Legislature(1999 - 2000)
03/09/2000 09:03 AM Senate FIN
| 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
MINUTES
SENATE FINANCE COMMITTEE
March 9, 2000
9:03 AM
TAPES
SFC-00 # 50, Side A and Side B
CALL TO ORDER
Co-Chair John Torgerson convened the meeting at
approximately 9:03 AM.
PRESENT Co-Chair John Torgerson, Co-Chair Sean Parnell,
Senator Al Adams, Senator Pete Kelly, Senator Loren Leman,
Senator Gary Wilken
Also Attending:
SENATOR ROBIN TAYLOR; BOB LOEFFLER, Director, Division of
Mining, Land and Water, Department of Natural Resources;
Attending via Teleconference: From Anchorage: DICK MYLIUS,
Resource Assessment and Development, Division of Mining,
Land and Water, Department of Natural Resources; LESLEE
OREBAUGH, Alaska Caregivers Association; From Fairbanks:
IRENE PAYTON, Member, Long Term Care Committee, American
Association of Retired Persons
SUMMARY INFORMATION
SB 6-DISPOSALS OF STATE LAND
The Committee adopted a committee substitute as a workdraft
and heard testimony from the sponsor and the Department of
Natural Resources. Three amendments were considered, two
were adopted and the bill moved from Committee.
SB 287-APPROPRIATION: LAND DISPOSAL BANK PROG
The bill was reported from Committee.
SB 73-ASSISTED LIVING FACILITIES
The Committee heard public testimony and considered two
amendments to the committee substitute workdraft. The
amendments were adopted and the bill moved from Committee.
SENATE BILL NO. 6
"An Act relating to the disposal of state land."
This was the seventh hearing for this bill in the Senate
Finance Committee. At the previous meeting a committee
substitute, 1-LS0071\S was adopted as a workdraft.
Co-Chair Torgerson reminded the members that there had been
some concerns from the Department of Natural Resources about
the committee substitute. As a result of meetings his staff
had with members of the department, Co-Chair Torgerson said
a new committee substitute was drafted.
Co-Chair Parnell moved to adopt CS SB 6, 1-LS0071\W as a
workdraft.
Senator Adams objected to request a brief comparison between
the two versions.
Co-Chair Torgerson explained the changes in Version "W" as
follows.
Section 1 Finding and Intent - page 2 line 3 inserted
"from the land disposal bank" in reference to the
75,000 acres and also inserted "as soon as practicable
after the effective date of this Act"
Section 2 - inserted language specifying that the
member of the land disposal advisory committee would
not be compensated, expect for per diem and travel
expenses. Also inserted, was language requiring the
committee to submit a report directly to the
legislature rather than through the commissioner.
Section 8 and Section 9 - allows the department to sell
land for a down payment of five percent up to 25
percent
Co-Chair Torgerson noted that currently the statutes
restricted the program to allow only a five-percent down
payment.
Section 8 - refers to land sold at auction
Section 9 - refers to land sold by lottery
Section 10 - allows the department to sell land that
has been foreclosed on to the first eligible buyer
Section 11 - clean-up measure, similar to Section 10,
which will make it easier for the department to resell
land
Section 12 - relates to the appraisal and surveys and
replaces "may" with "shall"
Section 8 of Version "S" - contained provisions of
statutes that did not apply to the land disposal bank
and were deleted
Senator Adams asked about the relationship between this bill
and SB 287, which appropriates funds for the land disposal
program. He noted that in previous discussions, it was
thought that future program receipts would be used to
operate the program rather than the Constitutional Budget
Reserve (CBR).
Co-Chair Torgerson explained his intent had always been to
fund the program with an appropriation. He stated that he
had requested a fiscal note from the department to show how
the appropriation would be spent over the next few years in
addition to showing projected revenues. He relayed that
there was the possibility the program would eventually be
funded through program receipts. He stressed that in order
to sell land "we have to front-end load the money" for
surveys, plotting, public hearings and other expenses that
add up to approximately $250 per acre.
