HB 120: "An Act relating to state land; relating to the authority of the Department of Education and Early Development to dispose of state land; relating to the authority of the Department of Transportation and Public Facilities to dispose of state land; relating to the authority of the Department of Natural Resources over certain state land; relating to the state land disposal income fund; relating to the leasing and sale of state land for commercial development; repealing establishment of recreation rivers and recreation river corridors; and providing for an effective date."
00 HOUSE BILL NO. 120 01 "An Act relating to state land; relating to the authority of the Department of Education 02 and Early Development to dispose of state land; relating to the authority of the 03 Department of Transportation and Public Facilities to dispose of state land; relating to 04 the authority of the Department of Natural Resources over certain state land; relating to 05 the state land disposal income fund; relating to the leasing and sale of state land for 06 commercial development; repealing establishment of recreation rivers and recreation 07 river corridors; and providing for an effective date." 08 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 09 * Section 1. AS 14.07.030 is amended to read: 10 (a) The department may 11 (1) establish, maintain, govern, operate, discontinue, and combine area, 12 regional, and special schools; 13 (2) enter into contractual agreements with the Bureau of Indian Affairs
01 or with a school district to share boarding costs of secondary school students; 02 (3) provide for citizenship night schools when and where expedient; 03 (4) provide for the sale or other disposition of abandoned or obsolete 04 buildings and other state-owned school property; 05 (5) prescribe a classification for items of expense of school districts; 06 (6) acquire and transfer personal property, acquire real property, and 07 transfer an interest in real property according to terms, standards, and conditions 08 established by the commissioner [TO FEDERAL AGENCIES, STATE AGENCIES, 09 OR TO POLITICAL SUBDIVISIONS]; 10 (7) enter into contractual agreements with school districts to provide 11 more efficient or economical education services; reasonable fees may be charged by 12 the department to cover the costs of providing services under an agreement, including 13 costs for professional services, reproduction or printing, and mailing and distribution 14 of educational materials; 15 (8) provide for the issuance of elementary and secondary diplomas to 16 persons not in school who have completed the equivalent of an 8th or 12th grade 17 education, respectively, in accordance with standards established by the department; 18 (9) apply for, accept, and spend endowments, grants, and other private 19 money available to the state for educational purposes in accordance with AS 37.07 20 (Executive Budget Act); 21 (10) set student tuition and fees for educational and extracurricular 22 programs and services provided and schools operated by the department under the 23 provisions of (1) of this section and AS 14.07.020(a)(9), (11), and (12); 24 (11) charge fees to cover the costs of care and handling with respect to 25 the acquisition, warehousing, distribution, or transfer of donated foods; 26 (12) establish and collect fees for the rental of school facilities and for 27 other programs and services provided by the schools; 28 (13) develop a model curriculum and provide technical assistance for 29 early childhood education programs; 30 (14) notwithstanding any other provision of this title, intervene in a 31 school district to improve instructional practices under standards established by the
01 department in regulation, including directing the 02 (A) employees identified by the department to exercise 03 supervisory authority for instructional practices in the district or in a specified 04 school; 05 (B) use of appropriations under this title for distribution to a 06 district; 07 (15) notwithstanding any other provision of this title, redirect public 08 school funding under AS 14.17 appropriated for distribution to a school district, after 09 providing notice to the district and an opportunity for the district to respond, when 10 (A) necessary to contract for services to improve instructional 11 practices in the district; or 12 (B) the district has failed to take an action required by the 13 department to improve instructional practices in the district; if funding is 14 redirected under this subparagraph, the department shall provide the redirected 15 funding to the district when the department has determined that the required 16 action is satisfactorily completed. 17 * Sec. 2. AS 19.30.080 is amended to read: 18 Sec. 19.30.080. Construction standards and maintenance. An access road 19 constructed under AS 19.30.060 - 19.30.100 shall be of low standard, not necessarily 20 suitable for all weather use. The state is not under obligation to maintain an access 21 road constructed under AS 19.30.060 - 19.30.100. If an access road is constructed 22 outside a municipality that has zoning ordinances, the right-of-way width for the road 23 shall be determined by the division of lands and the Department of Transportation and 24 Public Facilities. If an access road under AS 19.30.060 - 19.30.100 is constructed 25 within the boundaries of a municipality that has zoning ordinances, the right-of-way 26 width for the road shall be consistent with, but not in excess of, a municipal road 27 project's right-of-way [CONFORM TO THE SUBDIVISION CONTROL 28 ORDINANCES OF THE MUNICIPALITY]. Contracts for the work on an access road 29 are governed by AS 36.30 (State Procurement Code). 30 * Sec. 3. AS 35.20.070 is repealed and reenacted to read: 31 Sec. 35.20.070. Vacating and disposing of land; rights in land. (a) The
