Legislature(2005 - 2006)SENATE FINANCE 532

05/02/2006 09:00 AM Senate FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ HB 318 LIMITATION ON EMINENT DOMAIN TELECONFERENCED
Moved SCS CSHB 318(FIN) Out of Committee
+ HB 380 ANIMALS & ANIMAL OR AGRICULTURAL PRODUCTS TELECONFERENCED
Moved SCS CSHB 380(RES) Out of Committee
+ HB 105 MEDICAID FOR ADULT DENTAL SERVICES TELECONFERENCED
Heard & Held
+ HB 16 SCHOOL FUNDS RELATED TO BOARDING SCHOOLS TELECONFERENCED
Heard & Held
+= HB 218 PRIVATE HATCHERY COST RECOVERY FISHERIES TELECONFERENCED
Scheduled But Not Heard
+ Bills Previously Heard/Scheduled TELECONFERENCED
                                                                                                                                
     SENATE CS FOR CS FOR HOUSE BILL NO. 318(JUD)                                                                               
     "An Act limiting the exercise of eminent domain."                                                                          
                                                                                                                                
                                                                                                                                
9:12:47 AM                                                                                                                    
                                                                                                                                
This was  the first hearing for  this bill in the  Senate Finance                                                               
Committee.                                                                                                                      
                                                                                                                                
Senator  Bunde moved  to adopt  committee substitute  Version 24-                                                               
LS1083\R as the working document.                                                                                               
                                                                                                                                
Co-Chair Green objected for explanation.                                                                                        
                                                                                                                                
Co-Chair  Green explained  that,  at the  request  of the  bill's                                                               
sponsor, Representative  Lesil McGuire, Version "R"  would delete                                                               
language adopted by the Senate  Judiciary Committee. The language                                                               
eliminated is located in Sec. 5,  page 6 beginning on line 25 and                                                               
continuing  through  page 7,  line  11  of  SCS CS  HB  318(JUD),                                                               
Version 24-LS1083\P, as follows.                                                                                                
                                                                                                                                
     …However, a  municipality may exercise the  power of eminent                                                               
     domain  to acquire  private property  from a  private person                                                               
     for the  purpose of  transferring title  to the  property to                                                               
     another private person for economic development if                                                                         
          (1) the municipality does not delegate the power of                                                                   
     eminent domain to another person;                                                                                          
          (2) before issuing the notice in (3) of this                                                                          
     subsection, the  municipality makes  a good faith  effort to                                                               
     negotiate the purchase of the property;                                                                                    
          (3) written notice is provided at least 90 days before                                                                
     the  public  hearing to  each  owner  of  land that  may  be                                                               
     affected by the exercise of eminent domain;                                                                                
          (4) the municipality holds a public hearing on the                                                                    
    exercise of eminent domain after adequate public notice;                                                                    
          (5) the governing body of the municipality approves                                                                   
     the  exercise of  eminent domain  by  a two-thirds  majority                                                               
     vote; and                                                                                                                  
          (6) in the case of a second class city, the governing                                                                 
     body  of  the  city  adopts an  ordinance  by  a  two-thirds                                                               
     majority vote, the ordinance is  submitted to the voters for                                                               
     approval  at  the next  general  election  or at  a  special                                                               
     election  called  for  that purpose,  and  the  exercise  of                                                               
     eminent domain  is approved  by a majority  of the  votes on                                                               
     the question.                                                                                                              
                                                                                                                                
Co-Chair  Green supported  the elimination  of this  language, as                                                               
its inclusion would negate the  purpose of the bill. The adoption                                                               
of Version "R" would return the bill to its original form.                                                                      
                                                                                                                                
9:14:03 AM                                                                                                                    
                                                                                                                                
CRAIG JOHNSON, Staff to Representative  Lesil McGuire, the bill's                                                               
sponsor, informed the  Committee that this bill  was developed in                                                               
response to a  recent United States (U.S.)  Supreme Court ruling,                                                               
Kelo v. City  of New London, Connecticut, eminent  domain case in                                                             
which private property was condemned  and "transferred to another                                                               
private  entity for  private  economic  development". The  public                                                               
outcry to that Court's ruling  spurred eminent domain legislation                                                               
in 42  states. Representative McGuire  researched Alaska  Law and                                                               
found that existing law "would  allow this type of condemnation".                                                               
Therefore this bill,  which has been scrutinized by  a variety of                                                               
entities including  the Department of Law,  environmental groups,                                                               
the Alaska  Railroad Corporation, utility and  oil companies, and                                                               
realtors, was developed to address the issue.                                                                                   
                                                                                                                                
