Legislature(1995 - 1996)
03/22/1995 08:08 AM House RES
| Audio | Topic |
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE RESOURCES STANDING COMMITTEE
March 22, 1995
8:08 a.m.
MEMBERS PRESENT
Representative Joe Green, Co-Chairman
Representative Bill Williams, Co-Chairman
Representative Scott Ogan, Vice Chairman
Representative Alan Austerman
Representative Ramona Barnes
Representative John Davies
Representative Pete Kott
MEMBERS ABSENT
Representative Eileen MacLean
Representative Irene Nicholia
COMMITTEE CALENDAR
*HB 191: "An Act relating to the management and disposal 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
HRES - 03/22/95
HB 207: "An Act relating to adjustments to royalty reserved to
the state to encourage otherwise uneconomic production
of oil and gas; relating to the depositing of royalties
and royalty sale proceeds in the Alaska permanent fund
and providing for an effective date."
SCHEDULED BUT NOT HEARD
HRES - 03/22/95
HB 209: "An Act relating to the authority of the commissioner of
natural resources to allow reductions of royalty on oil
and gas leases; and providing for an effective date."
SCHEDULED BUT NOT HEARD
HRES - 03/22/95
*HB 265: "An Act relating to the export of live dungeness crab."
SCHEDULED BUT NOT HEARD
(* First public hearing)
WITNESS REGISTER
REPRESENTATIVE GENE THERRIAULT
Alaska State Legislature
State Capitol, Room 421
Juneau, AK 99801
Phone: 465-4797
POSITION STATEMENT: Prime Sponsor of HB 191
RON SWANSON, Director
Division of Land
Department of Natural Resources
3601 C Street
Anchorage, AK 99503
Phone: 762-2692
POSITION STATEMENT: Answered questions and explained amendments
on HB 191
NICO BUS, Acting Director
Division of Support Services
Department of Natural Resources
400 Willoughby Avenue
Juneau, AK 99801
Phone: 465-2406
POSITION STATEMENT: Answered questions on HB 191
HUGH MALONE, Representative
Kenai Peninsula Fishermen's Association
119 Seward St.
Juneau, AK 99801
Phone: 586-3516
POSITION STATEMENT: Expressed a concern regarding HB 191
PREVIOUS ACTION
BILL: HB 191
SHORT TITLE: MANAGEMENT OF STATE LAND AND RESOURCES
SPONSOR(S): REPRESENTATIVE(S) THERRIAULT
JRN-DATE JRN-PG ACTION
02/22/95 448 (H) READ THE FIRST TIME - REFERRAL(S)
02/22/95 448 (H) RESOURCES, FINANCE
03/15/95 741 (H) SPONSOR SUBSTITUTE INTRODUCED-
REFERRALS
03/15/95 741 (H) READ THE FIRST TIME - REFERRAL(S)
03/15/95 741 (H) RESOURCES, FINANCE
03/22/95 (H) RES AT 08:00 AM CAPITOL 124
03/29/95 (H) RES AT 08:00 AM CAPITOL 124
BILL: HB 207
SHORT TITLE: ADJUSTMENTS TO OIL AND GAS ROYALTIES
SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR
JRN-DATE JRN-PG ACTION
02/27/95 501 (H) READ THE FIRST TIME - REFERRAL(S)
02/27/95 501 (H) OIL & GAS, RESOURCES, FINANCE
02/27/95 501 (H) FISCAL NOTE (DNR)
02/27/95 501 (H) 2 ZERO FISCAL NOTES (DNR, REV)
02/27/95 501 (H) GOVERNOR'S TRANSMITTAL LETTER
03/08/95 665 (H) CORRECTED FISCAL NOTE (DNR) #3
03/09/95 (H) O&G AT 12:00 PM CAPITOL 17
03/09/95 (H) MINUTE(O&G)
03/14/95 (H) O&G AT 10:00 AM CAPITOL 124
03/14/95 (H) MINUTE(O&G)
03/15/95 (H) O&G AT 05:00 PM BELTZ ROOM 211
03/15/95 (H) MINUTE(O&G)
03/16/95 (H) O&G AT 10:00 AM CAPITOL 124
