Legislature(1995 - 1996)
03/31/1995 08:11 AM House RES
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HRES - 03/31/95 HB 191 - MANAGEMENT OF STATE LAND AND RESOURCES CO-CHAIRMAN GREEN stated the committee would be using the committee substitute (CS) of the sponsor substitute, version F of HB 191 as its working draft. SARA FISHER, LEGISLATIVE ASSISTANT, REPRESENTATIVE GENE THERRIAULT, PRIME SPONSOR, stated she would review the changes from the sponsor substitute of HB 191 contained in the work draft CS of HB 191, version F. She said Section 1 reduces the purchaser's expectation of no further disposals or development in the area. This section clarifies that when the department determines separation of residences, they consider the availability of timber, firewood, and water resources but does not imply a person has exclusive use of these resources. Number 199 MS. FISHER stated Sections 2-5 are the same as the sponsor substitute. She said Section 6 is a technical amendment and is similar to Section 5 but removes references to staking. She explained Section 8 is a technical change needed as a result of Sections 22 and 23. Section 20 is a new section which allows agricultural land to be sold at true market value by making preference right to the adjacent agriculture land owners at the discretion of the department. She noted that Mr. Swanson had pointed out earlier that mandating the preference right tends to depress the competition or eliminate the competition altogether, while unaffected parcels are bid up past appraised value. MS. FISHER stated Sections 22-23 amend the remote cabin permit program. She said these permits have never been offered because of the cost to implement the program. These changes will allow the department to provide for the sale or lease of state land for remote recreational cabin sites. She explained sales must be at fair market value and the purchaser must reimburse the state for appraisal, survey, and platting costs. She pointed out this change provides that the term of a lease permit is no more than five years, which may be renewed for one additional five year period. During the term of the lease, the permittee may purchase the site by paying fair market value for the site. Number 236 MS. FISHER said Section 26 is a new section intended to clarify that a person holding a shore fisheries permit has the right to renew that permit. She stated Sections 43 and 44 are technical changes. She told committee members Sections 45 and 46 are new sections that amend the homestead entry program. These changes allow for a person to reside on the homestead land and reimburse the state for survey and platting, or within five years, pay the state the fair market value of the homestead at the time of patent and reimburse the state for the survey. She noted this change removes the staking and brushing requirements, and references to "habitable, permanent dwelling." MS. FISHER stated Section 48 is a new section which clarifies the state has no obligation to provide services to disposals of state land, and a disposal does not by itself limit further disposals. She noted Section 49 contains repealers. Number 263 REPRESENTATIVE DAVIES noted the language in Section 2 in the sponsor substitute referring to land banks is being changed and the work draft now calls it a land disposal program. He felt the use of the word "program" is inconsistent with the way the word is used later on in the bill. He thought it made more sense to use the word "inventory." He wondered if Mr. Swanson had any objections to using the word "inventory" instead of "program" on page 2, lines 6 and 9. He felt that word works better because it is a list of objects as opposed to events. RON SWANSON, DIRECTOR, DIVISION OF LAND, DEPARTMENT OF NATURAL RESOURCES (DNR), testified via teleconference and said he did not object to the suggested change. MS. FISHER stated if Mr. Swanson does not have a problem with those changes, then the sponsor probably will not either. She thought the word "program" was used in order to conform with the planning process the DNR has used for the past ten years. MR. SWANSON said Ms. Fisher's comments are correct. The department goes through the land planning process which creates the inventory. Once the inventory has been developed, then the inventory goes into the disposal program and actual disposal. He stated while changing the word "program" to "inventory" does not create any heartburn, he really felt "program" would be the better word because the inventory had been created in the planning process already. Number 304 REPRESENTATIVE DAVIES thought it was confusing to talk about a list of lands as a program. He felt the word "program" means a prescription of things to do or a process. CO-CHAIRMAN GREEN wondered if there was any merit to having the words inventory/program or does that further confuse the issue. MR. SWANSON thought the words "inventory and/or program" might be better. REPRESENTATIVE DAVIES stated page 7, lines 6-8, in the work draft CS of HB 191, version F, pertains to the disposal of land and where the auction sale should be located. He said he understood the arguments as to why the commissioner should have