Legislature(2019 - 2020)GRUENBERG 120


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Heard & Held
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Moved HB 71 Out of Committee
         HB 3-STATE LAND SALE; PFD VOUCHER AND ASSIGN.                                                                      
2:08:17 PM                                                                                                                    
CHAIR LEDOUX announced  that the next order of  business would be                                                               
SPONSOR SUBSTITUTE FOR HOUSE BILL NO.  3, "An Act relating to the                                                               
purchase  and  sale of  state  land;  relating to  discounts  for                                                               
veterans on state land purchases;  and relating to the assignment                                                               
of permanent fund dividends to purchase state land."                                                                            
2:10:24 PM                                                                                                                    
DARRELL  BREESE,  Staff,  Representative Rauscher,  Alaska  State                                                               
Legislature,  paraphrased the  changes  included  in the  sponsor                                                               
substitute [Included in members' packets], which read:                                                                          
     Section 1: No Changes.                                                                                                   
     Section  2: Removes  reference to  (a) of  this section                                                                  
     for clarity                                                                                                                
     Section 3:  Includes new Paragraph  (f)   section  4 of                                                                  
     bill   in list of discounts  allowed to be used once in                                                                    
     Veteran's lifetime.                                                                                                        
     Section  4:  Changes   references  of  "individual"  to                                                                  
     "veteran"  for   clarity  and  to   better  communicate                                                                    
     Inserts  language   on  line  20  (subsection   (g)  of                                                                    
     language)  limiting   the  use   of  the   discount  in                                                                    
     combination with other discounts.                                                                                          
     Section 5: Adds reference  to include reference to land                                                                  
     sales  under  38.05.600     Remote  Recreational  Cabin                                                                    
     Sites at line 28 (AS 38.05.600).                                                                                           
     Section 6: No Changes.                                                                                                   
2:12:18 PM                                                                                                                    
REPRESENTATIVE RAUSCHER expressed his  agreement with the changes                                                               
to the proposed bill.                                                                                                           
2:13:39 PM                                                                                                                    
REPRESENTATIVE RAUSCHER,  as the  sponsor of SSHB  3, paraphrased                                                               
the  sponsor  statement  [Included in  members'  packets],  which                                                               
     Alaska has  an abundance  of three things:  land, PFDs,                                                                    
     and veterans.   House Bill 3 is a means  to bring these                                                                    
     three together.                                                                                                            
     House Bill 3  encourages the sale of  state lands, thus                                                                    
     creating   growth,  allowing   for   the   use  on   an                                                                    
     individual's  Permanent Fund  Dividend to  purchase the                                                                    
     land.  It  encourages  veterans to  use  the  statutory                                                                    
     discount  in combination  with  the  PFD assignment  to                                                                    
     purchase land.                                                                                                             
     Alaskans who  have resided  in the  state for  at least                                                                    
     one-year immediately  prior to the opening  of the land                                                                    
     disposal  and who  are at  least  18 years  of age  can                                                                    
     participate. The  state regularly offers  surplus lands                                                                    
     for sale either by auction or over-the-counter sales.                                                                      
     House  Bill  3  aims  to make  these  land  sales  more                                                                    
     accessible to  Alaskans by  allowing the  assignment of                                                                    
     the PFD by individuals to pay for the purchase.                                                                            
     I urge your support of House Bill 3.                                                                                       
2:15:41 PM                                                                                                                    
CHAIR LEDOUX asked  to clarify whether the  proposed bill offered                                                               
a further discount by using their PFD (permanent fund dividend).                                                                
2:16:09 PM                                                                                                                    
REPRESENTATIVE  RAUSCHER  explained  that any  person  could  use                                                               
their PFD to  purchase land.  He added that  veterans would get a                                                               
30 percent discount to the cost of the land.                                                                                    
CHAIR  LEDOUX  asked  to  clarify  that, if  the  intent  of  the                                                               
proposed  bill was  to  offer the  discount,  what advantage  was                                                               
offered to assign the PFD as opposed to writing a check.                                                                        
2:17:47 PM                                                                                                                    
MR.  BREESE  explained  that existing  statute  already  provided                                                               
military veterans with  a 25 percent discount, which  can be used                                                               
