Legislature(2001 - 2002)
04/24/2002 01:11 PM 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 232-REMOTE RECREATIONAL CABIN SITE SALES CO-CHAIR MASEK announced the first order of business, HOUSE BILL NO. 232, "An Act permitting state residents to purchase remote recreational cabin sites." Number 0133 REPRESENTATIVE McGUIRE moved to adopt the proposed committee substitute (CS), version 22-LS0791\U, Kurtz, 4/4/02, as a work draft. There being no objection, Version U was before the committee. Number 0170 REPRESENTATIVE FATE, sponsor of HB 232, informed fellow members that he had some amendments proposed by the Alaska Miners Association, Incorporated, and that although he'd called Steve Borell [the association's executive director], Mr. Borell was out of town and unable to testify. Number 0203 REPRESENTATIVE FATE moved to adopt Amendment 1, which read [original punctuation provided]: Page 3, line 10, following "section": Insert "from lands that were not selected by the state for mineral values and lands having a low mineral potential based on a geophysical survey complete not more than 15 years before the offering," Page 3, Line 22, following "use": Insert ", other than merely transiting over the parcel by any means," Page 3, Line 22-24: Delete "or at least five years of use including two years of active mining under a mining claim, by the person immediately preceding the nomination," Insert "or that person has held the area under a mining claim, as shown through not less than 5 consecutive years of production royalty reports to the state, on claims that are contiguous with the parcel," REPRESENTATIVE FATE informed the chair that where it says "with the parcel" on the last line of the amendment, it should say "are contiguous with or ... part of the parcel". He said it was a mistake "on our part" when formulating this. REPRESENTATIVE KAPSNER requested an at-ease until all members had copies of Version U. CO-CHAIR MASEK declined and announced that discussion of the amendment would continue. Number 0424 REPRESENTATIVE FATE explained Amendment 1: These were the suggestions, and I concur with the Alaska Miners Association. It simply ensures that mining or mineralized ground that has been identified by the state will not be part of the nomination for this entry. And there's some pretty good reason for that, because ... even where people understood that it was mineral ground in the past and they understood that they were subject to under -- or underground location of the assets under the mining claims, they still, in future years, litigate it by saying, "Well, the noise - they're disturbing me," and all these kind of things. So rather than to get into this fight that has happened before - even though the people have settled on that ground, even though the people had remote-parcel sites, why, then, they went into litigation and they cost everybody a lot of money; so, rather than to do that, we are just saying that any ground that's identified by the state as mineral ground will not be open to this entry. So, ... that's basically what one of those amendments says. Number 0569 The other one was concerning a person who snowshoes or skis a piece of property and then says, "Gee, I've been doing that for three or four years." Well, does that constitute, really, the use of a property for three consecutive years? It really doesn't. ... He just transited across this property in pursuing the activities that he wanted to pursue. So that was put in there so that a person truly had to use that, on a sustained basis, for whatever - for berry picking, for hunting, as a campsite, or for truly a stationary location - during the three years prior to the nomination. Number 0615 And under the "other mining", which I think was a good idea, the mining association really came up with the idea that the royalty reports should be the criteria for whether or not ... the people on that mining ground truly staked that ground for mining purposes, not just simply to squat on that ground under the mining laws to be able to take advantage of this. And so that was a good rule, and whether you've really mined any metal or not, ... you still have had the activity, and you have to file that report, even though the report may say "zero," that there is no royalty. REPRESENTATIVE FATE thanked the Alaska Miners Association for helping to straighten out some of these issues. CO-CHAIR MASEK indicated copies of the proposed CS had been distributed. [Comments from her staff indicated copies of the amendment were still being made.] Number 0734 REPRESENTATIVE CHENAULT asked about criteria under which the state can determine what is "mineral land," or whether, because of Amendment 1, the department could just decide everything's mineral land. REPRESENTATIVE FATE affirmed that there are criteria and added his belief that "this alludes to the geomagnetic surveys that they're doing across the state or other areas that have already been withdrawn as known ... geologically prone areas or mineralized-prone areas." He said these are identified areas, and that [the department] can't just go willy-nilly into an area