Legislature(1999 - 2000)

04/10/2000 03:20 PM RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
                   SENATE RESOURCES COMMITTEE                                                                                 
                         April 10, 2000                                                                                         
                            3:20 p.m.                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Rick Halford, Chairman                                                                                                  
Senator Robin Taylor, Vice Chairman                                                                                             
Senator Pete Kelly                                                                                                              
Senator Jerry Mackie                                                                                                            
Senator Lyda Green                                                                                                              
Senator Georgianna Lincoln                                                                                                      
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Sean Parnell                                                                                                            
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
CS FOR HOUSE BILL NO. 304(FIN) am                                                                                               
"An Act  relating to issuance  and sale  of revenue bonds  to fund                                                              
drinking  water  projects, to  the  Alaska  clean water  fund,  to                                                              
creation  of an  Alaska  clean water  administrative  fund and  an                                                              
Alaska drinking water  administrative fund, to fees  to be charged                                                              
in connection  with loans  made from the  Alaska clean  water fund                                                              
and the  Alaska drinking water fund,  and to clarification  of the                                                              
character and permissible uses of  the Alaska drinking water fund;                                                              
amending Rule  3, Alaska Rules  of Civil Procedure;  and providing                                                              
for an effective date."                                                                                                         
     -HEARD AND HELD                                                                                                            
                                                                                                                                
HOUSE BILL NO. 429                                                                                                              
"An  Act extending  the  termination date  for  the vessel  permit                                                              
moratoria  for the Bering  Sea Korean  hair crab  fishery and  the                                                              
weathervane  scallop  fishery;  and  providing  for  an  effective                                                              
date."                                                                                                                          
     -MOVED HB 429 OUT OF COMMITTEE                                                                                             
                                                                                                                                
SENATE BILL NO. 252                                                                                                             
"An Act relating to certain state rights-of-way."                                                                               
     -MOVED CSSB 252(RES) OUT OF COMMITTEE                                                                                      
                                                                                                                                
PREVIOUS SENATE COMMITTEE ACTION                                                                                              
                                                                                                                                
HB 304 - No previous Senate action.                                                                                             
                                                                                                                                
HB 429 - No previous Senate action.                                                                                             
                                                                                                                                
SB 252 - See Resources minutes dated 2/18/00.                                                                                   
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
Mr. Dan Easton, Director                                                                                                        
Division of Facility Construction and Operation                                                                                 
Department of Environmental Conservation                                                                                        
400 Willoughby                                                                                                                  
Juneau, AK  99081-1795                                                                                                          
POSITION STATEMENT: Presented HB 304 for the Administration                                                                   
                                                                                                                                
Mr. Mike Burns                                                                                                                  
Municipal Grants and Lands                                                                                                      
Division of Facility Construction and Operation                                                                                 
Department of Environmental Conservation                                                                                        
400 Willoughby                                                                                                                  
Juneau, AK  99081-1795                                                                                                          
POSITION STATEMENT:  Answered questions regarding HB 304                                                                      
                                                                                                                                
Mr. Deven Mitchell                                                                                                              
Treasury Division                                                                                                               
Department of Revenue                                                                                                           
PO Box 110405                                                                                                                   
Juneau, AK  99811-0405                                                                                                          
POSITION STATEMENT:  Answered questions regarding HB 304                                                                      
                                                                                                                                
Mr. Craig Tillery                                                                                                               
Assistant Attorney General                                                                                                      
Department of Law                                                                                                               
1031 W 4th Ave., Suite 200                                                                                                      
Anchorage, AK  99501-1994                                                                                                       
POSITION STATEMENT:  Answered questions regarding HB 304                                                                      
                                                                                                                                
Dave Soulak, City Manager                                                                                                       
City of Wrangell                                                                                                                
PO Box 531                                                                                                                      
Wrangell, AK  99929                                                                                                             
POSITION STATEMENT: Supports HB 304                                                                                           
                                                                                                                                
Bruce Jones, Director                                                                                                           
Division of Public Works                                                                                                        
City of Petersburg                                                                                                              
PO Box 329                                                                                                                      
Petersburg, AK  99833                                                                                                           
POSITION STATEMENT: Supports HB 304                                                                                           
                                                                                                                                
