HOUSE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE February 10, 1994 1:00 p.m. MEMBERS PRESENT Representative Harley Olberg, Chairman Representative Con Bunde Representative Cynthia Toohey Representative Ed Willis Representative Jerry Sanders, Vice Chair Representative Bill Williams MEMBERS ABSENT Representative John Davies OTHER LEGISLATORS PRESENT Representative Jeannette James COMMITTEE CALENDAR HB 352: "An Act relating to the approval of subdivision plats in areas outside organized boroughs, in the unorganized borough outside of cities, and in the third class boroughs; and relating to the definitions of `street and `subdivision'." PASSED FROM COMMITTEE *HB 398: "An Act relating to conveyance of certain land to municipalities." PASSED FROM COMMITTEE (* First public hearing) WITNESS REGISTER EDGAR BLATCHFORD, Commissioner Department of Community and Regional Affairs P.O. Box 112100 Juneau, AK 99811 Phone: 465-4700 POSITION STATEMENT: Testified on behalf of the Department of Community and Regional Affairs regarding the Division of Energy. REPRESENTATIVE JEANNETTE JAMES Alaska State Legislature Capitol Building, Room 501 Juneau, AK 99801-1182 Phone: 465-3743 POSITION STATEMENT: Prime Sponsor of SSHB 352. JEFF OTTESEN, Chief of Right-of-Way and Environment Division of Engineering and Operating Standards Department of Transportation and Public Facilities 3132 Channel Drive Juneau, AK 99801 Phone: 465-6954 POSITION STATEMENT: Supported SSHB 352 and proposed an amendment. RON SWANSON, Director Division of Lands Department of Natural Resources P.O. Box 107001 Anchorage, AK 99510-7001 Phone: 762-2692 POSITION STATEMENT: Supported CSHB 398. JOHN WALSH, Special Assistant to the Commissioner Department of Community and Regional Affairs P.O. Box 112100 Juneau, AK 99811-2100 Phone: 465-4890 POSITION STATEMENT: Provided information on CSHB 398. RICH WILSON, City Administrator City of St. George 1600 A Street, Suite 103 Anchorage, AK 99501 Phone: 272-8684 POSITION STATEMENT: Supported CSHB 398. LEE SHARP, Attorney St. George and Aleutians East Borough 420 L Street, Suite 400 Anchorage, AK 99501 Phone: 276-1969 POSITION STATEMENT: Supported CSHB 398. GARY WILLIAMS, City Manager City of Whittier P.O. Box 608 Whittier, AK 99693 Phone: 422-2337 POSITION STATEMENT: Supported CSHB 398. PREVIOUS ACTION BILL: HB 352 SHORT TITLE: SUBDIVISION PLAT APPROVAL:UNORGANIZED BOR SPONSOR(S): REPRESENTATIVE(S) JAMES JRN-DATE JRN-PG ACTION 01/07/94 2020 (H) PREFILE RELEASED 01/10/94 2020 (H) READ THE FIRST TIME/REFERRAL(S) 01/10/94 2020 (H) CRA, RESOURCES, FINANCE 01/21/94 2124 (H) SPONSOR SUBSTITUTE INTRODUCED REFERRALS 02/10/94 (H) CRA AT 01:00 PM CAPITOL 124 BILL: HB 398 SHORT TITLE: LAND CONVEYED TO & FROM MUNICIPALITIES SPONSOR(S): REPRESENTATIVE(S) OLBERG JRN-DATE JRN-PG ACTION 01/26/94 2153 (H) READ THE FIRST TIME/REFERRAL(S) 01/26/94 2154 (H) COMMUNITY & REGIONAL AFFAIRS, RESOURCES 02/01/94 (H) CRA AT 01:00 PM CAPITOL 124 02/01/94 (H) MINUTE(CRA) 02/10/94 (H) CRA AT 01:00 PM CAPITOL 124 ACTION NARRATIVE TAPE 94-7, SIDE A Number 085 CHAIRMAN HARLEY OLBERG called the meeting to order at 1:08 p.m. He noted for the record Representatives Toohey, Bunde and Sanders were present and noted for the record a quorum was present. Number 112 EDGAR BLATCHFORD, COMMISSIONER, DEPARTMENT OF COMMUNITY AND REGIONAL AFFAIRS, testified with media present, on the recent termination of Robert Harris, Director of Division of Energy. He stated, "For the record, my name is Edgar Blatchford. I serve as Commissioner of the Department of Community & Regional Affairs, at the pleasure of the Governor. Thank you for this opportunity to appear before you and for allowing me this moment to summarize some of my thoughts regarding recent developments within the department, specifically, within the Division of Energy. "On May 13 of last year, very near the end of the first session of the 18th Legislature, HCS CSSB 126, passed both houses and was transmitted to the Governor for signature. This legislation directed the `dismantling' of the former Alaska Energy Authority (`AEA') and reconstructed the general functions of it within the DCRA. Through the transition process, this operation has been brought aboard as a full division, equal in standing to the other three divisions within the department. As such, the highest ranking employee of the division is a director level. "Enabling legislation was fairly general with little expressed legislative intent, other than future operations be `in-line' with existing administrative functions, as opposed to quasi-autonomous or autonomous, as had AEA been in the past decade. Also, it was the expressed intent of the legislature, as well as a tenant of this