once  in a  lifetime, for  the purchase  of state  land for  non-                                                               
commercial  use.   He stated  that the  proposed bill  extended a                                                               
special discount  of 33 percent for  the purchase of land  if the                                                               
veteran applied  the PFD toward  the purchase  of land.   He said                                                               
this would  become an automatic  transfer from the  Department of                                                               
Revenue to  the Department of  Natural Resources, as this  was an                                                               
attempt to make the process easier for veterans.                                                                                
CHAIR  LEDOUX asked  for an  explanation to  the attached  fiscal                                                               
note, questioning how this made it any easier for the veteran.                                                                  
2:19:38 PM                                                                                                                    
REPRESENTATIVE  TARR shared  that  she had  purchased five  acres                                                               
directly from  the State of  Alaska through the over  the counter                                                               
land sales.   She asked that  Mr. Breese explain the  process for                                                               
using the PFD toward a land purchase.                                                                                           
MR. BREESE explained that Section  5 of the proposed bill allowed                                                               
the  Department  of Revenue  to  create  a  line on  the  on-line                                                               
dividend application to  allow direction of a portion  or all the                                                               
PFD toward payment on the property.                                                                                             
REPRESENTATIVE TARR  asked for clarification that,  prior to this                                                               
proposed  legislation,  the  veteran  may have  selected  the  25                                                               
percent discount  which would  have already  been applied  to the                                                               
purchase price.   She asked if  the proposed bill would  create a                                                               
mechanism for application  of the PFD toward payments  due on the                                                               
MR. BREESE directed  attention to page 2, line 21,  at the end of                                                               
Section  4 of  the proposed  bill, which  stated that  a discount                                                               
under  this  section  could  not   be  combined  with  any  other                                                               
discount.   He stated that  a previous 25 percent  discount would                                                               
not allow for  qualification of the 33 percent  purchase for that                                                               
same  parcel of  land.   In response  to Representative  Tarr, he                                                               
directed  attention to  page 2,  line 14,  of the  proposed bill,                                                               
which stated that  the 33 percent discount could  only be applied                                                               
to land purchased after August 1, 2019.                                                                                         
2:23:06 PM                                                                                                                    
REPRESENTATIVE  THOMPSON reflected  on land  he had  purchased in                                                               
1985 and  asked whether that had  been at a 50  percent veteran's                                                               
discount.  He asked about the current discount.                                                                                 
2:23:58 PM                                                                                                                    
MR.  BREESE, in  response  to  Representative Thompson,  directed                                                               
attention  to Section  1 of  the proposed  bill, which  explained                                                               
that the existing discount on  state land for an eligible veteran                                                               
was 25 percent;  whereas, the proposed bill offered  a 33 percent                                                               
discount with use of the PFD on purchases after August 1, 2019.                                                                 
2:24:47 PM                                                                                                                    
REPRESENTATIVE JACKSON asked if  there was an additional discount                                                               
for veterans with disability.                                                                                                   
2:25:28 PM                                                                                                                    
VERDIE BOWEN,  Director of Veterans  Affairs, Office  of Veterans                                                               
Affairs,  Department of  Military &  Veterans' Affairs,  reported                                                               
that the only  discount for land purchases was 25  percent and it                                                               
did not consider any disability.                                                                                                
REPRESENTATIVE  JACKSON  asked  if   several  veterans  could  go                                                               
together to purchase land and build a six-plex.                                                                                 
2:26:19 PM                                                                                                                    
REPRESENTATIVE RAUSCHER,  in response to  Representative Jackson,                                                               
shared  that the  sponsor statement  had clarified  language from                                                               
the original bill  so that only one 33 percent  discount would be                                                               
applied to  the purchase, even  if there were multiple  owners of                                                               
the land.   He pointed out that homeless veterans  would not need                                                               
a bank account,  as they could direct their PFD  to make the land                                                               
2:27:19 PM                                                                                                                    
REPRESENTATIVE THOMPSON directed attention to  page 1, line 8, of                                                               
the proposed  bill which stated  that the discount could  only be                                                               
applied  for use  other than  commercial or  industrial use.   He                                                               
opined that a six-plex would be considered commercial use.                                                                      
REPRESENTATIVE  JACKSON explained  that  she  intended that  each                                                               
