Legislature(2001 - 2002)
04/04/2001 03:40 PM Senate RES
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* first hearing in first committee of referral
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ALASKA STATE LEGISLATURE
SENATE RESOURCES COMMITTEE
April 4, 2001
3:40 p.m.
MEMBERS PRESENT
Senator John Torgerson, Chair
Senator Drue Pearce, Vice Chair
Senator Robin Taylor
Senator Kim Elton
Senator Georgianna Lincoln
MEMBERS ABSENT
Senator Rick Halford
Senator Pete Kelly
COMMITTEE CALENDAR
SENATE BILL NO. 35
"An Act relating to electronic application for and issuance of
licenses, permits, and tags issued by the Department of Fish and
Game; relating to violations regarding a license, permit, or tag
applied for or issued electronically; and providing for an
effective date."
HEARD AND HELD
SENATE BILL NO. 139
"An Act relating to fees for certain uses of state water and the
accounting and appropriation of those fees; relating to
authorizations for the temporary use of state water; making other
amendments to the Alaska Water Use Act; and providing for an
effective date."
HEARD AND HELD
SENATE BILL NO. 167
"An Act instructing the commissioner of natural resources to issue
a patent for the remaining interest in certain state land to the
owner of the agricultural rights to that land."
HEARD AND HELD
PREVIOUS COMMITTEE ACTION
SB 35 - No previous action to record.
SB 139 - No previous action to record.
SB 167 - No previous action to record.
WITNESS REGISTER
Mr. Kevin Brooks, Director
Division of Administrative Services
Department of Fish and Game
P.O Box 25526
Juneau AK 99811
POSITION STATEMENT: Supported SB 35.
Captain Howard Starbard
Division of Wildlife Protection
Department of Public Safety
453 South Valley Way
Palmer AK 99577
POSITION STATEMENT: Commented on SB 35.
Mr. Bob Loeffler, Director
Division of Mining, Land and Water
Department of Natural Resources
550 W 7th Ave., Ste 1070
Anchorage AK 99501
POSITION STATEMENT: Commented on SB 139 and SB 167.
Mr. Stan Foo
Alaska Miners Association
3301 Arctic Blvd., #202
Anchorage AK 99501
POSITION STATEMENT: Supported SB 139.
Mr. Bob Stiles, President
DRven Corporation
711 H St. #600
Anchorage AK 99501
POSITION STATEMENT: Supported SB 139.
Mr. Tadd Owens, Executive Director
Regional Development Corporation (RDC)
121 W. Fireweed #250
Anchorage AK 99504
POSITION STATEMENT: Opposed SB 139.
Ms. Pam Miller
P.O. Box 101811
Anchorage AK 99504
POSITION STATEMENT: Opposed SB 139.
Mr. Bill Ward
Ward Farms
P.O. Box 1087
Delta Junction AK 99737
POSITION STATEMENT: Opposed SB 139 and supported SB 167.
Mr. Gary Sonnichsen
P.O. Box 1506
Delta Junction AK 99737
POSITION STATEMENT: Opposed SB 139.
Mr. Bill Michel
P.O. Box 708
Delta Junction AK 99737
POSITION STATEMENT: Opposed SB 139.
Mr. Keith Warren
P.O. Box 1564
Delta Junction AK 99737
POSITION STATEMENT: Opposed SB 139.
Mr. John Wenger
HC 60 Box 280
Copper Center AK 99573
POSITION STATEMENT: Opposed SB 139.
Mr. Harvey Leonard
HC 60 Box 315
Copper Center AK 99573
POSITION STATEMENT: Opposed SB 139.
Mr. Al Roig
HC 60 Box 274
Copper Center AK 99573
POSITION STATEMENT: Opposed SB 139.
Mr. Eric Nashlund
HC 60 Box 271
Copper Center AK 99573
POSITION STATEMENT: Supported SB 139.
Mr. Sam Lightwood
HC 60 Box 229
Copper Center AK 99573
POSITION STATEMENT: Supported SB 139.
Mr. John Kunik
P.O. Box 83
Glennallen AK 99588
POSITION STATEMENT: Opposed SB 139.
Mr. Matt Krinke
P.O. Box 545
Glennallen AK 99588
POSITION STATEMENT: Opposed SB 139.
Mr. Daniel Boone
P.O. Box 53
Chitina AK 99566
POSITION STATEMENT: Opposed SB 139.