Bob Loeffler, Director                                                                                                          
Division of Mining, Land and Water                                                                                              
Department of Natural Resources                                                                                                 
3601 C St.                                                                                                                      
Anchorage, AK  99503-5935                                                                                                       
POSITION  STATEMENT:    Opposed to  specific  provisions  in  CSSB                                                            
252(RES)                                                                                                                        
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
TAPE 00-22, SIDE A                                                                                                            
Number 001                                                                                                                      
                                                                                                                                
CHAIRMAN HALFORD called the Senate  Resources Committee meeting to                                                            
order at  3:20 p.m.   Present were  Senators Lincoln,  Pete Kelly,                                                              
Green,  Taylor and  Chairman  Halford.   The  first  bill to  come                                                              
before the committee was HB 304.                                                                                                
                                                                                                                                
           HB 304-CLEAN WATER FUND/DRINKING WATER FUND                                                                      
                                                                                                                                
MR. DAN EASTON,  Director of Facility Construction  and Operations                                                              
for the Department  of Environmental Conservation  (DEC), gave the                                                              
following overview of  HB 304.  He noted Mike Burns  of DEC, Deven                                                              
Mitchell  of  the  Department  of   Revenue,  and  Craig  Tillery,                                                              
Assistant  Attorney   General,  were  also  available   to  answer                                                              
questions.    HB 304  pertains  to  DEC's  two low  interest  loan                                                              
programs to  construct drinking water  and wastewater  projects in                                                              
communities.  HB 304 provides DEC  with the same bonding authority                                                              
for both funds;  it currently has bonding authority  for the clean                                                              
water fund  only.  Second,  HB 304 provides  DEC with a  long term                                                              
method to pay  program operating costs from the loan  fund so that                                                              
DEC does  not have to  rely on general  funds.  Third,  the Senate                                                              
Finance  Committee   substitute  added   a  provision   to  expand                                                              
eligibility  for the  loan programs  to include  certain types  of                                                              
privately owned water and sewer utilities.                                                                                      
                                                                                                                                
MR.  EASTON  explained that  every  year  DEC  is eligible  for  a                                                              
federal grant that must be matched  with State money in a ratio of                                                              
5  to 1.   Each  loan program  gets about  $7.5 to  $8 million  of                                                              
federal money and  $1.5 million from the general  fund. That money                                                              
is loaned to communities on a reimbursement  basis and communities                                                              
repay the  loans with  interest.   The balance  of the funds  also                                                              
earn investment interest.                                                                                                       
                                                                                                                                
MR. EASTON  stated that  HB 304 is a  cost-saving measure.  DEC is                                                              
requesting bonding  authority so  that in the  future, if  the EPA                                                              
grants cease,  it will have  the authority  to sell bonds  and put                                                              
the  money in  the loan  programs.   In  the  short term,  bonding                                                              
authority will give  DEC the option of using bond  proceeds as the                                                              
State  match portion  and  to retire  the  bond indebtedness  with                                                              
interest earned on the $1.5 million  general fund amount.  DEC has                                                              
bonding authority  for the  clean water fund  so it will  use that                                                              
method for the FY 2001 capital budget.   If HB 304 is enacted, DEC                                                              
could do  the same  for the  drinking water  fund beginning  in FY                                                              
2002.                                                                                                                           
                                                                                                                                
CHAIRMAN HALFORD asked if DEC's investments  are in the tax exempt                                                              
market or the taxable market.                                                                                                   
                                                                                                                                
MR. MIKE BURNS replied that he believes they are all tax exempt.                                                                
                                                                                                                                
CHAIRMAN  HALFORD   asked  if   DEC  can   earn  enough   in  that                                                              
differential to cover the operating costs of the programs.                                                                      
                                                                                                                                
MR. DEVON  MITCHELL replied  that the loans  that are  made within                                                              
the fund are loaned at a subsidized rate to municipalities.                                                                     
                                                                                                                                