Co-Chair Torgerson advised that SB 287 would provide for a
one-time draw from the CBR to cover the initial costs of the
land disposal program.
Senator Green referred to discussion from the previous year
on SB 6 regarding Section 12, payment of appraisals, etc.
She did not think this was typical real estate procedure for
the buyer to pay for the appraisal and other costs.
Co-Chair Torgerson responded that the discussion took place
during the last hearing and that Version "S" contained the
word "may", which was changed to "shall" in the proposed
committee substitute Version "W". He noted the main reason
was to keep the fiscal note cost down.
Senator Green agreed with the premise but suggested that
"shall" should be considered for removal at a future date.
Co-Chair Torgerson remarked that the Committee would hear
testimony on this matter later in the meeting.
Senator Adams removed his objection qualifying that he still
had concerns with Section 2, the land disposal advisory
committee, asking about the procedure in the case of a tie
vote, and Section 4 that allows the legislature to
reclassify of parcels. He suggested this could create micro-
management by the legislature. His final concern was with
the funding source. He referred to the FY 00 supplemental
operating budget appropriation, SB 250 that reported from
the Committee the day before.
Without objection, Version "W" was adopted as a working
draft.
SENATOR ROBIN TAYLOR commented there were no changes made in
Version "W" that he could not support.
Senator Taylor addressed Senator Green's concerns, saying he
understood them but because of certain court decisions,
there was no way state land could be conveyed without a fair
market evaluation. His remarked that he would desire for the
legislature to simply set one price per acre and that
anything above that amount would be fair market value but he
did not think that was possible.
Co-Chair Torgerson relayed Senator Adams's concerns about
the advisory committee and legislative intervention.
Senator Taylor responded that the committee was just an
advisory committee and that the commissioner would make the
final decision. He noted that the original legislation
provided that the committee made those determinations, but
that because of a conflict with the some Supreme Court
decisions regarding improper delegation of legislative
prerogative, the provision had to be changed.
Co-Chair Torgerson added that the current language was the
same as that for the Minerals Management Commission.
Senator Adams clarified for the record that the commissioner
had the final say regarding land disposal.
Senator Taylor affirmed.
Senator Adams spoke to his other concern about micro-
management by the legislature.
Senator Taylor responded that the legislature never gives up
its right to change the classification. By inserting the
language into this bill, he said it prevents the legislature
from needing to adopt additional legislation later.
Senator Adams then asked if the sponsor supported the use of
the CBR versus a program receipt concept to fund the
program.
Senator Taylor understood the budget difficulties and
appreciated any funding mechanism to get the program
started. He surmised that the program would become self-
funded after the first year.
BOB LOEFFLER, Director, Division of Mining, Land and Water,
Department of Natural Resources testified to the
department's major concern with the required minimum of
75,000 acres. Because the funds necessary to sell the land
were appropriated separately by the legislature, he
classified this bill as an unfunded mandate.
Co-Chair Parnell asked that if the appropriation bill, SB
287 passes if SB 6 remains an unfunded mandate.
Mr. Loeffler replied that it does and explained that only
the first 75,000 acres would be funded by the appropriation,
while the bill requires that number of acres offered for
sale each year.
Co-Chair Parnell countered that as part of a typical
operating budget item, the program would be funded annually
and become part of the department's "base".
Mr. Loeffler did not understand that this program would
become part of the base or even a yearly increment.
Co-Chair Parnell stated that the department could certainly
request funding each year knowing that the statutes were in
place. He asked how much money the program would need to get
through the next year.
Mr. Loeffler explained the time frame involved in getting
land sold and the need to spend money in advance of the land
sales. In FY 02, he said the department would need another
$3.8 million, FY 03 would require $5.3 million, etc. He
stated that the program would generate a positive cash flow
beginning in FY 04 but that the income would not be enough
to pay back the earlier expenses until FY 09.
Co-Chair Parnell pointed out that the fiscal note provides
enough money to run the program through FY 01.
