Legislature(1993 - 1994)

03/08/1994 01:00 PM CRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
              HOUSE COMMUNITY AND REGIONAL AFFAIRS                             
                       STANDING COMMITTEE                                      
                          March 8, 1994                                        
                            1:00 p.m.                                          
  MEMBERS PRESENT                                                              
  Representative Harley Olberg, Chairman                                       
  Representative Jerry Sanders, Vice Chair                                     
  Representative Con Bunde                                                     
  Representative Cynthia Toohey                                                
  Representative Ed Willis                                                     
  Representative John Davies                                                   
  Representative Bill Williams                                                 
  MEMBERS ABSENT                                                               
  COMMITTEE CALENDAR                                                           
  *HB 515:  "An Act relating to the management of state land                   
            and resources; relating to certain remote parcel                   
            and homestead entry land purchase contracts and                    
            patents; and providing for an effective date."                     
            HEARD AND HELD IN COMMITTEE                                        
  WITNESS REGISTER                                                             
  NEIL JOHANNSEN, Director                                                     
  Division of Parks and Outdoor Recreation                                     
  Department of Natural Resources                                              
  P.O. Box 107001                                                              
  Anchorage, AK  99501-7001                                                    
  Phone: 762-2535                                                              
  POSITION STATEMENT:  Provided information on HB 515                          
  RON SWANSON, Director                                                        
  Division of Land                                                             
  Department of Natural Resources                                              
  P.O. Box 107005                                                              
  Anchorage, AK  99501-7005                                                    
  Phone: 762-2692                                                              
  POSITION STATEMENT:  Provided information on HB 515                          
  TOMAS BOUTIN, Director                                                       
  Division of Forestry                                                         
  Department of Natural Resources                                              
  P.O. Box 107005                                                              
  Anchorage, AK  99501-7005                                                    
  Phone: 762-2501                                                              
  POSITION STATEMENT:  Provided information on HB 515                          
  JERRY GALLAGHER, Director                                                    
  Division of Mining                                                           
  P.O. Box 107016                                                              
  Anchorage, AK  99510-7016                                                    
  Phone: 762-2165/465-2400                                                     
  POSITION STATEMENT:  Provided information on HB 515                          
  PREVIOUS ACTION                                                              
  BILL:  HB 515                                                                
  SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR                                 
  JRN-DATE     JRN-PG               ACTION                                     
  02/28/94      2551    (H)   READ THE FIRST TIME/REFERRAL(S)                  
  02/28/94      2551    (H)   CRA, RESOURCES, FINANCE                          
  02/28/94      2552    (H)   -FISCAL NOTE (DNR) 2/28/94                       
  02/28/94      2552    (H)   GOVERNOR'S TRANSMITTAL LETTER                    
  03/08/94              (H)   CRA AT 01:15 PM CAPITOL 124                      
  ACTION NARRATIVE                                                             
  TAPE 94-11, SIDE A                                                           
  Number 000                                                                   
  CHAIRMAN HARLEY OLBERG called the meeting to order at 1:18                   
  p.m.  He noted for the record Representatives Toohey, Bunde,                 
  Williams, Sanders and Willis were present and noted that a                   
  quorum was present.                                                          
  HB 515 - MANAGEMENT OF STATE LAND AND RESOURCES                              
  would like to first point out that Title 38, the Alaska                      
  Lands Act, has an early history.  Obviously, as the Governor                 
  says, we're an owner state.  We own, if you consider the                     
  submerged lands, probably somewhere around 160 million acres                 
  of land:  One and a half California's.  Our economy by and                   
  large rests upon those resources and Title 38 is a statute                   
  that goes back 35 years.  In fact, Title 38 had it's                         
  beginning with statehood in 1959.  It has been added to,                     
  patched on to, improved, perhaps not improved in many areas                  
  through the years.  We think that we need to start designing                 
  a new model.  Title 38 has grown to about 200 pages.                         
  There's a lot of redundancy in Title 38.  There's a lot of                   
  things in it that makes the bureaucracy less than totally                    
  efficient.  The first point that I'd like to make here is:                   
  It's the department's position that Title 38 needs many                      
  changes.  It probably needs close to a total rewrite.                        
