Legislature(2001 - 2002)
04/04/2001 03:40 PM RES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SB 167-AGRICULTURAL LAND CHAIRMAN TORGERSON announced SB 167 to be up for consideration. MR. DARWIN PETERSON, staff to Senator Torgerson, said: This legislation is intended to resolve a problem that dates back to the 1964 earthquake. In 1943, the Ross Miller family homesteaded 27 acres of land in Hope. In the early 1950s, the Millers leased 15 acres of adjoining land from the Forest Service, which they used for pasture. During the '64 earthquake, the Millers lost 18 of their 27-acre homestead. The Earthquake Exchange Program compensated the Millers for their loss by giving them only one acre of land. Subsequently, the state determined that the Millers had been treated unfairly and were entitled to the 15 acres of leased Forest Service land as relief. In 1978, agricultural rights to this land were conveyed as provided by former state law AS 38.05.321. For many reasons, fee simple title should have been granted at this time. Recently, DNR has declared that the state has no compelling interest in retaining the remaining interest in this property and, therefore, supports conveying full land rights. Unfortunately, there are no existing statutes that would authorize DNR to remove the agricultural restrictions on this land. SB 167 would make a minor statutory change to correct his situation. Anyone who received agricultural rights to land under section 6(a) of the Alaska Statehood Act would be eligible for fee simple title if the owner pays the fair market value for the state's remaining interest. This would only apply to tracts that are 15 acres or less. SENATOR TAYLOR asked if there were others in this class. CHAIRMAN TORGERSON said he didn't think there was. MR. LOEFFLER stated support for SB 167. MR. BILL WARD, a Delta Junction resident, said he thought this was a reasonable circumstance to do a transfer from agricultural to fee simple and supported SB 167. He cautioned them not to use the legislative process to change the status of other agricultural lands around the state because speculators would take advantage of it. CHAIRMAN TORGERSON said he shared his concerns and that this bill only applies to one person at 15 acres. MR. FRANK MILLER, a Ninilchik resident, said he appreciates the work the committee has done on this bill. His one concern is subsection (3) that says the owner of the rights for agricultural purposes pays the state the fair market value of the remaining interest in the land estate, as determined by an appraisal paid for by the owner. He said that's like buying their own land back at this point and he thought the price should go back to when the land should have been conveyed. MR. CHUCK GRAHAM, a Hope resident, said he concurred with Mr. Miller's comments on subsection (3). The Millers have valid preference rights and should have received fee simple title some years ago. He actually thought the price should be based on the appraised value in 1967. CHAIRMAN TORGERSON asked Mr. Loeffler how he was going to handle computing the fair market value of the Miller's property. MR. LOEFFLER explained that they compute the market value by doing an appraisal today and subtracting the appraised value of the agricultural rights that they own. The Millers would pay the difference under this bill. CHAIRMAN TORGERSON asked about the assertion that they are owed something because of the Earthquake Relief Act. MR. LOEFFLER replied that he had no knowledge of that Act. He added, "All I know is that in the 60's there was a preference right they were given that allowed them to have land with an agricultural covenant. He didn't know anything about the earthquake." SENATOR TAYLOR said that agricultural rights are basically a restriction on the land and he thought this removes the agricultural restrictions. MR. LOEFFLER responded that they own certain rights to the land and he would give them the appraised value of the land minus the rights of the land today. SENATOR TAYLOR asked if those rights have a value they can ascertain. MR. LOEFFLER answered yes. SENATOR TAYLOR said he empathized with the people, but he didn't know if you could legally sell land at some previously appraised price. MR. LOEFFLER said he thought it would go against the grain of the way they have done business in the state. He said they currently own land subject to agricultural rights. He noted, "It's the same way people at Pt. MacKenzie own the land with an agricultural covenant on it. They own the agricultural rights so to speak. In that, they have been living on it, their father and grandfather. I concur with Darwin's assessment that there is no state interest in keeping the land agricultural at this point. The world is not a better place if we do that. I would support their urge to get the land, but Senator, I don't know a way to do it for the 1967 price." CHAIRMAN TORGERSON said he didn't either and that he would hold the bill until he talked to the Millers about it.