Legislature(2021 - 2022)BARNES 124
04/30/2021 01:00 PM House RESOURCES
Note: the audio ![]()
and video ![]()
recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.
| Audio | Topic |
|---|---|
| Start | |
| HB98 | |
| HB135 | |
| HB120 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 135 | TELECONFERENCED | |
| *+ | HB 120 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 98 | TELECONFERENCED | |
HB 120-STATE LAND SALES AND LEASES; RIVERS
[Contains discussion of SB 97]
1:30:27 PM
CHAIR PATKOTAK announced that the final order of business would
be HOUSE BILL NO. 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."
1:31:01 PM
The committee took a brief at-ease at 1:31 p.m.
1:31:45 PM
REPRESENTATIVE RAUSCHER moved to adopt the proposed committee
substitute (CS) for HB 120, Version 32-GH1634\B, Radford,
4/23/21 ("Version B"), as the working document.
1:31:59 PM
CHAIR PATKOTAK objected for purposes of discussion and noted
that this is a conforming change to match the companion bill, SB
97. He then removed his objection. There being no further
objection, Version B was before the committee.
1:32:23 PM
MARTY PARSONS, Director, Division of Mining Land and Water,
Department of Natural Resources (DNR), presented a PowerPoint
[hard copy included in the committee packet] on HB 120, which he
explained is an attempt by the Dunleavy Administration to "get
Alaska lands into Alaskans' hands." He said that Version B has
removed from the original bill version some of the issues he
characterized as "controversial." He presented slide 2,
"Authority to DEED and DOT&PF," which read as follows [original
punctuation provided]:
Authority to DOT&PF and DEED to Dispose of State Land
Provides authority to ease disposal of excess
buildings around the state
? The bill amends current statutes to allow DOT&PF and
DEED to acquire and transfer excess buildings and land
that is no longer needed for the purposes of the
original acquisition
? This will streamline the disposal process and reduce
multi-agency efforts
MR. PARSONS explained that Title 38, under which DNR operates,
currently allows the Department of Transportation & Public
Facilities (DOT&PF) and the Department of Education and Early
Development (DEED) to dispose of lands previously procured for a
specific purpose directly instead of conveying them to DNR; he
stressed that this would only be for lands conveyed to DEED or
DOT&PF for a specific purpose. The provisions for land disposal
exist under the statutes governing DNR, he explained, but not
under the statutes governing DEED or DOT&PF. He reiterated that
Version B of HB 120 would simply "harmonize" the statutes.
1:34:55 PM
CHAIR PATKOTAK asked Mr. Parsons to discuss the changes in
Version B.
MR. PARSONS explained that the original language of HB 120 would
have repealed the statutes establishing the Susitna Basin
Recreation Rivers Management Plan, adopted in the late 1980s.
The language, he said, became a controversial issue with groups
using that area. He said that Version B also clarified portions
of Section 14.
1:36:37 PM
REPRESENTATIVE HANNAN expressed her understanding that
properties held by DEED are finite and asked about the number of
buildings and parcels of raw land. She said that, since DEED
properties are in communities, she would prefer to allow a local
government or school district the right of first refusal in
purchasing the property.
MR. PARSONS replied that Representative Hannan's assumption was
correct; DNR has identified five properties deeded to DEED with
locations in Fort Yukon, Wales, Shishmaref, and Teller. He
noted that the properties in Sitka for the Mt. Edgecumbe school
have already been disposed. He clarified that DEED would
determine how best to dispose of the remaining properties.
REPRESENTATIVE HANNAN asked whether all five properties include
buildings.
MR. PARSONS replied that he believes they do, but he would
verify.
1:39:36 PM
REPRESENTATIVE FIELDS asked whether there are larger DOT&PF
parcels, and if so, their locations. He noted that the
provisions in Sections 5, 6, and 8-11 would affect DNR lands
such as the Hatcher Pass area, and said he would like to see a
map of land affected by the provisions under HB 120 and how
current uses could be impacted.