veteran would own  their condominium in the six-plex.   She asked                                                               
if the  PFD would serve as  a guarantor or security  to the State                                                               
of Alaska.                                                                                                                      
REPRESENTATIVE  RAUSCHER  acknowledged  that  this  would  be  an                                                               
assurance for payment through the PFD.                                                                                          
2:28:54 PM                                                                                                                    
CHAIR  LEDOUX asked  if  the fiscal  note  [Included in  members'                                                               
packets]  accounted  for the  impact  of  a 33  percent  discount                                                               
instead of a 25 percent discount.                                                                                               
2:29:47 PM                                                                                                                    
MARTY PARSONS, Director, Central  Office, Division of Mining Land                                                               
and  Water,   Department  of   Natural  Resources,   offered  his                                                               
understanding  that  the  latest  fiscal  note  for  SSHB  3  did                                                               
identify the reduction of revenue for the sales of land.                                                                        
2:30:58 PM                                                                                                                    
CHAIR LEDOUX  asked about  an additional fiscal  note, as  it was                                                               
not addressed on the fiscal note she had before her.                                                                            
2:31:18 PM                                                                                                                    
DAN  SADDLER, Legislative  Liaison, Office  of the  Commissioner,                                                               
Department  of Natural  Resources, in  response to  Chair LeDoux,                                                               
acknowledged that there  was an additional fiscal  note which had                                                               
been "written  to the sponsor  substitute."  He stated  that this                                                               
fiscal  note had  a  "more accurate  reflection  of the  effects,                                                               
financially in the state, of  the sponsor substitute before you."                                                               
He  pointed out  that  the  fiscal note  from  the Department  of                                                               
Revenue  did  not  reflect  the   changes  made  by  the  sponsor                                                               
CHAIR  LEDOUX  reported  that the  committee  would  receive  the                                                               
fiscal note from the Department of Natural Resources.                                                                           
2:32:00 PM                                                                                                                    
REPRESENTATIVE  THOMPSON pointed  out that  the fiscal  note from                                                               
the Department of  Revenue referenced the utilization  of the PFD                                                               
for payments.   He asked  whether there  was a fiscal  note which                                                               
would address  an instance should  an individual make  payment in                                                               
full using the 25 percent discount.                                                                                             
2:32:31 PM                                                                                                                    
REPRESENTATIVE  RAUSCHER   pointed  out  that  the   fiscal  note                                                               
referenced the cost  for the software changes to  the PFD program                                                               
and to monitor the program each year.                                                                                           
2:33:45 PM                                                                                                                    
ANNE  WESKE, Director,  Central Office,  Permanent Fund  Dividend                                                               
Division,  Department  of  Revenue,   explained  that  the  costs                                                               
reported  on  the  fiscal  note prepared  by  the  Department  of                                                               
Revenue were  for the initial set-up  to the program, as  well as                                                               
the ongoing cost of about 15  hours each year.  She detailed that                                                               
this included the  annual update of the  program, file exchanges,                                                               
and any reporting required.  She  noted that, as there was public                                                               
contact,  it  was  necessary  to   ensure  the  technicians  were                                                               
knowledgeable in order to answer any questions.                                                                                 
2:35:20 PM                                                                                                                    
REPRESENTATIVE  THOMPSON, referencing  the Department  of Natural                                                               
Resources  fiscal  note,  opined  that there  would  not  be  any                                                               
involvement with the  PFD if the land  was paid for in  full.  He                                                               
acknowledged the  cost, as the  program needed to be  set-up even                                                               
if only one person utilized it.                                                                                                 
2:35:57 PM                                                                                                                    
REPRESENTATIVE KOPP  offered his  understanding that the  goal of                                                               
the land sale  program was to get state land  into private hands,                                                               
and the state was trying to facilitate this.                                                                                    
MR. SADDLER stated that a priority  of the governor was to ensure                                                               
the  expansion of  private land,  and that  public land  would be                                                               
transferred to  private hands  to be  developed and  utilized for                                                               
the benefit of Alaskans.                                                                                                        
REPRESENTATIVE KOPP offered his  understanding that this had been                                                               
hard  to  do  and  that   "there  has  been  rumblings  from  DNR                                                               