CHAIRMAN HALFORD  clarified that DEC  is going to sell  tax exempt                                                              
bonds so  it will  get the benefit  of the  tax exemption  and the                                                              
rate on the  bonds to come up  with the State's share.   Also, DEC                                                              
will  have money  in  that  account that  it  will  invest in  the                                                              
market.  He  asked if that investment  can be invested  to get the                                                              
highest  possible  rate  or  whether   there  are  vigorous  rules                                                              
governing how that tax exempt money can be invested.                                                                            
                                                                                                                                
MR.  MITCHELL answered  the  arbitrage rules  would  apply so  DEC                                                              
could  not exceed  the  yield it  was  paying on  the  bonds.   He                                                              
explained that DEC is contemplating  paying off the money obtained                                                              
through bonding  immediately.  That would allow  interest earnings                                                              
within the  fund to  be used as  the State  match for the  federal                                                              
receipts.                                                                                                                       
                                                                                                                                
CHAIRMAN HALFORD asked if DEC will  be going to the bond market to                                                              
get the  match for the  federal funds but  as soon as  the federal                                                              
funds are  received, DEC  will use existing  money to pay  off the                                                              
bond.                                                                                                                           
                                                                                                                                
MR. MITCHELL said that is correct.                                                                                              
                                                                                                                                
MR.  EASTON  added that  the  rules  about  these loan  funds  are                                                              
prescribed  in federal  law and are  designed  to keep the  states                                                              
from using  the funds for anything  other than drinking  water and                                                              
waste water  projects.   Once money  is put in  the fund,  it must                                                              
stay in the fund or be recirculated  as loans to communities.  One                                                              
exception  to that  rule is  a provision  that allows  the use  of                                                              
interest  earned on the  fund to  retire bond  debt.  The  federal                                                              
government included  that provision so  that the states  could use                                                              
bonding mechanisms to capitalize their loan funds.                                                                              
                                                                                                                                
Number 550                                                                                                                      
                                                                                                                                
CHAIRMAN HALFORD  said these  funds have grown  by the  amount the                                                              
State has  appropriated annually.  He  asked if the State  will no                                                              
longer  be  appropriating  money   once  DEC  goes  to  a  bonding                                                              
mechanism.                                                                                                                      
                                                                                                                                
MR. EASTON said that is correct.                                                                                                
                                                                                                                                
CHAIRMAN HALFORD surmised  that the growth rate of  the funds will                                                              
stop.                                                                                                                           
                                                                                                                                
MR. EASTON said  that DEC has projected the growth  rate will slow                                                              
down by about two percent.                                                                                                      
                                                                                                                                
MR. BURNS explained  the rate will be a little  higher because the                                                              
funds will  continue  to grow with  federal grants  that DEC  will                                                              
receive each year plus the interest received from loans.                                                                        
                                                                                                                                
MR. EASTON added  DEC has projected that over the  next ten years,                                                              
this mechanism  will take about two  percent of the growth  out of                                                              
the fund.                                                                                                                       
                                                                                                                                
CHAIRMAN HALFORD indicated  the growth based on  the State's share                                                              
of the  match will  be lost but  not the  growth from the  federal                                                              
share in the overall capitalization.                                                                                            
                                                                                                                                
SENATOR PETE  KELLY asked  if the current  rules of the  loan fund                                                              
require the State match to be from general fund dollars.                                                                        
                                                                                                                                
MR. EASTON said that is correct.                                                                                                
                                                                                                                                
SENATOR TAYLOR  asked if an additional  benefit of HB 304  will be                                                              
that personnel costs for the program  will be shifted out of DEC's                                                              
budget and funded with proceeds from that account.                                                                              
                                                                                                                                