  However, what we are taking on with your help, is basically                  
  a two phase process.  We want to do some fairly quick, we                    
  would hope relatively easy adjustments to make Alaska's land                 
  law work better.  For it to be a more efficient body of law                  
  to manage our natural resources.  At the same time, we're                    
  going through a process of trying to examine the nearly 200                  
  pages of statutes and there's a lot of regulations that                      
  apply to those statutes, to try to come up with something                    
  that will streamline and clarify and hopefully, craft a more                 
  efficient body of law for the future.  Particularly given                    
  the fact that most of the dollars go down and a lot of the                   
  bureaucracy, etc., may be difficult for us to afford at the                  
  same time that we need to increase the flow of revenues to                   
  state.  The bill (HB 515) is a complicated bill, even though                 
  it's only about 17 pages long.  It touches many different                    
  flavors of resources.  Everything from land disposals, to                    
  Native allotments in parks, to setnet in aquatic farm sites,                 
  timber sales, oil and gas leasing, and there's an important                  
  section on mining.  So we are essentially providing                          
  something for everybody.  There's nothing in this bill that                  
  does not touch every Alaskan...  So we think that there will                 
  be a lot of interest, before it's over with.  Basically,                     
  we're after something that will create what we will view, a                  
  more efficient government.  If you look at it in a                           
  collective sense, that will put us in a better and more                      
  efficient situation to sell and to lease natural resources.                  
  There's other things there but, by and large, what we're                     
  looking for here is something that will allow us to not                      
  eliminate public process, public process is important...but                  
  after talking to many different people, both inside and                      
  outside government interest groups, the Resource Development                 
  Council to a lot of people, it was our stance to embark upon                 
  the journey with some relatively small changes.  ...some of                  
  you are probably wondering why the State Park Director is                    
  sitting here talking about timber and oil and gas and                        
  mining.  Last week when they gave me this bill to basically                  
  kind of coordinate, I'm not the commander but the                            
  coordinator here, I asked the same question.  I've never                     
  even read Title 38, but in spite of the fact that I direct                   
  our park system, I've got a Master's degree in Forestry and                  
  I have a fairly wide interest in the efficient management of                 
  our resources.  I am here basically to coordinate, to bring                  
  people to the table.  If you have interest in specific                       
  resources, to make sure that you've got the state's top                      
  expert there to talk with you about that.  With that said, I                 
  would like to just simply offer a couple of requests from                    
  the Administration.  This is obviously the Governor's bill.                  
  The Administration has gone through a lot of internal opera                  
  to get here, believe me, and without going into the details,                 
  having watched the crafting of Title 38 in the last eighteen                 
  months in the department (DNR) its been a big deal to get                    
  here.  But the Administration has basically a couple of                      
  requests of this committee... with all due respect to the                    
  committee.  Our first request is that it's a short bill and                  
  this would be a very tempting bill to become...a christmas                   
  tree.  We feel as if, if the bill becomes fly paper and a                    
  lot of things get stuck on it, it's going to potentially                     
  affect its progress through the legislature...so, with all                   
  due respect, through each of the committees we're going to                   
  ask that the bill not go through a lot of amendment.  It's                   
  been through a lot of examination by a lot of people to get                  
  here.  We are working on phase two for you.  That will cover                 
  the bigger picture.  The last point I would like to make is                  
  to just simply...there's not a lot of time left and most of                  
  you are in the majority...  We would really like to see this                 
  bill make it through, and somebody had mentioned to me that                  
  you guys are halfway through your session this week, so                      
  there's not a lot of time and so I apologize for that, but                   
  we would like to see the bill try and make it to the                         
  Governor..."  He referred to other DNR directors to describe                 
  their sections of the bill.                                                  
  Representative John Davies joined the committee at 1:20 p.m.                 
  Number 227                                                                   
  REPRESENTATIVE CYNTHIA TOOHEY asked, "Is this also being                     
  introduced on the Senate side?"                                              
  MR. JOHANNSEN said, "The bill has been introduced as Senate                  
  Bill 339."                                                                   
  REPRESENTATIVE TOOHEY asked, "Who's carrying that?  Is there                 
  somebody specifically?"                                                      
  MR. JOHANNSEN replied, "It's the Governor's bill.  It has                    
  not been heard in the Senate, we believe there are a number                  
  of people who have a lot of interest in the bill, but I                      
  could not name a specific legislator."                                       
  Number 243                                                                   
  RON SWANSON, DIRECTOR, DIVISION OF LANDS, DNR, said, "The                    
  vast majority of the bill is land related.  Sections 1                       
  through 7 of the bill would amend AS 38.04.020 to delete the                 
  land disposal bank for potential state land sales, recast                    
  the land bank as a land disposal program, revise planning                    
  and classification requirements, and make appropriation                      
  requests for land disposals discretionary by the                             
  commissioner of the Department of Natural Resources (DNR).                   
