Legislature(1995 - 1996)
03/25/1995 01:06 PM House CRA
| Audio | Topic |
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* 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
March 25, 1995
1:06 p.m.
MEMBERS PRESENT
Representative Ivan, Co-Chair
Representative Alan Austerman, Co-Chair
Representative Kim Elton
Representative Al Vezey
Representative Pete Kott
Representative Irene Nicholia
MEMBERS ABSENT
Representative Jerry Mackie
OTHER LEGISLATORS PRESENT
Representative Norman Rokeberg
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
WITNESS REGISTER
REPRESENTATIVE VIC KOHRING
Alaska State Legislature
State Capitol Building, Room 428
Juneau, AK 99801
Telephone: (907) 465-2186
POSITION STATEMENT: Introduced HB 154
CRAIG LYON, Legislative Aide
to Representative Vic Kohring
Alaska State Legislature
State Capitol Building, Room 428
Juneau, AK 99801
Telephone: (907) 465-2186
POSITION STATEMENT: Answered questions regarding HB 154
JIM MCALLISTER, Regional Forester
Division of Forestry
Department of Natural Resources
400 Willoughby Ave., 3rd floor
Juneau, AK 99801-1796
Telephone: (907) 465-5401
POSITION STATEMENT: Explained buffer zones as they pertained to
HB 154
LARS EHRLANDER
P.O. Box 8420
Fairbanks, AK 99708
Telephone: (907) 451-8342
POSITION STATEMENT: Testified in support of HB 154
MICK MANNS
Paradise Valley
Bettles, AK 99726
Telephone: (907) 479-5704
POSITION STATEMENT: Testified in support of HB 154
WILLIAM SAMPLES, Project Manager
Federal Government
315 Cope St.
Kodiak, AK 99615
Telephone: (907) 486-2906
POSITION STATEMENT: Testified against HB 154
PAT CARLSON, Assessor
Kodiak Island Borough
710 Mill Bay Road
Kodiak, AK 99615
Telephone: (907) 486-9350
POSITION STATEMENT: Testified in support of HB 154
STEVE VAN SANT, State Assessor
Department of Community and Regional Affairs
333 W. 4th Ave., Suite 319
Anchorage, AK 99501
Telephone: (907) 269-4500
POSITION STATEMENT: Answered questions regarding HB 154
ELIZABETH HOLT
HC01, Box 6472
Palmer, AK 99645
Telephone: (907) 745-5577
POSITION STATEMENT: Testified against HB 154
LUCILLE FREY
HC02, Box 7342
Palmer, AK 99645
Telephone: (907) 745-5577
POSITION STATEMENT: Testified in support of HB 154
RAY BRIGGS
P.O. Box 3569
Palmer, AK 99645
Telephone: (907) 745-5654
POSITION STATEMENT: Provided Comments
WESLEY E. NEWCOMB
P.O. Box 1001
Sterling, AK 99672
Telephone: (907) 262-3135
POSITION STATEMENT: Testified in support of HB 154
PEGGY MULLEN
355 Lingonberry
Soldotna, AK 99669
Telephone: (907) 262-9225
POSITION STATEMENT: Testified against HB 154
STEPHEN CONN, Executive Director
Alaska Public Interest Research
P.O. Box 101093
Anchorage, AK 99501
Telephone: (907) 278-3661
POSITION STATEMENT: Testified against HB 154
TOM PITMAN, Municipal Assessor
Municipality of Anchorage
632 West 6th Avenue
Anchorage, AK 99519
Telephone: (907) 343-6697
POSITION STATEMENT: Testified against HB 154
TONY TURRINI, Counsel
Native Wildlife Federation
750 West 2nd Avenue
Anchorage, AK 99515
Telephone: (907) 258-4800
POSITION STATEMENT: Testified against HB 154
JOHN ISAACS
Alaska Chapter of the American Planning Association
308 G Street #315
Anchorage, AK 99517
Telephone: (907) 274-9719
POSITION STATEMENT: Commented on HB 154
BILL CUMMINGS, Assistant Attorney General
Transportation Section
Department of Law
P.O. Box 110300
Juneau, AK 99811-0300
Telephone: (907) 465-3603
POSITION STATEMENT: Testified on HB 154
GERON BRUCE, Legislative Liaison
Office of the Commissioner
Alaska Department of Fish and Game
P.O. Box 25526
Juneau, AK 99802-5526
Telephone: (907) 465-6143
POSITION STATEMENT: Testified on HB 154
STEVE NOEY, Real Estate Broker
P.O. Box 110018
Anchorage, AK 99511
Telephone: (907) 346-2208
POSITION STATEMENT: Testified in support of HB 154
LISA BLACHER, Lobbyist
Alaska Environmental Lobby, Inc.
P.O. Box 22151
Juneau, AK 99802
Telephone: (907) 463-3366
POSITION STATEMENT: Testified against HB 154
PAM NEAL, Executive Director
Alaska State Chamber of Commerce
217 Seward Street, No. 201
Juneau, AK 99801
Telephone: (907) 586-2323
POSITION STATEMENT: Testified on HB 154
PREVIOUS ACTION
BILL: HB 154
SHORT TITLE: REGULATORY TAKING OF PRIVATE PROPERTY
SPONSOR(S): REPRESENTATIVE(S) KOHRING,Rokeberg,Kott
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
02/21/95 (H) MINUTE(CRA)
03/01/95 550 (H) COSPONSOR(S): ROKEBERG
03/09/95 (H) CRA AT 01:00 PM CAPITOL 124
03/09/95 (H) MINUTE(CRA)
03/16/95 (H) CRA AT 01:00 PM CAPITOL 124
03/24/95 919 (H) COSPONSOR(S): KOTT
03/25/95 (H) CRA AT 01:00 PM CAPITOL 124
ACTION NARRATIVE
TAPE 95-11, SIDE A
Number 000
CO-CHAIR IVAN called the House Community and Regional Affairs
Committee to order at 1:06 p.m. He noted the members present at
the call to order were Representatives Kim Elton, Alan Austerman,
Al Vezey and Pete Kott. Members absent were Representatives Jerry
Mackie and Irene Nicholia. The agenda called for general
discussion on HB 154. He said witnesses were waiting on line to
testify from Anchorage, Mat-Su, Kodiak, Kenai and Soldotna. He
invited Representative Vic Kohring to introduce HB 154.
