Legislature(1995 - 1996)

01/17/1996 03:37 PM Senate RES

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
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                   SENATE RESOURCES COMMITTEE                                  
                        January 17, 1996                                       
                           3:37 P.M.                                           
                                                                               
                                                                               
 MEMBERS PRESENT                                                               
                                                                               
 Senator Loren Leman, Chairman                                                 
 Senator Drue Pearce, Vice Chairman                                            
 Senator Steve Frank                                                           
 Senator Rick Halford                                                          
 Senator Robin Taylor                                                          
 Senator Georgianna Lincoln                                                    
 Senator Lyman Hoffman                                                         
                                                                               
  MEMBERS ABSENT                                                               
                                                                               
 None                                                                          
                                                                               
  COMMITTEE CALENDAR                                                           
                                                                               
 SENATE BILL NO. 162                                                           
 "An Act relating to land used for agricultural purposes and to                
 state land classified for agricultural purposes or subject to the             
 restriction of use for agricultural purposes only; and annulling              
 certain program regulations of the Department of Natural Resources            
 that are inconsistent with the amendments made by this Act."                  
                                                                               
 SRES - 1/17/96                                                                
                                                                               
 SB 128 (NONRESIDENT HUNT, SPORT FISH, TRAP FEES) was scheduled, but           
 not taken up this date.                                                       
                                                                               
  PREVIOUS SENATE COMMITTEE ACTION                                             
                                                                               
 SB 162 - No previous action to consider.                                      
                                                                               
 SB 128 - No previous action to consider.                                      
                                                                               
  WITNESS REGISTER                                                             
                                                                               
 Representative Lyda Green                                                     
 State Capitol                                                                 
 Juneau, AK 99801-1182                                                         
  POSITION STATEMENT:   Sponsor of SB 162                                      
                                                                               
 Brett Huber, Legislative Aide                                                 
 c/o Senator Lyda Green                                                        
 State Capitol                                                                 
 Juneau, AK 99801-1182                                                         
  POSITION STATEMENT:   Commented on SB 162.                                   
                                                                               
 Ron Swanson, Deputy Director                                                  
 Division of Lands                                                             
 3601 C St., Ste. 1122                                                         
 Anchorage, AK 99503-5947                                                      
  POSITION STATEMENT:   Commented on SB 162.                                   
                                                                               
 John Cramer                                                                   
 P.O. Box 2636                                                                 
 Palmer, AK 99645                                                              
  POSITION STATEMENT:   Supported SB 162.                                      
                                                                               
 Karen Lee, Director                                                           
 Farm Service Agency                                                           
 1113 W. Fireweed                                                              
 Anchorage, AK 99503                                                           
  POSITION STATEMENT:   Supported SB 162.                                      
                                                                               
 Charles Forck                                                                 
 P.O. Box 929                                                                  
 Delta Junction, AK 99737                                                      
  POSITION STATEMENT:   Supported SB 162.                                      
                                                                               
 Bill Ward                                                                     
 P.O. Box 350                                                                  
 Soldotna, AK 99669                                                            
  POSITION STATEMENT:   Supported SB 162.                                      
                                                                               
 Mike Schultz                                                                  
 HC 62, Box 5440                                                               
 Delta Junction, AK 99737                                                      
  POSITION STATEMENT:   Supported SB 162.                                      
                                                                               
 Herb Simon                                                                    
 Glennallen, AK                                                                
  POSITION STATEMENT:   Supported SB 162.                                      
                                                                               
 Don Kratzler                                                                  
 Nenana, AK                                                                    
  POSITION STATEMENT:   Supported SB 162.                                      
                                                                               
 Bill Spencer                                                                  
 Nenana, AK                                                                    
  POSITION STATEMENT:   Supported SB 162.                                      
                                                                               
 Niilo Koponen                                                                 
 710 Chena Ridge Rd.                                                           
 Fairbanks, AK 99709                                                           
  POSITION STATEMENT:   Supported SB 162.                                      
 Tim Green                                                                     
 P.O. Box 204-405                                                              
 Douglas, AK 99824                                                             
  POSITION STATEMENT:   Commented on SB 162.                                   
                                                                               
