Legislature(1995 - 1996)
02/13/1995 08:07 AM House RES
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HRES - 02/13/95 HB 20 - RIGHTS IN TIDE/SUBMERGED LAND REPRESENTATIVE CARL MOSES, PRIME SPONSOR, stated there are two reasons he introduced HB 20. The Department of Natural Resources (DNR) leases are cumbersome, costly to obtain and the terms of the leases vary widely. He said it is difficult to obtain general obligation bonding without fee simple title or a 55 year lease on the land. He stressed HB 20 is a good bill and is supported by the Alaska Municipal League and the Association of Harbormasters and Port Administrators, Inc. He told committee members he would appreciate their support on HB 20. JOHN BAKER, ASSISTANT ATTORNEY GENERAL, NATURAL RESOURCES SECTION, DEPARTMENT OF LAW, testified via teleconference and stated he would comment on the effect of the public trust doctrine on conveyances authorized under HB 20. He said the public trust doctrine is a constitutional doctrine which was first announced by the U.S. Supreme Court holding that when a state enters the Union, it takes title to tidelands and submerged lands in trust for the people of the state for three basic purposes--navigation, commerce, and fishing--all in the context of access to and use of tidelands and submerged lands. MR. BAKER stated the Alaska Supreme Court has expressly adopted the public trust doctrine. In a 1988 case, the court held that the doctrine is inherent in the common use clause of the Alaska Constitution (Article VIII, Section 3). He said the Alaska Supreme Court ruled whereas conveyances remain subject to the public trust, members of the public cannot be excluded from pursuing public trust uses on that land because essentially there is an easement or a servitude placed on the land. He explained grantees of tidelands can still make use of the land but they may not make such use that would substantially impair use by the public. MR. BAKER said the standard is the tax holder can make such use of the property as it will not reasonably interfere with continuing access. He added they can make use of the land but they cannot prohibit, by any general attempt, to exclude the public or public trust uses. He stated DNR wants to ensure everyone is aware that conveyances authorized by HB 20 would remain subject to the public trust in the vast majority of cases. MR. BAKER stated there are some criteria under which a legislature may authorize conveyances free of the public trust in very narrow circumstances. The legislature has to clearly express that intent. He said under Section 38.05.825 (d) of HB 20, conveyances authorized by HB 20 are subject to restrictions required by law including AS 38.05.127 and specifically the public trust doctrine. He explained it is possible that future conveyances by DNR, authorized under HB 20, could be made free of the public trust but those conveyances would be in very limited circumstances. For example, there may be a conveyance of a small parcel for a specific public trust purpose. He noted that each conveyance will be looked at on a case by case basis. He pointed out if the court can construe a conveyance of tidelands or submerged lands as being subject to the public trust doctrine, it will construe it that way. Number 355 REPRESENTATIVE BARNES asked if a conveyance like this has ever been done before through statute. MR. BAKER replied there is an existing preference rights statute, AS 38.05.820, which for years has authorized conveyances under preference rights requiring the purchase of tide and submerged lands for a nominal fee. Generally, those have been based on prior occupancy of the tide and submerged lands at the time of statehood. He reiterated the legislature does have the authority to make this type of conveyance. He added the Alaska Supreme Court did find that conveyances under that statute are subject, in almost all cases, to the public trust doctrine. REPRESENTATIVE BARNES asked how much land the state has conveyed under the existing statute. MR. BAKER responded he did not know the answer. He said DNR could answer the question. Number 392 MOLLY SHERMAN, REPRESENTATIVE, ALASKA ENVIRONMENTAL LOBBY (AEL), stated AEL has serious concerns about HB 20. She said HB 20 contains a fatal flaw--it prohibits DNR from imposing any conditions on the conveyance of tide and submerged land other than those required by law. She noted deliberately or accidentally, HB 20 neglects to provide for reserving mineral rights to the state and prevents DNR from correcting the problem. What this means is that municipalities can get fee simple title to potentially very valuable tide and submerged lands that the state could lease for oil and gas in the future. She felt this might place the state's financial future in jeopardy via a loss of potential oil and gas revenues. MS. SHERMAN stated HB 20 requires DNR to convey any tide or submerged lands a municipality wants if four conditions are met. Under this method, a municipality could write a land use plan or amend an existing plan pursuant to this bill Section 1 (a)(3) and DNR must convey. She said in HB 20, under Section 1 conveyances, there is no return to the state, although state funds will be used to make the conveyances, nor any discretion on the state's part. She stressed there may not even be public notice, because without any dissection, it is not a discretionary decision. Therefore, no finding of whether the conveyance would be in the state's best interest could be made. She pointed