03/17/95 (H) O&G AT 05:00 PM CAPITOL 124
03/20/95 (H) O&G AT 05:00 PM CAPITOL 106
03/21/95 (H) O&G AT 10:00 AM CAPITOL 124
03/22/95 (H) RES AT 08:00 AM CAPITOL 124
BILL: HB 209
SHORT TITLE: OIL & GAS ROYALTY REDUCTION
SPONSOR(S): REPRESENTATIVE(S) GREEN,Rokeberg
JRN-DATE JRN-PG ACTION
02/27/95 503 (H) READ THE FIRST TIME - REFERRAL(S)
02/27/95 503 (H) OIL & GAS, RESOURCES, FINANCE
03/01/95 551 (H) COSPONSOR(S): ROKEBERG
03/09/95 (H) O&G AT 12:00 PM CAPITOL 17
03/09/95 (H) MINUTE(O&G)
03/14/95 (H) O&G AT 10:00 AM CAPITOL 124
03/14/95 (H) MINUTE(O&G)
03/15/95 (H) O&G AT 05:00 PM BELTZ ROOM 211
03/15/95 (H) MINUTE(O&G)
03/16/95 (H) O&G AT 10:00 AM CAPITOL 124
03/17/95 (H) O&G AT 05:00 PM CAPITOL 124
03/22/95 (H) RES AT 08:00 AM CAPITOL 124
BILL: HB 265
SHORT TITLE: EXPORT OF DUNGENESS CRAB
SPONSOR(S): REPRESENTATIVE(S) WILLIAMS
JRN-DATE JRN-PG ACTION
03/17/95 778 (H) READ THE FIRST TIME - REFERRAL(S)
03/17/95 778 (H) FSH, RESOURCES
03/22/95 (H) RES AT 08:00 AM CAPITOL 124
ACTION NARRATIVE
TAPE 95-38, SIDE A
Number 000
The House Resources Committee was called to order by Co-Chairman
Green at 8:08 a.m. No roll call was taken.
C0-CHAIRMAN JOE GREEN announced the committee would only hear HB
191. He stated HB 207 will be heard on Friday, March 24, HB 209
has been incorporated into HB 207, and HB 265 will be rescheduled
for another date.
HRES - 03/22/95
HB 191 - MANAGEMENT OF STATE LAND AND RESOURCES
REPRESENTATIVE GENE THERRIAULT, PRIME SPONSOR, told committee
members HB 191 is a housekeeping measure intended to clarify
certain Title 38 statutes governing the Department of Natural
Resources (DNR) management of state land and resources. He said HB
191 is intended to bring greater efficiency to the management of
state lands without sacrificing public involvement in land use
decisions. He stated as the House Finance subcommittee chairman
for the DNR budget, he has worked with the department to come up
with changes to Title 38 which would simplify programs and reduce
costs to the DNR. He felt the passage of HB 191 would result in a
more administratively efficient agency. He noted although the bill
is not intended to be a complete rewrite of Title 38, he believes
it is a positive effort, supported by the Administration, to
streamline state government.
REPRESENTATIVE THERRIAULT said there was a Title 38 bill last year
that worked its way through the process and was not passed in the
closing hours of the session. He stated his staff took a look at
that bill, identified those provisions pulled out and put into HB
121, and picked up the remaining pieces. He noted since that time,
he and his staff have had discussions with the department and a
number of additions have been suggested for the bill. He pointed
out HB 191 comes from the budget subcommittee level, where he has
worked with the commissioners and different division directors,
telling them that because the state does not have enough money to
support their agency activities to the point they desire, they need
to tell him and the committee what structural changes are needed in
the statutes to enable the department to live with the budget
provided this year and future years.
