Legislature(1995 - 1996)
02/21/1995 01:03 PM House CRA
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* first hearing in first committee of referral
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+ teleconferenced
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HCRA - 02/21/95 HB 154 - REGULATORY TAKING OF PRIVATE PROPERTY Number 031 REPRESENTATIVE VIC KOHRING, sponsor of HB 154, stated that "takings" did not refer to literally taking of property but referred to reclassifying property in such a way that it diminished the economic value of the property and restricted a private property owner from being able to develop that property as she/he deemed fit. With the "taking" it created an economic hardship for the property owner. One example of a "taking" involved a lake front lot on which a property owner wished to build his/her home, and a government entity came in and stipulated there would be a minimum property separation on the land. Representative Kohring stated this tended to render a lot of property useless in terms of its development capabilities creating diminished land value. This bill would provide a means of compensation for owners whose properties have been "taken." He stated the form of compensation referred to in the bill would be to adjust the assessed value of the land reducing the tax amount on that land. He then asked Craig Lyon, his legislative aide, to come forth and answer questions. Number 114 CRAIG LYON, Legislative Researcher for Representative Kohring, said he welcomed any comments or questions from committee members. Number 119 CO-CHAIR IVAN recognized the attendance of Representative Pete Kott. He also invited comments or questions from committee members. He then recognized Steve Van Sant on teleconference. Number 130 STEVE VAN SANT, State Assessor, Department of Community and Regional Affairs (DCRA), clarified that he wasn't testifying, but was available to answer any questions concerning assessments. Number 137 REPRESENTATIVE AL VEZEY questioned the use of the word "unconstitutionally." He said it took a Supreme Court determination to establish "unconstitutionally taken." Number 145 MR. LYON stated he was unsure as to how to answer the question. He said the bill referred to the current Alaska Constitution concerning private properties/eminent domain. Number 151 REPRESENTATIVE VEZEY wondered how an "unconstitutional taking" would be established. He said a regulatory agency and a property owner could not make that determination. Number 156 MR. LYON said that according to the State Constitution, if property was taken through regulatory means and the value of the property went down, then the owner needs to be justly compensated. He clarified eminent domain versus regulation, stating that with the first, the state essentially owns the title to the land and with the second, the owner still has the title to the land with little or no economic value to his land. Number 174 REPRESENTATIVE VEZEY stated the "power of eminent domain" is the power that the state has under the Constitution and has to be exercised in accordance with peoples' constitutional property rights. He said the stake in political subdivisions can certainly deprive people of their property without using eminent domain. Number 182 MR. LYON said the purpose of the bill is to stop the government from doing this. Number 184 REPRESENTATIVE VEZEY asked who was going to make the determination that the "taking" was "unconstitutionally" done? Number 188 MR. LYON again brought up the part of the bill that refers to the "taking" of private property without adequate compensation. The owner might still have the title, but the property would have lost all or most of its value to the owner. Upon the loss of value, then according to the bill, the owner can say his property has been "taken" and can claim compensation. Number 202 REPRESENTATIVE VEZEY still wanted to know how "unconstitutionally taken" was going to be determined. Number 204 MR. LYON wasn't sure unless it had to do with the guidelines the bill was asking the Department of Law to develop to show when those properties would be "taken" in an "unconstitutional" manner. Number 210 CO-CHAIR ALAN AUSTERMAN referred to page 2, line 12, and wanted to know why the government had to redo the "government takings guidelines" every year. He said this section would actually set the guidelines for what is "unconstitutional takings." Number 220 REPRESENTATIVE VEZEY said there was only one way you could establish whether something was "unconstitutional" and that is to take it to court and appeal it to the supreme court. He stated that the supreme court was the only body in the state with the power to interpret the Constitution. For those property owners wishing to claim their property as "unconstitutionally taken" they would have to go to court and be prepared to prevail or appeal a decision all the way to the supreme court. Number 234 MR. LYON said there is a large body of case law in the U.S. as well as in the state of Alaska relating to regulatory takings. Number 237 REPRESENTATIVE VEZEY stated this bill wouldn't accomplish anything not already in law because at the present moment, it is "unconstitutional" to deprive someone of his/her property