AM                                                                                                                    
CHAIR  RALPH  SEEKINS   announced  CSHB  92(JUD)  to   be  up  for                                                              
consideration.                                                                                                                  
                                                                                                                                
REPRESENTATIVE  MIKE KELLY,  bill sponsor,  advised the  committee                                                              
of  a new  committee substitute  (CS) for  the bill.  SCS CSHB  92                                                              
version  X would  permit the  University  of Alaska  to invest  in                                                              
corporations who  would produce and market inventions  coming from                                                              
the  university.  The  bill  that passed  the  House  limited  the                                                              
investment to  non-profit organizations  but the current  CS would                                                              
allow  for  investment  opportunities in  profit  corporations  as                                                              
well. The  university has seen  tremendous growth in  money coming                                                              
in for  sponsored research and  that has a tremendous  multiplier,                                                              
creating  thousands  of  jobs.   That  has  been  instrumental  in                                                              
changing  the  university's  funding  from  a  majority  of  state                                                              
funding to tuition and other funds.                                                                                             
                                                                                                                                
Part of a successful  research university is the  ability to "spin                                                              
off"  intellectual   properties  into   applied  science   and  to                                                              
contribute to the  economy. Presently the university  is prevented                                                              
from  investing   in  corporations   due  to  fear   of  liability                                                              
associated with  "piercing the corporate  veil." HB 92  would make                                                              
it  possible for  the  university to  invest  in corporations  but                                                              
would   not  allow   the   university  to   be   liable  for   the                                                              
corporation's debts.                                                                                                            
                                                                                                                                
When the House  stripped away the for-profit  corporation ability,                                                              
it  took away  a large  portion of  the potential  benefit of  the                                                              
bill. The current CS would add that ability back in.                                                                            
                                                                                                                                
8:57:47 AM                                                                                                                    
SENATOR  GENE   THERRIAULT  moved   24-LS0344\X  as   the  working                                                              
document before  the committee. Hearing no objections,  the motion                                                              
carried.                                                                                                                        
                                                                                                                                
DR.  CRAIG DORMAN,  Vice  President of  Academic  Affairs for  the                                                              
University of  Alaska Statewide  System, explained that  the basis                                                              
of the university's  request was based on public  law that permits                                                              
universities to  take ownership of  inventions that are  made with                                                              
federal  funding.   To  take  advantage  of  the   inventions,  it                                                              
requires that  things move  into the  commercial line  of business                                                              
and  would  start  by encouraging  the  individual  who  made  the                                                              
invention to patent or license it.                                                                                              
                                                                                                                                
9:00:28 AM                                                                                                                    
DR. DORMAN  said when  a scientist  invents a  piece of  equipment                                                              
used  to  further  his  research   it  can  be  useful  for  other                                                              
researchers  around  the world.  The  form  of ownership  that  it                                                              
would  typically  take could  include  the university  putting  up                                                              
it's  own  portion  of  the invention  rights  as  outlined  in  a                                                              
collective bargaining  agreement or  have stock rights  or partial                                                              
interest in a corporation.                                                                                                      
                                                                                                                                
DR.  DORMAN gave  an  example of  using  a non-profit  last  year.                                                              
Currently  the  university  is  involved  with  the  Alaska  Ocean                                                              
Observing   System.  The   university   is  in   the  process   of                                                              
establishing  rules and  governance processes  whereby it  becomes                                                              
part of the national  federation of regional agencies  and thus it                                                              
could accrue significant  federal funding, he noted.  Although the                                                              
university  wants  to  be  involved in  such  ventures,  there  is                                                              
concern  with regard  to  the university  being  seen  as a  "deep                                                              
pocket." Therefore,  the intent  of HB 92  is to avoid  losing the                                                              
university's  assets by  allowing  it to  participate in  start-up                                                              
ventures and charitable nonprofits.                                                                                             
                                                                                                                                
9:02:16 AM                                                                                                                    
SENATOR  GRETCHEN GUESS  asked  Dr. Dorman  the  amount of  public                                                              
universities that have the same provision.                                                                                      
                                                                                                                                
DR.  DORMAN  said from  his  experience  it was  common  practice.                                                              
Universities have a  variety of ways of allowing for  this type of                                                              
thing.                                                                                                                          
                                                                                                                                
REPRESENTATIVE   KELLY  explained  to   the  committee   that  the                                                              
university legal counsel  was unable to be present  today but they                                                              
put  the  language  for the  original  bill  together.  There  are                                                              
several states that have similar language as HB 92.                                                                             
                                                                                                                                
