Legislature(1997 - 1998)

02/18/1998 01:35 PM Senate CRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
    SENATE COMMUNITY & REGIONAL AFFAIRS COMMITTEE                              
                  February 18, 1998                                            
                      1:35 p.m.                                                
                                                                               
                                                                               
MEMBERS PRESENT                                                                
                                                                               
Senator Jerry Mackie, Chairman                                                 
Senator Dave Donley                                                            
Senator Randy Phillips                                                         
Senator Lyman Hoffman                                                          
                                                                               
MEMBERS ABSENT                                                                 
                                                                               
Senator Gary Wilken, Vice Chairman                                             
                                                                               
COMMITTEE CALENDAR                                                             
                                                                               
SENATE BILL NO. 28                                                             
"An Act relating to the unincorporated community capital project               
matching grant program; and providing for an effective date."                  
                                                                               
SENATE BILL NO. 190                                                            
"An Act relating to eminent domain and to negotiations to purchase             
property before it is taken through eminent domain; and providing              
for an effective date."                                                        
                                                                               
SENATE BILL NO. 191                                                            
"An Act relating to the exchange of state tide and submerged land              
to protect municipal watersheds and provide for airports and marine            
transportation facilities; and providing for an effective date."               
                                                                               
PREVIOUS SENATE COMMITTEE ACTION                                               
                                                                               
SB 28 - See Community & Regional Affairs minutes dated 2/18/98.                
                                                                               
SB 190 - See Community & Regional Affairs minutes dated 2/18/98.               
                                                                               
SB 191 - See Community & Regional Affairs minutes dated 2/18/98.               
                                                                               
WITNESS REGISTER                                                               
                                                                               
Senator John Torgerson                                                         
State Capitol                                                                  
Juneau, AK 99801-1182                                                          
  POSITION STATEMENT:  Prime Sponsor of SB 28                                  
                                                                               
                                                                               
Ms. Kim Metcalfe-Helmar, Special Assistant                                     
Department of Community & Regional Affairs                                     
P.O. Box 112100                                                                
Juneau, AK 99811-2100                                                          
  POSITION STATEMENT:  No position on CSSB 28(STA)                             
                                                                               
Rick Harris, Senior Vice President                                             
Sealaska Corporation                                                           
One Sealaska Plaza                                                             
Juneau, AK 99801                                                               
  POSITION STATEMENT:  Testified in support of SB 190 & SB 191                 
                                                                               
Ms. Lisa Blacher                                                               
Alaska Conservation Voice                                                      
P.O. Box 22151                                                                 
Juneau, AK 99802                                                               
  POSITION STATEMENT:  Voiced concerns with SB 190 & SB 191                    
                                                                               
John Jensen, Chief Right-of-Way Agent, Central Region                          
Department of Transportation & Public Facilities                               
P.O. Box 196900                                                                
Anchorage, AK 99519-6900                                                       
  POSITION STATEMENT:  Commented on SB 190 & SB 191                            
                                                                               
Ms. Jane Angvik, Director                                                      
Division of Land                                                               
Department of Natural Resources                                                
3601 C St., Suite 1122                                                         
Anchorage, AK 99503-5947                                                       
  POSITION STATEMENT:  Department has significant concerns with                
                     SB 191                                                    
                                                                               
Dick Mylius                                                                    
Division of Land                                                               
Department of Natural Resources                                                
3601 C St., Suite 1122                                                         
Anchorage, AK 99503-5947                                                       
  POSITION STATEMENT:  Has concerns with SB 191                                
                                                                               
ACTION NARRATIVE                                                               
                                                                               
TAPE 98-4, SIDE A                                                              
Number 001                                                                     
                                                                               
           SB  28 - UNINCORP. COMMUNITY MATCHING GRANTS                        
                                                                               
CHAIRMAN MACKIE called the Senate Community & Regional Affairs                 
Committee meeting to order at 1:35 p.m., and noted the presence of             
Senators Phillips, Hoffman, Donley and Mackie.                                 
                                                                               
