Legislature(1995 - 1996)
02/21/1995 01:03 PM House CRA
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE COMMUNITY AND REGIONAL AFFAIRS
STANDING COMMITTEE
February 21, 1995
1:03 p.m.
MEMBERS PRESENT
Representative Ivan Ivan, Co-Chair
Representative Alan Austerman, Co-Chair
Representative Jerry Mackie
Representative Kim Elton
Representative Al Vezey
Representative Pete Kott
Representative Irene Nicholia
MEMBERS ABSENT
None
OTHER HOUSE MEMBERS PRESENT
Representative Con Bunde
COMMITTEE CALENDAR
* HB 154: "An Act requiring the Department of Law to provide
guidelines regarding unconstitutional state and
municipal takings of private real property; relating
to the taxation of private real property taken
unconstitutionally by state or municipal action;
establishing a time limit for bringing an action
for an unconstitutional state or municipal taking of
private real property; and providing for an effective
date."
HEARD AND HELD
HB 80: "An Act relating to the approval, change, or
vacation of subdivision plats in areas outside
organized boroughs, in the unorganized borough
outside of cities, and in the third class boroughs;
and relating to the definitions of `street' and
`subdivision'."
PASSED OUT OF COMMITTEE
OVERVIEW: Division of Energy
(* First Public Hearing)
WITNESS REGISTER
REPRESENTATIVE VIC KOHRING
Alaska State Legislature
State Capitol Building, Room 428
Juneau, Alaska 99811
Telephone: (907) 465-2186
POSITION STATEMENT: Introduced HB 154 as the bill sponsor
CRAIG LYON, House Researcher
Representative Vic Kohring
Alaska State Legislature
State Capitol Building, Room 428
Juneau, Alaska 99811
Telephone: (907) 465-2186
POSITION STATEMENT: Followed up on the testimony given by
Representative Kohring
STEVE VAN SANT, State Assessor
Department of Community and Regional Affairs
333 W. 4th Ave., Ste. 319
Anchorage, Alaska 99501
Telephone: (907) 269-4500
POSITION STATEMENT: Answered questions on HB 154
STEVE NOEY, Real Estate Agent
1300 E. 80th
Anchorage, AK 99518
Telephone: (907) 274-8596
POSITION STATEMENT: Testified in favor of HB 154
SARA HANNON, Lobbyist
Alaska Environmental Lobby, Inc.
P.O. Box 22151
Juneau, AK 99802
Telephone: (907) 463-3366
POSITION STATEMENT: Testified in opposition to HB 154
REPRESENTATIVE JEANNETTE JAMES
Alaska State Legislature
State Capitol Building, Room 102
Juneau, AK 99811
Telephone: (907 465-3743
POSITION STATEMENT: Prime Sponsor of HB 80
RICK ELLIOT, Municipal Lands Trustee
Department of Community and Regional Affairs
333 W 4th St., Ste. 319
Anchorage, Alaska 99501
Telephone: (907) 269-4500
POSITION STATEMENT: Answered questions on HB 80
PAT KALEN, Surveyor
American Congress on Surveying and Mapping (ACSM)
5410 Grosbenor Lane
Bethesda, MD 20814
Telephone: None Available
POSITION STATEMENT: Testified and answered questions on HB 80
RON SWANSON, Director
Division of Land
Department of Natural Resources
3601 C St., Ste. 1122
Anchorage, AK 99503-5947
Telephone: (907) 762-2692
POSITION STATEMENT: Testified and answered questions on HB 80
PERCY FRISBY, Director
Division of Energy
Department of Community and Regional Affairs
333 W. 4th Ave., Ste. 220
Anchorage, AK 99519-2341
Telephone: (907) 269-4640
POSITION STATEMENT: Presented Overview on the Division of Energy
ERIC MARCHEGIANI, Manager/Engineering
Division of Energy
Department of Community and Regional Affairs
333 W. 4th Ave., Ste. 220
Anchorage, AK 99519-2341
Telephone: (907) 269-4698
POSITION STATEMENT: Participated in Division of Energy Overview
GLORIA MANNI, Administration Manager
Division of Energy
Department of Community and Regional Affairs
333 W. 4th Ave., Ste. 220
Anchorage, AK 99519-2341
Telephone: (907) 269-4642
POSITION STATEMENT: Participated in Division of Energy Overview
RICHARD EMERMAN, Senior Economist
Division of Energy
Department of Community and Regional Affairs
333 W. 4th Ave., Ste. 220
Anchorage, AK 99519-2341
Telephone: (907) 269-4644
POSITION STATEMENT: Participated in Division of Energy Overview
FRANK J. BETTINE, President
Alaska Cogeneration Systems
229 Whitney Road
Anchorage, AK 99501
Telephone: (907) 278-7283
POSITION STATEMENT: Presented Overview of the Cogeneration Systems
PREVIOUS ACTION
BILL: HB 154
SHORT TITLE: REGULATORY TAKING OF PRIVATE PROPERTY
SPONSOR(S): REPRESENTATIVE(S) KOHRING
JRN-DATE JRN-PG ACTION
02/03/95 237 (H) READ THE FIRST TIME - REFERRAL(S)