 Harvey Baskin                                                                 
 P.O. Box 877306                                                               
 Wasilla, AK 99687                                                             
  POSITION STATEMENT:   Commented on SB 162.                                   
                                                                               
 Ed Bostrom                                                                    
 P.O. Box 56822                                                                
 North Pole, AK 99705                                                          
  POSITION STATEMENT:   Supported SB 162.                                      
                                                                               
 Larry Devilbiss                                                               
 HC04, Box 9302                                                                
 Palmer, AK 99645                                                              
  POSITION STATEMENT:   Supported SB 162.                                      
                                                                               
 Mike Bronson                                                                  
 2229 Turnagain Pkwy.                                                          
 Anchorage, AK 99517                                                           
  POSITION STATEMENT:   Opposed SB 162.                                        
                                                                               
  ACTION NARRATIVE                                                             
                                                                               
  TAPE 96-2, SIDE A                                                            
                                                                               
 Number 001                                                                    
 SRES - 1/17/95                                                                
                    SB 162 AGRICULTURAL LAND                                  
                                                                              
  CHAIRMAN LEMAN  called the Senate Resources Committee meeting to             
 order at 3:37 p.m. and announced  SB 162  to be up for consideration.         
                                                                               
 SENATOR HALFORD moved to adopt the CS, Chenoweth, January 15                  
 version, to SB 162.  There were no objections and it was so                   
 ordered.                                                                      
                                                                               
 SENATOR LYDA GREEN, sponsor of SB 162, said she introduced this               
 bill after talking with numerous agriculture (ag) land owners,                
 industry organizations, soil and water conservation districts, and            
 consumers of Alaska agriculture products.  The changes are designed           
 to facilitate the growth, stability, and economic viability of                
 agriculture as a renewable resource industry for Alaska, she said.            
                                                                               
 BRETT HUBER, legislative aide to Representative Green, reviewed the           
 technical changes in the CS to SB 162.  He said there are two                 
 changes.  The first one is in section 9, page 6, which redefines an           
 allowable subdivision under the agricultural covenant.  The second            
 change is in section 11 (e), page 7, which clarifies the remedy for           
 breach of covenant to be by civil proceeding.                                 
                                                                               
 SENATOR LEMAN asked how that was different from now.  MR. HUBER               
 answered that now it is an administrative proceeding.                         
                                                                               
 Number 99                                                                     
                                                                               
 SENATOR LINCOLN asked if there was correspondence on this issue               
 from the Director of the Division of Agriculture.  SENATOR LEMAN              
 answered that the Committee was told the Division of Lands was                
 answering for the State.  SENATOR LINCOLN asked if the Director of            
 Agriculture had been involved in this process.  SENATOR LEMAN said            
 his staff had contacted Mr. Kerttula's office and his staff said              
 that Mr. Swanson would be providing the testimony on this bill for            
 the administration.                                                           
                                                                               
 SENATOR LINCOLN remarked that it seemed a bit unusual that there              
 was no testimony from the Division of Agriculture which has the               
 expertise on this issue.                                                      
                                                                               
 Number 148                                                                    
                                                                               
 RON SWANSON, Deputy Director, Division of Lands, said he had                  
 testified on this bill extensively in October and asked them if the           
 Committee had any questions regarding his testimony.                          
                                                                               
 SENATOR LEMAN asked him to summarize his position for the                     
 Committee.  MR. SWANSON said the Administration had not taken a               
 position on SB 162.                                                           
                                                                               
 SENATOR HALFORD asked if that meant after the legislature leaves              
 town, they would or would not recommend a veto.  MR. SWANSON said             
 he couldn't answer that now, because the Administration had not               
 taken a position on this issue.  SENATOR HALFORD said he wanted to            
 know if the CS addressed any of his concerns.                                 
                                                                               
