04/13/2016 03:30 PM Senate RESOURCES
| Audio | Topic |
|---|---|
| Start | |
| HCR17 | |
| HB216 | |
| HB274 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 216 | TELECONFERENCED | |
| + | HB 274 | TELECONFERENCED | |
| + | HCR 17 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
SENATE RESOURCES STANDING COMMITTEE
April 13, 2016
3:32 p.m.
MEMBERS PRESENT
Senator Cathy Giessel, Chair
Senator Mia Costello, Vice Chair
Senator John Coghill
Senator Bert Stedman
Senator Bill Wielechowski
MEMBERS ABSENT
Senator Peter Micciche
Senator Bill Stoltze
COMMITTEE CALENDAR
CS FOR HOUSE CONCURRENT RESOLUTION NO. 17(TRA)
Supporting the aviation industry; and urging the governor to
make state-owned land available to the unmanned aircraft systems
industry for the management and operation of unmanned aircraft
systems and related research, manufacturing, testing, and
training.
- MOVED CSHCR 17(TRA) OUT OF COMMITTEE
COMMITTEE SUBSTITUTE FOR HOUSE BILL NO. 216(RES)
"An Act relating to obstruction or interference with a person's
free passage on or use of navigable water; and amending the
definition of 'navigable water' under the Alaska Land Act."
- HEARD & HELD
COMMITTEE SUBSTITUTE FOR HOUSE BILL NO. 274(RES)
"An Act relating to extensions of certain state land leases;
relating to the exchange of state land; and relating to the
definition of 'state land.'"
- MOVED CSHB 274(RES) OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: HCR 17
SHORT TITLE: SUPPORT AVIATION INDUSTRY; USE STATE LAND
SPONSOR(s): REPRESENTATIVE(s) HUGHES
01/29/16 (H) READ THE FIRST TIME - REFERRALS
01/29/16 (H) TRA
02/02/16 (H) TRA AT 1:00 PM CAPITOL 17
02/02/16 (H) Heard & Held
02/02/16 (H) MINUTE(TRA)
02/04/16 (H) TRA AT 1:00 PM CAPITOL 17
02/04/16 (H) Moved CSHCR 17(TRA) Out of Committee
02/04/16 (H) MINUTE(TRA)
03/15/16 (H) TRA AT 1:00 PM CAPITOL 17
03/15/16 (H) Moved CSHCR 17(TRA) Out of Committee
03/15/16 (H) MINUTE(TRA)
03/16/16 (H) TRA RPT CS(TRA) 5DP 1NR
03/16/16 (H) DP: NAGEAK, STUTES, CLAMAN, HUGHES,
FOSTER
03/16/16 (H) NR: ORTIZ
03/21/16 (H) TRANSMITTED TO (S)
03/21/16 (H) VERSION: CSHCR 17(TRA)
03/23/16 (S) READ THE FIRST TIME - REFERRALS
03/23/16 (S) TRA, RES
04/06/16 (S) TRA RPT 3DP 1NR
04/06/16 (S) DP: MICCICHE, EGAN, BISHOP
04/06/16 (S) NR: STEDMAN
04/06/16 (S) TRA AT 8:30 AM BUTROVICH 205
04/06/16 (S) Moved CSHCR 17(TRA) Out of Committee
04/06/16 (S) MINUTE(TRA)
04/11/16 (S) RES AT 3:30 PM BUTROVICH 205
04/11/16 (S) Scheduled but Not Heard
04/13/16 (S) RES AT 3:30 PM BUTROVICH 205
BILL: HB 216
SHORT TITLE: NAVIGABLE WATER; INTERFERENCE, DEFINITION
SPONSOR(s): REPRESENTATIVE(s) TALERICO
01/19/16 (H) PREFILE RELEASED 1/8/16
01/19/16 (H) READ THE FIRST TIME - REFERRALS
01/19/16 (H) RES
03/16/16 (H) RES AT 1:00 PM BARNES 124
03/16/16 (H) Heard & Held
03/16/16 (H) MINUTE(RES)
03/18/16 (H) RES AT 1:00 PM BARNES 124
03/18/16 (H) Moved CSHB 216(RES) Out of Committee
03/18/16 (H) MINUTE(RES)
03/21/16 (H) RES RPT CS(RES) 8DP 1NR
03/21/16 (H) DP: JOHNSON, HERRON, CHENAULT, OLSON,
TARR, SEATON, TALERICO, NAGEAK
03/21/16 (H) NR: JOSEPHSON
03/23/16 (H) TRANSMITTED TO (S)
03/23/16 (H) VERSION: CSHB 216(RES)
03/25/16 (S) READ THE FIRST TIME - REFERRALS
03/25/16 (S) RES
03/28/16 (S) RES AT 3:30 PM BUTROVICH 205
03/28/16 (S) Scheduled but Not Heard
04/11/16 (S) RES AT 3:30 PM BUTROVICH 205
04/11/16 (S) Scheduled but Not Heard
04/13/16 (S) RES AT 3:30 PM BUTROVICH 205
BILL: HB 274
SHORT TITLE: STATE LAND; EXCHANGES; LEASE EXTENSIONS
SPONSOR(s): REPRESENTATIVE(s) MUNOZ
01/22/16 (H) READ THE FIRST TIME - REFERRALS
01/22/16 (H) RES
02/08/16 (H) RES AT 1:00 PM BARNES 124
02/08/16 (H) -- MEETING CANCELED --
03/18/16 (H) RES AT 1:00 PM BARNES 124
03/18/16 (H) Heard & Held
03/18/16 (H) MINUTE(RES)
04/01/16 (H) RES AT 1:00 PM BARNES 124
04/01/16 (H) Moved CSHB 274(RES) Out of Committee
04/01/16 (H) MINUTE(RES)
04/04/16 (H) RES RPT CS(RES) 7DP 2NR
04/04/16 (H) DP: JOHNSON, HERRON, OLSON, SEATON,
CHENAULT, TALERICO, NAGEAK
04/04/16 (H) NR: JOSEPHSON, TARR
04/09/16 (H) TRANSMITTED TO (S)
04/09/16 (H) VERSION: CSHB 216(RES)
04/11/16 (S) READ THE FIRST TIME - REFERRALS
04/11/16 (S) RES
04/13/16 (S) RES AT 3:30 PM BUTROVICH 205
WITNESS REGISTER
GINGER BLAISDELL, staff to Representative Shelley Hughes
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Commented on HCR 17 for the sponsor.