(Department  of Natural  Resources)  in the  past  that maybe  we                                                               
should just end  the program because it is hard  to get land into                                                               
private hands,  and it's  a lot of  administrative work  for very                                                               
little return."  He asked if this was correct.                                                                                  
MR. SADDLER explained that the  Division of Mining Land and Water                                                               
had an annual  recreational, remote parcel sale.   He stated that                                                               
this was available  through auction with any  unsold parcels then                                                               
available  over  the  counter.    He  added  that  this  provided                                                               
Alaskans the opportunity  to own a piece of  Alaska, and although                                                               
some  of  the  most  accessible  land  had  been  purchased,  the                                                               
discount for  veterans would include  a discount on the  value of                                                               
the land,  as well as the  assay survey costs.   He declared that                                                               
the benefit was worth it.                                                                                                       
REPRESENTATIVE KOPP stated  his support of the  proposed bill, as                                                               
it addressed  the problem  for getting  land into  private hands.                                                               
He  offered his  belief that  the  state was  most interested  in                                                               
getting land into private hands.                                                                                                
CHAIR LEDOUX asked if it made  more sense for the State of Alaska                                                               
to give every resident, and not  just veterans, a discount on the                                                               
land if the land sale program was  not used to the extent that it                                                               
could be used.                                                                                                                  
MR. SADDLER  replied that  this would  be a  policy call  for the                                                               
Alaska State  Legislature.  In  response to an  earlier question,                                                               
he  said that,  although it  was  possible to  buy land  directly                                                               
without use of the PFD, the  proposed bill made this process "one                                                               
less step, that's one degree easier to purchase land."                                                                          
CHAIR LEDOUX asked if there  was any consequence if an individual                                                               
checked  the box  to purchase  land on  the PFD  application, but                                                               
then decided not to purchase the land that year.                                                                                
MR. BREESE replied  that it was not necessary to  check a box [on                                                               
the PFD application] until the year after the land purchase.                                                                    
CHAIR LEDOUX  asked for clarification  that it was  not necessary                                                               
to pay the full price of the land upon purchase.                                                                                
2:41:07 PM                                                                                                                    
MR. PARSONS  remarked that this  was a robust land  sale program,                                                               
in place since  2000, and that about 85 percent  of the contracts                                                               
were to pay off the land over time.                                                                                             
REPRESENTATIVE  JACKSON  asked  if  use  of  the  permanent  fund                                                               
dividend would be in lieu of a down payment.                                                                                    
MR. PARSONS, in response, said that  a 5 percent down payment was                                                               
necessary to  begin the contractual  obligation, and  offered his                                                               
belief  that the  proposed  bill would  allow  for an  electronic                                                               
transfer  of   the  PFD  to   be  used  toward   the  contractual                                                               
MR. BREESE added  that it would be necessary for  a separate down                                                               
payment as the PFD would be used to make payments.                                                                              
REPRESENTATIVE  RAUSCHER shared  that  a very  low percentage  of                                                               
veterans used the program.  He  pointed out that, as the property                                                               
made available  was not  "as juicy" as  previous options,  it was                                                               
becoming more difficult to involve people with the program.  He                                                                 
offered his belief that the proposed bill would aid both the                                                                    
veterans and the land sale program.                                                                                             
2:45:06 PM                                                                                                                    
CHAIR LEDOUX opened public testimony.                                                                                           
2:45:35 PM                                                                                                                    
ED MARTIN, JR. shared his story of growing up on a homestead.                                                                   
He declared that he was in full support of the proposed bill "or                                                                
any bill that will put land in the hands of the people."                                                                        
2:49:45 PM                                                                                                                    
CHAIR LEDOUX closed public testimony.  SSHB 3 was held over.                                                                    

Document Name Date/Time Subjects
HB 3 Sponsor Statement 3.12.2019.pdf HMLV 3/14/2019 2:00:00 PM
HMLV 3/26/2019 1:00:00 PM
HRES 4/3/2019 1:00:00 PM
HRES 4/5/2019 1:00:00 PM
HRES 4/12/2019 1:00:00 PM
HB 3
HB 3 Explanation of Changes 3.12.2019.pdf HMLV 3/14/2019 2:00:00 PM
HMLV 3/26/2019 1:00:00 PM
HRES 4/3/2019 1:00:00 PM
HRES 4/5/2019 1:00:00 PM
HRES 4/12/2019 1:00:00 PM
HB 3
HB 3 Ver A 3.12.2019.pdf HMLV 3/14/2019 2:00:00 PM
HMLV 3/26/2019 1:00:00 PM
HRES 4/3/2019 1:00:00 PM
HRES 4/5/2019 1:00:00 PM
HRES 4/12/2019 1:00:00 PM
HB 3
HB 3 Ver M 3.12.2019.pdf HMLV 3/14/2019 2:00:00 PM
HMLV 3/26/2019 1:00:00 PM
HRES 4/3/2019 1:00:00 PM
HRES 4/5/2019 1:00:00 PM
HRES 4/12/2019 1:00:00 PM
HB 3