Legislature(2003 - 2004)

03/29/2004 03:19 PM House FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
HOUSE BILL NO. 319                                                                                                          
                                                                                                                                
     An Act relating to the disposal of state land by                                                                           
     lottery; and relating to the disposal, including sale                                                                      
     or lease, of remote recreational cabin sites.                                                                              
                                                                                                                                
REPRESENTATIVE HUGH  FATE explained that the  legislation was                                                                   
first introduced  four years  ago as HB  232, and  since that                                                                   
time it  has evolved with  assistance from the  environmental                                                                   
community,   the   Alaska  Miners'   Association,   and   the                                                                   
Department of Natural Resources  (DNR). He said that the bill                                                                   
basically would  move some public  sector lands  into private                                                                   
hands.  It also  designates  which  lands are  available.  He                                                                   
noted that  high mineral-value  lands, military  reservations                                                                   
and  selections   by  boroughs   would  be  off   limits.  It                                                                   
designates those  areas of land up for nomination,  giving an                                                                   
individual the  ability to nominate  and choose land  that he                                                                   
prefers.  The  DNR  Commissioner  makes  the  final  decision                                                                   
whether the land  is compatible with the nomination,  and the                                                                   
Department  would   formulate  regulations  to   address  the                                                                   
program.                                                                                                                        
                                                                                                                                
Representative Fate  explained that the fiscal  note includes                                                                   
DNR's low  figure of about $900  per acre, multiplied  by the                                                                   
number of acres  sold, to show a profit in  the second, third                                                                   
and  fourth years.  He advised  that during  the first  year,                                                                   
there would  be expenditures  in formulating regulations  and                                                                   
public notices.  He estimated  that sales  could be  three to                                                                   
four times the conservative figures in the fiscal note.                                                                         
                                                                                                                                
Representative Joule  asked if the bill would  limit how much                                                                   
land an  individual could  obtain in  various regions  of the                                                                   
state. Representative  Fate answered that nothing  limits the                                                                   
number of locations where an individual  could purchase land,                                                                   
but there is a 5-acre limit.                                                                                                    
                                                                                                                                
Representative Joule  asked the type  of title that  would be                                                                   
involved. Representative Fate  replied that it is fee simple,                                                                   
and clarified  that the  minerals are  reserved by  the State                                                                   
and the buyer wouldn't have subsurface  rights. He reiterated                                                                   
that  the high-mineral  potential  areas are  off limits  for                                                                   
staking.   He pointed out  that the bill includes  safeguards                                                                   
against lawsuits by the buyer  if someone comes in to exploit                                                                   
the subsurface minerals.                                                                                                        
                                                                                                                                
Representative  Foster noted  that the  backup is limited  to                                                                   
Southcentral Alaska  and the Copper  Valley, and he  asked if                                                                   
land would be available in Northwest  Alaska.  Representative                                                                   
Fate  stated that  it is  anywhere there  is available  state                                                                   
land that is not encumbered.   The final application would be                                                                   
reviewed by the DNR.                                                                                                            
                                                                                                                                
JIM  POUND,  STAFF TO  REPRESENTATIVE  FATE,  explained  that                                                                   
Amendment  #1 removes  contractual language  that was  in the                                                                   
original  bill.  The  contractual  language is  used  by  the                                                                   
Department  of Natural  Resources for  all their land  sales,                                                                   
and Legal felt  it was unnecessary.  The sponsor  also wanted                                                                   
to delete the 150% lawsuit in Section 3 of the bill.                                                                            
                                                                                                                                
Amendment #1 reads:                                                                                                             
                                                                                                                                
     Page 1, lines 1-2:                                                                                                         
          Delete "relating to the reservation of rights by                                                                    
          the state in land contracts and deeds;"                                                                             
                                                                                                                                
     Page 2, line 1, through page 3, line 15:                                                                                   
          Delete all material.                                                                                                  
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 5, lines 2-5:                                                                                                         
          Delete all material.                                                                                                  
                                                                                                                                