9:03:28 AM                                                                                                                    
SENATOR  GUESS  asked  Representative  Kelly  whether  the  normal                                                              
practice  was for  someone to  form  a corporation  but leave  the                                                              
university  not   liable  for  losses.   She  said  she   did  not                                                              
understand  why  anyone would  enter  into  an agreement  such  as                                                              
that.                                                                                                                           
                                                                                                                                
REPRESENTATIVE  KELLY responded  they would  be liable within  the                                                              
corporation and so  the investment would be at risk.  It would not                                                              
be any different  than the average person in  that the corporation                                                              
couldn't reach into the university.                                                                                             
                                                                                                                                
CHAIR SEEKINS  said it was more  of a corporate iron  curtain than                                                              
a corporate veil.                                                                                                               
                                                                                                                                
SENATOR  GUESS posed  a hypothetical  example.  If the  university                                                              
owns  forty percent  of a  corporation and  that corporation  goes                                                              
bankrupt  and  incurs $100,000  worth  of  losses, she  asked  who                                                              
would pay the liable loss.                                                                                                      
                                                                                                                                
REPRESENTATIVE KELLY  explained that it  would be the same  as any                                                              
investment in a  corporation and that the  university's investment                                                              
would be  at risk but the  corporation could not submit  that bill                                                              
to the Board of  Regents. It would be strictly  within that profit                                                              
or non-profit corporation.                                                                                                      
                                                                                                                                
SENATOR GENE  THERRIAULT commented  it was  no different  than any                                                              
other  corporation. The  assets of  the business  are at risk  but                                                              
the bank could not reach through to confiscate anyone's home.                                                                   
                                                                                                                                
9:07:47 AM                                                                                                                    
REPRESENTATIVE KELLY  commented that  the bill was  timely because                                                              
currently  there  is approximately  $150  million  dollars a  year                                                              
brought in  from the outside into  the university system.  He said                                                              
he is  very comfortable with the  bill and reminded  the committee                                                              
that  it  involves  the  Board of  Regents  and  is  very  tightly                                                              
controlled.                                                                                                                     
                                                                                                                                
SENATOR CHARLIE HUGGINS expressed support for the bill.                                                                         
                                                                                                                                
9:09:45 AM                                                                                                                    
SENATOR  THERRIAULT  asked  Representative  Kelly the  reason  the                                                              
House dropped out the for-profit corporations in the bill.                                                                      
                                                                                                                                
REPRESENTATIVE  KELLY  said  it  happened in  the  House  Economic                                                              
Development  and Tourism  Committee  out of  a "fairness"  concern                                                              
that there be no injury to the public.                                                                                          
                                                                                                                                
SENATOR THERRIAULT  said he did not understand why  there would be                                                              
any difference.                                                                                                                 
                                                                                                                                
REPRESENTATIVE  KELLY commented  the  concern was  about tort  and                                                              
fraud  but the  bill would  actually protect  the university  from                                                              
those sorts of things.                                                                                                          
                                                                                                                                
CHAIR SEEKINS  speculated  the reason the  committee dropped  non-                                                              
profit  from the  bill  was due  to  a basic  misunderstanding  of                                                              
corporate law.                                                                                                                  
                                                                                                                                
SENATOR  HUGGINS  asked  Representative Kelly  whether  the  House                                                              
Economic Development  and Tourism  Committee now understood  their                                                              
mistake.                                                                                                                        
                                                                                                                                
REPRESENTATIVE KELLY  said he couldn't comment. There  was another                                                              
side to  the issue,  which was  that the  bill now clarifies  that                                                              
the  corporate  entity  of  the university  does  not  enter  into                                                              
liability with the corporation.                                                                                                 
                                                                                                                                
9:13:13 AM                                                                                                                    
SENATOR HOLLIS  FRENCH said he had  a question for  the university                                                              
legal  counsel and  hoped to be  able to  question someone  before                                                              
the  bill left  committee. He  said he  wanted to  know the  other                                                              
states that use the same model that the bill proposes.                                                                          
                                                                                                                                
BRIAN  ROGERS, member,  University  of Alaska  Fairbanks Board  of                                                              
Regents,  expressed  support for  the  bill. Testimony  last  year                                                              
indicated  that  the  legal  protections  the  bill  provides  the                                                              
university  are identical  to  those that  are  provided to  state                                                              
agencies,  such  as  Alaska  Industrial   Development  and  Export                                                              
Authority  (AIDEA). The  university  has been  trying to  transfer                                                              
technology  to the  private sector  for some  time. They tried  in                                                              
the early  1990s to  set up a  technology development  corporation                                                              
but were not successful.                                                                                                        
                                                                                                                                
