Legislature(1995 - 1996)
04/10/1995 08:17 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
HB 191 - MANAGEMENT OF STATE LAND AND RESOURCES REPRESENTATIVE GENE THERRIAULT, PRIME SPONSOR, noted the work draft committee substitute (CS) before the committee is version G, which contains several changes, including those discussed at the last hearing and those which came as a result of the working group. He reviewed those changes. He said Section 8 is a technical amendment from Section 7 of the sponsor substitute of HB 191, which was needed to conform with changes in the remote cabin permit program. Section 12 is a modification of version F, which conforms with amendments made in Sections 22 and 23. Section 21 is an amendment made by the House Resources Committee (HRC). He explained Section 23 states the term of the lease is no more than five years which means a renewal of one additional five-year period. Section 24 is a result of a suggestion by the HRC to eliminate the term "permit." CO-CHAIRMAN GREEN asked Representative Therriault to address the change made on page 5, lines 25-30. REPRESENTATIVE THERRIAULT replied that change removes the remote cabin permit program and inserts lease program. CO-CHAIRMAN GREEN clarified that language is not necessary because there are no more permits. REPRESENTATIVE THERRIAULT said that is correct. Number 145 REPRESENTATIVE ALAN AUSTERMAN noted he has concerns regarding Section 25. He said this section had been discussed several times and he thought it was going to be changed. He stated this section removes a section which has been used for years on the shore leases and puts the leases back up for public auction. He pointed out during the working group's discussion, he was told this section would only apply to new leases but noted it had not been changed. He told committee members he reads this section to say that when existing leases come up for renewal, they can go up for public auction. REPRESENTATIVE THERRIAULT explained when an existing lease comes up for renewal, that lease will go to a fair market value lease but will not have to go up for public auction. He noted in Section 27, the language was changed to address the concern. He said an existing lease would come up for renewal under subleasing and renewals of leases. Therefore, the only time there would be a competitive bid situation is when there is a new area identified and competing people want the same parcel. He stressed if a person has an existing lease, has kept up his or her payments and has not allowed the lease to lapse, he or she would be able to extend that lease or keep control of that piece of property under a renewal. CO-CHAIRMAN GREEN shared Representative Austerman's concern. Number 202 RON SWANSON, DIRECTOR, DIVISION OF LAND, DEPARTMENT OF NATURAL RESOURCES (DNR), stated a person with an existing lease, as long as payments are being made and the lease is on good terms, has the right to renew under AS 38.05.102, which is an existing statute. He said that statute says, "If land within a leasehold created under AS 38.05.070 - 38.05.105 is offered for sale or long-term lease at the termination of the existing leasehold, the director may, upon a finding that it is in the best interest of the state, allow the holder in good standing of that leasehold to purchase or lease the land for its appraised fair market value at the time of the sale or long-term lease." He reiterated as long as the lease is being paid, the person has an automatic right of renewal if it is in the best interest of the state. He noted if the person is making payments and is still open for fishing, it will be in the best interest of the state. CO-CHAIRMAN GREEN observed person A has a site, has made his payments, and is a reputable person but perhaps an irritant to the commissioner. The commissioner may renew that lease if it is in the best interest of the state. He clarified it would be automatic for that person to have first right. He wondered if the word "shall" should be used instead of the word "may." MR. SWANSON thought using the word "shall" would create a constitutional problem because a preference right is being given. He stressed if people make their payments, the leases are renewed. He said hopefully personalities are not an issue. REPRESENTATIVE AUSTERMAN noted the last sentence in Section 27 says "and conditions prescribed by the commissioner". He clarified that language does not mean the ground rules are being changed. REPRESENTATIVE THERRIAULT responded that language refers to the