01 department may vacate easements acquired for public works purposes by executing 02 and filing a deed in the appropriate recording district. Upon filing, title to the vacated 03 rights in land inures to the underlying real property owner in the manner and 04 proportion considered equitable by the commissioner and set out in the deed. 05 (b) If the department determines that land or rights in land acquired by the 06 department are no longer necessary for public works purposes, the department may 07 (1) sell, contract to sell, lease, or exchange the land according to terms, 08 standards, and conditions established by the commissioner; or 09 (2) at the request of the commissioner of natural resources, transfer the 10 land to the Department of Natural Resources. 11 (c) Proceeds received from the sale or lease of land as authorized by this 12 section shall be credited to the funds from which the purchase of the land was made 13 originally. 14 * Sec. 4. AS 38.04.022 is amended to read: 15 Sec. 38.04.022. State land disposal income fund. (a) The revenue from the 16 state land disposal program shall be deposited in the state land disposal income fund in 17 the state treasury. On June 30 of each fiscal year, the portion of that fund that exceeds 18 $12,000,000 [$5,000,000] shall be deposited in the state general fund. The legislature 19 may appropriate money from the state land disposal income fund for expenditure by 20 the Department of Natural Resources for necessary costs incurred by the 21 commissioner in the implementation of state land disposal programs authorized under 22 this title or for any other public purpose. 23 (b) Within five days after the legislature convenes in regular session, the 24 Department of Natural Resources shall notify the legislature that a report reflecting all 25 money deposited in the fund established under (a) of this section during the prior fiscal 26 year is available. The report may include a recommendation to amend the deposit 27 limit established in (a) of this section. 28 * Sec. 5. AS 38.05.055 is amended to read: 29 Sec. 38.05.055. Auction sale or sealed bid procedures. (a) Unless another 30 method of sale is allowed [REQUIRED] under this chapter, AS 38.08, or AS 38.09, 31 the sale of state land shall be made at public auction or by sealed bid, at the discretion
01 of the director, to the highest qualified bidder as determined by the director. The 02 director may accept bids and sell state land under this section at not less than 70 03 percent of the appraised fair market value of the land. 04 (b) To qualify to participate under this section in a public auction or sale by 05 sealed bid of state land that is other than commercial, industrial, or agricultural land, a 06 bidder shall have been a resident of the state for at least one year immediately 07 preceding the date of the sale and submit proof of that fact, as the commissioner 08 requires by regulation. A bidder may be represented by an attorney or agent at a public 09 auction. 10 (c) An aggrieved bidder may appeal to the commissioner within five days after 11 the sale for a review of the director's determination [. THE SALE SHALL BE 12 CONDUCTED BY THE DIRECTOR, AND, AT THE TIME OF SALE, THE 13 SUCCESSFUL BIDDER SHALL DEPOSIT AN AMOUNT EQUAL TO FIVE 14 PERCENT OF THE PURCHASE PRICE. THE DIRECTOR SHALL 15 IMMEDIATELY ISSUE A RECEIPT CONTAINING A DESCRIPTION OF THE 16 LAND OR PROPERTY PURCHASED, THE PRICE BID, AND THE AMOUNT 17 DEPOSITED. THE RECEIPT SHALL BE ACKNOWLEDGED IN WRITING BY 18 THE BIDDER]. 19 * Sec. 6. AS 38.05.055 is amended by adding a new subsection to read: 20 (d) The sale shall be conducted by the director. The successful bidder at a 21 public action or all bidders at the time they submit their sealed bid, shall provide an 22 earnest money deposit in the amount of at least five percent of the bid amount. Not 23 later than 10 days after the public auction or sale by sealed bid, the director shall issue 24 a receipt to the successful bidder. The director's receipt shall contain a description of 25 the land or property purchased, the bid price, and the amount deposited. If the bidder 26 fails to enter into a contract to purchase or defaults in the payment of the bid amount, 27 five percent of the bid amount shall be forfeited to the state. 28 * Sec. 7. AS 38.05.065(a) is amended to read: 29 (a) A [THE] contract of sale for land, an interest in land, or property sold 30 under this chapter may be issued for [AT PUBLIC AUCTION OR BY SEALED 31 BID UNDER AS 38.05.055 SHALL REQUIRE] the remainder of the purchase price