and announce that it is mineralized. CO-CHAIR MASEK asked whether Representative Fate was seeking unanimous consent with Amendment 1. REPRESENTATIVE FATE responded in the affirmative. Number 0850 REPRESENTATIVE KERTTULA objected for discussion purposes. Inquiring about the second two parts of the amendment, she requested confirmation that "these are the people who can nominate to get the recreational parcel." REPRESENTATIVE FATE answered, "It's not exclusive to them, but it includes them, yes." He added: To make it clear, this situation came up because there were many miners who really are for this bill, who have had mines for many years. They spent years on that property, and they like to go back to it, whether it's still an active mine or even whether it's mined out. That's part of their spirit, really. And so they said, "We still have equipment out there. We would like some private land that is not still state land where we can either keep our cabin and have ... maybe a shed so that we don't have to move this equipment to keep it out of the weather." And they were really for this because it allows these people to have a small, two-and-a-half-acre parcel of land very close or on, as a matter of fact, those claims that they have. And throughout this, where it's shown and proven that, ... in the event of mining claims, ... they have been on these mining claims for five years, as proven by this amendment, then they can nominate. Then ... what happens is that once they nominate ... this land, the state can also nominate the surrounding land if it so chooses. If it's shown to be mineralized land - that we now have in ... this bill by amendment [if Amendment 1 is adopted] - then they would not open this to nomination but would still retain the right [of] that person to nominate ... his own parcel. Now, that's specific to this type of nomination. Another type of nomination is where the state nominates a large parcel of land for entry into a remote cabin site, and where the individual either has the right, through the commissioner, to appraise and have the survey done by himself or herself, and pay for that by themselves, to get clear title to that land; then that's another type of nomination. And there are restrictions in that, as the bill says, a half-a-mile-apart separation - if you're on a river, it's two miles of meander; if you're on a lake, I think it's now, what, 15 acres per cabin. ... It's truly a "remote" bill, so that it allows a person to get in to that country and still enjoy the remoteness of it. It also says that it can't be within a half a mile, for example, of ... a land claim or another parcel that is already occupied or designated ... as a non-open area for this kind of ... entry. Number 1089 REPRESENTATIVE KERTTULA asked what happens with the old mining claims: whether there is another way to get final ownership from the state after having [a claim] for a period of years, or if it is just the "mineral entry" that a person has a right to. REPRESENTATIVE FATE replied that there are federal patent laws, although they've changed over the years. He added, "On the state end of it, ... because of our constitution and the way the royalties are described from minerals to the benefit of all the people, constitutionally, I don't believe that the patent laws ... on state mining claims apply anymore." He acknowledged he might be incorrect about that. REPRESENTATIVE KERTTULA remarked, "I like our miners, so if anybody gets a benefit, I'd like to see them be able to get it." She requested clarification about what miners could receive now, however, and whether this might conflict with either that or what the federal law requires. Number 1278 DICK MYLIUS, Resource Assessment & Development Manager; Division of Mining, Land and Water; Department of Natural Resources (DNR), responded via teleconference, affirming Representative Fate's understanding that under state mining law, which is tied to both the constitution and the Alaska Statehood Act, one cannot get title to a mining claim [on state land], but can only get the mineral rights. That Act and the constitution basically say that if the state alienates title to the minerals - in other words, gives it to a private entity - the land technically can revert back to the federal government. He added: As a result of that, under state mining law you can never get the right to ... fee-title ownership, which you could under the old federal law, although the federal government's made it so difficult that even under the federal law you can pretty much ... never get full title - fee title - to the land through a mining claim anymore. Number 1329 REPRESENTATIVE KERTTULA asked whether this provision that grants title would fly in the face of the [state] constitution. MR. MYLIUS answered, "That is a concern of ours, that ... it essentially allows the use of mining claims in a way that is not envisioned under the constitution." REPRESENTATIVE FATE responded: That's specific to mining claims, and that's specific to the use of the resources. But it also has provisions in the constitution for the settlement of the land ..., and