02/03/95 237 (H) CRA, JUD, FIN
02/16/95 (H) CRA AT 01:00 PM CAPITOL 124
02/21/95 (H) CRA AT 01:00 PM CAPITOL 124
BILL: HB 80
SHORT TITLE: DNR APPROVAL OF PLATS IN UNORG BOROUGH
SPONSOR(S): REPRESENTATIVE(S) JAMES
JRN-DATE JRN-PG ACTION
01/13/95 41 (H) PREFILE RELEASED
01/16/95 41 (H) READ THE FIRST TIME - REFERRAL(S)
01/16/95 41 (H) COMMUNITY & REGIONAL AFFAIRS, RESOURCES
01/31/95 (H) CRA AT 01:00 PM CAPITOL 124
01/31/95 (H) MINUTE(CRA)
02/02/95 (H) CRA AT 01:00 PM CAPITOL 124
02/16/95 (H) CRA AT 01:00 PM CAPITOL 124
02/21/95 (H) CRA AT 01:00 PM CAPITOL 124
ACTION NARRATIVE
TAPE 95-3, SIDE A
Number 000
CO-CHAIR IVAN called the House Committee on Community and Regional
Affairs to order at 1:03 p.m. Members present at the call to order
were Representatives Austerman, Vezey and Nicholia. Members absent
at the call to order were Representative Mackie, Elton and Kott.
CO-CHAIR IVAN went over the meeting agenda and recognized those on
teleconference from Anchorage, Mat-Su, Kenai, and Homer. He
invited bill sponsor, Representative Vic Kohring to introduce HB
154.
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.
HCRA - 02/21/95
HB 80 - DNR APPROVAL OF PLATS IN UNORG BOROUGH
CO-CHAIR IVAN invited Representative James to come forward and
readdress HB 80. He also recognized those on teleconference
waiting to testify on the bill. He also pointed out a letter from
the Department of Natural Resources (DNR) addressing technical
changes they wished to see made in HB 80. Co-Chair Ivan asked that
proposed amendments be submitted at least 24 hours prior to a
committee meeting.
Number 459
REPRESENTATIVE JEANNETTE JAMES, Sponsor of HB 80, stated the
purpose of this bill was brought to her attention because of a plat
in her district that didn't fall under a platting authority. She
found that the Department of Natural Resources (DNR) was the filing
place for plats, but DNR had no authority to review the plats. She
said she has worked with surveyors and the DNR to pull the bill
together and bring it back in the form worked on during the
Seventeenth Legislature, SB 81. Representative James did a
comparison between SB 81 and HB 80 and drafted another copy to
incorporate everything that had previously been agreed upon by all
the parties involved. Representative James wanted Pat Kalen and
Ron Swanson to explain how their needs had been met with this bill.
Number 487
REPRESENTATIVE IRENE NICHOLIA wanted to know whether the changes
mentioned by Rick Elliot in the last committee meeting were the
same as Ron Swanson's.
Number 491
RICK ELLIOT, Municipal Lands Trustee, Department of Community and
Regional Affairs, stated he had not seen the changes and could not
offer an answer.
Number 493
CO-CHAIR IVAN again stated that proposed changes should be offered
to the committee with enough lead time for the committee members to
have a chance to look them over before a committee meeting.
Number 500
REPRESENTATIVE JAMES said the changes in the bill were directly
related from a request by the surveyors in Fairbanks. She stated
they tried to incorporate Rick Elliot's concerns into the bill as
well as to ensure the agreement of everyone.
Number 508
MR. ELLIOT mentioned that he didn't have a copy of the new
amendment, but he was familiar with SB 81.
Number 514
PAT KALEN, Surveyor, American Congress on Surveying and Mapping,
said he had a copy of the committee substitute but he wasn't sure
what the other amendments were.
Number 516
REPRESENTATIVE JAMES pointed out that the amendments delete the
right of way concerns for the Department of Transportation (DOT).
She said that DOT had an exemption on these before, but the
proposed amendments would change that to make the exemptions
specific to airports.
MR. KALEN confirmed that his concerns would still be addressed.
Number 522
RON SWANSON, Director, Division of Land, Department of Natural
Resources, stated he only had a committee substitute.
Number 524
REPRESENTATIVE JERRY MACKIE expressed his concerns over the
digression from the main topic. He referred to the letter from Ron
Swanson and stated that they are all in agreement that the changes
were quite technical and could be included in the new committee
substitute. He moved that the technical changes offered by Ron
Swanson be included in the committee substitute.