  Currently, existing AS 38.04.020 requires the land bank to                   
  have at least 500,000 acres classified and available for                     
  disposal into private ownership.  That statute also requires                 
  an annual report on the status of the land bank and mandates                 
  that the commissioner annually submit an appropriation                       
  request to the legislature to administer surveys and                         
  disposals of land.  The land bank system is outdated because                 
  regional land use plans have now classified over 2,000,000                   
  acres of state land for disposal.  Section 35 of the bill                    
  repeals existing AS 38.04.020(c), (f), (j), and (k), the                     
  requirements of which have become unnecessary due to the                     
  amount of land now classified for disposal.  Section 8 of                    
  the bill makes a conforming amendment to AS 38.04.021(b)(1).                 
  MR. SWANSON continued, "Sections 9 and 10 of the bill amend                  
  existing AS 38.04.030 and AS 38.04.035 to simplify the                       
  methods that DNR can use to design state land disposals.                     
  Section 9 amends existing AS 38.04.030 by authorizing DNR to                 
  develop additional disposal programs by regulation.  A                       
  program established by regulation would have to provide for                  
  competitive disposal at no less than fair market value, but                  
  would not necessarily have to conform to existing programs                   
  in AS 38.  Section 10 amends AS 38.04.035 by making a fair                   
  market value return to the state mandatory, rather than                      
  discretionary, when state land is conveyed to private                        
  parties, unless a conveyance for less than fair market value                 
  is specifically authorized by statute or regulation.                         
  MR. SWANSON further stated, "Section 11 of the bill amends                   
  existing AS 38.05.035(b)(9) to allow DNR to reconvey                         
  substitute land for state land that is subject to a pending                  
  Native allotment application.  This amendment is designed to                 
  give DNR the ability to relocate Native allotment claims                     
  from state parks and recreation areas to less sensitive                      
  areas.  Existing AS 38.05.035(b)(9) only allows the                          
  reconveyance of land wrongfully conveyed by the federal                      
  government to the state, such as land subject to Native use                  
  and occupancy predating state selection.  The amendment is                   
  intended to allow DNR to take advantage of a 1992 amendment                  
  to the Alaska Native Claims Settlement Act (ANCSA), 43                       
  U.S.C. 1617(c), which authorizes the relocation of pending                   
  Native allotment claims to substitute state land with the                    
  commissioner of DNR's concurrence.                                           
  MR. SWANSON continued, "Sections 13 and 14 of the bill                       
  delete from existing AS 38.05.055 and AS 38.05.057(a) the                    
  requirement that a purchaser appear in person at a lottery                   
  or auction for state land.  In Chambers v. State, No. 3AN-                   
  88-4634 CI (1989), that requirement was held to violate the                  
  equal protection clause of the Constitution of Alaska                        
  because it discriminates between local and non-local                         
  residents.  Section 12 of the bill amends existing AS                        
  38.05.050 to remove the requirement that the lottery or                      
  auction be held in a community near the land to be disposed.                 
  Such a decision would, instead, be discretionary.  Section                   
  35 of the bill repeals existing AS 38.05.057(g) and AS                       
  38.05.057(j), which are premised on the existing                             
  requirements in AS 38.05.050, AS 38.05.055, and AS                           
  38.05.057(a) that are being deleted.  Section 32 of the bill                 
  amends AS 38.09.010(g) to remove language related to                         
  personal appearance at a lottery and local site for a                        
  MR. SWANSON said, "In addition, sec. 14 of the bill deletes                  
  a provision of AS 38.05.057(a) that requires the                             
  commissioner of DNR to consult with the municipal assessor                   
  before determining the purchase price for state land located                 
  in that municipality.  Because the appraisal required by                     
  existing AS 38.05.840 gives the commissioner an accurate                     
  valuation, the consultation requirement is unnecessary.                      
  MR. SWANSON read, "Section 15 of the bill repeals and                        
  reenacts AS 38.05.069(e)(2).  Existing AS 38.04.069(e)(2)                    
  defines "approximate vicinity," a term that is not used                      
  elsewhere in existing AS 38.05.069, the agricultural                         
  preference right statute.  The bill would replace                            
  "approximate vicinity" with a definition of "adjacent," a                    
  term that is used elsewhere in that statute.                                 