01 to be paid in monthly, quarterly, or annual installments over a period of not more than 02 30  years, with interest at the rate provided in (i) of this section. Installment 03 payments plus interest shall be set on the level-payment basis. 04 * Sec. 8. AS 38.05.065(b) is amended to read: 05 (b) The contract of sale for land sold under AS 38.05.057 or under former 06 AS 38.05.078 shall require the remainder of the purchase price to be paid in monthly, 07 quarterly, or annual installments over a period of not more than 30  years. 08 Installment payments plus interest shall be set on the level-payment basis. The interest 09 rate to be charged on installment payments is the rate provided in (i) of this section. 10 * Sec. 9. AS 38.05.065(c) is amended to read: 11 (c) The director shall, for contracts under (a), (b), or (h) of this section, set out 12 in the contract for each sale the period for the payment of installments and the total 13 purchase price plus interest. The director, with the consent of the commissioner, may 14 also include in contracts under this section conditions, limitations, and terms 15 considered necessary and proper to protect the interest of the state. Violations of any 16 provision of this chapter or the terms of the contract of sale subject the purchaser to 17 appropriate administrative and legal action, including but not limited to specific 18 performance, termination [FORECLOSURE], ejectment, or other legal remedies in 19 accordance with applicable state law. 20 * Sec. 10. AS 38.05.065(d) is amended to read: 21 (d) If a contract for a sale of state land has been breached, the director may 22 issue a decision to [FORECLOSE AND] terminate the contract at any time 31 days 23 after delivering by certified mail a written notice of the breach to the address of record 24 of the purchaser. A breach caused by the failure to make payments required by the 25 contract may be cured within 30 days after the notice of the breach has been received 26 by the purchaser by payment of the sum in default together with the larger of a fee of 27 $50 or five percent of the sum in default. If there are material facts in dispute between 28 the state and the purchaser, the purchaser may submit a written request for a public 29 hearing for the review of the facts within 30 days after the notice of the breach has 30 been received. 31 * Sec. 11. AS 38.05.065(e) is amended to read:
01 (e) On a determination that there has been a breach of the contract based on 02 the administrative record and the evidence presented at a hearing, if requested, the 03 director shall issue a decision foreclosing the interest of the purchaser and terminating 04 the contract. The obligation to make payments under the contract continues through 05 the date of the director's decision to terminate the contract [FORECLOSE BY THE 06 DIRECTOR]. 07 * Sec. 12. AS 38.05.065(f) is amended to read: 08 (f) The director shall deliver the decision to [FORECLOSE AND] terminate 09 the contract personally to the purchaser or send it certified mail, return receipt 10 requested, to the address of record of the purchaser. If the breach is a failure to make 11 payments required by the contract, the decision shall include a notice to the purchaser 12 that if within 30 days the purchaser pays to the state the full amount of the unpaid 13 contract price, including all accrued interest, and any fees assessed under (d) of this 14 section, the department shall issue to the purchaser a deed to the land. If full payment 15 is not made within 30 days or the breach is for other than failure to make payment, the 16 decision [FORECLOSES AND] terminates all legal and equitable rights the purchaser 17 has in the land. 18 * Sec. 13. AS 38.05.065 is amended by adding a new subsection to read: 19 (j) If a sale of state land is to be made by means other than a means prescribed 20 by AS 38.05.055, the director shall require a person applying to purchase land, an 21 interest in land, or property, to submit an earnest money deposit of at least five percent 22 of the purchase price with the application for a contract to purchase land, an interest in 23 land, or property. This earnest money deposit shall be applied towards the purchase 24 price. If the applicant fails to enter into a contract to purchase or defaults in the 25 payment of the purchase price, five percent of the purchase price shall be forfeited to 26 the state. 27 * Sec. 14. AS 38.05 is amended by adding a new section to read: 28 Sec. 38.05.086. Leases and sales of land for commercial development. (a) 29 For purposes of stimulating economic development in the state, the commissioner may 30 lease and sell land that is identified in this section as appropriate for commercial 31 development. As provided in this section, if the lease is in good standing and the