 Number 184                                                                    
                                                                               
 (MR. SWANSON'S testimony was inaudible and, therefore, these are              
 his written comments.)  MR. SWANSON said that section one states              
 the intent of the Legislature is to convey fee simple title to                
 agricultural land, subject to an agricultural only covenant.  This            
 language may make it easier for owners of agricultural parcels to             
 obtain financing from other than the State.  If adopted, section 12           
 of this bill would require the Department to issue new conveyance             
 documents for all patents issued since August 15, 1976.  We should            
 also point out that if the State wants to use the land for another            
 use (pipeline, telephone, etc.), we would have to buy those rights            
 back.                                                                         
                                                                               
 Section two, removes survey requirement for agricultural land sales           
 which they oppose.  He explained that all disposals of State land             
 (sales or leases) are presently required to be surveyed.  They have           
 had numerous problems with unsurveyed land and paper plats to a               
 point that legislation (HB 80) to make DNR the platting authority             
 within the unorganized borough is likely to pass this legislature.            
 This provision would not be supported by many municipal platting              
 authorities.                                                                  
                                                                               
 Section three removes the requirement that agricultural land be               
 included in an area plan and classified prior to disposal.  The               
 Department opposes excluding agricultural land from the land use              
 planning and classification process.  The planning and                        
 classification statutes(AS38.04) are the result of a 1986 Supreme             
 Court case, Alaska Survival vs. State, where it was found that                
 disposals of State land cannot occur unless the land has been                 
 classified as a result of an area or regional planning process.               
 There is no reason to exempt just agricultural land from this                 
 requirement.                                                                  
                                                                               
 Section four removes authority to require pre-qualifications of               
 agricultural land buyers and allows the Commissioner to waive                 
 development requirements based on economics.  The Department                  
 opposed this section.  Pre-qualification enables the State to try             
 to limit sales to those people who are most likely to pursue                  
 actively the development of agriculture.  The Department supports             
 the ability of the Commissioner to waive, postpone, or modify                 
 contract terms based on economic considerations.  While it would be           
 helpful to have this authority, they also foresee a possible                  
 increase in workload due to requests and appeals.                             
                                                                               
 Number 218                                                                    
                                                                               
 SENATOR HALFORD asked if the Department now has the ability to pre-           
 qualify under the court's interpretation of the prior law.  MR.               
 SWANSON said he thought they did.  SENATOR HALFORD said he had a              
 legal opinion saying they don't and that they haven't had it since            
 1979.  MR. SWANSON said he would check on that question for him.              
                                                                               
 Section five restricts the lottery application process on land                
 sales that involve land from former agricultural land disposal                
 projects such as Delta I-II and Pt. MacKenzie.  MR. SWANSON said              
 they have no problem with that, although they don't see the need.             
                                                                               
 Section six allows sale of agricultural parcels described by                  
 aliquot parts and they oppose this section.  They prefer survey               
 requirements as noted in the discussion in Section two.                       
                                                                               
 Section seven changes language to be consistent.                              
                                                                               
 Section eight sets agricultural land sale interest rate at 8% and             
 makes interest payments also subject to a moratorium.  The                    
 Department does not support lowering the interest rate to 8% for              
 only agricultural purposes.  HB 191, which is before the Senate               
 Resources Committee, establishes an interest rate for all land                
 loans at the prime rate, plus 4% (currently 12.2%) and not to                 
 exceed 13.5%.  They do support the change that would ensure that              
 interest payments are to be considered as part of any payment                 
 moratorium.                                                                   
                                                                               
 SENATOR HALFORD requested a fiscal note on the exact consideration.           
 MR. SWANSON said a fiscal note had been submitted by the Division             
 of Agriculture stating about $1,000 per plat.                                 
                                                                               
 Section nine, he wrote, has a covenant running with the land that             
 restricts or limits the use to agricultural purposes and allowing             
 subdivision to a certain extent as long as the covenant runs with             
 the subdivided land, and as long as the resulting subdivision is              
 not less than 40 acres in size.  The Department believes that the             
 State should be reimbursed by landowners when the land is                     
 subdivided for the added rights to the land that are conveyed in              
 this bill.  They believe that the land values will increase from              
 25% to 200%, based on the size of the parcel.                                 
                                                                               
