SB 133-REMOTE RECREATIONAL SITES; SALES; PERMITS  3:59:22 PM CHAIR REVAK reconvened the meeting and announced the consideration of SENATE BILL NO. 133 "An Act relating to the sale or lease of state land for remote recreational sites; relating to permits for remote recreational sites; and providing for an effective date." 3:59:47 PM MARTY PARSONS, Director, Division of Mining, Land, and Water, Department of Natural Resources (DNR), Anchorage, Alaska, stated SB 133 is another step to fulfill the intent of art. VIII, sec. 1 of the Constitution of the State of Alaska to encourage settlement of Alaska lands consistent with the public interest. He said just three percent of the land in Alaska is in private ownership and this administration intends to expand that. MR. PARSONS displayed the pie chart on slide 3 that shows the breakdown of land ownership in Alaska. The federal government is the largest landowner with 59 percent; state ownership is 26 percent but will increase to about 30 percent once the state receives all its entitlement; the Alaska Native Claims Settlement Act (ANCSA) corporations hold about 12 percent; and about 3 percent is in private ownership, which includes municipalities. MR. PARSONS reviewed the different ways SB 133 provides for Alaskans to procure land in Alaska. The slide read as follows: • Lands can be identified and offered through the State Land Sales program • The Department of Natural Resources (DNR) will maintain a list of lands available for remote recreational sites • The State will identify areas where land is properly classified for settlement and may be staked for remote recreational sites • Individuals can nominate open state land not included in the annual state offering for remote recreational sites • Multiple ways to procure a site: • Purchase • Lease • Permit 4:03:24 PM MR. PARSONS described the current Remote Recreational Cabin Site Program under AS 38.05.600. The state identifies up to 20 acres of state land per parcel for disposal under a lottery. Successful individuals are able to stake their own parcel. The difference between the current RRCS program and the former programs is that the current program is open to residents only, it has no "prove-up" requirements, and the resident has the opportunity to own the land. He said DNR goes through a public interest finding and public process before offering the land as part of the staking program. 4:05:15 PM SENATOR VON IMHOF read the last bullet point on slide 5, "Since 2001 DNR has offered staking in 81 staking areas over 14 offerings." She asked for a description of a staking area and the definition of an "offering." MR. PARSONS directed attention to the examples on slide 7 of staking areas from previous RRCS offerings. He elaborated that a staking area is land DNR has identified as appropriate for staking within a larger offering area. For example, DNR may identify 15 authorizations within a 20,000 acre offering area. 4:07:19 PM SENATOR VON IMHOF asked how many individual parcels and total acres the division has sold since 2001. MR. PARSONS answered he would follow up with information. SENATOR VON IMHOF asked for an estimate and whether each staking area has about 50 parcels. 4:08:07 PM MR. PARSONS answered it depends on the individual offering. Some offerings could be 20,000 acres with 50 parcels and others could be 7,500 acres with just 4 or 5 parcels. He said he did not have the numbers in his head, but he would get the information to the committee quickly. 4:08:48 PM SENATOR STEVENS asked if the difference between prove-up and no prove-up is that prove-up means a person builds a cabin and no prove-up means they do not build a cabin. MR. PARSONS answered that is correct; the old staking programs required certain improvements. Under the Remote Recreational Cabin Staking program, the individual who staked the land was able to move into a three-year lease so they could get the land surveyed and appraised. They were allowed to make improvements, but it was not required. After that the individual could move into a land purchase contract. 4:10:01 PM SENATOR STEVENS commented he thought the idea was for these parcels to be improved. He asked if somebody could lease a parcel for three years, do nothing, and end up owning the land. MR. PARSONS answered that is technically correct. Most of the parcels are fairly remote and it is up to the individual who staked the land to use it for recreational purposes as they see fit. SENATOR MICCICHE asked if the bill repeals the current program and proposes a new one. He shared that he participated in the Day Harbor staking years ago and he was not sure the process was as sound as it could have been. MR. PARSONS answered yes; SB 133 repeals the program under AS 38.05.600 and replaces it with a new one. 4:12:00 PM SENATOR KAWASAKI asked if a tent platform would be an acceptable prove-up. MR. PARSONS answered the current Remote Recreational Cabin Staking program does not have a prove-up requirement. An individual stakes the land then has it surveyed and appraised. Improvements are at the individual's discretion, whether it is a tent platform, camping site, or a more permanent structure. SENATOR KAWASAKI asked if a parcel under the staking program could be used for a commercial purpose. MR. PARSONS answered no. 4:13:21 PM SENATOR BISHOP asked if commercial guides and outfitters are excluded. MR. PARSONS answered the Remote Cabin Staking program may not be used for a commercial purpose; that was part of the impetus for the commercial provision in what is currently SB 97. 