Mr. Darwin Peterson
Staff to Senator Torgerson
State Capitol Bldg.
Juneau AK 99811
POSITION STATEMENT: Commented on SB 167 for sponsor.
Mr. Frank Miller
Ninilchik AK
POSITION STATEMENT: Supported SB 167.
Mr. Chuck Graham
Hope AK
POSITION STATEMENT: Supported SB 167.
ACTION NARRATIVE
TAPE 01-27, SIDE A
Number 001
SB 35-ELECTRONIC FISH & GAME LICENSURE
CHAIRMAN JOHN TORGERSON called the Senate Resources Committee
meeting to order at 3:40 p.m. and announced SB 35 to be up for
consideration.
MR. KEVIN BROOKS, Director, Division of Administrative Service,
Alaska Department of Fish and Game (ADF&G), said that at the end of
1999 the department had application available on the Internet for
purchase of fish and game licenses, which proved to be popular.
ADF&G sold nearly 10,000 pieces of stock and generated over
$800,000 of revenue using this method. The total revenue for ADF&G
for one year is about $23 million and 700,000 - 800,000 pieces of
stock. The response from the public has been very positive, but
ADF&G has found that the statutes as written presume a paper
process. The Internet application takes 24 - 48 hours for the
department to process. It works well for non-residents because
there is a lot more preplanning that goes into their trips, but
ADF&G is trying to bridge the gap for those people who would want
to fish the same day. He said ADF&G does not anticipate that
Internet applications will take the place of over-the-counter
sales. ADF&G has over 1,500 vendors statewide that it appreciates
doing business with.
SB 35 would allow ADF&G, in conjunction with the Department of
Public Safety and the Fish and Wildlife Protection, to develop a
paperless method of issuing licenses. Currently four other states,
Idaho, Georgia, Oklahoma, and Florida, use a "smart number." The
number includes digits that identify the license year and gender of
the individual and possibly other information. The number would be
encoded and the bill would require the individual who decides to
purchase a license in this manner to agree to carry a picture I.D.,
which would help enforcement.
MR. BROOKS said ADF&G is trying to take three things into account
in changing the licensing system: it wants to make sure it is
enhancing public service; it is not doing anything to jeopardize
enforcement efforts; and it is not doing anything that would
negatively affect the revenue stream.
He said ADF&G has attempted to address some of the potential issues
by requiring a best interest finding and getting the concurrence of
the Division of Enforcement, which has expressed concerns about
going paperless. Another issue of importance is finding a good way
to record the harvest. The bill would give legislative approval to
pursue electronic licensing.
CHAIRMAN TORGERSON said he had some of the same concerns about
recording harvest.
MR. BROOKS said they have discussed whether making the licensing
system easier for a person would make someone who is otherwise
honest more prone to cheat on a license. He said ADF&G needs to
work with the Board of Game to find an effective way to use a
harvest ticket that is based on the honor system.
CHAIRMAN TORGERSON responded "It's only an honor system if you got
away with it."
MR. BROOKS agreed. He said that a person is supposed to record a
harvest "while the slime is still on your hands."
CHAIRMAN TORGERSON said he didn't see how a person, "could do it
with a beautiful picture I.D. card that says Alaska Fish and Game
on it."
MR. BROOKS responded that a separate harvest ticket would be the
option.
CHAIRMAN TORGERSON replied then ADF&G has to mail it so it might as
well keep the other system.
MR. BROOKS responded that he didn't view that as a reason not to
try to make this a better system.
CHAIRMAN TORGERSON said he would like to see the whole system
before he gives him a bill.
SENATOR ELTON said it seems that one of the check points that may
get to that issue is that this will not happen unless the Division
of Enforcement concurs that it works for them.
CAPTAIN HOWARD STARBARD, Division of Wildlife Protection,
Department of Public Safety (DPS), said the bill as written would
cause the Department of Fish and Game to get concurrence from his
commissioner when the system would come up. He thought electronic
licensing and recording of harvest would be hard to enforce.
CHAIRMAN TORGERSON asked if he envisioned that each officer would
use some sort of mini-computer to look up an I.D. number to see if
it's current.
CAPTAIN STARBARD answered affirmatively and said that they could
use something like a palm pilot.
