HB 371-STATE LAND AND MATERIALS  2:42:25 PM CO-CHAIR SADDLER announced that the final order of business would be HOUSE BILL NO. 371, "An Act providing for the Department of Transportation and Public Facilities to hold the surface estate of certain state land; relating to the transfer of certain state land and materials from the Department of Natural Resources to the Department of Transportation and Public Facilities for the construction or maintenance of the state highway system, state airports, and state public buildings and facilities; relating to the lease or sale of certain marine or harbor facilities; relating to the lease or disposal by the Department of Transportation and Public Facilities of rights-of- way, property interests, or improvements that are no longer required; relating to the grant of certain easements over submerged state land to the federal government; relating to the transfer of certain maintenance stations on the James Dalton Highway to the Department of Transportation and Public Facilities; relating to the conveyance of land for right-of-way purposes from the Alaska Railroad Corporation to the Department of Transportation and Public Facilities; and providing for an effective date." 2:43:39 PM CO-CHAIR FEIGE moved to adopt the proposed committee substitute (CS) for HB 371, labeled 28-LS1545\O, Bullock, 4/4/14, as the working draft. There being no objection, Version O was before the committee. 2:44:02 PM BECKY ROONEY, Staff, Representative Peggy Wilson, Alaska State Legislature, explained the changes to the proposed Version O. She said that Section 15 had been removed. She reported that HB 371 had been introduced at the request of Department of Transportation & Public Facilities (DOT&PF) and Department of Natural Resources (DNR) and was collaboration between these departments to reduce ambiguity and streamline rights-of-way processes. She declared that this was a no-cost solution that would save time and resources for transportation projects, as well as eliminate contractor requirements between the two departments when accessing road materials for transportation projects. She stated that there would be a reciprocal removal of the 55-year lease limit on US Forest Service transportation easements and DNR log transfer easements. 2:45:40 PM KIM RICE, Deputy Commissioner, Office of the Commissioner, Department of Transportation & Public Facilities, explained that the purpose of the bill was to create a relationship between DOT&PF and DNR for the overlap of land process procedures. She said that the bill would streamline project delivery by removing duplicate process, would improve the process for disposal of excess right of way to adjoining property owners, and would reduce bureaucracy for the management of state material sites. She pointed out that the agency did request the removal of Section 15 of the proposed bill. She stated that the agency had been diligent in its attempt to respond to all the public comments and make clarifications and changes per those requests. She paraphrased from the Sectional Analysis [included in members' packets], which read: Sec. 3, 5 & 8. These sections are identical in form and establish a process for the transfer of state- owned public domain land to DOT&PF for the construction or maintenance of state-owned airports (AS 02), highways (AS 19) and public facilities (AS 35). Within four months of DOT&PF's written determination that public domain land is reasonably necessary for a DOT&PF facility, DNR must transfer title to the surface estate of the identified property. The public receives notice of the intended transfer of state land by posting of DOT&PF's written determination and property plans. These sections clarify that a transfer of land from DNR to DOT&PF is not a "disposal" of state land and that the transfer of state property for the construction or maintenance of the state's infrastructure is presumed to be in the public interest. MS. RICE directed attention to the [Typical DOT&PF] Project Development Process flow chart [included in members' packets] which described the dealings with agencies and the public through the National Environmental Policy Act (NEPA) of 1969. She explained that, although there was a misperception that this process did not happen on all state projects, it was required if there were wetlands or archaeological sites involved. This dictated the public involvement process, which included a checklist. She assured the committee that the public process was not being thrown away, but was being offered earlier in the project development process. 