Legislature(1995 - 1996)

04/27/1995 01:30 PM House FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
  HOUSE BILL 191                                                               
                                                                               
       "An  Act  relating to  the  management and  disposal of                 
       state land  and resources; relating  to certain  remote                 
       parcel and homestead entry  land purchase contracts and                 
       patents; and providing for an effective date."                          
                                                                               
  Representative  Therriault  explained  that  HB  191  was  a                 
  housekeeping  measure intended to  clarify certain  Title 38                 
  statutes governing the Department of Natural Resources (DNR)                 
  management of State land and resources.  HB 191 was intended                 
  to bring greater efficiency to the management of state lands                 
  without   sacrificing  public   involvement   in  land   use                 
  decisions.                                                                   
                                                                               
  He concluded that the bill was not intended to be a complete                 
  rewrite of Title 38,  pointing out that it was  supported by                 
                                                                               
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  the  Administration  in anticipation  of  streamlining state                 
  government.                                                                  
                                                                               
  Representative  Therriault MOVED  to  adopt work  draft  #9-                 
  LS0766\M,  Luckhaupt, 4/25/95,  as  the  version before  the                 
  Committee.  There being NO OBJECTION, it was adopted.                        
                                                                               
  RON  SWANSON, DIRECTOR,  DIVISION  OF  LAND,  DEPARTMENT  OF                 
  NATURAL   RESOURCES,  provided   the  Committee   members  a                 
  sectional analysis of the legislation.                                       
                                                                               
  Representative Brown asked for  further clarification of the                 
  agricultural disposal  section.   Mr.  Swanson replied  that                 
  Section  #21  addresses preference  rights and  provides the                 
  Department discretion  to review the qualifications of those                 
  bidding.  Section  #22 would change  the terminology of  the                 
  approximate vicinity.                                                        
                                                                               
  Representative Therriault  noted that  it was  his intention                 
  that  when  dealing with  the  Department regarding  sale or                 
  utilization of  State land,  the State  should receive  fair                 
  market value  of leasing  and sales.   Representative  Brown                 
  agreed with  Representative  Therriault's  intention.    She                 
  asked if the  legislation would  address the conditions  and                 
  requirements attached to the agricultural disposal.                          
                                                                               
  Mr.  Swanson explained that those conditions would be a part                 
  of that program.  The initial  portion of the lease requires                 
  a  development  plan.     Representative  Brown  asked   the                 
  Department's  current plans  for the  agricultural disposal.                 
  Mr.  Swanson  advised that  the  Division of  Agriculture is                 
  currently in charge of those parcels and that a small amount                 
  of disposals continue to occur each year.                                    
                                                                               
  Representative Grussendorf asked if the work draft contained                 
  language  which  could  create management  problems  for the                 
  Department.  Mr.  Swanson advised  that the legislation  had                 
  been worked  on for several  months and that  the Department                 
  was satisfied with the result.                                               
                                                                               
  Co-Chair Hanley asked  if the set  net lease costs would  be                 
  substantially increased.   Mr. Swanson noted that  currently                 
  only the  administrative costs  would be  recuperated.   The                 
  leases  range from $150-$300 per year  depending on when the                 
  lease was issued.   Set net sites in the Cook  Inlet average                 
  selling price would be $24 thousand  dollars.  He noted that                 
  the permit  could not  be sold  without the  lease and  that                 
  amount should  include the  total combined  cost.   Co-Chair                 
  Hanley  disagreed  explaining  that  depending on  the  site                 
  location,  a person  would  pay much  more  than the  amount                 
  suggested by Mr.  Swanson.  Mr.  Swanson agreed it would  be                 
  site specific.                                                               
                                                                               
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  Representative  Therriault  reminded Committee  members that                 
  those people were using State land for economic benefit.  He                 
  pointed out that in Statute a cap existed limiting the value                 
  to $300 dollars.                                                             
                                                                               
  Co-Chair  Hanley  pointed out  "may"  had been  used  in the                 
  legislation.   Currently, one  does not  need a  lease.   He                 
  asked if everyone would be charged for tideland use or would                 
  they not apply for  a lease. Mr. Swanson replied  that there                 
  are currently  two thousand set  net licenses issued.   When                 
  the  Department goes to  "fair market value",  some of those                 
  will not continue their lease.  Although, with the increased                 
  permit cost, income brought to the State will triple.                        
                                                                               
  Representative  Brown questioned the  impact of  Section #29                 
  which deals with post mining location corners.  She asked if                 
  that section would allow someone to stake a new mining claim                 
  on the surface of land which is already owned.   Mr. Swanson                 
  responded, Section #29  would reserve the mineral  estate as                 
  required by law  to the  State which would  allow anyone  to                 
  come in  and stake  whatever  mineral interests  exist.   If                 
  there is any discovery or  development, compensation must be                 
  made to the surface owner.                                                   
                                                                               