SENATOR ELTON noted the bill has a zero fiscal note, but that they
would allow the vendor to assess up to $3 more for the issuance of
a permit or license electronically, but the $3 would be retained by
the vendor so it doesn't increase revenues to the department at
all.
MR. BROOKS responded that is correct and explained that currently a
vendor gets 5 percent of the gross sale, plus $1 per item. The
commission for a fishing license and a king salmon stamp is about
$3 for a resident. A non-resident sale is substantially higher. He
pointed out that section really only applies if the department
contracts with someone to do it for them. Currently, the Internet
sales are made by the state so no vendor commission is paid. All of
the money goes into the ADF&G fund.
SENATOR ELTON asked if this could show a positive fiscal impact
because the more licenses the department sells electronically, the
less discount it will be giving to vendors.
MR. BROOKS replied that is correct. He added that the database
often has a 90 - 100 day lag to data capture using a vendor who
reports monthly. With Internet sales, there's instant update of the
database and the department doesn't have to hire someone to capture
the data.
CHAIRMAN TORGERSON said they could use a driver's license so they
aren't giving everyone new numbers.
MR. BROOKS said they discussed drivers' licenses, but not every one
carries a license either.
CHAIRMAN TORGERSON said the committee would set this aside until
Mr. Brooks came back with a master plan.
SB 139-STATE WATER USE
CHAIRMAN TORGERSON announced SB 139 to be up for consideration.
MR. BOB LOEFFLER, Director, Division of Mining, Land and Water,
Department of Natural Resources (DNR), said he wanted to first
describe the problem this bill solves and then go through what the
bill does and explain how it's one part of the solution. He told
members:
In order to withdraw a significant amount of water from
the state, you need a water right if it's a permanent
withdrawal and a temporary water use authorization if
it's temporary for five years.
The basic problem we have is right now the system is
broken. We cannot issue the water rights that people
request. We don't provide the services that Alaskans
need. At the peak, this program had $1.6 million in the
program and 39 full-time people. Two years ago it was
down to $325,000 and four people and quite frankly that's
not enough to run the program that we have now - a
program that maintains 21,000 water rights files,
receives 250 applications for water rights and 150
applications for temporary water use permits.
The consequences of those four people not being able to
run the system is a backlog. We now have a backlog of 600
- 700 water right applications and a total of 3,000
actions - transfer, extensions and things like that. The
consequences of that backlog are threefold: people call
me up and say, 'When am I going to get my water right?'
and I have to say, 'Well, given our back log, it's going
to be two to three years.' And then they say, 'I can't do
my development for two to three years? If I withdraw
water, I'm going to break the law for two to three
years?'
That's not the way government should be run and that's
not a service that I'm proud to provide.
The second consequence is because of a staff that's
trying to do things with shortcuts, we're targeted for
litigation and we almost lost a year of exploration at
NorthStar.
The third consequence, of course, is that people go ahead
and withdraw water without a permit. Often, that probably
does very little harm to the resource. Occasionally, it
does risk a resource. That's the problem we need to
solve. It's a problem of a group that cannot run the
program that we have today. It's not a problem created by
a particular legislature or administration. We have had
declining budgets for 20 years. This bill is one part of
a three-part solution. I would like to describe again
those three parts so you can see how the bill fits in and
then I would like to go to what the bill does.
The three parts of the solution we envision are first, we
cannot continue to administer a program designed in the
early 80s with budgets for this millennium. So we need to
find a way to do more with less and perhaps to provide
less service for less money, which will run the program
on a smaller budget. To that end we're proposing
regulations in the next two to three weeks that should
significantly streamline the program and allow those
water withdrawals that are least likely to affect the
environment or other users go much quicker. We think 65
percent of our caseload will fall into that category.
The second is even a streamlined program needs more than
four people to run it. So to that end there is an
increment in this year's budget for an additional
$300,000 to both run the program and in four or five
years rid us of the backlog. The performance measures I
put down for that increment was that we would do a
typical water right within 60 days and a typical
temporary water use permit within about 15 days.
The third part - streamline program - more money, is this
bill does two things. The first thing it does is try to
provide a long term income source to fund the program.
