Legislature(1997 - 1998)
04/15/1998 09:12 AM Senate FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
MINUTES SENATE FINANCE COMMITTEE 15 April 1998 9:12 a.m. TAPES SFC-98, #121, Sides A and B CALL TO ORDER Senator Bert Sharp, Co-chair, convened the meeting at approximately 9:12 a.m. PRESENT In addition to co-chairman Sharp, Senators Phillips, Donley, Torgerson, Parnell and Adams were present when the meeting was convened. Also Attending: SENATOR RICK HALFORD; REPRESENTATIVE TERRY MARTIN, REPRESENTATIVE NORM ROKEBERG; PAM VARNI, Director, Legislative Affairs Agency; KEVIN KEMPTON, Human Resources Manager, Legislative Affairs Agency; CAROL CARROLL, Director, Division of Support Services, Department of Natural Services; DENNIS POSHARD, Legislative Liaison, Office of the Commissioner, Department of Transportation and Public Facilities; TIM BENINTENDI, staff to Senator Tim Kelly; MEL KROGSENG, staff to Senator Robin Taylor; BRUCE CAMPBELL, staff to Representative Pete Kelley; fiscal analysts, Division of Legislative Finance; aides to committee members and other members of the Legislature. Via Teleconference: JANE ANGVIK, Director, Division of Lands, Department of Natural Resources, Anchorage; ALLEN MINISH, professional land surveyor, Anchorage; CLIFF EAMES, Alaska Standard for the Environment, Anchorage. SUMMARY INFORMATION Co-chair Sharp convened the meeting. He reviewed the schedule for the committee and said they would first take up SB 108 followed by HB 467. He noted a new CS in HB 51 and said it would be brought up tomorrow morning; also a new CS in HB 210 and would be moved to tomorrow's calendar. There was a technical problem with HB 472 and said he would ask a waiver of the five-day rule on the Senate Floor so this matter could also be taken up on tomorrow's calendar. He called SB 108. SENATE BILL NO. 108 "An Act relating to the disposal of state land by lottery." CS FOR SENATE BILL NO. 108(RES) "An Act relating to the disposal of state land and interests in state land; and providing for an effective date." MEL KROGSENG, staff to Senator Robin Taylor was invited to join the committee. She gave a brief review of the sponsor statement. She said the bill presently before the committee no longer offered land under a lottery system. Two other approaches had been taken; land over the counter, and an open entry program, programmed after the old program of the early '70's. She said an amendment had been drafted to fix the glitch in section five. This glitch had arisen when sections three and four were adopted in the Resources committee. She continued her review and said there was approximately 581,000 acres in the land bank. However, since there was no legal description for the land they eliminated reference to the land bank from the bill. Further provisions of the bill were no requirement for the State to provide schools on agricultural lands, no requirement to construct roads, and surveys would be at buyer's expense. Potential buyers would have to pay a security of ten percent and the State would provide maps and a list of qualified real-estate appraisers. In summing up she noted a provision for an immediate effective date. Senator Torgerson asked about page 2 under intent and asked about the settlement land monies that would go into the public school trust fund. Currently only half of one percent is going to that trust fund of all lands that are sold. He asked why would they now want to put one hundred percent in. Ms. Krogseng said that because they do have to fund schools it would be a good way to put money aside for them. Senator Torgerson voiced concern that the money would be locked up. Currently they could only spend the interest on that account which was up to $227 million. Seven million is appropriated to school education. He asked further on page 2, line 24 why "shall" had been changed to "may". Ms. Krogseng said this was language requested by the department and they could explain the change. Senator Phillips suggested that on page 7, lines 11 - 15 the five-year lease be extended another five years with twenty percent down up front once the survey had been done. This would keep people serious about getting land. Ms. Krogseng said they wanted to make land available to all Alaskans. Asking twenty percent down would limit the ability for acquisition. She explained there was approximately 50,000 acres, which equaled 5,000 parcels that had been previously offered. This land has already been surveyed and can be easily identified and put on the counter. Senator Phillips said his concern was that some land had been sold and for some reason the buyer did not complete the requirements and it was put back on the counter again. He said he would like to see people have land and complete it. Not have a partial structure built and then walk away from it and leave the State holding the bag. Ms. Krogseng said that in working on this piece of legislation she has learned that the State has entered into contracts on the land that states that one is required by law to remove the structure. However, if it is not removed, the department has the authority to go forward and sell that particular parcel