 Section 10 provides that land classified for agriculture may be               
 conveyed to municipalities without any restrictions.  Currently               
 only the agricultural interest in the land may be conveyed to                 
 municipalities.  Current law allows for transfer of other                     
 interests, if it is in the best interest of the state.                        
                                                                               
 Section 11 requires cooperation by land owners with appropriate               
 soil and water conservation districts when implementing soil                  
 conservation plans.  The Department supports this.                            
                                                                               
 The second part, (2) as a condition of the conveyance, the                    
 Commissioner may not require a development plan unless the                    
 Commissioner permits modification of a plan based on economic                 
 hardship or other extenuating circumstances, they support, but see            
 an increase in workload to perform the task of analyzing economic             
 hardship claims and appeals.                                                  
                                                                               
 The third part states, (3) The Commissioner may not limit (a) the             
 right to construct improvements related to agricultural use, (b)              
 the right to use the land and improvements for purposes that are              
 incidental to and not inconsistent with the primary use, (c) the              
 right to subdivide and sell, if the resulting parcels are not in              
 violation of the minimum parcel size.  The Department believes the            
 State should be reimbursed for lost revenue when agricultural land            
 is subdivided.  The difference between the original price of the              
 agricultural right compared to the increased value of fee title for           
 subdivision purposes should be returned to the State.  They do not            
 oppose incidental gravel use or disposal of timber incidental to              
 clearing for agricultural production.                                         
                                                                               
 "(e) A covenant described in (a) of this section may be enforced              
 only by a civil action," puts the burden of proof on the State                
 which still has the administrative procedures to follow and will              
 have the additional workload of unnecessary civil litigation.                 
 Administrative appeals provide the applicant the ability to go to             
 court, if they so chose.  The Department opposes that section.                
                                                                               
 The Department does not oppose the definition of agricultural                 
 purposes, MR. SWANSON said.                                                   
                                                                               
 Section 12 requires the Commissioner to issue new conveyance                  
 documents to all agricultural parcels sold since 8/15/76 which they           
 very strongly oppose.  This is a major workload and not fair to               
 those who choose not to purchase agricultural property, because of            
 the deed restrictions.  There is also a very good chance of title             
 problems as "wild deeds" will result, because of dual title                   
 interests being conveyed by the State.  Further, there are fair               
 market value issues, as discussed above. (Section 11, 3(c)).                  
                                                                               
 Section 13 requires conveyance documents for municipalities which             
 the Department opposes based on workload and title problems as                
 noted above. They currently have the ability to remove                        
 restrictions, if it is in the best interest of the State.                     
                                                                               
 Section 14 repeals current regulations affecting agricultural land            
 disposals since August 1978 and the Department opposes repeal of              
 executive branch regulations.                                                 
                                                                               
 Number 354                                                                    
                                                                               
 JOHN CRAMER, former Director, Division of Agriculture, supported SB
 162.  He said the Administration has done a lot to help the oil               
 companies on the North Slope and SB 162 helps the farming community           
 in Alaska.  He especially supported the 8% interest rate.                     
                                                                               
 Number 389                                                                    
                                                                               
 KAREN LEE, Director, Farm Service Agency (USDA), said she has a               
 long history of agriculture in this State.  USDA does a lot of farm           
 lending in every other state, but Alaska.  The reason has been,               
 because of the reversionary clause that's in the agricultural-                
 rights-only-deeds that the State issues.  She urged their favorable           
 consideration for modification along the lines proposed in SB 162.            
 Because of the reversionary clause, the Federal Farm Loan Program             
 has been practically dead in Alaska since the 1970's.  Each year              
 nearly $2 million has been earmarked for the program in Alaska and            
 each year the money sits in an account for about six months and is            
 then transferred to one of the other 49 states who have reasonable            
 land titles.  Well over $20 million has been diverted in this way.            
                                                                               
 MS. LEE said her agency took over the Federal Farm Loan Programs in           
 1995 and they are now actively making farm loans.  However, they              
 are restricted to movable collateral for farms on the 500,000 acres           
 the State has sold.  Farm ownership loans are restricted to fee               
 simple land such as those acquired under the old federal Homestead            
 Act.                                                                          
                                                                               
