Legislature(2013 - 2014)BARNES 124
03/04/2014 08:00 AM House COMMUNITY & REGIONAL AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| HB296 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 296 | TELECONFERENCED | |
HB 296-STATE LAND DISP./LEASEHOLDER PREFERENCE
8:06:39 AM
CO-CHAIR LEDOUX announced that the only order of business would
be HOUSE BILL NO. 296, "An Act providing for certain individuals
who have erected a building on land leased from the state to
receive a preference right to purchase certain state land
without competitive bid."
CO-CHAIR LEDOUX passed the gavel to Representative Foster.
8:07:50 AM
CO-CHAIR LEDOUX, speaking as the sponsor of HB 296, paraphrased
from the following written statement [original punctuation
provided]:
House Bill 296 establishes a new preference right for
people holding a state lease to buy the land before
the State transfers the property to a municipality.
This right is contingent upon certain conditions,
chief among them that the lease-holder must have
invested in the land, assembled a building on the
land, and received at least 25% of their total income
from the land over the preceding ten years. This
right is also without a competitive bid and the land
would be sold at a fair market price.
This bill is necessary to protect the livelihoods of
people who have invested their time, sweat and money
into businesses that often serve our unique Alaska
lifestyles. After working the land for years, perhaps
decades, a person should have some assurance that
their efforts would be protected and be given the
chance to purchase the land they had labored on for so
long.
I urge you to support this bill. And with that I'll
turn it over to my staff, Thomas Brown, to give more
details about the bill.
8:09:46 AM
REPRESENTATIVE REINBOLD moved to adopt the proposed committee
substitute (CS) for HB 296, Version 28-LS1375\U, Bullock,
2/24/14, as the working document.
REPRESENTATIVE KITO III objected for purposes of discussion.
8:10:23 AM
THOMAS BROWN, Staff, Representative Gabrielle LeDoux, Alaska
State Legislature, informed the committee the purpose of HB 296
is to provide that certain individuals receive a preference
right to purchase certain state land without a competitive bid.
The proposed legislation would allow state land leaseholders the
first right of refusal on land in which they have made
investments, and on which they depend for their livelihood.
Current state statutes allow for an individual to receive a
preference right to purchase up to five acres of state land
under certain conditions:
a. The individual must have erected a building on the
land.
b. The land must have been used for five or more years
for bona fide business purposes, under a federal
permit or without the need for a permit, and, after
state selection, under a state permit or lease.
c. The business the land is used for must have produced
at least 25 percent of the individual's total income
for the five years preceding the application for
preference right.
MR. BROWN explained that HB 296 would extend the first right of
refusal to individuals who have a state-issued lease for land
that is involved in a municipal entitlement selection. The
preference right to purchase up to five acres of land without
competitive bid would be granted under the following conditions:
1. The individual must have erected a building on the
land.
2. They have used the land for bona fide business
purposes for ten or more years under a state lease
that was issued competitively.
3. The individual has received at least 25 percent of
their total income for the ten years preceding the
application for the preference right.
MR. BROWN continued to explain the specifics of the program as
follows:
1. In the case of municipal entitlement selection of state
land, an individual who meets the conditions previously
outlined and applies for preference right within 120 days
of notice of a municipal entitlement selection, will be
granted a preference right to purchase the land.
2. The land will be sold at fair market value of the
unimproved land, as determined by an appraisal and survey
to be paid for by the applicant.
3. It also provides a mechanism by which a municipality will
be compensated for the land if the leaseholder chooses to
purchase it.
4. The remaining amount of land within the overall municipal
entitlement will be reduced by the amount of land the
leaseholder purchases, up to five acres.
5. The revenue from the purchase of the parcel will be given
to the municipality.
8:13:10 AM
MR. BROWN advised there is a zero fiscal note from the
Department of Natural Resources (DNR) attached to the bill. A
description of the differences between the original bill and
Version U was included in the committee packet, and further
reviewed by Mr. Brown, beginning on page 2, line 9, where the
words "an active" were changed to "a valid." On page 2, line
10, the words "on which there is a" were replaced by "that has
a." On page 2, lines 10 and 11 clarify that the state-issued
land lease had been issued competitively. On page 2, line 12
clarifies that the municipal entitlement is a land selection.
On page 2, line 13, the word "further" was added, and on line
14, the word "lessee" was removed. On page 2, lines 14-17
clarify the conditions under which an individual would be
granted a preference right. On page 2, lines 17-19 provide for
a time limit of 120 days within which to apply for a preference
right. On page 2, line 19 adds the words "if the director
grants the preference right." On page 2, lines 21 and 22
reference the appropriate appraisal statutes, AS 38.05.840. On
page 2, line 25 references the statute that outlines how a
written determination is administered. On page 2, lines 26-30
insert a provision for compensating municipalities for land
purchased by a leaseholder with a preference right.
8:15:53 AM
REPRESENTATIVE KITO III inquired as to how many inholdings HB
296 might affect.
