00 CS FOR SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 191(RES) 01 "An Act relating to the management and disposal of state land and resources; 02 relating to certain remote parcel and homestead entry land purchase contracts and 03 patents; and providing for an effective date." 04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 05 * Section 1. AS 38.04.010(b) is amended to read: 06  (b) State land that is located beyond the range of existing schools and other 07 necessary public services, or that is located where development of sources of 08 employment is improbable, may be made available for seasonal recreational purposes 09 or for low density settlement. The seasonal recreation use or low density settlement 10 shall have sufficient separation between residences so that public services will not be 11 necessary or expected. The availability of timber, firewood, and water resources shall 12 be considered in determining separation between residences.  By considering the 13 availability of timber, firewood, and water under this subsection or in making any 14 disposal decision, the state does not by virtue of that consideration imply any 01 right of the person receiving the disposal to an exclusive or other right to the 02 timber, firewood, or water, that the state will not make any other disposals in the 03 area, or that any disposals made will be limited in type or any other manner. 04 * Sec. 2. AS 38.04.020(a) is amended to read: 05  (a) The state [COMMISSIONER SHALL ESTABLISH A] land disposal 06 program consists of [BANK CONTAINING] state land identified and classified 07 under adopted regional land use plans for disposal into private ownership. 08 * Sec. 3. AS 38.04.020(b) is amended to read: 09  (b) The state land disposal program [BANK] does not include 10  (1) land nominated for selection or selected by a municipality to satisfy 11 a general grant land entitlement under AS 29.65 or former AS 29.18.201 - 29.18.213; 12  (2) land retained in state ownership for multiple-use management; 13  (3) land where less than a fee simple title has been conveyed; 14  (4) land retained in state ownership under an enactment of the 15 legislature or by the governor or a state agency under authority of law. 16 * Sec. 4. AS 38.04.020(d) is repealed and reenacted to read: 17  (d) On January 15 of the first regular session of each legislature, the 18 commissioner shall report to the legislature on the total acreage of land planned and 19 classified as suitable under this title for 20  (1) settlement purposes, including homestead, commercial, or industrial 21 disposal; 22  (2) agricultural disposal; and 23  (3) grazing leases. 24 * Sec. 5. AS 38.04.020(e) is repealed and reenacted to read: 25  (e) The commissioner may annually submit to the governor an appropriation 26 request for the entire amount of funding estimated to be necessary for each project 27 proposal to allow survey and disposal of land proposed to be offered for (1) homestead 28 staking under AS 38.09; (2) agricultural, commercial, industrial, or other uses under 29 AS 38.05.055 or 38.05.057; or (3) other subdivisions. Each project proposal shall 30 include the general location of the land and the estimated cost of preliminary feasibility 31 studies, engineering design work, right-of-way acquisition, and construction of access 01 roads and capital improvements required by municipal subdivision ordinance or 02 regulation of the platting authority or otherwise necessary to develop and market the 03 land. 04 * Sec. 6. AS 38.04.020(g) is amended to read: 05  (g)  The [AFTER JULY 1 OF EACH YEAR, THE] commissioner shall direct 06 the expenditure of money appropriated for the disposal of land in response to requests 07 made under (e) [AND (f)] of this section for the following: 08  (1)  land [LAND] designated as suitable for homestead disposal shall 09 be [CLASSIFIED AND] surveyed under this chapter and AS 38.05 and made available 10 for entry [STAKING AND LEASE] under AS 38.09; [.] 11  (2)  land [LAND] designated as suitable for subdivision and homesite 12 disposal shall be surveyed, subdivided, [CLASSIFIED,] and disposed of under this 13 chapter, AS 38.05, and AS 38.08; [.] 14  (3)  land [LAND] designated agricultural, commercial, industrial, or 15 suitable for other disposal shall be sold under AS 38.05.055 or 38.05.057. 16 * Sec. 7. AS 38.04.020(h) is amended to read: 17  (h) Individual parcels disposed of in subdivisions intended for private 18 residential or recreational use may not exceed five acres unless the commissioner 19 determines that a larger size is necessary to comply with municipal ordinances; [,] to 20 permit the design of a viable subdivision because of topographical features, soil 21 conditions, on-site sewage disposal requirements, or water drainage or supply 22 considerations that are unique to the subdivision; to increase the return to the state 23 from the sale of the parcels; [,] to minimize adverse effect on wildlife, fishery, public 24 recreation, timber, or other significant resources in the area; [,] or to minimize adverse 25 effect on other residential uses in the area. 26 * Sec. 8. AS 38.04.020(i) is amended to read: 27  (i) Nothing in this section prevents the disposal of other land by the 28 commissioner in accordance with AS 38.05.055, 38.05.057, 38.05.070, the issuance of 29 remote recreational cabin site leases or sales [PERMITS] under AS 38.05.079, 30 AS 38.08, AS 38.09, or other law. 31 * Sec. 9. AS 38.04.021(a) is amended to read: 01  (a) A municipality may apply for financial assistance for the execution of a 02 land disposal program of general grant land entitlements received from the state under 03 AS 29.65 or former AS 29.18.201 - 29.18.213 by submitting a request to the 04 commissioner for inclusion in the request submitted to the governor [LEGISLATURE] 05 under AS 38.04.020(e). A municipality may request financial assistance for expenses 06 of surveying land, designing subdivision plats, installing improvements required by 07 municipal ordinance or regulation of the local platting authority, and other reasonable 08 direct costs of land disposal. 