 Another interesting anomaly caused by the restrictive deeds is that           
 they have a loan program to help farmers pursue a non-agricultural            
 business on their farms to supplement the agricultural income.                
 This program acknowledges the huge shift of income experienced by             
 family farms in the last two decades, nation-wide.  In 1994, over             
 90% of farms were at least somewhat dependent on off-farm income.             
 However, the agricultural rights restrictions mean such                       
 supplementary income producing enterprises are actually illegal in            
 Alaska, even though they often mean the difference between success            
 and failure.                                                                  
                                                                               
 Number 420                                                                    
                                                                               
 SENATOR LINCOLN asked if a person needed a minimum acreage to                 
 qualify for a farm loan.  MS. LEE answered, no, because of the                
 agricultural rights only clause on land, they are actually making             
 farm loans to people with no land at all.                                     
                                                                               
 SENATOR TAYLOR asked if a reversionary clause is a normal thing in            
 other states.  MS. LEE answered that nobody else has it.                      
                                                                               
 SENATOR HALFORD asked her if she thought the covenant was just as             
 enforceable as the reversionary clause.  MS. LEE replied,                     
 certainly.  She thought in reality they would have to go to court             
 in either case.                                                               
                                                                               
 Number 444                                                                    
                                                                               
 CHARLES FORCK, Delta Junction, said on page 4, section 6 he thought           
 that aliquot parts needed to be specifically defined.                         
                                                                               
 MR. FORCK supported the 8% interest rate.  Language on page 6, line           
 3, he thought should reference section 11, (3) (B) because                    
 explanations are made of land uses.  He also had a concern whether            
 or not the covenant is as protective of the agricultural rights as            
 the present provision.  He couldn't remember there ever being a               
 provision allowing the Commissioner to take the land back and that            
 bothered him.                                                                 
                                                                               
 Number 499                                                                    
                                                                               
 BILL WARD, Delta Junction owner of agricultural land, said he                 
 supported SB 162.  He said he had talked to a lot of agricultural             
 people and none of them had ever intended to violate any                      
 agricultural restricted use.  Their focus is on the ownership of              
 the land, itself.  Existing statute says they own an "interest" in            
 the land and they are referred to as the land holder, not the land            
 owner.                                                                        
 MR. WARD also thought a covenant had a greater degree of                      
 enforcement behind it, since a violation would go to court right              
 away instead of getting tied up for years in an administrative                
 proceeding.                                                                   
                                                                               
 Number 546                                                                    
                                                                               
 MIKE SCHULTZ, Delta Junction, supported SB 162.  He said over 12              
 years he had been working to put several parcels together to build            
 up an operation and make it economically viable.  He said they are            
 using the agricultural land for its highest and best use which is             
 growing crops.  There is no pressure to divide into housing lots.             
 He thought interest rates should be down in the 8% - 10% range.               
 Existing rates are above market.                                              
                                                                               
 SENATOR PEARCE asked him what interest the farmers in the midwest             
 were paying for their farm loans.  MR. SCHULTZ answered that the              
 rate a year ago was in the 7 - 8% percent range.                              
                                                                               
  TAPE 96-2, SIDE B                                                            
  Number 588                                                                   
                                                                               
 SENATOR PEARCE asked why they decided to peg the interest rate at             
 8%, instead of floating with the market like in the lower 48.  MS.            
 LEE said the rate a couple of days ago was 6.25% and a commercial             
 bank would probably charge 2 - 2 1/2% on top of that.  She                    
 explained that the "Farmer Mac" rate is the whole credit system.              
 A direct loan from them would be about 7% interest.  There is also            
 the guaranteed program which guarantees up to 90% to a commercial             
 bank.  They would add whatever the bank would want to charge to               
 their rate.                                                                   
                                                                               
 SENATOR FRANK commented that maybe we should explore changing the             
 way in which farm land has been financed.  Going to a fee simple              
 basis would allow Alaska to participate in some federal programs              
 that will allow the State to pass through a subsidized rate to the            
 farm community.  Maybe the State could be cashed out of this                  
 business.                                                                     
                                                                               