MR. EASTON replied  that actually, personnel are  currently funded                                                              
out  of  a portion  of  the  federal  grant,  so  as long  as  DEC                                                              
continues to  get the federal grant,  it can continue to  fund its                                                              
personnel.  The  problem  is  that   the  federal  grant  for  the                                                              
wastewater program  will stop in  2003 and for the  drinking water                                                              
program in  2008.  The  second purpose  of this legislation  is to                                                              
give DEC a contingency  plan to use when the  federal grant stops.                                                              
HB 304  will allow  DEC to split  the repayment  string.    HB 304                                                              
sets  up an administrative  fund   for  each loan  fund.  A  small                                                              
portion of  the community repayment  funds will be  deposited into                                                              
an  income  account  in  the administrative  account.    DEC  will                                                              
continue  to request  that  capital funds  be  appropriated to  an                                                              
operating  account every  year and  then it would  ask that  those                                                              
funds be  transferred  to DEC's operating  budget  to be used  for                                                              
personnel costs.                                                                                                                
                                                                                                                                
SENATOR MACKIE asked  if the source of the money  will be from the                                                              
loan program.                                                                                                                   
                                                                                                                                
MR. EASTON said basically, yes.   He explained if a portion of the                                                              
repayment  was not split  off, it  could not  be used for  program                                                              
operating costs.   No general  funds will  be used to  support the                                                              
program.                                                                                                                        
                                                                                                                                
CHAIRMAN  HALFORD  asked  Mr.  Easton  to  elaborate  on  the  new                                                              
entities that will be eligible to participate.                                                                                  
                                                                                                                                
MR. EASTON explained  that the House Finance  Committee substitute                                                              
made eligible,  for both loan programs, privately  owned utilities                                                              
that are  certified and economically  regulated by  the Regulatory                                                              
Commission  of  Alaska  (RCA).   By  state  law,  privately  owned                                                              
utilities  would be  eligible for  both drinking  water and  waste                                                              
water  loans.    Under  federal law  however,  they  will  not  be                                                              
eligible  for waste  water loans.    The bill  contains a  delayed                                                              
effective date of two years to generate  revenues to deal with the                                                              
additional costs and  to develop regulations.   Beginning FY 2002,                                                              
DEC will be able  to make loans to privately  owned, certified and                                                              
economically regulated drinking water utilities.                                                                                
                                                                                                                                
Number 870                                                                                                                      
                                                                                                                                
MR. MITCHELL noted  that one concern he heard  about participation                                                              
by private utilities relates to the  tax exempt status of any bond                                                              
issuance that  might occur with  the long term  borrowing concept.                                                              
If private  participation within the  pool exceeds ten  percent, a                                                              
tax question would  arise and tax exempt bonds could  no longer be                                                              
issued.  He indicated that problem is "down the road."                                                                          
                                                                                                                                
CHAIRMAN HALFORD asked  if there is a distinction  between private                                                              
for-profit and private non-profit entities.                                                                                     
                                                                                                                                
MR. EASTON  said that no distinction  is made in HB 304  but he is                                                              
not aware of whether RCA makes that distinction.                                                                                
                                                                                                                                
CHAIRMAN  HALFORD  asked  if  DEC  uses  all  of  the  money  made                                                              
available each year.                                                                                                            
                                                                                                                                
MR. EASTON said it does.                                                                                                        
                                                                                                                                
CHAIRMAN  HALFORD  expressed  concern   about  private  for-profit                                                              
utilities  competing  in a  government-run  system.   He  wondered                                                              
about adding  a non-profit  requirement  to the private  utilities                                                              
provision to provide some level of protection.                                                                                  
                                                                                                                                
CHAIRMAN HALFORD took public testimony.                                                                                         
                                                                                                                                
MR. DAVE SOULAK, the City Manager  of the City of Wrangell, stated                                                              
support for HB  304 because it provides more economical  loans for                                                              
communities.   Both the clean water  and the drinking  water funds                                                              
will  be self  supporting  by  the year  2002  and  will save  the                                                              
general  fund  over $3  million  per  year. These  programs  allow                                                              
communities  to  save  time  and  money.    DEC's  programs  offer                                                              
communities loans  at two percent  less than conventional  funding                                                              
sources and, with  passage of HB 304, three percent.   Communities                                                              
can easily  explain to DEC  personnel their operational  costs and                                                              
maintenance systems  which are difficult  to explain  to personnel                                                              
at  conventional financing  institutions.   HB 304  will create  a                                                              
win-win situation:  the State  will save $3  million for  the next                                                              
two  years  and  lower interest  rates  will  provide  savings  to                                                              
communities.                                                                                                                    
                                                                                                                                
