Legislature(1995 - 1996)
01/22/1996 03:39 PM Senate RES
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* first hearing in first committee of referral
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SENATE RESOURCES COMMITTEE
January 22, 1996
3:39 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
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."
PREVIOUS SENATE COMMITTEE ACTION
SB 162 - See Resources minutes dated 1/17/96.
WITNESS REGISTER
Senator Lyda Green
State Capitol, Juneau, Alaska, 99801-1182¶(907)465-6600
POSITION STATEMENT: prime sponsor of SB 162
John Dufendach
Eagle Ridge Ranch
Box 309, Delta Junction, AK 99737¶(907)895-4309
POSITION STATEMENT: supports SB 162
Frank Burris
Eagle Ridge Ranch
HB 62, Box 5780, Delta Junction, AK 99737¶(907)895-4329
POSITION STATEMENT: supports SB 162
Kym Swift
Box 90064, Anchorage, AK 99509
POSITION STATEMENT: testified on SB 162
Ron Swanson, Deputy Director
Division of Land, Department of Natural Resources
3601 C St., Ste. 1122, Anchorage, AK 99503-5947 (907)762-2692
POSITION STATEMENT: supports SB 162
ACTION NARRATIVE
TAPE 96-4, SIDE A
Number 001
CHAIRMAN LEMAN called the Senate Resources Committee meeting to
order at 3:39 p.m.
SRES 1/22/96
SB 162 AGRICULTURAL LAND
Number 020
CHAIRMAN LEMAN brought up SB 162 as the only order of business
before the Senate Resources Committee. The chairman noted there
was a new proposed committee substitute before the committee
containing one change.
SENATOR TAYLOR made a motion to adopt the committee substitute to
SB 162.
CHAIRMAN LEMAN, hearing no objection, stated the committee
substitute was adopted. The chairman asked Senator Green to
explain the change contained in the committee substitute.
Number 035
SENATOR GREEN, prime sponsor of SB 162, stated the change addresses
a concern that the Division of Land had with the interest provision
in the bill. The committee substitute sets the interest rate at
9.5%, which is the only change from the prior version. In the
prior version, the rate was set at 8.0%.
CHAIRMAN LEMAN noted that change is on page 5, Section 8. He
commented he would rather see a floating interest rate than a fixed
one, but he recommended the Finance Committee work further on
developing the interest rate.
Number 065
SENATOR LINCOLN expressed concern that under SB 162, the value of
agricultural land would increase to such an extent that property
taxes would increase to the point of becoming a burden. She asked
if participating in the program set up in SB 162 could be
voluntary, so that an owners' property taxes would not be affected.
Number 103
SENATOR TAYLOR did not think SB 162 would have that effect.
Nothing in SB 162 would encourage boroughs to increase the
valuation on agricultural land.
Number 145
SENATOR LINCOLN asked if by passing SB 162, we are allowing prime
agricultural land to be subdivided and sold off for purposes other
than agricultural uses.
Number 160
SENATOR GREEN responded that would not occur under SB 162, because
the required use for that land would still be agricultural.
CHAIRMAN LEMAN noted that under SB 162, subdivided agricultural
land would still carry the agricultural covenants. Section 9
contains the agricultural restrictions.
Number 198
CHAIRMAN LEMAN asked if any committee members have proposed
amendments.
SENATOR TAYLOR proposed a conceptual amendment on page 5, lines 7-
10 establishing the interest rate at the federal reserve lending
rate plus 1%.
Number 208
SENATOR PEARCE objected for the purposes of commenting that she
would rather send the bill to the Finance Committee and ask them to
change the section in order to allow farmers to utilize federal
loan programs.
Number 223
SENATOR TAYLOR responded it wasn't the intent to restrict that. He
just doesn't want to pass a bill out with a fixed rate. He
certainly would not want to preclude anyone from having access to
federal funds. Senator Taylor asks for withdrawal of his
amendment, with the stipulation that his intent travels with the
legislation.
Number 240
CHAIRMAN LEMAN asked if there is any objection to withdrawal of the
amendment. Hearing none, the chairman stated the amendment was
withdrawn.
Number 247
SENATOR FRANK commented that business people tend to like fixed
interest rates, if the rate is reasonable. The argument could be
made that it ought not to float with the market.
Number 280
SENATOR TAYLOR stated there are some good reasons to have floating
interest rates.
Number 291
CHAIRMAN LEMAN commented we ought to enable farmers to get other
financing, and the state should not necessarily be the number one
stop for financing. The chairman asked if there was any more
testimony.
Number 305
JOHN DUFENDACH, testifying from Delta Junction, stated he is a
farmer with the Delta Junction Barley Project and he supports SB
162.