HB 154 - REGULATORY TAKING OF PRIVATE PROPERTY
Number 023
REPRESENTATIVE VIC KOHRING, Sponsor, said his bill impacted the
effectiveness of regulations regarding private property and
regulations that restrict the individual's use of private property.
The bill states just compensation for the individual in the event
of a regulatory taking. He addressed committee concerns from the
prior two hearings on HB 154. The first concern questioned the
anticipated increase in litigation if HB 154 became law.
Representative Kohring stated this would not happen, as he talked
with the Deputy Director of the National Association of Attorney
Generals who said they had no knowledge of increased litigation
resulting from other states passing similar legislation. The
second concern was whether it was considered an unfunded mandate if
the state were to impose a restriction and make a municipality pay
the property owner in a regulatory taking. Representative Kohring
said there wouldn't be an unfunded mandate because the state agency
would be required to reimburse any municipality that compensated a
property owner in a takings claim.
Number 076
CO-CHAIR IVAN recognized the attendance of Representative Irene
Nicholia. He asked if committee members had any questions or
comments.
Number 082
REPRESENTATIVE PETE KOTT asked if the state agency didn't have the
funds to compensate a municipality, would it require a legislative
appropriation. He stated there was a provision in HB 154 saying
payment must be rendered in three months.
Number 102
REPRESENTATIVE KOHRING said he wasn't aware of a state agency
running out of available funds in terms of their operating budget
proceeds.
Number 112
REPRESENTATIVE KOTT asked what kind of effect it would have on an
agency if it had to render payment within three months but had no
money with which to compensate parties. He stated this scenario
would require a legislative appropriation.
Number 121
REPRESENTATIVE KOHRING agreed the appropriation would have to be
the solution which would have negative effects on the operation of
the state agency.
Number 129
REPRESENTATIVE KOTT asked if HB 154 shouldn't address a provision
that would cover the agency in the event a payment was due during
the interim and funds weren't available.
Number 137
REPRESENTATIVE AL VEZEY interpreted it to say if the agency
couldn't pay the debt within the required time, it accrued interest
according to state law.
Number 148
REPRESENTATIVE KOHRING stated he wouldn't object to extending the
amount of time required to pay back the debt.
Number 159
CRAIG LYON, Legislative Aide to Representative Vic Kohring, said a
state agency could do one of two things: They could pay the
compensation or they could refuse to take the action and pay. He
stated HB 154's intent was to act as a deterrent.
Number 170
REPRESENTATIVE VEZEY said an obligation was incurred by the state
agency and with not following through with payment of debt, the
owed party suffered a loss of property. Routinely, this situation
would be kept in check by the paying of interest. He mentioned
several different operations, both on a state and private level,
where debts are incurred and a debtor paid interest on overdue
debts.
Number 184
REPRESENTATIVE KOHRING said there was a provision in the bill
regarding interest in the event there was an outstanding debt.
Interest would accrue at 3.5 percent.
Number 188
REPRESENTATIVE KOTT interpreted it to mean 3.5 percent would be
accrued during the three month limit to pay the owed party. He
wanted to know why the London Interbank offering rate was used
instead of the Prime Rate.
Number 201
MR. LYON responded the London Interbank rate was used because it
was more stable than the Prime Rate.
Number 208
REPRESENTATIVE KOTT said he understood the London Interbank
offering rate was higher with an escalated interest rate.
Number 213
MR. LYON stated it would be up to the committee to decide which
rate to use.
Number 219
REPRESENTATIVE KIM ELTON wanted to know, if a shop was closed down
and qualified as taking, whether the municipality taxpayers or
municipality was required to reimburse the property owner.
Number 231
MR. LYON stated if an individual had purchased property and opened
a business before a zoning came into effect, according to the terms
listed in HB 154, the private property owner would have to be
compensated in the event his business was closed.
Number 241
REPRESENTATIVE ELTON asked if a liquor establishment, in a village
that has chosen to go dry, would qualify under the takings
provisions of HB 154.
Number 246
MR. LYON stated he would assume it would, as would any legitimate
business that has part of their economic viability or use taken
away by government action.
Number 251
CO-CHAIR IVAN asked if there were questions or comments from the
committee.
Number 254
REPRESENTATIVE IRENE NICHOLIA wondered why there wasn't a fiscal
note from the Department of Law (DOL) and the Department of
Transportation and Public Facilities (DOTPF).
Number 262
MR. LYON stated there should be a fiscal note from the DOL with a
lengthy analysis of the proposed cost to the department equaling
three months of attorney time.
Number 268
REPRESENTATIVE NICHOLIA asked if the department didn't submit an
estimated cost in the actual dollar amount.
Number 270
MR. LYON confirmed this and stated they had estimated three months
of attorney time to draw up the regulations. He noted members had
copies of Idaho and Washington State guidelines regarding
regulatory takings which would be similar to what HB 154 suggests.
Number 279
REPRESENTATIVE KOHRING said that by implementing the bill in July
1995 and requesting the guidelines to be ready by January 1996,
gives the DOL six months to formulate the guidelines. If a taking
should occur during these six months, it wouldn't actually be
addressed until July 1996.
Number 291
REPRESENTATIVE KOTT corrected the comments regarding attorney time
in that it stated two months not three with the initial
compilation.
Number 297
REPRESENTATIVE KOHRING said the DOL was concerned there would be
perpetuating costs involving the guidelines. The guidelines would
uniformly apply to any taking and be comprehensive enough not to
call for additional drawings.
Number 310
REPRESENTATIVE ELTON asked if Representative Kohring had a chance
to review a memo written by the State Forester. He thought the
Division of Forestry (DOF) had an expectation of a loss of hundreds
of millions of dollars. He believed it would be prudent to get a
fiscal note from the Department of Natural Resources (DNR) to
formalize an estimate.