REPRESENTATIVE HUGHS
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Sponsor of HCR 17.
REPRESENTATIVE DAVID TALERICO
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Sponsor of HB 216.
CHAD HUTCHINSON, staff to Senator John Coghill
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Commented on HB 216.
ED FOGELS, Deputy Commissioner
Department of Natural Resources (DNR)
Juneau, Alaska
POSITION STATEMENT: Commented on HB 216.
RICHARD BISHOP, representing himself
Fairbanks, Alaska
POSITION STATEMENT: Supported HB 216.
ROD ARNO, Executive Director
Alaska Outdoor Council
Juneau, Alaska
POSITION STATEMENT: Supported HB 216.
REPRESENTATIVE CATHY MUÑOZ
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Sponsor of HB 274.
CRYSTAL KOENEMAN, staff to Representative Muñoz
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Provided a sectional analysis of HB 274.
ALPHEUS BULLARD
Legislative Legal Services
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Answered questions on HB 274.
WYN MENEFEE, Deputy Director
Alaska Mental Health Trust Land Office
Department of Natural Resources (DNR)
Juneau, Alaska
POSITION STATEMENT: Answered questions on HB 274.
DOUG ISAACSON, General Manager
Minto Development Corporation
Fairbanks, Alaska
POSITION STATEMENT: Supported HB 274.
ACTION NARRATIVE
3:32:06 PM
CHAIR CATHY GIESSEL called the Senate Resources Standing
Committee meeting to order at 3:32 p.m. Present at the call to
order were Senators Stedman, Costello, Coghill, and Chair
Giessel.
HCR 17-SUPPORT AVIATION INDUSTRY; USE STATE LAND
3:32:44 PM
CHAIR GIESSEL announced consideration of HCR 17 [CSHCR 17(TRA)
was before the committee].
GINGER BLAISDELL, staff to Representative Shelley Hughes, Alaska
State Legislature, said this measure was brought to their
attention by the Unmanned Aircraft System's Task Force, because
one individual was able to secure a contract with the Department
of Natural Resources (DNR) to test his unmanned aircraft system
equipment by using state lands. The task force put this idea
together and HCR 17 is the result.
REPRESENTATIVE SHELLEY HUGHES, Alaska State Legislature, Juneau,
Alaska, sponsor of HCR 17, said the task force's top priority
has been safety and privacy, but they are also tasked with
promoting economic activities related to this industry and that
is what HCR 17 does.
She said Alaska has a lot of space, which is unique, and if
state land can be made available, industry could use it for
research testing, training, manufacturing and maintenance and
operations of the systems. She said this will be a multi-billion
industry and would be a good thing for the state. These are high
tech jobs and young people are very interested in this kind of
activity. It could open the door for some of them in the future.
3:36:27 PM
CHAIR GIESSEL commented that the University of Alaska, Fairbanks
(UAF) has the Poker Flats Research area where her son worked
developing the initial Unmanned Aircraft Program (UAP). He
counted walrus in the Aleutians with a little aircraft that
could fly over them without them being concerned at all, but if
a regular aircraft went over, even if it was higher, they all
jumped into the water. It has multiple uses and was also tested
on the TransAlaska Pipeline System (TAPS).
SENATOR COSTELLO thanked the sponsor for this resolution and
asked if she had run into any privacy issues or if there are any
privacy guidelines to oversee this industry.
REPRESENTATIVE HUGHES replied that privacy is always a topic on
their agenda and Alaska has statutes that do apply. Right now
they are working with law enforcement to create tools to deal
with situations if they don't already exist. It's tricky, but
she has a draft bill for next year. Congress is currently
looking at the FAA reauthorization bill and there is talk about
restricting states as to what they can do and whether they can
even specify unmanned aircraft systems in their statutes. It is
an evolving technology and she doesn't want to penalize this
industry specifically if laws are already on the books that will
work.
3:39:20 PM
She said concerns about privacy were expressed on the House
floor and a bill was passed a couple of years ago requiring
search warrants in conjunction with the use of drones. There
were attempts to put privacy language in this resolution, but
this bill is about economic opportunities, and another bill
would be a proper vehicle for that.
CHAIR GIESSEL opened public comment. Finding none, she closed
public testimony.
3:40:36 PM
SENATOR COSTELLO moved to report CSHCR 17(RES), version 29-
LS1327\E, from committee with individual recommendations and
attached zero fiscal note. There were no objections and it was
so ordered.