administration, that appropriate functions of the division able to be contracted out, should be contracted out. Clearly, this implies, and I fully support, an added element of scrutiny over projects under contract. As a member of the board of directors for AEA, AIDEA and the Alaska Housing Finance Corporation, I am well aware of the responsibility incumbent upon me as a representative of the public finances, especially in matters of contract and procurement. "The first and foremost priority in the transition process called for full integration of the new division into the department as a whole. To this end, physical relocation of former AEA offices into the departments' Anchorage office was a priority. Secondly, design of an operating organization structure was critical. Throughout the process, I insisted that there be `no interruption of services to rural Alaska.' During this period, I was fully involved in activity of the RAVEN Commission, responding to the needs of the rural bulk fuel issue and overall operations of the department. Deputy Commissioner Geraghty was assigned to work with the new division director to develop firm timelines to accomplish our goals. "It was my intention to produce a division that could withstand the budget scrutiny of the legislature during the FY 95 session and as such, an eye to downsizing, while retaining all relevant aspects of the division's responsibility was essential. Once the operation is up and fully functioning, following relocation, I will review operations and determine if this goal was met. Should the division be in need of additional personnel or require modifications to the proposed FY 95 budget, I would express such concerns with the director and/or the legislature to make necessary adjustments. "Recent developments within the division, specifically by the former division director, have forced this issue prematurely. I cannot, and will not, tolerate departure from standard operating procedures when dealing with the legislative body. Direct communications by any of my directors, petitioning or bargaining with members of the legislature for particular budget increments or increases in personnel are outside such normal operating bounds. Each of you have staffs, entrusted with specific duties and responsibilities. Departure from agreed upon conditions, direct negotiations with other legislators, possibly compromising your integrity and neutrality, would similarly mandate immediate action. Within state government there are approximately 150 director level positions. Just imagine, the chaos and confusion if each were to negotiate particular `deals' with the legislative body. I cannot accept this and experienced staff recognize this is not permissible without the expressed consent of their commissioner. This flare up within my department would be but a mere flame in a firestorm of political chaos. "I asked for Mr. Harris's resignation based upon this, and this alone. I respect Mr. Harris's professional integrity and fully support him in his future endeavors. I did not ask, nor did I accept, Ms. Linda Thomas's resignation and her departure is indeed unfortunate. I wish her the very best in her future endeavors and can only give her the highest of professional respect. "Although the downsizing within the Division of Energy has been met with severe criticism, I withhold comment on whether or not `we have cut too close to the bone.' Physical relocation is complete, computer link up is well under way and I will be reviewing operations to determine, if as Mr. Harris reports, more staff are needed. Should I concur with this recommendation, I will address it at that time. If budgets permit, I will accomplish it within the current budget and upon the approval of the Governor's office for authority to hire under the current freeze. Should such a change require legislative approval or modification or the proposed FY 95 budget, you will be apprised of my request at that time. "I understand the budget dilemmas before the legislature. This will not be an easy year for any of us or for any other agency. Cuts to programs will impact all Alaskans in one fashion or another. The frustration expressed by cuts within the staff of the Division of Energy, or by yourselves, will be revisited by all of us should operating budgets be reduced. "I stand by my decisions. I serve at the pleasure of the Governor and unless directed otherwise, will continue to operate my department in a manner consistent with the Governor's expressed directive to strengthen local economies, strengthen local governments and improve fiscal accountability. "I welcome the legislature's interest in my department's operations. I pledge to work closely with the