CO-CHAIR IVAN appreciated the comments and recommendations.
Number 546
REPRESENTATIVE VEZEY asked if the new committee substitute had been
adopted.
Number 549
REPRESENTATIVE KOTT moved to adopt the committee substitute for the
purpose of the discussion.
Number 552
REPRESENTATIVE MACKIE stated that he already had a motion on the
floor requesting that the technical changes be included in the
committee substitute before the committee substitute be adopted by
the committee.
Number 553
CO-CHAIR AUSTERMAN felt that Representative Mackie's motion
couldn't be acted upon until the committee substitute was adopted
by the committee.
Number 555
REPRESENTATIVE MACKIE stated there were two ways it could be done.
It could be included into the committee substitute which becomes a
part of the working document and then move the committee substitute
before the committee.
Number 557
CO-CHAIR IVAN accepted the motion put forth by Representative Kott
to adopt the committee substitute.
Number 559
REPRESENTATIVE MACKIE again moved that Ron Swanson's technical
changes be included in the committee substitute.
Number 564
REPRESENTATIVE KOTT objected for the purposes of clarification. He
pointed out there were two recommended changes, the first dealing
with section 40, and the second dealing with the definition of
subdivision. He stated that if only part of the letter was going
to be adopted, then it needed to be clarified.
Number 571
REPRESENTATIVE JAMES stated from her perspective concerning Ron
Swanson's amendments, he had two changes with a preference for the
second change. She said his changes should be made into two
amendments.
Number 576
REPRESENTATIVE MACKIE moved to divide the question with a motion to
adopt the first portion.
Number 579
CO-CHAIR IVAN heard no objection, so it was so ordered.
Number 581
REPRESENTATIVE JAMES detailed the options in the second portion of
the amendments.
Number 587
REPRESENTATIVE VEZEY asked Representative James if she was
endorsing the proposed amendments from Ron Swanson. She replied
that she was.
Number 590
REPRESENTATIVE MACKIE asked Ron Swanson to explain the difference
between the two options he'd put forth.
Number 593
MR. SWANSON said he had provided two options because he had been
presented with two options and he hadn't the time to take it to
Legal to ask which option was the better one. His main concern
here was that within an airport, any alignments of the runway or
roads as it is leased would not be subject to review by the DNR.
The external boundary was one of the major concerns. He felt both
suggestions were operable, but again he stated his lack of time to
go over them thoroughly to discern the best one.
Number 602
REPRESENTATIVE VEZEY asked Mr. Swanson why he was advocating a lot
of detail in the statute.
Number 607
MR. SWANSON felt it wasn't that much detail, but information
explaining both options. He talked about the size of corner
alignment dependent upon the subdivision.
Number 615
REPRESENTATIVE MACKIE stated that he'd pick the second option
because of its clarity not due to deletion but to a stipulator
addition. He felt the underlined part added to the sentence would
solve dedicated right of ways. Representative Mackie moved that
the committee accept the language in the second option.
Number 622
REPRESENTATIVE VEZEY objected just for the purpose of getting a
clearer explanation from the bill sponsor.
Number 624
REPRESENTATIVE JAMES pointed out two things she hoped would be
accomplished by HB 80. She stated previous problems included
exempting various things. Upon the creation of right of ways, DOT
wants to locate toward the center of the road. The first part
would state that DOT would not be exempt from this any longer. The
second stated that providing the right of way boundaries had not
previously been dedicated to the public. A "subdivision" would be
a right of way not previously dedicated to the public and wouldn't
be dedicated to the public.
MR. KALEN wanted a fax copy of the proposed definition.
MR. SWANSON said he would fax the copy to Mr. Kalen.
Number 645
REPRESENTATIVE JAMES stated it was in the bill once, and an
exemption was requested, but now it is being added back in.
CO-CHAIR IVAN invited Pat Kalen to proceed with his comments.
Number 651
MR. KALEN had two comments. He was satisfied with the majority of
the committee substitute. He said it retained, to a large extent,
the wording of SB 81. The problems with it on his end were over
the exemptions. He stated there were little land transactions
within the state that were in any unorganized boroughs. He
wondered why the exemptions would need to be met in an unorganized
borough.
MR. KALEN stated his organization was one that worked with various
state agencies to develop this legislation. He said he was
speaking on behalf of the surveying society.
Number 679
REPRESENTATIVE MACKIE clarified that Mr. Kalen was in favor of the
committee substitute.
Number 680
MR. KALEN stated that for the most part, he and his staff were in
favor of the committee substitute. His reservations revolve
primarily around the definition of the word "subdivision." He said
that in the past, the word was clearly defined based on a
definition offered by Senator Leman. He stated that surveyors had
originally stopped SB 81 over the confusion of the word
"subdivision" and who it applied to. He stated he didn't have any
exceptions or exemptions for anyone in his definition.