REPRESENTATIVE THERRIAULT said the discussions held also included
comments from the Senate side. He stated the DNR subcommittee has
met a number of times jointly with members of the Senate budget
subcommittee for DNR. He noted that Ron Swanson from the Division
of Land, DNR, is present to answer technical questions. He added
there is a packet of proposed changes from the DNR in committee
members folders. He explained the proposed amendments having a
period before them have already been included in the bill and the
proposed amendments having an asterisk before them are those he
hopes the committee will consider for a possible committee substitute.
REPRESENTATIVE THERRIAULT noted he was approached by Representative
Williams about the possibility of having a timber provision put
into HB 191. He asked Representative Williams, through his staff,
not to propose that provision because he would like to keep HB 191
strictly land management, aside from timber.
CO-CHAIRMAN GREEN noted for the record that Representatives Davies,
Kott, Austerman, Ogan and Green are present.
Number 124
REPRESENTATIVE ALAN AUSTERMAN noted on page 1, the bill talks about
adopting regional land use plans. He wondered if those plans have
already been done or are they something which need to be done.
REPRESENTATIVE THERRIAULT responded the plans have already been
done. He said the desire is to clean up the language in the
statutes which deals with the old land disposal bank.
Number 140
RON SWANSON, DIRECTOR, DIVISION OF LAND, DNR, said in the 1970s,
the state had a land disposal bank where the public could nominate
land for disposal, which was before the land use planning statutes
were on the books. The land disposal bank is still in the statutes
and the department does what is required every year--that is to
hold a public hearing annually, where people can nominate land to
go into the disposal bank. He stated for the last three years no
one has ever showed up at the public hearing and no one has
proposed land. Rather, the land use planning process is used. He
told committee members the desire is to eliminate the duplication.
He stressed the land use planning process is the process which
works.
REPRESENTATIVE AUSTERMAN said on page 4, line 24, the word "should"
is being changed to "shall" be at fair market value. He questioned
why the word "shall" is being used. He stated sometimes the fair
market values are high.
MR. SWANSON responded all land the state disposes of has to go
through an appraisal process. He stated there still is discretion
for the commissioner to lower those values for various reasons--act
of God, depressed economies, raised economies, etc. He said any
time there is discretion on what the market value is, it leads to
constant appeals. Therefore, the "shall" is saying appraise the
land and whatever the fair market value is, that is what the land
will be sold for.
MR. SWANSON noted the state also has the discretion to dispose of
land either by lottery or auction. He felt an auction is the
better way to go and that is what the state will be doing this
summer. He stated an auction does establish what the fair market
value is. He said a minimum bid will be set, which will probably
be less than the fair market value, and then the auction method
will be used, using sealed bids. He pointed out it is difficult,
in some locations, to determine a fair market value because the
only other sales are state sales--there is not a mixed private,
municipal, state market to pull from.
Number 213
REPRESENTATIVE AUSTERMAN noted that on page 8, line 23, the bill
talks about set net fishing and on line 29, the bill repeals and
reenacts the next section. He wondered how the old section
compares with the new section.
MR. SWANSON said Section 20 addresses shore fishery leases and
Section 21 deals with aquatic farming.
REPRESENTATIVE AUSTERMAN stated he was more concerned with Section
21 as to how it compares to the old section.
MR. SWANSON responded the real difference is the state will get
fair market value for the aquatic farm leases. He explained
presently an applicant comes in for the first three years just to
get a land use permit. He said on aquatic farming and hatchery
site leases, it takes three years to bring something to market.
Therefore, the desire is to give a person the chance to do that--
not pay fair market up-front for leasing state land when there is
no return. He noted that also in the first three years, it gives
the DNR, the Alaska Department of Fish and Game (ADF&G), and the
Department of Environmental Conservation (DEC) the opportunity to
determine whether or not it is a viable farm. At that point, the
state would convert the farm over to a fair market value lease,
instead of just covering the costs of administering the program.
REPRESENTATIVE AUSTERMAN asked what does a fair market value lease
mean.
MR. SWANSON responded the fair market value lease involves a
regular appraisal and a percentage of that is paid each year. He
said it usually is approximately 5 to 7 percent per year, depending
on location.
