00 CS FOR SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 191(FIN) 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 AS 38.04.020(d) is repealed and reenacted to read: 17  (d) On January 15 of the first regular session of each legislature, the 18 commissioner shall report to the legislature on the total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 38.05.600 30 [AS 38.05.079], 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 38.05.067(d) is amended to read: 09  (d) This section does not apply to the sale of state land under AS 38.05.057, 10 AS 38.08, or [AS 38.04.020(g)(2) AND] AS 38.09. 11 * Sec. 21. AS 38.05.069(a) is amended to read: 12  (a) On a determination that the highest and best use of unoccupied land is for 13 agricultural purposes and that it is in the best interests of the state to sell or lease the 14 land, the commissioner may [SHALL] grant to an Alaska [ALASKAN] resident 15 owning and using or leasing and using land for agricultural purposes a first option at 16 the auction to purchase or lease the unoccupied land situated adjacent to land presently 17 held by the Alaska [ALASKAN] resident for the amount of the high bid received at 18 public auction. If more than one Alaska [ALASKAN] resident qualifies for a first 19 option under this section, eligibility for the first option shall be determined by lot and 20 the option must be exercised on the conclusion of the public auction. A parcel of 21 agricultural land sold under this section may not be less than 20 acres and a parcel of 22 agricultural land that is acquired by exercise of the option granted in this subsection 23 may not exceed 320 acres. Agricultural land that is acquired under this section must 24 be used for agricultural purposes as required by law. 25 * Sec. 22. AS 38.05.069(e)(2) is repealed and reenacted to read: 26  (2) "adjacent" means that a tract of land has one common boundary 27 point with presently held land or is separated from the presently held land only by a 28 physical barrier such as a road or stream. 29 * Sec. 23. AS 38.05.075(a) is amended to read: 30  (a) Except as provided in AS 38.05.035, 38.05.070, 38.05.073, [38.05.079,] 31 38.05.082, 38.05.083, 38.05.087, 38.05.102, 38.05.600, 38.05.810, and this section, 01 leasing shall be made at public auction to the highest qualified bidder as determined 02 by the commissioner. In the public notice of a lease to be offered at public auction, 03 the commissioner shall specify a minimum acceptable bid and the lease compensation 04 method. The lease compensation method shall be designed to maximize the return on 05 the lease to the state and shall be a form of compensation set out in AS 38.05.073(m). 06 An aggrieved bidder may appeal to the commissioner within five days for a review of 07 the determination. The leasing shall be conducted by the commissioner and the 08 successful bidder shall deposit at the auction the first year's rental or other lease 09 compensation as specified by the commissioner, or that portion of it that the 10 commissioner requires in accordance with the bid. The commissioner shall require, 11 under AS 38.05.860, qualified bidders to deposit a sum equal to any survey or 12 appraisal costs reasonably incurred by another qualified bidder acting in accordance 13 with the regulations of the commissioner or incurred by the department under 14 AS 38.04.045 and AS 38.05.840. If a bidder making a deposit of survey or appraisal 15 costs is determined by the commissioner to be the highest qualified bidder under this 16 subsection, the deposit shall be paid to the unsuccessful bidder who incurred those 17 costs or to the department if the department incurred the costs. All costs for survey 18 and appraisal shall be approved in advance in writing by the commissioner. The 19 commissioner shall immediately issue a receipt containing a description of the land or 20 interest leased, the price bid, and the terms of the lease to the successful qualified 21 bidder. If the receipt is not accepted in writing by the bidder under this subsection, 22 the commissioner may offer the land for lease again under this subsection. A lease, 23 on a form approved by the attorney general, shall be signed by the successful bidder 24 and by the commissioner within the period specified in the auction notice. 