Number 322
MR. LYON stated the DOF was referring to legislation prohibiting
the use of timber within a 66 foot buffer zone currently in place.
Individuals who haven't bought property before buffer zones were
installed currently don't have the value of the property, but those
individuals who bought the land before buffer zoning, have lost
value in their land. The memo mentioned hundreds of millions of
dollars in value not utilized by the individual property owners.
Number 343
REPRESENTATIVE ELTON stated much of the land involved were Native
lands transferred prior to the Forest Practices Act. This Act was
drafted by foresters, people in fishing communities and by other
resource users to protect hundreds of millions of dollars in other
resources.
Number 353
REPRESENTATIVE KOHRING stated the basic intent of the regulations
is to protect the well-being of the public. A restriction from an
individual's property rights calls for just compensation. He
believed HB 154 would have an impact on the burden of regulations
within society, both on national and state levels.
Number 376
CO-CHAIR IVAN recognized the attendance of Representative Norm
Rokeberg.
Number 380
REPRESENTATIVE NICHOLIA asked about a fiscal note from the DOTPF.
Number 383
MR. LYON stated he hadn't specifically asked for a fiscal note from
DOTPF.
Number 388
REPRESENTATIVE VEZEY stated it was the policy of the Knowles
Administration that the committee request fiscal notes, not the
bill sponsor. The Administration is asking committees to request
fiscal notes from them, and they would oversee the job of
protracting them.
Number 397
REPRESENTATIVE NICHOLIA asked if Tom Boutin would be available for
questioning.
Number 404
REPRESENTATIVE KOHRING said he wasn't aware of Mr. Boutin's
attendance.
Number 409
CO-CHAIR IVAN stated members from the Division of Forestry were
present to answer questions.
Number 419
JIM MCALLISTER, Regional Forester, Division of Forestry Coastal
Region Office, Department of Natural Resources (DNR), said he would
answer questions regarding forest practices issues.
Number 422
REPRESENTATIVE NICHOLIA asked him to explain a section of the memo
from Tom Boutin.
Number 424
MR. MCALLISTER said the Forest Practices Act specified private
Native owned lands have a 66 foot buffer left on all streams of a
certain type. The Act had no defined amount of streams it would
entail. He stated a single tree could be worth around $20,000
creating an estimate of hundreds of millions of dollars in value
lost to the Native corporations with the established buffer zones.
Number 440
REPRESENTATIVE NICHOLIA asked if HB 154 came into effect, the
estimated millions would be the loss to Native corporations.
Number 443
MR. MCALLISTER said buffers are in the definition of a taking.
Fish and Wildlife had installed the buffers for fish habitat
purposes. The buffers were placed with the representation and
process of private landowners, fishing communities and regulatory
agencies.
Number 454
REPRESENTATIVE NICHOLIA asked if HB 154 would have an impact on the
fishing industry.
Number 457
MR. MCALLISTER stated the current buffers established in 1990 would
be considered a taking and the state could be liable to pay private
property owners for the value within the buffers.
Number 464
CO-CHAIR IVAN asked for questions from the committee.
Number 466
REPRESENTATIVE VEZEY asked if there was an estimate of uncutable
timber located on private land.
Number 470
MR. MCALLISTER said he didn't have an estimate as it wasn't
possible to have a detailed counting of the trees as well as the
variety of streams.
Number 476
REPRESENTATIVE VEZEY said the Forest Practices Act didn't deal with
areas where harvesting wasn't considered but only in those where
state law prohibited certain trees from being harvested. He
believed an estimate could be deduced from these areas.
Number 481
MR. MCALLISTER said the Division of Forestry identifies the streams
meeting the criteria but thousands of miles of buffers were still
left.
Number 491
REPRESENTATIVE VEZEY stated this bill would only impact private
landowners and not state or federal land. He wanted to know what
percent of commercially valuable forest were privately owned.
Number 498
MR. MCALLISTER said the buffers referred to private land, as
federal land had its own buffer requirements. About half a million
acres were being harvested in the Southeast region since 1990.
Number 505
REPRESENTATIVE VEZEY asked how many buffer zones were in the
private land areas. He also wanted to know what percent of the
half a million acres was harvested.
Number 509
MR. MCALLISTER didn't know what percent and he said some village
corporations have harvested most of their property outside of the
buffers. The majority of the buffer trees are still standing,
however, and one village corporation has estimated their uncut
trees equaling about $20 million in profit.
Number 521
REPRESENTATIVE VEZEY asked if this was in response to HB 154.
Number 522
MR. MCALLISTER said the estimate was in response to the value of
the buffers and the village corporation estimate of what was left.
Number 525
REPRESENTATIVE VEZEY asked if the $20 million profit was what was
tied up in regulations.
Number 527
CO-CHAIR IVAN invited testimony from witnesses on teleconference.
Number 539
LARS EHRLANDER said he had faxed information for the committee the
day before and wondered if the members had received it. He
appreciated the committee's effort in working on HB 154. He has
been involved for 12 years in a condemnation case which has been
difficult for his family. He believed his case could be used as a
worst case scenario. He stated he was glad this committee was
working on legislation to ensure his situation didn't happen to
anyone else. He was concerned about the ten year time limit to
file a complaint or take action regarding a taking. He expressed
concern about when the time limit began, when the government
committed the wrong, or when the owner realized he had been hurt.
Mr. Ehrlander's case started 12 years ago and is still ongoing and
he's not even a hundred percent sure that he was hurt as he is
awaiting the decision of the Supreme Court ruling. He said it
would be difficult for him to remain within the ten year limit to
file a complaint if he's not sure whether he was hurt. He had four
approved city tax lots and one was taken due to a separation
agreement the state didn't want to go through with. He wanted to
see the immunity removed from state officials as he's noticed the
government had more immunity than members in private industry. In
his case, his property and working capital were taken but the fees
to take it to court, he estimated, were over $120,000.
Number 652
CO-CHAIR IVAN invited Mick Mans to testify.