Number 257
CO-CHAIRMAN GREEN asked if a piece of land is taken to establish an
aquatic farm, the farm is successful and then the person purchases
the land, does that person purchase the fair market value before
anything is started or the fair market value as it is when it is
purchased.
MR. SWANSON responded the state identifies a location for an
aquatic farm and the applicant applies for it. He said at that
point, the state gives the person a land use permit. He stated for
the first three years, that person has the opportunity to develop
the farm. Once it is proven the farm will work, the state then
converts the farm over to a fair market value lease from year four
up to year ten.
CO-CHAIRMAN GREEN stated that person then has come in and
established a higher value.
MR. SWANSON replied no. He said the state does not appraise the
improvements to the farm--it appraises the value of the land.
Number 278
REPRESENTATIVE PETE KOTT wondered how much revenue is generated
through state land sales versus what is spent by the division to
operate the program.
MR. SWANSON stated he cannot give the exact dollar figures but
stressed the department spends a lot more than what it brings in,
particularly in home sites and homesteads, as the applicant pays
$10 to go out and do something for 10 years and does not pay
anything during the interim period. The applicant can then prove
up that land and get it for nothing or they can purchase it. He
said the current requirements are very heavy on the administrative
side, with no return to the state.
REPRESENTATIVE THERRIAULT added that was one of the frustrations of
the DNR budget subcommittee--there are all kinds of things which
have been put on the books to keep people from speculating, to make
sure a person gets a recreational use permit, etc., and the
department has many requirements to check and double check things.
He stressed DNR does not do those checks because the department
does not have the budget. He said the subcommittee discussion was
if the state sells, conveys, or leases the land under a fair market
value, the state will be done with the land and the administrative
costs will decline and hopefully the revenues will increase. He
noted now since there is a concern that someone might make a dollar
off of state land, the state spends millions and millions of
dollars to keep that from happening. He stressed it is a very
cumbersome system.
REPRESENTATIVE KOTT noted that Section 1 of HB 191 says land must
have an adopted regional land use plan before it is eligible for
the land disposal program. He asked how much state land currently
has an adopted regional land use plan.
MR. SWANSON replied the state currently owns about 87 million acres
and has land use plans in place for about 65 million acres. He
said the only areas in the rail belt, road belt and ship belt areas
not having a plan in place is the Kenai Peninsula and Kodiak which
will have plans in place shortly. He said the only region where a
land use plan is not in place is in some of the Yukon River areas
where there is no demand for land disposals. He estimated two-
thirds of the state has land use plans.
Number 335
REPRESENTATIVE KOTT noted in Section 15 of HB 191, it appears that
the DNR retains itself as the loan servicer.
MR. SWANSON stated that is correct. He said most private financial
institutions will not loan money on undeveloped land because there
is no collateral.
REPRESENTATIVE KOTT asked if the state would be in a position to
contract the loan provision out to a financial institution.
MR. SWANSON replied the department has found, through the Mental
Health process, that banks are willing to buy the loans once they
have been made, but basically all the banks do is collect the
money. He reiterated that financial institutions are not willing
to loan the money up-front.
REPRESENTATIVE KOTT noted that in Section 17, the interest rate is
suggested at 4 percent over the prime rate. He felt that interest
rate is high.
CO-CHAIRMAN GREEN noted for the record that Representative WILLIAMS
had joined the committee.
NICO BUS, ACTING DIRECTOR, DIVISION OF SUPPORT SERVICES, DNR,
stated this interest rate is suggested for unimproved land. He
noted the prime rate is for the very best lending situations. He
said the department is suggesting 4 percent with a cap so the rate
does not go over 13 percent. He pointed out that most of the
department's rates are 12-13 percent currently. He added there is
no credit check involved for the people who apply.
Number 371
CO-CHAIRMAN GREEN said he shared Representative Kott's concern. He
thought 4 percent over the federal reserve rate and 2 percent over
the prime rate were more customary.