3:41:07 PM
At ease
HB 216-NAVIGABLE WATER; INTERFERENCE, DEFINITION
3:41:40 PM
CHAIR GIESSEL called the meeting back to order and announced
that consideration of HB 216. [CSHB 216(RES), labeled 29-
LS0995\N, was before the committee.]
REPRESENTATIVE DAVID TALERICO, Alaska State Legislature, sponsor
of HB 216, testified that this measure has to do with the
state's navigable waters. The Submerged Lands Act of 1953
recognized each state as holding the title for any submerged
land under a navigable waterway within its boundaries. This term
is defined in AS 38.05.965 (14), which specifies a number of
activities that can be conducted in a body of water in order to
deem the body as navigable. While the list of activities is
lengthy, there are a few omissions that HB 216 hopefully will
address.
He said the Submerged Lands Act, the Statehood Act, and the
Alaska National Interest Lands Conservation Act (ANILCA) have
provisions about the state's ability to use its waterways. He
takes this seriously because our waterways provide commerce for
some people and they provide recreation, exploration and
subsistence, as well. Waterways in several of his communities
are highways.
3:42:44 PM
SENATOR WIELECHOWSKI joined the committee.
REPRESENTATIVE TALERICO said he had conferred with the
Department of Natural Resources (DNR) about an unambiguous
definition, one that was a good enough so there would be no
ambiguity about where Alaska stands on its waterways He noted
that there was an amendment to consider.
3:44:39 PM
SENATOR COGHILL moved Amendment 1.
29-LS0995\N.1
Bullard
4/13/16
AMENDMENT 1
OFFERED IN THE SENATE BY SENATOR COGHILL
TO: CSHB 216(RES)
Page 2, line 7, following "season":
Insert ", whether in a frozen or liquid state,"
Page 2, lines 9 - 13:
Delete "harvesting of ice, state or federal
military training, landing and takeoff of aircraft,
operation of boats or other watercraft, hovercraft,
snow machines, all-terrain vehicles, and other
motorized or nonmotorized vehicles, storage of
vehicles, and [PUBLIC BOATING,] trapping, hunting
[WATERFOWL AND AQUATIC ANIMALS]"
Insert "landing and takeoff of aircraft, and
public boating, trapping, hunting waterfowl and
aquatic animals"
SENATOR COGHILL explained that this amendment would "slim down"
the definition, because of concerns that this definition would
actually make it tougher for land dispositions within Alaska. It
deletes the harvesting of ice and the nonmotorized vehicle
storage and inserts landing and takeoff of aircraft, public
boating, trapping, hunting, water fowl and aquatic animals. It
also says water is navigable whether it's in the frozen or
liquid state. He didn't want existing verbiage to create a
problem for Alaska on land disposals or create places where
people could hide things in case law.
SENATOR STEDMAN objected for discussion and clarification. He
liked the direction the amendment was going, but was concerned
about how it would affect the southern coastal regions of the
state. Some people who moved up here from the Lower 48 find
airplane noise objectionable, and it seems like more
restrictions have been put on airplanes for ingress and egress
to peoples' properties. One way to restrict them is by using
municipal planning ordinances. He wanted the "pecking order" to
be clear about how this statute would mesh with municipal and
city ordinances.
SENATOR COGHILL referenced Alaska's Public Trust Doctrine and
enjoyment of public waterways on public trust lands is pretty
significant. So, they want to make sure planes have access on
water and on frozen land. The language was meant to assure that
the Public Trust Doctrine was upheld without creating more
difficulties in disposal of public land in Alaska.
3:49:23 PM
SENATOR STEDMAN said to put a finer point on it, planning
departments or commissions take property rights away and it's a
very sensitive subject when municipalities start stripping
peoples' access rights. He wanted it clear what authority the
state has over municipalities with this statute change. He wants
to make it as difficult as possible for folks that showed up
fairly recently to get away from where they live to come here
and make it just like the place they left. He wanted a
conversation on that issue. Then he removed his objection to
adopting Amendment 1.
3:50:36 PM
CHAD HUTCHINSON, staff to Senator John Coghill, Alaska State
Legislature, said he had done research on this issue and there
are multiple definitions of navigable waters depending on
whether you are dealing with a federal or a state agency. For
instance, "navigable waters" has a separate definition as it
relates to the EPA and the Clean Water Act as opposed to what HB
216 is trying to do. There is a definition for "navigable
servitude" as it relates to the commerce clause when a new
channel is built, particularly as it pertains to the Coast Guard
and the military. There is a definition of "navigable waters"
under the Quiet Title Act, evidenced by the Sturgeon Case, and
whether the determination can be made in federal district court,
something the state has struggled with for years. Another case
in the year 2000 tried to assert jurisdiction under the federal
Quiet Title Act, and the federal court system basically said
because they hadn't made a determination as to navigability yet,
they could move to dismiss and the state would have to wait for
some sort of legislative change from Congress, which is what
they are attempting to do right now.
HB 216 references the state Public Trust Doctrine, which is
distinct from those other definitions. Every state's public
trust doctrine is different, he explained, but they have three
common elements: they handle commerce and focus on navigability
and on fisheries. Those are the three things that are held in
trust for the beneficiaries. The trustees are the legislative
branch and they make a determination as to what they consider to
be important to be held in trust for the public. In this case,
the existing statute says that float planes and aircraft are
important. The Public Trust Doctrine has multiple definitions
depending on what the state deems to be important: ie, cutting
ice, bathing, and swimming, on an open beach. The determination
has been made that there is a public interest in maintaining
some sort of access into remote areas of Alaska for float planes
and that is why it is included in the current definition.