Number 655
MICK MANS said HB 154 would prevent government agencies from
bankrupting individuals and companies from preventing sensible,
economic development of Alaska. He said without the bill, all the
current federal and state laws meant to protect property rights are
meaningless. He thought HB 154 should be expanded to include
mineral rights, grazing rights, logging rights, access rights,
traffic rights, recreational rights and all rights meant to protect
development of any kind. He believed the government would continue
takings knowing the individual probably wouldn't be able to pay the
lawsuit fees without HB 154. He referred to Section 1 in which no
person shall be deprived of life, liberty and property for equal
protection. He then referred to different amendments and the U.S.
Constitution concerning private property and the individual's
rights. He explained the big case he's been through with his
mining operation and the battles with the Department of Fish and
Game and the government to have mining rights to a certain section
of land. He stated something should be done to end the government
abuse of private individuals and companies with the intent to enjoy
living in Alaska without having to worry about governmental takings
without due process of law.
TAPE 95-11, SIDE B
Number 073
CO-CHAIR IVAN invited Bill Samples from Kodiak to testify.
Number 084
BILL SAMPLES, Project Manager, Federal Government, said there must
be a cost/benefit ratio between a government agency action and what
it's going to cost and what it would take out of the private
sector. He stated HB 154 parallels the constitutional law. He
stated he wasn't sure how buffers created in 1990 could be subject
to legislation created in 1995. He wanted to recognize regulation
requiring there be environmental assessments done and that no
property could be used for criminal activity.
Number 136
CO-CHAIR IVAN asked if there were any questions or comments from
the committee. He invited Pat Carlson to testify.
Number 141
PAT CARLSON, Assessor, Kodiak Island Borough, was concerned about
the implications of taxation and assessment adjustments required.
This would be in direct conflict with existing state law which
requires all property be annually assessed at one hundred percent
market value. A property owner could acquire an appraisal from an
outside agent that would become the assessment regardless of the
opinion of the value. He's currently involved with land
acquisitions in Kodiak in which he has appraisals from certified
appraisers that are millions of dollars apart. He mentioned
discussions concerning timber land where expansion of the buffers
to one hundred feet could have tremendous impacts on Native
corporations' timber harvesting on Afognak Island. He believed
analysis needed to be done on the impact dealing, not only with
government agencies but also with private citizens, in the
fisheries industries. The state could, by default pay millions of
dollars. He stated if the committee went back to the original
language of the bill regarding taxation, which does not conflict
with the market value estimate, and exclude language regarding
appraisals, many conflicts could be avoided. The procedures
already in place satisfy the needs of the citizens as to the value
of their property. He suggested further analysis be done by the
DOL when looking into the impacts of the various issues regarding
changes made to mining laws or timber laws.
Number 207
REPRESENTATIVE ELTON asked what would happen if a taking has been
determined because a property owner wasn't allowed or no longer
allowed to do something. He asked if Mr. Carlson would view the
private property at the rate which included the value of the
property plus the amount paid by the government to compensate the
property owner in the event of a taking, or would he assess the
property at the new value that reflects the government action that
took away a property right.
Number 226
MR. CARLSON said, as an assessor, he was required to annually
reappraise the property at its market value. The government action
affects the highest economic return of that property and decreases
the value. The assessor would have to, under the law, reflect this
in his assessment. In a physical taking of a property, the
assessor would have to reflect that under the existing law. He
said the appraisal issue is necessary and makes the assessment
procedure complicated.
Number 244
REPRESENTATIVE ELTON said, if he was a property owner and the
government had compensated him for the loss of property, he
believed the money given to him would be a reflection of the value
of the property. He said this money should be taken into account
with the base value of the property.
Number 256
MR. CARLSON said under existing state law, he would not reflect the
income to the property owner. The property would receive the
compensated money and lower the assessed value because of the
taking.
Number 261
REPRESENTATIVE VEZEY said he understood that under current state
law if there was a change in zoning, the uses prior to the change
are allowed to continue as long as there aren't major changes that
would cause it to go beyond a maintenance of the establishment.
Number 270
MR. CARLSON said this was a correct understanding. He said he ran
into evaluation problems and had to adjust it to fit into the
existing annual analysis.
Number 276
REPRESENTATIVE VEZEY asked if a community decided a certain
establishment was no longer desirable, would rezoning change the
fact that this proprietor could continue to do business.
Number 283
MR. CARLSON said it was difficult to analyze. The assessor would
look at the general retail value of the property and make
adjustments if the property was required not to be used.
Number 293
REPRESENTATIVE VEZEY stated he was just questioning Mr. Carlson's
background in the commercial regulation of property.
Number 298
REPRESENTATIVE ELTON said if there was a change in zoning, at the
point the property is sold, the full value couldn't be collected
because of additional restrictions. He said figuring out whether
it would be a taking from the past owner or the next would be an
interesting question.
Number 307
REPRESENTATIVE VEZEY said the law was well established and property
rights could be transferred where the grandfather rights clause
ends in that this use terminates for whatever reason on the part of
the owner.
Number 314
CO-CHAIR IVAN invited Steve Van Sant to testify.
Number 316
STEVE VAN SANT, State Assessor, Department of Community and
Regional Affairs (DCRA), stated currently in Alaska the appeal
procedure is set up. The bill by-passes the appeal procedure to
give property owners the option to appeal before the Board of
Equalization. This one asks that an independent appraisal from a
real estate appraiser be accepted by the municipality in the
evaluation mentioned earlier. He asked the legislature to look at
the original bill that states any taking should be reflected in the
assessed value and, if the landowner agrees, may appeal it.
Number 338
CO-CHAIR IVAN invited Elizabeth Holt to testify.
Number 340
ELIZABETH HOLT stated she opposed HB 154. She said she owned
several pieces of lake front property and she didn't understand why
she should be compensated due to regulations to protect water
quality. She said this issue has bothered the Mat-Su Valley for
years.
Number 357
CO-CHAIR IVAN invited Lucille Frey to testify.
Number 359
LUCILLE FREY stated she was a private landowner who lost property
rights every time a regulation or ordinance was passed. She said
HB 154 encourages more economic development for building. Her
property has undergone government takings and she believed the
private property owner needed protection.