Mr. Loeffler stressed that the $9 million appropriation
would pay the costs of the first 75,000 acres. He again
explained the time frame as broken into three categories:
50,000 acres of potential reoffers, 20,000 acres of remote
sales, and 5,000 acres of subdivisions. Because of the lag
time, he warned that the subdivisions would not be salable
until FY 03 and the remote sales and reoffers would be split
between FY 02 and FY 03. Therefore, he stated that what
would be sold in FY 01 would be land that was prepared for
sale using funding provided in FY 00.
Senator Green asked about the one-year and two-year
lifetimes of surveys and appraisals.
Mr. Loeffler explained that most of the remote parcels would
not require appraisals. However, he stated the title search,
land classifications, etc. could not be completed by the
summer and therefore surveys would not get done until the
next summer. He noted that the summer was the ideal time to
sell land because buyers have the ability to examine the
land.
Senator Green asked why the survey would add an additional
year to the sale process instead of only an additional week
or month.
Mr. Loeffler repeated that the survey would not be completed
until next summer. The reason for the delay in the reoffers,
he added was because of the time required for a title
search.
Senator Green asked if those easier parcels could be sold
earlier.
Mr. Loeffler responded that the department would try.
Co-Chair Torgerson asked what would happen to the program if
it were not funded.
Mr. Loeffler answered that if the program was not funded the
land would not be disbursed.
Co-Chair Torgerson wanted the department to come before the
Committee the next year to defend the budget and to explain
the progress before receiving additional funding. He
stressed that all but a very few state programs are subject
to appropriation.
Senator Wilken referred to page three lines 16 and 17 that
provided that the land may not be disposed of for less than
fair market value, and page four, line 12 that dictated a
process for auction or lottery at a 70 percent rate of the
fair market value. He asked if there was not a conflict. He
questioned the statute that in one section, stated that the
land could not be sold below value, yet in another section,
stipulated land could be sold up to 30 percent less if the
director so chooses.
Mr. Loeffler responded that in either case, the land would
be sold at auction or lottery. If land was not sold, he
explained that the commissioner would then have the
authority to lower the price to no less than 70 percent of
fair market value. He stated this provision has been in
statute for several years.
Senator Wilken then addressed page four, line 21, "bidder
shall deposit an amount specified by the director, equal to
at least five percent" and questioned whether five percent
was too low of a down payment. He felt this amount did not
indicate a commitment on the part of the purchaser that the
land would be purchased and improved. He thought this might
instead encourage people to simply buy and hold land.
Co-Chair Torgerson commented that he understood that the
department was limited to the five-percent amount. However,
he wanted to allow some leeway so the remote parcels could
be sold. He qualified that he did expect the down payment
would be raised up to the maximum amount of 25 percent for
some of the more sought after properties.
Mr. Loeffler affirmed and allowed that the default rate on
the land sales was higher when buyers only had five percent
invested in the property, which caused greater expense in
the future to the department. He then pointed out the fiscal
note's projected income if the required down payment raised
significantly above five percent. He expected between five
and 25 percent down payments would be required.
Co-Chair Torgerson noted that for some more desirable areas,
the minimum down payment requirement could be increased, but
that in other remote areas, it could be difficult to sell
the land even with a down payment as low as five percent.
Mr. Loeffler generalized the fiscal note was expensive in
requesting $18 million over the next five years in addition
to the $9 million for this year. However, he thought it
represents a new way of doing business and that the costs of
land distribution would be significantly less than in the
past.
Mr. Loeffler pointed out the detailed financial back up
accompanying the fiscal note that gave certain cost
assumptions and certain sale assumptions. [Copy on file] He
repeated that the revenues will exceed expenditures in FY 04
and the revenues will pay back all previous expenditures in
FY 09.
Co-Chair Torgerson returned to Senator Wilken's concern
about the conflict relating to the fair market value
requirement. He relayed earlier conversations with the
witness were it was established that fair market value was
set during an auction by the bids made.
