02/28/1996 02:22 PM House JUD

 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.