MR. BUS reiterated the department's rates currently are 12-13
percent. He explained the reason for that rate is the department
does not do any credit checks. He said if people are willing to
pay that rate, then after a period of time, people either keep
paying or they default. He noted the default rate currently is 3
percent. He stressed if the 12-13 percent is lowered, the
department might experience more defaults because more people will
just give it a go.
CO-CHAIRMAN GREEN asked if the higher interest rate precludes some
private ownership which otherwise might become private.
MR. BUS said last year when the prime rate was low, the interest
rate would have been 7 percent, so the rate is fluctuating. He
stated currently the department has the rate locked in at
approximately 12 percent. He explained this proposal will make the
interest rate more in line with the market. He felt if the
interest rate is dropped 1 or 2 percent, he is not sure whether or
not more people will be interested. He thought with a lower rate,
more people would apply.
MR. SWANSON added that the current interest rate is 12.7 percent
and if that is lowered, there will be a run on every contract the
department has to refinance. He said the current statute refers to
the Federal Land Bank, which no longer exists. The department is
attempting to establish a rate that anyone can look up and figure
out what the interest rate is going to be. He expressed concern
also that the state has many contracts, which were sold, that were
Mental Health funds and if the interest rate is lowered too much,
there will be a run on those contracts also. That situation would
put the department in a position of having to reimburse the bank
that purchased all of the contracts.
Number 421
REPRESENTATIVE THERRIAULT noted the existing statutes talk about
the Federal Land Bank which does not exist anymore, so that
mechanism is very confusing as to what the interest rate should be.
Therefore, what is proposed is a clarification.
REPRESENTATIVE AUSTERMAN clarified the normal bank rate is
approximately 2 percent above the prime rate.
MR. SWANSON stated a bank usually has a variable rate, the prime
rate plus another percentage, and the rate is based on credit
checks, amount of down payment, and many other factors. He added
that most banks will not say how their interest rate is determined.
Most banks gear their interest rates to various markets. He
explained the department only requires 5 percent down, there are no
credit checks involved, and many factors are considered. He
pointed out that most lending institutions have a AAA to C rating
and the interest rate for a AAA or A rating is approximately 2
percent. The department chose a rate in the middle, which they
felt was fair.
MR. BUS agreed with Mr. Swanson's comments. He added that the 4
percent over prime is an average rate--it is not the best rating,
but it is also not the worst rating.
Number 459
MR. SWANSON noted the committee received a packet of possible
amendments to HB 191. He said at the DNR subcommittee hearings
there were various questions on land disposals and how the state
could minimize future impacts to the state. The proposed
amendments address specific concerns.
MR. SWANSON stated AS 38.05.069(a) mandates that when DNR sells
land at an auction, particularly agricultural land, the adjacent
landowner has a preference for purchase. He noted that the word
"adjacent" is defined elsewhere in the bill. He said the
department would like to make this subsection discretionary in
regard to a preference. He pointed out there are times when the
department would definitely want to grant a preference. For
example, if a farm were to be enlarged, it would become profitable.
He explained there have been instances where people use their
preference to suppress the local economy, to take over the land to
prevent someone else from coming in. He noted preference rights
suppress the fair market value because no one is going to bid
against people with preference rights.
MR. SWANSON reviewed the next amendment. He said in 1988, the
homestead law was changed to make it mandatory that the state
survey particular tracts of land and then those be offered as pre-
designated homesteads. Previously, people could go out and stake
whatever area they wanted. He stated since the department has to
survey those tracts of land, the department would like to make it
mandatory the state recoup the costs of the survey from the
successful applicant. The department could then reinvest that
money to do additional surveys and offer more homesteads in the
future. He stressed the department wants to make the program self-
sustaining.
MR. SWANSON stated the next amendment refers to a similar subject.
He explained previous to 1988, an applicant could go out and stake
a particular tract. However, when the legislature passed the law
making it mandatory for the DNR to survey that tract, the
requirement for the applicant to go out and stake the tract was
left in. He said it was odd the department has survey markers in
the ground and then the applicant is required to put a wooden post
on top of the department's survey monument. He felt it was a
useless requirement.
