Legislature(1997 - 1998)
04/28/1997 08:04 AM House CRA
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 38 - CONVEYANCE OF LAND SELECTIONS TO BOROUGHS Number 640 CHAIRMAN IVAN indicated that the committee would consider HB 38, "An Act relating to Statehood Act land selection conveyances to boroughs and unified municipalities." He entertained a motion to adopt a proposed committee substitute for HB 38, labeled O- LS0233\E. Number 668 REPRESENTATIVE AL KOOKESH made a motion to adopt the committee substitute for the purpose of discussion. Number 680 REPRESENTATIVE TOM BRICE, sponsor of HB 38, came before the committee to testify. He said everyone realizes state revenues are decreasing and one of the few assets the state has that could help municipalities address long term economic needs is land. This is one thing that the state is very rich in. This legislation would allow, in AS 29.65.010, municipalities to select up to an additional 50,000 acres of state land within their boundaries. He said he thinks it is important to look at alternative ways to increase the assets of municipalities, particularly since the state is cutting back on programs such as revenue sharing and municipal assistance. Also, it was his opinion that municipalities tend to have a better track record than the state in getting lands out to the public for housing, resource development and various other economic activities. This is another reason why he introduced this legislation. REPRESENTATIVE BRICE added that the original version of the bill was written around some of the parameters which were included in the university lands bill. Through discussions with the Department of Natural Resources (DNR) and Legislative Legal Services, it was basically decided that a much easier, much quicker approach would be to add a new section, which is Section 1 in the committee substitute, AS 29.65.035, to increase up to an additional 50,000 acres. There are a few issues which the committee might want to consider, particularly, on page 1, line 9, "January 1, 2012," which leaves the opening for selection to 15 years. He thought that there were a few ways to look at this situation. The DNR thinks like it might cast a cloud on title and slow down economic development. On the other hand, given the protections that are currently found in AS 29.65, this shouldn't have that much of an effect in his opinion. REPRESENTATIVE BRICE was concerned about giving the municipalities the time to get raise the money because basically they'll be paying for the conveyance. This would give them enough time to go through an appropriate planning process to determine what state lands, if any, they would like to add to their rolls. Number 914 REPRESENTATIVE RYAN asked if this was in addition to the 10 percent of the land. REPRESENTATIVE BRICE responded, "VUU (vacant unappropriated unreserved) land, yes." REPRESENTATIVE RYAN said, "Brand new land?" REPRESENTATIVE BRICE responded, "Yes." Number 929 REPRESENTATIVE RYAN noted that when he was on "the local assembly" they were allotted 112,000 acres and they had gotten rid of 6,000 in 28 years. They figured at that rate, it would be year 2300 by the time they disposed of the land they presently possess. They resisted mightily and enough people got together and they forced an auction of some 40 acre parcels, which will still take forever. He said it is his understanding is that this land grant entitlement was originally set up for newly incorporated municipalities to sell the land, get their money and start their government, but just about every municipality that he's aware of has held onto the land. He asked if there were any provisions in the bill which would force them to put this land up for auction. REPRESENTATIVE BRICE responded, "Initially there has been provisions that would require the municipality, in the first bill, in discussing with DNR -- and some of the comments I heard from various municipalities there was some concerns raised, the concern raised with DNR that once they conveyed the land, I had established a time line that if that land had not been made available or put into productivity in an economically productive manner at some point in time in the future that it would revert back to the state. DNR didn't want to go through the paperwork and the headache. And the municipalities were concerned that sometimes it takes a little bit to get those lands put into process and moved through." He said that he would not be opposed to other suggestions about how they can ensure that this land would be put into productive use as soon as possible. Municipalities do better, albeit maybe not as good as they should, but they do better than the state. Number 1088 REPRESENTATIVE RYAN stated that he liked the idea in the original version of the bill regarding a time line. REPRESENTATIVE BRICE responded that this would require establishing a procedure by which that land would revert back to the state. This will probably add additional administrative