this actually does adhere to that constitutional edict. So, ... in my view and in the legal view - ... we've been over this many times - there was no conflict in that. Number 1482 REPRESENTATIVE KERTTULA announced her objection to Amendment 1. She explained: As I read the amendment, it would grant title to mining lands; otherwise, you wouldn't have the production royalty report for the five years. So I think we're creating a problem there. ... What I think I'm reading is that you'd want someone who had an old mining claim, ... who kept it around, but if there's no more mining going on it, maybe it could happen. But if there's five consecutive years of mining reports, it seems to me ... REPRESENTATIVE FATE interjected: That's really not true. It could be an active mining claim. But you have to remember that once that fee- simple [title is] granted, it's no longer a mining claim. You can get fee-simple ground through this and through other land-disposal processes by the state already. And a mining claim is not ... a claim in perpetuity. ... You have to do certain work; you have obligations to do assessment work. And so ... if you really want to get technical about this, a person could let ... that portion or a portion of the claim lapse ... and it goes back to the state and you'll immediately [stake] it ... under this law, and it becomes a fee-simple land again. So the mining claim itself is correct, that the claim itself does not revert ... in private interest as a mining claim. But this isn't about mining claims. This is about private ground and how we can get private ground into the hands of the people in the state of Alaska. Number 1605 REPRESENTATIVE KERTTULA asked, "So you're saying ... that the claim is separate from the land, that the state holds the mineral rights but that ... we could give the land in fee simple?" REPRESENTATIVE FATE replied: Well, you haven't stated it quite the way I stated it, but when you stake a claim, you only stake a claim to the subsurface minerals, not to the surface. And so when you're talking about subsurface rights, you can't own those subsurface rights; you have to lease those subsurface rights. That's not necessarily so on the surface. Actually, other people can use that surface. I'm saying that even ... under the most bizarre circumstance, if worse came to worst, you could ... let the lease lapse - or the claim lapse - and restake it, and it would still come under ... this law, if you had to do that. I don't believe it does, according to some of the "legal" that we've already had, because ... when you're mining, you're talking strictly about subsurface rights, even though you may have the use of the surface ... in conducting the mining operation. But I think we're down a rabbit track right here, going into the mining operation rather than what we're trying to do ... in getting people ... fee-simple land in the state of Alaska. Number 1688 REPRESENTATIVE KERTTULA maintained her objection to Amendment 1, saying it wasn't clear whether it could be allowed. A roll call vote was taken. Representatives McGuire, Stevens, Kapsner, Fate, Chenault, Masek, and Scalzi voted in favor of Amendment 1. Representative Kerttula voted against it. [Representative Green was absent.] Therefore, Amendment 1 was adopted by a vote of 7-1. Number 1760 REPRESENTATIVE FATE, in response to Mr. Mylius, who didn't have a copy of Amendment 1, reiterated what it does. Number 1994 MR. MYLIUS offered testimony on Version U. Noting that he oversees the state's land-disposal program, he first thanked Representative Fate and his staff for working with DNR on this bill and sharing ideas. He expressed DNR's overall concern, however, that the bill changes DNR's existing remote recreational cabin program. In effect since 1997, that program was first funded last year; it is the first such program in more than ten years, and it seems to work, although some bugs may need to be ironed out. Last year, he told members, DNR offered 295 parcels in ten different areas under the program and received about 700 applications; it plans to offer another 250 stakings this summer. In future years, he indicated, DNR hopes to offer "new and better areas" instead of just those offered previously under the homesteading program; there hadn't been time to identify new areas, which need to go through a best- interest finding, public notice, and land-title work, for example. MR. MYLIUS reported that the current program about breaks even: it costs about $400,000 a year to administer and is expected to yield about $400,000 in revenue in FY 05. He pointed out that, basically, stake-it-yourself land disposals aren't big moneymakers because the costs to administer them are usually fairly high and the land available under these programs generally is more remote and of lower value. These programs aren't designed to make money, but are designed to get primarily recreational lands into private ownership. Number 2104 MR. MYLIUS explained DNR's concerns about changes to the program under Version U: The fundamental changes are: that the bill establishes a very strict timeframe for completing