MR.  BRUCE  JONES, the  Public  Works  Director  for the  City  of                                                              
Petersburg, stated  that Petersburg  is very interested  in seeing                                                              
HB 304 pass.  Petersburg has two  loan agreements with DEC.  If HB                                                              
304  passes,  the   lower  interest  rate  will   save  Petersburg                                                              
approximately  $35,000  per year.    He agrees  that  HB 304  will                                                              
create a win-win situation.                                                                                                     
                                                                                                                                
CHAIRMAN  HALFORD asked  if the small  communities have  expressed                                                              
concern about allowing  private for-profit entities  to compete in                                                              
this program.                                                                                                                   
                                                                                                                                
Number 1267                                                                                                                     
                                                                                                                                
MR. JONES replied  he supports giving private  utilities access to                                                              
the loan funds  because the purpose of the program  is to preserve                                                              
public health.   His only concern  is that the  private for-profit                                                              
entities  be required to  be regulated  by the  RCA and  that they                                                              
compete on a level playing field.                                                                                               
                                                                                                                                
MR. SOULAK commented  that all funds have been  granted this year.                                                              
He feels  it is incumbent  upon the  State to help  municipalities                                                              
which are not for-profit.  For-profit  utilities provide dividends                                                              
to their shareholders.                                                                                                          
                                                                                                                                
CHAIRMAN HALFORD asked  what level of subsidy  flows through these                                                              
programs.                                                                                                                       
                                                                                                                                
Number 1353                                                                                                                     
                                                                                                                                
MR. EASTON  said the interest rate  on the loans is  currently 4.1                                                              
percent, which  is 75 percent of  the municipal bond index,  so it                                                              
is three-quarters of  what a city would pay if it  sold bonds.  In                                                              
addition, cities do not have to pay the assorted bonding costs.                                                                 
                                                                                                                                
CHAIRMAN  HALFORD   said,  in  that  case,  he   suspects  private                                                              
utilities will use this program.                                                                                                
                                                                                                                                
MR. EASTON said  Alaska currently regulates about  22 economically                                                              
regulated and certified private utilities.   DEC does not expect a                                                              
huge run on the loan funds and, in  fact, the loan funds have done                                                              
well  and are  getting  bigger.   Some  communities  are leery  of                                                              
sharing  the pie,  but  DEC thinks  that  economic regulation  and                                                              
certification  will  force  for-profit  entities  to pass  on  any                                                              
savings  realized   through  the  low-interest  programs   to  the                                                              
customers  through the  rate structure.   DEC  also discussed  the                                                              
fact that  some privately owned utilities  may pose a  higher risk                                                              
than municipalities,  and they may  take more time and  energy, so                                                              
the bill contains  a provision that allows DEC  to apportion costs                                                              
so  that  municipalities  pay  a  lower  interest  rate  than  the                                                              
privately owned utilities.                                                                                                      
                                                                                                                                
CHAIRMAN HALFORD asked if DEC could  provide a State cost-of-funds                                                              
analysis.   If HB  304 can  pass on a  benefit at  no cost  to the                                                              
State, some concerns will be alleviated.   He said he was thinking                                                              
the bill  could contain  a provision  that prohibits the  interest                                                              
rate to  private entities from being  lower than the  overall cost                                                              
of funds  to the State.   He questioned  whether the  State should                                                              
privatize  the  subsidy  for for-profit  corporations  if  private                                                              
utilities  are  in  competition   with  municipalities  and  local                                                              
governments.                                                                                                                    
                                                                                                                                
Number 1594                                                                                                                     
                                                                                                                                
MR. EASTON pointed  out that DEC sees a real  benefit to improving                                                              
drinking water  quality and a  fairly sizeable number  of Alaska's                                                              
population  is served by  private drinking  water utilities.   DEC                                                              
feels  that expanding  the  eligibility  will result  in  improved                                                              
drinking water.                                                                                                                 
                                                                                                                                