TAPE 95-3, SIDE B
Number 000
REPRESENTATIVE MACKIE asked the members to look at the option he
moved. He said the option just added into the definition of things
not included. He stated one thing not included was right of way
boundaries already dedicated.
Number 016
REPRESENTATIVE JAMES believed that this option stated right of ways
can be adjusted as long as they weren't dedicated to the public,
and upon the dedication to the public, it becomes a subdivision.
Number 040
REPRESENTATIVE VEZEY mentioned his concern over the amendment. His
understanding of the definition of "subdivision" and the committee
substitute, extended his belief that it didn't include right of way
boundaries.
Number 050
REPRESENTATIVE JAMES answered that subdivision had nothing to with
right of ways. A "subdivision" was if you put in a right of way
and you plat it for public purpose, then it was a "subdivision."
If you move a right of way that has previously been moved, then it
still was a subdivision. The only time it wasn't, upon moving a
right of way, was if it had never been dedicated to the public.
Number 060
REPRESENTATIVE VEZEY stated he didn't quite follow.
REPRESENTATIVE JAMES said that if you divided a piece of land into
two parts, it would be a subdivision, not including cadastral
plats, control plats, open to entry plats, and parcel plats. She
stated this was providing the right of way boundaries that hadn't
been previously dedicated to the public. Upon the adjustment of a
right of way that had been dedicated as a plat and was then moved,
it was a subdivision again. Historically, when DOT has changed
right of ways and taken the monuments from the land or even changed
the land one way or another, they pay for taken land and take out
their monuments. They then indicated that you had to find your
corners by going to the center of the roadway. Those owners then
had to undergo surveying because it was a requirement and they were
not exempt from doing that.
Number 102
REPRESENTATIVE MACKIE stated that Representative Vezey brought up
a good point. He agreed with the sponsor, but his problem with it
was that the actual language may be a bit confusing. He stated it
still accomplished its intention.
Number 109
MR. KALEN explained his letter which added language to the
definition of "subdivision." He stated that leases were already
dealt with in section 40, 50 and 60. He said this bill was headed
in the right track, but he stated the wording should be simple.
Number 135
CO-CHAIR IVAN stated his appreciation of Mr. Kalen's comments. He
asked Representative James what her recommendations would be.
Number 139
REPRESENTATIVE JAMES said the right of way boundaries issue would
not be deleted and anything creating or adjusting right of way
boundaries was a "subdivision" with the exception of an airport,
because it was already exempted. She said this referred to the
replat of a subdivision and a replat won't be excluded. She said
that deleting "or creating or adjusting right of way boundaries"
would be the better way to go. Its absence would indicate that it
was a "subdivision." Her intent was not to give DOT an exemption
for creating or adjusting right of way boundaries and to have them
include it in the description of a subdivision.
MR. KALEN commented on ways to redefine this definition.
REPRESENTATIVE MACKIE asked that testifiers request permission from
the chairman for recognition before commenting.
Number 179
CO-CHAIR IVAN appreciated the remarks made by Representative
Mackie. He then asked Representative James what could be
accomplished.
Number 181
REPRESENTATIVE JAMES said there was a motion on the floor to accept
the second option. She preferred this option be the first option
by deleting certain wording, "or creating or adjusting right-of-way
boundaries." She then stated she would be happy with the bill with
these changes.
Number 195
REPRESENTATIVE VEZEY clarified that the original motion was to
adopt the second option, but now the motion was to adopt the first
option.
Number 200
CO-CHAIR IVAN heard no objections and it was so ordered to adopt
the first option. He again invited questions and comments from
committee members and other testifiers. He pointed out that he
would appreciate testifiers request permission to speak rather than
interrupting when they wished to say something. He then asked the
desire of the committee concerning HB 80.
Number 218
REPRESENTATIVE KOTT moved that the committee substitute for HB 80
with the new amendments and with its fiscal notes be moved out of
the committee.
Number 228
CO-CHAIR IVAN heard no objection, and CSHB 80 was moved out of the
CRA Committee with individual recommendations.
HCRA - 02/21/95
OVERVIEW: DIVISION OF ENERGY
CO-CHAIR IVAN then invited the members from the Division of Energy
(DOE) to come forward to give their overview. He first recognized
Percy Frisby.
Number 243
PERCY FRISBY, Director, Division of Energy, first introduced the
staff that he'd brought with him. He wanted Eric Marchegiani to
come forward to give his presentation on the various programs
within the division.
Number 264
ERIC MARCHEGIANI, Manager/Engineering, Division of Energy,
Department of Community and Regional Affairs, started with
Operation Technical Emergency Assistance (OTE). OTE provides rural
technical assistance to communities in the form of engineering
which provided bulk fuel and help with the power systems. He said
training was also provided through OTE as well as meter
installation, data inquisition and emergency prevention.