CHAIR PATKOTAK expressed that it would be helpful to understand
any statewide effects under the proposed legislation, as well as
getting detailed information on any areas of special interest.
REPRESENTATIVE FIELDS asked Mr. Parsons to explain the thought
process regarding the location of parcels for disposal in
relation to lands used for recreation.
MR. PARSONS asked Representative Fields whether he was
referencing DOT&PF or general state lands.
REPRESENTATIVE FIELDS replied, "More broadly."
MR. PARSONS stressed that the lands identified for disposal are
DOT&PF [or DEED] lands that were acquired only for specific
purposes. He said that if DOT&PF had done a prescriptive action
to take over a certain parcel, and then found there was no
longer an identified purpose for that parcel, DOT&PF would have
the opportunity to dispose of the parcel through its own
statutes instead of conveying it to DNR for processing and
disposal. He clarified that HB 120 would remove the "red tape."
REPRESENTATIVE FIELDS noted that he may have misunderstood the
intent of the bill and expressed his understanding that Hatcher
Pass wouldn't be affected under HB 120.
MR. PARSONS said, "That is correct."
1:44:30 PM
REPRESENTATIVE RAUSCHER asked whether concerns such as asbestos
remediation were considered in identifying buildings for
disposal.
MR. PARSONS reiterated his earlier explanation of HB 120 and
stressed that only five parcels have been identified for
disposal. He said that DEED may be able to provide a larger
list of buildings, but those would not be part of the provisions
under HB 120.
1:46:46 PM
MR. PARSONS continued his presentation with slide 3, "Land
Disposal Income Fund (LDIF)," which read as follows [original
punctuation provided]:
Increase Land Disposal Income Fund (LDIF)Cap
Increase spending authority from the LDIF for project
development
The cap on the LDIF is proposed to be increased from
$5M to $12M to provide additional capital for the
department to develop and dispose of state lands and
to offset inflation since the fund was established in
2000
? The $5M cap has not been adjusted in 20 years
? Personnel and Development costs have increased
significantly, reducing the available "working
capital"
? This will result in more acreage available for
sale and construction of access
? This is not an increase in appropriation simply
an adjustment to the funding cap
1:48:42 PM
REPRESENTATIVE HANNAN asked, "The land disposal income fund has
been considered a 'sweepable fund,' correct?"
MR. PARSONS replied, "That is correct."
REPRESENTATIVE HANNAN noted that she understands the reason for
increasing the fund and asked whether it has generally held
enough to fund the land disposal program.
MR. PARSONS responded that land sales currently produce a little
over $5 million annually. He explained that several projects
have been deferred because DNR currently doesn't have the
ability to build infrastructure and comply with the planning
authorities of local municipalities, which would be necessary to
bring higher value land into the market. He said that
increasing the fund cap would allow DNR to fund larger, more
expensive projects.
1:50:40 PM
CHAIR PATKOTAK asked how much excess the fund has held for each
of the past five fiscal years.
MR. PARSONS replied that he would get that information, as well
as provide a list of projects deferred due to the low funding
cap.
1:51:16 PM
REPRESENTATIVE SCHRAGE asked whether the working capital is
funded through the land sales or an appropriation.
MR. PARSONS responded that the fund is not an appropriation.
REPRESENTATIVE SCHRAGE asked about the public process for
deciding to develop a piece of property with the intent to sell.
MR. PARSONS replied that DNR has developed a process by which
factors such as infrastructure needs and cost, comparable land
sales, appraisal, and design are considered. If the cost-
benefit analysis for developing the land is positive, a
preliminary decision is distributed to the public, as well as
state and local agencies and tribal governments, for input.
After the public process, he explained, the plan is amended, a
final decision is made, and work begins.
REPRESENTATIVE SCHRAGE asked whether DNR would require a
specific rate of return on a project in order to begin
development.
MR. PARSONS replied that if the expected fair market value could
recoup the cost of development, the project would most likely go
through.
1:55:48 PM
CHAIR PATKOTAK asked to see the policy for the public process.