Mr.  Johnson stated  that one  of the  policies paramount  in the                                                               
development of the bill was  "the appropriateness of transferring                                                               
private  property to  another  private individual",  specifically                                                               
the transfer  of people's  homes. Numerous  homes were  taken and                                                               
transferred  to  a private  developer  in  the Connecticut  case.                                                               
Thus, this bill contained language  that would protect a person's                                                               
primary residence. He clarified however,  that the bill would not                                                               
absolutely prohibit eminent  domain of a person's  home, as there                                                               
are  legitimate instances  for its  use.  "The determination  was                                                               
that the ability of one  person to recreate doesn't take priority                                                               
over  another person's  dwelling space."  This determination  was                                                               
further refined to protect approximately  a four-acre plot around                                                               
someone's home from eminent domain.                                                                                             
                                                                                                                                
Mr.  Johnson stressed  that while  "this is  a bill  that no  one                                                               
loves",  90 percent  of  it  is acceptable.  It  is a  compromise                                                               
between the stances of such  entities as the American Association                                                               
of Realtors who believe that  "no private property should ever be                                                               
taken" as  opposed to the  position of environmental  groups that                                                               
support  widespread  use  of  eminent  domain.  This  bill  would                                                               
reserve  the  use of  eminent  domain  "in traditional  uses  but                                                               
strictly deals with those two  narrow policy issues of private to                                                               
private and protecting someone's home".                                                                                         
                                                                                                                                
9:17:44 AM                                                                                                                    
                                                                                                                                
Mr. Johnson professed this legislation,  which would not fiscally                                                               
impact  the   State,  was  thoroughly   reviewed,  both   in  its                                                               
development and during its 22  Legislative hearings. He urged the                                                               
Committee to support the bill.                                                                                                  
                                                                                                                                
Co-Chair Green asked for confirmation  that the sponsor supported                                                               
the Version "R" committee substitute.                                                                                           
                                                                                                                                
Mr. Johnson affirmed.                                                                                                           
                                                                                                                                
Mr.  Johnson noted  that federal  legislation is  currently being                                                               
considered  that would  restrict  funding to  states that  "allow                                                               
private to  private transfers of any  political subdivisions". In                                                               
conclusion,  this  bill  would   reserve  eminent  domain  policy                                                               
decision  authority  to  the Legislature  rather  than  to  local                                                               
governing bodies.                                                                                                               
                                                                                                                                
9:18:49 AM                                                                                                                    
                                                                                                                                
LUKE  HOPKINS, Assembly  Member,  Fairbanks  North Star  Borough,                                                               
testified  via teleconference  from Fairbanks,  in opposition  to                                                               
Version  "R".  The  Borough  considers  eminent  domain  a  local                                                               
control  issue and  has established  a  process to  best fit  the                                                               
needs of  the community. The  Municipality of Anchorage  has also                                                               
adopted an eminent domain policy.                                                                                               
                                                                                                                                
9:19:57 AM                                                                                                                    
                                                                                                                                
Mr.  Hopkins addressed  Mr. Johnson's  comments that  Version "R"                                                               
"would strike  the best balance"  between the  various interests.                                                               
One  consideration omitted  however, was  a local  municipality's                                                               
right  to  take  action  on an  issue  involving  eminent  domain                                                               
specifically relating to economic  development concerns. He urged                                                               
the  Committee   to  consider  the  Senate   Judiciary  committee                                                               
substitute,  Version "P",  as it  is responsive  to the  needs of                                                               
local governments.                                                                                                              
                                                                                                                                
9:21:23 AM                                                                                                                    
                                                                                                                                
Senator  Stedman  asked  Mr.  Hopkins  whether  this  bill  might                                                               
"hinder"  a  municipality's ability  to  extend  sewer and  water                                                               
lines  or further  utility infrastructure.  Oftentimes, easements                                                               
are necessary to support these efforts.                                                                                         
                                                                                                                                
9:22:14 AM                                                                                                                    
                                                                                                                                
Mr. Hopkins understood  that the bill would  not restrict utility                                                               
and infrastructure easements.                                                                                                   
                                                                                                                                
Co-Chair Green concurred.                                                                                                       
                                                                                                                                
9:23:11 AM                                                                                                                    
                                                                                                                                
Senator Stedman stated that, oftentimes,  in the effort to expand                                                               
a utility trunk  line, a utility must  negotiate easements across                                                               
private property. The question is  whether this legislation might                                                               
negatively  impact  municipality  or utility's  ability  in  that                                                               
regard.                                                                                                                         
                                                                                                                                
Mr.  Johnson  assured  the  Committee  these  circumstances  were                                                               
"protected  in  the  bill".  Efforts were  taken  not  to  change                                                               
existing uses of  eminent domain. Language in  Sec. 2(a)(10) page                                                               
3, line 10 specifically allows  the continuance of eminent domain                                                               
for community  sewerage needs. Utility  infrastructure, railroad,                                                               
hospital,  highway needs  and other  public good  needs are  also                                                               
addressed in Sec. 2.                                                                                                            
                                                                                                                                
Senator Stedman acknowledged.                                                                                                   
                                                                                                                                
PETER PUTZIER, Senior  Assistant Attorney General, Transportation                                                               
Section,  Department   of  Law,  concurred  with   Mr.  Johnson's                                                               
remarks.                                                                                                                        
                                                                                                                                