09 * Sec. 10. AS 38.04.021(b) is amended to read: 10  (b) A request by a municipality under this section must be accompanied by 11  (1) a schedule for the disposal of municipal land for the next five years; 12 the schedule shall be based on an assessment of the demand for private land within the 13 municipality [AND INCLUDED IN THE ASSESSMENT SUBMITTED UNDER 14 AS 38.04.020(f)]; 15  (2) an estimate of the number of acres of municipal land that the 16 municipality plans to dispose of during each fiscal year of the five-year period; 17  (3) a description of the methods to be used for the disposal of 18 municipal land and the terms under which it will be offered to the public; and 19  (4) a description of the municipal land that the municipality plans to 20 dispose of each fiscal year during the five-year period. 21 * Sec. 11. AS 38.04.030 is amended to read: 22  Sec. 38.04.030. LAND AVAILABILITY PROGRAMS. Programs that may 23 be used by the director to make the state's land surface available for private use under 24 AS 38.04.020 - 38.04.055 include sale of whole or partial rights to the fee simple 25 estate, including conveyance of agricultural use rights; leasing; [OPEN-TO-ENTRY;] 26 homesiting; homesteading; permitting for construction and occupation of cabins in 27 isolated locations on land retained in state ownership; and other methods as provided 28 by regulation or other law.  Notwithstanding a contrary provision of this title, a 29 land availability program adopted by regulation must provide for competitive 30 disposal, based on no less than fair market value, to serve the best interests of the 31 state. 01 * Sec. 12. AS 38.04.035 is amended to read: 02  Sec. 38.04.035. CRITERIA FOR PROGRAM SELECTION. In determining 03 which land availability program is appropriate for state land in different locations, the 04 director shall be guided by the following criteria: 05  (1) to cover public costs associated with private land use and to provide 06 the public with a fair return for publicly owned property, conveyance of state land to 07 private parties shall [SHOULD] be at fair market value except where otherwise 08 authorized by statute, or by an administrative regulation the adoption of which is 09 specifically permitted by statute; 10  (2) sale or lease programs should be used where land is readily 11 accessible to a major community center or where, because of a prime location on 12 waterfront or a transportation route or some other location characteristic, land has 13 relatively high real estate value; 14  (3) sale programs are preferred but lease programs should be used 15  (A) where special land use controls are required and there is a 16 high public interest in having certain types of land used for particular purposes; 17  (B) when the intended use is a temporary one; 18  (C) in commercial or industrial situations when a leasehold can 19 provide cash flow advantages to the lessee; 20  (D) when a unique location with special public values is 21 involved, as in a deep water port, hydroelectric site, or aquaculture facility; 22  (E) where current demand for private use is high, but 23 projections suggest that, in the future, the land may be more valuable for public 24 use, as in accessible waterfront recreation areas; 25  (4) [FOR ENABLING ISOLATED CABIN DEVELOPMENT IN 26 REMOTE LOCATIONS WHERE SURVEY AND CONVEYANCE IS 27 IMPRACTICAL, OR WHERE DISPOSAL OF LAND WOULD CAUSE POTENTIAL 28 CONFLICTS WITH OTHER RESOURCES AND USES, OR WHERE A LONG-RANGE INTEREST IN PUBLIC 29 OWNERSHIP AND USE EXIST, A SYSTEM FOR 30 CABIN PERMITS ON PUBLIC LAND MAY BE USED; 31  (5)] limited or conditional title may be granted when the state's best 01 interest so dictates; among other things, title limitations may include grants of 02 agricultural interest only, retention of development rights, and retention of scenic or 03 other easements; a conditional title may be tied to a development schedule or other 04 standards of performance. 05 * Sec. 13. AS 38.04.045(b) is amended to read: 06  (b) Before the issuance of a long-term lease under AS 38.05.070 or of a patent 07 for state land, an official cadastral survey shall be accomplished, unless a comparable, 08 approved survey exists that has been conducted by the federal Bureau of Land 09 Management. Before land may be offered under AS 38.05.055, 38.05.057, AS 38.08, 10 or AS 38.09, an official rectangular survey grid shall be established. The rectangular 11 survey section corner positions shall be monumented and shown on a cadastral survey 12 plat approved by the state. For those areas where the state may wish to convey 13 surface estate outside of an official rectangular survey grid, the commissioner may 14 waive monumentation of individual section corner positions and substitute an official 15 control survey with control points being monumented and shown on control survey 16 plats approved by the state. The commissioner may not issue more than one 17 conveyance for each section within a township outside of an official rectangular survey 18 grid. No portion of land to be conveyed may be located more than two miles from an 19 official survey control monument except that the commissioner may waive this 20 requirement on a determination that a single purpose use does not justify the 21 requirement if the existing status of the land is known with reasonable certainty. The 22 lots and tracts in state subdivisions shall be monumented and the cadastral survey and 23 plats for the subdivision shall be approved by the state. Where land is located within 24 a municipality with planning, platting, and zoning powers, plats for state subdivisions 25 shall comply with local ordinances and regulations in the same manner and to the same 26 extent as plats for subdivisions by other landowners. State subdivisions shall be filed 27 and recorded in the district recorder's office. The requirements of this section do not 28 apply to land made available [THROUGH A CABIN PERMIT SYSTEM,] for material 29 sales, for short-term leases, or for parcels adjoining a surveyed right-of-way, [OR FOR 30 LAND THAT HAS BEEN OPEN TO RANDOM STAKING UNDER THE REMOTE 31 PARCEL PROGRAM OR HOMESTEAD PROGRAM IN THE PAST]; however, for 01 short-term leases the lessee must comply with local subdivision ordinances unless 02 waived by the municipality under procedures specified by ordinance. In this subsection, 03 "a single purpose use" includes a communication site, an aid to navigation, and a park 04 site. 05 * Sec. 14. AS 38.05.050 is amended to read: 06  Sec. 38.05.050. DISPOSAL OF LAND FOR PRIVATE OWNERSHIP. The 07 commissioner shall determine the land to be disposed of for