9:16:12 AM                                                                                                                    
MR. ROGERS  gave an  example of an  invention that identifies  pin                                                              
bones in  a fish and  removes them, making  for a better  product.                                                              
Without  a corporate  veil  or  legal protections  the  university                                                              
could become  liable if someone were  to choke on a pin  bone that                                                              
did not  get removed.  The standard  university  stance is  to not                                                              
take risks  and so the  bill provides a  balance so that  the only                                                              
risk to  the university  would be the  investment. HB  92 balances                                                              
the protections  yet allows  them to  create economic  development                                                              
from the  university  and in the  long run,  provides revenues  to                                                              
the university.                                                                                                                 
                                                                                                                                
CHAIR SEEKINS announced a brief recess at 9:18:07 AM.                                                                         
                                                                                                                                
9:25:11 AM                                                                                                                    
CHAIR SEEKINS held the bill in committee.                                                                                       
                                                                                                                                
         SB 298-TRUSTS: CHALLENGES; CLAIMS; LIABILITIES                                                                     
                                                                                                                                
9:26:25 AM                                                                                                                    
CHAIR RALPH SEEKINS announced SB 298 to be up for consideration.                                                                
                                                                                                                                
BRIAN  HOVE, Staff  to  Senator Seekins,  introduced  SB 298.  The                                                              
bill revises  Titles 13  and 34  pertaining to the  administration                                                              
of trust assets.                                                                                                                
                                                                                                                                
Updates  incorporated  into  Title  13  include  the  addition  of                                                              
clarifying  language  relating  to the  various  powers  conferred                                                              
upon  the  trustee; trustee  reporting  requirements;  and  claims                                                              
made against trust assets.                                                                                                      
                                                                                                                                
Updates integrated  into Title 34  include language  pertaining to                                                              
the  exemption from  transfer  provisions  for certain  IRA  trust                                                              
assets; technical  corrections  made to AS  34.40.110(b);  and the                                                              
handling of trust assets in cases of divorce or dissolution.                                                                    
                                                                                                                                
Since 1997, the  Alaska State Legislature has  consistently worked                                                              
to update  and improve laws  regarding the use and  administration                                                              
of trusts.  As a result, Alaska  is considered one of  the premier                                                              
trust jurisdictions  in the  country. The  updates proposed  in SB                                                              
298 are in keeping  with revisions made to Alaska's  trust laws in                                                              
1997  and 2003.  They are  intended to  preserve Alaska's  leading                                                              
position  within the  universe of  products  and services  offered                                                              
nationwide.                                                                                                                     
                                                                                                                                
9:28:50 AM                                                                                                                    
The   bill   clarifies   prior  trust   legislation,   makes   the                                                              
administration  of  trusts  in  Alaska  more  efficient  and  cost                                                              
effective,  and will  keep Alaska  as the  jurisdiction of  choice                                                              
for  trust administration.  Mr.  Hove  offered to  answer  general                                                              
questions.                                                                                                                      
                                                                                                                                
9:29:48 AM                                                                                                                    
BETH  CHAPMAN described  herself  as a  private practice  attorney                                                              
working  in   estates  and   trusts.  She  represents   individual                                                              
families, individuals  who service trustees, and  beneficiaries of                                                              
trust.  She said she  supports the  bill because  it brings  trust                                                              
business and revenues to Alaska and helps protect families.                                                                     
                                                                                                                                
The first  provision  to discuss  is in  Sections 2  and 3 and  is                                                              
designed to  clarify a trustee's  powers to appoint  trust assets.                                                              
Simply  put,  it is  designed  to  improve the  administration  of                                                              
trusts so  that trustees have  flexibility to respond  to changing                                                              
circumstances in the family.                                                                                                    
                                                                                                                                
CHAIR  SEEKINS interrupted  Ms. Chapman  to ask  the committee  to                                                              
adopt the current version of the bill.                                                                                          
                                                                                                                                
9:30:58 AM                                                                                                                    
SENATOR  CHARLIE  HUGGINS  moved  to adopt  24-LS1113\  Y  as  the                                                              
working document  before the committee. Hearing no  objection, the                                                              
motion carried.                                                                                                                 
                                                                                                                                
CHAIR SEEKINS  explained the  Y version  replaces the  word "from"                                                              
on page 2 line 1 with "or" after the word "income."                                                                             
                                                                                                                                