Number 372
CO-CHAIR IVAN invited Ray Briggs to testify.
Number 375
RAY BRIGGS said he was involved in a federal lawsuit against the
city of Palmer for contaminating property next to the airport which
is next to his property. He asked what the private home owner had
when a state agency will not enforce an in-state or federal
regulation against individuals who break the regulations by
creating a hazardous dump site into wetlands. He believed this
would be an adverse condemnation. He bought property in 1989 from
the federal government, Small Business Administration, who
appraised the property at $295,000 but the Federal Bureau of
Administration (FBA) withdrew their support. He believed this was
because the FBA wanted to limit their liability for the cleanup.
He wanted to know where the landowner went except to the federal
court to sue the state or municipality for breaking the
regulations. He said the city of Palmer wasn't fined for the
contamination. He asked where the private landowner stood at this
point.
Number 414
CO-CHAIR IVAN asked Mr. Lyon to answer the question.
Number 417
MR. LYON stated he wasn't sure how the question pertained to HB
154.
Number 420
REPRESENTATIVE VEZEY stated the comments made by Mr. Briggs are
covered under federal law and not under the scope of HB 154.
Number 424
MR. BRIGGS asked if HB 154 dealt with inverse condemnation.
Number 426
REPRESENTATIVE VEZEY said he interpreted HB 154 as addressing the
issue of inverse condemnation by regulation.
Number 431
MR. LYON said this was also his interpretation.
Number 432
MR. BRIGGS said his property was appraised at $295,000 and the FBA
doesn't want the property. He wanted to know what to do next now
that his property was devalued to zero and if HB 154 could help
him.
Number 441
MR. LYON said there was a set up process to remedy Mr. Briggs'
situation. He stated he wasn't familiar with this area of law.
Number 446
MR. BRIGGS asked if anyone could send him a copy of regulations he
could go by. He had received a cost estimate from an attorney of
$250,000 to $300,000 to take his case into court.
Number 454
CO-CHAIR IVAN said representatives from state agencies weren't
present to address Mr. Briggs' concern but he would follow up on it
and get information back to Mr. Briggs. He invited Wesley Newcomb
to testify.
Number 463
WESLEY NEWCOMB stated he and a number of people he was representing
were all in favor of HB 154.
Number 469
CO-CHAIR IVAN invited Peggy Mullen to testify.
Number 470
PEGGY MULLEN referred to page 7 regarding takings as describing
anything including restraints on wetlands and restricted use of
private property. She stated the bill didn't address the potential
for excluding an economic resource such as the river salmon
industry affecting commercial and sports fishermen and a borough's
decision to restrict use of riverfront property. She said if she
wanted to have a bulk fuel storage facility, for example, on her
riverbank property, the city borough could come and say she
couldn't as it could harmfully affect salmon.
Number 528
CO-CHAIR IVAN said Bill Cummings from the DOL was present to
address this issue.
Number 532
REPRESENTATIVE KOTT said regulations could be considered necessary
to avoid or correct a public nuisance.
Number 536
REPRESENTATIVE VEZEY asked what percent of the 62-mile Kenai
riverbank was private property.
Number 540
MS. MULLEN responded that approximately 58 percent was private
property.
Number 541
REPRESENTATIVE VEZEY said Ms. Mullen's comments concerning bulk
fuel storage close to a riverbank was included under different
statutes. He said there was a several million dollar bond
requirement to have such a storage facility. He didn't think this
was a reasonable concern for Ms. Mullen to have. He asked what Ms.
Mullen's property boundary was compared to the Kenai River.
Number 553
MS. MULLEN said most of the bank lots were referred to as piano key
lots because they run directly up to the bank and may only be 100
feet wide. She said the agencies available in Kenai aren't well
versed enough to explain restrictions above ordinary tidewater.
She said she was concerned about the bill being too one-sided in
compensating private property owners instead of looking at how to
benefit the whole community.
Number 583
REPRESENTATIVE VEZEY said it was one thing for a government agency
to appropriate land for public use, such as roads, but for the
agency to request that private land be used for the public would
anger many individuals.
Number 592
MS. MULLEN said most riverbank landowners choose to live there
because they love to fish and are angry at having anyone instruct
them on how to use their property.
Number 601
CO-CHAIR IVAN invited Steven Coon to testify.
Number 604
STEPHEN CONN, Executive Director, Alaska Public Interest Research,
stated HB 154 was an unmitigated disaster. He said it disempowers
communities in the urban areas from dealing with these issues and
it has tremendous effects on villages developing their zoning
regimes. He said it puts a stake in local control. He said to
look at the potential for outside businesses to come in and take
from the state revenue. He thought the flexible language in the
bill would create a playground for lawyers. He stated this bill
would put an end to communities making their own decisions to the
extent it would have an effect over the rights of the private
property owner.
Number 649
CO-CHAIR IVAN invited Tom Pitman to testify.
Number 651
TOM PITMAN, Municipal Assessor, Municipality of Anchorage, agreed
with the earlier concerns discussed by Pat Carlson. He thought HB
154 stifled an appropriate approach in property evaluation. He
said he didn't understand the intent under AS 34.50.120 requiring
an assessor's analysis of economic effects.
Number 675
CO-CHAIR IVAN invited Tony Turrini to testify.
Number 676
TONY TURRINI, Counsel, National Wildlife Federation, said he
opposed HB 154. He said HB 154 would create a larger, more
expensive and less efficient government. He said attorneys, who
would litigate the many claims raised by this legislation, would
benefit from this bill. He said any action taken by the government
which affects real or private property is a taking creating
unlimitless opportunities for claims. Under HB 154, an
unscrupulous business could ask to be compensated for not complying
with anti-trust regulations, for establishing a monopoly or
engaging in price-fixing. He said Alaskan taxpayers would end up
paying for the legislation. He said HB 154 would require state and
municipal governments and agencies to engage in a time consuming,
expensive analysis of potential risks, costs and alternatives.
TAPE 95-12, SIDE A
Number 017
CO-CHAIR IVAN invited John Isaacs to testify.