01 development requirements of the lease have been satisfied, the lessee may purchase 02 the leased land. 03 (b) The department may identify land appropriate for commercial 04 development from any or all of the following categories: 05 (1) state land identified or nominated as Qualified Opportunity Zones 06 under 26 U.S.C. 45D, 26 U.S.C. 1400Z-1 and 1400Z-2, and 26 C.F.R. 601.601; 07 (2) state land nominated by the public; public nominations under this 08 paragraph are limited to one for each person and may not exceed 640 acres in size; 09 (3) any other state land the department deems appropriate for 10 commercial development. 11 (c) If land identified in (b) of this section is classified in a manner that does 12 not allow disposal of the land, the commissioner may classify or reclassify the land 13 through a classification order under AS 38.05.300 and a written decision by the 14 director under AS 38.05.035(e). 15 (d) The commissioner may open certain areas of land identified in (b) of this 16 section for leasing and sale, and issue a request for proposals to develop land within 17 the areas. Before proposals may be requested, the commissioner shall issue a decision 18 under AS 38.05.035(e) that the lease and sale of the land within the areas opened is in 19 the state's best interest. The commissioner's request for proposals must be in writing. 20 (e) A person may apply to develop land within the areas by responding to the 21 commissioner's request for proposals and paying an application fee as provided by 22 regulation. In addition to any information requested by the commissioner in the 23 request for proposals, a response to the request for proposals must include 24 (1) the specific type of commercial development proposed; and 25 (2) the specific location and description, including amount, of land 26 requested for the proposed commercial development; the amount of land requested in 27 a response to request for proposals may not exceed 20 acres and must be reasonably 28 compact. 29 (f) The commissioner's request for proposals must be posted on the Alaska 30 Online Public Notice System (AS 44.62.175) for at least 30 consecutive days and must 31 be furnished by electronic format or mail to a person who received notice of the
01 decision issued under (d) of this section. 02 (g) A response to the commissioner's request for a proposal must be in writing 03 and submitted by the deadline set by the commissioner. The commissioner may reject 04 any proposal that does not meet the requirements of this section or that the 05 commissioner determines, in writing, is not in the best interests of the state. The 06 commissioner's decision to reject a proposal is subject to appeal or a petition for 07 reconsideration under AS 44.37.011. 08 (h) If the commissioner determines that only one suitable proposal for a 09 specific area of land exists, the commissioner may issue a lease to that person as 10 provided in this section if it is in the best interests of the state. If the commissioner 11 determines that there are two or more suitable proposals for the same land or 12 overlapping land, the commissioner shall award the lease to the highest bidder as 13 determined by the commissioner at a public auction or by sealed bid if it is in the best 14 interests of the state. Participation in the public auction or sealed bid under this 15 subsection is limited to the persons who submitted proposals for the same land or 16 overlapping land. 17 (i) The annual fee for a commercial land lease under this section shall be set 18 by the commissioner so as to ensure that the state receives a fair return for the use 19 granted by the lease for the term of the lease and shall be a form of compensation set 20 out in AS 38.05.073(m). A lease must be for a term of not more than five years. A 21 lease in good standing may be renewed for one additional five-year period. The lease 22 may not be assigned by the original lessee during the term of the lease or any renewal 23 without the approval of the director. 24 (j) A commercial land lease under this section may be terminated by the 25 commissioner before the expiration of the term of the lease for a breach of the terms of 26 the lease, including a failure to use the land in a manner required by the terms of the 27 lease. After expiration of the lease term or termination of the lease before it expires, 28 improvements or personal property on the land subject to the lease shall be managed 29 in the manner required by AS 38.05.090. 30 (k) At any time during the lease, a lessee in good standing may submit an 31 application to the department to purchase all or a portion of the land leased under this