out there would be little point or need in notifying and consulting the general public. MS. SHERMAN said Section 1 (b) of HB 20 would allow DNR to convey tide and submerged land out of state lands that have been designated by statute if the DNR commissioner finds that the municipalities proposed use is consistent or compatible with the purpose of the designation. She noted that designated lands include state parks, state wildlife refuges, and critical habitats, among others. Number 438 REPRESENTATIVE BARNES asked if the AEL has ever supported any oil and gas leases anywhere. MS. SHERMAN said she would be happy to find out. CO-CHAIRMAN GREEN asked Mr. Swanson to address the transfer of mineral interests with surface interests. RON SWANSON, DIRECTOR, DIVISION OF LAND, DNR, testified via teleconference and recalled that Representative Barnes had asked how much land had been conveyed under the former statute AS 38.05.820. He said to date, the department has conveyed 22,848 acres to various municipalities. He responded in regard to the other question, the department never envisioned conveying oil and gas to municipalities under AS 29.65 which is the municipal land act. The department only conveys the surface estate if the oil and gas has been obtained through state ownership pursuant to the statehood act. He noted if the committee wanted to make it more clear, an amendment could be made to the bill specifically stating the department has no intention of conveying subsurface estates. Number 482 WELLS WILLIAMS, PLANNING DIRECTOR, CITY AND BOROUGH OF SITKA, testified via teleconference and stated Sitka strongly supports HB 20. He said the reasons for HB 20 outlined in Representative Moses' sponsor statement are very clear and very succinct. He stressed the city has been pleased with the responsiveness which Mr. Swanson's department has given in the past several years. He felt the reality is however, the department does not have the time or the local knowledge to make local land use decisions. MR. WILLIAMS said since Sitka is going through a very broad based planning effort involving environmental groups and developing interests as well, the city is in a better position to make those decisions. He stressed HB 20 is also very important for other communities in Southeast Alaska. BOB JUETTNER, ADMINISTRATOR, ALEUTIANS EAST BOROUGH (AEB), testified via teleconference and stated AEB supports HB 20. He said HB 20 balances the public trust doctrine with community needs for tidelands development. He noted AEB feels HB 20 is an equitable piece of legislation and it corrects inequities that municipalities incorporated after 1964 have. He stated that original legislation was amended on the floor of the Senate and ruled out anybody but first class cities incorporated at that time. Yet, it still allows the first class cities incorporated, prior to 1964, to go out and manage uplands and to get the fee simple title to that tideland. MR. JUETTNER stated AEB wishes to keep the tidelands conveyance (indiscernible) as clean as possible with nothing other than what is currently in statute. He noted that what happens in tidelands leasing is the special conditions evoke general conditions that are imposed upon us (indiscernible) become more and more burdensome over time. He said the AEB is in the process of doing its municipal entitlement and has to hold the state harmless from plans it has had under their management, for contamination. He stressed these types of requirements go well beyond the intent of the original legislation and limits AEB's ability to move forward with the development of land. MR. JUETTNER felt HB 20 would be a good piece of legislation not only for the AEB but all coastal communities needing access to the ownership of tides and submerged lands. Number 563 CO-CHAIRMAN GREEN said there was a question raised that because submerged lands are state domain and that by transferring title absolute other than a lease, there might be some confusion. Referring to page 2, line 20, he wondered if the words "or sale" implies that the land would no longer be subject to state ownership. MR. SWANSON stated the DNR recommends the deletion of the words "or sale" because it is public trust land and the public trust doctrine. He said the department's concern is that if land is conveyed into private ownership by the municipality to a third person, while not necessarily violating the public trust doctrine at the time of the sale, may violate, by its use over time, the doctrine at a later date. This puts the state in an awkward position of having to go back and sue. He stressed on a lease document the stipulations can be changed over time, even if it is a long term lease. CO-CHAIRMAN GREEN clarified that eliminating the words "or sale" would avoid any problems expressed earlier about subsurface mineral interests. MR. SWANSON stated that is correct. CO-CHAIRMAN GREEN asked if the sponsor has any problem with the suggested amendment. REPRESENTATIVE MOSES said he does not. REPRESENTATIVE AUSTERMAN stated he does not agree with the proposed amendment. He said part of the problem and the reason HB 20 is before the committee is due to some of the leases that DNR has put out there. He felt the department has constricted and stopped a lot of the development on some of these tidelands. In addition, it has made them very expensive. He stressed the sale should be left in HB 20. He noted that in committee member's folders there is a memorandum from Tamara Cook dated February 7, 1995, and