Number 020
JOHN ISAACS, Alaska Chapter of the American Planning Association,
has tried to come up with solutions for problems facing Alaskan
communities, such as the restrictive Federal Wetlands Permitting
Act. He said his association agrees with some concepts of the
bill, such as the unreasonable and restrictive taking of property.
He questioned whether HB 154 was the appropriate solution to the
problems and with the vague, broad language in the bill. He
thought those getting the worse end of the deal concerning takings
claims would be communities and the general public. He recommended
the committee not take action regarding HB 154 until the broad
scope of language could be improved.
Number 074
CO-CHAIR IVAN asked if there were any other witnesses on
teleconference wishing to testify.
Number 094
REPRESENTATIVE KOTT said HB 154 referred to civil liabilities. He
was concerned about the provision regarding buffer zones protecting
anadromous streams and wouldn't apply retroactively. He wondered
if the legislature would be obligated to provide financial
incentives to those individuals.
Number 115
MR. MCALLISTER stated this was the DNR's concern.
Number 120
REPRESENTATIVE KOTT asked if there was a representative from the
DOL to answer questions.
Number 121
CO-CHAIR IVAN invited Bill Cummings to testify.
Number 127
BILL CUMMINGS, Assistant Attorney General, Transportation Section,
Department of Law (DOL), expressed his pleasure at being present.
Number 130
REPRESENTATIVE KOTT asked if the current holdings in the buffer
zones would be affected and reimbursed.
Number 136
MR. CUMMINGS stated there was a 95 to 100 percent probability that
there would be compensation due to the drafting of HB 154.
Number 146
REPRESENTATIVE VEZEY stated with the current holdings, compensation
would be offered, but upon the passage of HB 154, if the government
put restrictions on property, it would be regarded as a taking.
Number 154
REPRESENTATIVE KOHRING stated the intent of HB 154 was not to make
it retroactive to any period of time but from its effective date.
He said he would be willing to clarify this language in the bill.
Number 164
REPRESENTATIVE VEZEY asked for a summary of property owners' rights
under the grandfather statute.
Number 167
MR. CUMMINGS said it was a common practice for example with zoning,
where a municipality comes in and changes permissible uses.
Generally, property owners are prohibited from expanding the use
but could take steps to reasonably keep the building in usable
condition, locking the owner under the passage of a new ordinance.
Number 178
REPRESENTATIVE VEZEY asked what happened if a city or municipality
decided to zone out a pornographic business. He wanted to know the
options available for this business unwanted by a community.
Number 187
MR. CUMMINGS replied that it depended upon the nature of the
specific business. He said there was an amount of litigation in
the Supreme Court concerning pornographic businesses, but there
were certain restrictions that could be applied and, in others,
couldn't.
Number 201
REPRESENTATIVE VEZEY asked about liquor stores and the potential
for a municipality to build a school within the designated 400 yard
zone. He asked what would happen to the liquor store.
Number 209
MR. CUMMINGS said the liquor store would be able to remain in its
spot, as it was there first.
Number 210
REPRESENTATIVE ELTON asked what would happen in a village that
voted to go dry and closes a liquor establishment.
Number 213
MR. CUMMINGS said under HB 154, the municipality or state ends up
buying the liquor store stock and liquor license because it was a
type of property.
Number 222
REPRESENTATIVE VEZEY asked what happened next after an action of
this sort.
Number 224
MR. CUMMINGS said the liquor store would close down and the owner
got the bad end of the deal.
Number 227
REPRESENTATIVE VEZEY asked if there hadn't been court cases
concerning this particular issue.
Number 229
MR. CUMMINGS stated under current statutory authority, liquor is
one of the more regulated commodities. He said a risk in owning
a liquor license was a community could vote to go dry creating a
loss in investment for the owner.
Number 235
REPRESENTATIVE VEZEY said there was a provision in the regulations
concerning the status of a liquor license in a community gone dry.
He thought the provisions stated if liquor became legal again the
prohibited liquor license and owner had grandfather rights.
Number 244
MR. CUMMINGS said this provision could be in effect but one had to
wait to exercise it, and by then it didn't have much value. He
said there were a large number of villages that had been dry for a
while and the liquor license owner had to wait until the village
voted to go wet again. He wasn't sure what the license right and
expectancy would be worth.
Number 253
CO-CHAIR IVAN asked Mr. Cummings to respond to Mr. Briggs' earlier
question concerning hazardous waste devaluing property.
Number 260
MR. CUMMINGS replied under federal legislation, this claim could
come against the municipality but he wasn't sure it would rise to
the level of a taking under HB 154.
Number 270
CO-CHAIR ALAN AUSTERMAN said many complaints from individuals via
teleconference referred to simplistic things where a taking would
be along water habitat areas, setbacks on properties, requiring
water and sewer in lots and not being able to subdivide a property.
He wanted to know who made this determination. He believed the
language in HB 154 would result in numerous ongoing court cases
with municipalities based upon public demands.
Number 296
MR. CUMMINGS said routine police power rulings would be a taking
under HB 154. Rulings included such things as the Forest Practices
Act, set back requirements, subdivisions, sewer requirements and
Division of Motor Vehicle codes regarding tinted windows.
Number 311
REPRESENTATIVE ELTON referred to public testimony and agreed that
HB 154 would create a large opportunity for certain suits. He
asked what Mr. Cummings' expectation of municipalities was and
whether they would be going to court more often in the future and
if the DOL would be involved in more cases.
Number 330
MR. CUMMINGS said he believed municipalities would be litigating
more. He viewed HB 154 as a full employment act for lawyers
regardless of which side they took.
Number 340
CO-CHAIR AUSTERMAN asked for confirmation regarding the forest
industry on Kodiak Island and whether the additional property
intended to be developed would be regarded as a taking if a buffer
zone setback was set up.
Number 350
MR. CUMMINGS said it would be a taking either way. He stated,
under the Alaska Native Claims Settlement Act (ANCSA), corporations
got land without restrictions. Since then, the state has enforced
the Forest Practices Act and imposed standards, creating a
situation in which the Natives had property rights and the
legislation has taken away their ability to fully exploit the
resources of the property. Under HB 154, with this loss, the
Natives are entitled compensation.