9:24:50 AM                                                                                                                    
                                                                                                                                
RUTH  BLACKWELL, Realtor  and Representative,  Alaska Association                                                               
of  Realtors,   shared  that  the   Association  is   99  percent                                                               
supportive of  Version "R". The  Association is  against changing                                                               
private property to public use,  as such action would negate that                                                               
land's  obligation to  contribute to  the community  tax base.  A                                                               
person's  private  property  should   only  transfer  to  another                                                               
private  entity through  the free  market enterprise  system. The                                                               
government   should  not   become  involved   in  that   process.                                                               
Currently, only  one percent of  the land in Alaska  is privately                                                               
owned; 99 percent of the land  is owned by the State, federal, or                                                               
lands  claim  entities.  That  amount  should  be  sufficient  to                                                               
provide  for a  municipality or  other public  land use  need for                                                               
economic gain.                                                                                                                  
                                                                                                                                
9:26:38 AM                                                                                                                    
                                                                                                                                
PEGGY  ANN  MACONNOCHIE,  Representative, Alaska  Association  of                                                               
Realtors, enthusiastically  spoke in  support of Version  "R", as                                                               
it would revert  the bill to its original intent.  "The Kelo case                                                             
was a clear  taking of private property …  for private purposes."                                                               
The Association  understood municipalities'  desire to  have more                                                               
local  control, but  that must  not come  at the  expense of  the                                                               
owners' property rights. Version  "R" would protect those private                                                               
property rights.                                                                                                                
                                                                                                                                
9:28:13 AM                                                                                                                    
                                                                                                                                
Ms.  McConnochie  assured the  Committee  that  "this is  a  very                                                               
important issue  to all  of us as  private property  owners", and                                                               
the Legislature's decision  on this bill would  be remembered for                                                               
decades. People's homes  should be sacred. A  person's ability to                                                               
own, use,  and transfer  property is "one  of our  basic rights".                                                               
Legislative protection of that right would be appreciated.                                                                      
                                                                                                                                
9:28:46 AM                                                                                                                    
                                                                                                                                
KEVIN RITCHIE, Executive Director,  Alaska Municipal League (AML)                                                               
informed the Committee  AML had "no position  on eminent domain".                                                               
However,  he  noted that  three  of  AML's largest  members  have                                                               
enacted  eminent domain  policies similar  to those  presented in                                                               
the  bill. The  only issue  of concern  to AML  is that  of local                                                               
control.                                                                                                                        
                                                                                                                                
Mr. Ritchie  agreed with Mr.  Hopkins that the policy  adopted in                                                               
the   Senate   Judiciary   committee  substitute,   Version   "P"                                                               
established  a  process  through  which  "the  Legislature  could                                                               
absolutely guarantee" that "a very  substantial and fair" eminent                                                               
domain public  hearing process  would occur  at the  local level.                                                               
Any decision made  at the local level would  require support from                                                               
the majority of the local governing body.                                                                                       
                                                                                                                                
Mr.  Ritchie concurred  with the  Alaska Association  of Realtors                                                               
position that  this was  a very  important decision.  However, he                                                               
reemphasized AML's concern about  local control. He stressed that                                                               
one should  be mindful that  the Kelo case, which  generated this                                                             
legislation, occurred in Connecticut.  Alaska is not Connecticut.                                                               
None of  the 10,000  eminent domain  situations presented  in the                                                               
Kelo case pertained  to a situation that occurred  in Alaska. "We                                                             
have been good stewards of eminent domain."                                                                                     
                                                                                                                                
9:30:41 AM                                                                                                                    
                                                                                                                                
Co-Chair Green removed her objection to adopting Version "R".                                                                   
                                                                                                                                
There being no further objection,  Version "R" was ADOPTED as the                                                               
working document.                                                                                                               
                                                                                                                                
Senator Dyson  was "delighted  with both  the bill"  and Co-Chair                                                               
Green's support of it.                                                                                                          
                                                                                                                                
Senator  Dyson  moved to  report  the  bill from  Committee  with                                                               
individual recommendations and accompanying fiscal notes.                                                                       
                                                                                                                                
There being no  objection, SCS CS HB 318 (FIN)  was REPORTED from                                                               
Committee with  previous zero  fiscal note  #1 dated  January 11,                                                               
2006  from the  Department  of Commerce,  Community and  Economic                                                               
Development; previous zero fiscal note  #2 dated January 11, 2006                                                               
from  the  Department  of  Environmental  Conservation;  previous                                                               
indeterminate  fiscal  note  #3   dated  January  10,  2006  from                                                               
Department of  Law; previous indeterminate  fiscal note  #4 dated                                                               
January 11,  2006 from the  Department of Natural  Resources; and                                                               
previous  indeterminate fiscal  note  #5 dated  January 11,  2006                                                               
from the Department of Transportation and Public Facilities.                                                                    
                                                                                                                                
9:31:58 AM                                                                                                                    
                                                                                                                                

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