  MR. SWANSON said, "Changes made by secs. 16 through 18 and                   
  sec 35 of the bill eliminate special procedures for leasing                  
  setnet and aquatic farming sites contained in existing AS                    
  38.05.082, 38.05.083, and 38.05.856.  Sections 29 and 35                     
  revise the public notice requirements of existing AS                         
  38.05.945 accordingly, by repealing AS 38.05.945(a)(5) and                   
  (6) and amending AS 38.05.945(d).  Section 16 amends                         
  existing AS 38.05.082(b), which requires DNR to award setnet                 
  leases between two or more competing applicants on the basis                 
  of a complex analysis of the "most qualified applicant."                     
  This procedure is highly dependent on DNR's ability to make                  
  factual determinations as to each applicant's tenure in the                  
  fishery, present ability to utilize the location to its                      
  maximum potential, and "other factors relevant to the                        
  equitable assignment of the disputed area."  The amendment                   
  would replace this procedure with the options of either a                    
  public auction under AS 38.05.075(a) or, if only one                         
  application is received and the value of the lease is $5,000                 
  a year or less, a negotiated lease under AS 38.05.070(b).                    
  In secs. 3 and 5, ch. 27, SLA 1991, the legislature amended                  
  AS 38.05.082(b), effective January 1, 1997, regarding                        
  language that refers to DNR land use plans.  Section 34 of                   
  the attached bill clarifies that the changes in the bill                     
  regarding new procedures for determining the qualifications                  
  of setnet lease applicants, contained in sec. 16 of the                      
  bill, do not affect the changes made to AS 38.05.082(b) by                   
  secs. 3 and 5, ch. 27, SLA 1991.                                             
  MR. SWANSON further stated, "In sec. 18 of the bill, AS                      
  38.05.083 is repealed and reenacted to set out aquatic farm                  
  and hatchery site leasing procedures.  In the repeal and                     
  reenactment, many of the existing permit provisions in AS                    
  38.05.856 are moved to AS 38.05.083 as leasing provisions.                   
  AS 38.05.856 is repealed by sec. 35 of the bill.  Section 35                 
  of the bill also repeals existing AS 38.05.855, which                        
  requires DNR to identify and propose sites for aquatic farms                 
  and hatcheries, and AS 38.05.946(b), which requires DNR to                   
  hold public hearings on those proposed sites.  The purpose                   
  of these changes is to bring the leasing of setnet and                       
  aquatic farming sites into conformity with the procedures                    
  governing other state land uses.  Section 36 of the bill                     
  makes clear that the changes made to existing AS 38.05.083                   
  and 38.05.856 by secs. 18 and 34 of the bill do not impair                   
  the legal rights of a person who holds a permit under those                  
  statutes.  Section 19 of the bill repeals and reenacts AS                    
  38.05.090 to make a lessee of state land responsible for                     
  returning a former leasehold to a marketable condition.  The                 
  amendment would also provide for the automatic vesting of                    
  title in the state of any personal property, buildings, or                   
  fixtures that are not removed by the lessee within a                         
  specified time.  Under the existing statute, a lessee who                    
  leaves buildings or personal property on state land when a                   
  lease expires is not subject to any penalty and is not                       
  responsible for the costs of restoring the property to a                     
  condition suitable for subsequent leasing.  The changes made                 
  by sec. 19 would address this statutory deficiency."                         
  Number 368                                                                   
  reading verbatim where Mr. Swanson stopped, midway on page 6                 
  of the DNR document submitted to the committee, "Section 20                  
  would allow the commissioner after a best interest                           
  determination to offer for sale timber that would lose                       
  substantial economic value or would perpetuate insect or                     
  disease, if not salvaged within two years and thereby the                    
  requirements in 38.05.113, among them the requirement that a                 
  sale has been in the five year plan for at least the two                     
  prior years, would not exist.  And also the requirement in                   
  38.05.115 which says that a negotiated sale can't be larger                  
  than 500,000 board feet and has to be a year or less in                      
  duration, would not be a requirement.  Section 21 would                      
  amend 118(c) to allow the commissioner to do a negotiated                    
  sale, if the conditions which are now in 118(c) were to                      
  exist perspectively within the next two years."                              