8:16:27 AM
WYN MENEFEE, Chief of Operations, Central Office, Division of
Mining, Land and Water, Department of Natural Resources (DNR),
said DNR anticipates that few leases would qualify for the
preference by meeting all of the criteria and having a municipal
entitlement selection affecting them. Statewide there are about
69 competitive leases, and the number would be reduced by the
aspects of the bill. Mr. Menefee estimated that less than 10
would qualify.
REPRESENTATIVE KITO III asked if allowing a private individual
or organization to purchase the land creates an access right to
an inholding.
MR. MENEFEE replied no, and explained that access is an issue
that is not addressed in the proposed legislation. Typically,
access to parcels surrounded by state land is not an issue
because there are multiple ways to obtain access such as
generally allowed usage, an easement, or by a waterway. At the
time surrounding land is transferred to a municipality or
borough, it is unclear what access the borough will or will not
allow. He advised that municipalities typically are not
interested in restricting access, thus this normally hasn't been
an issue, but he would not guarantee an issue related to access
would not arise.
8:19:13 AM
REPRESENTATIVE FOSTER opened public testimony.
8:19:35 AM
MEL GILLIS related his situation in which he lost his business
after many years of operation on state land. He said he
understood that the [Alaska] Constitution directs that land
would be made available for development, and he tried to buy the
land he leased from the state in 1984, where he built a nice
place with permission from DNR. However, 15 years later, the
municipality requested the land and the state granted its
request. Mr. Gillis spent $247,000 to save his lodge and five
acres of state land. He opined the bill would prevent this
situation in the future, and he urged the committee to create a
way that an individual can obtain the state land that they
choose, without DNR specifying what is available to them. He
noted that the bill is only the first step to correct a problem
with DNR.
8:22:54 AM
REPRESENTATIVE REINBOLD said Mr. Gillis' story is sad and HB 296
is a step in the right direction to help future Alaskans in
their businesses and to prevent unfair actions. She expressed
her hope that the state is business-friendly and "things like
this don't continue to happen."
MR. GILLIS said there are no guarantees with DNR, and the
American Dream in Alaska - for those who are trying to start a
business in the Bush - is dead.
REPRESENTATIVE REINBOLD agreed that smaller communities need a
business-friendly climate.
CO-CHAIR LEDOUX expressed her belief that the bill may not help
Mr. Gillis, but will help individuals in the future.
8:25:51 AM
THOR STACEY, Lobbyist, Alaska Professional Hunters Association,
Inc., informed the committee Mr. Gillis is a long-time member of
the Alaska Professional Hunters Association and its board
supports the concept of HB 296. Although in Mr. Gillis' case
the bill is too late, there are other hunting guides who have
similar issues. He advised that the association has about 120
professional members who are registered guides across the state.
Alaska's guiding industry garners about $80 million in
associated economic impacts to the state, and brought in about
$55 million new dollars to the state in 2013. Fifty percent of
the association's economic impact in new dollars and on
employment is to rural areas outside of urban centers; for
example, the rural economic development that comes with hunting
operations based on leases for hunting lodges. Alaska has a
diversity of hunting services, including those who obtain state
land leases and make improvements to provide shelter in a harsh
environment. Those service providers face a lot of business
risk in terms of building in rural Alaska, and they have a
general faith that the system will encourage a legal business
which provides infrastructure across remotes areas of the state.
Mr. Stacey pointed out that those who choose to make this
investment and take this risk know there are no guarantees,
however, when a government entity overlaps another and makes a
selection, the improvements can suddenly be bought out
underneath them. The association board sees this as a potential
for injustice, and expects that the bill gives an individual a
chance to fairly purchase the improvements that they have built.
From the perspectives of rural economics, diversity of services,
safety, and social benefits, Mr. Stacey said the association is
in strong support of the bill.
8:30:11 AM
REPRESENTATIVE FOSTER, after ascertaining that no one else
wished to testify, closed public testimony.
CO-CHAIR LEDOUX urged for passage of the bill.
8:30:35 AM
The committee took a brief at-ease.
8:31:13 AM
REPRESENTATIVE KITO III withdrew his objection to the adoption
of CSHB 296, Version U. There being no further objection,
Version U was before the committee.
8:31:23 AM
REPRESENTATIVE REINBOLD moved to report CSHB 296, Version 28-
LS1375\U, Bullock, 2/24/14, out of committee with individual
recommendations and the accompanying fiscal notes. There being
no objection, CSHB 296(CRA) was reported from the House
Community and Regional Affairs Standing Committee.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 296 Sponsor Statement.pdf |
HCRA 3/4/2014 8:00:00 AM |
HB 296 |
| HB 296.pdf |
HCRA 3/4/2014 8:00:00 AM |
HB 296 |
| HB 296 Committee Substitute.pdf |
HCRA 3/4/2014 8:00:00 AM |
HB 296 |
| HB 296 Fiscal Note DNR.pdf |
HCRA 3/4/2014 8:00:00 AM |
HB 296 |
| HB 296 Changes.pdf |
HCRA 3/4/2014 8:00:00 AM |
HB 296 |