private use. The 08 commissioner shall determine the time and place of disposal. An auction sale, a 09 lottery sale, or a disposal of land for homesites may [SHALL] be held in a community 10 that is near the land to be sold or disposed of. 11 * Sec. 15. AS 38.05.055 is amended to read: 12  Sec. 38.05.055. AUCTION SALE PROCEDURES. Unless another method of 13 sale is required under this chapter, [AS 38.07, OR] AS 38.08, or AS 38.09, the sale 14 of state land shall be made at public auction to the highest qualified bidder as 15 determined by the director. The director may accept bids and sell state land under this 16 section at no less than 70 percent of the appraised fair market value of the land. [A 17 BIDDER MUST APPEAR IN PERSON AT THE AUCTION UNLESS MEDICAL 18 REASONS, ATTENDANCE AT SCHOOL, OR MILITARY SERVICE OUTSIDE 19 THE STATE PREVENT ATTENDANCE.] A bidder may be represented by an 20 attorney or agent at the auction [IF THE LAND OFFERED FOR DISPOSAL IS 21 COMMERCIAL, INDUSTRIAL, OR AGRICULTURAL LAND]. An aggrieved 22 bidder may appeal to the commissioner within five days after the sale for a review of 23 the director's determination. The sale shall be conducted by the director and at the 24 time of sale the successful bidder shall deposit an amount equal to five percent of the 25 purchase price. The director shall immediately issue a receipt containing a description 26 of the land or property purchased, the price bid, and the amount deposited. The 27 receipt shall be acknowledged in writing by the bidder. 28 * Sec. 16. AS 38.05.057(a) is amended to read: 29  (a) The commissioner may dispose of land, including land limited to use for 30 agricultural purposes, by lottery. The purchase price of land sold by lottery shall be 31 the fair market value of the land as determined by the commissioner. The 01 commissioner may sell land by lottery for less than the fair market value of the land 02 on a determination that scarcity of land for private use in the area of the land to be 03 sold has resulted in unrealistic land values. [THE COMMISSIONER SHALL 04 CONSULT WITH THE ASSESSOR OF A MUNICIPALITY BEFORE 05 DETERMINING THE PURCHASE PRICE FOR LAND THAT IS LOCATED IN 06 THE MUNICIPALITY AND THAT IS TO BE SOLD UNDER THIS SECTION.] The 07 lottery shall be conducted in public by the commissioner.  A [AN APPLICANT MAY 08 NOT BE SELECTED TO PURCHASE LAND UNLESS THE APPLICANT IS 09 PRESENT ON THE DATE AND AT THE PLACE THAT THE LOTTERY IS 10 CONDUCTED UNLESS MEDICAL REASONS, ATTENDANCE AT SCHOOL, OR 11 MILITARY SERVICE OUTSIDE THE STATE PREVENT ATTENDANCE. AN 12 APPLICANT MAY BE REPRESENTED BY AN AGENT ON THE DAY OF THE 13 LOTTERY IF THE LAND OFFERED FOR SALE IS COMMERCIAL, 14 INDUSTRIAL, OR AGRICULTURAL LAND. ON THE DAY OF THE LOTTERY 15 A] purchaser selected by lot shall deposit an amount equal to five percent of the 16 purchase price within 30 days after receiving notification of the selection. 17 * Sec. 17. AS 38.05.065(a) is amended to read: 18  (a) The contract of sale for land sold at public auction under AS 38.05.055 19 shall require the remainder of the purchase price to be paid in monthly, quarterly, or 20 annual installments over a period of not more than 20 years, with interest at the 21 [PREVAILING] rate provided in (i) of this section [FOR REAL ESTATE 22 MORTGAGE LOANS MADE BY THE FEDERAL LAND BANK FOR THE FARM 23 CREDIT DISTRICT FOR ALASKA AT THE TIME THE CONTRACT IS SIGNED]. 24 Installment payments plus interest shall be set on the level-payment basis. 25 * Sec. 18. AS 38.05.065(b) is amended to read: 26  (b) The contract of sale for land sold under AS 38.05.057 or under former 27 AS 38.05.078 shall require the remainder of the purchase price to be paid in monthly, 28 quarterly, or annual installments over a period of not more than 20 years. Installment 29 payments plus interest shall be set on the level-payment basis. The interest rate to be 30 charged on installment payments is the [PREVAILING] rate provided in (i) of this 31 section [FOR REAL ESTATE MORTGAGE LOANS MADE BY THE FEDERAL 01 LAND BANK FOR THE FARM CREDIT DISTRICT FOR ALASKA AT THE TIME 02 THE CONTRACT IS SIGNED]. 03 * Sec. 19. AS 38.05.065 is amended by adding a new subsection to read: 04  (i) The interest rate for contracts under this section is the prime rate as 05 reported in the Wall Street Journal on the first business day of the month in which the 06 contract is sent to the purchaser for signature, plus 4 percent; however, the total rate 07 of interest may not exceed 13.5 percent. 08 * Sec. 20. AS 38.05.069(a) is amended to read: 09  (a) On a determination that the highest and best use of unoccupied land is for 10 agricultural purposes and that it is in the best interests of the state to sell or lease the 11 land, the commissioner may [SHALL] grant to an Alaska [ALASKAN] resident 12 owning and using or leasing and using land for agricultural purposes a first option at 13 the auction to purchase or lease the unoccupied land situated adjacent to land presently 14 held by the Alaska [ALASKAN] resident for the amount of the high bid received at 15 public auction. If more than one Alaska [ALASKAN] resident qualifies for a first 16 option under this section, eligibility for the first option shall be determined by lot and 17 the option must be exercised on the conclusion of the public auction. A parcel of 18 agricultural land sold under this section may not be less than 20 acres and a parcel of 19 agricultural land that is acquired by exercise of the option granted in this subsection 20 may not exceed 320 acres. Agricultural land that is acquired under this section must 21 be used for agricultural purposes as required by law. 22 * Sec. 21. AS 38.05.069(e)(2) is repealed and reenacted to read: 23  (2) "adjacent" means that a tract of land has one common boundary 24 point with presently held land or is separated from the presently held land only by a 25 physical barrier such as a road or stream. 26 * Sec. 22. AS 38.05.079(a) is amended to read: 27  (a)  The [AFTER SEPTEMBER 1, 1980, THE] commissioner may provide for 28 the sale or lease of state land for remote recreational cabin sites in areas of the 29 state with dispersed populations [ISSUE A PERMIT FOR THE USE OF REMOTE 30 STATE LAND IN A MUNICIPALITY FOR A CABIN SITE IF THE LAND WAS 31 CLASSIFIED FOR THAT PURPOSE UNDER FORMER AS 38.05.047(a)(5)(B). 