1:56:04 PM
REPRESENTATIVE HOPKINS asked whether the process Mr. Parsons
described was used to develop and sell the agricultural land
outside of Nenana.
MR. PARSONS replied that the Nenana land underwent a different
process and indicated that [Division of Agriculture] Director
Dave Schade would have more information.
1:56:50 PM
REPRESENTATIVE SCHRAGE noted that adjusting the $5 million cap
for inflation would add only $2.5 million. He asked, "Is there
that substantial of a backlog of properties that need investment
to bring them to sale? Why do you need the additional $4.5
million?"
MR. PARSONS reiterated his explanation that DNR is also trying
to ensure the ability to undergo future projects. He said that
projects often have road construction requirements stipulated by
the municipalities or boroughs which could include ingress and
egress for emergencies, emergency equipment for evacuation, two-
lane roads, and electrical infrastructure; the costs of such
infrastructure requirements can be "rather high."
1:59:48 PM
MR. PARSONS resumed the PowerPoint presentation with slide 4,
"Commercial Use," which read as follows [original punctuation
provided]:
Commercial Use Land Sales
This new statute governing the leasing and sale of
state lands deemed suitable for commercial
development, within Qualified Opportunity Zones or in
state determined commercial development areas
? Land can be nominated by the public
? Leasing option to complete requirements for sale and
allow immediate commercial activity
? After conclusion of the lease requirements for sale
will occur
? Individuals have requested a program to allow for
such sales
? The number of acres identified for proposed
development will be significant and the number of
acres conveyed will depend on the proposals received
MR. PARSONS explained that this idea was borne by the need for
small entrepreneurs to have land on which to base their
operations without having to go through a competitive bidding
process. He said that DNR would work with a business on a
development plan and enter into a lease, with the goal of
selling the land to the business as it grows. He stressed that
this program would be for commercial use only, with the
intention of diversifying the economy, rather than for
recreational use.
2:02:42 PM
REPRESENTATIVE HANNAN asked for more information on the process.
MR. PARSONS described two ways in which the proposed program
could operate. In the first scenario, he said, a business could
identify a parcel of land, approach DNR with a development idea,
lease the land from DNR at fair market value, and at the end of
the lease, if the business has developed and the land is being
used as planned, the lease could be converted to a sale. In the
second scenario, he said, DNR could identify lands and solicit
ideas for their commercial use; if multiple businesses wanted
the same land, options would be evaluated for highest return to
the state.
2:05:04 PM
REPRESENTATIVE RAUSCHER asked who pays for the land appraisal.
MR. PARSONS replied that the individual or business would be
responsible for the survey and appraisal.
2:05:55 PM
CHAIR PATKOTAK stated his understanding that the business would
be responsible for the survey and appraisal costs when going
through the commercial nomination process.
MR. PARSONS replied, "That is correct."
CHAIR PATKOTAK asked, "So in the other process, the state might
carry the bill on the appraisal when it goes to competitive
bid?"
MR. PARSONS explained that if the state offered a parcel of land
and multiple businesses could make use of the land with no
overlap, each would be responsible for the appraisal cost of its
own acreage. If multiple organizations wanted the same acreage,
then the land would go to the highest bidder, who then would be
responsible for the survey and appraisal. If DNR offered a
discrete parcel, then the survey and appraisal would be done
before the land was made available.
2:07:17 PM
REPRESENTATIVE RAUSCHER asked whether these parameters are in
the proposed legislation.
MR. PARSONS said that it's his recollection that the language is
in HB 120.
CHAIR PATKOTAK noted that this issue would need clarification.
2:07:47 PM
REPRESENTATIVE HOPKINS asked how the state would determine that
an appraisal is accurate.
MR. PARSONS responded that DNR would provide instructions on
what the appraisal would need to include.
REPRESENTATIVE HOPKINS asked how DNR would know that an
appraisal is legitimate.
MR. PARSONS responded that the in-house appraisal staff at DNR
reviews all of the appraisals to ensure the development
standards are met.