Mr. Loeffler explained the sealed bid process with the
department setting a minimum bid at the fair market value.
He said the bids often are submitted at a much higher
amount. He added that the pricing schemes are established in
AS 38.05.055 for auctions and AS 38.050.057 for lotteries.
He suggested that the new section on page three lines 16 and
17 in the bill could conflict with the existing statute as
Senator Wilken pointed out.
Co-Chair Torgerson clarified that the provisions relating to
fair market value on page three of the bill only applied to
that section.
Mr. Loeffler responded that if the assumption that the fair
market language only applied to that section were true, then
there was no conflict.
Mr. Loeffler addressed the idea of offering land not
originally sold at auction for sale on the Internet through
a sealed bidding process. He stated that if the land was not
sold in one auction, chances were low that it would be sold
at a second auction with the same minimum bid requirement.
He said that if land were not sold, the department would
just hold it until a buyer approached the department with an
offer. That was permitted under the auction and lottery
portion of statute.
Co-Chair Torgerson stated that the intent of the sponsor was
to make land available over the Internet and to give
authority to the department to do so.
Mr. Loeffler was not opposed to offering land for sale on
the Internet.
Co-Chair Torgerson asked if the department was currently
required to sell land at fair market value.
Mr. Loeffler answered yes.
Co-Chair Torgerson then asked if the 70 percent provision
was the existing language.
Mr. Loeffler explained it was and that it was an exception
to the general stipulation that at least fair market value
be applied.
Senator Wilken asserted that the two provisions needed to
comply with each other.
DICK MYLIUS, Resource Assessment and Development, Division
of Mining, Land and Water, Department of Natural Resources
testified via teleconference from Anchorage to clarify that
the 70 percent provision was part of existing statute that
allows the director to sell at less than fair market value.
He continued this provision applies in cases where the
director determines that there is a shortage of land, which
causes an artificially inflated value.
Co-Chair Torgerson asked if the language was important to
leave in statute.
Mr. Mylius spoke of the pros and cons saying he did not know
if the language was in conflict but that he also did not
know why it should be retained.
Senator Wilken wanted to change either the language on page
three or page four.
Amendment #3: This is a conceptual amendment to delete the
language on page four lines 12 and 13 in Section 8 of the
bill that allows the director to sell state land for
anything less than the appraised fair market value. The
amendment deletes, "no less than 70 percent of" making the
sentence read, "The director may accept bids and sell state
land under this section at the appraised fair market value
of the land."
Senator Wilken moved for adoption.
Mr. Loeffler suggested amending similar language that
applied to the lottery statute.
Senator Wilken amended his amendment to also delete, "The
purchase price of the land sold by lottery shall be the fair
market value of the land as determined by the commissioner.
The commissioner may sell land by lottery for less than the
fair market value of the land on a determination that
scarcity of land for private use in the area of the land to
be sold has resulted in unrealistic land values." from page
four lines 27 through 34 in Section 9.
Senator Green recalled a previous land disposal bill from
several years before and was unsure that she wanted to take
away the ability to sell "trash land". She suggested
revising the language that dictated "lands may not be
disposed of under this section for less than the appraised
fair market value." She stated that while the intent was not
to give the land away, the state should be able to sell the
land when possible. She then asked if fair market value was
the amount offered by the highest bidder.
Co-Chair Torgerson responded it was not and that certain
procedures were followed that included an appraisal.
Senator Adams agreed with Senator Green's desire to maintain
the ability to sell less than desirable land, saying he
thought this amendment would hinder land disposal.
Co-Chair Torgerson asked if Section 9 only applied to
agriculture land.
Mr. Mylius responded that neither Section 8 or Section 9,
the provisions to allow sales at lower than the fair market
value, had been used in the five years he has been working
for the department. However, he did not know if they had
ever been instituted in the past for auction or lottery
offerings.