  Representative Brown thought that Section  #29 was worded so                 
  as to  allow a  person to  stake land  prior to getting  the                 
  surface owners  involved.   She thought  the language  would                 
  establish a mining  conflict between the land  owner and the                 
  State.  Mr. Swanson agreed, although, he noted that once the                 
  earth  is  being  turned over,  a  bond  must  be posted  or                 
  compensation must be made to the surface owner.                              
                                                                               
  Mr. Swanson  explained that  Section #29,  specifies that  a                 
  bond must be  posted when  the earth is  turned except  when                 
  going in and posting  the corners.   That would be the  only                 
  case when a bond would not need to be posted.                                
                                                                               
  Representative  Brown  asked  how  private  surface  parcels                 
  currently  are  staked.   Mr.  Swanson noted  that  on State                 
  disposal land, a variety of possibilities exist.  If it were                 
  a small  subdivision, it  would be  closed to  mineral entry                 
  prior to the sale of the subdivision.                                        
                                                                               
  Representative Brown asked how that would be affected by the                 
  change offered  in Section  #31.   Mr. Swanson  acknowledged                 
  that current language  would close it  to mining but not  to                 
  mineral   location.      Those   gaps   would   be   closed.                 
  Representative Brown inquired in passage  of the bill, would                 
  any current land parcels  be affecting someone's  residence.                 
  Mr. Swanson commented  that any small size  surface disposal                 
  done by the State  would be closed after the  mineral entry.                 
                                                                               
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  A conflict  could be  created within municipalities  because                 
  they are left  open at their request due to mineral entry.                   
                                                                               
  Representative  Brown asked  if  the provision  contained in                 
  Section #29  would be available also to municipalities.  Mr.                 
  Swanson noted that they would be because the land originally                 
  came from the  State who  reserves those subsurface  rights.                 
  The State controls what happens beneath the ground.                          
                                                                               
  Representative Brown asked what mechanism would be available                 
  to the surface  owner to  prevent staking of  the claims  on                 
  their land.  Mr.  Swanson explained that there would  be two                 
  methods:                                                                     
                                                                               
       1.   Request that  the State  close it to  mineral                      
            entry;                                                             
       2.   File their own mining claim.                                       
                                                                               
  Discussion  followed  between Representative  Brown  and Mr.                 
  Swanson regarding the value of the surface being affected by                 
  a  mining  claim  and  the  surface  versus  the  subsurface                 
  bonding.    Representative  Therriault  reiterated that  the                 
  legislation would allow the State to protect it's subsurface                 
  rights.  Representative Brown thought that Section #29 could                 
  establish a situation  of conflict and could  cause problems                 
  for those who have acquired service.   Under current law, if                 
  someone wanted to do  that, they would need to  negotiate in                 
  advance  the  compensation.    She  understood that  in  the                 
  language of the bill, once  the staking rights had occurred,                 
  the rights  would then  exist.   Representative Brown  noted                 
  that the surface  owner would be  in a weakened position  to                 
  receive    fair    compensation    for    their    property.                 
  Representative Therriault  pointed out that the  State would                 
  close the rights before the surface title was transferred.                   
                                                                               
  (Tape Change HFC 95-103, Side 2).                                            
                                                                               
  Representative Brown asked if it would  be a problem for the                 
  Department  if  Section  #29  was   changed.    Mr.  Swanson                 
  responded that Section #29 was  requested by the Department,                 
  although, pointed  out that  there was  currently a  Supreme                 
  Court decision which negates the premise of Section #29.                     
                                                                               
  Representative Therriault provided Committee members with  a                 
  memorandum  response to  that Superior  Court decision  from                 
  Kerwin  Krause,  Mineral  Property  Manager,  Department  of                 
  Natural Resources.  [Attachment #1].   Mr. Swanson explained                 
  why  Section  #29  would  be more  beneficial  to  the State                 
  stating that  if a higher subsurface value  exists, then the                 
  surface  being used  for should  be discovered.   He advised                 
  that concern  exists by  private land  owners being  able to                 
  control what happens to the State's subsurface.                              
                                                                               
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  Representative Brown  agreed  with  Mr.  Swanson,  although,                 
  noted concern of staking by private parties on private lands                 
  without the State's knowledge, involvement  or control.  Mr.                 
  Swanson advised that the State would know, as claims legally                 
  have to  be posted.  He  did not think inclusion  of Section                 
                                                                               
  Mr. Swanson instructed  that the provision would  not change                 
  people posting  "nuisance" mining  claims.   The State  will                 
  determine if the claim is valid.  Representative Brown asked                 
  whose responsibility would it be for the private land owner,                 
  who had  a "nuisance"  mining  claim on  their property,  to                 
  execute the law and the decision.   Mr. Swanson replied that                 
  it  would be  the  State's responsibility  to  respond to  a                 
  nuisance mining  claim regardless  of who  the property  was                 
  registered to.                                                               
                                                                               
