CS FOR HOUSE BILL NO. 279(FIN) "An Act relating to encroachments in the right-of-way of a highway." This was the first hearing for this bill in the Senate Finance Committee. BEN MULLIGAN, Staff to Representative Bill Stoltze, the bill's sponsor, stated that the intent of this bill would be to allow certain encroachments to remain on State highways' right-of-ways provided that the encroachment did not impede State highway projects. These encroachments might include such things as water systems or portions of a garage that were unknowingly built on the right-of-way prior to the point at which the State's highway right- of-way progressed and made the encroachment known. Mr. Mulligan continued that certain encroachments could be grandfathered in by this bill, provided that six criteria, as specified in Sec. 2(c)(1) through (6), page two, lines eight through nineteen, were met. This criterion is as follows. (1) The encroachment does not pose a risk to the traveling public, and the integrity and safety of the highway is not compromised; (2) the applicant has demonstrated the encroachment was erected in good faith. (3) the denial of the encroachment permit would pose a hardship on the person, agency, owner, or lessee who applies for the permit; (4) the issuance of an encroachment permit will not cause a break in access control for the highway; (5) the land will not be necessary for a highway construction project during the initial term of the permit; and (6) issuance of a permit is consistent with federal requirements regarding encroachments on federal-aid highways. Mr. Mulligan provided examples of situations relating to the criteria: the term "good faith" would apply to situations such as an encroachment that was not intentionally constructed on the right-of-way or that a hardship would be imposed were no alternate reasonable water source available to replace a well located on the right of way. Mr. Mulligan shared that the Department of Transportation and Public Facilities discussed the conditions of this legislation with the federal government, and that the understanding is that the proposed criteria would be acceptable. Continuing discussions would occur. Mr. Mulligan noted, however, that language would be included in that bill that would allow the federal government to have the final say on whether or not an encroachment exemption permit would be granted. Nonetheless, this legislation would provide an opportunity for people to petition for an exemption under these guidelines. Co-Chair Green asked the location of that federal preference. Mr. Mulligan read the pertinent language which is included in Section 1(d)(2) on page one, lines 11 through 13 as follows. (2) present in the right-of-way on the effective date of this Act may remain, subject only to removals required by federal highway funding requirements imposed on the state by federal law, … Co-Chair Green asked whether the encroachment must have existed prior to a certain time, as otherwise, the Department might encourage someone to build an encroachment and be issued a permit in order to prevent some highway project from occurring due to the costs incurred by having to condemn and purchase that property. Mr. Mulligan cited an example of a building that was first constructed as a territorial school built by the federal government on the right of way of what was, at the time, only a small two-lane road. The right-of-way at that time was small. Over time, the road was expanded and the right-of-way had increased. The building is now a community building with a playground in which meetings are held and a school is operating. Were an encroachment permit not provided in this case, a portion of the playground and the parking structure would be lost. Another example is that of a 50-year old fire department that could loss a substantial part of its access area. 6:33:26 PM Co-Chair Green understood that while the bill would allow for such situations, the bill contains a mechanism through which the State could refuse or discontinue a permit were the land to become necessary to a project. Mr. Mulligan stated that a forthcoming amendment would address Co- Chair Green's concern regarding when an encroachment must have been in place. That date would be specified as January 1, 2005. Co-Chair Green asked for confirmation that the State could deny a permit or discontinue one. Mr. Hooley affirmed. Amendment #1: This amendment deletes "the effective date of this Act" and inserts "January 1, 2005," following the words "right-of- way on" in Section 1(d)(2), page one, line 12. In addition, the words "the effective date of this Act, is" are deleted and replaced with the words "January 1, 2005, was" in Sec. 2(c) page two, line five. Furthermore, language following "highway on" in Sec. 2(d) page two, line 21 is deleted and replaced as follows. Delete "the effective date of this Act that is not authorized by a written encroachment permit until the department determines that the encroachment does not qualify for an encroachment permit issues" Insert "January 1, 2005, unless the owner, occupant, or person in possession of the encroachment or any other person causing or permitting the encroachment to exist receives the notice provided under AS 19.25.230 and is informed of the application process for an encroachment permit" Finally, the amendment inserts a new section into Sec. 2 page three following line eight as follows. (g) Except for damage, injury, or death resulting from gross negligence or reckless or intentional misconduct of the state or an agent or employee of the state, the state is not liable for damage to, or damage resulting from the presence of, an encroachment in the right-of-way of a state highway." Co-Chair Wilken moved for the adoption of Amendment #1. Mr. Mulligan noted that this amendment would specify that an encroachment must have been in existence by January 1, 2005. The addition of subsection (g) "would remove any liability from the State" for its allowance of an encroachment. Co-Chair Green understood therefore that the inclusion of subsection (g) would remove the State from liability pertaining the encroachment. There being no objection, Amendment #1 was ADOPTED. 6:36:31 PM Senator Stedman remarked that language in Section 1(d)(2) page one, line 11 as well as language in Sec. 2(c) page two, line two, are of concern as the use of the word "may" and the word "shall", respectively, could imply that citizens could have the right of imminent domain on a right-of-way. He asked that input from the Department of Transportation and Public Facilities be provided in this regard as there are numerous encroachments throughout the State, which the Department must address. This language appears to be "restrictive" and as such might place the Department "at a disadvantage" in its ability to clear a right-of-way. Co-Chair Green asked whether the language beginning with "if the department finds that" as reflected in Sec. 2(c) page two, beginning on line seven and continuing for approximately "anther twenty or so lines" would address that concern. In addition, she asked whether this concern had been raised in any other committee hearing on this bill. 6:38:26 PM Mr. Mulligan responded in the negative. Continuing, however, he noted that while the Department had expressed some "unease" with the language, no amendment had been suggested. Senator Stedman asked that further input from the Department be sought as "operative words such as the Department shall issue an encroachment permit" could result in "substantial impacts" on the State. Co-Chair Green asked that a representative from the Department provide input to the Committee in this regard. Senator Stedman also suggested that the encroachment permits issued by the Department should be time specific and should include renewal provisions. Co-Chair Green asked whether such language was included in the bill. 6:39:38 PM Mr. Mulligan stated that current regulations allow for the issuance of five-year permits, which could be renewed in five-year increments. This would be verified. Co-Chair Green ordered the bill HELD in Committee in order to receive further information from the Department. 6:40:10 PM