MS. CHAPMAN  continued the bill  allows the trustee to  respond to                                                              
changes   in   circumstances.  Many   times   families   establish                                                              
irrevocable  trusts and then  circumstances  arise with regard  to                                                              
beneficiaries. The  provision would allow the trustee  to continue                                                              
the  trust under  terms that  are beneficial  to the  beneficiary,                                                              
does  not impact  their interest  in the  trust, and  yet does  so                                                              
without the need to involve a court proceeding.                                                                                 
                                                                                                                                
9:32:38 AM                                                                                                                    
MS. CHAPMAN  continued the second  provision concerns  the statute                                                              
of  limitations for  claims against  a  trustee. Currently  Alaska                                                              
law  has  three  different  statutes  of  limitations  for  claims                                                              
against  a  trustee  brought  by  a  beneficiary.  This  leads  to                                                              
confusion and  works to the  disadvantage of trust  beneficiaries.                                                              
The proposed  changes would eliminate  the different  time periods                                                              
for  interim reports  and final  reports. It  would eliminate  the                                                              
difference so that  there would be one statute  of limitations for                                                              
all types of  claims relating to  a report given by a  trustee. It                                                              
would  also  impose  additional  obligations on  the  trustees  to                                                              
ensure that the beneficiaries are aware of the time limitation.                                                                 
                                                                                                                                
The statute would  require that the trustee use  14-point pitch to                                                              
clearly communicate the limitation period to the beneficiary.                                                                   
                                                                                                                                
9:33:51 AM                                                                                                                    
The other  amendment to  the statute  of limitations corrects  the                                                              
time periods for  notices when a trustee decides to  use the court                                                              
to  approve  a   report.  Currently  there  is   an  inconsistency                                                              
regarding when  those notices  must be  provided. The  probate and                                                              
trust  codes are  designed to  protect  beneficiaries by  ensuring                                                              
that claims  are handled in an  expeditious manner so  that assets                                                              
can  be distributed  to beneficiaries  free  of potential  claims.                                                              
The amendment balances  expeditious resolution of  claims with the                                                              
rights  of beneficiaries  to adequate  disclosure regarding  trust                                                              
assets  and  the  right  to bring  claims  arising  from  a  trust                                                              
report.  The limitation  periods  proposed in  SB  298 are  longer                                                              
than the  limitation periods  currently in  the probate  code that                                                              
apply to  estates but  they are  fair and  provide a good  balance                                                              
between  the   needs  for   administration  of   a  trust   in  an                                                              
expeditious manner yet protect beneficiaries rights, she said.                                                                  
                                                                                                                                
9:35:11 AM                                                                                                                    
SENATOR  HOLLIS  FRENCH asked  Ms.  Chapman  what the  statute  of                                                              
limitations would be if the bill were to pass.                                                                                  
                                                                                                                                
MS. CHAPMAN  responded the  bill would reduce  the process  to two                                                              
statutes  of   limitations.  The   first  would  be   an  ultimate                                                              
limitation of  three years. That would  be from any report  that a                                                              
trustee provides  to a beneficiary.  The second limitation  period                                                              
would be  six months. That applies  to final reports  and proposes                                                              
to  eliminate a  longer  statute of  limitations  that applies  to                                                              
interim reports, which is two years.                                                                                            
                                                                                                                                
SENATOR  FRENCH   asked  Ms.  Chapman  to  describe   under  which                                                              
circumstances  when, in the  life of  a trust,  a final  report is                                                              
issued.                                                                                                                         
                                                                                                                                
MS.  CHAPMAN  said  a  final  report  is  issued  when  the  trust                                                              
relationship is  going to be  terminated either because  the trust                                                              
is to be  terminated and the  assets distributed or a  new trustee                                                              
will be taking over the duties of administration.                                                                               
                                                                                                                                
SENATOR FRENCH clarified  in the notice of the  final report there                                                              
would  be delivery  of notice to  the beneficiary  that they  have                                                              
six months to act should there be any dispute.                                                                                  
                                                                                                                                
MS. CHAPMAN agreed.                                                                                                             
                                                                                                                                
9:37:29 AM                                                                                                                    
RICH  HOMPESCH,  described  himself  as  an  attorney  in  private                                                              
practice   who   does   estate  planning,   probate,   and   trust                                                              
administration.  He testified in  support of  the bill  and agreed                                                              
with the testimony of Ms. Chapman.                                                                                              
                                                                                                                                
DICK THWAITS, Attorney  and Chairman of the Board  of Alaska Trust                                                              
Company,  testified in  support of  the bill  and agreed with  the                                                              
testimony  of Ms.  Chapman.  He  said often  times  a trustee  can                                                              
anticipate when  a trust  terminates and can  start in  motion the                                                              
six-month statute and make the distribution immediately.                                                                        
                                                                                                                                
