HOUSE BILL 79                                                                
                                                                               
       "An Act allowing the Department of Natural Resources to                 
       quitclaim  land   or  interests   in  land,   including                 
       submerged or shore  land, to a municipality  to correct                 
       errors   or   omissions   of   the  municipality   when                 
       inequitable detriment would  result to a person  due to                 
       that person's reliance upon the  errors or omissions of                 
       the municipality."                                                      
                                                                               
  REPRESENTATIVE   JERRY  MACKIE   advised  that  HB   79  was                 
  introduced at the request of the City of Skagway in order to                 
  correct a long  standing land ownership problem  in Skagway.                 
  Fifty years  ago a  dike was  constructed along  the Skagway                 
  River to protect  the town from  flooding.  Over the  years,                 
                                                                               
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  the area between  the original river  bank and the dike  has                 
  been reclaimed and subdivided by the city with lots sold and                 
  built upon.   The  city did not  have a  clear title  to the                 
  land.    Hence, the  title  for subsequent  private property                 
  owners  is  also  clouded.     Not  only  are  the   owners'                 
  investments and improvements at risk, but bank financing for                 
  further improvements or sales are foreclosed.                                
                                                                               
  Representative Mackie  pointed  out that  the Department  of                 
  Natural  Resources  (DNR)   has  unsuccessfully  sought   an                 
  administrative remedy for the problem.   HB 79 would add the                 
  needed provision by allowing the director of the Division of                 
  Lands, the discretion to quitclaim land to a municipality to                 
  correct past  errors and omissions.  The director could also                 
  set any terms or conditions  that deemed appropriate for the                 
  transaction.    Furthermore,  land  title  transferred to  a                 
  municipality in  that manner  would be  counted against  the                 
  municipality's  general  land  grant  entitlement  from  the                 
  State.                                                                       
                                                                               
  Representative  Mackie  distributed  a  map  diagraming  the                 
  referenced dike area.  [Attachment #2].                                      
                                                                               
  Representative Grussendorf advised the Committee that Andrew                 
  Pekovich, Manager, Southeast  Region, Department of  Natural                 
  Resources,  suggested reducing  the sunset  on the  proposed                 
  legislation.  Representative Mackie commented that Amendment                 
                                                                               
  Representative Brown asked how subsurface interests would be                 
  affected by the proposed legislation.                                        
                                                                               
  NICO  BUS, DIRECTOR,  DIVISION  OF ADMINISTRATIVE  SERVICES,                 
  DEPARTMENT  OF   NATURAL  RESOURCES,   commented  that   the                 
  subsurface rights would not be effected or transferred.   He                 
  added, that information  was based on a conversation  he had                 
  with  Ron Swanson,  Director, Division  of Lands.    Mr. Bus                 
  offered to  provide the  Committee a  letter explaining  the                 
  concern.                                                                     
                                                                               
  Co-Chair  Hanley asked if other municipalities would qualify                 
  under   the  dispensation   proposed  in   the  legislation.                 
  Representative  Mackie  stated  that to  date  there  are no                 
  others, although, the  legislation was written such  that if                 
  another  municipality  in  the State  experienced  the  same                 
  problem, and then approached DNR,  meeting the criteria, the                 
  problem could be addressed.                                                  
                                                                               
  Representative  Therriault  MOVED  to  adopt  Amendment  #1.                 
  There  being  NO  OBJECTION,  it  was adopted.    Discussion                 
  followed  among  Committee  members  and  Mr. Bus  regarding                 
  submerged lands classification by the State.                                 
                                                                               
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  Representative Foster MOVED to  adopt CS HB 79 (FIN)  out of                 
  Committee  with  individual  recommendations  and  with  the                 
  accompanying fiscal notes.                                                   
                                                                               
  CS  HB  79 (FIN)  was  reported  out of  Committee  with "no                 
  recommendations"  and  with   zero  fiscal   notes  by   the                 
  Department of Community and  Regional Affairs dated  2/03/95                 
  and the Department of Natural Resources dated 2/03/95.