HB 154 - REGULATORY TAKING OF PRIVATE PROPERTY Number 620 CO-CHAIR IVAN then indicated the committee would take up HB 154 sponsored by Representative Kohring. He asked that Co-Chair Austerman, representing the subcommittee on the bill, discuss the concerns on the bill. CO-CHAIR AUSTERMAN stated the recommendations had been distributed to committee members and Representative Kohring had provided a response. He noted that it had been suggested that the subcommittee recommendations be attached and forwarded to House Judiciary since most of the issues were under their purview. Number 640 CO-CHAIR IVAN asked for testimony from those on teleconference, starting with Tom Boedecker of Kenai. Number 649 TOM BOEDECKER, Borough Attorney for Kenai Peninsula Borough, expressed his concerns regarding this legislation. He interpreted the focus of the sponsor to be dealing with takings by regulatory action; however, the definition of governmental action was too broad to be limited to that. He also expressed concern regarding assessments of property which may be redundant in existing law. Of particular concern to him were the guidelines to be developed by the Attorney General (AG). Under the bill it was specified the guideline to be developed by the AG would not alter the law beyond what the Constitution provides. He felt the AG would be very conservative in the viewpoints and the guidelines, and would rule that things were takings much more often than not. It raised the question of immunity of local officials. TAPE 95-16, SIDE A Number 000 JON ISAACS, Anchorage, expressed concern on the current version and preferred the C version which developed guidelines for government to follow and has a much more reasonable definition of government action. It takes into account the effect of government takings on property tax. He felt the K version of the bill was too broad and would create a legal and financial nightmare for both state and local governments and private citizens. Number 048 BEN SUDDATH, testified via teleconference from Seward, outlining personal problems he had encountered regarding this issue. Number 131 BILL CUMMINGS, Assistant Attorney General, Department of Law, indicated he thought this legislation was quite revolutionary and felt there were some serious questions that needed to be addressed. He stated there were provisions in the legislation that were unconstitutional, ambiguous, and major departures from public policy. His main concern was the constitutional issues which were in Section 3 of the bill. He felt there was a question of what the effect was to be of the guidelines the AG was to prepare. The Constitution gave only the legislature the right to enact laws. Under the provisions of the bill, funding of the damage award was to come from the budget of the agency doing the taking. He indicated there was a constitutional problem in that appropriations are made to the agency for certain activities and can't be spent for other things. Another problem was that a person who suffers a regulatory taking was to be fully compensated. The problem was the definition does not include all the constitutional provisions already provided. The final problem he felt was with the interest provisions using the London Interbank rate. The norm in Alaska is to pay the legal interest rate which is currently set by statute at 10.5 percent and also applies in condemnation cases. Many of the takings in this bill result from physical invasions or depravation of the benefits of ownership. In the cases where the London Interbank rate would be lower than 10.5 percent, the people would have a great chance of prevailing on a constitutional argument that they were denied equal protection under the law because there is no logical difference between a person experiencing an administrative taking and one who experiences a more traditional taking. One other area of concern was the taking of access from property. The bill provides that payment be made for depravation of access and is left with two provisions; to buy out the parcel of land or provide access to it. Buying out the land is good public policy; however, providing access in addition to paying for damages is like double payment. Number 265 SARA HANNAN, Alaska Environmental Lobby, expressed strong opposition to the bill. She also expressed strong disagreement with the idea of passing this legislation on to the next committee without addressing the problems identified. Number 318 CO-CHAIR IVAN noted that the subcommittee had brought forward issues that the House Judiciary Committee would better address. Number 323 TOM BOUTIN, Director, Division of Forestry, Department of Natural Resources, stated this legislation would be devastating to the Alaska Forest and Resources Practices Act. The Act statutorily requires a great deal of protection of fish habitat and water quality that are takings under HB 154. In Southeast Alaska alone, for buffer strips, he felt that the impact could be as much as $200 million. The division's budget was only $7 million annually, which could not begin to cover the costs. He reiterated that this legislation had severe ramifications on the Forest Practices Act and would consider most of their actions as takings, which would be very expensive. Number 361 CRAIG LYON, House Researcher to Representative Kohring, stated that they appreciated the time the committee and subcommittee had taken. He hoped the memo had addressed some of the concerns of the subcommittee and supported passing the legislation on to the House Judiciary Committee. Number 371 REPRESENTATIVE KOTT stated he was concerned that the response to the subcommittee's questions had only been received just prior to the beginning of the committee meeting. Number 384 REPRESENTATIVE VEZEY moved that the committee pass CSHB 154(CRA) out of committee with individual recommendations and attach the subcommittee's letter of recommendations for the next committee of referral. Number 392 REPRESENTATIVE ELTON expressed objection. He expressed concern that the committee should be incorporating village and municipal input into the legislation. He felt the legislation had tremendous impact on local governments and should address the issues during the interim as was the recommendation of the subcommittee. He noted that the Departments of Law and Natural Resources had presented many reservations. He expressed a concern on the retroactivity clause in the bill and felt the committee was not being responsible. He maintained his objection. Number 450 CO-CHAIR IVAN asked for a roll call vote. The motion was adopted with Representatives Austerman, Ivan, Kott and Vezey voting in favor of the motion and Representative Elton voting against the motion. Co-Chair Ivan noted that the bill had moved to the next committee.