 SENATOR TAYLOR suggested looking at the federal formula for their             
 rate and using the same formula for total consistency between the             
 programs.                                                                     
                                                                               
 SENATOR FRANK said they should look at all the State's rates as a             
 policy matter.                                                                
                                                                               
 HERB SIMON, Glennallen, supported SB 162.  He questioned the                  
 estimated $250,000 to implement this program.  He thought the cost            
 was too high.  MR. SWANSON said he submitted a letter to the                  
 Committee on November 13 explaining the reasons for the expense.              
 He said he would be happy to provide this to Mr. Simon.                       
                                                                               
 MR. SIMON said the use of agricultural land and its disposal                  
 seriously needs to be revised and updated.  He thought SB 162 was             
 a step in the right direction.                                                
                                                                               
 Number 451                                                                    
                                                                               
 DON KRATZLER, Nenana agricultural land owner, supported SB 162,               
 because he thought a fixable title with an agricultural covenant              
 would protect the agricultural integrity of agricultural lands                
 better than what we have now.  It would give farmers a true sense             
 of ownership.  Now the land simply cannot be collateralized,                  
 because of the restrictions on the title.  He also supported                  
 lowering the interest rate from 12% - 13% down to 8%.                         
                                                                               
 Number 408                                                                    
                                                                               
 BILL SPENCER, Nenana land owner, supported SB 162.  He has a 225              
 acre parcel on which he raises pigs, potatoes, and hay.  He drew              
 the parcel in 1985 and has developed it for the last 10 years by              
 hard work and not borrowing any money.  He said this bill would               
 treat Alaskan farmers like all other farmers in the United States.            
                                                                               
                                                                               
 SCOTT MILLER, President, Delta Farm Bureau, said they unanimously             
 passed a resolution supporting SB 162.  As a member of the Delta              
 Community Coalition, he reported that at their last meeting,                  
 agriculture and economic development was voted as the most popular            
 economic development idea that they would like to spend grant                 
 monies pursuing.  Clearing up title in SB 162 is a step in the                
 right direction.  He noted that he was getting calls from in-state            
 and out-of-state people on a weekly basis who want to pursue                  
 farming in Alaska.                                                            
                                                                               
 As a farmer with agricultural land, MR. MILLER said, he found it an           
 extreme hardship to not be able to get any financing.                         
                                                                               
 SENATOR TAYLOR said he wanted to personally thank Senator Green for           
 bring this issue before them.  He said it is the first major piece            
 of reform legislation on agriculture in this State he has seen in             
 12 years.                                                                     
                                                                               
 Number 359                                                                    
                                                                               
 SENATOR PEARCE said she remembered with the State dairy project,              
 the farmers complained they were required to build farm buildings             
 on each farm, rather than being able to take advantage of economies           
 of scale and build one barn to handle all the dairy cattle.  Now              
 people are being told they can't build fixed, farm-related                    
 structures on their land.  She asked how they could be restricted             
 in both directions.  MR. SWANSON replied that it was possible the             
 buildings were not going to be built in the right places.  He said            
 they had to make sure the buildings' primary use was agricultural.            
                                                                               
                                                                               
 Number 337                                                                    
                                                                               
 NIILO KOPONEN said he homesteaded in 1952 and proved up in five               
 years.  He thought one of the principal problems is that the banks            
 and "credit outfits" were using a form of urban red-lining, because           
 in other states, agricultural rights are accepted by loan agencies.           
 He thought the banking agencies were trying to force some changes.            
 He thought the legislature had never done anything to adequately              
 protect farm land in organized boroughs and didn't think this bill            
 would do much for them, either.  He thought it was extremely                  
 important to have adequate title.  To ensure adequate rights-of-way           
 to property, there must be a survey.  He said the State was remiss            
 in not developing surveys and adequate property descriptions when             
 it disposes of land.  Going from covenants to ag rights is another            
 subsidy for the bar association.                                              
                                                                               