Representative Croft  asked if the deleted  language included                                                                   
provisions that  the mining industry  wanted as a  penalty to                                                                   
any  lawsuits. Representative  Fate replied  that the  mining                                                                   
industry never requested the 150%  and he had included it for                                                                   
a high  threshold but the penalty  would have been  more than                                                                   
the land was worth.                                                                                                             
                                                                                                                                
Representative  Croft asked  what protections  remain in  the                                                                   
bill. Mr. Pound replied that the  language in Section 2, even                                                                   
though  deleted  from the  bill,  would  still apply  to  the                                                                   
contract between the DNR and the purchaser.                                                                                     
                                                                                                                                
Co-Chair  Harris  asked  if  Amendment   #1  deletes  all  of                                                                   
Sections 2 & 3.  Mr. Pound affirmed.                                                                                            
                                                                                                                                
Co-Chair  Harris  expressed  concern  that  this  bill  might                                                                   
create a situation similar to  that in the Mat-Su Valley with                                                                   
coal   bed  methane.      He   reiterated  that   under   the                                                                   
Constitution, the State owns the  subsurface rights. He noted                                                                   
limited  protection  in the  bill  for the  private  property                                                                   
owner who desires  protection from drilling or  mining on his                                                                   
property. He expressed that if  this bill makes the situation                                                                   
worse, his intention  is not to support it.  He  spoke to the                                                                   
need to strike a balance between  mining and people's private                                                                   
property rights.                                                                                                                
                                                                                                                                
Co-Chair  Harris   asked  if   the  deletion  of   Section  2                                                                   
eliminates the problem.  Mr. Pound  replied that the language                                                                   
in Section  2 is in existing  statute, and it would  still be                                                                   
used in  the land  contracts between  the Department  and the                                                                   
purchasers.  He was  unsure  of the  language  in the  Mat-Su                                                                   
Valley  private sector  contracts, but  he thought that  this                                                                   
language  was more  specific.  Co-Chair Harris  said that  he                                                                   
would talk to Representative Fate.                                                                                              
                                                                                                                                
Representative Chenault referred  to the new fiscal note that                                                                   
shows 7 full-time and one half-time employees in 2006.                                                                          
                                                                                                                                
JIM DERRINGER  explained  that pages  7 and  8 of the  fiscal                                                                   
note backup describe the 7-1/2  positions in the fiscal note.                                                                   
The  sponsor increased  the staff  by one  position over  the                                                                   
Department's request. Representative  Chenault noted that the                                                                   
older  fiscal note  backup showed  6-1/2  positions, and  Mr.                                                                   
Derringer clarified that there would be 7-1/2 positions.                                                                        
                                                                                                                                
Representative  Hawker  referred   to  the  analysis  in  the                                                                   
previously  published   Fiscal  Note  #1  prepared   by  Land                                                                   
Sales/Municipal Entitlements in  DNR.  He noted the language,                                                                   
"The  new program  would  have  DNR negotiate  private,  non-                                                                   
competitive  sales. (This  is a significant  change  from the                                                                   
existing  policy of  only public,  competitive land  sales.)"                                                                   
He asked if that is an accurate  statement. Mr. Pound replied                                                                   
that the  bill authorizes  an individual  to select  a parcel                                                                   
and  request  a  first  right  of  refusal,  which  could  be                                                                   
considered a  private sale,  but it is  ultimately up  to the                                                                   
Commissioner   whether   it   would  be   a   private   sale.                                                                   
Representative Hawker  commented that, as written,  it is not                                                                   
quite an accurate statement.  Mr. Pound agreed.                                                                                 
                                                                                                                                
Representative  Joule requested a  sectional analysis  of the                                                                   
bill.  Mr. Pound said that he would provide one.                                                                                
                                                                                                                                
MATT  DAVIDSON,   EXECUTIVE  DIRECTOR,  ALASKA   CONSERVATION                                                                   
VOTERS, commented  that the group  had been involved  in this                                                                   
legislation  during the  previous  legislature. He  explained                                                                   
that the Alaska  Conservation Voters (ACV) could  not support                                                                   
the  bill at  this time.  The  ACV supports  land sales  that                                                                   
safeguard  important lands  for  public access,  recreational                                                                   
opportunities,  and fish and wildlife  habitat. He  said that                                                                   
HB  319  is  unnecessary  and unfair,  and  it  would  invite                                                                   
conflict with other users of these  lands. Mr. Davidson urged                                                                   
the committee not to take quick action on the bill.                                                                             
                                                                                                                                