9:39:40 AM                                                                                                                    
SENATOR  FRENCH  asked him  to  restate  his point  regarding  the                                                              
distribution to beneficiaries and the issuance of report.                                                                       
                                                                                                                                
MR. THWAITS said:                                                                                                               
     Oftentimes  as a trust  comes to  its termination,  that                                                                   
     is,  the children  are  reaching the  age  at which  the                                                                   
     trust  can be distributed  to them,  it is  advantageous                                                                   
     to then  issue a  preliminary report  as to what  assets                                                                   
     are there, what  has been done with the  assets, and how                                                                   
     the  assets are  going to  distribute. Each  beneficiary                                                                   
     would  then  have  a  six-month  period  with  which  to                                                                   
     respond or reply.                                                                                                          
                                                                                                                                
9:41:09 AM                                                                                                                    
MR.  BLATTMACHR,  President  and  CEO  of  Alaska  Trust  Company,                                                              
expressed strong support for SB 298.                                                                                            
                                                                                                                                
DAVID SHAFTEL identified  himself as an attorney who  works in the                                                              
estate  and  trust arena  and  a  member  of attorneys  and  trust                                                              
officers who  have worked to  improve estate statutes  since 1997.                                                              
He testified in support of SB 298.                                                                                              
                                                                                                                                
STEVE GREER identified  himself as an attorney  whose practice was                                                              
limited to  estate and trust work.  He testified in support  of SB                                                              
298.                                                                                                                            
                                                                                                                                
9:43:39 AM                                                                                                                    
JONATHON BLATTMACHR,  Attorney,  said although he  is a  member of                                                              
the  Alaska  Bar, he  practices  primarily  in  New York.  He  was                                                              
involved in  the development of  the Alaska trust  legislation and                                                              
said it  was a pro-consumer  bill. He testified  in support  of SB                                                              
298.                                                                                                                            
                                                                                                                                
CHAIR SEEKINS closed public testimony.                                                                                          
                                                                                                                                
SENATOR GRETCHEN  GUESS asked  Ms. Chapman  to walk the  committee                                                              
through how Section 11 would work.                                                                                              
                                                                                                                                
MS. CHAPMAN  said Section 11 was  designed to parallel  the claims                                                              
procedure reviews  for probates when there is  an estate involved.                                                              
An  irrevocable  trust  doesn't   go  through  the  court  probate                                                              
process and  there has  been uncertainty  regarding how  creditors                                                              
can assert claims against the revocable trusts.                                                                                 
                                                                                                                                
When the settlor  dies, the trustee can publish  notice similar to                                                              
the notice published  for an estate. That notice has  a four month                                                              
statute of limitations  and it adopts the probate  procedures that                                                              
are contained in  AS 13.16.450-525. They also can  file a petition                                                              
with the superior  court for the determination of  claims if there                                                              
are any issues regarding those claims.                                                                                          
                                                                                                                                
She said:                                                                                                                       
     So  what happens  is you  file  a public  notice in  the                                                                   
     newspaper.  Claims come in  from creditors. The  trustee                                                                   
     can  either allow  them  or deny  them  pursuant to  the                                                                   
     probate code.  If a claim is disallowed then  we have to                                                                   
     give  them additional  notice and allow  them the  right                                                                   
     to  petition the  court for  determination and  validity                                                                   
     of  the  claim. If  there  are  no  claims or  if  we've                                                                   
     resolved  all   claims  within  four  months,   then  no                                                                   
     further claims  can be asserted against the  assets of a                                                                   
     revocable  trust just  as that happens  with an  estate,                                                                   
     and  then   the  assets  can   be  distributed   to  the                                                                   
     beneficiaries  knowing that all  claims of the  deceased                                                                   
     have been satisfied.                                                                                                       
                                                                                                                                
9:47:41 AM                                                                                                                    
SENATOR  CHARLIE  HUGGINS  related  an anecdote  about  a  probate                                                              
judge in  Georgia who  used his  position to  accumulate a  lot of                                                              
land. He  asked her whether  there was  a liability in  Alaska for                                                              
that scenario to happen.                                                                                                        
                                                                                                                                
MS.  CHAPMAN said  she  did not  believe  Alaska  runs that  risk.                                                              
Other  than Anchorage,  the state  does not  have probate  judges.                                                              
The  courts do  not  oversee the  administration  of the  estates;                                                              
they are there only as needed for resolving disputes.                                                                           
                                                                                                                                