25 * Sec. 24. AS 38.05.082(b) is amended to read: 26  (b) The director may classify land as subject to leases for fisheries 27 development. In an area or region of the state for which a land use plan has not been 28 adopted under AS 38.04.065, the director may classify land for lease under this section 29 after notice under AS 38.05.945. The director may [SHALL] publicly invite 30 applications for lease of the selected areas. Each application shall be accompanied by 31 an affidavit to the effect that the applicant presently intends to personally utilize the 01 leased area for fishing purposes throughout the term of the lease [THE 02 FOLLOWING SEASON]. If two or more applications are received for the same shore 03 area, the director may offer [SHALL AWARD] the lease at public auction under 04 AS 38.05.075(a). If only one application is received and the appraisal value of the 05 lease is $5,000 a year or less, the commissioner may issue a negotiated lease under 06 AS 38.05.070(b) [TO THE MOST QUALIFIED APPLICANT. IN DETERMINING 07 THE QUALIFICATIONS OF APPLICANTS, THE DIRECTOR SHALL CONSIDER 08 THE LENGTH OF TIME DURING WHICH THE APPLICANT HAS BEEN 09 ENGAGED IN SET NETTING, THE PROXIMITY OF THE PAST FISHING SITES 10 OF THE APPLICANT TO THE LAND TO BE LEASED, THE PRESENT ABILITY 11 OF THE APPLICANT TO UTILIZE THE LOCATION TO ITS MAXIMUM 12 POTENTIAL, AND OTHER FACTORS RELEVANT TO THE EQUITABLE 13 ASSIGNMENT OF THE DISPUTED AREA. IF THE DIRECTOR CANNOT 14 DETERMINE A PREFERENCE BETWEEN CONFLICTING APPLICANTS FOR 15 THE SAME LEASE SITE ON THE BASIS OF QUALIFICATIONS, THE 16 DIRECTOR SHALL SELECT BETWEEN THE APPLICANTS BY LOT. AN 17 AGGRIEVED APPLICANT MAY APPEAL TO THE COMMISSIONER WITHIN 30 18 DAYS FOR A REVIEW OF THE DIRECTOR'S DETERMINATION]. 19 * Sec. 25. AS 38.05.082(c) is amended to read: 20  (c) A lease for set net fishing may be issued for any period not exceeding 10 21 years. If the commissioner determines that the land is not being utilized for the 22 purpose for which the lease is issued, the lease may be declared void. [THE 23 DIRECTOR SHALL ESTABLISH A REASONABLE RENTAL FOR THE LEASE, 24 EQUAL TO THE ADMINISTRATIVE COSTS INVOLVED IN PROCESSING THE 25 LEASEHOLD APPLICATIONS.] 26 * Sec. 26. AS 38.05.082(d) is amended to read: 27  (d) Subleasing and renewals of leases are governed by AS 38.05.095 and 28 38.05.102.  Notwithstanding (b) of this section, a lease held under this section on 29 the effective date of this bill section may be renewed under terms and conditions 30 prescribed by the commissioner. 31 * Sec. 27. AS 38.05.083 is repealed and reenacted to read: 01  Sec. 38.05.083. AQUATIC FARMING AND HATCHERY SITE LEASES. 02 (a) The commissioner may offer to the public for lease at public auction under 03 AS 38.05.075 or by negotiation under AS 38.05.070 a site for aquatic farming or 04 related hatchery operations. Before a final decision to issue or renew a lease under 05 this section, the commissioner shall give notice and allow opportunity for comment in 06 accordance with AS 38.05.945, and may hold a hearing to take testimony. Before a 07 final decision to issue or renew a lease under this section, the commissioner shall 08 consider all relevant comment or testimony submitted under this section, AS 38.05.945, 09 or 38.05.946. 10  (b) The commissioner, for good cause, may deny an application for issuance 11 or renewal of a lease under this section, but shall provide the applicant with written 12 findings that explain the reasons for the denial. 13  (c) A site may be leased under this section for not less than the appraised fair 14 market value of the lease. The value of the lease shall be reappraised every five years. 15  (d) A lease under this section may be assigned, but if the assignee changes the 16 use of the site the lease reverts to the state. 