MR. HUTCHINSON said expanding the Public Trust Doctrine too much
or adding multiple definitions can adversely affect private
property interests in the surrounding adjacent areas. For state
land disposals they have to fit into the statutory definition of
allowable uses. Depending on what region you are in in Alaska,
aircraft have a significant influence for just getting in and
out of a community. The amendment is balanced to assure the
adjacent private property owners' interest isn't damaged versus
the sponsor's intent of having some sort of analysis as it
relates to frozen water conditions.
SENATOR STEDMAN said his district doesn't have the ice issues
that people in the north have. When water freezes over here
people don't put skis on planes; they just don't fly. But they
do fly into bays to drop off and pick up people from the beach,
from their home on the water front, or from a public easement on
the beach. That type of ingress/egress is his concern in his
district. It is a very sensitive topic, because it infuriates
Alaskans when people come up here and want to shut down access
because they don't like propeller noise for three minutes. He
wants to protect the rights that Alaskans have to access their
property as much as absolutely possible and not be interfered
with by people paddling around in some "non-motorized gizmo." He
wanted a clearer definition of how this language change will
interact with that policy.
3:57:49 PM
SENATOR COGHILL said he totally agreed with Senator Stedman and
that is why the measure talks specifically about landing and
take-off of aircraft, public boating, trapping and hunting.
CHAIR GIESSEL, finding no further questions, invited the DNR to
testify.
3:58:16 PM
ED FOGELS, Deputy Commissioner, Department of Natural Resources
(DNR), said DNR deals with two navigability issues: one is
fighting for state ownership of lands under navigable waters.
They challenge the Bureau of Land Management any time a state
land parcel is conveyed to make sure that navigable waters are
identified, because those lands under navigable waters were
already state-owned at statehood. Therefore, they shouldn't be
part of Alaska's statehood land entitlement. He said HB 216
doesn't really affect that task, at all, because it focuses on
the state's definition of navigability. But in looking at this
bill, he saw perhaps some unintended consequences with impacts
on private property, but the amendment addresses those concerns.
SENATOR STEDMAN said he has had numerous conversations in his
office on this subject over the years. A lot of state leases
were transferred to most of the major Southeast communities
several years ago and the regulatory environment that the state
imposed was much more amenable to the public than when these
leases were turned over to the municipalities. A lot of people
were infuriated because property rights were inadvertently
stripped away, and that is where they are stuck today. He wanted
to know how this measure interacts on the municipal level with
potential removal of property rights folks have under the state
guidance.
MR. FOGELS answered that this bill with the amendment won't have
any impact on the status quo. If there is a body of water the
state believes is navigable today under current law this
amendment would ensure that definition would hold in all seasons
and even if the body of water is frozen. The actual water body
itself would still be accessible as it is today.
MR. FOGELS explained that the state definition of navigability
comes into play when the DNR conveys land to municipalities,
because it can't convey ownership of navigable waters. These
waters have to be identified and excluded from conveyance to the
municipalities. They are retained in state ownership and
easements would likely be reserved along those water bodies.
This bill won't change that in any way.
SENATOR STEDMAN gave him another example: Senator Wielechowski
wants to go trout fishing and grabs his fly rod and wants to be
picked up in front of his house or from a state easement; his
concern is the restriction that may be imposed on him to have a
plane come in and pick him up and take him trout fishing for the
day or load his family's camping gear in a Beaver and go to some
lake. This trend is very slow, but it is definitely in place,
and he wants state statute to be as tight as possible to block
it. "If they don't want to hear float planes, Southeast is not
the place to live," Senator Stedman exclaimed.
MR. FOGELS said this bill would not add further restrictions.
SENATOR STEDMAN said he recognizes that, but he wanted to know
if this bill interacts with any municipal ordinances when some
municipalities may not want airplane noise before 9 a.m. in
after 5 p.m.
4:05:22 PM
MR. FOGELS responded that the intent of the navigability
definition is to define where state ownership is among
municipal, private, and state lands, and it was beyond his level
of expertise to know if the state of Alaska and a municipality
disagree on how float planes should be regulated on a typical
pond. But typically, the state would defer to the local
government to manage that activity if push came to shove.
SENATOR STEDMAN removed his objection to adopting the amendment,
but he wanted the opportunity for his staff to work on the bill
for a day to make sure they leave no stone unturned to keep
property rights embedded with Alaskans who own the property.
SENATOR COSTELLO said she had identified a drafting error on
page 1, line 12, where the number should be 2. After some
discussion, it was decided that there was no error.
CHAIR GIESSEL opened public comment.
4:08:43 PM
RICHARD BISHOP, representing himself, Fairbanks, Alaska,
supported HB 216. One thing caught his attention on page 1, line
8:
Section 1(a)(1) authorized by law or regulation or by
a permit issued by a federal or [AGENCY AND A] state
agency;
He said the Sturgeon case has been very prominent in the news.