MR. MARCHEGIANI said another program he discussed was the
Electrical Systems Life, Health and Safety Improvements where
emergency concerns were taken care of immediately.
MR. MARCHEGIANI discussed the Business Management Development
program which provides assistance to a community's management of
utilities. Its work with private enterprise was encouraged.
MR. MARCHEGIANI also pointed out their Rural Power Systems Upgrade
Program which provided assistance to a community that needed to
upgrade their distribution system, their switch gear, or their
generators. In some cases, the community had just grown in size.
This program works with the community to provide the necessary
upgrades.
MR. MARCHEGIANI talked about their Bulk Fuel System Spill
Prevention Program which dealt with piping systems and correcting
them from the fill point to the tank farm. The Coast Guard has
worked well with this program to ensure that fuel does get to the
remote villages.
MR. MARCHEGIANI discussed the Electric Service and Extension Fund
which has ongoing projects expected to be finished this year.
There was no funding for this last year.
MR. MARCHEGIANI then brought up the Circuit Rider Emergency
Response Service which was also a maintenance system. This program
has three contractors that visit approximately 68 villages on a
quarterly basis. They provide training and help provide quick help
to get a community's power back on line. According to the village
service agreement, the village was responsible for the parts in
order for the work to be accomplished. If this was not possible,
then an arrangement would be made to try to find funding for that
rural community. This was because this program was geared to help
the village get trained and do the work in the event of a power
outage and unavailability of contractors. He then welcomed
questions or comments.
Number 346
CO-CHAIR AUSTERMAN asked about the other programs on a contract
basis.
Number 349
MR. MARCHEGIANI answered that they do contract for other programs,
but a lot was put out to bid with distribution systems, generators
and services.
Number 354
CO-CHAIR AUSTERMAN wanted to know how many of the generation plants
were owned by the district or by the state. He was also interested
in how the replacement system worked.
Number 359
MR. MARCHEGIANI said that whenever work was done in a village, the
state didn't own the power system. A grant was usually given to
the village with the idea that the village owned their own power
plant. Whatever the utility used, the division worked alongside
the village that signed a grant agreement to do contracting work
and it all depended upon the certain village situation.
CO-CHAIR AUSTERMAN asked a question regarding power line systems.
MR. MARCHEGIANI replied that he was only aware of two lines owned
by the state. He said the community owned their own lines and
distribution systems or their own power plants. He stated that all
the programs that installed power plants or distribution systems
were grant programs.
Number 383
CO-CHAIR AUSTERMAN referred to a statement concerning the main
problem with bulk fuel tank areas were the feedlines. He asked
whether or not a little bit of maintenance could solve this
problem.
Number 387
MR. FRISBY answered that at the moment, they were complying with
the Coast Guard mandate, trying to get delivery systems from the
barge to the tank which he referred to as a "band-aid approach."
He said they were looking at about $200 million to fix all rural
bulk fuel problems.
Number 398
CO-CHAIR AUSTERMAN asked if this was due to the amount of money
needed to fix up the rural fuel problems. He also wanted to know
if the division had been researching any possibilities of the
private sector being involved in helping to solve the fuel
problems.
Number 401
MR. FRISBY acknowledged that they were presently working with three
different private entities to work out an agreement where they go
into partnerships with the owners of the bulk fuel system. The
only way to correct the problem was to get the private sector
involved with it. Without the private enterprise or a big influx
of money, the problem wouldn't be corrected.
Number 410
CO-CHAIR IVAN commented that one of his communities had been
looking at the private public sector approach to resolve these
problems. He'd also been talking to village fuel owners such as
village corporations, municipal governments and school districts.
He said that village corporations were ready to invest in improving
and purchasing safe fuel containers, however technical assistance
from the division was needed to further this motivation.
Number 435
MR. FRISBY invited Gloria Manni to address the committee. He said
she was in charge of all the loan programs throughout the state.
Number 438
GLORIA MANNI, Administration Manager, Division of Energy, DCRA,
began with discussing the Bulk Fuel Revolving Loan Fund. This was
popular since it was available to communities with a population of
less than two thousand. She said loans could be made up to
$100,000 for the purchase of bulk fuel. This could occur once or
twice during a year. This loan fund could provide up to 90 percent
of the value of the purchase of the fuel. All the loans needed to
be paid within nine months, so that upon the first repayment, the
community could then get another loan for the following year. The
interest rate ranged from 0 percent for the first time borrower to
5 percent for the second time borrower, and 7 percent for every
loan thereafter. In some cases, the division would waive the
interest to permit the repayment of the loan. The village
borrowers usually got this loan for heating purposes but sometimes
they got it for electrical generation.
MS. MANNI described another loan program, the Rural Typification
Revolving Loan Fund, which allowed communities to borrow from this
fund at a rate of 2 percent interest to extend services to areas
previously being served by the state. She said they must have at
least three new hookups every time. This program has proven itself
to be burdensome to both sides, the division and the borrowers, in
such a way that legislators last year requested that the money be
reappropriated within the fund and be used to help with bulk fuel
repairs.