Senator Wilken said the purpose of the bill wasn't only to
sell land but to also have something done with the land
whether used for recreation, agriculture, etc. He asserted
that by lowering the "bar" and allowing land to be purchased
for less than fair market value, "what we've really allowed
is for people to essentially lock up the land without an
investment in the land." He believed that as stewards of the
people's land, the legislature should ensure that the people
get at least the fair market value of their assets. He
suggested that if this restriction become an impediment to
selling land for production, the statute could be changed in
the future.
Co-Chair Torgerson opposed amendment until he could be surer
of the calculation of fair market value in relation to the
highest bid offered at an auction. He was not convinced that
the highest offer was or was not fair market value.
Senator P. Kelly did not think a bid made at auction
constituted fair market value and noted that the market for
these land sales was not broad. He supported the amendment
saying it protects the assets of the state.
Senator Green spoke to earlier conversations regarding the
value and authenticity of every appraisal done. She thought
that the bid process was the actuality of the value of the
property even if the state wants to think the value is much
higher. For this and other reasons, she said she would not
support the amendment.
Co-Chair Torgerson considered borough foreclosures on
property to restitute delinquent taxes noting that these
properties were sold for the highest price offered rather
than an appraised value. While he understood that minimum
prices were often set in these situations, he was unsure how
that minimum price was established. Therefore, he saw both
sides of the issue.
Tape: SFC - 00 #50, Side B 9:50 AM
Senator Green stated that the current statute defined fair
market value as "the price at which a willing seller and a
willing buyer will trade." She did not see any mention of
appraisals in the definition section.
Co-Chair Torgerson then concluded that the willing price
could not be lower than 70 percent of the fair market value.
Co-Chair Parnell clarified that the division testified that
the 70 percent provision was never used.
Mr. Loeffler stated that in the years of his and Mr. Mylius'
service, the provision had not been utilized.
Senator Taylor asserted that state-owned land has been
sitting fallow for 40 years because the department had been
"sitting on it, refusing to sell it." He spoke to the
advantages of allowing Alaskans to purchase the land, to use
it and allow a borough to collect property taxes. He
stressed, "anyway you can go about taking the land from
these bureaucratic barons at the Department of Natural
Resources and providing an opportunity for Alaskans to own
it - we ought to be falling all over ourselves to give this
land away." He admonished that this legislature could also
do nothing just as all other legislatures had done since
statehood and then complain because there was no economic
diversification.
Senator Taylor continued lamenting that he found the
department's entire discussion defending the fiscal note
offensive. He stated that 50,000 acres of land was already
surveyed and appraised and could be sold immediately without
costing an additional $90,000.
Co-Chair Torgerson
A roll call was taken on the motion.
IN FAVOR: Senator Wilken, Senator P. Kelly, and Co-Chair
Parnell
OPPOSED: Senator Leman, Senator Adams, Senator Green,
Senator Donley, and Co-Chair Torgerson
ABSENT: Senator Phillips
The motion FAILED (3-5-1)
Senator P. Kelly
Amendment #4: This conceptual amendment deletes, "on the
Internet" and inserts "within the state" after "advertised"
on page 3 line 15. The amended sentence reads as follows.
"Land offered for disposal under this section but not
disposed of may be advertised within the state and offered
at sealed-bid auction in accordance with department
regulation."
Senator P. Kelly moved for adoption and spoke to his concern
about "billions of eyes" looking over the available land for
sale in Alaska. He did not want those people to own land,
saying they could be an impediment to development. He
lamented about environmental organizations purchasing land
in other states and the subsequent constituent group whose
desire is to stop development and to stop other landowners
from enjoying their own land.
Co-Chair Torgerson suggested removing the entire sentence
unless it was Senator P. Kelly's intent to limit all
advertising to within the state.
Mr. Loeffler affirmed that although the department already
does advertise within the state, it could do a better job.
He stated that state-owned land sales are not advertised
outside of Alaska.
Senator P. Kelly amended his amendment to delete the entire
sentence on page 3 lines 14 through 16 that read, "Land
offered for disposal under this section but not disposed of
may be advertised on the Internet and offered at sealed-bid
auction in accordance with department regulation."