I'm easy. Any way we get the money, we'll take it to run
the program to provide the services that I think Alaskans
need. But this bill tries to provide a long-term income
source to do that and it does that through recommending
water use fees. When you get a water right, it's a right
forever. You never need to touch it again. This scale
would assess a sliding scale water use fee. I've been
shopping that around and I'd like to tell you the
reactions I get from people about that. But first let me
tell you what the second part of the bill does. Our
temporary water use program, which we use for temporary
water uses, has been the subject of a significant amount
of litigation on the North Slope. It is a program that
was implied by statute, but created in regulations. This
bill would, in fact, provide explicit legislative
authority for how the program has been working for 20
years. Some validated permits have been called into
question by some of the North Slope rulings. So that's
what the bill does. It does two things, a long-term
income source for the program and explicit legislative
authorization for a temporary water use fee program. It
does not change how we run the water use program.
Number 1500
MR. LOEFFLER said he produced a proposed amendment as the result of
the reactions he received after showing this around in the mining
community, the agriculture community, the Alaska Water Resources
Association, the Resource Development Council and environmental
groups. The groups came to the consensus that this is a problem.
The state is not providing services that people demand and the
problem needs to be fixed. He said:
With respect to charging it through temporary water use
fees, although there was some agreement, that is, an
annual fee on your property right, the reaction ranged
from reluctant approval to disgust to outright hostility.
In a sense, people were saying, 'You have a problem, but
this is a silly way to fix it.'
What they were suggesting was a number of things: one,
that an annual fee on a property that you own was
inappropriate and no other state works that way and
second, they were concerned, quite frankly, that there
were no bounds to how much I could charge in the bill nor
did existing permitees want to fund the 20-year backlog.
So what was suggested instead is that they said you
should charge people for the services you provide. You
should charge people the reasonable direct cost of the
permit application and that suggestion was pioneered by
the legislature in HB 361 last year, commonly called the
DEC fees bill.
MR. LOEFFLER said the proposed amendment is the DEC fees bill. It
puts into statute a framework that directs DNR to charge the
reasonable direct costs of processing those applications and that's
the long-term income source.
MR.STAN FOO, Alaska Miners Association (AMA), stated support for SB
139. He said the AMA appreciates the department's efforts to
address this issue that involves all water users. The AMA also
supports the technical amendments and is encouraged by the effort
to use the DEC fees bill in the framework for this effort. However,
he expressed concern that water fees should not be necessary for
uses such as suction dredges or water that's collected and released
back into a stream.
MR. BOB STILES, President, DRven Corporation, said he was
testifying on behalf of the DRven Corporation. Drven supports the
technical amendments to this bill and recognizes the problems that
DNR faces. DNR is charged with managing a resource that often has
no constituency. One of the main reasons he is present today is to
illustrate that water rights, while they are not flashy, do have a
constituency.
MR. TADD OWENS, Executive Director, Resource Development Council
(RDC), said the RDC worked for about 2 1/2 years with a diverse
group of industry representatives, the legislature and DEC to pass
HB 361 and they support the department's recommendation that this
program be added into that structure for fees. It distributes the
burden of the program's costs fairly between the private sector, in
terms of industry applying for these permits, and the public at
large. He stated, "Another critical issue this bill solves is DNR's
backlog. There are a lot of folks out there who are operating
essentially without their authorization and we do support DNR's
request for funding to take care of that backlog."
MS. PAM MILLER, an Anchorage resident, said she is concerned about
SB 139 as Alaska has the best water statutes in the nation that
were set up to protect Alaska's clean water, fish and wildlife.
MR. BILL WARD, Ward Farms, opposed SB 139, and said he came from
states where water was a very valuable commodity and water rights
were sought after. They were handled with very little bureaucracy
and overhead. He said the bureaucracy in Alaska is quite large; to
get water rights he had to go through ADF&G, the Department of
Environmental Conservation and Coastal Zone Management. He is
concerned that "reasonable fees" is more for government than it
would be for the private sector. He said he uses half the amount of
water exempted from a residential household, or about 800 gallons.
He is stuck between the big commercial rigs and the residential
users. He warned, "If you want to make money for the general fund,
that's okay, but please don't set up a level of bureaucracy over
nothing more than people to shuffle papers."
MR. GARY SONNICHSEN, a Big Delta resident, supported Mr. Ward's
testimony and opposed SB 139. He said the department's plan is to
charge more fees to add a lot more government and a lot more
paperwork, which will create more problems.
MR. BILL MICHEL, a Delta Junction resident, said he didn't think
the state had any surface or subsurface rights to the water.
Therefore, they have no business to tax it.