The Supreme Court told the Ninth Circuit Court to go back to the
drawing board and get it right. That promises ongoing court
deliberation over some period of time. The National Park Service
issued a news release saying this hadn't really changed anything
and that they would continue business as usual in administering
lands. That raises the question of what sort of regulations or
permits they may apply during the course of further court
deliberations on the question of the extent of their authority
over state navigable waters. He said it is a very dangerous
precedent to have state statute that says "authorized by...a
permit issued by the federal government." It would be
appropriate to qualify that as a "valid federal permit" or
simply leave reference to "federal permit" out. In political
gamesmanship in the legal arena it would be entirely
inappropriate for the state to tacitly concede that any federal
permit without qualification would be cause for restricting the
use of state navigable waters. Wording should be changed to
avoid that implication. Otherwise he supports the bill and the
amendment.
4:12:20 PM
ROD ARNO, Executive Director, Alaska Outdoor Council, Juneau,
Alaska, supported HB 216. He also supported Senator Coghill's
amendment. He had the same concerns as Mr. Bishop about having
some qualifier on the federal permitting.
CHAIR GIESSEL, finding no further testimony, closed public
comment on HB 216. Finding no further objection, she said
Amendment 1 is adopted.
SENATOR COGHILL asked the sponsor to respond to "authorized by
law or by a permit".
REPRESENTATIVE TALERICO said he talked about Alaska's potential
to develop hydroelectric projects in the future, and wanted to
"massage" a provision giving the state the ability to work with
the federal government on permitting those projects. He had
discussed inserting "valid" in front of "permit", but he was
open to suggestions. He shared Senator Stedman's sentiments and
would strengthen that language if possible.
4:15:39 PM
MR. HUTCHINSON said he talked with Mr. Bishop earlier today, and
the Sturgeon case in some respects is a slightly different issue
as it relates to state statute and the state Public Trust
Doctrine. The Sturgeon issue is on federal navigability on the
Nation River in the Yukon. It has been sent back to the Ninth
Circuit with instructions, but the actual specifics of the case
have not been determined. He understands the possible confusion,
which is worthy of further consideration.
CHAIR GIESSEL announced that she would hold HB 216 in committee
to allow the opportunity to work on it.
HB 274-STATE LAND; EXCHANGES; LEASE EXTENSIONS
4:17:13 PM
CHAIR GIESSEL announced consideration of HB 274 [CSHB 274(RES),
version 29-LS0234\N, was before the committee.]
REPRESENTATIVE CATHY MUÑOZ, Alaska State Legislature, Juneau,
Alaska, sponsor of HB 274 said about four or five years ago she
was contacted by a local non-profit who had been working for
many years on a potential land exchange with the State of
Alaska. The state wanted to acquire the trail land that leads
out to a state park that is on private property, and the owner
of the trail wanted a piece of nearby land to get better access
to their camp. Discussions to try to initiate and finalize this
land exchange began in early 2000.
REPRESENTATIVE MUNOZ said when she became involved she found a
number of inefficiencies in land exchange statute. Two sections
of code govern land exchanges; one is land exchanges with
municipalities, and that section of code works pretty well, and
the other is private land exchanges, which is very cumbersome
and almost impossible to finalize a successful land exchange
under.
The section of code that governs private land exchanges includes
private entities, the Mental Health Trust Authority, tribal
entities as well as the federal government. The last successful
land exchange under this section of code happened in 2006 near
Skagway where a piece of state land was exchanged for a piece of
federal land near Gustavus for the Falls Creek Hydroproject.
That took close to 20 years to finalize.
REPRESENTATIVE MUNOZ explained that the reason it takes so long
is because one needs to have exact value between the two
parcels, which is very difficult to achieve, and the fact that
the appraisal is only good for one year. So, after going through
an extensive public process, the best interest finding, three
public hearings, the surveying and the appraisal, at the end of
the one year the whole process has to start over because the
appraisal is only good for one year. Under this legislation the
best interest finding will continue, but instead of exact value,
it calls for approximate equal value. It has the same notice
provisions under AS 38.05.945 and best interest finding
provisions that are used for all oil and gas leases, timber
sales, and leasing of mineral land.
4:21:26 PM
HB 274 has language that affirms that a mineral estate can only
be executed consistent with the State Constitution or with
federal law. In particular the Statehood Act, Section (6)(i),
affirms that the state can only convey a mineral estate to the
federal government. Other language requires the exchange to go
before the legislature for review and approval if the exchange
has a value of $5 million or more.
REPRESENTATIVE MUNOZ summarized that the main changes in HB 274
are that the exchange procedures will follow AS 38.05.035(e) and
the notice provisions under AS 35.05.945. The one-year
limitation has been removed on the validity of an appraisal and
approximate equal value is used instead of exact value for the
potential exchanges.
4:22:59 PM
CHAIR GIESSEL asked for a sectional analysis.
4:23:07 PM
CRYSTAL KOENEMAN, staff to Representative Muñoz, Alaska State
Legislature, provided a sectional analysis of HB 274 as follows:
Section 1. Removes a reference in AS 38.05.030(c) to AS
38.05.090 which is repealed in sec. 13 of the bill.
Section 2. Adds two new subsections to AS 38.05.070. The first
subsection permits the Department of Natural Resources
(department) to extend certain existing land leases if it is in
the best interest of the state and necessary while the
department considers applications. The second subsection
provides that the extensions are not subject to AS 38.05.035(e)
and it requires public notice of a lease extension under the
section.
Section 3. Applies existing notice standards to state land
exchanges.
4:24:13 PM
Section 4. Clarifies that in AS 38.05 the terms "state land ''
and "land" include shoreland and tideland. It was suggested by
Legislative Legal Division as cleanup language.