9:49:47 AM                                                                                                                    
SENATOR   HUGGINS  moved   CSSB  298(JUD)   from  committee   with                                                              
individual recommendations  and attached fiscal notes.  Hearing no                                                              
objections, the motion carried.                                                                                                 
                                                                                                                                
9:50:10 AM                                                                                                                    
                                                                                                                                
              HB 318-LIMITATION ON EMINENT DOMAIN                                                                           
                                                                                                                                
9:54:28 AM                                                                                                                    
CHAIR  RALPH SEEKINS  announced  CSHB  318(FIN) am  to  be up  for                                                              
consideration.                                                                                                                  
                                                                                                                                
CRAIG JOHNSON,  Staff to Representative Lesil  McGuire, introduced                                                              
the bill  and said  it resolved  around a  policy call  of whether                                                              
the state  should allow  private property to  be transferred  to a                                                              
private  individual  for  economic   gain.  Also,  should  eminent                                                              
domain be  allowed to take someone's  private home so  that others                                                              
might recreate, he  asked. He referred to Kelo versus  City of New                                                              
London where  the city captured  forty homes and  transferred them                                                              
to an  economical development  project and  the property  ended up                                                              
being a parking  lot. This created outrage across  the country and                                                              
to date  more than  forty pieces  of legislation  has entered  the                                                              
federal system  regarding eminent  domain. The  bill that  has the                                                              
most  support  says  that  any state  or  municipality  that  uses                                                              
eminent  domain to  take private  property for  private gain  will                                                              
lose their economic development money for a period of two years.                                                                
                                                                                                                                
More  than thirty  states are  in  the process  of addressing  the                                                              
issue through legislation  and the sponsor of the  bill would like                                                              
to ensure the same thing could not happen in Alaska.                                                                            
                                                                                                                                
9:57:02 AM                                                                                                                    
MR. JOHNSON said  he has discovered through research  that some of                                                              
the properties taken through eminent domain were second-                                                                        
generation  homes that  were in  a viable  neighborhood. The  bill                                                              
creates a  definition for the word  "home." The sponsor  of HB 318                                                              
intends  to  protect  Alaskan's  homes as  much  as  possible.  He                                                              
prepared the  committee that the  testimony they would  hear would                                                              
not  be totally  supportive  and he  conceded  that it  was not  a                                                              
"perfect bill."                                                                                                                 
                                                                                                                                
9:59:34 AM                                                                                                                    
MR. JOHNSON  stated that  many attorneys have  looked at  the bill                                                              
as well  as state departments,  the Realtors Association,  utility                                                              
companies,  the railroads,  and  some oil  companies. The  current                                                              
version represents  a balance  from the  suggestions and  concerns                                                              
of many different entities.                                                                                                     
                                                                                                                                
10:02:26 AM                                                                                                                   
SENATOR CHARLIE  HUGGINS asked  Mr. Johnson  the type  of feedback                                                              
they are receiving regarding the trail system in Anchorage.                                                                     
                                                                                                                                
MR. JOHNSON  said they have heard  a lot of support  regarding the                                                              
trail  system,  mainly  from  the  city  assembly  who  passed  an                                                              
ordinance  against  the taking  of  personal property.  The  basic                                                              
premise of  the bill is that a  person's home is their  castle and                                                              
that the least the government can do is protect it.                                                                             
                                                                                                                                
10:05:56 AM                                                                                                                   
SENATOR HUGGINS  asked for  clarification  whether the bill  would                                                              
impact traditional trails.                                                                                                      
                                                                                                                                
MR.  JOHNSON  said  access  to   hunting  and  fishing  trails  is                                                              
specifically protected in the bill.                                                                                             
                                                                                                                                
SENATOR HOLLIS  FRENCH said  most projects  have many  aspects and                                                              
as an example,  someday there will  be a large development  on the                                                              
south  side of  Mount  McKinley  to allow  people  more access  to                                                              
Denali National  Park. That  will have a  huge economic  impact on                                                              
the area.  He asked Mr.  Johnson how he  proposes to  separate the                                                              
recreational  aspect of  a new hotel  and road  from the  economic                                                              
development aspects.  He said property  could be taken to  build a                                                              
railroad  because that would  fall into  economic development  but                                                              
some projects are large-scale and are mixed.                                                                                    
                                                                                                                                
MR. JOHNSON  said that example  wouldn't come under  consideration                                                              
because that is  federal land and the bill only  addresses private                                                              
property.                                                                                                                       
                                                                                                                                
SENATOR FRENCH  countered there was a  lot of private land  on the                                                              
south side of Denali  off of the Petersville Road  that would fall                                                              
under the restriction if the bill were too tightly crafted.                                                                     
                                                                                                                                