CHAIRMAN MACKIE announced SB 28  would be taken up as the first                
order of business.  He noted there was a draft committee substitute            
which is substantially different than the original bill and is the             
result of his working with Senator Torgerson on several issues.                
                                                                               
SENATOR JOHN TORGERSON, prime sponsor of SB 28, speaking to the                
committee substitute, said the thrust behind the bill was to let               
unincorporated communities that are in organized boroughs also                 
participate in the unincorporated community matching grant program.            
Currently, that grant money is only available if the community is              
outside of a borough.                                                          
                                                                               
Senator Torgerson outlined the following revisions to the                      
Unincorporated Community Capital Project Matching Grant Program:               
                                                                               
.    The legislation provides that the unincorporated communities              
     in an organized area must come up with a 30 percent match in              
     money similar to the way boroughs do for their Capital                    
     Matching Grant Program.  This does not change the existing                
     unincorporated communities outside the boroughs from the                  
     current required match of 5 percent;                                      
                                                                               
.    It changes the program so that  a community must have a                   
     project in order to be granted the money.  Currently, a grant             
     is given regardless if there is a project on the books or not;            
                                                                               
.    It revises the fund distribution so projects can be based on              
     health and safety considerations subject to a ranking system              
     put together by the department.  It is anticipated that the               
     ranking system would be something similar to the Department of            
     Environmental Conservation's ranking process for water                    
     projects, as well as other ranking criteria that's used across            
     the board in other departments;                                           
                                                                               
.    It requires the governor to include projects in his capital               
     projects which would then come to the Legislature for final               
     appropriation; and                                                        
                                                                               
.    It changes the lapse time of the program from five years to               
     four years.  If a community has a project approved, it can                
     accumulate money for up to four years for a same project since            
     the maximum that be granted in one fiscal year is $25,000.                
                                                                               
Senator Torgerson directed attention to backup information                     
containing a list of incorporated areas by Senate district, the                
communities that are currently in the program by Senate district,              
and the communities that would be added to the program.  He noted              
that it roughly doubles the number of entities that could be                   
eligible for this program.                                                     
                                                                               
Number 090                                                                     
                                                                               
CHAIRMAN MACKIE asked Senator Torgerson what happens if the                    
projects  that are submitted to the Legislature by the governor and            
agencies  are funded below the amount requested for the $25,000                
grants to these communities.  SENATOR TORGERSON responded that is              
where they anticipate the ranking system would kick in and projects            
would be ranked by the departments based on health and safety                  
considerations.  He also noted that unincorporated areas inside of             
boroughs must have borough assembly approval for projects and the              
borough assemblies must recognize a nonprofit entity that's going              
to represent that area.                                                        
                                                                               
Number 115                                                                     
                                                                               
SENATOR HOFFMAN said the legislation seems to treat all of the                 
unincorporated communities much more fairly, but he expressed                  
concern that Section 2 changes the amount of the grant from a                  
minimum of $25,000 to a maximum of $25,000, so a community can                 
accumulate up to $100,000 over a four-year period, but in many                 
rural areas of the state it is conceivable that $100,000 wouldn't              
even cover a forty by sixty building.  SENATOR TORGERSON responded             
that there are other processes to go through to receive grant                  
money, and this was never intended to be everything for an                     
unincorporated community  to  pick projects without having some                
kind of fiscal restraint on it.  He said this levels the playing               
field, and by going to the maximum,  probably more communities can             
be squeezed in if they have smaller requests to begin with.                    
                                                                               
Number 180                                                                     
                                                                               
SENATOR PHILLIPS  directed attention to page 2, line 2 and the                 
phrase "social unit," which he thought should be defined in the                
legislation.  SENATOR TORGERSON replied that it was a good point,              
and that he would check with the drafter to see if it should be                
further defined.                                                               
                                                                               
Number 200                                                                     
                                                                               
Responding to an inquiry by Chairman Mackie, SENATOR TORGERSON                 
explained that the original legislation included recognized                    
nonprofits within the state of Alaska, but it was taken out in a               
sponsor substitute, and he has no intention of expanding the                   
legislation.  He added that some entities aren't communities as                
defined by unincorporated community and filed under the state as a             
recognized  unincorporated community, and that might be why "social            
unit" was included in the legislation.                                         
                                                                               