costs. He suggested that maybe as part of this reverting of lands back to the state, that the municipalities would have to bear the burden of this cost, as well as the conveyance. Number 1135 REPRESENTATIVE RYAN added that any land that's abandoned automatically reverted to the government through the process of condemnation. Perhaps this would be a smooth way to take care of this situation. He also wondered who would be entitled to this land, as far as organized municipalities. He said he doesn't think that Anchorage, as a municipality, had any available lands to acquire. He wondered if there would be some entities who might be winners and losers because there's no room to expand. REPRESENTATIVE BRICE stated that this was a very good question. He said, "From my point of view, if the state has land in these municipalities maybe we need to look at getting rid of it, if the state does not have land in those municipalities or does not have 50,000 acres then basically there would be no benefits to that municipality." Number 1215 CHAIRMAN IVAN noted that he was not familiar with what would happen to the conveyance procedure if this bill was approved and the borough decided to collect an additional 50,000 acres. He said he wonders if these selections are undertaken on a contiguous basis, or could you make a selection way out in the country somewhere. REPRESENTATIVE BRICE responded that this question related to an interesting conversation he had with Legislative Legal Services. He asked, "What if the municipality of Anchorage didn't have any state land and wanted some in the Fairbanks North Star Borough? Would this land become part of the municipality of Anchorage?" He had hoped to side-step this whole situation, but stated that provisions could be made within the bill to allow a municipality to select land outside of its boundaries. He said that would not necessarily give that municipality governmental powers over this land. The land would be a commodity just like a truck owned by the municipality. Number 1326 REPRESENTATIVE RYAN asked if this bill would give an opportunity to the North Slope Borough to select Prudhoe Bay. REPRESENTATIVE BRICE responded that Prudhoe Bay would have to be a vacant, unallocated, unreserved lot. The definition of VUU is within AS 29.65.130 which defines that land that land has not been set aside for resource development. Number 1397 REPRESENTATIVE OGAN noted that the city of Palmer didn't receive any additional land because there was no state land within this area. He was concerned about municipalities that could choose lands not adjacent to their municipality. He requested that Representative Brice address this issue. REPRESENTATIVE BRICE stated that the lands they were referring to are vacant, unappropriated, and unreserved. The definition of this designation is Sec. 29.65.130.(10) and he read it for the committee as follows: "(10) vacant, unappropriated, unreserved land" means general grant land as defined in (3) of this section, excluding minerals as required by section 6(i) of the Alaska Statehood Act, that (A) has not been set aside by statute for one or more particular uses or purposes; (B) has not been approved for patent to a municipality under this chapter or former AS 29.18.190 and 29.18.200; (C) is unclassified or, if classified under AS 38.05.300, is classified for agricultural, grazing, material, public recreation, or settlement purposes, or is classified in accordance with an agreement between a municipality and the state providing for state management of land of the municipality; or (D) was classified no earlier than September 1, 1983, as resource management and is still classified as resource management under AS 38.05.300. (Section 17 ch. 74 SLA 1985; am Section 9 ch 34 SLA 1987)." REPRESENTATIVE BRICE offered that they could expand this definition in the title of the bill. He said he was lead to believe that those issues regarding resource development lands were set aside. Number 1575 REPRESENTATIVE OGAN said, "Having not read 29.65.130 - and just briefly heard it, what about the possibility of excluding real developments, you know, like pipelines and a mining, the assets that a mine has, the buildings, equipment, things like that." REPRESENTATIVE BRICE stated, "I see what you're getting at and, quite frankly, that that is my purpose as well. It's hard to build a subdivision on a mine." He added that basically this legislation allows land to be circulated so municipalities can transfer it to people. He noted that he would be very amenable to something along these lines. He stated that most of these issues have been addressed by putting the program in AS 29.65. Number 1680 WELLS WILLIAMS, Planning Director, City and Borough of Sitka, testified via teleconference from Sitka on HB 38. He stated that he's the defacto land manager for the City and Borough of Sitka. The City and Borough of Sitka is thoroughly supportive of HB 38. This legislation would do a number of things for