some discretion as to where the disposals are held. However, he felt as a matter of policy, the legislature should be suggesting to the commissioner that wherever it is practicable, the auction should be in a community near where the land is being sold or disposed of. REPRESENTATIVE DAVIES expressed concern that by changing the word "shall" to "may" on line 7, that policy intent is lost. He felt the same discretion on the part of the commissioner could be effectuated while leaving the policy intent in place by keeping the word "shall" and then on line 8, inserting the words "unless the commissioner issues a written finding that it is impractical." He felt that change would allow the commissioner to find in certain cases that it is not practical to have an auction in an area close by but would leave the general intent to hold the auctions close to the actual land being sold. Number 356 MR. SWANSON stated the history of this section is that previously it was required that the applicant and the department appear, in person, in the location where the land was going to be disposed of. He said the Superior Court ruled that requirement was unconstitutional. He explained the idea behind this section is why make the state spend a lot of money to appear in a particular community if the applicant is not required to be there for all types of disposals. He pointed out the department would certainly hold an outcry auction in the community where the land is being sold, but he saw no point in the state appearing if the disposal is going to be a sealed bid or a lottery and the applicant is not required to be there. REPRESENTATIVE DAVIES noted he knows it is the department's intent to hold outcry auctions in the communities. His concern is the language contained in Section 14 does not explicitly suggest that intent. MR. SWANSON suggested adding that only outcry auctions be held in the location where the land is to be sold. CO-CHAIRMAN GREEN wondered how many times auctions get submissions from people not in attendance. MR. SWANSON stated outcry auctions are normally only held for agricultural sales and usually the person or a representative of the person is always present. CO-CHAIRMAN GREEN asked if the word "may" would cause the department to not do business as usual except for streamlining it. MR. SWANSON replied the word "shall" is currently in the statute and the department is required to appear. He said the word "may" is much better for the department as it streamlines it and will provide a cost saving. REPRESENTATIVE DAVIES asked how the disposal of land is handled for homesites. MR. SWANSON responded homesites are always done by lottery. REPRESENTATIVE DAVIES questioned how the public becomes aware of homesite disposals. MR. SWANSON replied the homesite disposals are advertised in all major newspapers in the state at least once, sometimes up to four times. The department also has a land disposal sale brochure which is available to the public through department offices and some libraries across the state. He said the department also uses public service announcements on radio and television where possible. REPRESENTATIVE DAVIES asked how does a person enter the lottery. MR. SWANSON stated within the sale brochure there is an application which the person can mail in, along with the $10 entry fee. Number 412 REPRESENTATIVE DAVIES asked Mr. Swanson how he would feel about changing lines 6-8 to read, "An outcry auction sale shall be held in a community that is near the land to be sold or disposed of." MR. SWANSON stated that language is fine. He said that is certainly what the department would do. REPRESENTATIVE DAVIES made a MOTION to AMEND the work draft CS of HB 191, version F, on page 7, lines 6-8, delete the current sentence and rewrite it to read, "An outcry auction sale shall be held in a community that is near the land to be sold or disposed of." CO-CHAIRMAN GREEN announced there is no quorum present. REPRESENTATIVE DAVIES stated on page 9, lines 13-15, of the work draft CS of HB 191, version F, it says "If more than one Alaska resident qualifies for a first option under this section, eligibility for the first option shall be determined by lot and the option must be exercised on the conclusion of the public auction." He asked in that instance, what happens if the person who wins the lot does not choose to exercise it. MR. SWANSON replied the next person in line would assume the role. Number 469 REPRESENTATIVE DAVIES said in Section 21, page 9, the definition of adjacent says, "a tract of land has a common boundary or corner to presently held land or is separated from the presently held land only by a physical barrier such as a road or stream." He stated there is also another configuration of land where the boundaries could be touching but not satisfy this definition. He told committee members to imagine two squares where one corner of one square is touching the center of the side of the other square. He noted they would be touching each other but would not have a corner in common nor would they have a line segment in common. He pointed out he has seen land actually divided up that way. REPRESENTATIVE DAVIES suggested the problem with