Legislative Budget & Audit Committee review of the Division of Energy operations. If there is anything I can do to assist your staff in this endeavor, please let me know. I look forward to working with your committee as we proceed to review proposed FY 95 budgets and with individual members to bring resolution to issues within your respective districts. Thank you." Representative Williams joined the committee at 1:12 p.m. and Representative Willis arrived at 1:17 p.m. Number 300 REPRESENTATIVE CYNTHIA TOOHEY asked, "Was any of this evident when you came before the committee on January 18?" COMMISSIONER BLATCHFORD answered no. REPRESENTATIVE TOOHEY continued, "I'd just like to say that I support your position 100 percent. You are the person in charge." REPRESENTATIVE BUNDE said, "I don't want to be like Will Rogers, the only thing I know is what I read in the papers and I appreciate you coming and sharing your perspective with us so that we have a more immediate source of information." CHAIRMAN OLBERG thanked Commissioner Blatchford and called an at ease between 1:19 p.m. and 1:24 p.m. He then brought forth SSHB 352. Number 332 HB 352 - SUBDIVISION PLAT APPROVAL:UNORGANIZED BOR REPRESENTATIVE JEANNETTE JAMES, SPONSOR OF SSHB 352, read her sponsor statement and a supporting letter from the Department of Natural Resources (DNR) aloud: "This is a relatively simple bill. Basically, it is to assign a platting authority for subdivisions that are done outside organized boroughs where there may or may not be platting or planning authority in place and even in those municipalities where they have no planning authority. This would allow the DNR to be acting as that planning authority. Currently all plats are filed with DNR but they do no review and they have no authority to do any review. Currently no legal authority reviews plats in the unorganized boroughs for compliance with state Laws. This means that there is not agency review of access to each lot, the outcome is that there are landlocked lots created. Currently `paper plats' are allowed to be recorded without being surveyed, HB 352 corrects this oversight. This legislation requires the Department of Natural Resources to review plats for compliance with state law. There are several definitions of street and subdivision in various statutes, this legislation defines them as requested by the Department of Natural Resources. And I have a statement here by the Department of Natural Resources which I would like to read into the record. The letter from Harry Noah to myself regarding this bill. The Department of Natural Resources supports the Sponsor Substitute for HB 352, which includes the addition of the definitions of `streets' and `subdivisions'. We also understand that the Alaska Society of Professional Surveyors also supports HB 352. They specifically requested that the bill include the definitions of `streets' and `subdivisions' as in the sponsor substitute. These two definitions are needed to establish a common definition of street and subdivisions for use by all state agencies that are involved in permitting and approval of subdivisions. The lack of a common definition has made it difficult for surveyors to meet the requirements of all state agencies. This bill will greatly benefit anyone purchasing or having property in the unorganized borough or third class boroughs. There is more and more subdivision activity in our outlying areas. The passage of this bill will ensure that land offered for sale in these areas meets the applicable laws, reduces the chances of clouded title, ensures proper location of sale parcels, and ensures that all subdivided parcels have legal access. And that is what has prompted me to file this bill because this summer, I was involved with a plat outside of a platting area in my district, and I had a little struggle to be sure that they would include buildable legal access to these lots. And it wasn't required of them and all they had to do was file their plat with DNR. About noon today, I did get a position paper from the Department of Transportation and they had a concern about it and they also provided me with amendment number two. I do have an amendment number one as well." Number 394 REPRESENTATIVE CON BUNDE said, "The fiscal note, while it's not substantial, I would like to encourage looking at the idea that the beneficiaries of these plats pay the cost of the review by DNR." REPRESENTATIVE JAMES said, "That's my amendment number one, and I was aware there was a fiscal note. I never had any intentions of having a fiscal note. I said this should be revenue neutral. So I have an amendment that will do that. To talk about the amount of money, their guesstimate of how many of