MS. MANNI described another program which was the Power Project
Fund Loan, under which a variety of projects could be funded,
mostly for electrical generation. It was a very valuable program
with an interest rate ranging from 0-7 percent in order to ensure
that the project was financially feasible. The DOE has about $22
million in receivable notes from this loan fund, but the loans were
made in the early 80s.
Number 483
CO-CHAIR AUSTERMAN questioned the tracking record of the loan
programs. He wanted to know what kind of default rate there was.
Number 486
MS. MANNI replied that some borrowers were late and this was the
normal part of doing business. The overall tracking record was
good because the loan fund dealt with utilities, so if anyone fell
behind, they worked with the utility management to come up with
methods to get the money to pay back the state. To date, no loans
have been written off, and for some communities, legislation has
been passed to turn the loan into a grant. From the division's
point of view, Ms. Manni said these programs were doing very well.
She said the division was able to collect all the loans by
developing a training process to teach communities how to collect
and pay back loans.
Number 504
CO-CHAIR AUSTERMAN commented on his desire to go more toward the
private sector in a number of issues that the state deals with. He
would like to see, at some point, the problems solved in the bush
with the private sector going in and providing fuel and by carrying
the loans on their own and therefore, get into a position where
they could provide the fuel tanks and fuel. He said if all these
things were tied together as joint deals, the private sector would
be able to cover the responsibilities the state currently
undertakes.
Number 516
MS. MANNI responded that under the Power Project Fund Loan and the
Bulk Fuel Revolving Loan Fund, the private sector can borrow as
long as they have the sponsorship of the community. A private
investor was eligible to come and borrow money for a community
project for the benefit of that community.
Number 522
CO-CHAIR AUSTERMAN stated that he wanted to get the state out of
the loaning business and let the private sector take over the whole
process. He said at some point in time, the state and rural
communities could end up in this situation if they are allowed to
move forward and do away with the present mentality of dependence
upon state government to handle all problems.
Number 529
REPRESENTATIVE NICHOLIA stated that Co-Chair Austerman should get
into private business.
Number 532
CO-CHAIR IVAN said he could see communities phasing away from the
government but not totally breaking away from it. He also
encouraged private lending institutions to come in.
Number 536
CO-CHAIR AUSTERMAN stated there would always be areas in which the
government would need to be there to help. He said there were a
lot of instances where the private sector couldn't help, but they
could take over many responsibilities.
Number 540
CO-CHAIR IVAN recognized the attendance of Representative Con
Bunde.
Number 542
MR. FRISBY elaborated more on the remarks made by Co-Chair
Austerman. His goal is to "put themselves out of business,"
especially concerning the bulk fuel systems. The division had
approximately $2.7 million to work with bulk fuel upgrades in the
rural communities. He said that the division needed approximately
$200 million to solve all the current problems. He also agreed
that the private sector needed to get more involved in order to
help overcome this financial disability. He said that an
educational system needed to be established for the rural
communities and private enterprise with the goal of looking at the
best way to move into the communities. It would be a big learning
curve for all involved before results could be seen.
Number 557
MS. MANNI said a new fund was established by the legislature in
1993 called the Southeast Energy fund. This fund received an
allocation every year from the Four Dam Pool Transfer Fund and it
could only be used for grants to be given to a utility
participating in transmissions. She then discussed the Power Cost
Equalization Fund which covered two programs. The first, the Power
Cost Equalization (PCE) Program, helped electrical customers of
rural utilities to become eligible for PCE. This fund would help
to pay some of the electrical bills in the rural communities. In
1993, this was changed so that residential customers and schools
and some private enterprises were the only ones eligible for this.
The limit was up to 700 kilowatt hours and big consumers were
responsible for paying for the rest of their electrical use.
Grants were issued from the Rural Typification Revolving Fund
during the annual reappropriation process.
Number 583
CO-CHAIR AUSTERMAN asked how much money goes through the Four Dam
Pool Fund and how much is appropriated to the Southeast Energy
Fund.
Number 586
MS. MANNI responded that the 1996 planned budget for the Four Dam
Pool is around $10.3 million. Out of that, 40 percent goes to the
Southeast Energy Fund and about 40 percent to the Power Cost
Equalization Fund and about 20 percent to the Power Project Fund.
Number 592
CO-CHAIR IVAN asked if the division had a policy to deal with
communities during the winter that were low on fuel.
Number 599
MR. FRISBY responded that the community needs to notify the
division and then the community and the division work out a
solution to get the fuel to the communities. He said the division
made sure the fuel was restocked and paid for in full, and in some
cases, the division allowed an extension as long as the debt didn't
exceed $100,000. He stated they were familiar with dealing with
communities and their fuel shortages.