the definition could be fixed by changing lines 21-23, on page 9, of the work draft CS of HB 191, version F, to read "adjacent" means that a tract of land has at least one common boundary point with presently held land or is separated from the presently held land only by a physical barrier such as a road or stream." MR. SWANSON stated that language is fine. He added that he did not read the current language as common boundary or common corner but rather read it to say common boundary or corner touching. CO-CHAIRMAN GREEN said if everyone could picture a square with a diamond sitting on top of it--adjacent at the north boundary but not at the corner. REPRESENTATIVE DAVIES asked Mr. Swanson if he has any problem with the suggested change in language. MR. SWANSON replied no. REPRESENTATIVE DAVIES referring to line 23, page 9, asked if there is going to be a problem if there is a stream paralleled by a road. MR. SWANSON responded no. Number 515 REPRESENTATIVE DAVIES asked on page 10, line 6, of the work draft CS, version F, why the words "lease permit" is used. He wondered if the word "permit" could be eliminated. MR. SWANSON replied yes. He said there must have been an error in the rewrite. REPRESENTATIVE DAVIES thought the language should say "cabin site lease" throughout Section 23. He said wherever the language says "permit", it should say "lease" and where it says "permittee", it should say "lessee". He wondered if Mr. Swanson had any problem with those suggested changes. MR. SWANSON said no. He stated the section had just been drafted the day previous and some technical changes still need to be made. REPRESENTATIVE DAVIES said his next question was in regard to page 10, line 21, of the work draft CS of HB 191, where it gives the director the discretion to invite applications. He wondered what assurance is there a public notice will be given. MR. SWANSON replied the language refers to a disposal of land. Therefore, the state Constitution requires public notice. REPRESENTATIVE DAVIES asked what the purpose is of line 21, on page 10, changing the word "shall" to "may." He thought it might be redundant since the department does that anyway. He thought the line was there to perhaps set up the next sentence. MR. SWANSON stated the department advertises a given area sale which may be open to shore fishery leases. Within that given area, the department does not necessarily say how many leases will be issued. Therefore, the department is trying to make the language discretionary. He said the department will tell the public that the department will be issuing leases or a lease within a given area but only certain people can qualify. He wondered why the department would want to advertise for applications or invite applications if people do not qualify. REPRESENTATIVE DAVIES reiterated he does not understand how the discretionary invitation works. CO-CHAIRMAN GREEN clarified if in fishery site A, a preference is given to the existing permittee or lessee and if the department had to go to the expense of publicly inviting applicants, yet fishery site A is still going to have a preference, the question becomes is there any merit to continuing the process just to establish a fair market value. MR. SWANSON said that is correct. CO-CHAIRMAN GREEN said if there is no other person wanting the permit or lease or if there are others who want it but the existing permittee or lessee wants it, would the department under a "may" go ahead and publicly invite to try and get a fair market value established or would the department have other means to determine what the fair market value is. MR. SWANSON replied the department does not currently use a fair market value for shore fishery leases. The department can only get what it costs to administer the program. He said the change on line 21, page 10, will allow the department to have the discretion to get fair market value. He was not sure how the department would do that, but added there are several options. CO-CHAIRMAN GREEN clarified having the word "shall" in the language would assist the department in establishing a fair market value or since the lease or permit is going to the person who currently has it anyway should the person want it, "may" still might be a preferable word to avoid an unnecessary notification to the public, when none of the public is going to have a chance at the lease or permit anyway, unless the owner does not want to come up with the fair market value. MR. SWANSON said that is correct. Number 610 REPRESENTATIVE DAVIES clarified the public invitation for applications, in some cases, is an additional step the department would go through to establish the fair market value. MR. SWANSON replied that is correct and added that the department may go through. REPRESENTATIVE DAVIES stated his next question is in regard to page 18, lines 14-17, of the work draft CS of HB 191, version F. He asked someone to explain the changes contained in the language. TAPE 95-45, SIDE A Number 000 MS. FISHER replied Section 32 of the sponsor substitute clarifies the department can allow livestock grazing, commercial berry picking or mushroom harvesting, and similar minimal-value consumptive uses by