01 AFTER SEPTEMBER 1, 1981, THE COMMISSIONER MAY ISSUE A PERMIT 02 FOR THE USE OF REMOTE STATE LAND OUTSIDE A MUNICIPALITY FOR 03 A CABIN SITE] if the land is classified for that purpose under the procedures required 04 by AS 38.05.300 and 38.05.945.  Sales under this section shall be at fair market 05 value and the purchaser shall reimburse the state for the appraisal, survey, and 06 platting costs for the recreational cabin site. 07 * Sec. 23. AS 38.05.079(b) is amended to read: 08  (b) The annual fee for a remote recreational cabin site lease shall be set by 09 the commissioner so as to ensure that the state receives a fair return for the use 10 granted by the lease for the term of the lease [PERMIT IS $100 A YEAR]. The 11 commissioner shall establish regulations that [WHICH] specify the application 12 procedures for and the terms and conditions of a remote recreational cabin site lease 13 [PERMIT]. A lease [PERMIT] must be for a term of not more [LESS] than five [25] 14 years, and may be renewed for one additional five-year period. At any time during 15 the lease, the lessee may purchase the remote recreational cabin site by having the 16 site appraised and surveyed in a manner acceptable to the department and by 17 paying to the state the fair market value for the site. The lease may not be 18 assigned by the original lessee [PERMITTEE] during the term of the lease [PERMIT]. 19 * Sec. 24. AS 38.05.079(c) is amended to read: 20  (c) A remote recreational cabin site lease [PERMIT] may be terminated by 21 the commissioner before the expiration of the term of the lease [PERMIT] if a 22 permittee fails to use the land under lease [PERMIT] in the manner required by the 23 terms of the lease [PERMIT]. After termination of a remote recreational cabin site 24 lease [PERMIT], improvements or personal property on the land subject to the lease 25 [PERMIT] shall be managed in the same manner as required by AS 38.05.090. 26 * Sec. 25. AS 38.05.082(b) is amended to read: 27  (b) The director may classify land as subject to leases for fisheries 28 development. In an area or region of the state for which a land use plan has not been 29 adopted under AS 38.04.065, the director may classify land for lease under this section 30 after notice under AS 38.05.945. The director may [SHALL] publicly invite 31 applications for lease of the selected areas. Each application shall be accompanied by 01 an affidavit to the effect that the applicant presently intends to personally utilize the 02 leased area for fishing purposes throughout the term of the lease [THE 03 FOLLOWING SEASON]. If two or more applications are received for the same shore 04 area, the director may offer [SHALL AWARD] the lease at public auction under 05 AS 38.05.075(a). If only one application is received and the appraisal value of the 06 lease is $5,000 a year or less, the commissioner may issue a negotiated lease under 07 AS 38.05.070(b) [TO THE MOST QUALIFIED APPLICANT. IN DETERMINING 08 THE QUALIFICATIONS OF APPLICANTS, THE DIRECTOR SHALL CONSIDER 09 THE LENGTH OF TIME DURING WHICH THE APPLICANT HAS BEEN 10 ENGAGED IN SET NETTING, THE PROXIMITY OF THE PAST FISHING SITES 11 OF THE APPLICANT TO THE LAND TO BE LEASED, THE PRESENT ABILITY 12 OF THE APPLICANT TO UTILIZE THE LOCATION TO ITS MAXIMUM 13 POTENTIAL, AND OTHER FACTORS RELEVANT TO THE EQUITABLE 14 ASSIGNMENT OF THE DISPUTED AREA. IF THE DIRECTOR CANNOT 15 DETERMINE A PREFERENCE BETWEEN CONFLICTING APPLICANTS FOR 16 THE SAME LEASE SITE ON THE BASIS OF QUALIFICATIONS, THE 17 DIRECTOR SHALL SELECT BETWEEN THE APPLICANTS BY LOT. AN 18 AGGRIEVED APPLICANT MAY APPEAL TO THE COMMISSIONER WITHIN 30 19 DAYS FOR A REVIEW OF THE DIRECTOR'S DETERMINATION]. 20 * Sec. 26. AS 38.05.082(c) is amended to read: 21  (c) A lease for set net fishing may be issued for any period not exceeding 10 22 years. If the commissioner determines that the land is not being utilized for the 23 purpose for which the lease is issued, the lease may be declared void. [THE 24 DIRECTOR SHALL ESTABLISH A REASONABLE RENTAL FOR THE LEASE, 25 EQUAL TO THE ADMINISTRATIVE COSTS INVOLVED IN PROCESSING THE 26 LEASEHOLD APPLICATIONS.] 27 * Sec. 27. AS 38.05.082(d) is amended to read: 28  (d) Subleasing and renewals of leases are governed by AS 38.05.095 and 29 38.05.102.  Notwithstanding (b) of this section, a lease held under this section on 30 the effective date of this bill section may be renewed under terms and conditions 31 prescribed by the commissioner. 01 * Sec. 28. AS 38.05.083 is repealed and reenacted to read: 02  Sec. 38.05.083. AQUATIC FARMING AND HATCHERY SITE LEASES. 03 (a) The commissioner may offer to the public for lease at public auction under 04 AS 38.05.075 or by negotiation under AS 38.05.070 a site for aquatic farming or 05 related hatchery operations. Before a final decision to issue or renew a lease under 06 this section, the commissioner shall give notice and allow opportunity for comment in 07 accordance with AS 38.05.945, and may hold a hearing to take testimony. Before a 08 final decision to issue or renew a lease under this section, the commissioner shall 09 consider all relevant comment or testimony submitted under this section, AS 38.05.945, 10 or 38.05.946. 11  (b) The commissioner, for good cause, may deny an application for issuance 12 or renewal of a lease under this section, but shall provide the applicant with written 13 findings that explain the reasons for the denial. 14  (c) A site may be leased under this section for not less than the appraised fair 15 market value of the lease. The value of the lease shall be reappraised every five years. 16  (d) A lease under this section may be assigned, but if the assignee changes the 17 use of the site the lease reverts to the state. 18  (e) Before entering into a lease under this section, the commissioner shall 19 require the lessee to post a performance bond or provide other security to cover the 20 costs to the department of restoring the leased site in the event the lessee abandons the 21 site. 22  (f) The commissioner shall adopt regulations establishing criteria for the 23 approval or denial of leases under this section and for limiting the number of sites for 24 which leases may be issued in an area in order to protect the environment and natural 25 resources of the area. The regulations must provide for the consideration of upland 26 management policies and whether the proposed use of a site is compatible with the 27 traditional and existing uses of the area in which the site is located. 