Senator Green wondered if Internet advertising could be
controlled to only reach those potential buyers inside the
state.
Co-Chair Torgerson understood that any web site could be
accessed from any computer anywhere in the world.
Mr. Loeffler corrected his earlier statement saying that the
department currently does publish its land disposal brochure
on the Internet through the Department of Natural Resources
web page. He noted that state-owned land is not actually
sold via the Internet.
Co-Chair Torgerson surmised that was the practice that
Senator P. Kelly was attempting to prohibit.
Senator P. Kelly affirmed.
Senator Taylor stated that three or four years ago the
department advertised and offered parcels for sale over the
Internet. He said this practice was controversial because
parties outside the state were bidding against Alaskans for
this land. He told of one situation where interested buyers
from Juneau were outbid by a group of doctors from
California. As a result, he said the law was changed to
require that land sales first be offered to Alaskan
residents. This new law stipulated that the land could not
be offered Internet or otherwise advertised outside the
state until Alaskans were given a chance to bid. He
emphasized he wanted Alaskans to have a "first shot" at the
land.
When asked by Senator Donley if he supported the amendment,
Senator Taylor commented that he did not think the amendment
would have much of an affect. He thought that the greater
number of potential buyers the department could reach the
better chance of receiving fair market value for the
parcels. So long as Alaskans were given the first
opportunity to buy parcels and the did not participate, he
thought the Internet was a good marketing tool and should be
utilized to sell the state-owned land.
Senator P. Kelly thought there would be more land available
for sale than could be sold to Alaskans. He did not think
the demand was as great as Senator Taylor attested and that
Alaskans would only want to purchase a certain amount of
land. Senator P. Kelly spoke of other ways Alaskans can buy
land such as from Native corporations and organizations,
boroughs, and also privately held parcels. He stressed that
the state cannot stop Outside purchasers from "locking up"
Alaskan land but he but did not want to make it easier for
them.
Senator Green referred to the five-year plan or schedule for
the land disbursal program and asked if this meant there
would be a five-year lag before the land is sold or a five-
year lag before the parcels could be offered for sale on the
Internet.
Mr. Loeffler responded that was not correct and that the
five-year plan was only to notify the public of what
offerings were forthcoming. He stated this was to ensure a
stable land disposal process and so the public could
anticipate what lands were actually being offered.
A roll call was taken on the motion.
IN FAVOR: Senator Adams, Senator Wilken, Senator P. Kelly,
Senator Donley, Co-Chair Parnell, and Co-Chair Torgerson
OPPOSED: Senator Green, Senator Leman,
ABSENT: Senator Phillips
The motion PASSED (6-2-1)
Amendment #5: This conceptual amendment inserts, "70 percent
of" on page three line 17 of the bill. The sentence then
reads, "Land may not be disposed of under this section for
less than 70 percent of the appraised fair market value."
Senator Wilken moved for adoption saying he wanted to
eliminate the conflict between Sections 4 and 8.
Mr. Loeffler stated he thought this change would make the
language more consistent.
Senator Green reviewed AS 38.04.020, to which this amendment
applied, and asked if the land disposal bank referenced was
different from the auction sales in AS 38.05.055, or Section
8.
Mr. Loeffler explained the land disposal bank is the pool of
land from which parcels are offered and that the method used
to offer the land was either auction, lottery or in some
cases, homestead. He interpreted "land may not be offered
from the land disposal bank" does not apply to the method in
which the land was disbursed.
Senator Green asked if of any of the disposal methods
required a full appraisal.
Mr. Loeffler replied that all parcels require an appraisal
with the exception of the land covered by the 70-percent
language or the sweat equity program. He noted that the
existing 70-percent language was contained in the statute
governing auctions and that the lottery statutes do not
include this language.
Senator Green told the Committee about discussions held in
the legislature four years prior about the unintended
consequences of many actions taken with the previous land
disposal legislation. She stated that she would not object
to the amendment, but that she would not support it either
without further review.