17  (e) Before entering into a lease under this section, the commissioner shall 18 require the lessee to post a performance bond or provide other security to cover the 19 costs to the department of restoring the leased site in the event the lessee abandons the 20 site. 21  (f) The commissioner shall adopt regulations establishing criteria for the 22 approval or denial of leases under this section and for limiting the number of sites for 23 which leases may be issued in an area in order to protect the environment and natural 24 resources of the area. The regulations must provide for the consideration of upland 25 management policies and whether the proposed use of a site is compatible with the 26 traditional and existing uses of the area in which the site is located. 27 * Sec. 28. AS 38.05.090 is repealed and reenacted to read: 28  Sec. 38.05.090. REMOVAL OR REVERSION OF IMPROVEMENTS UPON 29 TERMINATION OF LEASES. (a) Unless otherwise agreed to in writing by the 30 commissioner, a lessee shall remove from a former leasehold 31  (1) all personal property, including above-ground and below-ground 01 tanks, transportable buildings, equipment, machinery, tools, and other goods, not 02 belonging to the state, within 30 days after termination of the lease; and 03  (2) all buildings and fixtures, including gravel pads, foundations, and 04 slabs, not belonging to the state, within 60 days after termination of the lease. 05  (b) Unless otherwise agreed to in writing by the commissioner, the lessee shall 06 restore the leasehold to a good and marketable condition, acceptable to the 07 commissioner, within 120 days after termination of the lease. 08  (c) If the lessee does not remove personal property, buildings, and fixtures as 09 required within the time specified under (a) of this section, title to the personal 10 property, buildings, and fixtures that remain automatically vests in the state unless the 11 commissioner elects to remove and dispose of the remaining personal property, 12 buildings, and fixtures of the lessee. The commissioner may assess upon the lessee 13 the cost of removing and disposing of personal property, buildings, and fixtures 14 remaining upon the land. 15  (d) If the lessee does not restore the land within the time period specified 16 under (b) of this section, the commissioner may have the land restored and assess the 17 costs upon the lessee. 18  (e) As part of a lease agreement, and in order to protect the public interest, the 19 commissioner may require terms for removal or reversion of improvements additional 20 to those specified in (a) - (d) of this section. 21  (f) Private residential improvements of a lessee that have become fixtures of 22 the land and that are not removed by that lessee upon termination of the lease shall be 23 purchased by the subsequent purchaser of the land if the improvements were 24 authorized in the former lease or by permit from the director and if they have a net 25 value of more than $10,000. The net value is the value of the improvements as 26 determined by an appraisal approved by the commissioner, less all rents due the 27 department, all costs of restoration under (d) of this section, and all department 28 expenses estimated to be incurred in making the sale. After termination of the former 29 lessee's lease, and at additional times as determined necessary by the commissioner, 30 the value of the authorized residential fixtures shall be determined by an independent 31 appraisal made at the cost of the former lessee. A notice or offer by the state to sell 01 formerly leased land under this subsection must state (1) the appraised value of 02 authorized residential fixtures remaining on the land that must be purchased, and (2) 03 that that cost is included in the purchase price. Out of the proceeds of the sale, the 04 department shall pay to the former lessee the appraised value of the residential 05 improvements, less all rents due the department, all costs of restoration due the 06 department under (d) of this section, and all department expenses incurred in making 07 the sale. 08  (g) Personal property described in (c) of this section is not subject to AS 34.45 09 (Uniform Unclaimed Property Act). 10 * Sec. 29. AS 38.05.131(a) is amended to read: 11  (a) Unless specifically provided otherwise in AS 38.05.132 - 38.05.134, the 12 provisions of AS 38.05.005 - 38.05.037 [AS 38.05.005 - 38.05.040], 38.05.140(f), 13 38.05.180, 38.05.182 - 38.05.184, and 38.05.920 - 38.05.990 apply to the issuance of 14 oil and gas exploration licenses and leases under AS 38.05.132 - 38.05.134. 