28 * Sec. 29. AS 38.05.090 is repealed and reenacted to read: 29  Sec. 38.05.090. REMOVAL OR REVERSION OF IMPROVEMENTS UPON 30 TERMINATION OF LEASES. (a) Unless otherwise agreed to in writing by the 31 commissioner, a lessee shall remove from a former leasehold 01  (1) all personal property, including above-ground and below-ground 02 tanks, transportable buildings, equipment, machinery, tools, and other goods, not 03 belonging to the state, within 30 days after termination of the lease; and 04  (2) all buildings and fixtures, including gravel pads, foundations, and 05 slabs, not belonging to the state, within 60 days after termination of the lease. 06  (b) Unless otherwise agreed to in writing by the commissioner, the lessee shall 07 restore the leasehold to a good and marketable condition, acceptable to the 08 commissioner, within 120 days after termination of the lease. 09  (c) If the lessee does not remove personal property, buildings, and fixtures as 10 required within the time specified under (a) of this section, title to the personal 11 property, buildings, and fixtures that remain automatically vests in the state unless the 12 commissioner elects to remove and dispose of the remaining personal property, 13 buildings, and fixtures of the lessee. The commissioner may assess upon the lessee 14 the cost of removing and disposing of personal property, buildings, and fixtures 15 remaining upon the land. 16  (d) If the lessee does not restore the land within the time period specified 17 under (b) of this section, the commissioner may have the land restored and assess the 18 costs upon the lessee. 19  (e) As part of a lease agreement, and in order to protect the public interest, the 20 commissioner may require terms for removal or reversion of improvements additional 21 to those specified in (a) - (d) of this section. 22  (f) Private residential improvements of a lessee that have become fixtures of 23 the land and that are not removed by that lessee upon termination of the lease shall be 24 purchased by the subsequent purchaser of the land if the improvements were 25 authorized in the former lease or by permit from the director and if they have a net 26 value of more than $10,000. The net value is the value of the improvements as 27 determined by an appraisal approved by the commissioner, less all rents due the 28 department, all costs of restoration under (d) of this section, and all department 29 expenses estimated to be incurred in making the sale. After termination of the former 30 lessee's lease, and at additional times as determined necessary by the commissioner, 31 the value of the authorized residential fixtures shall be determined by an independent 01 appraisal made at the cost of the former lessee. A notice or offer by the state to sell 02 formerly leased land under this subsection must state (1) the appraised value of 03 authorized residential fixtures remaining on the land that must be purchased, and (2) 04 that that cost is included in the purchase price. Out of the proceeds of the sale, the 05 department shall pay to the former lessee the appraised value of the residential 06 improvements, less all rents due the department, all costs of restoration due the 07 department under (d) of this section, and all department expenses incurred in making 08 the sale. 09  (g) Personal property described in (c) of this section is not subject to AS 34.45 10 (Uniform Unclaimed Property Act). 11 * Sec. 30. AS 38.05.130 is amended to read: 12  Sec. 38.05.130. DAMAGES AND POSTING OF BOND.  Except for entry 13 to post mining location corners under AS 38.05.195, 38.05.205, or 38.05.245, rights 14 [RIGHTS] may not be exercised by the state, its lessees, successors or assigns under 15 the reservation as set out in AS 38.05.125 until the state, its lessees, successors, or 16 assigns make provision to pay the owner of the land full payment for all damages 17 sustained by the owner, by reason of entering upon the land. If the owner for any 18 cause refuses or neglects to settle the damages, the state, its lessees, successors, 19 assigns, or an applicant for a lease or contract from the state for the purpose of 20 prospecting for valuable minerals, or option, contract or lease for mining coal or lease 21 for extracting geothermal resources, petroleum, or natural gas, may enter upon the land 22 in the exercise of the reserved rights after posting a surety bond determined by the 23 director, after notice and an opportunity to be heard, to be sufficient as to form, 24 amount, and security to secure to the owner payment for damages, and may institute 25 legal proceedings in a court where the land is located, as may be necessary to 26 determine the damages that [WHICH] the owner may suffer. 27 * Sec. 31. AS 38.05.131(a) is amended to read: 28  (a) Unless specifically provided otherwise in AS 38.05.132 - 38.05.134, the 29 provisions of AS 38.05.005 - 38.05.037 [AS 38.05.005 - 38.05.040], 38.05.140(f), 30 38.05.180, 38.05.182 - 38.05.184, and 38.05.920 - 38.05.990 apply to the issuance of 31 oil and gas exploration licenses and leases under AS 38.05.132 - 38.05.134. 01 * Sec. 32. AS 38.05.185(a) is amended to read: 02  (a) The acquisition and continuance of rights in and to deposits on state land 03 of minerals, which on January 3, 1959, were subject to location under the mining laws 04 of the United States, shall be governed by AS 38.05.185 - 38.05.275. Nothing in 05 AS 38.05.185 - 38.05.275 affects the law pertaining to the acquisition of rights to 06 mineral deposits owned by any other person or government. The director, with the 07 approval of the commissioner, shall determine that land from which mineral deposits 08 may be mined only under lease, and, subject to the limitations of AS 38.05.300, that 09 land that shall be closed to location under AS 38.05.185 - 38.05.275 [MINING]. 10 State land may not be closed to [MINING OR MINERAL] location under 11 AS 38.05.185 - 38.05.275 except as provided in AS 38.05.300 and unless the 12 commissioner makes a finding that mining would be incompatible with significant 13 surface uses on the state land. State land may not be restricted to mining under lease 14 unless the commissioner determines that potential use conflicts on the state land 15 require that mining be allowed only under written leases issued under AS 38.05.205 16 or the commissioner has determined that the land was mineral in character at the time 17 of state selection. The determinations required under this subsection shall be made in 18 compliance with land classification orders and land use plans developed under 19 AS 38.05.300. 