Number 614
DICK EMERMAN, Senior Economist, Division of Energy, DCRA, said they
were also involved in various projects. He noted that over the
past few years, they have managed the feasibility studies for
projects like the Sutton-Glennallen Intertie. They also do
planning studies upon the request of legislators, utilities or
communities. The division is about to bring in a contractor to
review the most promising rural transmission projects and to
identify and define their costs and possible finance situations.
Mr. Emerman stated they were also involved in demonstration
projects on alternative energy, the biggest being in Kotzebue,
where they were funding a wind demonstration project. Last, he
mentioned bulk fuel storage and the vast amount of money needed to
correct the current problems. The division staff has just started
an effort to get out to communities to work with them to define, in
the absence of state grants, what long term solutions would be
appropriate for the community.
Number 679
CO-CHAIR IVAN recognized Representative Con Bunde and Frank
Bettine, President of Alaska Cogeneration Systems.
Number 686
REPRESENTATIVE CON BUNDE introduced two of his constituents, Frank
and Genivee Bettine. He said they had a proposal that might
address some of the serious problems concerning the cost of
electrical energy in rural Alaska.
TAPE 95-4, SIDE A
Number 000
FRANK BETTINE, President, Alaska Cogenerations Systems (ASCI), said
his company was formed in 1993 for the purpose of developing coal
fired and cogeneration plants throughout Alaska as an energy
efficient and environmentally superior alternative to diesel
generation by electric utilities. His proposal recommended the use
of coal fired generation plants in rural Alaska to replace diesel
generation and use the waste heat captured off the combustion cycle
to displace millions of gallons of fuel oil that were now being
used for space heating purposes throughout the community. This was
possible because Alaska Cogeneration Systems was in the process of
reactivating and reopening the Evan Jones Coal Mine, home of the
highest quality coal in Alaska.
MR. BETTINE listed the four principals that made up Alaska
Cogeneration Systems. The first being himself, a professional
electrical engineer, with extensive Alaska utility experience, as
well as an attorney at law. The next person he mentioned was
William Steigers, Ph.D., an environmental permitting specialist.
The third was Michael Oswald, mechanical engineer who worked as
vice-president for Energy Products of Idaho. He was instrumental
in developing the fluid ice bid combustion technology for clean
coal burning fuel. The last principal for ACSI was Austin Hobbs,
another electrical engineer, and also had a sublease for the Evan
Jones Coal Mine.
MR. BETTINE then disclosed his reasons for being before the
committee. His group had been proposing since 1993, to construct
a coal fired cogeneration project to supply the energy needed to
run a hydroelectric plant. DCRA had been notified several times
that ACSI had intended to construct this project to provide Copper
Valley's load, but the DCRA was opposed to this project.
MR. BETTINE stated their project for Valdez represented a fully
integrated resource option. Their proposal was to mine coal at
Evan Jones Coal Mine in Valdez that would provide all the electric
energy for Copper Valley. The waste heat captured from this plant
would instill a need to create a district waste heat system in
Valdez, in which the captured waste heat would displace between 2-3
million gallons of fuel used for space heating purposes. The total
amount of displaced fuel would be about 6 millions gallons on an
annual basis. This would create an extremely high thermal
efficiency.
MR. BETTINE stated another aspect of their project would be to haul
the coal to Valdez in containerized vans. These vans would then be
able to back haul solid waste from the surrounding areas of Valdez
after they dropped off their coal load and a proposed land fill
site would be the strippets from the Evan Jones Coal Mine. ACSI
has met with the DCRA and various other organizations that would
control this and they felt this would be a great idea. This would
not only apply to this community but through all coastal
communities in Alaska.
MR. BETTINE said the advantages of coal fired cogeneration would be
to allow the burning of about 25 percent of the solid waste right
on site as a supplemental fuel to the coal, reducing the amount of
coal necessary to be hauled from the mine. This mine would also
create a centralized landfill for small communities throughout
Alaska.
MR. BETTINE said the Evan Jones Coal Mine supplied all of Alaska's
coal up until about 1960 when it was shut down due to the
availability of natural gas. The economic situation is such now
that it looks promising to reactivate the coal mine. He stated
that the proven reserves of the Evan Jones Coal Mine is around 30
million tons of recoverable coal which is enough to supply 300 tons
per year for many years to come.
MR. BETTINE identified several people who would like to purchase
waste heat, including all the major businesses in Valdez such as
the school district, the community college, the Coast Guard, DOT
and even the city of Valdez itself. The city of Valdez had very
unique ideas on how to use the excess heat to melt snow to keep the
street clear because the cost of the heat would be low. They also
want to use the heat to construct another fishery on the west part
of town and the heat would allow them to build and support a
hatchery to grow king salmon.