SENATOR  TAYLOR  suggested  adding  a provision  that  limits  the                                                              
subsidy   to private utilities  so that, although  the competition                                                              
is for the same  pot of funds, the private utilities  will have to                                                              
pay  more to  play.    He thought  the  lower interest  rate  will                                                              
provide  a huge incentive  for private  utilities to  participate.                                                              
He  suggested specifying  in the  bill that  a different  interest                                                              
rate  will apply  to private  for-profit  utilities, possibly  100                                                              
percent of whatever amount the municipal bond bank sells at.                                                                    
                                                                                                                                
CHAIRMAN HALFORD added that a higher  interest rate will also make                                                              
the fund  grow faster.   He asked Mr.  Easton to prepare  language                                                              
for a possible amendment and announced he would hold the bill.                                                                  
                                                                                                                                
         HB 429-MORATORIA: HAIR CRAB & SCALLOP FISHERIES                                                                    
                                                                                                                                
CHAIRMAN  HALFORD informed  committee members  that HB 429  simply                                                              
extends the  moratoria on  the Hair  Crab and Weathervane  Scallop                                                              
fisheries.  HB  429 does not address the question  of creating new                                                              
transferable permits; it maintains  the status quo.  He noted that                                                              
he is opposed  to creating new  transferable permits as  they will                                                              
create artificial  value that will  destroy the economics  of some                                                              
fisheries.                                                                                                                      
                                                                                                                                
There being no  public testimony, SENATOR MACKIE moved  HB 429 and                                                              
its accompanying  zero fiscal note from committee  with individual                                                              
recommendations.  There being no objection, the motion carried.                                                                 
                                                                                                                                
               SB 252-RS 2477 STATE RIGHTS-OF-WAY                                                                           
                                                                                                                                
CHAIRMAN HALFORD  noted the committee  has held one hearing  on SB                                                              
252 and that  a committee substitute (CS) has  been proposed which                                                              
is substantially shorter  than the original bill.   The CS deletes                                                              
the entire listing and allows the  Department of Natural Resources                                                              
(DNR) to add to  its list.  The most significant  change to the CS                                                              
is a  provision that  suspends, at the  request of a  municipality                                                              
with  platting authority,  the requirement  to  record parcels  of                                                              
land of less than 41 acres.  The  result of that provision will be                                                              
that  the 40  acre parcels  that many  municipalities disposed  of                                                              
will not  be recorded.   The CS does  not remove the  existence or                                                              
non-existence  of  RS  2477s.   It  also  suspends  the  recording                                                              
requirement  in  situations  where  a  municipality  has  platting                                                              
authority and alternative access  and has smaller parcels on which                                                              
it is difficult to locate an unsurveyed RS 2477.                                                                                
                                                                                                                                
SENATOR MACKIE moved to change the  number "40" to "41" on line 6,                                                              
page 2  and to adopt  the CS (Version  1 GS2004\H) as  the working                                                              
document of the  committee.  There being no objection,  the motion                                                              
carried.                                                                                                                        
                                                                                                                                
Number 1909                                                                                                                     
                                                                                                                                
CHAIRMAN HALFORD proposed amending the title to read,                                                                           
                                                                                                                                
     "An Act  relating to listing,  survey and mapping of  RS 2477                                                              
     rights-of-way,   maintaining  records   concerning  RS   2477                                                              
     rights- of-way,  and suspending the recording  requirement on                                                              
     parcels of  less than 41  acres until surveyed,  if requested                                                              
     by a municipality with platting authority."                                                                                
                                                                                                                                
SENATOR TAYLOR  moved the title  change as a conceptual  amendment                                                              
to allow the legal drafters to craft the appropriate language.                                                                  
                                                                                                                                
There being no objection, CHAIRMAN  HALFORD announced a conceptual                                                              
title change was adopted.                                                                                                       
                                                                                                                                
CHAIRMAN HALFORD took teleconference testimony.                                                                                 
                                                                                                                                
