SB 204-STATE LAND SALES; PLATS; RIVERS  5:11:45 PM CHAIR MICCICHE announced that the final order of business would be SENATE BILL NO. 204, "An Act relating to state lands; relating to the authority of the Department of Natural Resources over state owned lands; relating to the disposal of state land; relating to the leasing and sale of state land for commercial or industrial development; repealing establishment of recreation rivers and recreation river corridors; and providing for an effective date." CHAIR MICCICHE noted that this was the first hearing for SB 204. 5:12:20 PM MARTIN PARSONS, Director, Division of Mining, Land, and Water, Alaska Department of Natural Resources, Anchorage, Alaska, explained that SB 204 is a land sale bill the governor introduced to help the Division of Mining, Land, and Water (DMLW) make lands available to fulfill the need and desire for Alaskans to own a piece of Alaska. 5:13:02 PM MR. PARSONS commenced his presentation, SB 204 State Land Sales; Plats; Rivers. He displayed slide 2, Why and How DNR sells State land? that made the following points: • Alaska Constitution o Article 8, Section 1 -It is the policy of the State to encourage the settlement of its land and the development of its resources by making them available for maximum use consistent with the public interest." o Article 8, Section 9 requires reservations of minerals (as required by Section 6(i) of the Statehood Act) and reservations for access to these resources (implemented by AS 38.05.125). o Article 8, Section 10 requires public notice and "other safeguards of the public interest" when selling state land. No disposals or lease of state lands, or interests therein, shall be made without prior public notice and other safeguards of the public interest as may be prescribed by law. • Alaska Statute Title 38 o AS 38 serves as an "owner's manual" for Alaska's Statehood Act entitlement lands, dealing with management as well as conveyance. o Most of the authority of Land Sales is codified within AS Title 38, Chapter 05 The Alaska Land Act. He explained that slide 2 provides an overview of why the State sells land, the authorities, and the constitutional framework but not necessarily the requirements. One of the department's primary purposes is to provide for the development and settlement of state land, but the State reserves the minerals as part of Alaska's Statehood Act. MR. PARSONS emphasized that land sales are subject to the public interest. The land sales program is not a land giveaway. The department does not make land available where the public does not have an opportunity to weigh in on how the State sells the land. Land sales go through the normal public process under Title 38, the statutes the make lands available under the Alaska Land Act. 5:14:03 PM MR. PARSONS displayed slide 3, SB 204 - State Platting Authority for State Land Managed by DNR, that contains the following information: • State assumes platting responsibilities for state lands within and outside of municipal boundaries. • Consolidation of platting requirements will add efficiencies to the development of state land for disposal to Alaskans; reducing costs and time necessary to bring state lands onto the market helping to fulfill the demand for state land parcels. o Where appropriate the state will be consistent with municipal construction and subdivision stipulations into the subdivision designs to the maximum extent o Road Rights of Ways will be platted consistent with DOT&PF requirements square4 Access to subdivisions will meet "Collector road" standards o Reduces development costs making projects economically feasible o Provides predictability in development costs and timelines o Reduces rework of plats He said platting and land sale development would all be consistent with AS 38.04.065. The State would work closely with municipalities and boroughs throughout the planning process. MR. PARSONS explained that the portion of the bill that slide 3 addresses also deals with the effects on the Division of Forestry, the Alaska Trust Land Office, and the Alaska Department of Military Affairs (DMVA) where the State accepts opportunities to plat roads into certain areas. For example, the Division of Forestry could access a burnt stand of timber that was dried and would be excellent firewood; the division would be able to bring that online in a very quick and predictable manner while taking municipal concerns into account. He said one of the things that DMLW would look at is reserving rights-of-way for roads within a subdivision. DMLW would work with the Alaska Department of Transportation and Public Facilities (DOT&PF) to make sure that there would not be a need to come back at a later date to purchase or widen a right-of- way. DMLW would also work with the boroughs and the municipalities to make sure the width of the right-of-way was correct for any future land development. MR. PARSONS highlighted that lands developed within a borough would go on their tax rolls for tax collection. He added that boroughs take responsibility of the roads once the State brings the roads up to standards. CHAIR MICCICHE apologized and asked him pause his overview so Commissioner Feige would provide her opening statement for SB 204. 5:18:17 PM CORRI A. FEIGE, Commissioner, Alaska Department of Natural Resources, Anchorage, Alaska, stated that Article 8, Section 1 of the Alaska Constitution states that it is the policy of the State to encourage the settlement of its lands and the development of its resources by making them available for maximum use consistent with the public interest. She detailed that SB 204 focuses on state land availability for sale and development to drive the state's economy. The bill aims to make more land available to Alaskans and commercial activities to directly impact municipal tax bases, jobs, and the state's economic growth. COMMISSIONER FEIGE said she believes SB 204 will increase demand for state land parcels. The Alaska Department of Natural Resources (DNR) will meet increased demand by creating more efficient ways for subdividing and offering state land for sale to increase the supply of land parcels available for purchase and development. She stated that SB 204 would increase the supply of state land parcels through the following four key actions: 1. Extension of state platting authority to all state land managed by DNR to allow for lower cost of subdivision and faster conversion of state land to sale-ready parcels. 2. An increase in the cap on the land disposal income fund from $5 million to $7.5 million to offset inflation, which has never been done since the fund came into existence, and further to make more funding available for land subdivision and construction of access. 3. The bill aims to create a new commercial land use program that allows the public to nominate parcels within economic opportunity zones or state determined commercial development areas. 