There was no objection and the amendment was ADOPTED.
Senator Adams addressed the fiscal note from the Department
of Natural Resources. He surmised that if this bill passed,
$15 million would have to be added to the department's
budget over the next two years to operate the program. He
made a suggestion of setting aside $15,787,000 in the
Constitutional Budget Reserve (CBR) fund through the fiscal
note to eliminate the concern about this program being an
unfunded mandate. He qualified that he did not support this
deposit, but felt it should be considered.
Co-Chair Torgerson stated that such a deposit into the CBR
would not solve the concerns because Mr. Loeffler would then
complain that the program was an unfunded mandate for the
following years of FY 06, FY 07 and so forth. Co-Chair
Torgerson stressed that it was unfair to claim that without
designated program receipts, a program was an unfunded
mandate.
Senator Wilken noted language on page two line eight and
expressed concern there was no length of terms for the land
disposal advisory committee. He suggested five-year terms of
service.
Co-Chair Torgerson responded that every time the Speaker of
the House of Representatives or the President of the Senate
positions changed, they could chose different people to
serve in the positions held by appointees of the
legislature. The seats that are appointed by the governor
would be up for review subject to the turnover of the
governor as well, he added.
Senator Taylor commented on the fiscal note charging that
the department severely overstated the expenditures and that
the revenues generated were understated. He referred to the
stipulation on page five of the bill that requires the
commissioner to recover the appraisal or survey costs.
Therefore, he stated that the 50,000 acres of land that was
already surveyed or appraised would generate revenue as soon
as it was sold because the buyer would be required to
reimburse the department. He noted that this legislation
directs the department to sell this land, which would
recover the entire previous investment made by the state. He
admonished the department, who "for the price of $9 million
they're willing to take up another 25,000 acres" of land
that potential buyers would stake on their own.
Senator Adams noted the sponsor statement suggested a zero
fiscal note and to have the program operate under the
recovered revenue as Senator Taylor stated above.
Senator Taylor stated he would prefer that, "but
unfortunately, if we don't pay the blackmail that they want,
this thing's going to get vetoed. It will probably get
vetoed anyhow, but if we don't come up with the right amount
of money for these bureaucrats, they will refuse to move any
piece of land." He admitted that there would be some
additional cost but that it was not nearly what the
department was projecting.
Mr. Loeffler answered Senator P. Kelly's question saying the
department has a backlog of 50,000 acres of potential
reoffers because it did not have the funding to sell. He
stated that the requested $9 million was not just to sell
this land but for 20,000 acres of remote parcels and 5,000
acres of new surveyed lands as well.
Senator P. Kelly asked how long the 50,000 had been
available for disposal.
Loeffler answered since 1980.
Senator P. Kelly then asked at any given time how much land
was available for purchase.
Mr. Loeffler replied that each year the department offered
between 100-150 parcels but hoped to offer the entire 50,000
land bank over the next two years through this legislation.
Senator P. Kelly wanted to know how much of that land was
actually sold.
Mr. Loeffler said about half was sold and clarified that
those 100-150 parcels were typically the highest-grade
parcels. He estimated that approximately 500 of the 5,000
parcels would be sold during this large offering.
Senator P. Kelly didn't think the land offering would
generate the anticipated demand. He argued that if a person
were asked if they wanted some land, the answer would be
yes. However, the demand is measured by the number of people
who actually but these parcels at fair market value. He
noted land is currently on the market from other offerings
such as municipalities and private parties. He was concerned
what would happen to the marketability of the privately held
land in the case of a large offering of state-owned land.
Co-Chair Parnell offered a motion to report from Committee,
1-LS0071\W as amended with individual recommendations and a
$9,447,000 fiscal note from the Department of Natural
Resources. There was no objection and the bill MOVED FROM
COMMITTEE.
SENATE BILL NO. 287
"An Act making an appropriation for the state land
disposal bank program; making an appropriation from the
constitutional budget reserve fund under art. IX, sec.