MR. JOHNSON  said the bill allows  for access to trails  and roads                                                              
and  does not  affect a  developed road  system. If  a borough  or                                                              
munipality  wants to  take private  land  and sell  it to  another                                                              
private individual  it would be  prohibited. If they want  to keep                                                              
it for their  own use, such  as infrastructure, then it  would not                                                              
be protected  under the bill.  If they  want to sell  private land                                                              
to  a developer  of a  lodge,  they would  have  trouble doing  so                                                              
under the bill.                                                                                                                 
                                                                                                                                
10:09:52 AM                                                                                                                   
SENATOR FRENCH  said ultimately the  judge would make the  call of                                                              
whether the  eminent domain taking  of someone's private  land was                                                              
for  economic development  or  not. He  felt  that it  would be  a                                                              
difficult process and subject to interpretation.                                                                                
                                                                                                                                
MR. JOHNSON  agreed that  the judge  would make the  determination                                                              
because  by  definition, eminent  domain  is  a court  action.  He                                                              
noted  that only  one percent  of the  land in Alaska  is held  in                                                              
private hands.                                                                                                                  
                                                                                                                                
SENATOR GUESS  asked Mr.  Johnson to  explain the instances  where                                                              
local government  could impose local  control. She  questioned the                                                              
reason he  said that  the bill would  not affect the  Municipality                                                              
of Anchorage.                                                                                                                   
                                                                                                                                
10:12:22 AM                                                                                                                   
MR. JOHNSON  responded ordinances  that are more  restrictive tend                                                              
to trump state laws.                                                                                                            
                                                                                                                                
SENATOR GUESS asked  the reason for adding "fiber  optic lines" on                                                              
page 3 line 8.                                                                                                                  
                                                                                                                                
MR. JOHNSON said  it was done at the request of  a House Judiciary                                                              
Standing Committee  member as an  attempt to plan for  the future.                                                              
If a  cable company has  a right-of-way and  they need to  use the                                                              
land for  fiber optics  infrastructure, they  wanted to  make sure                                                              
that scenario was covered.                                                                                                      
                                                                                                                                
SENATOR GUESS  asked Mr.  Johnson to  explain the third  exemption                                                              
on page 4.                                                                                                                      
                                                                                                                                
MR.  JOHNSON  said  that  is directly  out  of  the  Alaska  State                                                              
Constitution  that guarantees  the right  to access of  resources.                                                              
He  asked to  have a  representative  from the  Department of  Law                                                              
explain the reason.                                                                                                             
                                                                                                                                
PETER PUTZIER,  Senior Assistant  Attorney General,  Department of                                                              
Law (DOL), said  the language comes from Article 8,  Section 18 of                                                              
the Alaska  State Constitution.  The reason  for the exception  is                                                              
to avoid  any argument that  the bill in  some way  conflicts with                                                              
the Constitution.                                                                                                               
                                                                                                                                
10:14:43 AM                                                                                                                   
SENATOR  GUESS  asked  whether  she  reads  it  correctly  that  a                                                              
private home could be taken to access resources.                                                                                
                                                                                                                                
MR.  PUTZIER   explained  the  way   the  Constitution   reads  is                                                              
proceedings in eminent  domain may be undertaken  for private ways                                                              
of  necessity  to  permit  essential   access  for  extraction  or                                                              
utilization of resources. The bill uses the exact same language.                                                                
                                                                                                                                
SENATOR  THERRIAULT asked  Mr. Putzier  to speak  about the  fifth                                                              
exemption.                                                                                                                      
                                                                                                                                
MR. JOHNSON said  it was brought as a concern that  in a case such                                                              
as  an  oil  lease,  the  state  could  take  back  the  lease  if                                                              
absolutely  necessary.  That was  put  in as  a  request from  the                                                              
Department of Natural Resources.                                                                                                
                                                                                                                                
SENATOR GENE THERRIAULT  asked whether the state,  through eminent                                                              
domain would  actually take  back the lease  or whether  the state                                                              
would  take the  resource  under  the lease  and  pay fair  market                                                              
value for it.                                                                                                                   
                                                                                                                                
CHAIR  SEEKINS said  it would  appear  that the  state would  take                                                              
back the surface use of the land.                                                                                               
                                                                                                                                
MR.  PUTZIER said  he  understood  the idea  was  to preserve  the                                                              
right to  take back  the property. There  would be interplay  with                                                              
existing lease  rights and,  he said, it  would be an  interesting                                                              
exercise  of eminent  domain. It  is  theoretically possible  that                                                              
the property  could be taken  back if the  consensus was  that the                                                              
property wasn't used productively.                                                                                              
                                                                                                                                