CHAIR PATKOTAK stated his belief that Representative Hopkins'
question was intended to clarify checks and balances to ensure a
fair assessment.
2:09:35 PM
REPRESENTATIVE SCHRAGE asked to what extent the state would be
covering costs that should be paid by the developer, and whether
the costs could include building a road to access the property
or putting in infrastructure which would benefit the developer.
MR. PARSONS replied that it depends on the program. Under the
land disposal program, if the state is selling individual
parcels in a subdivision, then in order for the state to meet
the requirements of borough planning boards, the state, as the
developer, would commonly be required to establish
infrastructure such as roads, subdividing the parcels, and
bringing in electricity. When an individual lot is purchased,
the buyer would be responsible for things like clearing the
lots, building driveways, and running water and power. Under
the commercial use program, however, he said that the state
doesn't guarantee any type of constructive access.
REPRESENTATIVE SCHRAGE asked whether a property would go through
a competitive bidding process after having been nominated by a
private individual.
MR. PARSONS said that under the commercial use program a person
or business could identify a property for commercial use,
provide DNR with a development plan, enter into a lease, develop
the land with state monitoring, and have the opportunity to
convert the lease to a sale without going through the
competitive bidding process.
2:13:14 PM
CHAIR PATKOTAK asked whether it would be possible to bypass the
lease and buy the land directly.
MR. PARSONS said that under this program, they would go to a
lease first and then the sale. He explained that DNR would want
to ensure that the property isn't being used for speculation; as
the intention of the commercial use program is to expand
economic diversity, leasing allows the state to make sure the
land is used in accordance with that intention.
CHAIR PATKOTAK asked whether there's a minimum lease length
before the opportunity to purchase.
MR. PARSONS said that while there is no limitation in the
proposed legislation, regulations could be implemented.
2:15:03 PM
REPRESENTATIVE RAUSCHER asked whether the state could deny a
proposal based on the appraised value.
MR. PARSONS explained that an appraisal determines the value of
the land.
REPRESENTATIVE RAUSCHER asked, "Wouldn't you want to get your
use accepted before you put all the money into the survey and
the estimate of the land instead of having it all at once, so
that the state now, actually, gets a free estimate if they turn
down your usage?"
MR. PARSONS replied that someone who was nominating a parcel of
land would have a reasonable expectation that their proposal
would be accepted. He said, "I wouldn't assume that someone
would go out, survey, and have a land appraised and then come to
the state, and that would be the first time they start talking
about what they want to do." He further explained that there
would have been conversations as part of due diligence regarding
areas such as land classifications or use restrictions. He
said, "I'm envisioning quite a dialogue prior to getting to the
point where an individual would go out and survey and appraise
the land."
2:18:12 PM
REPRESENTATIVE HOPKINS read from slide 4 of Mr. Parson's
presentation, "The number of acres identified for proposed
development will be significant and the number of acres conveyed
will depend on the proposals received" and asked for a
definition of "significant." He then asked whether there are
any types of lands currently designated as "opportunity zones"
or otherwise unavailable for the commercial use program.
MR. PARSONS responded that lands set aside as legislative
designated areas (LDAs) wouldn't be available, and that possible
uses of land already being used for things like subsurface
exploration would have to be carefully considered. He said that
if a parcel of land is not classified for disposal there would
need to be a reclassification.
REPRESENTATIVE HOPKINS asked whether the process for
reclassifying the land is legislative or administrative.
MR. PARSONS answered that it's administrative and goes through
public process.
2:21:10 PM
REPRESENTATIVE MCKAY stated his assumption that the parcels are
checked for archaeological remnants and ancient graveyards.
MR. PARSONS replied that checking for historical significance is
always part of the process before any state land conveyances.
2:22:14 PM
REPRESENTATIVE HANNAN said that shellfish farms have been
operated for 30 years, and when they were first established, the
general consensus was that commercial enterprises shouldn't be
able to hold long-term leases to beachfront land. She asked
whether a current leaseholder of developed land would be able to
convert their lease to a sale.