Sitka which are consistent with the current tone of the legislative session. The city and borough operates an aggressive land management program. They acquire property and sell it for development for the express purpose of encouraging the private sector to develop the property. The proceeds of these sales go into the city and borough's permanent fund and directly enables them to keep their property taxes lower. There are pieces of property that the city and borough would plan to select from the state of Alaska if this legislation passes. He said they see these lands as having private development potential which would allow them, through the development of this land probably 10 to 20 years out, to maintain stable property taxes in the face of declining revenues from the state of Alaska. MR. WILLIAMS stated that the city and borough worked very closely with the Division of Lands in the Department of Natural Resources. They are incredibly grateful to Andy Pekovich and his staff in the DNR Southeast regional office for helping them go through this selection process. As they've gone through this process, they've been one of the leaders in paying some of the processing costs for DNR to allow them to use their resources elsewhere. They are perfectly happy to pay any of the processing costs for any lands selected under this legislation. He said the city and borough sees this program as helping to keep low property tax and to compensate for lost state revenues. Number 1829 REPRESENTATIVE OGAN asked how Sitka's permanent fund is set up. MR. WILLIAMS responded that Sitka has a multi-million dollar permanent fund. The bulk of the investments are currently in bonds. Two years ago, the assembly allowed the municipality to invest up to 20 percent of this permanent fund in equities. The earnings of this permanent fund go directly to keeping property taxes low. The earnings of the permanent fund allow them to effectively keep their millage rate two mills lower than they ordinarily would have. The entire earnings on an annual basis go into the general fund. Any access to the principal of this fund would require a vote of the people as part of their municipal charter. The sale of land over the last few years has resulted in $2 million additional dollars being put into the fund. The interest and earnings off of this has allowed them to add more tax relief. He noted the only monies that can be accessed without a vote of the people is the earnings. Number 1947 BOB BRIGHT, Planning Director, Ketchikan Gateway Borough, testified via teleconference from Ketchikan on HB 38. He echoed Mr. Williams' comments. He stated that when the legislation was proposed it included only Section 6(b) lands. After reviewing the committee substitute, it looks as though it does include also 6(a) lands which would include lands in Southeast Alaska. He informed the committee that Ketchikan also has an aggressive lands program to turn borough lands into private lands. They have a land trust fund in which the principal is preserved. The interest is spent to improve the borough lands with infrastructure and to help get this borough property into private hands. Number 2007 JANE ANVIK, Director, Division of Land, Department of Natural Resources, testified via teleconference from Anchorage on HB 38. The Administration is supportive of the concept of increasing distribution of state lands to municipalities. She indicted she wasn't sure she had the most recent version of the bill. Ms. Anvik said she has Version A, which does not incorporate Title 29 as the methodology of ensuring the entitlement, but if this is what the change involves, they'd be willing to work with the sponsor and committee to ensure that additional lands would be made available to municipalities if they used the regular program under Section 29.65. MS. ANVIK made one cautionary note for consideration by the committee in that the division has a great deal of land currently owed to municipal governments. They are working steadfastly on trying to provide the first entitlements to cities and boroughs across the state. She said the division currently thinks that they should fulfill their existing obligations to municipalities before they process additional requests from boroughs that have already received their entitlements. With this cautionary note, they are supportive of the utilization of Title 29.65 as the methodology which would allow them to use 6(a) and 6(b) lands within the existing time frames that are set out in 29.65. Number 2102 CHAIRMAN IVAN requested a status report on the current obligations of conveyances that haven't been met. REPRESENTATIVE OGAN asked what the aggregate of all the lands was assuming this legislation would become law with 50,000 acres per borough. He asked how much land would be given away. Number 2130 MS. ANVIK responded there would be an additional 800,000 acres available. The original entitlement for boroughs is 1.3 million acres. REPRESENTATIVE OGAN questioned how much