  Number 387                                                                   
  for Oil and Gas saying, "Section 22...this change, I believe                 
  is in a Senate bill that's now somewhere, SB 322.  This                      
  specific provision has been on and off the explorational                     
  licensing package that has been moving through, but hasn't                   
  passed yet.  It's not on any of the exploration licensing                    
  bills now.  This is a section that requires an oil and gas                   
  lease sale to be on the sales schedule for at least two                      
  years.  The way the language is written now, that lease sale                 
  must be held within 90 days of the quarter it was scheduled                  
  and if it isn't held within that time period, it has to go                   
  back on the schedule for two years.  We're proposing to                      
  eliminate that language which requires that 90 day time                      
  frame.  We propose that for two reasons:  First of all in                    
  those cases, such as lease sale 78, where we've been                         
  enjoined and it seems unlikely that we will be able to hold                  
  it within 90 days, we have to go through the process all                     
  over.  Even if after four or five years, it turns out that                   
  we might win that case, we still have to go through the                      
  process.  The second reason is, some of the folks, again                     
  lease sale 78, folks on the Kenai said we want more time to                  
  comment.  The way the law is written now we couldn't give                    
  them that time, because that would automatically put us over                 
  the limit.  So, this is the sword that cuts both ways but we                 
  think it will give the department a lot more flexibility.                    
  Section 23, we get into the mining sections.  AS 38.05.185                   
  (a) is the section that talks about the commissioner's                       
  authority to close land and the commissioner, since                          
  statehood has always been very careful to mineral entry and                  
  that's the bureaucratic term for staking mining claims.  The                 
  law allows the commissioner to close it to mineral entry and                 
  mining, and we've been advised by the Department of Law                      
  that, as written, the commissioner could actually close to                   
  mining, valid existing mining claims."                                       
  Number 420                                                                   
  REPRESENTATIVE TOOHEY said, "The federal law, I believe,                     
  says that you cannot close to mineral entry land that is                     
  valid mining land, that has actual potential validity to                     
  MR. GALLAGHER replied, "Right.  The way the state law is                     
  written, although it's never been used this way, is that the                 
  commissioner can close it to mineral entry or mining.  Our                   
  concern is that if the close to mining provisions were ever                  
  used against valid existing rights that would one, perhaps                   
  be unconstitutional and certainly constitute taking.  Now,                   
  the legislature can take with compensation, the commissioner                 
  doesn't have the authority.  The commissioner doesn't have                   
  that kind of a bank account.  So what we want to do is clean                 
  this up so there's no question that the commissioner's                       
  authority cannot trample valid existing rights...  The                       
  commissioner can only close it to future claim staking.  It                  
  can't have any effect on the valid existing rights.  Section                 
  24...this is language that dates back to statehood, 1959.                    
  It's language that the federal government had in the 50s, it                 
  is no longer applicable.  It is arcane language and it                       
  requires in sections 4 and 5 that an alien, someone from                     
  another country or another corporation, that that country                    
  have like mining rights to the State of Alaska, which means                  
  mining claims and stuff.  There's not a country that has                     
  this kind of right, okay?  So what this statute does is it                   
  employs a number of fairly clever attorneys in Anchorage to                  
  create hoops so that you can comply with this.  It has no                    
  purpose.  What we're proposing to do is eliminate that                       
  language to put miners and mining companies on the same foot                 
  as every other business as Alaska...qualified corporation in                 
  the state.  Section 25...  (In) 1989 the legislature adopted                 
  rents and royalties for state miners and the discussion at                   
  that point was, `Gosh if we stick a firm number in statute                   
  for the rent, it could become out of date, due to inflation                  
  at some point,' so what the legislature did is they put an                   
  escalator in there based on the consumer price index of                      
  Anchorage.  We still believe that's a good idea.  The way it                 
  was written then was that every five years we will adjust                    
  it, based on the Anchorage CPI, right now it's $20, next                     
  year we have to adjust it.  Well, it could be $23.11.                        
  Frankly, I've got just a couple of state employees who                       
  collect that $20 from 44 mining claims and it's a whole lot                  
  easier, if they collect it in round numbers.  So what we're                  
  saying is, let's keep the idea of the escalator in there but                 
  let's do it in $5 increments, not in five year increments.                   
  It's a whole lot easier for both the miners and my staff to                  
  deal with.  Section 26...AS 38.05.255 is the section of                      
  state law that gives miners the right to use the surface for                 
  mining purposes...for mills, for tailings disposals, for                     
  those long-term surface improvements they need for a mine.                   
  Unfortunately, the statute refers to this authorization as a                 
  permit and a permit by law is a one year revocable                           
  authorization.  If you're going to invest tens of millions                   
  of dollars in a mill, in a mine, and you take this revocable                 
  one year authorization to the bank, they're not very happy.                  