negotiation on what is fair market value and the requirement for setting that payment would be the terms and conditions of the lease. Number 253 REPRESENTATIVE AUSTERMAN asked which statute existing leases are covered under currently. MR. SWANSON replied AS 38.05.082. REPRESENTATIVE AUSTERMAN recalled Mr. Swanson had said earlier that existing leases are covered under a statute. He clarified that statute is AS 38.05.082. MR. SWANSON said leases issued today are under AS 38.05.082 but when they come up for renewal, they are covered under AS 38.05.102, which is an existing statute. REPRESENTATIVE THERRIAULT added that AS 38.05.102 is the general language in statute which allows for renewals of leases. Therefore, that statute is there for all leases. CO-CHAIRMAN GREEN clarified the word "may" is in the statute as it is written now and has not been a problem in the past. MR. SWANSON replied that is correct. MR. THERRIAULT asked the committee to consider making one more change. He suggested on page 11, line 29, delete "person holding a permit", insert "lease held" and on page 11, line 30, delete "renew that permit", insert "be renewed". He said this suggestion changes the wording so it does not apply to permitting where it talks about a lease. (Representative DAVIES joined the committee.) REPRESENTATIVE AUSTERMAN made a MOTION to ADOPT CSSSHB 191(RES). CO-CHAIRMAN GREEN asked if there were any objections. Hearing none, the MOTION PASSED. Number 347 REPRESENTATIVE AUSTERMAN made a MOTION to AMEND CSSSHB 191(RES) on page 11, line 29, delete "person holding a permit", insert "lease held" and on page 11, line 30, delete "renew that permit", insert "be renewed". REPRESENTATIVE JOHN DAVIES OBJECTED for discussion purposes. CO-CHAIRMAN GREEN said this change is suggested in order to take out the word "permit". REPRESENTATIVE DAVIES WITHDREW his objection. CO-CHAIRMAN GREEN asked if there were any objections to the motion. Hearing none, the MOTION PASSED. Number 379 REPRESENTATIVE AUSTERMAN clarified AS 38.05.082 is used to set up shore fishery leases. MR. SWANSON replied that is correct. REPRESENTATIVE AUSTERMAN clarified it is not possible that it might be misconstrued that subsection (b) would apply to the leases he is concerned about. MR. SWANSON responded no. He explained once a lease is issued, as long as it is in good standing, the lease will be renewed. He said this would only kick in on the original application or if the lease expires and there is a new applicant. He reiterated once a lease is issued, it is renewable. REPRESENTATIVE THERRIAULT added that any renewal would take place under AS 38.05.102. REPRESENTATIVE AUSTERMAN noted subsection (b) does not refer to new. MR. SWANSON said the word new is not included because the person may assign or sell the lease. Number 405 REPRESENTATIVE DAVIES clarified the leases are sellable. MR. SWANSON replied the leases are sellable and assignable upon approval of the state. He stated the person has to have a limited entry permit and cannot sell the lease to someone who does not have one. REPRESENTATIVE DAVIES asked if the original applicant no longer wants to use a lease, why does the state not put the lease back up for auction again. MR. SWANSON said when a person holds a lease, they can do what they want with that lease. REPRESENTATIVE THERRIAULT added that a limited entry permit and a good shore lease site goes together as a package. He said it is not desirable to inadvertently impact the value of the limited entry permit by taking away a good site. He noted that is the reason he wanted to go to a fair market value because it goes along with the limited entry permit and does have a value. He stressed he wanted to ensure that the state is getting at least fair market value while the lease is being used. REPRESENTATIVE OGAN asked how this section affects the guide industry. MR. SWANSON replied the bill does not affect the industry at all as they are issued under existing leases under Title 38 already. He stated this section only deals with shore fish and aquatic farm leases. Number 437 REPRESENTATIVE DAVIES asked if the policy that the leases are renewable and sellable is in regulation. MR. SWANSON stated that policy is in statute AS 38.05.102. REPRESENTATIVE OGAN made a MOTION to MOVE CSSSHB 191(RES), as amended, with attached fiscal notes out of committee with individual recommendations. CO-CHAIRMAN GREEN asked if there were any objections. Hearing none, the MOTION PASSED.
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