10:18:47 AM                                                                                                                   
CHAIR  SEEKINS   asked  whether  the  property  would   include  a                                                              
subsurface estate.                                                                                                              
                                                                                                                                
MR. PUTZIER said that was his understanding.                                                                                    
                                                                                                                                
SENATOR  THERRIAULT asked  whether  the definition  of  "property"                                                              
was the  acreage or  the resource.  He also  asked whether  anyone                                                              
could potentially take the resource without taking the acreage.                                                                 
                                                                                                                                
MR.  PUTZIER said  he  did  not think  the  state  could take  the                                                              
resource without paying for the value of the resource.                                                                          
                                                                                                                                
SENATOR GUESS referred  to page 4 line 8 and asked  the reason for                                                              
the phrase "common carrier."                                                                                                    
                                                                                                                                
10:20:31 AM                                                                                                                   
MR. PUTZIER said  the language was in response  to similar federal                                                              
legislation so that  Alaska would be in conformity.  The intent is                                                              
to cover something like public bus systems, for example.                                                                        
                                                                                                                                
SENATOR  GUESS clarified  that under  the  definition of  economic                                                              
development, it means "for profit."                                                                                             
                                                                                                                                
10:21:48 AM                                                                                                                   
SENATOR   FRENCH  observed   there   was  nothing   in  the   bill                                                              
prohibiting  the state  from offering  large amounts  of money  to                                                              
entice landowners to sell.                                                                                                      
                                                                                                                                
MR. PUTZIER said that is absolutely correct.                                                                                    
                                                                                                                                
MR. JOHNSON added  there was also an escape clause  in the case of                                                              
a "hold  out"  that would  allow the  Legislature to  step in  and                                                              
determine whether  a situation was  an appropriate use  of eminent                                                              
domain.                                                                                                                         
                                                                                                                                
SENATOR  FRENCH   referred  to  page  5  and   the  definition  of                                                              
"recreational  facility  or  project."  He  posed  a  hypothetical                                                              
situation of a  small community where thousands of  people use the                                                              
small  boat  harbor  and  the  city  determined  the  harbor  must                                                              
expand.  He asked  how  that situation  would  be  handled if  the                                                              
harbor expansion would be within 250 feet of a residence.                                                                       
                                                                                                                                
10:24:17 AM                                                                                                                   
MR.  JOHNSON  said the  city  would  probably offer  the  resident                                                              
owner  additional  money for  the  property  although  if it  were                                                              
identified to be  a large economic project, a  judge could justify                                                              
the taking of the property.                                                                                                     
                                                                                                                                
SENATOR FRENCH  asked Mr. Johnson  the reason for  not identifying                                                              
"boat  launch" in  the bill.  He  speculated there  would be  more                                                              
incidences  of  that occurring  than  any  issue with  small  boat                                                              
harbors.                                                                                                                        
                                                                                                                                
MR. JOHNSON said  there was no reason. The language  came from the                                                              
Department of Natural  Resources (DNR) and the  Department of Fish                                                              
and Game (DFG).                                                                                                                 
                                                                                                                                
10:28:46 AM                                                                                                                   
CHAIR  SEEKINS asked  Mr. Putzier  the  reason the  bill uses  the                                                              
words "personal property" instead of "private property."                                                                        
                                                                                                                                
MR. PUTZIER  said "personal property"  is generally  considered an                                                              
automobile  or something  like  a  swing set.  "Private  property"                                                              
restricts  the language  to "real  property" that  could be  taken                                                              
with eminent domain.                                                                                                            
                                                                                                                                
CHAIR  SEEKINS  asked the  reason  for  using the  word  "personal                                                              
residence" versus "private residence."                                                                                          
                                                                                                                                
MR. PUTZIER responded either phrase could be used. The                                                                          
definition of residence is difficult and there is no model even                                                                 
in other states.                                                                                                                
                                                                                                                                
CHAIR SEEKINS asked how the residence is considered in the case                                                                 
of someone owning a home in a family trust.                                                                                     
                                                                                                                                
MR. PUTZIER said it would depend on how it flows through the                                                                    
definitions in Section 3 subparagraphs (A-C).                                                                                   
                                                                                                                                
10:31:30 AM                                                                                                                   
CHAIR SEEKINS held the bill in committee.                                                                                       
                                                                                                                                
There being no further business to come before the committee,                                                                   
Chair Seekins adjourned the meeting at 10:34:19 AM.                                                                           
                                                                                                                                

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