20 * Sec. 33. AS 38.05.190(a) is amended to read: 21  (a) The right to acquire exploration and mining rights under AS 38.05.185 - 22 38.05.275 may be acquired or held only by 23  (1) citizens of the United States at least 18 years of age; 24  (2) legal guardians or trustees of citizens of the United States under 18 25 years of age on behalf of the citizens; 26  (3) persons at least 18 years of age who have declared their intention 27 to become citizens of the United States; 28  (4) [ALIENS AT LEAST 18 YEARS OF AGE IF THE LAWS OF 29 THEIR COUNTRY GRANT LIKE PRIVILEGES TO CITIZENS OF THE UNITED 30 STATES; 31  (5)] corporations organized under the laws of the United States or of 01 any state or territory of the United States and qualified to do business in this state [, 02 EXCEPT THAT IF MORE THAN 50 PERCENT OF THE STOCK OF A 03 CORPORATION IS OWNED OR CONTROLLED BY ALIENS WHO ARE NOT 04 QUALIFIED, THE CORPORATION IS NOT QUALIFIED TO ACQUIRE OR HOLD 05 THE RIGHTS]; 06   (5) [(6)] associations of persons described in (1) - (4) [(1) - (5)] of this 07 subsection. 08 * Sec. 34. AS 38.05.211(d) is repealed and reenacted to read: 09  (d) The rental amount established under this section shall be revised by the 10 commissioner as provided in this section based on changes in the Consumer Price 11 Index for all urban consumers, Anchorage Metropolitan Area (Semi-Annual Average) 12 compiled by the Bureau of Labor Statistics, United States Department of Labor, as 13 revised, rebased or replaced by that bureau. The reference base index is the index for 14 January - June, 1989, as revised or rebased by that bureau. The rental amount shall 15 be revised by the commissioner if the change between the index for the first six 16 months of the current year and the most recent index used to revise the rental, or the 17 reference base index if the rental amount has never been revised, equals or exceeds $5. 18 The rental amount shall be increased or decreased, as appropriate, by an amount equal 19 to the change in the index described in this subsection rounded to the nearest whole 20 $5 unit. The commissioner shall calculate the change in the index annually and, if the 21 rental amount must be revised, shall adopt a regulation establishing the revised rental 22 amount. A revised rental amount applies to a rental payment if the regulation 23 establishing the revised rental amount took effect at least 90 days before the date the 24 rental payment is due. 25 * Sec. 35. AS 38.05.255 is amended to read: 26  Sec. 38.05.255. SURFACE USE OF LAND OR WATER. Surface uses of 27 land or water included within mining properties by owners of those properties shall be 28 limited to those necessary for the prospecting for, extraction of, or basic processing of 29 mineral deposits and shall be subject to reasonable concurrent uses.  Leases 30 [PERMITS] for millsites and tailings disposal may be issued [GRANTED] by the 31 director. The leases [PERMITS] shall be conditioned upon payment of a reasonable 01 annual rent [CHARGE] for the lease [USE] and restriction to [CONTINUANCE OF] 02 the limited use. Timber from land open to mining without lease, except timberland, 03 may be used by a mining claimant or prospecting site locator for the mining or 04 development of the location or adjacent claims under common ownership. On other 05 land, timber may be acquired as provided in this chapter. Use of water shall be made 06 in accordance with AS 46.15. 07 * Sec. 36. AS 38.05.255 is amended by adding a new subsection to read: 08  (b) A lease issued under this section is exempt from the provisions of 09 AS 38.05.075 - 38.05.080. The commissioner, by regulation, shall establish 10 appropriate leasing procedures and annual rent amounts for leases under this section. 11 * Sec. 37. AS 38.05.265 is amended to read: 12  Sec. 38.05.265. ABANDONMENT. Failure to properly record a certificate of 13 location or a statement of annual labor, [FILE WITH THE DIRECTOR WITHIN THE 14 TIME PRESCRIBED A LEASE APPLICATION,] pay any required annual rental, pay 15 any required production royalty, or keep location boundaries clearly marked as 16 required by AS 38.05.185 - 38.05.275 and by regulations adopted under these sections 17 constitutes abandonment of all rights acquired under the mining claim, leasehold 18 location, lease, or site involved, and the claim, location, lease, or site is subject to 19 relocation by others. A locator or claimant of an abandoned location or a successor 20 in interest may not relocate the location until one year after abandonment. A statement 21 of annual labor that does not accurately set out the essential facts is void and of no 22 effect. If an annual rental or a royalty payment is deficient but is otherwise timely 23 paid, abandonment does not result if full payment is made within 24  (1) the period prescribed by a deficiency notice from the commissioner; 25 or 26  (2) 30 days after a final judgment establishing the amount due if the 27 deficiency amount due was contested. 28 * Sec. 38. AS 38.05.810(a) is amended to read: 29  (a) Except as otherwise provided in AS 38.05.183(h), the (1) lease, sale, or 30 other disposal of state land or resources may be made to a state or federal agency or 31 political subdivision, (2) [THE] lease, sale, or disposal of coal deposits suitable for 01 mining may be made to a utility owned and operated by a government agency or 02 nonprofit cooperative association organized to participate under the Federal Rural 03 Electrification Act for the purpose of generating electric power and energy or the 04 production of process steam, or both, (3) [OR THE] sale or other disposal of state land 05 may be made to a tax-exempt, nonprofit corporation, association, club, or society 06 organized and operated exclusively for the management of a cemetery or a solid waste 07 facility, or (4) sale or other disposal of land within a state subdivision may be 08 made to that subdivision's nonprofit, tax-exempt homeowners' association, for less 09 than the appraised value as determined by the director and approved by the 10 commissioner to be fair and proper and in the best interests of the public, with due 11 consideration given to the nature of the public services or function rendered by the 12 applicant [AGENCY, SUBDIVISION, TAX-EXEMPT, NONPROFIT 13 CORPORATION, ASSOCIATION, CLUB, OR SOCIETY, OR UTILITY MAKING 14 APPLICATION], and of the terms of the grant under which the land was acquired by 15 the state.  