01 section for its fair market value at the time of purchase, if the lessee 02 (1) has completed the development requirements of the land leased 03 consistent with the proposal submitted under (g) of this section and as provided by the 04 terms of the lease; 05 (2) has appraised and surveyed the site in a manner acceptable to the 06 department, at the lessee's expense; and 07 (3) pays an application fee as provided by regulation. 08 (l) A lessee who purchases the land under (k) of this section may apply the 09 amount of the lease payments made under the lease to the purchase price of the land. 10 Other amounts paid, including fees, penalties, survey costs, and appraisal costs, may 11 not be applied to the purchase price of the land. 12 (m) If an application to purchase land is denied, the lessee may continue to 13 hold the lease according to the terms of the lease, and may apply again to purchase the 14 land. Any subsequent application must address the reasons the previous application 15 was denied. 16 (n) The commissioner shall adopt regulations under AS 44.62 (Administrative 17 Procedure Act) to implement this section. Regulations adopted under this subsection 18 shall, at a minimum, address 19 (1) the application procedures for a commercial land lease or sale 20 under this section; 21 (2) the auction or sealed bid process, if necessary, under (h) of this 22 section; 23 (3) the terms and conditions that may be included in a commercial land 24 lease under this section; 25 (4) resolving any and all competitive bidding disputes and issues; 26 (5) the procedure for requesting proposals; 27 (6) the criteria for assessing proposals; and 28 (7) any administrative fees. 29 * Sec. 15. AS 38.05.321(a) is amended to read: 30 (a) The department shall include in a document that conveys state land 31 classified as agricultural land
01 (1) a perpetual covenant for the benefit of all Alaska residents and 02 running with the land that restricts or limits the use of the land for agricultural 03 purposes; and 04 (2) one of the following, as appropriate: 05 (A) a perpetual covenant for the benefit of all Alaska residents 06 and running with the land permitting the owner of land that had been obtained 07 under homestead entry to subdivide and convey the land in parcels of not less 08 than 20  acres each; or 09 (B) a perpetual covenant for the benefit of all Alaska residents 10 and running with the land permitting the owner of land that had been obtained 11 by purchase to subdivide and convey not more than eight [FOUR] parcels of 12 the land of not less than 20  acres each, subject to the restriction that a 13 subdivided parcel may not be further subdivided. 14 * Sec. 16. AS 38.05.321(d) is amended to read: 15 (d) For state land classified as agricultural land that is conveyed under (a) of 16 this section, 17 (1) the commissioner may require the landowner to cooperate with the 18 appropriate soil and water conservation district under AS 41.10 in the development 19 and implementation of soil conservation plans as authorized by AS 41.10.110(6); 20 (2) as a condition of the conveyance, the commissioner may not 21 require preparation and implementation of a schedule of planned agricultural 22 development or a farm development plan specified in a land purchase contract unless 23 the commissioner permits modification of a plan in cases of economic hardship or 24 other extenuating circumstances; 25 (3) the commissioner may not 26 (A) limit the right of the landowner to use the land and 27 improvements for purposes that are [INCIDENTAL TO AND] not inconsistent 28 with and do not limit the primary use of the land for agricultural purposes; 29 (B) except as provided by (i) of this section, limit the right of a 30 landowner to construct housing for the landowner and farm laborers, to 31 construct improvements for animals, or to construct improvements that are
01 reasonably required for or related to agricultural use on the original parcel and 02 on additional subdivided parcels, not to exceed the limits and restrictions set by 03 (a)(2) of this section; and 04 (C) limit the right of the landowner to subdivide and convey 05 the land if the resulting parcels are not in violation of the limits and restrictions 06 set out in (a)(2) of this section. 07 * Sec. 17. AS 38.05.321(j) is amended to read: 08 (j) In this section, "agricultural purposes" means 09 (1) the production, storage, and sale, for commercial or personal use, 10 of useful plants and animals; 11 (2) the construction of 12 (A) housing for landowners and farm laborers; 13 (B) improvements for animals; or 14 (C) improvements that are reasonably required for or related to 15 agricultural use; 16 (3) the use of gravel reasonably required or related to agricultural 17 production on the parcel conveyed; and 18 (4) removal and disposition of timber in order to bring agricultural 19 land into use. 20 * Sec. 18. AS 38.05.965 is amended by adding a new paragraph to read: 21 (29) "public auction" means a public oral outcry auction or a public 22 online auction. 23 * Sec. 19. AS 41.23.400, 41.23.410, 41.23.420, 41.23.430, 41.23.440, 41.23.450, 41.23.460, 24 41.23.470, 41.23.480, 41.23.490, 41.23.500, and 41.23.510 are repealed. 25 * Sec. 20. Section 1, ch. 122, SLA 1988 is repealed. 26 * Sec. 21. The uncodified law of the State of Alaska is amended by adding a new section to 27 read: 28 TRANSITION: REGULATIONS. The commissioner of natural resources, the 29 commissioner of education and early development, and the commissioner of transportation 30 and public facilities may adopt or amend regulations as necessary to implement the changes 31 made by this Act. The regulations take effect under AS 44.62 (Administrative Procedure Act),
01 but not before the effective date of the law implemented by the regulations. 02 * Sec. 22. This Act takes effect immediately under AS 01.10.070(c).