MR. PARSONS clarified that the commercial use program is for
uplands only, and that the state is prohibited from conveying
tidelands or submerged lands to any entity other than a
municipality. He said that if someone already had a lease,
another entity couldn't take that away from them.
REPRESENTATIVE HANNAN said that she understands that the
shellfish themselves are on the tidelands but that commercial
shellfish farms have uplands permits for things like onsite
living quarters. She asked whether a commercial shellfish
farmer would be able to purchase the upland currently under
lease.
MR. PARSONS explained that justification of commercial use, such
as processing or transportation, would need to be provided.
2:26:26 PM
REPRESENTATIVE SCHRAGE asked whether a lease converted to a sale
could then be resold for non-commercial use.
MR. PARSONS replied that once the land was conveyed from the
state there would no longer be a stipulation on the parcel that
restricted it for commercial use.
CHAIR PATKOTAK asked whether existing leases, when expiring,
could be transferred to sales.
MR. PARSONS responded that upon expiration, a current lease
could be converted into a lease under the commercial use
program, and the land could subsequently be purchased at the end
of that lease.
CHAIR PATKOTAK asked Mr. Parsons to clarify whether a current
leaseholder would have to wait until expiration of the lease,
then enter into a new lease under the commercial use program,
and only then at the end of that lease have the option to buy
the land. He said that a leaseholder may have been more
conservative than an owner in developing the land.
MR. PARSONS responded that the state could terminate the
existing lease and enter into a new lease under the commercial
use program, so that the entrepreneurial activities are
protected. He stressed that it's not the intent of the program
to effectively kick someone off of the land they've been
developing, and that DNR would work to convert an existing lease
to a commercial use program lease given an appropriate
development plan.
2:30:32 PM
DAVID SCHADE, Director, Division of Agriculture, Department of
Natural Resources, began his portion of the PowerPoint with
slide 5, "Agriculture Lands," which read as follows [original
punctuation provided]:
Reduced Restrictions to Agricultural Land Disposals
Statutes are modified to reduce restrictions on
agricultural land to private ownership
? Reduces parcel size from a minimum of 40 acres to 20
acres when subdividing
? Increases the number of parcels from a maximum of
four parcels to eight parcels when subdividing
? Allows for land use and improvements, including
those that do not limit the primary use for
agricultural purposes
MR. SCHADE explained that HB 120 would allow both use of and
improvements on agriculture covenanted land to include modern
revenue-generating activities that don't impede on its primary
use as an agriculture operation; for example, he said, a farmer
could open a bed and breakfast or put in a cell tower. He
explained that the reading of the statute by the Department of
Law (DOL) has determined that not only are those activities
currently disallowed, but farming operations are also limited in
how large tracts of land may be parceled, limiting the acreage
to four parcels with a minimum of 40 acres each. Under HB 120,
he said, large operations would be allowed to have eight parcels
of 20 acres or more, and parcels of between five and 20 acres
would be allowed to establish ancillary activities such as a
tractor dealership, allowing for infrastructure opportunities.
He characterized the proposed legislation as attempting to make
agricultural lands more user-friendly while increasing
agricultural use.
2:34:22 PM
REPRESENTATIVE HANNAN asked whether the statute would require
agriculture activities be ongoing while operating non-farming
activities.
MR. SCHADE explained that agricultural covenants require
agriculture activities to continue. Because of the limitations
on other activities, he said, it's been difficult to enforce the
covenants. He said that the first step is to clarify what the
allowable uses would be, then take on a more active role in
covenant enforcement.
REPRESENTATIVE HANNAN asked how an allowable use is determined.
MR. SCHADE replied, "You're asking the million dollar question,
it's the one we struggle with: What level of agriculture is
agriculture?" He said that one of the reasons for allowing
ancillary uses on the smaller parcels is to keep the
traditional, larger farming enterprises on the large parcels.
He expressed strong support for the 20-acre minimum to allow for
crop rotation in traditional agriculture. He said that if HB
120 passes, it would be incumbent on DNR to write regulations
clarifying the metrics of ancillary and non-farm uses.