MR. KEITH WARREN, a Delta Junction resident, said in the private
sector, if you can't make your budgets for whatever reason, you've
got to dole it out. He thought the government should take this
lesson from the private sector. He opposed SB 139.
MR. JOHN WENGER, a Copper Center resident, supported Mr. Ward's
testimony 100 percent and said what really concerns him is that the
next largest user group is the public water supply. If Copper
Center's water supply falls under the department's over 15,000
gallon a day category and the people have to start paying fees, it
would put a lot of people back financially.
MR. HARVEY LEONARD, a Copper Center resident, opposed SB 139. He
thought it was another attempt by bureaucracy to make them pay for
something they don't have the money to pay for.
MR. AL ROIG, a Copper Center resident, opposed SB 139. He thought
the bill was poorly written and would do nothing but create a
larger bureaucracy.
MR. ERIC NASHLUND, a Copper Center resident, said that SB 139 is
just a revenue-generating source.
TAPE 01-27, SIDE B
MR. SAM LIGHTWOOD, a Copper Center resident, said the legislature
is requiring fees and other small amounts for services that the
state normally provides for its citizens. Mr. Ward said he had to
apply for four different water rights permits. That is duplicative
and makes the process so complicated. He noted, "It was much better
when we had a little more adequate funding from the legislature
directing to provide these services to people. The answer to that,
of course, is the legislature needs to find better sources of their
funding. They are nickel and diming everyone to death and the
overall plan has to be worked out."
He thought the legislature should reinstate the income tax and
said, "I hope I get out of here alive."
MR. JOHN KUNIK, a Glennallen resident, said the bill would require
water meters, meter readers, installation crews, law enforcement,
etc. He asked what would happen to individuals who live on federal
lands who use water and how all the water would be metered.
MR. MATT KRINKE, a Glennallen resident, opposed SB 139. He said
[he] can't afford the money to pay for the bureaucracy.
CHAIRMAN TORGERSON asked if the bill will affect water rights on
federal land.
MR. LOEFFLER answered that all water is reserved by the state.
There is an implied federal water right that the feds have a right
to for certain federal lands, but it is determined through a joint
process that is very complicated or typically they just come to the
state for a water right.
CHAIRMAN TORGERSON asked if the state could bill them more than it
does Alaskans or whether they are billed at all.
MR. LOEFFLER replied that they are billed an application fee like
everyone else.
MR. DANIEL BOONE, a Chitina resident, said, "I don't think this is
a good bill. One of the main reasons is that a few years ago the
State of Alaska left us millions of dollars in hydro projects for
small communities around the state, like Bradley Lake. By charging
a fee to the electric companies and the small private utilities to
generate cheaper electricity, the rates will immediately increase
probably twofold." He said the other reason he is against the bill
is that too many places in Alaska have "public wells" and this bill
would increase the fees on them.
SENATOR ELTON referenced the language on page 5, line 24, and asked
if AS 46.15.080 applies to the issuance or extension under this
section of an authorization for temporary use of water. He said
"Temporary" is defined as five years and possibly 10 years under
the extension according to a conversation he had with Mr. Loeffler.
He did not understand why Mr. Loeffler didn't want the provisions
of that to apply when the provisions say that the commissioner has
to consider the effect on fish and game resources, public health
and economic activity resulting from the activity.
MR. LOEFFLER responded that they consider the effect on fish
resources and public health before they prioritize water users,
"but a temporary water use does not convey a property right. OAO
gives us a best interest criterion before we convey a property
right. This is part of making clear that a temporary water use
authorization is, in fact, a revocable authorization - does not
convey a property right or anything like a property right. But
certainly we work very closely with Fish and Game to take into
account any affect on fish resources, wildlife, or, for that
matter, prior water right holders."
SENATOR ELTON said, "I understand that you want to make a
distinction between a permit and a temporary water authorization."
He asked where in statute it compels Mr. Loeffler to consider the
effect on fish and game resources or public health or other
economic activities for a temporary authorization if he is
exempting himself from those provisions.
MR. LOEFFLER answered that he is required to consult with ADF&G.
Under subsection (f), he is expected to put limitations on
protecting the rights of other people and the public interest. The
methods and regulations he has been dealing with for 20 years also
require him to do that and that's been the department's mode of
operation. He said he would have to get back to him with a complete
answer.