MR. BOB  LOEFFLER, Director  of the Division  of Mining,  Land and                                                              
Water, DNR,  made the  following comments.   DNR believes  that RS                                                              
2477s  on private  property  should  be  recorded so  that  future                                                              
purchasers  of that property  have notice  that an encumbrance  on                                                              
the  title exists.    DNR is  very  concerned,  however, with  the                                                              
provision in SB 252 requiring it  to record encumbrances in places                                                              
where none  exists.  The record  over the years shows  that people                                                              
do not want  an encumbrance recorded  on a title when in  fact the                                                              
RS 2477  does not pass  through their  property.  DNR  can support                                                              
the  requirement   to   record  within   a  municipality   if  the                                                              
municipality does not object, but  outside of municipalities there                                                              
are many  small lots, and given  DNR's current level of  data, DNR                                                              
is  not  exactly sure  where  the  trails  are.   Recording  those                                                              
parcels will be unfair to the private  property owners.  DNR hoped                                                              
the bill would not  require it to record parcels  of less than 160                                                              
or 40 acres unless it can verify  that the trail goes through that                                                              
parcel.                                                                                                                         
                                                                                                                                
MR.  LOEFFLER  also  informed  committee  members  that  the  bill                                                              
contains a deadline  of one year for trails listed  in legislation                                                              
which is  over one year  old, therefore  the deadline  has already                                                              
passed.   In addition,  eliminating  the 12 trails  from the  bill                                                              
that do not meet the requirements  of a RS 2477 may lead people to                                                              
think they are  authorized to trespass.  He said  his main concern                                                              
is  the provision  that  requires  DNR to  record  trails when  it                                                              
cannot verify that those trails exist.                                                                                          
                                                                                                                                
In  response to  Mr. Loeffler's  concerns,  CHAIRMAN HALFORD  said                                                              
with regard  to the time lines, the  bill does not amend  the time                                                              
lines in existing  law; those time lines were not  followed by DNR                                                              
last year.   Regarding  DNR's main concern,  the long  term survey                                                              
costs,  those costs  could amount  to $100 million,  so the  short                                                              
term answer is  to accurately use GPS and other  location systems.                                                              
Use of those systems will prevent  parcels of any significant size                                                              
from being  recorded on  the wrong  pieces of  property.   He said                                                              
that  although questions  remain  about small  parcels outside  of                                                              
municipalities,  he does  not  know how  to  resolve that  without                                                              
losing the notification provisions  of the bill.  He repeated that                                                              
the bill  does not  create or  extinguish any  rights.   It merely                                                              
provides notice  to the public in  the best way possible  short of                                                              
spending $100 million.                                                                                                          
                                                                                                                                
MR. LOEFFLER stated that regarding  the use of GPS or other short-                                                              
cut technologies  to determine  where trails  are with  respect to                                                              
property boundaries, the more creative  DNR can be, the better off                                                              
everyone  will be.   He said  he agrees  on a philosophical  level                                                              
with what Chairman  Halford is saying but he believes  it is wrong                                                              
to  record   on  people's  property   until  DNR  knows   that  an                                                              
encumbrance exists.                                                                                                             
                                                                                                                                
CHAIRMAN  HALFORD remarked  that the  requirement to  record on  a                                                              
parcel  that is  not on the  trail will  force someone  to do  the                                                              
research  to prove otherwise.   At  least a  potential buyer  will                                                              
know that research needs to be done.                                                                                            
                                                                                                                                
SENATOR MACKIE asked if DNR supports the changes in the CS.                                                                     
                                                                                                                                
Number 2219                                                                                                                     
                                                                                                                                
MR.  LOEFFLER replied  the only  provision that  DNR is  concerned                                                              
about  is the  one that  requires it  to record  on small  parcels                                                              
outside of municipalities.                                                                                                      
                                                                                                                                
CHAIRMAN HALFORD said that requirement is in existing law.                                                                      
                                                                                                                                
MR. LOEFFLER said that is correct.                                                                                              
                                                                                                                                
SENATOR TAYLOR asked  Mr. Loeffler if he supports  the specific CS                                                              
before the committee  which does not require DNR  to record on any                                                              
parcels smaller than 40 acres.                                                                                                  
                                                                                                                                