these plats they would be doing in a year, how much the costs would be....It's about $350 per subdivision, per plat, and that should make us revenue neutral and I will be getting a new fiscal note as soon as this amendment is adopted." Number 414 REPRESENTATIVE BUNDE moved to adopt amendment number one. There were no objections. REPRESENTATIVE JAMES addressed the second amendment from the Department of Transportation and Public Facilities saying, "(They) have concerns because of the rule that they're working under right now, that's working quite well regarding right-of-ways and transferring leasehold interest at state owned areas. At the end of the bill it would add `this does not apply to plats prepared for the Department of Transportation and Public Facilities for the purpose of creating or adjusting right-of-way boundaries or transferring lease hold at state owned airports.' And this is to not interfere with what they've got going right now, and I have no objections to that amendment." REPRESENTATIVE BUNDE said, "I assume when they (DOTPF) are adjusting right of way boundaries for transferring leases, they have surveyed that property." REPRESENTATIVE JAMES said, "I don't think they do anything without surveys." REPRESENTATIVE BUNDE moved to adopt the second amendment. There were no objections. Number 451 JEFF OTTESEN, CHIEF OF RIGHT-OF-WAY AND ENVIRONMENT, DIVISION OF ENGINEERING AND OPERATING STANDARDS, DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES, testified in support of HB 352 saying, "Yes we do survey all right-of- ways. We do survey and we do create a plat document which gets recorded and records that line in perpetuity. The dilemma we have, and we've been having it with the boroughs too, is that a subdivision is normally a voluntary activity on the part of the land owner and when we're involved in condemnation, we're basically trying to coerce somebody to sign a subdivision that they object to and we're having to go to court to actually acquire the property and we're put in a situation where you can't survey the property, you can't get on it, you can't get them to agree to sign a document that conveys a document, when their very objection is they don't want to do this. So we simply can't proceed with condemnation and acquire the property which has been surveyed and platted in advance. We have to acquire the property with the court's permission and then go ahead and do the survey and do the recording. A number of the boroughs, as they came out with their individual platting ordinances were running us through the same problem." Number 481 REPRESENTATIVE TOOHEY moved that HB 352 be moved out of committee as amended with individual recommendations. There were no objections. CHAIRMAN OLBERG clarified that there would be a new zero fiscal note attached to HB 352, which will become a committee substitute when the amendments are incorporated. There was a brief at ease from 1:35 p.m. until 1:37 p.m. CHAIRMAN OLBERG brought forth HB 398. HB 398 - LAND CONVEYED TO & FROM MUNICIPALITIES Number 499 RON SWANSON, DIRECTOR, DIVISION OF LANDS, DEPARTMENT OF NATURAL RESOURCES, stated, "When I last testified, we were dealing with the sponsor substitute and I raised several concerns. Following that particular hearing I got together with representatives of the City of Whittier, Aleutians East Borough, and (the Department of) Community and Regional Affairs (DCRA), to address those concerns and we did come to agreement with basically a different bill, which now I think is embodied in the committee substitute for HB 398. It does read a little bit different than what you had before." REPRESENTATIVE BUNDE moved that the draft committee substitute be brought before the committee. There were no objections. MR. SWANSON continued, "Section two has the new rewrite of the conveyance of tide and submerged lands to various municipalities. One concern I think DCRA will bring up is the definition of municipalities is not included in this legislation, but we have expanded the intent here to include all municipalities including boroughs, which is not in the original legislation. What we agreed to do is limit the conveyances to municipalities, to areas that are either developed for waterfront development or suitable for waterfront development. This will provide local control of particular developments, (and) will limit the liability to the state because the state will no longer be the landowner. It will become the municipality's concern. We do have a land classification called waterfront development, which would include what it actually says is `waterfront development for a variety of activities'. In order to make the conveyance, the use of the land could not reasonably interfere with navigation or public access. It has to be classified waterfront development or suitable for waterfront development and be consistent with the land use plan either adopted by the state, local municipality, or a coastal policy counsel. And the land would be required for the accomplishment of an improvement or development, and approved by the municipality. The application by a municipality must go through a finding by the director that it is suitable for those particular activities, and at that point we also inserted a step in the process where...