Number 511
MR. SWANSON said the next amendment refers to remote cabin permits
AS 38.05.079. He stated this is a program which has never been
implemented. The provision allows an applicant to go out and stake
a remote location for recreational use. The applicant
automatically gets a 25 year lease, pays $100 and never has to
survey the land. He noted the department never implemented the
program because of the possible administrative nightmare behind all
the overstaking, the non-requirement of survey, and no return of
fair market value. He explained an opportunity is at hand to amend
that particular statute to ensure that the land does get surveyed.
He thought it was also an excellent opportunity to have these
recreational disposals and require the department to get a fair
market value for them.
MR. SWANSON noted the next few proposed amendments address concerns
about public service costs and expectations, basically disclaiming
any future infrastructure costs to the state. He said the
amendments would put into statutes that the state would not be
obligated to provide any services to land which is subject to
homesite entry and patent. The disclaimer would be made right in
the statute. He explained currently, there are a number of
disclaimers in AS 38.04, the planning statutes, which say when the
department does land disposal plans, it should consider things that
do not create obligations. He did not feel the disclaimers
necessarily protect the state from people coming in later and
wanting particular services. He said if the disclaimer is placed
in the particular land disposal statute, people will know when they
go out and get one of these things, they cannot come back and
require that to happen.
Number 546
MR. SWANSON stated a concern was also expressed about the "not in
my back yard" syndrome and the fact that once the department
disposes of a particular tract of land, people come in and oppose
any future land disposals. He said the next several suggestions
relate to that concern.
MR. SWANSON noted the land planning statute directs the department
to consider the availability of timber, firewood, and water when
doing particular land disposals. He said many people feel that
once they purchase state land, all the state land around them
should be used for that particular purpose. He explained the
suggested language would eliminate that assumption. He said in the
next suggestion, the department is saying (indiscernible) AS 38.04
requirements fit right into the statutes that eliminate the "not in
my back yard" attitude, particularly with unforeseen problems of
scattered land disposals throughout the state.
CO-CHAIRMAN GREEN clarified the state would make a disclaimer on
the conveyance, so a person cannot come back and say they have
lived in a certain place for so many years and was not aware of
something which happened in 1995, etc.
MR. SWANSON responded the land disposal brochures the department
has issued the past few years do contain a disclaimer, but there is
not much to back up that disclaimer. He said if it is put in
statute, the department can clearly indicate in the conveyance
document that a person will get such and such, but will not get
these additional things which that person may desire.
Number 571
REPRESENTATIVE AUSTERMAN recalled that Mr. Swanson had discussed
remote cabin permits, AS 38.05.079. He wondered if there are any
sites out there now which have just been staked, are being used and
will have to get a survey done.
MR. SWANSON replied the department has never offered anything under
the remote cabin permit program because of the heavy administrative
costs to the agency.
Number 585
HUGH MALONE, REPRESENTATIVE, KENAI PENINSULA FISHERMEN'S
ASSOCIATION, stated in Sections 19 and 20 the department deals with
an issue which has caused administrative difficulties in regard to
the determination of who should get a shore fisheries lease. He
said the proposal in HB 191 would put those leases up for public
auction. He stressed the change from the present system, where the
leases are allocated based on a priority of use, is causing a
concern to the present shore fishery lease holders. He noted he
does not have a solution for the concern, but did want to bring the
concern to the committee. He pointed out that last year, this
section was taken out of the legislation.
CO-CHAIRMAN GREEN stated the committee will be looking at a
committee substitute at the next hearing which will incorporate
several, if not all of the amendments discussed and any other
issues which may be brought up as committee members address HB 191.
He asked Mr. Malone if he would be able to have his position worked
out with the sponsor in the next few days.
MR. MALONE said he certainly will try.
REPRESENTATIVE AUSTERMAN commented he does want to follow up with
his constituents on the fisheries issues contained in HB 191.
CO-CHAIRMAN GREEN wondered if the follow up would take just a few
days or is there a need to extend the period of time before hearing
HB 191 again.