surveys and appraisals, ... in one year; it allows DNR to negotiate private, noncompetitive sales, rather than ... just public sales, which is all we currently ... do; the bill requires that we ... try to offer 300 parcels a year, and, again, the bill is subject to appropriations from the legislature, is in there, but we have a concern about having ... a quota in there; it allows members of the public to nominate a specific site, and if they can demonstrate the past recreational or mining use of that, we would be required to offer that site to the individual; and the final major change is that it restricts parcels to 2.5 acres - the current program allows parcels of up to 20 acres to be offered. Our specific concerns related to those things are that, first, the program will cause difficulty in meeting municipal platting requirements. The current program we have was designed so that municipalities could exercise some control over how land disposals occur. Our biggest concern is the issue of lot sizes, that the bill specifies a minimum lot size of 2.5 acres. The minimum lot size in most boroughs that exercise planning authority is about 10 acres for remote parcels of land, and that's based on what's generally been considered the minimum size for [an] onsite sewage disposal program. So that'll either mean that in municipalities such as the [Matanuska- Susitna] Borough, Fairbanks North Star Borough, or Kodiak [Island] Borough, we'd ... have to go against their municipal platting rules or not offer the program in those areas. Number 2170 MR. MYLIUS continued addressing DNR's concerns: Secondly, the bill establishes [a] preference right for individuals who use the land for recreational or mining purpose. We've had a lot of discussion with Representative Fate on this issue, but DNR has a concern with any sort of preference right, because our existing sale programs almost entirely are offered to all Alaskans ... [as] an equal opportunity, basically, ... through an auction or lottery where every Alaskan has an equal chance to ... get the land. The provision in this bill that allows people who can demonstrate use, whether it's for recreational or mining-related purposes, is contrary to that, by giving those folks a preference right. And we have a concern about that. Regarding recreational use, we are concerned that ... the program would encourage people to build cabins and other structures in trespass, because they would build cabins to help demonstrate that they use the land and then they would apply to purchase the land. So we think it's subject to abuse. We have similar concerns under the mining law that ... the provision that allows people to use a mining claim to establish a right will result in people's staking mining claims with the idea of eventually getting ownership for recreational cabins. And we don't believe that's the intent of the mining law. Our other concern related to mining - and this is partly resolved by the amendment - is that our experience has shown that you don't really want to have private recreational parcels scattered amidst mining areas, because people that get those cabins eventually build houses there and don't want to see mining. We've had that problem with the True North project in Fairbanks, ... where people that we sold land to 20 years ago have become the leading opponents to the mining project in their backyards. Number 2275 MR. MYLIUS continued addressing concerns: A third concern that DNR has about the bill is we feel that it should not contain a requirement to propose 300 parcels a year. Such quotas set in legislation, even when it specifies that it's subject to appropriations, build up an expectation with the public that DNR will offer that amount regardless of whether or not sufficient funding is provided. And fourth, we feel that the program will be expensive and will lose money. Our concerns about this ... stem from two things. One is, the preference-right provision will result in people applying for isolated, scattered parcels that we'd have to process or could end up processing individually, which is inefficient. The current program allows us to group areas or group parcels [and] offer a bunch - open one area, ... and we go through one title check, one best-interest finding, and so on, that covers a number of parcels. We do one survey, one appraisal that covers a number of parcels. And by having individuals apply and kind of dictate where the program goes could end up being very ... inefficient. And the other concern is, the minimum size, again, of 2.5 acres results in fairly small parcels and less revenue to the state. MR. MYLIUS again thanked Representative Fate for working with DNR on the bill. Number 2349 REPRESENTATIVE FATE contended that these are first-come, first served sales and that neither the constitution nor the statutes necessarily call for competitive bids. He said the present disposal program is popular, and there are always too many people who qualify for desired plots; thus there is a lottery that people have to be lucky enough to win in order to get a parcel from the state. He referred to two letters