4:14:05 PM MR. PARSONS directed attention to slides 7 and 8 and explained they are intended to illustrate the remote staking program has had offerings and authorizations statewide. The offerings range from Nome to Lake Louise, to Southcentral to Southeast. 4:14:56 PM MR. PARSONS paraphrased slides 9-10 that provide an overview of what is in SB 133. The slides read as follows: • Repeals existing RRCS program • Provides for Commissioner to identify areas where land is properly classified for settlement and offer those lands for staking of remote recreational sites • Identifies who is eligible to participate in the program • Establishes what parcel size may be staked by an eligible participant 10 acres • Provides for Alaskans to nominate lands for inclusion • Requires information necessary for identifying staked parcel • Process for handling conflicting staked parcels • Directs the Commissioner to establish regulations to implement the program • Establishes process for staking and purchasing a piece of state land for a remote recreational site • Sale price is fair market value • Applicant must survey and appraise the site • Also establishes a process for staking and leasing of state land for remote recreational sites • Establishes process for leasing a remote recreational site • Initial 10-year leasing period • Two additional 10-year lease renewal periods • Restricts assignment of a lease • Termination of lease for non-compliance • Establishes timeframe for surveying and appraising • Requirement for marking of parcel boundaries 4:18:27 PM SENATOR BISHOP asked if DNR does the appraisal and bills for it. MR. PARSONS answered the intention is for the individual to be responsible for both the survey and appraisal and the rules for that can be handled through the regulatory process. SENATOR BISHOP said he assumes the surveyor would need to be licensed in this state. MR. PARSONS answered that is correct; an official survey must be done by a licensed surveyor. SENATOR MICCICHE referenced earlier conversations that in part led to the bill. He said the problem is that some families have leased land for generations. He asked if those parcels that are under lease could be included in this program with the current leaseholders being given the right of first refusal. 4:20:44 PM MR. PARSONS said the reference is to the Personal Use Cabin Program. DNR believes that except in areas where the cabins would be in a legislatively designated area, there will be an opportunity for the leaseholders to participate in this program and convert their lease to a purchase. SENATOR MICCICHE asked if that could be interpreted to mean that there is a path forward. MR. PARSONS answered the division's intent is to allow the individuals who participated in the PUCP program to gain title to those lands. 4:21:46 PM SENATOR STEVENS asked him to talk about the assignment of a lease and the restrictions that will be placed on the assignment. MR. PARSONS answered the language on paragraph (1) on page 10, lines 13-14, states the lease may not be assigned, conveyed, or otherwise transferred, except though an estate or intestate succession. 4:22:40 PM SENATOR STEVENS summarized that a lease could pass to family through a will. MR. PARSONS answered that is correct and Mr. Orman with the Department of Law was available to correct him if he misspoke. CHAIR REVAK asked Mr. Orman for his opinion. 4:23:08 PM CHRISTOPHER ORMAN, Assistant Attorney General, Civil Division, Natural Resources Section, Department of Law, Juneau, Alaska, agreed with Mr. Parsons. The lease may not be assigned or conveyed but it can pass through estate or intestate succession. He also noted that language in paragraph (3) on page 10, lines 18-19 talks about the restrictions DNR has the discretion to impose on the lease. 4:24:07 PM SENATOR KIEHL asked if the biggest difference is there is not a best interest finding and instead, people can stake all the vacant unreserved land in a given parcel. MR. PARSONS answered yes; there is no best interest finding. He said it is DNR's understanding that the areas available for people to stake would be a subset of the Vacant, Unappropriated, Unreserved (VUU) land, and the commissioner could include all or a portion of that land. SENATOR KIEHL asked how to prevent the staking program acreage from being on top of a coal seam or a site with commercial mineral potential. MR. PARSONS answered certain non-conveyable land classifications would not be available to participate in the program. SENATOR KIEHL commented, "We keep hearing we've got better maps of the moon than of Alaska; I wonder if we're as confident as all that." 4:26:06 PM SENATOR VON IMHOF questioned the need to hire five full- time employees as part of establishing a process for leasing a remote recreational site. She mentioned hiring a surveyor when DNR already has 10 surveyors on staff and referenced an earlier statement about outsourcing surveying and appraisal work. She asked if these hires were necessary, particularly given that this administration is trying to reduce the footprint of government. 