  So this clearly needs to be a lease and we have changed the                  
  words out to make it work as a lease.  Section 27 is a                       
  relatively minor change.  This has to do with abandonment of                 
  mining claims.  There's language in there now that says, `If                 
  you ask for a lease application from me to convert your                      
  mining claims to a lease, and I send it to you, and you                      
  don't return it to me within 60 days, you lose your mining                   
  claims.'  Well, you might change your mind.  It's an                         
  unnecessary and particularly harsh piece of law that serves                  
  no purpose at this point and we're suggesting to get rid of                  
  that language.  In the repealer section, which is section                    
  35, page 16 (of HB 155), most of these repealers are                         
  conforming to make the other sections work, but buried in                    
  the middle there's 38.05.207, part of the statute that                       
  requires a production license for miners.  This was adopted                  
  in 1983.  The legislature thought that this would provide                    
  adequate public notice to avoid and handle `Six Eye'                         
  litigation, the Supreme Court said, `No, it doesn't.'  It's                  
  still on the books, miners don't apply for them.  We don't                   
  issue them.  They serve no purpose.  Clean up the statutes                   
  and get them out of there."                                                  
  Number 504                                                                   
  MR. SWANSON read from a document submitted to committee                      
  members dated March 1, 1994.  "Section 28 of the bill amends                 
  AS 38.05.850(a) to clarify that the use of revokable permits                 
  is allowable to authorize certain uses of limited value.                     
  MR. SWANSON continued, "Sections 30, 31 and 33 of the bill                   
  amend existing AS 38.08.030, 38.08.040, and AS 38.09.030,                    
  respectively, to increase fees for the use of homesites and                  
  homesteads before patent, to defray DNR's administrative                     
  costs.  Existing AS 38.08.030(b) sets a maximum $10                          
  application fee for the use of a homesite.  Existing AS                      
  38.09.030(a) limits the application fee for homesteads to $5                 
  per acre.  These minimal fees presently paid by permittees                   
  for the use of state land do not even cover DNR's                            
  administrative costs.  This proposal would amend AS                          
  38.08.030(b) by increasing the fee for new homesite                          
  applications to the maximum of $25 set out in AS                             
  38.05.057(d), and would amend AS 38.08.040(a) to establish a                 
  $100 annual fee to receive and hold a homesite permit before                 
  patent.  AS 38.09.030(a) would be amended to increase the                    
  application fee for homesteads to $20 per acre if the land                   
  is not classified as agricultural.  The fee increases would                  
  apply only to new applications filed after the effective                     
  date of this bill.  Section 36 of the bill makes clear that                  
  the new requirement in AS 38.08.040 for payment of an annual                 
  rental fee for a homesite entry permit does not apply to a                   
  person who was issued a permit under that statute's existing                 
  guarantee that the $10 "application fee is the sole rent                     
  chargeable on the permit for its duration.                                   
  MR. SWANSON continued, "In addition, secs. 30 and 31 make                    
  amendments to clarify that homesite entry permits are issued                 
  under lottery procedures in AS 38.05.057(e), (f), and (h).                   
  Under DNR regulations, lottery procedures apply to issuance                  
  of the permits, but AS 38.05.057 and AS 38.08 are not clear                  
  regarding the applicable procedures.                                         
  MR. SWANSON said, "Section 35 of the bill would repeal                       
  existing AS 38.09.050(d) and (e), which prohibit the sale of                 
  homesteads for five years after the issuance of patent and                   
  the subdivision of homesteads for either five or 10 years                    
  after patent, depending on whether the land was purchased                    
  under AS 38.09.090.  Section 38 of the bill would prohibit                   
  DNR from including the conditions of former AS 38.05.078(d)                  
  (prohibiting sale or subdivision of the parcel for 10 years                  
  after purchase) in a remote parcel purchase contract issued                  
  after the effective date of this bill.  This section also                    
  would require DNR to amend a remote parcel or homestead                      
  purchase contract or patent issued before the effective date                 
  of the bill if the holder of the contract or patent pays (1)                 
  the administrative costs of the amendment, and (2) the                       
  difference between the land's fair market value before and                   
  after the conditions on the land are removed.  The latter                    
  requirement is proposed because the fair market value of                     
  remote parcel land and homestead entry land sold by the                      
  state under existing law has been reduced by 50 percent to                   
  account for the conditions in AS 38.05.078 and AS 38.09.050.                 