Number 256                                                                     
                                                                               
KIM METCALFE-HELMAR, Special Assistant, Department of  Community &             
Regional Affairs, said the department had not had a chance to look             
over the new committee substitute, but she thought the                         
establishment of a ranking system would change program                         
administration significantly.                                                  
                                                                               
There being no further testimony on SB 28, CHAIRMAN MACKIE                     
requested a motion to adopt the committee substitute and to move               
the bill out of committee.                                                     
                                                                               
SENATOR PHILLIPS moved the adoption of CSSB 28(CRA) and to move                
CSSB 28(CRA) out of committee with individual recommendations.                 
Hearing no objection, it was so ordered.                                       
                                                                               
Number 285                                                                     
                                                                               
                                                                               
        SB 190 - ATTEMPT TO PURCHASE BEFORE EMINENT DOMAIN                     
                                                                               
CHAIRMAN MACKIE brought SB 190 before the committee as the next                
order of business.  As the prime sponsor of the legislation, he                
turned the gavel over to Senator Phillips while he made his                    
presentation on the bill.                                                      
                                                                               
SENATOR MACKIE said he introduced SB 190 to bring fairness and                 
expediency to state and municipal government actions which require             
the acquisition of private lands for public uses.  The usual                   
practice is to acquire private property through condemnation                   
proceedings.  This is a process where the governmental entity                  
exercises the power of eminent domain to take the property and                 
compensate the owner with or without the private owner's consent or            
agreement.  The only recourse for an unwilling owner is to                     
challenge in court the validity of the taking's public purpose and             
the amount of compensation.  In most cases the court's                         
consideration is principally to determine the appropriate level of             
compensation.  For both the governmental entity and the private                
property owner, this can be an expensive and time consuming                    
procedure.  For many land owners, the prospect of contesting a                 
condemnation proceeding in court is often beyond the landowner's               
financial abilities to pursue.  In these situations the landowner              
is at the mercy of the governmental entity, the extent of its                  
property desires, and its method of determining compensation.                  
                                                                               
Senator  Mackie said SB 190 would simply require that prior to                 
condemnation, a reasonable and diligent effort is made to purchase             
private property through negotiations with the property owner.  He             
pointed out that at least 23 states have similar requirements.  He             
said he thinks it is reasonable to ask that the government entity              
that's going to take the land makes every diligent effort to                   
negotiate with the person on a value and price prior to just taking            
it because someone that doesn't have any money or an understanding             
of the legal process could be overwhelmed with the bureaucracy and             
be at a disadvantage in trying to protect his or her property                  
rights.                                                                        
                                                                               
Number 325                                                                     
                                                                               
SENATOR PHILLIPS invited Rick Harris to the table to testify on SB
190 and then turned the gavel back over to Chairman Mackie.                    
                                                                               
RICK HARRIS, Senior Vice President of Sealaska Corporation, said               
the corporation has 330,000 acres of fee estate scattered                      
throughout Southeast Alaska, and eminent domain has become an                  
important issue to them, not because they are an ANCSA corporation             
but because they are a private land holder within the state.                   
However, Sealaska has found that current eminent domain laws do not            
provide the protections that they would like to have in their                  
dealings with the government.                                                  
                                                                               
                                                                               
Mr. Harris said SB 190 would add some additional protections to the            
private landowner by requiring the government and other condemning             
authorities to diligently attempt, in good faith, to purchase                  
private land before taking that land through the power of eminent              
domain.  Two prerequisites that would be critical to improve the               
eminent domain law would be to require a diligent, good faith                  
effort to purchase, and to justify the particular property interest            
that is being taken.                                                           
                                                                               
In his closing comments, Mr. Harris said Sealaska believes that SB
190 will level the playing field.  The landowner and the state will            
begin with an arms-length bargaining relationship.  The landowner              
will have the benefit of full disclosure of information used by the            
state to determine the public purpose for the taking and value of              
the interest taken.                                                            
                                                                               