(without patent transference) once we made a finding that it was in the best interest of the state to convey a particular parcel of land for waterfront development, we would make then a conveyance to the municipality where they could then start issuing leases on that particular property, without waiting for the survey. If they did want patent they would, of course, have to complete the survey and if there are any conflicts in property rights, of course, they would have to conduct the survey. This would get development properties on line much quicker than what would otherwise be available." Number 544 CHAIRMAN OLBERG asked, "You're saying now that any municipality can apply for their tidelands?" RON SWANSON confirmed that and said, "...last changes that we made were that any conveyance under this legislation would require access to and along easements to be reserved that are currently required in AS 38.05.127, and that any land would be subject to the public trust, and if anybody thought the public trust was being violated you could, of course, go to court immediately. And lastly, any municipality that dissolves, the land would automatically revert back to the state. The last thing which I forgot to mention earlier is, this particular bill would not increase or diminish a municipality's land entitlement under AS 29.65, but in the same light, any acreage conveyed would not be charged against that particular entitlement. I expect the acreage to be fairly small, but very important though for revenue generation for municipalities." REPRESENTATIVE BUNDE said, "You mentioned a concern about defining a municipality. Do you think we ought to address that concern?" MR. SWANSON deferred that questions to DCRA. Number 574 JOHN WALSH, SPECIAL ASSISTANT, DCRA, testified, "In work drafts and discussions, we had discussed the expansion of this bill from strictly municipalities to include boroughs, so if we're all using the term municipality loosely...it one day meant just cities, first and second class cities. If you would like to expand that definition, I think it would be prudent to include that in the language here. For purposes of clarification, I think it would be in your best interests to precisely define exactly what you mean by municipality. The previous draft had a different interpretation of that same phrase." CHAIRMAN OLBERG asked, "Does your department have a definition of municipality that includes all municipalities including boroughs?" MR. WALSH proceeded, "I think for the purpose of this section...AS 38.05.825, municipality means a home rule, first or second class city and a home rule first, second or third class borough and a unified municipality. So you could insert that, to this language and it would suffice for the purpose of this chapter." CHAIRMAN OLBERG said, "I think we'll just do that..." and asked for a motion. Number 595 REPRESENTATIVE TOOHEY moved that DCRA's definition be incorporated into CSHB 398 as an amendment and be adopted. There were no objections. MR. WALSH cautioned the committee, "The burden is going to be at the director or the commissioner level of DNR to restrict that, and there's going to be intense pressure upon that department, and some of these boroughs are quite armed with legal staff and whatnot, and the pressure upon the state agency and the attorney general's office could be overwhelmed. So I would ask you to consider it in the intent language, either now or on the floor, what your express intent is with respect to those phrases, above and beyond the language in the bill." MR. SWANSON said, "I think we've captured the thought of the land classified for waterfront development. That's very clearly laid out in regulation and it also has to be consistent with the land use plan or comprehensive plan. So I think it goes through very exhaustive public process with what is truly waterfront development. It's not just a theory." REPRESENTATIVE BUNDE asked, "This would not subtract from the acreage that the municipality is allowed and my reaction is why not, as that may encourage more careful consideration of possible selections." MR. SWANSON said, "That was my