Number 361
CO-CHAIR IVAN invited Geron Bruce to testify.
Number 369
GERON BRUCE, Legislative Liaison, Office of the Commissioner,
Alaska Department of Fish and Game (ADF&G), mentioned several
concerns ADF&G had toward the committee substitute for HB 154. He
stated under Title 16, protecting and maintaining fish and wildlife
resources are the responsibility of the department. He asked the
committee to consider most of these resources are migratory and
could be on private property at one point and public lands at
another. He said HB 154 would impair the ability of the department
to protect these resources. He reviewed the historical basis of
why Americans chose to take this approach in regarding their fish
and wildlife resources as public. He said the ADF&G views HB 154
as undoing the balance between private property owners and
recognition of the rights of fish and wildlife resources by
elevating the rights of the private landowner above the public
interest. He stated this would put the ADF&G in an impossible
situation by being mandated by Title 16 to protect public fish and
wildlife resources and by prohibiting the ADF&G from using its
regulations to exercise the mandates. He gave examples of problems
caused for the ADF&G upon the passage of HB 154. The bill would
restrict the department's ability to protect important salmon
rearing and spawning habitats due to requested mining proposals in
Alaskan waters. He also elaborated on the Kenai River forest
industry creating a loss of about 12 percent of the productive
salmon producing habitat from habitat alterations. He believed HB
154 would undermine current proposals made by municipalities to
protect the resources. Access was another concern of the ADF&G.
A private landowner could have timber on his property he wished to
harvest but is impeded by a salmon producing stream on his
property. The owner would have to work with the ADF&G to get a
permit to access the timber and wait until there was no danger of
affecting the salmon population. This restriction on when it was
safe to get the timber from across the stream could be misconstrued
as a taking by the private property owner under HB 154. Mr. Bruce
referred to Potters Marsh and a parcel of land leased to a private
individual who wanted to develop a truck stop. The ADF&G denied
this proposal and, had HB 154 been in effect, the individual could
have claimed this as a taking and the department would have had to
compensate the owner. The ADF&G believes the current permit system
works well and have found only four former appeals for denial of
permits. Mr. Bruce gave an estimate of applications for permits
reviewed in Region 2 from July 1, 1991, to June 30, 1994, to prove
how insignificant the appeals were. He said there were 2300
applications reviewed for Title 16 permits, 1335 permits were
issued, 12 were denied, and the rest were deemed unnecessary. He
again reiterated the ADF&G believed the current system worked well
in providing a balance for private property owners to exercise
their land rights and the public's interest in protecting the fish
and wildlife resources important to Alaska.
Number 538
CO-CHAIR IVAN asked if the committee had any questions or comments.
He invited Steve Noey to testify.
Number 544
STEVE NOEY, Real Estate Broker, said from the testimony already
given, he believes regulatory takings are being done. He referred
to a memorandum submitted by the DNR regarding stream buffers which
says, by using the buffer program and AS 41.17, they have taken
millions of dollars in value from Native corporations. He
supported HB 154 which he believes takes care of problems pointed
out by government agencies. He stated the private property owner
should be justly compensated for his property as the Constitution
states.
Number 598
REPRESENTATIVE ELTON asked if a Native corporation should be made
to pay for the loss of a common property resource. He questioned
attaining the balance between the action of a private landowner and
that of someone wishing to make a living on resources degraded by
the private landowner.
Number 608
MR. NOEY said he wasn't aware of any situations where a resource
was completely annihilated, eliminating the livelihood of someone.
He stated a resource on someone's private property belonged to that
individual.
Number 613
REPRESENTATIVE ELTON was concerned with the belief that government
can pay, which really places this responsibility onto the taxpayers
or Alaskans not receiving necessary services such as education or
public safety.
Number 616
MR. NOEY said this wasn't true because if the government didn't
take, it didn't pay. He said the government had to act first and
pay later.
Number 617
REPRESENTATIVE ELTON said people have taken the salmon resources
and not paid, but the government pays for the loss of timber
resources.
Number 619
CO-CHAIR IVAN asked the committee if they had any questions or
comments. He invited Lisa Blacher to testify.
Number 629
LISA BLACHER, Lobbyist, Alaska Environmental Lobby, Inc., stated
she opposed HB 154. She referred to the bill sponsor and his use
of Mr. Noey as an example for why HB 154 was important. She said
Mr. Noey wanted to build an improper sewage disposal system on his
subdivision in Kachemak Bay. She stated he still hadn't complied
with the Department of Environmental Conservation's (DEC) waste
disposal permitting guidelines and was denied the ability to
proceed with his development. She read the DOL's trial brief,
concerning Steve Noey v. DEC, stating DEC's engineers testified it
would be appropriate to reject Mr. Noey's proposal because waste
water would be discharged to the surface of the land impacting
adjoining property and posing a public health hazard. Upon the
passage of HB 154, Mr. Noey could be allowed exemption from DEC's
permitting process or have the right to sue to make up for money
lost. Ms. Blacher talked about Alaska's high rates of Hepatitis B
and other infectious diseases and asked the committee if it wanted
to weaken a regulation that monitors sewage. She said HB 154 would
undermine municipal and local laws controlling zoning restrictions,
labor laws and seafood handling resulting in endless litigation.
She said information concerning the cost to other states that have
enacted similar legislation has not been substantial because it was
too early to see results. She noted the administrative costs have
been tremendous, reaching into the millions. She asked the
committee to consider the costliness of hiring legions of attorneys
and attending to thousands of claims. Ms. Blacher said regulations
would always be in place and anyone could file a claim saying the
regulations affected them. The regulations are important in
protecting public health and safety. However, if a regulation
causes a hardship for anyone, the court system is in place to
address these cases. She believed regulatory takings should be
looked at on a case-by-case basis instead of creating a bill
addressing these cases as a whole.