Section 5. Amends AS 38.50.010 to add two new requirements: when
the director disposes of state land or an interest in state land
the disposal must be in the best interest of the state and the
director must provide notice under AS 38.05.945.
Section 6. Adds three new subsections to AS 38.50.010 that
establish procedures for the exchange of state land or an
interest in state land and requires legislative review of
exchanges valued at $5 million or more.
4:25:11 PM
Section 7. Removes a requirement that the director, when
negotiating a land exchange involving more than one party,
"consider only the land and other consideration which the state
would convey and receive if the exchange were executed."
Section 8. Removes an existing limitation in AS 38.50.050 that
was deemed by the Legislative Legal Division to not add anything
and references "significant public purpose" which is not defined
in statute nor is it used anywhere else and there is no case law
referencing it. It is clean up language clarifies that any
conveyances must be authorized by the Constitution of the State
of Alaska and by applicable federal law.
Section 9. Amends AS 38.50.070 to provide that, unless waived,
the appropriate state agency will continue to administer valid
existing rights in land, or interests in land, conveyed under AS
38.50 and that revenue derived from existing rights in the land,
or an interest in land, will continue to accrue to the state
until the land is conveyed under AS 38.50 .150
4:26:42 PM
Section 10. Changes the requirement that the director hold three
public hearings concerning the exchange of land valued at more
than $5,000,000 to a requirement that the director hold at least
two public meeting, one of which must be held in person in a
municipality close to the proposed land exchange.
Section 11. Conforms AS 38.50.140 to changes made in secs. 6 and
13 (repeal of AS 38.50.020). Makes de minimus editorial changes.
Section 12. Clarifies that in AS 38.50 the terms "state land ''
and "land" include shoreland and tideland and was recommended by
Legislative Legal.
4:27:39 PM
Section 13. Repeals AS 38.50.020, 38.50.040, 38.50.080(b),
38.50.090, 38.50.100, 38.50.110, 38.50.120(b), and 38.50.130.
She said an explanation was in their packets, but she would go
over those if that was the committee's will.
4:28:06 PM
SENATOR STEDMAN asked for clarification of references to
"submerged lands below mean low tide and tidelands up to mean
high tide" and "in-shoreland."
MS. KOENEMAN said that Alpheus Bullard from Legislative Legal
was on line to clarify.
SENATOR STEDMAN asked Mr. Bullard to define "shoreland,
tideland, and submerged land."
4:28:57 PM
ALPHEUS BULLARD, Legislative Legal, Alaska State Legislature,
Juneau, Alaska, answered that shoreland and tideland don't have
a specific definition in statute. These changes are included in
this bill to make all the provisions consistent. So, instead of
calling "shore or tide," now they say "shoreland and tideland."
The normal understanding of those words is that shoreland is
along the shore and tideland is land that is touched by the
tide.
SENATOR STEDMAN said he wanted some help from DNR, because he
thought there was a clear delineation of separate property
rights whether one is in the uplands or shoreland versus a
tideland versus submerged lands.
CHAIR GIESSEL said that could be done.
REPRESENTATIVE MUNOZ interrupted that that Ms. Koenaman would
read the definition into the record.
MS. KOENEMAN read from AS 38.05.965, subsection (23):
Shoreland means land belonging to the state, which is
covered by non-tidal water that is navigable under the
laws of the United States up to ordinary high water
mark as modified by accretion, erosion or election.
4:30:58 PM
SENATOR WIELECHOWSKI asked if "when it is in the best interest
of the state" on line 5 in section 5 is an appealable decision,
and if it is subject to a lawsuit and if there are any
recommendations on how the department is supposed to define what
is in the best interest of the state.
REPRESENTATIVE MUNOZ replied that the best interest finding is
necessary and is outlined in statute. That same finding is used
on all existing land lease deals with DNR. It is an appealable
decision. That was affirmed by Wyn Menefee, Deputy Director,
Alaska Mental Health Lands Trust, Department of Natural
Resources (DNR), who was also in the audience.
SENATOR WIELECHOWSKI said line 8 looks like a very significant
change, but he was told it is not. It says the director has the
right to dispose of state land or interest in land and then
language is added: including the land estate, the mineral estate
or both. And when they start talking about mineral estate that
means oil and gas, which triggers a lot of strong emotions in
this committee. He asked her to explain the rationale for
including mineral estate and to reassure him they are not giving
the director the ability to give away oil and gas rights to a
private individual.
REPRESENTATIVE MUNOZ replied that an exchange of a mineral
estate can only be conveyed by the state to the federal
government and the section 8 language is consistent with
existing statute. It says "exchanges must be pursuant to the
State Constitution and applicable federal law, which is the
Statehood Act, Section (6)(i), which requires the state not to
dispose of those interests to any entity other than the federal
government." However, the state can receive a mineral estate and
having that language is helpful in clarifying that.
SENATOR WIELECHOWSKI said it looks like language on page 3,
lines 10-14, deletes: "exchanges shall be for the purpose of
consolidating state land holdings, creating land ownership, and
use patterns, which will permit more effective administration of
the state public domain, facilitating the objectives of state
programs or other public purposes." He asked the rationale for
taking that out.
REPRESENTATIVE MUNOZ replied that language is considered
superfluous. The department is focusing on just five or six
categories, when in fact there might be a broader opportunity
which is covered through the best interest finding. The state
would not enter into an exchange unless it clearly was in the
state's best interest.