MR. BETTINE stated that based on the parameters contained in the
Copper Valley Intertie feasibility study prepared by the DCRA, it's
economical to do this. ACSI could make a reasonable profit and
charge a reasonable cost for their energy. They would be selling
waste heat to selected large consumers, at about 85 percent of what
it would cost them to heat their buildings using fuel oil. This
money then would go back in and offset rates to all Copper Valley
consumers who would all share in the cost of the waste heat. ACSI
would be a great demonstration project to show that renewal of coal
fired cogeneration technology within the state is viable and it is
a good alternative to continue diesel generation. He said that if
the shipped coal was spilled in the ocean, it is just an activated
charcoal filter, whereas if oil is spilled, it would create an even
bigger mess. ACSI is offering Alaska's most abundant resource to
provide the energy needs of many of the coastal communities within
Alaska.
MR. BETTINE continued that a modern coal burning plant is not quite
the pollutant it once was and even rivaled a gas plant in
cleanliness. A coal plant burns 10 times cleaner than a diesel
generator would. This was due to the fact that diesel generators
burn at a high temperature, emitting lots of toxins and
particulates unable to be seen by the naked eye. A modern coal
plant, however, burns at a lower temperature and emits about one-
tenth of that given off by a diesel generator. They inject
limestone to lower the sulfur dioxide emitted and put bag hoses
over the exhaust stream acting like a giant vacuum cleaner bag
capturing all the particulates. He stated the only pollution given
off by a coal fired cogeneration plant was water vapor and carbon
dioxide.
MR. BETTINE listed several economic advantages for constructing the
Valdez cogeneration project. First, he said you would have the
power generation capacity located at CVEA's major load center.
Approximately 70 percent of Copper Valley's load is in Valdez,
making it advisable to have the plant in Valdez. Another advantage
is that it is the least cost option for supplying CVEA's power
requirements. Installing a plant would also provide 12 long term
jobs in Valdez for plant operators. ACSI would consider entering
a 20- to 30-year contract with Copper Valley Electric providing its
future requirements. This plant would be providing Valdez
consumers an estimated $5 million in additional savings due to the
purchase of waste heat. He stated they would be reactivating the
Evan Jones Mine in the Valley creating 12 long term jobs and up to
30 mining jobs over a period of three to five years.
MR. BETTINE went on to say previous legislators during 1994 stated
they wanted to replace diesel generation where possible with local
alternative solutions such as coal, and increase existing systems
efficiencies by using waste heat and also develop projects that
reduce or eliminate diesel generation in rural communities.
MR. BETTINE commented that ACSI is trying to meet the requirements
of Alaska's energy strategy. Private power developers in the lower
United States constructed 50 percent of all new generation put on
line last year. ACSI is the first private power developer trying
to construct a major cogeneration facility within the state. ACSI
has met with resistance from both the DCRA and the state itself.
In the lower United States, private power producers are sought
highly by utilities because they can produce cheap, reliable power
more so than utilities can. A typical power producer would operate
his plant at two-thirds the manning of a utility, reducing the cost
of charges per kilowatt hour.
MR. BETTINE stated that the Nineteenth Legislature was elected on
the platform that they would encourage private development and
curtail government interference with private industry. He said he
was present to ask the government to give the private industry a
chance. ACSI wants the government to stop subsidizing Alaska
utilities at the expense of private power producers. He
specifically asked the legislature, when it comes to the Valdez
project, to rescind the legislation that authorized the Sutton-
Glennallen Intertie. He asked that legislators not make available
the $35 million that was appropriated into the Power Project Loan
Fund, but to allow a private power producer to move forward to
supply that energy to Copper Valley Electric. He expressed his
interest at being eligible to receive some of that money and his
company would be willing to take it out as a loan and pay it back
with an interest rate ranging from 0 to 7 percent. He again stated
that his project was economically feasible, even if they go out on
the open market. ACSI would just like to have the equal
opportunity that's provided for other utilities throughout the
state and have access to lower cost debt financing providing lower
cost power.
MR. BETTINE also wanted the legislators to look at the present
budget situation. He said it wasn't prudent to ask the citizens of
the state of Alaska to subsidize a major capital project competing
with a private sector project that would provide lower, more
economic power for the people.
Number 368
CO-CHAIR IVAN requested that the division respond to the overview
given by Mr. Bettine, either by letter or personal contact. He
said that further interest could be channeled through the different
legislators through meetings and letters of opinion.
Number 385
REPRESENTATIVE BUNDE asked about shipping coal up the Yukon and
Kuskokwim River and how far up would shipping be possible.
Number 389
MR. BETTINE answered they have only looked at sending it upriver to
Bethel at one-third the cost of shipping fuel oil.
ADJOURNMENT
CO-CHAIR IVAN ended the meeting and stated that there was no
meeting scheduled for Thursday, February 28. He adjourned the
meeting at 3:00 p.m.
| Document Name | Date/Time | Subjects |
|---|