Legislature(2001 - 2002)

04/04/2001 03:40 PM RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= 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.                                                                                   

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