4. The bill will repeal the unenforceable management restrictions on certain state land parcels that have actually hindered the very activities that they were originally intended to encourage. COMMISSIONER FEIGE summarized that growing the economy of the state and building stronger municipal tax bases have one common denominator and that is land. Getting more land into Alaskans' hands, while still protecting access for recreation, is essential for diversifying Alaska's economy that is less reliant upon oil and gas jobs for individual employment and financial security. 5:22:22 PM MR. PARSONS displayed slide 4, SB 204 - Increase Land Disposal Income Fund Cap, that contains the following information: • Increase spending authority from the Land Disposal Income Fund for project. • The cap on the Land Disposal Income Fund is proposed to be increased from $5.0 million to $7.5 million to provide additional capital for the department to develop and dispose of state lands and to offset inflation since the fund was established in 2000. o $5 million cap has not adjusted in 20 years o Personnel and Development costs have increased significantly, reducing the available "working capital" o Will result in more acreage available for sale and construction of access. He detailed that the Land Disposal Income Fund, enacted in 2000, revitalized the department's land sale program. The $5 million cap allows the department to spend up to $5 million on surveys, design, appraisal hiring, road construction, and other types of amenities that are necessary for land sales. He said costs have increased over the course of 20 years and the department estimates that increasing the cap to $7.5 million takes inflation into account. He emphasized that the cap is not an appropriation. The $7.5 million cap would simply authorize the program to receive the money and allow the department to build more access roads to make more land available. 5:24:59 PM MR. PARSONS displayed slide 5, Land Sales Competitive Programs, and discussed the following bullet points: • Sealed-Bid Auction Sales o Available to Alaskan residents o Online/Paper Bid system during set bidding period • Over-the-Counter Purchase o Open to the public world-wide throughout the year • Remote Recreational Cabin Sites o Stake it yourself program o Lease to sale conversion He said the sealed-bid auction is the department's initial offering of land that is only open to Alaskans. Parcels that do not sell go into the over-the counter purchase program. MR. PARSONS said the Remote Recreational Cabin Staking Program is very popular. In an identified area, people can stake up to 20 acres, clear the land, and start to build a cabin while under lease. After a period of time the program converts the lease into a sale. This land is typically more remote. He clarified that the land sales program does not include agriculture. MR. PARSONS displayed slide 6, SB 204 - Additional Sale Authorities, and discussed the following bullet points: • Provides for ease of Land Sales purchase contracts o Modifies auction requirements for easier administration of land offerings square4 Allows for more modern sale options, including online auctions o Increase max contract term to 30 years square4 Currently capped at 20 years square4 Allows for longer financing of higher value parcels He explained that the department would like to change the ways it offers, contracts, and finances land. Currently DNR is not able to offer online land auctions like an eBay. The requested changes to the program include extending the maximum contract length from 20 years to 30 years. Extending the payment period would open lands up for more Alaskans to participate. 5:27:31 PM MR. PARSONS displayed slide 7, SB 204 - Commercial Use Land Sales, and discussed the following points: • This new statute governing the leasing and sale of state lands deemed suitable for commercial development, within Qualified Opportunity Zones or in state determined commercial development areas. o Land can be nominated by the public o Leasing option to complete requirements for sale and allow immediate commercial activity o After conclusion of the lease requirements a sale will occur o Individuals have requested a program to allow for such sales o The number of acres identified for proposed development will be significant and the number of acres conveyed will depend on the proposals received He explained that individuals who had ideas about creating remote lodges for hunting or eco-tourism fostered the idea for the commercial land sale program. The idea is to develop the program in Qualified Opportunity Zones designated by the IRS for economically depressed areas. MR. PARSONS detailed that an individual or the State could identify a 5 to 20-acre parcel and submit a development plan that describes structures, the workforce, and the skills required to develop the project. The participant would ultimately pay for surveying and appraisal costs. He said program participants would receive a five-year lease to show the land is being developed according to plan. The State would convert the lease to a sale if the participant is meeting their plan requirements. Initial leasing prevents land speculation. The department's intent with the program is to create economic diversity. 5:29:44 PM MR. PARSONS displayed slide 8, SB 204 - Repeal of Recreational Rivers Statutes, and discussed the following points: • The bill repeals statutes relating to the designation of certain rivers in southcentral Alaska as recreation rivers, in order to allow for more effective management of state land. o Reduction of current limitations on land management o Repeal will end unenforceable management issues and restrictions on recreational and commercial use on over 260,000 acres square4 Provides for generally allowed uses square4 Allows expansion of Land Use opportunities o May increase acreage available for inclusion in the Land Sales program or new commercial development program MR. PARSONS detailed that the Susitna Recreational Rivers Plan and accompanying statutes set aside lands in the 1980s and '90sfor access along certain riverways like Kroto Creek, the Deshka River, and the Little Susitna River. However, the statutory stipulations within the plan are unenforceable and restrictive for commercial recreation development. He said the notion of repealing the recreational plan raised concerns about access. The department would have to do a plan amendment for reclassifying lands contained within the area and initiate a public process to address concerns. SENATOR KIEHL said he had questions for the department that he would hold for the next hearing due to time constraints. CHAIR MICCICHE suggested the members submit any questions to his office and he would forward them to the department so they will be prepared to answer them at the next hearing. He noted that the sectional analysis would not be heard today. 5:33:38 PM CHAIR MICCICHE held SB 204 in committee for further consideration.