Number 312
FRANK BURRIS, testifying from Delta Junction, stated he is a
principal in Eagle's Ridge Ranch, one of the Barley Projects, but
that most of his land is either in CRP (Conservation Reserve
Program - farmer is paid to leave land fallow) or is unfarmable.
He supports SB 162, and especially likes the language in Sections
11-13.
SENATOR HALFORD asked Mr. Burris how many acres he has in CRP.
MR. BURRIS responded he has 1,400 acres in CRP, out of a total of
2,900 acres.
SENATOR HALFORD asked what the annual federal payment was for that
CRP land.
MR. BURRIS replied he receives about $50,000 per year. This is the
last year of the CRP contract. He is not sure if the ranch will
re-up in the CRP program after this year.
SENATOR HALFORD asked if the length of the contract was for 10
years at approximate level payments.
MR. BURRIS responded that it was.
Number 338
KYM SWIFT, testifying from Anchorage, stated she does not
understand why the State is still in the agriculture business. In
one year, the Division of Agriculture wrote off $41,000,000 in
loans. She does not think it makes sense for loans to be
administered by political entities. She thinks some of the
provisions of SB 162 are good.
SENATOR TAYLOR asked Mr. Swanson if the Department of Natural
Resources supports the committee substitute for SB 162.
RON SWANSON, Deputy Director, Division of Lands, Department of
Natural Resources, stated the concerns of the department have all
been answered except for the mandatory issuing of new passes to all
current pass holders. The department is willing to do that, but we
feel the applicant should bear the cost.
Number 380
SENATOR TAYLOR asked again if the department supports the
legislation.
MR. SWANSON responded that the department does support the
legislation except for the provision that the state should bear the
cost of conversion of passes.
Number 380
SENATOR TAYLOR does not understand what the cost would be, other
than the issuance of a new deed.
MR. SWANSON replied the drafting of the deeds is not the issue.
Since Alaska is a non-mandatory recording state, the fiscal note
reflects contracting with private industry to prove who owns the
land. The alternative would be for the applicant to provide that
information to the department. That process should be applicant
driven, and not mandatory for the state.
CHAIRMAN LEMAN does not disagree with Mr. Swanson on which party
should bear the cost, and asked Senator Green what her opinion is
on that matter.
Number 390
SENATOR GREEN thinks it would be fairly easy to work out that
concern to the department's satisfaction. She has no problem with
that concern.
SENATOR TAYLOR expressed the opinion that the amount stated in the
fiscal note seemed rather high to him. He asked that the
department do a little better job in giving the legislature some
written explanation.
Number 400
CHAIRMAN LEMAN informed Senator Taylor that there was a fairly
detailed analysis with the fiscal note that he might want to
review.
SENATOR TAYLOR agreed that the person receiving the benefit should
be paying the cost.
SENATOR HOFFMAN asked Mr. Swanson if he had any problems with the
removal of the survey requirements by Section 2.
Number 407
MR. SWANSON sees the removal of survey requirements as optional, so
he does not have a problem with that. But that does seem to
conflict with Section 6. He prefers using the word "may", instead
of the word "shall".
SENATOR GREEN commented that sounded fine.
SENATOR TAYLOR made a motion to discharge SB 162 from the Senate
Resources Committee and then objected to the motion for purposes of
discussion on the motion.
SENATOR TAYLOR asked Mr. Swanson the departments' time frame for
selling state-held agricultural land.
Number 428
MR. SWANSON responded that the state holds an agricultural land
sale at least once a year, with the last one being held in October
1995. Of the land made available for sale, about half was
successfully bid upon.
CHAIRMAN LEMAN asked if there were minimum bids required.
MR. SWANSON replied that minimum bids are set based upon fair-
market value. Existing agricultural land owners or lease holders
are given preference to meet high bid to add land to their existing
farm in order to make their operation more economically viable.
Number 443
SENATOR HOFFMAN asked Mr. Swanson if a strip mall could be built
upon subdivided land.
Number 452
MR. SWANSON responded that agricultural covenants would continue to
apply to subdivided land.
Number 463
SENATOR TAYLOR expressed concern over "eternal" covenants made by
the department. Perhaps there should be a sunset date on
covenants. He would like the department to consider putting a time
limit on covenants.
Number 490
CHAIRMAN LEMAN asked if the objection to discharging SB 162 from
committee was maintained.
SENATOR TAYLOR replied, "no."
CHAIRMAN LEMAN asked if there were further objections to
discharging SB 162 from committee. Hearing none, the chairman
stated SB 162 was discharged from the Senate Resources Committee.
He requested the Finance Committee to take into consideration the
instruction regarding interest rates.
Number 505
CHAIRMAN LEMAN adjourned the Senate Resources Committee meeting at
4:15 p.m.
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