Number 364                                                                     
                                                                               
SENATOR PHILLIPS questioned why this is a problem because he has               
been involved with a few of these situations in his own district               
and they worked out fairly well.  MR. HARRIS responded that                    
Sealaska has had several situations where eminent domain has been              
used against them.  He cited as an example the Kake Airport where              
the Department of Transportation wanted to purchase the right-of-              
way and required that the trees be cut down and retained at a low              
level.  Sealaska effectively has a piece of property that can no               
longer be commercial forest land.  He said they need a better                  
negotiating process in terms of how the state comes to them to                 
negotiate using their eminent domain authorities.                              
                                                                               
SENATOR DONLEY pointed out that if they've got a legitimate claim              
and the state is not negotiating with them, they can go to court.              
However, MR. HARRIS replied that the cost of litigation becomes                
just as difficult as the negotiation.  He said they are trying to              
avoid going to court, but he suggested the legislation could be                
strengthened further by requiring that when the condemning makes a             
declaration of eminent domain that they have to pay that amount of             
money and the landowner can use that money as a vehicle to                     
litigate.                                                                      
                                                                               
Number 472                                                                     
                                                                               
CHAIRMAN MACKIE commented that there are a lot of different                    
examples that can be used and the large private landowners, in most            
cases, would always have the resources to negotiate, but the small             
landowners may not have the resources, attorneys, etc., to                     
challenge the government.  He questioned what is unreasonable about            
asking the government to make a reasonable effort to negotiate with            
the person prior to taking their land.                                         
                                                                               
SENATOR DONLEY stated he agreed with the Chairman's philosophy, but            
his fear exists in creating a new statutory test the Judiciary can             
interpret in ways that were never intended be interpreted that way.            
                                                                               
CHAIRMAN MACKIE said the committee would continue to take testimony            
on the bill, but he acknowledged some work needed to be done on the            
legislation to see if some language can be crafted that would not              
create serious burdens of proof in the courts.                                 
                                                                               
Number 540                                                                     
                                                                               
LISA BLACHER, representing the Alaska Conservation Voice, stated               
her group commends the intent of the bill, but they do have some               
concerns with it.  They question the term "interest to be taken,"              
which appears three times in the bill, and believe the way it is               
used is ambiguous and they question what it refers to. It is                   
suggested that the language either be deleted or defined more                  
clearly.  She said it also appears that the bill may establish a               
new level of right of compensation similar to regular  proposed                
regulatory takings legislation, and if so, they don't think it is              
wise to open the door to the possibility of such financial                     
liability to the state.                                                        
                                                                               
Number 560                                                                     
                                                                               
JOHN JENSEN, Chief Right-of Way Agent for the Central Region,                  
Department of Transportation and Public Facilities, stated he was              
present to answer questions the committee may have about the                   
eminent domain process as it has been practically applied.                     
                                                                               
SENATOR PHILLIPS asked Mr. Jensen if there was a problem in                    
southeast as far as attitude or approaches is concerned.  MR.                  
JENSEN  acknowledged there may be a problem of attitude, but he                
believes the department does make a good faith effort; however,                
their differences  typically and usually in compensation lead to               
the frustrations addressed by Mr. Harris.                                      
                                                                               
Number 579                                                                     
                                                                               
SENATOR HOFFMAN asked Mr. Jensen if he thought the legislation                 
would assist in the eminent domain process.  MR. JENSEN replied                
that like Senator Donley he has some concern with the                          
interpretation of some of the language in the bill and the                     
possibility that it may delay the process.                                     
                                                                               
TAPE 98-4, SIDE B                                                              
Number 567                                                                     
                                                                               
CHAIRMAN MACKIE agreed that the language may need to be reworked,              
but he questioned why the fear of something in the nature of a good            
faith effort if they are already doing so.  He doesn't believe it              
will cause delays, but sometimes if it does cause a delay for a                
short time, he thinks it is reasonable to  protect an individual's             
rights to property that they he may worked all his life to secure.             
MR. JENSEN said he agreed with Senator Mackie, but his only                    
reservation is the unknown on how that language will be interpreted            
even though they already do that.                                              
                                                                               