  Representative Brown questioned  how many "nuisance"  claims                 
  had been eliminated resulting from action of the Department.                 
  Mr. Swanson  did  not know,  although pointed  out that  the                 
  number  of  "nuisance" claims  have  been decreasing  due to                 
  filing procedures.                                                           
                                                                               
  Representative  Therriault  referenced  Section  #32 of  the                 
  legislation.    Mr. Swanson  explained  the changes  to that                 
  section.  The intent of that section makes State interest in                 
  line with  that of  the federal  government.  Currently,  an                 
  alien  from  a country  with  "like privileges"  can receive                 
  authority to  stake  claims.   That privilege  has not  been                 
  exercised thus  the inclusion  of that  language in  Section                 
                                                                               
  Representative Brown asked  if provisions were  contained in                 
  the  legislation which would affect the  oil and gas leasing                 
  program.   Mr. Swanson stated that Section #30 contained one                 
  provision which  would affect  oil and  gas by removing  the                 
  requirement that the director of that division be bonded.                    
                                                                               
  Representative Brown  inquired if policy changes  existed in                 
  the proposed legislation.  Mr. Swanson commented that policy                 
  changes would be  made to land disposals  placing them under                 
  fair  market value  consideration rather  than  "give away".                 
  Representative Therriault  added that Section  #51 addresses                 
  railroad and utility realignment.                                            
                                                                               
  Representative  Brown  questioned  the status  of  land  and                 
  resources previously disposed  of before 1982.   Mr. Swanson                 
  referenced two provisions; first, Section #52 which provides                 
  a savings cost to the Department for home site permits.  The                 
  other provision deals  with remote parcels and  the way they                 
  are issued.  Representative Brown disclosed that she was the                 
                                                                               
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  owner of a  remote parcel  which could be  affected by  that                 
  provision.   Discussion followed regarding  the restrictions                 
  currently in law which reduce fair market value by 50%.                      
                                                                               
  REED STOOPS, AJ ASSOCIATES,  JUNEAU, testified in opposition                 
  to Section  #29.   He explained  that Section  #29 had  been                 
  included  in  the bill  resulting from  a recent  court case                 
  regarding a mining claim  located on private land.   In that                 
  case, the judge  ruled that in  order to do prospecting  and                 
  file a mining  location on land which has been conveyed to a                 
  private individual and not closed to private entry, it would                 
  be the obligation  of the person filing  the claim to go  to                 
  the  land owner for consent or  to the Department and file a                 
  bond to compensate for damages which might be done.                          
                                                                               
  He  continued,  Section #29  would  change that  decision by                 
  providing the person filing the claim permission to enter on                 
  private property without  the permission  of the land  owner                 
  and without  the permission  of  DNR to  file a  claim.   He                 
  emphasized  that it  would  not make  sense  for someone  to                 
  trespass on private  property without the permission  of the                 
  landowner.    The current  decision  has been  filed  in the                 
  Supreme Court, placing the  land owner in conflict with  the                 
  mining  claimant.    Mr.  Stoops   noted  that  the  factual                 
  information provided in Attachment #1 was incorrect.                         
                                                                               
  Representative Therriault  advised that there  are currently                 
  techniques being developed  to look into the ground in order                 
  to find  mineral deposits without  drilling or digging.   He                 
  asked  if there was  an alternative  to by-passing  the land                 
  owner,  and going  directly to DNR  to receive  approval and                 
  posting for bond.  Mr. Stoops  noted that under current law,                 
  the miner  is allowed  to go  to the  Department and  file a                 
  bond.                                                                        
                                                                               
  Mr.  Swanson  spoke   against  posting  of  bonds   for  the                 
  aeromagnetic investigation activity.  Mr. Stoops  noted that                 
  there exists a question  if aeromagnetic investigation would                 
  be  sufficient to constitute  a "discovery".   He added, two                 
  different  circumstances are  at stake,  private and  public                 
  lands.    Representative Therriault  noted  that since  this                 
  section was controversial and that  there currently exists a                 
  court case, he would not object to removing the Section #29.                 
                                                                               
  Representative Brown  MOVED to  delete Section  #29.   There                 
  being NO OBJECTION, it was adopted.                                          
                                                                               
  Representative Therriault MOVED  to report  CS HB 191  (FIN)                 
  out of Committee  with individual  recommendations and  with                 
  the accompanying fiscal notes.  There being NO OBJECTION, it                 
  was so ordered.                                                              
                                                                               
                                                                               
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  CS HB 191  (FIN) was reported  out of  Committee with a  "do                 
  pass"  recommendation  and   with  a  fiscal  note   by  the                 
  Department  of Natural Resources  and a zero  fiscal note by                 
  the Department of Fish and Game dated 4/10/95.                               

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