The commissioner shall ensure, by regulation, deed restriction, covenant, 16 or otherwise, that disposals of land under this subsection serve a public purpose 17 and are in the public interest. 18 * Sec. 39. AS 38.05.850(a) is amended to read: 19  (a) The director, without the prior approval of the commissioner, may issue 20 permits, rights-of-way or easements on state land for roads, trails, ditches, field 21 gathering lines or transmission and distribution pipelines not subject to AS 38.35, 22 telephone or electric transmission and distribution lines, log storage, oil well drilling 23 sites and production facilities for the purposes of recovering minerals from adjacent 24 land under valid lease, and other similar uses or improvements, or revocable, 25 nonexclusive permits for the [LIMITED] personal or commercial use or removal of 26 resources that the director has determined to be of limited value [OF TIMBER OR 27 MATERIALS]. The commissioner, upon recommendation of the director, shall 28 establish a reasonable rate or fee schedule to be charged for these uses, subject to the 29 exception for nonprofit cooperative associations specified in (b) of this section. In the 30 granting, suspension or revocation of a permit or easement of land, the director shall 31 give preference to that use of the land which will be of greatest economic benefit to 01 the state and the development of its resources. However, first preference shall be 02 granted to the upland owner for the use of a tract of tideland, or tideland and 03 contiguous submerged land, which is seaward of the upland property of the upland 04 owner and which is needed by the upland owner for any of the purposes for which the 05 use may be granted. 06 * Sec. 40. AS 38.05.945(a) is amended to read: 07  (a) This section establishes the requirements for notice given by the department 08 for the following actions: 09  (1) classification or reclassification of state land under AS 38.05.300 10 and the closing of land to mineral leasing or entry under AS 38.05.185; 11  (2) zoning of land under applicable law; 12  (3) issuance of a 13  (A) preliminary written finding under AS 38.05.035(e)(5)(A) 14 regarding the sale, lease, or disposal of an interest in state land or resources for 15 oil and gas subject to AS 38.05.180(b); 16  (B) final written finding under AS 38.05.035(e)(5)(B) regarding 17 the sale, lease, or disposal of an interest in state land or resources for oil and 18 gas subject to AS 38.05.180(b); 19  (C) written finding for the sale, lease, or disposal of an interest 20 in state land or resources under AS 38.05.035(e)(6); 21  (4) a competitive disposal of an interest in state land or resources after 22 final decision under AS 38.05.035(e); 23  (5) [A PUBLIC HEARING UNDER AS 38.05.856(b); 24  (6)] a preliminary finding under AS 38.05.035(e) [AND 38.05.855(c)] 25 concerning sites for aquatic farms and related hatcheries; 26   (6) [(7)] a decision under AS 38.05.132 - 38.05.134 regarding the sale, 27 lease, or disposal of an interest in state land or resources. 28 * Sec. 41. AS 38.08.030(b) is amended to read: 29  (b) Fees for filing an application may not exceed $25 [$10]. 30 * Sec. 42. AS 38.08.040(a) is amended to read: 31  (a) An applicant meeting the qualifications for homesite entry under 01 AS 38.08.030 and selected under (f) of this section shall be issued a revocable permit 02 to occupy and improve the homesite in order to qualify for issuance of patent as 03 provided in this chapter.  The holder of a homesite entry permit shall pay, in 04 advance, an annual rental fee of $100. [THE APPLICATION FEE IS THE SOLE 05 RENT CHARGEABLE ON THE PERMIT FOR ITS DURATION.] 06 * Sec. 43. AS 38.08.040 is amended by adding a new subsection to read: 07  (f) If only one application for a homesite parcel is received, the commissioner 08 shall offer an entry permit for the parcel to the applicant provided the applicant is 09 otherwise qualified. If more than one application is received for a parcel, the 10 commissioner shall select by lottery the applicant who is entitled to receive the permit 11 for the parcel. The lottery shall be conducted under regulations adopted by the 12 commissioner that are to the maximum extent practicable consistent with the provisions 13 of AS 38.05.057 and the regulations adopted under that section. 14 * Sec. 44. AS 38.09.010(g) is amended to read: 15  (g) The commissioner may limit the number of persons permitted to obtain 16 [STAKE] homestead entries within an area designated under (a) of this section by a 17 lottery of qualified applicants. [THE COMMISSIONER MAY CONDUCT A 18 LOTTERY HELD UNDER THIS SUBSECTION IN THE COMMUNITY THAT IS 19 CLOSEST TO THE AREA DESIGNATED FOR HOMESTEAD ENTRY. THE 20 COMMISSIONER MAY REQUIRE THAT EACH PARTICIPANT IN THE 21 LOTTERY BE PRESENT UNLESS ATTENDANCE AT THE LOTTERY IS 22 PREVENTED BY 23  (1) MEDICAL REASONS, ATTENDANCE AT SCHOOL, OR 24 MILITARY SERVICE OUTSIDE THE STATE; OR 25  (2) A MANDATORY, UNAVOIDABLE EMPLOYMENT 26 COMMITMENT DETERMINED VALID BY THE COMMISSIONER BEFORE THE 27 SALE.] 28 * Sec. 45. AS 38.09.030(a) is amended to read: 29  (a) An applicant for a homestead entry permit shall 30  (1) submit proof acceptable to the commissioner that the applicant is 31 at least 18 years of age and has been a resident of the state for not less than one year 01 immediately before the date of application; and 02  (2) pay a fee of $5 per acre according to the description provided by 03 the applicant if the entry is on land classified agricultural, or $20 per acre if the 04 entry is on land not classified agricultural; 05  (3) agree to comply with the requirements of AS 38.09.050 [; 06  (4) CERTIFY THAT THE CORNERS OF THE LAND ENTERED 07 HAVE BEEN STAKED AND THE BOUNDARIES HAVE BEEN FLAGGED; OR 08  (5) ASSUME FULL RESPONSIBILITY FOR THE ACCURACY OF 09 THE DESCRIPTION OF THE LAND FILED WITH THE COMMISSIONER UNDER 10 AS 38.09.020(b)]. 