Mr. Davidson thought the fiscal  note figures were optimistic                                                                   
regarding how  much land would  be sold, and said  that State                                                                   
land disposal programs  don't make money. He  referred to the                                                                   
April  2003  Alaska Conservation  Alliance  report  (copy  on                                                                   
file.) that  shows that  past state  land sales haven't  made                                                                   
money.  The  Department of Natural Resources  has worked hard                                                                   
to make  the state land sale  program more efficient,  and HB
319 is a step  backward. He said that best  interest findings                                                                   
for  every  single  application   would  be  cumbersome.  The                                                                   
Department's  estimate  of  over  $400  thousand  a  year  to                                                                   
process  the applications  would  make it  difficult for  the                                                                   
state to make  any money. The Department would  be prohibited                                                                   
from selling land directly adjacent  to these properties.  If                                                                   
HB 319  isn't fully funded,  and existing land  sale programs                                                                   
stay in  the budget, DNR resources  would be drained  for the                                                                   
existing programs.                                                                                                              
                                                                                                                                
Mr.  Davidson continued,  expressing that  the best  interest                                                                   
findings by DNR  would lead to the expectation  of a decision                                                                   
to rule in the applicant's favor.  He argued that because the                                                                   
bill  language is  noncompetitive and  gives individuals  the                                                                   
right of  first refusal to  the land selected,  only Alaskans                                                                   
with access to the backcountry  would have knowledge of these                                                                   
areas, and only  the most powerful Alaskans  would obtain the                                                                   
land. The bill  has no mechanism to deal with  conflicts that                                                                   
may  arise.  He discussed  potentially  conflicting  adjacent                                                                   
uses that have not been addressed  in the bill.  He concluded                                                                   
that when the  state builds a new subdivision  in wild areas,                                                                   
it results in an over-harvest of fish and game resources.                                                                       
                                                                                                                                
Co-Chair  Harris  asked  if the  Alaska  Conservation  Voters                                                                   
supports  any  more  land  going  into  public  hands.    Mr.                                                                   
Davidson affirmed that it supports  the current DNR land sale                                                                   
program.  Co-Chair  Harris  asked  if the  ACV  supports  any                                                                   
natural   resource   development.   Mr.   Davidson   replied,                                                                   
"absolutely."  Co-Chair Harris  asked when in the past couple                                                                   
years  the ACV  has supported  natural resource  development.                                                                   
Mr.  Davidson  replied  that   natural  resource  development                                                                   
should  pay  its own  way,  provide  jobs for  Alaskans,  not                                                                   
overly harm the  environment, and be supported  by locals. He                                                                   
asserted that in  the coal bed methane development,  three of                                                                   
those four principles were not met by the State.                                                                                
                                                                                                                                
Co-Chair Harris asked if the ACV  supports opening ANWR.  Mr.                                                                   
Davidson replied the ACV does  not have a position on it, but                                                                   
it would be fair to say that it does not support it.                                                                            
                                                                                                                                
Co-Chair  Harris commented  that Mr.  Davidson's critique  of                                                                   
the  bill  was  against  public land  going  to  the  private                                                                   
sector, although he did express  support for the Department's                                                                   
land  lottery.  He  pointed  out that  Alaska  has  the  most                                                                   
federal lands of  any state in the nation,  and Alaskans want                                                                   
to be able to own land.                                                                                                         
                                                                                                                                
Mr. Davidson responded  that the majority of  state lands are                                                                   
neither  high  quality nor  accessible.  He said  that  there                                                                   
would be  a lot of competition  for the parcels  in Southeast                                                                   
if the  bill moves  forward. He thought  that there  would be                                                                   
competition  to use those  parcels for  public uses  as well,                                                                   
and the lands have other values.                                                                                                
                                                                                                                                
HB  319  was   heard  and  HELD  in  Committee   for  further                                                                   
consideration.                                                                                                                  
                                                                                                                                

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