4:26:58 PM MR. PARSONS answered the division believes this program will be very popular. If their analysis is correct, the program will require a surveyor who primarily will write survey instructions, review plats, and do the administrative work to identify the parcels and ownership and ensure all the criteria for the platting process are met. The anticipated workload will require additional appraisers, land surveyors, and staff to administer the program. SENATOR VON IMHOF highlighted that the Department of Natural Resources has 210 employees, including 10 fulltime level I land surveyors, 12 fulltime level I natural resource managers, 52 fulltime level II natural resource specialists, and 4 fulltime level II appraisers. She said she did not know these employees' current workload or if the land surveying needs in DNR were "huckity buck," but she wanted it on the record that she was cautious and wary of the $750,000 fiscal note that calls for five new fulltime employees. 4:29:41 PM SENATOR BISHOP asked if individuals would have the option to purchase these parcels under the same terms and conditions as the current process; the state carries the note and individuals make payments to the state. MR. PARSONS answered yes. 4:30:43 PM SENATOR KAWASAKI referenced the state map of VUU lands on slide 12 and asked if DNR has determined that each of the blue colored parcels are not critical habitat or have something that would preclude a sale. MR. PARSONS answered that map is the division's current best estimate of what VUU lands would be available for this program. He added the caveat, "I cannot tell you 100 percent every acre of that is unencumbered or is available." He said he could say the land is not classified for habitat or minerals and it has not been approved for municipal land entitlements. He added that before the land is offered to the public a more rigorous analysis would be necessary. 4:32:35 PM SENATOR KAWASAKI referenced Section 2 and asked what additional studies would be required for the director to make a written finding that the best interest of the state will be served by the process going forward. He cited a bill he worked on with the director to make the current process easier. MR. PARSONS answered the "035" best interest finding is not necessary, but the division would still go through a rigorous process to ensure the relevant lands are not encumbered by pipelines, easements, leases, or other authorizations. This will be similar to the current process initially, but less work will be required in the end to convey the land and enter the authorization, he said. 4:35:44 PM SENATOR MICCICHE asked if he agreed that this iteration of the remote cabin site program had a different system for basically the same thing. MR. PARSONS agreed that was fairly accurate; instead of discrete parcels, this program looks statewide at what might be included in the program. SENATOR MICCICHE referred to the fiscal note analysis and asked if $750,000 to $2.5 million in sales is expected over time. MR. PARSONS answered that is the revenue estimate and $569,900 is the estimated expense for a net of less than $200,000. 4:38:24 PM SENATOR BISHOP referenced the map on slide 10 and asked if the parcels in blue are available for staking and lease. MR. PARSONS answered it should be considered a preliminary analysis of locations where land may be available. SENATOR BISHOP noted the bill says an individual could nominate outside those quadrants. MR. PARSONS confirmed that was correct. 4:39:18 PM CHAIR REVAK requested the sectional analysis for SB 133. MR. PARSONS deferred to Mr. Orman for the sectional analysis. 4:39:42 PM MR. ORMAN stated he was primarily available to answer legal questions about the bill, but he could provide a summary. CHAIR REVAK stated he would wait to hear the sectional analysis during a subsequent hearing. 4:40:27 PM SENATOR MICCICHE asked Mr. Parsons to provide better detail on the lands available under the bill. CHAIR REVAK requested he send the more detailed maps to the committee. SENATOR KIEHL noted the chair's staff had posted a more detailed map on BASIS. MR. PARSONS agreed a more detailed map was posted on BASIS. He reiterated that this was just a preliminary look at the land that potentially would be available. CHAIR REVAK advised the committee would look at the detailed map and follow up if there were questions on that or the sectional analysis. 4:42:48 PM CHAIR REVAK opened public testimony on SB 133; finding none, he closed public testimony. 4:43:12 PM CHAIR REVAK held SB 133 in committee.