SENATOR ELTON asked, "I took a look at the public notice section
that is repealed under this bill and it seems to me that I know
that public notice can be onerous, but the public notice provisions
here provide that within 15 days of publication of notice, an
interested person may file an objection and that the commissioner
has to consider that objection within 30 days, can extend that to
180 days, if the commissioner thinks there's enough there to have a
hearing - AS 46.15.133, the section that they are exempting
themselves from." He said if NorthStar is exluded, he wondered why
giving notice with 15 days to file an objection and giving the
commissioner 30 days to make a determination has been onerous in
the past.
MR. LOEFFLER answered:
Most of the temporary water use permits are for things
like construction camps and when the agencies determine
there is no environmental harm, a 15 to 40 day wait to
halt construction in mid-summer is a problem. In areas
where we think there is likely to be harm, we can public
notice it and we are not prohibited from doing it. The
practice for the last 20 years has been not to [indisc.]
things and everyone imagines a 5-year or 10-year
facility, but often we used them for DOT, which is one of
our major consumers. In the middle of summer
construction, yes Senator and Mr. Chairman, a 15 - 30 day
delay is a problem.
When we are giving a state resource away forever, which
is a water right, we're constitutionally required to do
public notice. But for something that we believe that we,
the agencies, determine won't harm the environment or
other water users and is temporary and is revocable if
there is a problem that delay often will cause a problem.
SENATOR ELTON responded:
When you get to be my age, 10 years can seem like forever
and the second comment would be that I understand that
you may have a problem with DOT or someone wanting water
rights for two days to make concrete or cement, but
that's already covered in AS 46.15.133, because it says,
the Commissioner may designate types of water
appropriations that are exempt from this section. So, the
commissioner isn't precluded from making a quick
decision, because there is a provision that allows him to
do that.
Number 1900
SENATOR LINCOLN asked Mr. Loeffler to expand on the fact that DNR
expects to discount fees for non-consumptive use. She also asked
what the impact of these fees would be on the previous speaker who
was a farmer and, therefore, had the 800-gallon exemption per acre
for 6,000 acres.
MR. LOEFFLER said:
Let me answer the second one first - what are the impacts
of the fees. Under the bill as written, the fees would
range from $50 to $500 for a water right. So if you had a
water right, if you had a number of water rights, you
could have multiples of $500 each year. Although,
typically we try to consolidate them for that reason. I
will say that under the amendments that I suggested that
you would pay the reasonable cost of adjudicating the
water right and then there would be no more fees. So, for
the person in Delta who has a farm, the bill as written
would provide an annual fee that is a sliding scale based
on the amount of water right. For the amendment, we
suggested a one-time application fee that would be
related to the cost of adjudicating. In an area where
there's not a lot of people and not much problem with
adjudication, you would expect to have a reasonably small
fee.
SENATOR LINCOLN asked if that would be less than $1,000.
MR. LOEFFLER said he didn't know, but he thought most small water
right holders would be less than $1,000. He said he would get an
estimate.
CHAIRMAN TORGERSON said they had heard the fear out there that
people just don't trust government to do a reasonable fee, "and I
sort of agree with that…I'd like to see what your intent is."
SENATOR LINCOLN asked him to get back to them on fees for a miner
replenishing the water source that goes right back into the stream.
CHAIRMAN TORGERSON said he thought that was a suggested amendment
instead of just being mentioned in a fiscal note.
SENATOR TAYLOR said: "If we're going to set any fees at all, I have
voted for my last fee bill in this legislature after the blood,
sweat and tears that you, Mr. Chairman, and I have put into DEC
just trying to get a handle on how they were going to charge every
hotdog cart out there to go inspect them and never did get a
straight answer in two years. I'm not about to start increasing
fees so as to support your agency."
CHAIRMAN TORGERSON noted that they had exempted the hotdog carts.
He said he intended to work more on the bill starting with the
North Slope.
SENATOR ELTON said he thought part of the problem was that there
aren't as many people doing permits now as there used to be. One of
the sad things about the testimony is that people have said they
are willing to pay just to speed the process up, because waiting
for two years or longer is a significant economic drain. He stated,
"This is one approach. Another would be to restore funding closer
to a level we had 15 or 16 years ago."
CHAIRMAN TORGERSON added, "Or exempt the users and widen the
brackets a little bit more instead of worrying about the guy that
carries the canteen from Anchorage to Mat-Su.