of the 1.3 million acres has been conveyed. Number 2153 MS. ANVIK stated that she could answer the question backwards by stating that they still owe 600,000 acres. They have distributed 700,000 and owe 600,000. REPRESENTATIVE OGAN asked if there was some characterization of the type of municipality that hasn't picked their land. Number 2160 DICK MYLIUS, Chief, Resource Assessment and Development Section, Division of Land, Department of Natural Resources, testified via teleconference from Anchorage on HB 38. He responded that specifically the boroughs they owe a lot of land to Lake and Peninsula Borough, Northwest Arctic Borough, Denali Borough, Aleutians East Borough, the North Slope Borough and the Kenai Peninsula Borough. He summed up by stating that it's mostly the new boroughs that haven't received a lot of their lands. REPRESENTATIVE RYAN asked what amount of land has been sold or transferred by the state to the various programs enacted over the years, such as the homestead, open entry, recreation, mining claims, et cetera. Number 2252 MS. ANVIK responded that there are 700,000 acres that have gone out to municipal governments. One million acres went to the mental health settlement. Lands that have been conveyed to the university and other settlements total 880,000 acres. Land for private, residential or agricultural uses such as open entry, homestead, et cetera, is another 700,000. She would provide the committee with lists that outline the information. As a caveat, while they're owed 105 million acres from the federal government, they have only actually received patent to 40 million acres so far. They are still in the process of negotiating with the federal government. REPRESENTATIVE RYAN referred to the 700,000 figure and asked if that is land that has actually been conveyed or is it land that has just been applied for or has the title actually passed to individuals. Number 2310 MS. ANVIK responded that this is land that's actually been conveyed. REPRESENTATIVE IVAN asked if there has ever been a situation where there is a borough, and within the borough there's a municipality that makes a claim and both entities compete for the claim. Number 2338 MS. ANVIK responded that occasionally a situation happens where there is a borough that is in competition with a city over the same piece of land. The city would have first rights over the borough in this situation. REPRESENTATIVE RYAN stated that he didn't know if the following would apply, but under AS 25.65.080 they talk about payment for land deficiency. Under this section, there is a period of time for selection and after July 1, 1980, the amount of land selected by the municipality that's physically suitable for residential, commercial and industrial purposes amounts to less than one-third, per capita. For those purposes an unselected, remaining entitlement shall, for the purposes of deficiency payment under this subsection, be considered land physically suitable for this at $1,000 an acre if they can't get it. He said if they open up the new program, would it come under the statute for places like Anchorage where there's no land to select because it's not within their boroughs. Could they come back to the state and say, "Well you guys didn't give us any land, so give us $5 million." He asked if they would they be encumbered by this. Number 2488 REPRESENTATIVE BRICE responded that in discussing this very issue with Legislative Legal Services, they assured him that this would not come under the land deficiency statutes. MS. ANVIK stated that there were several communities for whom 50,000 acres is not possible since they don't own 50,000 within their boundaries. The department requests that this be clarified in this legislation in that they do not adopt a new payment for land deficiency under this provision of this law. Some language they suggested was that it could be up to 50,000 acres. This would mean that the department wouldn't be required to give them 50,000 acres if they didn't have it. Number 2449 CHAIRMAN IVAN stated that in the interest of acquiring additional information regarding this legislation, the bill would be held over. TAPE 97-20, SIDE B Number 001 CHAIRMAN IVAN requested the current status of municipalities that have already taken care of their entitlements and other pertinent information regarding this proposed legislation. He said he doesn't want to add another layer to this already existing system. He appointed Representative Ryan as a subcommittee chair to look at this bill, do some work on it and bring it back before the full committee. He also appointed Representatives Joule and Ogan to the subcommittee. REPRESENTATIVE RYAN requested that the department provide the committee with overlay maps to get a fair idea of what the state's ownership is, the intended ownership, conveyances of the federal government, et cetera. Number 058 MS. ANVIK said she would be happy to provide these maps.
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