2:49:56 PM JOHN BENNETT, Right-of-Way Chief, Northern Region, Department of Transportation & Public Facilities, relayed that, as some of the existing language in the disposal statutes was confusing and difficult, the proposed bill attempted to provide language that was uniform for aviation, highways, and public facilities, in order to solve some of the problems. He paraphrased from the Sectional Analysis, [included in members' packets], which read: Sec. 2, 4 & 10. These sections are identical in form and provide uniform language across all of DOT&PF's statutory authorities for the disposal of excess land and property interests for airports (AS 02), highways (AS 19) and public facilities (AS 35). Upon a DOT&PF determination that lands or property interests are excess to its needs, DOT&PF shall notify DNR to allow the transfer of excess lands to be used for other public purposes. DOT&PF retains its current authority to dispose excess property and improvements according to the terms and conditions established by the DOT&PF commissioner. MR. BENNETT explained that this essentially offered DNR the first right of refusal for the return of excess land, which also allowed the opportunity to assist adjoining property owners. He offered an anecdote for sewage lagoons within the right of way and the unresolvable disposal issues, which would now be resolvable with the proposed bill. He relayed another anecdote for the return of excess land, under AS 35, which stated that it had to be returned to the vested owner. This resulted in a situation whereby, when the original owner could not be found, the land could not be sold. 2:53:25 PM SEAN LYNCH, Assistant Attorney General, Transportation Section, Civil Division (Juneau), Department of Law, paraphrased from Sections 1, 6, and 9, which read: Sec. 1, 6 & 9. These sections are identical in form and resolve an ambiguity in state law that vests DOT&PF with authority to hold and manage airports (AS 02), highways (AS 19), public facilities (AS 35), and vests DNR with authority to hold and manage state lands (AS 38). These sections clarify that DOT&PF has primary authority to manage the surface estate of its facilities; DNR retains its authority to administer its statutory authorities on highway, airport, and public facility land, upon DOT&PF terms and conditions to protect the state's infrastructure. MR. LYNCH explained that this placed DOT&PF in the primary regulatory position regarding highway rights-of-way, instead of the current overlapping authority with DNR for state land. He said a similar issue for material sales was addressed in Section 13, an amendment to the DNR Alaska Lands Act, which broadened the existing DOT&PF exemptions in AS 38.05.030 to exempt DOT&PF from the DNR material sales contract requirements, while DNR retained its full authority to issue material sales contracts. 2:56:24 PM CO-CHAIR SADDLER asked whether DOT&PF would have to declare that the material was surplus to its needs before DNR could sell it to the public. MR. LYNCH explained that third party sales were under an Alaska Lands Act standard. The DNR sales were determined by best interest to the state, and DOT&PF would coordinate with DNR for third party sales. CO-CHAIR SADDLER asked if there were examples of legislative appropriation supplanting best interest findings. MR. LYNCH directed attention to the lands acquisition in Sections 3, 5, and 8, and explained that the transfer of public domain from DNR to DOT&PF was not a disposal of state land, it was a transfer presumed to be in the public interest. He said there was not a need for a best interest finding under the Alaska Lands Act when state land was appropriated for a state infrastructure project. CO-CHAIR SADDLER asked for similar examples in state law of this language where the action is presumed to be in the state's interest without a best interest finding. MR. LYNCH reported that examples of other state agencies exempt from the Alaska Lands Act included the University of Alaska, the Alaska Railroad, and the Alaska Mental Health Trust Authority, and therefore did not need best interest findings. 3:00:55 PM REPRESENTATIVE TARR requested further clarification on Section 13. WYN MENEFEE, Chief of Operations, Division of Mining, Land and Water, Department of Natural Resources, clarified that Section 13 was different than the previous Sections 1, 6, and 9, which recognized the DOT&PF primary authority on lands needed for rights of way, and Sections 3, 5, and 8, which transferred needed lands. Section 13 offered DOT&PF the liberty to go into and obtain materials from many other material sites which were not managed by DOT&PF, without a material contract or any charge. He clarified that it was up to DOT&PF to determine how to manage what was necessary, as DNR would manage for a different purpose. REPRESENTATIVE TARR inquired as to where this was located in the budget, as DNR would no longer receive the revenue for materials used by DOT&PF. MR. MENEFEE explained that there would be no charge or transfer of monies for materials used by DOT&PF. DOT&PF currently paid DNR an administrative processing fee for a material sales contract, but under proposed HB 371, there would be no transfer of funds between the departments. MS. RICE explained that the administrative fees covered the contract cost, but under the proposed bill, there would not be any contract written. She added that DNR would consult with DOT&PF and would limit its material sales based on those requests. She pointed out that an existing third party contract would not be affected. 3:04:20 PM MR. BENNETT directed attention to concerns for Section 3, 5, and 8, and the process for acquiring new property from DNR for projects. Eliminating DNR from the decision-making process and the public notice would reduce transparency to the public, but as legislation specified that DOT&PF would determine that the lands were reasonably necessary, another point of public notice was added to the process with no net loss in public involvement or notice. He stated that public involvement and process was extensive and varied depending on the complexity of the project. CO-CHAIR SADDLER held over HB 371.