 MR. KOPONEN thought that section 10, "However, only rights in the             
 land for agricultural purposes may be transferred and all other               
 interests in the land will remain with the State." should not be              
 deleted.  He thought it was necessary to increase our agricultural            
 production in the State for local use and also to meet the                    
 developing Asian market.                                                      
                                                                               
 SENATOR TAYLOR noted that Mr. Koponen had earned his land through             
 his own hard work and now owns it fee simple.  He asked if he would           
 support a State homestead bill that would provide others with the             
 same opportunity he had.  MR. KOPONEN replied, certainly.  He added           
 that he is still being taxed at the rate of suburban subdivision              
 land.  He said that sort of pressure is one of the things that has            
 destroyed the agricultural support businesses.  He thought it was             
 also the people who do business with the farmers who are hurt by              
 the disappearance of agriculture.                                             
                                                                               
 Number 209                                                                    
                                                                               
 TIM GREEN said he has had property in the Trapper Creek area since            
 1984.  It was part of a larger parcel that was subdivided and there           
 are covenants on it that say "no building of fixed or immoveable              
 structures."  Because of that, it is worthless for a greenhouse               
 operation which is what he wants to do with the property.  He said            
 he has paid taxes on it for 11 years.                                         
                                                                               
 SENATOR FRANK asked him what the value of his ag land was compared            
 to other land in the area that is fee simple.  MR. GREEN said that            
 it was appraised at $6,000 for the 40 acres.  He said there was not           
 even a road to his property, so it was completely undeveloped and             
 not worth as much as property with a road to it.                              
                                                                               
 SENATOR FRANK said there should be a way property values could be             
 quantified for the purpose of this legislation.                               
 SENATOR GREEN explained that the frustration was that once the                
 original five-acre developable plot is peeled off, the rest of the            
 land cannot have any structure on it.                                         
                                                                               
 SENATOR PEARCE asked if the law had changed since he bought his               
 land and he said no.                                                          
                                                                               
 Number 110                                                                    
                                                                               
 HARVEY BASKIN, Pt. MacKenzie, said he is one of the two remaining             
 dairymen at Pt. MacKenzie and he has an agricultural use only                 
 tract.  He was concerned that he couldn't sell his property to his            
 heirs, because he doesn't have a fee simple title.                            
                                                                               
 ED BOSTROM, North Pole, said he was a full-time farmer for 10                 
 years.  He said the important issue in Alaska is economic                     
 development.                                                                  
                                                                               
 TAPE 96-3, SIDE A                                                             
 Number 001                                                                    
                                                                               
 He said he had developed 100 of his 240 agricultural acres.  He had           
 to diversify to make it work economically.  His is the exception              
 where smaller is better.  They cannot handle all the things they              
 are doing and will need to lease or sell some of their operations,            
 like their haying operation.  Under current regulation, he can't              
 lease it out so that a person could build a cabin on the part that            
 is leased, in order to run the haying operation.                              
                                                                               
 LARRY DEVILBISS, Palmer, said he is a third generation farmer in              
 the Mat-Su Valley.  He said they are living with subdivision all              
 the way around them, but he has just doubled the size of his farm             
 in his generation.  All the dynamics in this State are not to                 
 subdivide, he said.  In his area, subdivisions are being bought up            
 and put back into farming.  In the subdivision process he would               
 like to make sure there are both physical and legal accesses.                 
                                                                               
 Number 120                                                                    
                                                                               
 MIKE BRONSON urged the committee to oppose SB 162.  He thought the            
 solution to poor planning by DNR was to give the farmers more                 
 discretion to deal with land.  The title provision is not a                   
 solution to those problems.  He said the original agricultural land           
 program was not meant as a means of getting public lands into the             
 private sector, it was meant to protect farming as a land use in              
 Alaska.  Specifically, he opposed section 1, the fee title section            
 and section 11, the provision for improvements that are only                  
 incidental to agricultural use.                                               
                                                                               
 Number 200                                                                    
                                                                               
 SENATOR LEMAN thanked everyone for their testimony, said they would           
 hold SB 162 over, and adjourned the meeting at 5:20 p.m.                      
                                                                               

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