or that structure. If they derive more than $10,000 the residual must be given to the person who did the actual construction. She said she had been involved in real estate for many years and had never seen such a contract. But she doesn't know how to get out of it or what to do about people who have left the State and no longer in touch. In further response to Senator Phillips, she believes that most defaults occurred during the slump of the 1980's. She hoped now the State was a little smarter and things would be arranged a little differently. Senator Adams asked about land disposal under Title 38 and CSSB 108(RES). Ms. Krogseng said that as far as land classifications, one land classification had been included that was not in current statute. That was private recreation land. There are no open entry programs on the books at this time. As far as the fiscal impacts this legislation would provide a mechanism for the department to put the up-front costs and appraisals on the potential buyer, as opposed to the department funding those costs and the Legislature having to appropriate those funds. She said there was some concern for the fiscal notes and they did not feel that it should require that much money. Other agencies and entities, such as the Mental Health Trust, that were doing land disposals for a far less amount of money than was listed on the fiscal note attached to this bill. She would hope that this program would pay for itself in the long run. Senator Torgerson referred to pages seven and eight which talked about roads required to be built if a person divides their land. He noted the road was to be constructed to the standards of the Department of Transportation and Public Facilities. That meant to him that an individual that purchased land and had to build a right-of-way or extend the end of a gravel road would have to build that road up to the specifications of the current road and they couldn't put in a dirt road to their property. Ms. Krogseng said the department advised her they had standards for trails, however as far as roads it would depend on what is in the area. The intent of that language was so that one would not go in and create a road that would be winding all over the place and encroach on another's property. Senator Torgerson said he agreed with the route, but still had problems with the construction to the standards set by the department. It would only be valid if the department were to take over maintenance. JANE ANGVIK, Director, Division of Lands, Department of Natural Resources testified via teleconference from Anchorage. She opposed the bill. It would create a new program and have a negative affect on land sales. It would further flood the market with approximately 200,000 acres/year causing a devaluation of private land. (Poor quality of teleconference is noted.) She referred to a memo from the Division of Land, which had proposed legislation that would enhance the existing program. She still believed, however, that there were ways the department could work with the Legislature to enhance the disposal program. She made a brief reference to the fiscal note attached to her memo. She said the largest land disposal was in 1981 for a total of 79,000 acres. Senator Adams asked under the RES version of this bill what would happen to the value of private landowners. Ms. Angvik said the department was not trying to compete with private realtors, however they would depress the value of private land. Senator Adams further asked about fiscal notes. She said there was a significant cost involved for the State to sell property and she explained those additional related costs. However, she felt income could be generated over time if done in an orderly fashion. She agreed this could address the needs of Alaskans wishing to acquire State lands. Subdivided land could also be sold over the counter. She also stated that the department had outlined its anticipated income for the State in their fiscal note. Senator Adams asked if the department's proposal had been given to Senate Resources and Ms. Angvik indicated it had been. In response to Senator Torgerson, Ms. Angvik explained the requirements for State land purchase. Senator Torgerson asked how many appraisals had been rejected. Ms. Angvik said she did not have the information at present but would get it and submit it to the committee. Senator Phillips asked what the time frame for a normal person from the time they submit their application for disposal of land and the time they get the actual title in hand? Ms. Angvik said the time would depend on whether they paid cash or not. Senator Phillips clarified from the time of payoff. Ms. Angvik said when individuals were purchasing land over time from the State they were required to pay ten percent down and then they have twenty years to pay off the rest. On average people take twenty years. ALLEN MINISH, professional land surveyor testified via teleconference from Anchorage. He said he supported the bill. He further testified that a partial structure was a problem and was not usually an asset to the State on returned property. He felt there needed to be language regarding