original position, that it would be charged against entitlement. There were some valid concerns raised by some of the municipalities of their limited entitlement. They need some uplands, some tidelands, the two kind of come together...because we restricted it down to actual waterfront development. Most of that acreage is going to be pretty minimal." Number 636 RICH WILSON, CITY ADMINISTRATOR, CITY OF ST. GEORGE, testified via teleconference in support of CSHB 398, "I'm pleased to see (this) is being addressed very adequately. For many years, we've been working in our city to obtain leases and for various reasons, no fault intended on any part, but it just takes a long time. As such, it's limiting the ability of the public body at the municipal level to exercise their responsibilities. I'm pleased that the DNR and the municipalities proposing this and legislators proposing this are in agreement on all those key provisions." CHAIRMAN OLBERG asked, "If a municipality receives a land entitlement that adjoins the ocean, does that end at the mean high tide mark. Where is the boundary in the land entitlement now?" MR. SWANSON said, "It's at mean high tide." CHAIRMAN OLBERG said, "When we talk about tidelands, we are talking about land that's underwater half the time perhaps." MR. SWANSON said, "The definition of tideland is the line between mean high tide and mean low tide and submerged lands means...underneath saltwater all the time." LEE SHARP, ATTORNEY, ST. GEORGE AND ALEUTIANS EAST BOROUGH, via teleconference, testified, "In municipal law, municipality means all municipalities and while it's not defined in Title 38, it is defined in Title 29. AS 29.71.800 (13), that encompasses every kind of municipality in Alaska, but the intent was certainly that it include all municipalities and boroughs whether home rule or general law. As for the concern about all the tidelands within boroughs, I think about all that means is that boroughs have more tidelands to select from than you would expect in the cities, but it doesn't mean they're going to get anymore because the provision in here...is that tidelands be required for a project or an improvement. I don't think that we should be concerned that the boroughs are going to be able to abuse this. As to charging against entitlement, some cities at this point have no entitlement whatsoever; these lands are going to come to the municipalities with some restrictions on them that are not going to be put on lands that they select under their general land entitlement. They don't have to be classified for a particular use. So if you charge it against that, then maybe you ought to give them the tidelands without any restrictions on them, but we know there have to be restrictions on them, so these really aren't of the same nature." TAPE 94-7, SIDE B Number 015 REPRESENTATIVE TOOHEY asked, "This fiscal note, does that reflect the transfer of the lands to the municipalities for the surveying, and can that be absorbed by the developer." MR. SWANSON said, "That fiscal note was based on the original bill, the sponsor substitute, when I was required to convey all tidelands. Under this particular bill (CSHB 398), we will come in with a zero fiscal note because the people that I am now administering the leases with, I can just turn around and convey the land to the municipalities instead of having to administer leases all the time." There was discussion regarding earthquakes. Number 052 GARY WILLIAMS, CITY MANAGER, WHITTIER, via teleconference, testified, "I'd like to compliment all those who've been involved in the production of the current committee substitute. I believe it meets all the criterion for a good piece of legislation, because it's good policy to create legislation which solves problems and creates opportunities for rural public interest. This bill provides potential economic opportunities for all sixteen boroughs in the state, for at least one first class city and by my count, 49 second class cities. The conveyance of tide and submerged lands under this bill will, in my view, not result in wholesale demand for conveyances and place unreasonable demands on the ability of DNR to process conveyances. I urge a do pass on this legislation." REPRESENTATIVE ED WILLIS asked about the significance of the repealer on CSHB 398. CHAIRMAN OLBERG said, "That is the paragraph 11 of section 1, (which says) `is repealed on January 1, 1998,' they have until then to get that done and then that expires." Number 145 REPRESENTATIVE BUNDE moved to pass CSHB 398 as amended out of committee on individual recommendations with a zero fiscal note. There were no objections. Number 175 ADJOURNMENT CHAIRMAN OLBERG adjourned the meeting at 2:03 p.m.