issuing permits, an authority the Department of Law recently questioned. MR. SWANSON stated that is correct. The Department of Law said if a person removes a resource in any way, a lease has to be issued, not a permit. He said the language Representative Davies has asked about allows the department to do some basic things under the permit process which are not so time consuming. For example, after a forest fire, mushrooms come up and people like to harvest them. He explained because the mushrooms are harvested, the department would have to issue a lease and by the time the lease is issued, the mushrooms would be long gone. REPRESENTATIVE DAVIES asked if all the repealers in Section 49 are conforming to other things done in the bill and also questioned if there is anything substantive in the repealers. MR. SWANSON stated the intent was to not do anything substantive but just conform to everything else in the bill. Number 063 JERRY LUCKHAUPT, LEGISLATIVE COUNSEL, LEGISLATIVE LEGAL SERVICES, LEGISLATIVE AFFAIRS AGENCY, stated Mr. Swanson is correct to a certain extent. He said many of the repealers are necessitated by changes made in the bill. He explained there are a few repealers that work on their own which were requested by the department such as the removal of the requirement for bonding. He noted the repealers were all a part of the original bill. REPRESENTATIVE DAVIES asked if there are any other substantive things in the repealers. MR. LUCKHAUPT replied AS 38.05.040 is the bonding requirement. AS 38.05.035(e)(6)(F) removes the requirement for a written finding before a public hearing related to a production license issued under AS 38.05.207 which is a change necessitated by the repeal of AS 38.05.027, which was necessitated by the oil and gas changes made last year. He said the AS 38.057 changes are reflected by changes made to AS 38.05.057 in the bill. The changes to AS 38.05.855 and AS 38.05.856 are not necessarily reflected by things going on in the bill but relate to the fact that AS 38.05.855 and AS 38.05.856 are repeals of the aquatic farm sites program--the identification program the commissioner must go through in the tideland land use permits for aquatic farming. REPRESENTATIVE OGAN made a MOTION to ADOPT CSSSHB 191(RES), version F. CO-CHAIRMAN GREEN asked if there were any objections. Hearing none, the MOTION PASSED. Number 150 REPRESENTATIVE DAVIES noted for the record he still has concerns on page 2 about the distinction between program and inventory. REPRESENTATIVE DAVIES made a MOTION to AMEND CSSSHB 191(RES) on page 7, line 6, insert "outcry" after "An" and delete ", a". On line 7, page 7, delete "lottery sale, or a disposal of land for homesites may" and insert the word "shall". He said lines 6-8 would now read, "An outcry auction sale shall be held in a community that is near the land to be sold or disposed of." MS. FISHER said the proposed amendment might pose a conflict with Section 15. MR. LUCKHAUPT stated an outcry auction is not defined anywhere in statute. Therefore, a term is going to be contained in the bill which is not defined anywhere. Secondly, in Section 15, sections are being repealed which require the presence of bidders at auction sales. He thought maybe Mr. Swanson had an idea of how these two sections could be put together to accomplish Representative Davies' purpose. MR. SWANSON said he did not have an idea how to accomplish Representative Davies' purpose. He stated he understands his concerns. He noted the department would do what he is suggesting anyway, but he was not sure how to put that in statute. REPRESENTATIVE OGAN clarified that Section 15 is for sealed bids. Number 206 MR. SWANSON replied the department does two different types of auctions. The majority of the auctions are sealed bids but occasionally the department does an outcry auction. REPRESENTATIVE OGAN asked if it is most cost effective to do a sealed bid auction. MR. SWANSON responded yes. He stated sealed bids are normally what the department does. REPRESENTATIVE DAVIES WITHDREW his MOTION. REPRESENTATIVE DAVIES made a MOTION to AMEND CSSSHB 191(RES) on page 9, line 21, delete "a" and insert "at least one"; delete "or" and insert "point". On line 22, page 9, delete "corner to" and insert "with". He said the line would read "(2) "adjacent" means that a tract of land has at least one common boundary point with presently held land or is separated from the presently held land only by a physical barrier such as a road or stream." CO-CHAIRMAN GREEN asked if there were any objections. Hearing none, the MOTION PASSED. REPRESENTATIVE DAVIES made a MOTION to CONCEPTUALLY AMEND CSSSHB 191(RES), page 10, lines 6-16, deleting the word "permit" everywhere it appears in Section 23 and where appropriate substitute the word "lease." He added where the word "permittee" appears, change it to the word "lessee." MR. LUCKHAUPT said he understood the sense of the amendment and would make the changes. REPRESENTATIVE DAVIES thought line 6, page 10, would read better if it said "cabin site lease". CO-CHAIRMAN GREEN noted there was no quorum present. REPRESENTATIVE DAVIES WITHDREW his motion.
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