these partial structures and about the removal of such. He suggested a down payment at the time of building, which could be used by the State to remove the structure if the purchase requirements were not completed. Senator Phillips said he was the one who brought up the partial structure problem and asked if the five-year lease with the five-year extension that he had proposed would be a good idea? Mr. Minish indicated that he was not a fan of this type of leasing program. He did support having the buyer do the surveys and appraisals. (Tape #121, Side A was switched to Side B.) CLIFF EAMES, Alaska Standard for the Environment testified via teleconference from Anchorage. He noted for the committee they had offices in Anchorage and Mat-Su and enjoyed a membership of approximately 8,000 families. He said they opposed SB 108. This would lock up land enjoyed by the public and put it into private use. As the Department of Natural Resources has testified it would cost a great deal of money that could be better spent on other programs that the State had to cut. They did support a more modest program, similar to what has been discussed, that would re-offer already offered lands. It would, however, have to be funded and very little funding has been made available over the past few years. Contrary to popular belief, there was a significant amount of private land available in Alaska and many other ways to obtain such private land. For instance one could make use of classified ads and realtors. There was also land available through the Mental Health rust Authority and the University. In summing up he suggested the committee look at the Department of Natural Resources proposal. Senator Torgerson MOVED amendment #1. Senator Adams OBJECTED. Ms. Krogseng explains this is a technical amendment. Senator Adams REMOVED his objection. WITHOUT OBJECTION amendment #1 was ADOPTED. Senator Torgerson MOVED amendment #2. WITHOUT OBJECTION it was ADOPTED. Senator Torgerson MOVED amendment #3. He said on page 8, line 1, this amendment would delete the remainder of the sentence after the word "municipality" and insert "and if the person purchasing the land applies to the Department of Transportation and Public Facilities or a municipality for the road to be included in their maintenance program then the road must be constructed to the standards set out by the affected agency." Senator Adams OBJECTED. (Amendment #3 was copied and handed out to committee members.) Senator Adams REMOVED his objection. WITHOUT OBEJCTION amendment #3 was ADOPTED. Co-chair Sharp asked what was the pleasure of the committee. Senator Adams suggested referring the bill back to Senate Resources. He voiced concern on disposing of land and said that it should be worked out with the department. There was also a problem with the fiscal note. Co-chair Sharp HELD SB 108 in committee. He said he did not want to move a bill with a substantial fiscal note attached to it without proper review. He then called HB 467. HOUSE BILL NO. 467 "An Act relating to employees of the legislature who are employed under a personal services contract." BRUCE CAMPBELL, staff to Representative Pete Kelly was invited to join the committee. He reviewed the bill and sponsor statement. This regarded legislative contract employees and most state agencies that have the authority to hire temporary employees who do not participate in PERS. This did not include seasonal employees but rather short- term employees who worked on a salary or hourly basis. He further noted the Administration supported this bill. The attacked fiscal note indicates it would save the State money. PAM VARNI, Director, Division of Legislative Affairs Agency was invited to join the committee. In response to Senator Phillips she said the bill would affect the tour guides because they would not be hired in the retirement system. Actually, if they were not working during session or special session they had not been putting them in the retirement system. She advised the committee that they usually use high school interns not interested in being in the retirement system. Senator Phillips asked if they could put current staff under contract as well? Ms. Varni said if there was someone who did not want to be in the retirement system and the appointing authority wanted to look at doing that it would be a possibility. Senator Adams said the title implied that anyone in the Legislature could do this. He asked if the State would still handle the self-employment tax or would the individual have to make that contribution to the Federal IRS? Ms. Varni said they did report on the 1099 Form for employees that have a professional service contract. The individual does need to pay the required taxes. Senator Torgerson MOVED HB 467 and WITHOUT OBJECTION it was REPORTED OUT with individual recommendations and accompanying fiscal notes from the Department of Administration, Retirement and Benefits, zero and All Legislature (-$4.3). ADJOURNMENT After outlining the schedule for tomorrow's agenda, Co-chair Sharp recessed the meeting at approximately 10:25 a.m. SFC-98 -1- 4/15/98
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