REPRESENTATIVE AUSTERMAN thought he would be ready early next week.
CO-CHAIRMAN GREEN noted that Representative BARNES had joined the
committee.
Number 646
REPRESENTATIVE THERRIAULT inquired what the time line will be on HB
191.
CO-CHAIRMAN GREEN asked Representative Austerman if there will be
a need for a teleconference.
REPRESENTATIVE AUSTERMAN stated he did not think that was
necessary.
Number 661
REPRESENTATIVE OGAN asked if the disposal of agricultural lands,
such as Point McKenzie, will be affected by HB 191.
MR. SWANSON responded currently there is a concern with Point
McKenzie because it is original mental health land now converted to
non-mental health land. The department is now waiting for the
Supreme Court to make a ruling. He said the department could
technically do a disposal at this time but chooses not to because
the department does not want to create another mom and pop
situation, in case the Supreme Court reverses the decision of the
lower court.
REPRESENTATIVE OGAN asked if any of the changes represented in HB
191 affect the disposal of the Point McKenzie land.
MR. SWANSON responded the changes do not. He said a couple of the
changes make the disposal simpler. He noted agricultural disposals
have been excluded from the subdivision definition.
Number 685
CO-CHAIRMAN GREEN said on page 4, open-to-entry is being excluded
and on page 16, the bill talks about the holder of a homesite and
on page 17, the bill talks about an applicant for a homestead. He
asked Mr. Swanson to clarify the difference.
TAPE 95-38, SIDE B
Number 000
MR. SWANSON stated in regard to the open-to-entry on page 4, the
open-to-entry program was repealed in the 1980s, so the department
is basically taking that program off the books. He said homesteads
and homesites currently are on the books. Currently, under the
homesite and homestead program, the applicant pays the department
$10 for an application, the applicant receives a permit and for 10
years, the applicant does not reimburse the state anything. The
applicant can get the land in two ways--they can pay fair market
value if they do the prove up or they can live on it and get it for
free. The department is recommending these people pay the state at
least $100 for use of the state land for 10 years instead of using
the land for free.
CO-CHAIRMAN GREEN said he heard that earlier, but wondered what the
difference is between homesteads and homesites.
MR. SWANSON replied a homesite is a subdivision lot which a person
can get for free if they can prove up on it. A homestead is a 40
acre tract...the bigger ones. He added that homesites are very
popular, particularly in Southeast.
REPRESENTATIVE RAMONA BARNES clarified that homestead parcels go
from 40-160 acres.
MR. SWANSON said that is correct. He said homestead parcels are a
minimum of 40 acres. He noted there are two different types of
homestead parcels--agricultural and residential. He explained
agricultural homestead parcels are 40-160 acres and residential
homestead parcels are 20-40 acres.
CO-CHAIRMAN GREEN clarified that Point McKenzie was a special
situation since it was 640 acres.
MR. SWANSON stated those were not homesteads but rather plain
agricultural disposals.
CO-CHAIRMAN GREEN noted HB 191 will be heard again on Wednesday,
March 29.
REPRESENTATIVE BARNES clarified that Point McKenzie was a different
type of disposal. She thought there was a lottery involved and
then there were specific improvements required which caused the
failure of many of those farms.
MR. SWANSON stated that was correct. He said the department
required the successful applicant to come in with a development
schedule and to then follow the development schedule which caused
the failures.
REPRESENTATIVE BARNES stated when the parcels in the Big Delta were
developed in the late 1970s, one of the big problems which caused
the failure of those parcels was the department only allowed the
agricultural rights to those parcels of land. Therefore, the
people could not go to banks to borrow money, they could not pass
the land on to their heirs, and that is how the state got such a
large investment into the Delta-Barley project. She recalled that
the state had over $100 million in those parcels up in the Big
Delta.
MR. SWANSON agreed there was a substantial investment involved.
ADJOURNMENT
There being no further business to come before the House Resources
Committee, Co-Chairman Green adjourned the meeting at 9:55 a.m.
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