TAPE 95-12, SIDE B
Number 000
PAM NEAL, Executive Director, Alaska State Chamber of Commerce,
said she supported HB 154 as it would sensitize government to
private property rights. She said what is happening is regulatory
action is more subtle than putting a parkway through a land area.
Many groups are using the regulatory process to determine how
private property will be used. Groups such as the timber industry
and the mining industry are two suffering from this action.
Federal regulations are a problem seen nationwide with no
consideration of the loss to private property owners. She believed
that private property rights are the highest concern within Alaska.
She said upon the loss of any kind, someone is paying, be it the
property owners or the government. Without some kind of
protection, she believes the private property owner is paying too
frequently for a government regulation.
Number 065
CO-CHAIR IVAN asked for questions from the committee. He asked
Representative Kohring to follow up on the comments given by all
the testifiers.
Number 069
REPRESENTATIVE KOHRING said he appreciated the discussions given by
the testifiers. He saw this as pitting the small landowner against
a government trying to defend itself. He believed this bill was
considered a threat by government agencies against their ability to
continue opposing restrictions. He asked who was being defended,
the private landowner or government. He thought HB 154
sufficiently addressed these concerns and stated the individual had
constitutional rights. He said the bottom line was to compensate
a private landowner whose property was devalued as it was his
right. He requested the committee's consideration with HB 154.
Number 135
CO-CHAIR AUSTERMAN interpreted HB 154 as not addressing the cases
he referred to in previous comments. He believed if a community
wished to zone to certain standards they had the right. If they
created a zoning not agreeable by someone, this bill would enable
the individual to file a takings claim. He said the good of a
resource had to have some overall value to all Alaskan citizens.
He stated he was uncomfortable with HB 154 as it was currently
written unless his concerns could be addressed in the bill. He
said it was one thing for an individual to buy property with the
knowledge of set guidelines regarding the zoning of that property,
but not allowing the owner to develop that property gives the
individual the right to protest.
Number 195
REPRESENTATIVE KOHRING said rezoning didn't necessarily mean there
would be a devaluation of property as it could even increase the
value of property. He remembered a case in Wasilla where property
was reclassified as a commercial lot increasing that lot's value.
Number 208
CO-CHAIR AUSTERMAN referred to page 7, Section 9, which redefines
taking as other governmental actions that regulates or imposes a
restraint on private property use for public benefit. This public
benefit could be for rezoning an area but under HB 154, if an
individual didn't want his property rezoned for public use, he
could claim his property was devalued. He assumed public benefit
would go so far as to say the community had rights.
Number 222
REPRESENTATIVE KOHRING said the value wouldn't be arbitrarily
determined by the property owner but by fee appraisal. It wouldn't
be up to the private landowner to decide if his property had lost
value, but by the appraiser.
Number 231
REPRESENTATIVE VEZEY said rezoning has been claimed to be a taking.
He didn't think this was common when a higher standard of property
use was established, it usually raised the standard. He agreed
there could be basis for argument if the standards were lowered.
He stated zoning didn't stop existing land use.
Number 252
REPRESENTATIVE KOTT said if a government couldn't afford to take
property, it shouldn't. He was concerned with the anadromous
streams, referring to Montague Island and the ongoing Koncor
operation. If a buffer on each side of a stream was considered a
taking, a decision needed to be made on whether to protect the
spawning salmon or render payment for the taking. Rendering this
payment would be an extensive financial proposition for the
government. He said in striking a balance, the fishing resource
would be more consistent with the Constitution, thereby demanding
more protection, creating a need for a buffer and requiring
payment, which would drain the state funds.
Number 279
REPRESENTATIVE KOHRING stated he wasn't sure what kind of balance
could be struck.
Number 282
REPRESENTATIVE KOTT referred to Mr. Cummings' comment regarding a
100 percent probability stating takings and previous takings would
fall into this category.
Number 293
REPRESENTATIVE ELTON was concerned there was too much focus on the
buffer issue. He believed the government would have to pay twice
in some cases. He was disturbed by the general notion that
government can pay. He used the example of a small village
choosing to go dry by vote and the government placing a value of
$150,000 on the liquor business, there would be a government cost.
This cost would be born by individual Alaskans living within the
village, making it a significant disincentive to go dry. If a
village chooses not to go dry, the future costs would be high as
the government has to cover education, public safety, health and
social services and other public services.
Number 331
REPRESENTATIVE KOHRING said it boiled down to the fundamental
question of who is going to pay, the government or the individual
property owner. Upon an unconstitutional taking of private
property, everyone, constitutionally, has the right to just
compensation.
Number 343
CO-CHAIR IVAN appreciated the committee's interest in addressing HB
154. He stated the various state agencies had problems with the
current HB 154, but he understood the purpose and intent of the
bill. He requested the bill be further addressed in a subcommittee
which would include the bill sponsor and representatives from the
state agencies having difficulty in accepting HB 154. He hoped
these individuals would work together to come up with a workable
piece of legislation to bring before the committee for further
consideration. He delegated Representative Austerman as Chair of
the subcommittee and invited Representatives Elton and Kott to be
on the subcommittee.
Number 395
REPRESENTATIVE KOHRING expressed his appreciation at the
willingness of the committee to continue working with him on his
bill. He thanked the committee members and all those present and
stated he respected everyone's opinions regarding HB 154. He hoped
a compromise could be reached on which everyone could agree.
Number 402
REPRESENTATIVE KOTT also expressed his appreciation of the bill
sponsor taking on this difficult issue. He made a suggestion to
the subcommittee chair there be more focus on the elementary issues
the Community and Regional Affairs Committee was charged to review.
He thought many of the legal issues addressed by testifiers would
be better addressed in the next committee of referral, the
Judiciary Committee. He hoped CRA wouldn't digress from its
responsibilities.
Number 413
CO-CHAIR IVAN said his point was well taken.
Number 414
CO-CHAIR AUSTERMAN said it wasn't his intent to bury the bill and
he expressed his willingness to further discuss HB 154. He was
concerned HB 154 didn't breach the issue of too much regulation.
ADJOURNMENT
CO-CHAIR IVAN adjourned the House Community and Regional Affairs
Committee at 3:45 p.m.
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