Legislature(2005 - 2006)SENATE FINANCE 532
05/08/2005 01:00 PM FINANCE
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* first hearing in first committee of referral
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CS FOR HOUSE BILL NO. 279(FIN) "An Act relating to encroachments in the right-of-way of a highway." This was the second hearing for this bill in the Senate Finance Committee. BEN MULLIGAN, Staff to Representative Bill Stoltze, recounted that, during the first hearing on this bill, Senator Stedman had requested the Department of Transportation and Public Facilities' input on certain provisions of the bill. Senator Stedman stated his desire was to hear the Department's position regarding the right of way restrictions addressed in the bill. JOHN MACKINNON, Deputy Commissioner, Highways and Aviation, Department of Transportation and Public Facilities, informed the Committee that the Department "welcomes the legislation", as it would allow the Department to conduct activities in a manner desired. While the Department currently has authority in this regard, this bill would clarify that authority and improve current regulations by implementing a six-part encroachment test. The Department worked closely with both the Senate and House bill sponsors in the development of the bill. While the bill has been improved during its transit through the committee hearing process, some additional amendments would be desired. The Department of Law also supports the bill. SENATOR CHARLIE HUGGINS, Senate Transportation Committee Chair, explained that Amendment #1 would align language in HB 279 with that of the Senate Transportation Committee's companion bill. [NOTE: Amendment #1 was adopted during the May 7, 2005 Committee hearing on this bill.] Co-Chair Green noted that Amendment #1 specified that in order for an encroachment to be considered it would have had to exist by January 1, 2005. It also removed the liability on the part of the State for any damages. Senator Huggins concurred. AT EASE 7:17:06 PM / 7:18:10 PM Amendment #2: This amendment deletes all material in Sec. 2(c)(2) on page two, lines ten and eleven of the bill and replaces it with the following. (2) The applicant has demonstrated the encroachment was erected with the good faith belief it was lawful to erect and maintain the encroachment in its location. The amendment also deletes the entirety of Sec. 2(g) that was adopted in Amendment #1 during the May 7, 2005 Committee hearing and replaces it with the following. (g) The state is not liable for damage to, or damage or injury resulting from the presence of, an encroachment in the right- of-way of a state highway. Co-Chair Wilken moved for the adoption of Amendment #2. Co-Chair Green clarified that she was the sponsor of the amendment. Mr. MacKinnon explained that the proposed Sec. 2(c)(2) language would further "strengthen" the intent of the term "good faith". This language change was suggested by the Department of Law. There being no objection, Amendment #2 was ADOPTED. Mr. Mulligan pointed out that the Department of Law also suggested that the Sec. 2(g) language adopted in Amendment #1 be replaced by that proposed in Amendment #2 in order to "completely" remove the State from any liability issues were someone harmed as the result "of hitting an encroachment". Senator Hoffman questioned the need to hire four new right-of-way agents as depicted in the Department's April 28 2005 fiscal note #1. Mr. MacKinnon stated that considerable effort was exerted in refining the fiscal note; initial expenses were much higher. The note is an estimate based on the average number of encroachment issues the Department deals with on an annual basis. The actual expense is unknown as there is no history pertaining to the terms included in the bill. Prior activity in regards to encroachments was simply to have them removed. The note anticipates that one- third of the annual encroachments would undergo the permit application process. The note would be lower were fewer permits requested. The six-part test would assure that permits would not be "rubber stamped". Permits would not be issued for things that would place the public in an unsafe position or something "that would likely be hit". A thorough determination process would be conducted. 7:22:55 PM Senator Hoffman stated, therefore, that the question is whether the end result of the bill would be worth the expense. Co-Chair Green understood that the provisions of the bill would not apply to commercial operations. Mr. MacKinnon affirmed that it is not the intent of the Department to apply the provisions of this bill to commercial operations. However, he noted that 50 commercial encroachment permits are currently handled under existing regulations, and that the existing fee structure contributes approximately $107,000 annually in economic rent to the Department including approximately $7,000 each from four cellular phone towers. Most of the current commercial encroachments involve small areas whose rent amounts to approximately $100 per year. Mr. MacKinnon stated that an application fee would be imposed for the residential application. Permits are issued for five years and could be renewed in five-year increments. No annual rent is charged for residential encroachments. Senator Stedman asked how quickly a permit could be cancelled. Mr. MacKinnon replied that, were the area required for highway purposes, a 30-day cancellation notification would be required by regulation. Highway needs take precedence over the public's privilege to use the right of way "granted through permit". Co-Chair Green questioned the reason that four new right-of-way agent positions would be required since the Department already conducts this activity. Mr. MacKinnon responded that while the Department could currently conduct this activity, this legislation would implement a new "set of rules". There would be a higher application fee and an annual fee. This legislation would also "differentiate" the residential encroachments from all the others. Co-Chair Green noted that the fiscal note specifies that the expenses would lower in the out-years. However, she asked whether it would be necessary to retain the four right-of-way agent positions over time. Mr. MacKinnon assured that the Department would not endeavor to create a program that would seek to identify right-of-way encroachments. Right-of-way encroachments would be identified in conjunction with the undertaking of a highway project. This bill would require more work than is presently done in regards to the permitting process. The Department, as property managers of the right of way, would be required to insure that the encroachments do not change during the five-year permit time and become a public hazard. Therefore a review period would also be assigned to the five-year period. Senator Dyson voiced appreciation for the work involved in developing this legislation as it relates to situations occurring in his election district. He specifically appreciated the Department's comments spoken during this hearing. Improved regulations would be appreciated. Mr. MacKinnon allowed that some in the Department do not support this action; however, the clarifications provided by this legislation would be appreciated. Senator Huggins stated that Senator Dyson and Senator Stedman could both attest that, when dealing with areas that have "restricted terrain", people tend to build right on the road. This activity, however, makes it difficult to widen or improve a road. In the past, in order to meet the federal funding guidelines, the State has simply bulldozed down right-of-way encroachments. This legislation would "formalize a process" and allow citizens to petition for a permit. He voiced appreciation for Mr. MacKinnon's efforts in spearheading this effort in a cooperative and understanding manner. Efforts have been made to address this in a manner that is good for Alaskans. Co-Chair Green agreed that the process has been conducted in a different manner than it was approximately ten years prior in regards to a similar issue. Co-Chair Wilken moved to report the bill, as amended, from Committee with individual recommendations and accompanying fiscal notes. There being no objection, the SCS CS HB 279(FIN) was REPORTED from Committee with $418,500 fiscal note #1, dated April 28, 2005 from the Department of Transportation and Public Facilities.