Number 535                                                                     
                                                                               
                                                                               
CHAIRMAN MACKIE stated SB 190 would be held in committee for                   
further work on its language.                                                  
                                                                               
                                                                               
        SB 191 - EXCHANGE OF STATE TIDE AND SUBMERGED LAND                     
                                                                               
CHAIRMAN MACKIE brought SB 191 before the committee as the final               
order of business.  He turned the gavel over to Senator Phillips               
while he made a presentation on his bill.                                      
                                                                               
SENATOR MACKIE, prime sponsor of SB 191, said it was introduced as             
a companion bill to SB 190 to deal with some of these land issues.             
He explained that if a municipality needs an area for a watershed              
to the protect the community's water supply, or for a ferry                    
terminal, or for an airport, etc., the legislation gives DNR the               
option of exchanging tide and submerged lands for privately owned              
lands needed by a municipality.  He said it is another option that             
would allow DNR to have a little more flexibility to work with the             
private landowners to accomplish a public good.                                
                                                                               
Number 508                                                                     
                                                                               
RICK HARRIS, Senior Vice President, Sealaska Corporation, said                 
approximately 10 percent of the land in Southeast Alaska is in                 
private ownership, but most of that land is disproportionately                 
located in and around the state's municipalities.  Frequently,                 
these lands needed by the municipalities for essential municipal               
services  are held in private ownership.  Sealaska supports                    
creating a new mechanism that would allow the state to acquire                 
those essential municipal lands and at the same time allow the                 
private landowners to receive some other value that would serve                
their purposes and needs.                                                      
                                                                               
Mr. Harris said that under current law, DNR is already authorized              
to negotiate land exchanges, but these general land exchange                   
statutes are quite discretionary, and there is no vehicle through              
which either a municipality or another state agency can compel DNR             
to commit state-owned lands to improve public purposes.  Also,  the            
existing law lacks a clear statement of legislative priorities to              
guide DNR in the types of exchanges which the agency should focus.             
                                                                               
Concluding, Mr. Harris said Sealaska thinks SB 191 will provide an             
excellent opportunity to resolve some of the issues dealt with on              
a daily basis throughout the state.                                            
                                                                               
Number 475                                                                     
                                                                               
Responding to SENATOR PHILLIPS, MR. HARRIS explained Sealaska                  
Corporation owns municipal watersheds in Hydaburg, has selection               
rights in the municipal watershed of Craig,  and owns municipal                
watersheds in Kake and Hoonah.  On three different occasions,                  
Sealaska has attempted to find vehicles to create land exchanges               
that would allow them to move away from those watersheds and get               
them back into public ownership,  and in all cases, those efforts              
have been thwarted for a variety of reasons.                                   
                                                                               
Number 440                                                                     
                                                                               
JANE ANGVIK, Division of Land, Department of Natural Resources,                
testifying via teleconference from Anchorage, said DNR has some                
significant concerns about SB 191 in general, particularly with the            
prospect of transferring tidelands to private ownership.  The state            
has a legal responsibility under the public trust doctrine to                  
retain most tidelands and submerged lands.  This is because DNR is             
required, through the public trust doctrine, to manage the                     
shoreline lands for the use and enjoyment of all Alaskans.  She                
pointed out that most other states do not allow private individuals            
to acquire shore lands, and in the past, many that did so have                 
spent millions of dollars to reacquire these public lands.                     
                                                                               
Ms. Angvik said that while existing statutes allow DNR to transfer             
tidelands to municipalities, the Legislature specifically                      
prohibited municipalities from selling these lands.  She  pointed              
out that in the areas Mr. Harris made reference to, Hydaburg,                  
Craig, Kake, Hoonah, the state has very little land so that the                
possibility for land exchanges is very slim simply because they                
don't have anything to exchange.                                               
                                                                               
Ms. Angvik said the notion of public trust requires that access to             
the water, water allocation, and marine activities are protected in            
perpetuity in order to provide for the common use of the land.                 
                                                                               
