HB 391 - DISSOLVED MUNICIPALITIES/SUCCESSION Number 096 TOM WRIGHT, Staff to Representative Ivan Ivan testified regarding HB 391, an act related to dissolved municipalities. After discussing with Margie Vandor from the Department of Law, who had been in contact with someone from the Department of Community and Regional Affairs, both of these entities agreed that it didn't make a difference if the language in this legislation should read "shall" or "may" in relation to the state being obligated to assume responsibility for an entity chooses dissolution. MR. WRIGHT then referred to a letter sent by the Alaska Rural Electric Cooperative Association, Inc. (ARECA) which he hadn't yet been able to read. The committee stood at ease until everyone had a chance to review it. MR. WRIGHT made note of the second area of concern regarding the Local Boundary Commission (LBC) reviewing debts and liabilities prior to transferring them. These both have to be placed into consideration before the dissolution results. He then referred to Rick Elliott on line from the Department of Community & Regional who was available to answer questions which Representative Green asked about subsurface and surface land rights. Number 365 RICK ELLIOTT, Municipal Land Trustee, Department of Community & Regional Affairs, Division of Municipal & Regional Assistance outlined for the committee that there were four ways which a city might acquire land. They may acquire land from the Federal Town Site Program, or possibly from municipal entitlement. The municipality could purchase land, assume it through donation or condemnation or lastly, by 14 (c) (3) conveyances. If property is conveyed under this latter provision to an entity, the only right which is transferred is the surface rights, there wouldn't be any subsurface rights attached. MR. ELLIOTT went on to note if property was acquired under municipal entitlement, the state reserves the mineral estate rights also. Under the other two categories, there could be possible mineral interests attached. The federal government typically conveys all rights to property unless they've determined that the land is valuable and they would reserve these interests. Conceivably, there could be situations where land is transferred with subsurface rights as well. After discussing these scenarios with the Department of Law, they agreed that a stipulation in the quit claim deed should be included to reserve the mineral estate if any, to the state. This would take care of this problem. Mr. Elliot said that this could be accomplished through a standard provision in the deed. Number 600 REPRESENTATIVE CON BUNDE noted for the record that it was his intent that this subsurface provision should made part of the standard deed even though it wouldn't be made a part of this legislation as a precautionary step. He then made a motion to move CSHB 391 (CRA) from the House Judiciary Committee with individual recommendations and attached fiscal note. Hearing no objections, it was so moved.