in packets with regard to doing one's own survey and appraisal, which the bill would allow; he said it would take 80 people doing that in order [for this program] to break even, and it would make money if there were 150 applicants. REPRESENTATIVE FATE questioned the fiscal note. He referred to the projection in DNR's fiscal-note analysis of the need for "2 staff for Public Information Offices (Fairbanks and Anchorage), 2 staff to review/approve applications, 1 appraiser and 1 survey position to review and approve appraisals/surveys, 1 staff to issue deeds (and conduct related title search), 1 FT staff to keep land status maps current". He offered his belief that it would take only two persons spending 1 to 1.5 hours each to plat the new sites, instead of the seven personnel he said were listed. Furthermore, he said, a revolving fund in the land- disposal program can be used for the surveying and appraisal, "if required ... by people who don't want to pay for this." REPRESENTATIVE FATE also said the higher down payment, 20 percent instead of the current 5 percent, will increase the front-end money required to do these things, "if an individual doesn't choose to do them himself, and most will." He further suggested that the best-interest finding is retained in order to ameliorate any problem with a sale to an individual "after the first-come, first-served concept came into play." Addressing the concept of preferences, he pointed out that laws and even the constitution have preferences, such as those for veterans. Number 2541 DANA L. OLSON testified via teleconference, noting that she had provided written testimony previously. She read from the state constitution, Article VIII, Natural Resources [Section 1], and told members that she doesn't believe a piecemeal best-interest finding on each parcel complies with that, "especially ... this committee holding that I would have to have a revision of the Susitna area plan." She said: I have been very patient over the years, but I ... really think that if you're going to act quasi- judicial, then the committee should have a factual finding or a factual basis for making a decision concerning disposal in the Susitna area. A lot of things have changed. New laws come into place. The classification by itself becomes meaningless without consideration of the other laws and constitutional requirements. So I am generally in favor of recreational cabin sites. However, ... I would encourage the committee to ... put of record what the factual basis of holding one disposal requirement for this extensive review, and holding another one to bare-bones minimum. ... There must be some basis, or at least provide a means [by which] ... a person might question the committee's expertise. CO-CHAIR MASEK asked whether anyone else wished to testify; there was no response. She closed public testimony. Number 2699 REPRESENTATIVE FATE wrapped up by saying DNR and he had "agreed to disagree" on this. He emphasized the number of people he has heard from who want to get small pieces of land into the hands of private citizens. He also said the 2.5-acre size fits well "within the platting context of the Department of Natural Resources, in spite of what we've heard, because we've had testimony to two cartographers in that regard." He said he has nothing against the current disposal plan and that he sees this as a reinforcement tool to be used by DNR, because the commissioner would have the ability to approve or deny applications. He concluded by saying the bill would ensure that people who qualify could choose "the parcel of their desire," provided that they meet the criteria, "and then they have a piece ... of Alaska that they've been trying to get for years and years." Number 2772 REPRESENTATIVE McGUIRE moved to report CSHB 232, version 22- LS0791\U, Kurtz, 4/4/02 [as amended], out of committee with individual recommendations and the accompanying fiscal notes. Number 2781 REPRESENTATIVE KAPSNER objected. She said Bob Loeffler [of DNR] had raised some excellent points, the bill hadn't been fine- tuned, and she didn't believe it should move out of committee. REPRESENTATIVE KERTTULA explained why she couldn't support the legislation, although she believed Representative Fate had his finger on a problem and she didn't disagree with trying to get more land to people. She pointed out that fundamental problems raised in the last hearing still exist; for example, someone who can fly to a piece of land - and therefore notice it, file for it, and receive it - could receive [title] over perhaps indigenous people or people who are less wealthy. She also expressed concern that the amendment steps over the line constitutionally with the mining claims. Number 2847 A roll call vote was taken. Representatives Stevens, Fate, Chenault, McGuire, and Masek voted to report CSHB 232 [Version U, as amended] from committee. Representatives Kapsner and Kerttula voted against. [Representatives Green and Scalzi were absent.] Therefore, CSHB 232(RES) was moved out of the House Resources Standing Committee by a vote of 5-2.
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