Ms. Angvik also expressed concern with the issue of valuing                    
tidelands and trying to ascertain the value of tidelands relative              
to the value of uplands.  This is a challenge because there aren't             
very many tidelands that have actually been conveyed.                          
                                                                               
Ms. Angvik pointed out that Section 14(c)(3) of Alaska Native                  
Claims Settlement Act provided for local governments to have up to             
1,280 acres to use for municipal purposes, so while DNR is very                
supportive of providing some surety for municipal governments,                 
particularly in Southeast Alaska, to controlling their watersheds              
for example, they do not believe that conveying the tidelands is               
the methodology to pursue.                                                     
                                                                               
Number 364                                                                     
                                                                               
CHAIRMAN MACKIE pointed out that Section 14(c)(3) applies to                   
village corporations, not regional corporations like Sealaska.  The            
fact is that Sealaska Corporation physically owns the land and the             
watersheds of those other communities.  He questioned how Sealaska             
is supposed to be compensated or treated fairly in giving up those             
lands for a public purpose if DNR doesn't have any land to exchange            
and they are not able to do a land exchange with them.   He added              
that the purpose of SB 191 is to give DNR an option to deal with               
this issue, an option that they would have available to them in                
cases that make sense for absolute public need for essential public            
services.  MS. ANGVIK responded that the capacity of DNR to be able            
to evaluate the public interest and the long-term interests of the             
state is removed by the legislation and it is a mandatory                      
requirement.  While she understands the difficulty associated with             
community development, in particular Southeast Alaska where the                
vast majority of the land is owned by the federal government, she              
doesn't have alternative ways of compensating a private landowner              
if what they owned is the watershed.                                           
                                                                               
DICK MYLIUS, Division of Land, Department of Natural Resources ,               
also pointed out that if DNR transferred title it is no longer land            
managed by the department, and even though the landowner may                   
currently allow public use or access by the public, once it is                 
their land they can change that policy in the future.  In other                
states the courts have actually gone back and reacquired public                
trust lands where the public has lost access to the shoreline.                 
                                                                               
Number 301                                                                     
                                                                               
JOHN JENSEN, Department of Transportation & Public Facilities, said            
eminent domain proceedings are a tool DOT uses that provides the               
least cost to the public, and it is most often the most expedient              
way to acquire lands.                                                          
                                                                               
CHAIRMAN MACKIE asked Mr. Jensen if he saw this legislation as                 
something positive where DOT wouldn't have to come up with the                 
cash; that by working with the municipality and DNR they exchange              
some tidelands adjacent to an upland ownership which is all private            
anyway.  MR. JENSEN responded that it may be appropriate in some               
instances, but he agrees with Ms. Angvik that if the agency is                 
required to do that then it becomes somewhat of an obstacle to                 
development of that particular project.  He suggested it should be             
voluntary between both parties.                                                
                                                                               
Number 205                                                                     
                                                                               
LISA BLACHER, representing the Alaska Conservation Voice, stated               
their support for the protections in current law that ensure public            
access to navigable and public waters of the state.  They are                  
concerned that the proposed changes in SB 191 will weaken those                
protections by allowing state tide and submerged lands to become               
privately owned through land exchanges.                                        
                                                                               
Ms. Blacher stated that the Alaska Conservation Voice's concern  is            
with access because right now Alaska does have public access to all            
of these state tide and submerged lands.  At the very least, they              
would like the bill to limit the transfer of state tide and                    
submerged lands within municipal boundaries so as to not open up               
the entire state for that type of transfer opportunity.                        
                                                                               
There being no further testimony on SB 191, CHAIRMAN MACKIE said it            
was his intention to move the bill on to the Resources Committee.              
                                                                               
SENATOR DONLEY moved SB 191 and the accompanying fiscal note be                
passed out of committee with individual recommendations.  Hearing              
no objection, it was so ordered.                                               
                                                                               
There being no further business to come before the committee, the              
meeting adjourned at 3:02 p.m.                                                 

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