  Removal of the conditions under secs. 34 and 37 of the bill                  
  is designed to increase revenue from state land sales and to                 
  allow private landowners greater use of the land.  That's                    
  kind of a thumbnail sketch of the section analysis of the                    
  bill.  From there, I'd answer your questions."                               
  Number 544                                                                   
  REPRESENTATIVE TOOHEY said, "I get a little nervous when you                 
  say, `we've got to do this right away' because... I'm a                      
  little paranoid in this job.  My question is:  Are we going                  
  to  subject fishing, timber, mining, oil and gas industry or                 
  have you worked with the industries to alleviate their fears                 
  or are we going to start getting phone calls saying that                     
  this is a terrible (bill)?"                                                  
  MR. GALLAGHER replied, "We have alerted the industries, the                  
  environmental groups, various groups, what we we're up to.                   
  We gave them shopping lists early on and we took their                       
  comment.  But we did not seek, nor did we receive their                      
  concurrence.  So, we already know there are some parts of                    
  this that some groups like, some dislike, but we have not                    
  worked these problems through."                                              
  Number 557                                                                   
  MR. JOHANNSEN said, "There are sections of the bill that are                 
  going to be controversial and I believe the vast majority of                 
  sections will not be controversial.  I'm not going to tell                   
  you which ones we think are controversial.  Most of it, I                    
  believe is relatively benign from the standpoint of people                   
  getting lathered up, but there's a couple things here."                      
  Number 569                                                                   
  REPRESENTATIVE WILLIS asked, "When you go out and get ready                  
  to make a timber sale, what do you do to protect the                         
  streams, the fisheries, so to speak?"                                        
  MR. BOUTIN said, "We're talking about state land here in                     
  this particular bill.  On stream protection on state land,                   
  there's a 100 foot buffer strip on either side of important                  
  fish habitat which is virtually a `no-cut zone,' even though                 
  41.17.087 does allow variations, the state doesn't use                       
  variations in that 100 foot `no-cut zone' on its own                         
  land...and then from 100 feet out to 300 feet, there's a                     
  special wildlife management zone and secondly, a second                      
  answer to your question is that the state, in every timber                   
  sale, goes through two concurrent processes.  One, 38.05.113                 
  is a five year planning document and the sale must have been                 
  in the five year sale plan for the two prior years and we                    
  receive comment from agencies, municipalities and the public                 
  about important considerations, including fish habitat.                      
  Then 38.05.112 is a forest land use plan which is a decision                 
  document process and there too, we have comment from                         
  agencies, municipalities and the public.  But for protection                 
  of fish habitat and water quality, the state Forest Resource                 
  and Practices Act, updated in 1990, is directed specifically                 
  at fish habitat and water quality."                                          
  REPRESENTATIVE WILLIS asked, "Who follows through to see                     
  that that's complied with?"                                                  
  MR. BOUTIN said, "Here we're talking about contract                          
  administration of the state's own timber sales and so                        
  there's a process for inspection and oversight of timber                     
  sales and then the reforestation that follows afterwards."                   
  Number 600                                                                   
  REPRESENTATIVE JOHN DAVIES said, "Will we have an                            
  opportunity to meet with DNR folks after we hear public                      
  CHAIRMAN OLBERG said, "I suppose we could hear public                        
  testimony and then have our DNR people come back to address                  
  the concerns expressed during public testimony."                             
  Number 600                                                                   
  REPRESENTATIVE DAVIES said, "Since this is a fairly                          
  complicated...a lot of different issues in it.  I expect                     
  that we may hear, I know on certain issues, we're going to                   
  hear a lot of comment and I would certainly welcome the                      
  opportunity after we've heard that comment to reflect some                   
  of those questions back to the administration."                              