MR. LOEFFLER remarked  that the previous version  was neutral with                                                              
respect  to  whether   a  parcel  was  inside  or   outside  of  a                                                              
municipality.   DNR does not like  the provision that  requires it                                                              
to record parcels outside of a municipality  but the other changes                                                              
in the CS are of much less concern.                                                                                             
                                                                                                                                
CHAIRMAN  HALFORD  said the  issue  is  the obligation  of  notice                                                              
versus the  potential of giving a  person a notice  of encumbrance                                                              
that will  require that  individual to  prove it  is on  the wrong                                                              
piece of  ground.  That action  might be damaging to  the person's                                                              
emotional well being  but he does not know what the  answer is. He                                                              
noted  the  issue deals  with  conflicting  values that  are  both                                                              
legitimate.                                                                                                                     
                                                                                                                                
SENATOR TAYLOR  said the problem  would be resolved had  the State                                                              
had an  ongoing program  of surveying  RS 2477s  and fighting  for                                                              
them.  Now, none of this will be  resolved until DNR uses a little                                                              
common sense  in the way it manages  State lands, even  if it just                                                              
deals with one RS 2477 at a time.                                                                                               
                                                                                                                                
CHAIRMAN HALFORD noted this is a  Senate bill.  He suggested,  "If                                                              
we took  out the provision  that said the  40 acres in  the title,                                                              
not  in the  bill,  but that  the  41 acre  line  only applies  to                                                              
municipalities with  platting authority, our bill  would still say                                                              
that it applies inside municipalities  with platting authority but                                                              
the Administration could make their  pitch to try to carry that to                                                              
the  unorganized   areas  or  the  smallest   communities  without                                                              
platting authority to  the other body.  I don't know  if there's a                                                              
-  it's not  an area  where  there's an  absolute  right or  wrong                                                              
because you are  dealing with people on both sides  that have very                                                              
legitimate concerns."                                                                                                           
                                                                                                                                
SENATOR MACKIE said a case can be made either way.                                                                              
                                                                                                                                
CHAIRMAN HALFORD said he would not  object to backing away from at                                                              
least that part  of the title and letting the bill  go through the                                                              
process to  see what the  collective wisdom  of both houses  is on                                                              
that question.                                                                                                                  
                                                                                                                                
SENATORS GREEN and MACKIE felt that  would be a reasoned approach.                                                              
                                                                                                                                
TAPE 00-22, SIDE B                                                                                                              
                                                                                                                                
SENATOR MACKIE  asked Mr. Loeffler  his opinion of  the Chairman's                                                              
suggestion.                                                                                                                     
                                                                                                                                
MR. LOEFFLER  said he would  appreciate that opportunity  and that                                                              
he  does understand  that there  are legitimate  concerns on  both                                                              
sides of the issue.                                                                                                             
                                                                                                                                
SENATOR  MACKIE moved  to delete  the  words, "if  requested by  a                                                              
municipality with platting authority."                                                                                          
                                                                                                                                
SENATOR LINCOLN asked for clarification.                                                                                        
                                                                                                                                
CHAIRMAN HALFORD explained that the  text of the bill would remain                                                              
the same but the title would be amended  to delete the phrase, "if                                                              
requested by a municipality with  platting authority" to allow the                                                              
House to debate that question and make that change.                                                                             
                                                                                                                                
CHAIRMAN  HALFORD noted  without objection,  the conceptual  title                                                              
was amended.                                                                                                                    
                                                                                                                                
SENATOR LINCOLN  asked Mr. Loeffler  if he feels that  language is                                                              
better.                                                                                                                         
                                                                                                                                
MR. LOEFFLER said he does.                                                                                                      
                                                                                                                                
SENATOR  TAYLOR  moved CSSB  252(RES)  to  the next  committee  of                                                              
referral  with   individual  recommendations.    There   being  no                                                              
objection, the motion carried.                                                                                                  
                                                                                                                                
With no further business to come before the committee, CHAIRMAN                                                                 
HALFORD adjourned the meeting at 4:12 p.m.                                                                                      

Document Name Date/Time Subjects