Opinion ID: 2566102
Heading Depth: 3
Heading Rank: 3

Heading: Applying the Current Version of AS 38.05.090 Would Have an Impermissible Retroactive Effect on Transactions Conducted Under the Former Version.

Text: Alaska Statute 38.05.090 governs the disposition of improvements placed on state land by lessees of the land. In 1997 the legislature changed the statute in a number of ways. [5] Two of the changes are relevant here. First, the former statute required removal of improvements owned by a lessee, so long as removal would not damage the land. [6] The current statute also requires removal and provides that lessees must return the land to good and marketable condition. [7] Under the former statute, improvements or chattels whose value exceeded $10,000 could be sold at public auction if not removed, with the proceeds going to the lessee. [8] Most importantly, any subsequent purchaser of the land was required to purchase improvements that had become fixtures of the land, with the proceeds also going to the former lessee. [9] Under the current statute, any property left on the leasehold, whether a fixture or not, becomes the property of the state and the lessee receives no compensation, [10] unless they are [p]rivate residential improvements. [11] The current version also includes stronger restoration requirements than the former statute, which could become important later in the life of this parcel [12] but are not implicated directly by the DNR decision from which Rush appeals. As described above, the question in this case is whether the current version of AS 38.05.090 would have a retroactive effect if applied to the termination of RC & D's lease. If it would, the statute may not be applied. [A] statute will be considered retroactive insofar as it `gives to pre-enactment conduct a different legal effect from that which it would have had without passage of the statute.' [13] A statute creates this different legal effect if it would impair rights a party had when he acted, increase a party's liability for past conduct, or impose new duties with respect to transactions already completed. [14] Under the former statute, when a lessee acquired fixtures by purchasing or building them, among the property rights he gained was the right to force any buyer of the state land to purchase the fixtures. Under the new statute, that property right no longer exists. The record is not clear as to whether RC & D acquired the buildings under the old law when it accepted the assignment of the lease or under the new law when the Borough passed its ordinance conveying them. The timing of the acquisition does not matter to the outcome of the case, however, because under either scenario, applying the new law would alter the consequences of a transaction conducted under the former version and therefore have a retroactive effect. The former statute was in effect in 1996 when RC & D accepted assignment of the lease. If RC & D acquired the buildings at that time, then it had the right to force their purchase upon sale of the land. Applying the new law would take away that right, thus altering the legal effect of its acquisition. Alternatively, RC & D may have only acquired the buildings as a result of the 2000 Borough ordinance, after the law changed. But the Borough acquired the hatchery fixtures from ADF & G in 1994, under the old statute, and therefore its property rights in the buildings included the right to force their sale. At the same time, the Borough gained the right to transfer everything it owned  the buildings and all of its property rights it had in them. The ability to transfer all rights is a basic aspect of property: A property right consists not merely in its ownership and possession, but in the unrestricted right of ... disposal. [15] This principle is most commonly encountered in the law of zoning. A landowner may have a grandfathered right to use his property in a way that current zoning would not allow because he had put the land to that nonconforming use before it was barred. [16] When the owner sells the land, the purchaser takes the grandfathered right to continue the nonconforming use. [17] Similarly, here the right to force a sale of the fixtures was part of what the Borough gave RC & D when it transferred the buildings via the 2000 Borough ordinance. Applying the new statute would deny RC & D that right and thus diminish the Borough's right to transfer all that it held, a right that it gained when it acquired the buildings from ADF & G in 1994. This would change the legal effect of the 1994 transaction, the mark of a retroactive application.