  CHAIRMAN OLBERG said, "I think what we'd like to do is                       
  accommodate the Governor's wishes in giving the bill a                       
  chance to pass this session but at the same time, give it a                  
  measured look while we're at it.  It does have two other                     
  REPRESENTATIVE DAVIES said, "With respect to Title 38 and                    
  rewriting it, I certainly concur that there's a lot of                       
  language and some of it's inconsistent, selfcontradictory                    
  and we need to look at that.  I guess I would be more                        
  comfortable, however, if we didn't mix what are the sort of                  
  benign, what most people would concede are housekeeping                      
  details, with other more controversial issues.  It just, as                  
  a matter of procedure, would seem like it would be a good                    
  idea to try to identify those things that were really and                    
  truly housekeeping, just the matters of making the language                  
  conforming, and I believe there are quite a long list of                     
  those kinds of things, and separate this out...  Whenever we                 
  do this, Title 38 of course, as you indicated touches every                  
  single in the State of Alaska, it's important therefore, as                  
  a general precept, that we preserve the public ability to                    
  make input at every step of the way.  And in that                            
  preservation I can't resist the comment that it's impossible                 
  to be totally efficient.  Democracy is not necessarily a                     
  very efficient process and when we want to hear from                         
  everyone.   It's a little frustrating sometimes that we                      
  can't move along as quick as we'd like to.  I also have a                    
  question about what is Phase Two and is there a timetable                    
  associated with that?"                                                       
  Number 638                                                                   
  MR. JOHANNSEN replied, "Phase Two basically, at this point                   
  in time, is starting to evolve from what had earlier been                    
  perceived as taking pieces of Title 38 and advancing them as                 
  legislation.  It's now appearing that it's going to be                       
  difficult to chop up Title 38 and submit it in pieces.  It                   
  creates a real complication between the policy statement and                 
  what follows, and also the body of regulations that have                     
  been promulgated based upon Title 38.  That's the long                       
  answer.  The short answer is:  We are hoping to have                         
  legislation for the next session.  What it's going to look                   
  like, how comprehensive it's going to be, I don't know.  But                 
  at this point in time, we are hoping to having a fairly                      
  controversial, freudian slip, correction, a fairly                           
  comprehensive bill next session."                                            
  REPRESENTATIVE TOOHEY asked, "You gentlemen, of course, will                 
  be available for questions, is that correct?  Detailed,                      
  honest questions with detailed, honest answers?  I would                     
  like to see us have testimony, on say, mining and fishing at                 
  one meeting so we could go through it that way, and the next                 
  meeting we go through timber and oil and gas.  So at least                   
  we're fairly well versed before we make a judgment call."                    
  MR. GALLAGHER said, "The department's staff and directors                    
  are available in any way you want that to happen.  Formal                    
  committee hearings and work sessions and one-on-ones, we                     
  will have the right people when you need them."                              
  Number 674                                                                   
  REPRESENTATIVE DAVIES said, "I think it might be                             
  helpful...there was some reference made to a different                       
  Senate bill.  I know that there are at least two other bills                 
  that have language that's either similar to or related to                    
  items that are in (HB 155).  SB 310 comes to mind and HB, I                  
  don't know what it was that we dealt with in Resources a                     
  couple of days ago, which relates to this issue of ANCSA.  I                 
  think it would be helpful if we had some cross references to                 
  what those others bill do or don't do with respect to, if                    
  the other bill were to pass this language would be necessary                 
  and visa versa.  So I think some cross referencing..."                       
  CHAIRMAN OLBERG said, "(There) was one that triggered                        
  something in my memory about a bill having to do with Native                 
  land selections within parks and being able to trade.  I                     
  think as this process comes together that will probably                      
  happen perhaps naturally.  I suppose what I'm envisioning                    
  next is a public hearing on teleconference for everybody to                  
  let us know what they think.  I don't know whether we want                   
  everybody from the department here to respond to those as                    
  they come in, or whether we want to hear it all, digest and                  
  then have another hearing, public teleconference type                        
  hearing with the department representatives here."                           
  Number 696                                                                   
  REPRESENTATIVE TOOHEY suggested a four hour meeting on a                     
  REPRESENTATIVE OLBERG said, "We will have another hearing on                 
  it probably next Tuesday and perhaps let's all be thinking                   
  about how best to structure that hearing..."                                 
  REPRESENTATIVE CON BUNDE said, "Certainly, I think these                     
  gentlemen should hear the questions rather than have us                      
  translate them, because something would get lost in                          
  REPRESENTATIVE TOOHEY asked about the status of the Mental                   
  Health Lands litigation as it relates to HB 515.                             
  TAPE 94-11, SIDE B                                                           
  Number 000                                                                   
  MR. JOHANNSEN replied, "The Mental Health bill...that bill's                 
  going to be introduced likely within about two weeks."                       
  MR. SWANSON said, "That is correct, and we've been very                      
  careful on these Title 38 amendments, not to cross over so                   
  we have a conflict.  The two can be dealt with totally                       
  CHAIRMAN OLBERG set the next hearing on HB 515 on Tuesday,                   
  May 15, 1994, at 1:15 p.m. and then adjourned the meeting at                 
  2:10 p.m.                                                                    

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