11 * Sec. 46. AS 38.09.050(a) is amended to read: 12  (a) The commissioner shall issue a patent to homestead entry land if the permit 13 holder 14  (1)  either 15  (A) resides and lives on the homestead entry land for not less 16 than 25 months within five years after the issuance of the homestead entry 17 permit and reimburses the state for the survey and platting of the 18 homestead parcel; or 19  (B) within five years pays the state the fair market value of 20 the homestead parcel at the time of patent and reimburses the state for the 21 survey and platting of the homestead parcel; and 22  (2) [SUBMITS AN ALIQUOT PARTS DESCRIPTION OR 23 COMPLETES AN APPROVED SURVEY OF THE LAND IN AN AREA WHERE 24 THE COMMISSIONER WAIVES THE RECTANGULAR SURVEY GRID WITHIN 25 FIVE YEARS AFTER THE ISSUANCE OF THE PERMIT; 26  (3) ERECTS A HABITABLE, PERMANENT DWELLING ON THE 27 HOMESTEAD WITHIN THREE YEARS AFTER THE ISSUANCE OF THE 28 HOMESTEAD ENTRY PERMIT; 29  (4) BRUSHES THE BOUNDARIES OF THE LAND NOT 30 DESCRIBED BY ALIQUOT PARTS OR AS A LOT OF RECORD WITHIN 90 31 DAYS AFTER THE ISSUANCE OF THE PERMIT; 01  (5)] clears and either puts into production or prepares for cultivation 02 either 25 percent of the land classified for agricultural use or 50 percent of the 03 cropland soils, whichever is less, within five years after issuance of the permit. 04 * Sec. 47. AS 38.09.050(b) is amended to read: 05  (b) Nothing in this chapter prohibits a homestead entry permit holder from 06 residing in a temporary dwelling on the homestead [BEFORE ERECTION OF THE 07 PERMANENT DWELLING]. 08 * Sec. 48. AS 38.09 is amended by adding a new section to read: 09  Sec. 38.09.105. REMOVAL OF CONDITIONS ON REMOTE PARCEL AND 10 HOMESTEAD ENTRY LAND. (a) The commissioner may not include the 11 conditions of former AS 38.05.078(d) in a remote parcel purchase contract issued on 12 or after the effective date of this section. 13  (b) The commissioner shall amend a remote parcel or homestead entry land 14 purchase contract or patent issued before the effective date of this section to remove 15 the conditions of former AS 38.05.078(d) or former AS 38.09.050(e) if the holder of 16 the purchase contract or patent 17  (1) requests the amendment; 18  (2) pays the reasonable administrative costs of the amendment as 19 determined by the commissioner; and 20  (3) pays the difference, as established by the commissioner, between 21 the land's fair market value before the amendment and the estimated fair market value 22 after the amendment. 23 * Sec. 49. AS 38.95 is amended by adding a new section to read: 24 ARTICLE 7. NO OBLIGATION TO PROVIDE SERVICES TO DISPOSALS 25 OF STATE LAND; NO LIMITATION ON FURTHER DISPOSALS. 26  Sec. 38.95.300. DISCLAIMER APPLICABLE TO STATE DISPOSALS. 27 Except as otherwise specifically provided, nothing in this title 28  (1) obligates the state to provide services to land that is disposed of by 29 the state, or any grantee of the state, or is the subject of any disposal program; 30  (2) limits the authority of the state to dispose of land or any interest 31 in land or resources in the area of the current disposal, provides any exclusive right 01 or interest in the area of the disposal, or implies or requires that any disposals made 02 will be limited in type or any other manner. 03 * Sec. 50. AS 38.04.020(c), 38.04.020(f), 38.04.020(j), 38.04.020(k); 04 AS 38.05.035(e)(6)(F), 38.05.040, 38.05.057(g), 38.05.057(j), 38.05.079(d), 38.05.207, 05 38.05.855, 38.05.856, 38.05.945(g), 38.05.946(b); AS 38.08.090; AS 38.09.010(e), 38.09.020, 06 38.09.040(a)(2), 38.09.040(a)(3), 38.09.040(a)(4), 38.09.050(d), 38.09.050(e), 38.09.060, 07 38.09.070, 38.09.090, 38.09.900(1), 38.09.900(3), and 38.09.900(4) are repealed. 08 * Sec. 51. Notwithstanding AS 41.21.120 - 41.21.125, within Township 10 North, Range 09 1 East, Seward Meridian, the commissioner of natural resources may 10 (1) convey a property interest in land to the Alaska Railroad Corporation for 11 the purpose of realigning the railroad in conjunction with the relocation of the Seward 12 Highway, provided that the property interest conveyed must be equivalent to that conveyed 13 to the state-owned railroad under 45 U.S.C. 1201 - 1214 (Alaska Railroad Transfer Act of 14 1982) and shall be held and managed by the Alaska Railroad Corporation under AS 42.40; 15 (2) grant a 300 foot wide highway easement to the Department of 16 Transportation and Public Facilities for the relocated Seward Highway; 17 (3) grant a 100 foot wide utility easement to Chugach Electric Association, 18 Inc., for the relocation of the 115 kilovolt electric transmission line (Federal Power 19 Commission project no. 2170, AA-39417, and ADL 32417) and the electric distribution line 20 (A-029885) located within the Chugach State Park. 21 * Sec. 52. APPLICABILITY. The change to the interest rate to be charged on contracts 22 for the sale of land under AS 38.05.065, made by secs. 17 - 19 of this Act, applies to all 23 contracts under AS 38.05.065 sent by the Department of Natural Resources to purchasers for 24 signature on or after the effective date of secs. 17 - 19 of this Act. 25 * Sec. 53. REVISOR'S INSTRUCTION. The amendments to AS 38.05.082(b), made by 26 sec. 25 of this Act, do not affect the amendments made to that subsection by sec. 3, ch. 27, 27 SLA 1991, effective January 1, 1997. Unless amended or repealed by Act of the legislature 28 after the effective date of this section, the amendments to AS 38.05.082(b), made by sec. 25 29 of this Act, continue in effect after the amendments made by sec. 3, ch. 27, SLA 1991, take 30 effect January 1, 1997. 31 * Sec. 54. TRANSITIONAL PROVISIONS: REGULATIONS. (a) Notwithstanding 01 sec. 55 of this Act, the Department of Natural Resources may proceed to adopt regulations 02 necessary to implement the changes made by this Act. The regulations take effect under 03 AS 44.62 (Administrative Procedure Act), but not before July 1, 1995. 04 (b) To the extent they are consistent with AS 38.08, regulations governing the 05 selection of applicants for homesite parcels under AS 38.08 in effect on the effective date of 06 secs. 42 - 43 of this Act remain in effect notwithstanding the amendment to AS 38.08.040, 07 made by secs. 42 - 43 of this Act, until the regulations are amended, repealed, or superseded. 08 * Sec. 55. Except for sec. 54 of this Act, this Act takes effect July 1, 1995. 09 * Sec. 56. Section 54 of this Act takes effect immediately under AS 01.10.070(c).