4:34:35 PM
SENATOR WIELECHOWSKI asked the rationale for the repealer in
section 13.38.50.080(b) that says:
The director in implementing the provisions of this
chapter may not alienate or agree not to exercise
selection rights granted to the state in the Alaska
Statehood Act or other applicable law authorizing the
state to select land or interest in land.
MS. KOENEMAN replied that the state has already selected all of
its land under the Alaska Statehood Act, and since it has no
further ability to select land, that subsection is no longer
necessary. She added that the state hasn't necessarily received
the selections.
CHAIR GIESSEL pointed out that it is actually explained on a
page in the document, which is on BASIS.
SENATOR WIELECHOWSKI asked for the rationale for removing AS
38.50.090 language on coordinating with other state agencies.
MS. KOENEMAN replied that language was removed, because there is
now reference to AS 38.05.035(e), which includes a requirement
for state agencies to provide a summary through public comments.
The department would collect those public comments from the
other agencies and work with the other departments on their
concerns. Basically, it ties back to another version of statute.
4:37:08 PM
WYN MENEFEE, Deputy Director, Alaska Mental Health Trust Land
Office, Department of Natural Resources (DNR), Juneau, Alaska,
said he was chief of operations for the Division of Mining, Land
and Water for 12.5 years and this issue is very important to DNR
as they have had "much trouble" getting exchanges done, because
of existing language.
Many needs are coming before them, he said, everything from
consolidation of land ownership and access to business
opportunities where a lease or an easement doesn't handle the
problem, and numerous people have been turned away.
He said the department disposes of a huge amount of state
interests through AS 38.05.035(e) decisions, which are
appealable and can be taken to court. If they do something that
is not in the best interest of the state, the public surely can
challenge them. The department needs a very supportable decision
if they are going to go through with an exchange, but they
believe that can be done with this modification.
SENATOR WIELECHOWSKI asked him to provide some exchanges he
would consider doing under this language that have not been
considered before.
MR. MENEFEE answered that there have been proposed exchanges
from native corporations and private individuals for purposes
that were wholly for their purposes and weren't in the interest
of the state, at all. Those were easy to turn away. But others
offer up something that would be very beneficial to the state,
for instance creating a landownership pattern or maybe a mineral
estate offering that would be good for miners to develop, or
maybe the state has been wanting to do work on some sort of
project and hasn't been able to without the land. He has seen
exchanges proposed for conservation purposes and development
purposes, but only a few have been successful.
He explained that because of the decision process in AS
38.05.133(e) the department has to describe why it is in the
best interest of the state to do an exchange. They have to
articulate the analysis of things they have considered and what
it will do for the state that is good.
SENATOR WIELECHOWSKI asked what deference the court would give
to the best interest finding.
MR. MENEFEE answered that there is a lot of case law on state
best interest, and the court does not replace its judgment for
the department's as long as it is not acting capriciously and
arbitrarily. They look at whether the statutes and regulations
have been followed and if a logical train of thought was used in
explaining why it is in the best interest of the state. The
courts have said they don't want to define "best interest,"
because it changes over time.
4:43:05 PM
SENATOR WIELECHOWSKI said this measure really is investing a
huge amount of power in the DNR director and commissioner, and
maybe it would be good and maybe not. The courts have very
little say about the arbitrary and capricious standard and it is
"extremely difficult" to overcome. He asked if opening up a
whole lot of land for exchanges is a big policy call.
MR. MENEFEE responded that he thinks there will be plenty of
opportunities for land exchanges. He didn't think it opens up
anything more grandiose than before other than the process is
cleaner. The department still must make sound defensible
decisions and the public can challenge their decisions. The
courts have told them numerous times when they have gone astray;
so he feels the system has a check and balance.
SENATOR WIELECHOWSKI said it doesn't appear that they are
changing any legal standards that a court would look at as
diminishing the public process.
4:45:18 PM
MR. MENEFEE agreed with that and added the only exception is
that "hearings" was changed to "meetings" in one section and it
went from three to two, the main reason being they would have to
go through the whole legislative process again on anything that
fits into that one area of the statute.
4:45:48 PM
DOUG ISAACSON, General Manager, Minto Development Corporation,
Fairbanks, Alaska, said he supported HB 274. He noted at least
three letters of support in their packets: one from his
president, Roxanne Frank, one from their parent corporation,
Seth-De-Ya-Ha Corporation, and one from Edna Riley, president of
the Board of Directors. There was also a letter of support from
Mike Kelly who is the COO of the Dinyea Corporation. They
support it, because it cleans up the process.
He appreciated Senator Wielechowski's question about it causing
a stampede, and his corporation in applying will have to prove
that it's a good idea for the state. When he contemplates doing
some development on the Steese Highway, he has his shareholders'
interest at heart, but he also has workforce development and
benefits to the local community in mind. But they aren't able to
use that as a consideration without the language in this bill.
They still have to meet high hurdles, but this will make the
process worth looking at.
4:48:16 PM
SENATOR WIELECHOWSKI said a new section is being added saying
that land or an interest in land exchange must be approximately
of equal value, and then it says the director may enter into an
exchange with a finding that the value of the property received
together with the value of other public benefit equals or
exceeds the value of the property relinquished by the state.
He surmised that some people will want to trade swamp land for
valuable state land and he wanted "some findings" on the record
about what "approximately equal value" means in terms of
protecting the citizens from that happening.