17(c), Constitution of the State of Alaska; and
providing for an effective date."
This was the first hearing for this bill in the Senate
Finance Committee. It contained the funding appropriation
for the land disposal program contained in SB 6.
Senator P. Kelly clarified that the funds would come from
the CBR and would be paid back over time. He wanted to know
the timeframe for repayment.
Co-Chair Torgerson answered the full amount was expected to
be paid back by the year 2009. He stressed that if there
were to be a land disposal program, there would need to be
some up-front money to start the process.
Senator Leman expressed concern over how the money would be
spent in future years. While he would support the bill, he
warned he would be carefully watching the department to see
how the money was spent and that the program was a wise
investment for the state. He encouraged the department to
use its best efforts to disburse the land for less than $9
million.
Senator P. Kelly stated that he would not vote for a $9
million fiscal note.
Co-Chair Parnell offered a motion to move from committee, SB
287 1-LS1489\A with individual recommendations.
Senator P. Kelly objected.
A roll call was taken on the motion.
IN FAVOR: Senator Green, Senator Donley, Senator Leman,
Senator Wilken, Co-Chair Parnell, and Co-Chair Torgerson
OPPOSED: Senator Adams, Senator P. Kelly
ABSENT: Senator Phillips
The motion PASSED (6-2-1)
Senator Wilken recognized the work of co-chair, Darwin
Peterson and the Department of Natural Resources.
COMMITTEE SUBSTITUTE FOR SENATE BILL NO. 73(HES)
"An Act relating to assisted living homes; and
providing for an effective date."
This was the fourth hearing on this bill in the Senate
Finance Committee. The committee substitute before the
members was 1-LS0468\G.
LESLEE OREBAUGH, Alaska Caregivers Association, testified
via teleconference from Anchorage to thank Senator Mike
Miller, Senator Johnny Ellis, Senator Wilken and the Senate
Finance Committee for their efforts on this bill.
MONTA FAYE LANE, President, Alaska Caregivers Association,
testified via teleconference from Fairbanks thanking the
Committee for listening to the plight of the assisted living
homes and the low reimbursement rate. She stressed that this
was a very important industry for Alaskans.
IRENE PAYTON, Member, Long Term Care Committee, American
Association of Retired Persons, testified via teleconference
from Fairbanks of learning about the role that assisted
living homes play. She said the legislature has a lot to
learn about how the system is working. She stated this
legislation was a great beginning.
Amendment #1: This amendment reduces the minimum daily rates
of payment to assisted living homes as proposed in the bill
from $50 to $42.25 and from $75 to $51.
Co-Chair Parnell moved for adoption.
Co-Chair Torgerson explained the dollar amounts more
accurately reflect the actual amount that would be funded
House Finance Committee's version of the FY 01 operating
budget. He stressed his desire was to move the bill to the
other body in such a position where it would garner support.
He noted there was not an updated fiscal note that reflected
this reduction, but that the amount would be about half that
of the current $1,248,800 fiscal note.
Co-Chair Parnell asked if the sponsor supported the
amendment.
Co-Chair Torgerson said the sponsor wanted the bill to be
adopted into law and understood the steps necessary to have
that happen.
Without objection, the amendment was ADOPTED.
Amendment #2: This amendment changes the effective dates of
the bill from the year 1999 to 2000.
Co-Chair Parnell moved for adoption.
Co-Chair Torgerson explained the technical amendment to
bring the language into compliance with the current year as
opposed to 1999, when the bill was first introduced.
There was no objection and the amendment was ADOPTED.
Co-Chair Parnell offered a motion to moved from Committee,
CS SB 73 (FIN) 1-LS0468\G as amended with individual
recommendations and forthcoming fiscal note from the
Department of Administration and $711,500 fiscal note from
the Department of Health and Social Services.
The bill MOVED FROM COMMITTEE without objection.
ADJOURNED
Senator Torgerson adjourned the meeting at 10:33 AM.
SFC-00 (18) 03/09/00
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