rights without following the provisions in the Constitution. Number 246 MR. LYON said there was a three-part guideline that discussed regulatory takings and determined land value loss. He then introduced Mr. Steve Noey on teleconference. Number 256 STEVE NOEY, real estate agent, said that the supreme court in 1994 ruled that as long as you have some economic use left of the property, it was a regulatory taking. He stated this differs from a constitutional taking where if they take one quarter of your property and (indisc.) you of one dollar of value, you have compensation coming. The court ruling in 1994 basically says they can take all of the value except your ability to pitch a tent on it and you are not compensated. Mr. Noey stated that he was in favor of this law if it defines the fact that if you lose $1 in value of your property then you have the ability to seek compensation. Number 274 REPRESENTATIVE VEZEY asked Mr. Noey if he could summarize the U.S. Supreme Court ruling in 1994 regarding a case in South Carolina. Number 279 MR. NOEY said he was talking about the rulings within the state of Alaska. The DEC and CDEC vs. Noey wherein the State Supreme Court stated on a regulatory taking that as long as some economic use remains in the property, it wasn't a taking. The State Constitution and the U.S. Constitution say that if you lose $1 of value of the property or if you lose any of your property physically, then you are due just compensation. Number 295 REPRESENTATIVE VEZEY said the Constitution says only what the supreme court states it says and the Alaska Legislature can't pass a law that would change the supreme court ruling. Number 302 MR. NOEY said the state decisions differ from the decision they took from the U.S. Supreme Court. The U.S. Supreme Court decision on the same kind of regulatory taking stated that any intended use with the defect of taking, if you had loss of the intended use of the property, then you have defect of taking and compensation is due. The state made it more restrictive and said that as long as you had any economic use, there was no taking. Number 318 REPRESENTATIVE VEZEY was curious as to how constitutional and nonconstitutional could be established by statute. Number 326 MR. NOEY said the Fifth Amendment to the Constitution provides for just compensation. He stated this proposed law was to try to bring into performance, regulations that the Constitution stated back in 1776 and just say that regulatory takings are a fact and don't have to be a physical invasion. Number 339 REPRESENTATIVE VEZEY thanked Mr. Noey for his explanations. He questioned the intent of the bill and proposed statute. Number 345 CO-CHAIR IVAN recognized Sara Hannon from the Alaska Environmental Lobby and invited her to give her testimony. Number 349 SARA HANNON, lobbyist for the Alaska Environmental Lobby, Inc., stated that she agreed with Representative Vezey. She said the Constitution sets out some very basic parameters about what the government can and can't do to individual citizens. One of the things framed out in the Constitution, is that there is a judicial process to remedy a situation whether a person or a law is violated. The Alaska Environmental Lobby advocates that undue state regulation should be done away with. They are seeking efficiency of government purposes. She believed this bill is a facade to do something much further reaching. The regulations that impact our property rights the closest were zoning regulations. The ramifications for a bill that ask to amend the Constitution, Ms. Hannon believed needed to be seriously reviewed. She stated that she's opposed to HB 154 in its form and she didn't believe there was a justification for it. She did say that there were individual Alaskans who the judicial process has not served to remedy. She stated there needed to be the specific individual cases. She said that lawyers made millions of dollars arguing these cases and if the judicial process needed to be changed to give citizens a handle on being able to ask for other kinds of remedy, then change it. She believed the statutory changes were misleading. She said this bill was bad legislation and a bad statute and she hoped the committee would not give it serious consideration. Number 411 CO-CHAIR IVAN recognized the attendance by Representatives Elton and Mackie and HB 80 bill sponsor, Representative Jeannette James. He invited questions or comments from the committee members. REPRESENTATIVE KOTT asked whether or not there was anyone from the Department of Law to testify regarding HB 154. CO-CHAIR IVAN answered there wasn't anyone to testify and he wanted to hold the bill over and give Representative Vezey's questions an opportunity to be addressed by a Legal Services consultant. Number 430 REPRESENTATIVE VEZEY stated that he did have a number of questions due to his interest in this topic. He left the option open to the chairman in terms of what Co-Chair Ivan wanted to do with the bill, whether to pass it out to the Judiciary Committee, or to keep it further discussion. Number 434 CO-CHAIR IVAN said that he wished to keep the bill in the committee and work on it to ensure every concern is addressed.
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