SB 167-AGRICULTURAL LAND
CHAIRMAN TORGERSON announced SB 167 to be up for consideration.
MR. DARWIN PETERSON, staff to Senator Torgerson, said:
This legislation is intended to resolve a problem that
dates back to the 1964 earthquake. In 1943, the Ross
Miller family homesteaded 27 acres of land in Hope. In
the early 1950s, the Millers leased 15 acres of adjoining
land from the Forest Service, which they used for
pasture. During the '64 earthquake, the Millers lost 18
of their 27-acre homestead. The Earthquake Exchange
Program compensated the Millers for their loss by giving
them only one acre of land. Subsequently, the state
determined that the Millers had been treated unfairly and
were entitled to the 15 acres of leased Forest Service
land as relief. In 1978, agricultural rights to this land
were conveyed as provided by former state law AS
38.05.321.
For many reasons, fee simple title should have been
granted at this time. Recently, DNR has declared that the
state has no compelling interest in retaining the
remaining interest in this property and, therefore,
supports conveying full land rights. Unfortunately, there
are no existing statutes that would authorize DNR to
remove the agricultural restrictions on this land.
SB 167 would make a minor statutory change to correct his
situation. Anyone who received agricultural rights to
land under section 6(a) of the Alaska Statehood Act would
be eligible for fee simple title if the owner pays the
fair market value for the state's remaining interest.
This would only apply to tracts that are 15 acres or
less.
SENATOR TAYLOR asked if there were others in this class.
CHAIRMAN TORGERSON said he didn't think there was.
MR. LOEFFLER stated support for SB 167.
MR. BILL WARD, a Delta Junction resident, said he thought this was
a reasonable circumstance to do a transfer from agricultural to fee
simple and supported SB 167. He cautioned them not to use the
legislative process to change the status of other agricultural
lands around the state because speculators would take advantage of
it.
CHAIRMAN TORGERSON said he shared his concerns and that this bill
only applies to one person at 15 acres.
MR. FRANK MILLER, a Ninilchik resident, said he appreciates the
work the committee has done on this bill. His one concern is
subsection (3) that says the owner of the rights for agricultural
purposes pays the state the fair market value of the remaining
interest in the land estate, as determined by an appraisal paid for
by the owner. He said that's like buying their own land back at
this point and he thought the price should go back to when the land
should have been conveyed.
MR. CHUCK GRAHAM, a Hope resident, said he concurred with Mr.
Miller's comments on subsection (3). The Millers have valid
preference rights and should have received fee simple title some
years ago. He actually thought the price should be based on the
appraised value in 1967.
CHAIRMAN TORGERSON asked Mr. Loeffler how he was going to handle
computing the fair market value of the Miller's property.
MR. LOEFFLER explained that they compute the market value by doing
an appraisal today and subtracting the appraised value of the
agricultural rights that they own. The Millers would pay the
difference under this bill.
CHAIRMAN TORGERSON asked about the assertion that they are owed
something because of the Earthquake Relief Act.
MR. LOEFFLER replied that he had no knowledge of that Act. He
added, "All I know is that in the 60's there was a preference right
they were given that allowed them to have land with an agricultural
covenant. He didn't know anything about the earthquake."
SENATOR TAYLOR said that agricultural rights are basically a
restriction on the land and he thought this removes the
agricultural restrictions.
MR. LOEFFLER responded that they own certain rights to the land and
he would give them the appraised value of the land minus the rights
of the land today.
SENATOR TAYLOR asked if those rights have a value they can
ascertain.
MR. LOEFFLER answered yes.
SENATOR TAYLOR said he empathized with the people, but he didn't
know if you could legally sell land at some previously appraised
price.
MR. LOEFFLER said he thought it would go against the grain of the
way they have done business in the state. He said they currently
own land subject to agricultural rights. He noted, "It's the same
way people at Pt. MacKenzie own the land with an agricultural
covenant on it. They own the agricultural rights so to speak. In
that, they have been living on it, their father and grandfather. I
concur with Darwin's assessment that there is no state interest in
keeping the land agricultural at this point. The world is not a
better place if we do that. I would support their urge to get the
land, but Senator, I don't know a way to do it for the 1967 price."
CHAIRMAN TORGERSON said he didn't either and that he would hold the
bill until he talked to the Millers about it.
CHAIRMAN TORGERSON adjourned the meeting at 5:00 p.m.
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