on the second page of that memo there was a discussion of tightening up the title to the bill. The last paragraph indicates a tighter title to read, "An Act relating to conveyance of certain tide and submerged land to municipalities." He felt that title change would solve some of the problems and concerns expressed by DNR about the land going to a third party. The land would only go to a municipality. MR. SWANSON said the department absolutely will convey the fee simple to the municipalities and it will not be encumbered with the stipulations contained in leases. He stated all the stipulations in the leases were basically to ensure the state was not liable. He stressed once the land is admitted to the municipality, it becomes their problem. He noted the reason the department wants the words "or sale" deleted is because the department does not think it is right for the municipality to be able to convey the land to a third party and put the third party in jeopardy of the public trust doctrine. Number 667 CO-CHAIRMAN GREEN recalled that Mr. Swanson had said the department will transfer a fee simple which gets back into the situation of transferring mineral interests as well. MR. SWANSON said he stated fee simple but meant only for the surface estate not the subsurface estate. TAPE 95-14, SIDE A Number 000 REPRESENTATIVE AUSTERMAN made a MOTION to AMEND HB 20 by changing the title to read, "An Act relating to conveyance of certain tide and submerged land to municipalities." CO-CHAIRMAN GREEN asked Mr. Swanson if he has any problems with the title change. MR. SWANSON said the change is good. REPRESENTATIVE MOSES said the change is fine and added that he was going to recommend the change. CO-CHAIRMAN GREEN asked if there were any objections to the motion. Hearing none, the MOTION PASSED. CO-CHAIRMAN GREEN made a MOTION to AMEND HB 20 to delete the words "or sale" on page 2, line 20. REPRESENTATIVE AUSTERMAN OBJECTED. REPRESENTATIVE BARNES asked Co-Chairman Green to speak to his motion. CO-CHAIRMAN GREEN said the concern is if the words "or sale" is included in that line and the municipality ultimately makes a sale of that land to a third party, the third party then is in jeopardy of being sued by the state as an innocent third party because tide and submerged lands were conveyed to the state under sovereignty. REPRESENTATIVE BARNES wondered if the state normally sells land which has been held in public trust. MR. SWANSON responded the state does not sell tide shore submerged lands. The department is prohibited from doing so in Title 38. REPRESENTATIVE BARNES clarified the department is also prohibited under the Statehood Act and the state constitution from selling any subsurface rights. MR. SWANSON said that is correct. REPRESENTATIVE BARNES clarified even if the department conveyed or sold this land, the public trust doctrine, under the constitution and the fact the department cannot sell these rights would not apply. MR. SWANSON said under no cases would the department alienate the subsurface which would be retained by the state. On the surface estate for tide shore submerged lands, the department is also currently prohibited from selling those. The department does lease them. The department is recommending that the same basic rules apply to municipalities. REPRESENTATIVE AUSTERMAN said with the passage of HB 20, the state would be able to sell the surface rights of the properties to the municipalities but the subsurface would be held by the state. REPRESENTATIVE BARNES clarified the concern is the department would not lease the property to municipalities under the same terms they would sell it to them. She wondered if there was some concern that the department is going to continue to tie up the land. REPRESENTATIVE AUSTERMAN stated the concerns which have been expressed to him by municipalities is the form of the lease has been very restrictive to municipalities as far as how the lease is written and the cost of that lease. He said if he could be assured it would be just a straight lease of the land rather than include restrictions on the municipalities and how they can lease the land, he would be more comfortable. CO-CHAIRMAN GREEN pointed out that Mr. Swanson has given a commitment. He clarified that Mr. Swanson said the department would be transferring the surface estate fee simple. MR. SWANSON said that is correct. He stated the department does not think it is good that the municipality can also convey in fee to a third party. REPRESENTATIVE BARNES asked Representative Moses why the words "lease or sale" are in HB 20 on page 2, line 20. REPRESENTATIVE MOSES felt the municipalities should not be restricted in any way. He said if the department is going to convey the tidelands to the municipalities, they should also have the privilege of selling the land in the future. He noted he cannot imagine why a municipality would want to sell the tidelands nor could he imagine anyone wanting to buy the tidelands with the public trust doctrine in place. CO-CHAIRMAN GREEN asked for a roll call vote on the motion. Voting in favor of the motion were Representatives Ogan, Nicholia, and Green. Voting against the motion were Representatives Barnes, Austerman, and Williams. The MOTION FAILED. REPRESENTATIVE BARNES made a MOTION to MOVE HB 20 as amended, with accompanying fiscal notes, with individual recommendations. CO-CHAIRMAN GREEN asked if there were any objections. Hearing none, the MOTION PASSED.
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