MR. MENEFEE replied the rationale behind going with "approximate
equal value" rather than "appraised fair market value only" is
that when you start taking "other considerations" into account,
the Universal Standards of Professional Appraisal Practice
(USPAP), which is used nationwide for coming up with fair market
value doesn't allow using "other considerations" in the
valuation.
For example, he said currently an exchange is happening at Point
Bridget and because of the survey an appraisal couldn't quite
get to an exact equal value. Two things could be done to resolve
the issue. It could be equalized with cash or one could say the
value is pretty close, because the state now has road access to
a state park, which it did not have before and the private land
owner could have shut down access to that park. People were
trespassing across it at all times to get to the state park, and
the question becomes is that public access valuable enough to
warrant covering the difference in value. The decision would
have to articulate that and then it would have to go before the
legislature.
SENATOR WIELECHOWSKI asked him to clarify when they have to get
legislative approval.
MR. MENEFEE replied for unequal values.
SENATOR WIELECHOWSKI asked if the value is unequal by $1, do
they still have come to the legislature for approval.
MR. MENEFEE replied because there was terminology about unequal
value in previous statute, regulations had clarified that it had
to be a small percentage.
4:52:45 PM
SENATOR WIELECHOWSKI asked how he would define "approximate
equal value."
MR. MENEFEE replied that regulations go through a public process
and they think that would be a good way to further define
"approximate equal value" if this measure passes. In his view
the intent is to always try to reach equal value, but in
thinking of "other considerations" it's hard to get to that
exact equal value. In the case of Point Bridget, because of the
way the subdivision went, it threw off the appraisal, making the
values a little off. So, in that case they would have to go
through another cycle of trying to do another subdivision plat
to make it equal. Maybe one could get close enough with $1000 to
$5000; it's hard to say, because if you are dealing with a small
parcel an unequal value is going to be a big deal, but for a
larger parcel that unequal value is a little bit more.
SENATOR WIELECHOWSKI said hypothetically someone has a piece of
swamp land that is worth $50,000 and it happens to be access to
a river where people want to go and fish - the Kenai River - and
they want to swap that for a half-million dollar parcel. The
director says that piece is only worth $100,000, but it has a
$400,000 approximately value to the public, because of the
access. So, they deem it to be of approximately equal value. The
court gives them broad deference in their decision. As he reads
it that wouldn't have to come before the legislature. Is that
correct?
4:55:15 PM
MR. MENEFEE replied that his hypothetical would come before the
legislature, because he would consider that an unequal value
land exchange. Approximate equal value gives them that
flexibility for when the exchange can't be made exact and that
is the flexibility they are looking for.
SENATOR WIELECHOWSKI countered that the statute they are passing
gives the director the ability to say approximate equal value,
but also the ability to include the value of other public
benefits in that consideration. So, could he not say we think
the value of access to this river is worth $450,000?
MR. MENEFEE replied for the department to feel secure with that,
they would have to be ready to go to court and uphold it. They
would have to say why they think the other benefit of that
access is worth that much in monetary terms. That could be in
lost opportunities where the department can say it knows it will
have to later buy that access for this much or they will lose
this opportunity that will make the state this many millions of
dollars. He would work to state the value in terms of money.
4:57:20 PM
SENATOR WIELECHOWSKI said he appreciated the dialogue and sees
where he is trying to get, but he is naturally suspicious about
a bad deal escaping legislative oversight.
MS. KOENEMAN closed by thanking the committee for considering
the bill.
SENATOR COGHILL moved to report CSHB 274(RES), version N, from
committee with individual recommendations and attached zero
fiscal note. There were no objections and it was so ordered.
4:58:50 PM
CHAIR GIESSEL finding no further business to come before the
committee, adjourned the Senate Resources Committee meeting at
4:58 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB274 Sponsor Statement Ver. N.pdf |
SRES 4/13/2016 3:30:00 PM |
HB 274 |
| HB274 Legislation Ver. N.PDF |
SRES 4/13/2016 3:30:00 PM |
HB 274 |
| HB 274 Explanation of Changes Version N.pdf |
SRES 4/13/2016 3:30:00 PM |
HB 274 |
| HB 274 Sectional Analysis Version N.pdf |
SRES 4/13/2016 3:30:00 PM |
HB 274 |
| HB274 Fiscal Note-DNR.PDF |
SRES 4/13/2016 3:30:00 PM |
HB 274 |
| HB274 Supporting Documents-Letters of Support-Dinyea 041216.pdf |
SRES 4/13/2016 3:30:00 PM |
HB 274 |
| HB274 Supporting Documents-Letters of Support-Minto 020316.pdf |
SRES 4/13/2016 3:30:00 PM |
HB 274 |
| HB274 Supporting Documents-Letters of Support-Seth-De-Ya-Ah 020316.pdf |
SRES 4/13/2016 3:30:00 PM |
HB 274 |
| HB274 Supporting Documents-Repealer Explanation.pdf |
SRES 4/13/2016 3:30:00 PM |
HB 274 |
| CSHB216(RES)-Amendment in SRES-Coghill-4-13-2016.PDF |
SRES 4/13/2016 3:30:00 PM |
HB 216 |
| HB274-Updated Fiscal Note-DNR-4-13-2016.pdf |
SRES 4/13/2016 3:30:00 PM |
HB 274 |
| CSHB216-Updated Fiscal Note-DNR-4-13-2016.pdf |
SRES 4/13/2016 3:30:00 PM |
HB 216 |