2:38:31 PM
MR. PARSONS resumed the PowerPoint with slide 6, "Development,"
which read as follows [original punctuation provided]:
Road Development and Minimum Lot Size Standards
The bill clarifies statutes relating to the
development of roads and minimum lot size standards
? Provides statute language to ensure State land
disposals are held to the same platting and zoning
requirements as all municipal projects for both lot
size and constructed access
MR. PARSONS explained that this section of the proposed
legislation is intended to allow the state to be held to the
same standards as a private developer when developing lands
within the boundaries of the organized boroughs of
municipalities. If a private developer was allowed to build
roads to a collector standard, he said, the state couldn't be
required to build roads to the more costly arterial standard,
with wider shoulders and different drainage structures. He
noted that this agreement was reached with the cooperation of
the Alaska Municipal League.
2:40:49 PM
REPRESENTATIVE HANNAN asked for the location of that language in
the bill.
MR. PARSONS replied that it is in Section 2, on page 3, lines
17-29. Section 2 read as follows:
Sec. 2. AS 19.30.080 is amended to read:
Sec. 19.30.080. Construction standards and
maintenance. An access road constructed under AS
19.30.060 - 19.30.100 shall be of low standard, not
necessarily suitable for all weather use. The state is
not under obligation to maintain an access road
constructed under AS 19.30.060 - 19.30.100. If an
access road is constructed outside a municipality that
has zoning ordinances, the right-of-way width for the
road shall be determined by the division of lands and
the Department of Transportation and Public
Facilities. If an access road under AS 19.30.060 -
19.30.100 is constructed within the boundaries of a
municipality that has zoning ordinances, the right-of-
way width for the road shall be consistent with, but
not in excess of, a municipal road project's right-of-
way [CONFORM TO THE SUBDIVISION CONTROL ORDINANCES OF
THE MUNICIPALITY]. Contracts for the work on an access
road are governed by AS 36.30 (State Procurement
Code).
2:41:26 PM
MR. PARSONS presented slide 7, "Additional Sales and
Authorities," which read as follows [original punctuation
provided]:
Additional Sale Authorities
Provides for ease of Land Sales purchase contracts and
clarification
? Modifies auction requirements for easier
administration of land offerings
o Allows for more modern sale options, including
online auctions
? Increases max contract term to 30 years
o Currently capped at 20 years
o Allows for longer financing of higher value
parcels
? Language referencing "foreclosure" is modified to
"termination" to align with the current administrative
process
MR. PARSONS explained that slide 7 highlighted the "cleanup
language" in the proposed legislation.
2:43:42 PM
REPRESENTATIVE SCHRAGE asked whether there would be a way for
residents without Internet access to participate in an auction.
MR. PARSONS responded that at this time DNR is not set up to
conduct online-only auctions; the current system is to have an
auction, with any lands unsold moved to an "over-the-counter"
sale. He said that it's those lands that could be put up for
online auction.
CHAIR PATKOTAK noted that it would be preferable to have a paper
system remain available.
REPRESENTATIVE SCHRAGE asked whether HB 120 could potentially
allow a system of online-only auctions.
MR. PARSONS replied, "I believe that would be a possibility."
2:45:33 PM
CHAIR PATKOTAK announced that HB 120 was held over.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 135 Support University of Michigan Center for Sustainable Systems 4.27.2021.pdf |
HRES 4/30/2021 1:00:00 PM |
HB 135 |
| HB 135 Example Geothermal Facilities 4.27.2021.pdf |
HRES 4/30/2021 1:00:00 PM |
HB 135 |
| HB 120 DNR Presentation to HRES 4.30.2021.pdf |
HRES 4/30/2021 1:00:00 PM |
HB 120 |
| HB 120 Draft HRES CS 4.30.2021.pdf |
HRES 4/30/2021 1:00:00 PM |
HB 120 |
| HB 120 Sectional Analysis to HRES CS 4.30.2021.pdf |
HRES 4/30/2021 1:00:00 PM |
HB 120 |