15 * Sec. 30. AS 38.05.185(a) is amended to read: 16  (a) The acquisition and continuance of rights in and to deposits on state land 17 of minerals, which on January 3, 1959, were subject to location under the mining laws 18 of the United States, shall be governed by AS 38.05.185 - 38.05.275. Nothing in 19 AS 38.05.185 - 38.05.275 affects the law pertaining to the acquisition of rights to 20 mineral deposits owned by any other person or government. The director, with the 21 approval of the commissioner, shall determine that land from which mineral deposits 22 may be mined only under lease, and, subject to the limitations of AS 38.05.300, that 23 land that shall be closed to location under AS 38.05.185 - 38.05.275 [MINING]. 24 State land may not be closed to [MINING OR MINERAL] location under 25 AS 38.05.185 - 38.05.275 except as provided in AS 38.05.300 and unless the 26 commissioner makes a finding that mining would be incompatible with significant 27 surface uses on the state land. State land may not be restricted to mining under lease 28 unless the commissioner determines that potential use conflicts on the state land 29 require that mining be allowed only under written leases issued under AS 38.05.205 30 or the commissioner has determined that the land was mineral in character at the time 31 of state selection. The determinations required under this subsection shall be made in 01 compliance with land classification orders and land use plans developed under 02 AS 38.05.300. 03 * Sec. 31. AS 38.05.190(a) is amended to read: 04  (a) The right to acquire exploration and mining rights under AS 38.05.185 - 05 38.05.275 may be acquired or held only by 06  (1) citizens of the United States at least 18 years of age; 07  (2) legal guardians or trustees of citizens of the United States under 18 08 years of age on behalf of the citizens; 09  (3) persons at least 18 years of age who have declared their intention 10 to become citizens of the United States; 11  (4) [ALIENS AT LEAST 18 YEARS OF AGE IF THE LAWS OF 12 THEIR COUNTRY GRANT LIKE PRIVILEGES TO CITIZENS OF THE UNITED 13 STATES; 14  (5)] corporations organized under the laws of the United States or of 15 any state or territory of the United States and qualified to do business in this state [, 16 EXCEPT THAT IF MORE THAN 50 PERCENT OF THE STOCK OF A 17 CORPORATION IS OWNED OR CONTROLLED BY ALIENS WHO ARE NOT 18 QUALIFIED, THE CORPORATION IS NOT QUALIFIED TO ACQUIRE OR HOLD 19 THE RIGHTS]; 20   (5) [(6)] associations of persons described in (1) - (4) [(1) - (5)] of this 21 subsection. 22 * Sec. 32. AS 38.05.211(d) is repealed and reenacted to read: 23  (d) The rental amount established under this section shall be revised by the 24 commissioner as provided in this section based on changes in the Consumer Price 25 Index for all urban consumers, Anchorage Metropolitan Area (Semi-Annual Average) 26 compiled by the Bureau of Labor Statistics, United States Department of Labor, as 27 revised, rebased or replaced by that bureau. The reference base index is the index for 28 January - June, 1989, as revised or rebased by that bureau. The rental amount shall 29 be revised by the commissioner if the change between the index for the first six 30 months of the current year and the most recent index used to revise the rental, or the 31 reference base index if the rental amount has never been revised, equals or exceeds $5. 01 The rental amount shall be increased or decreased, as appropriate, by an amount equal 02 to the change in the index described in this subsection rounded to the nearest whole 03 $5 unit. The commissioner shall calculate the change in the index annually and, if the 04 rental amount must be revised, shall adopt a regulation establishing the revised rental 05 amount. A revised rental amount applies to a rental payment if the regulation 06 establishing the revised rental amount took effect at least 90 days before the date the 07 rental payment is due. 08 * Sec. 33. AS 38.05.255 is amended to read: 09  Sec. 38.05.255. SURFACE USE OF LAND OR WATER. Surface uses of 10 land or water included within mining properties by owners of those properties shall be 11 limited to those necessary for the prospecting for, extraction of, or basic processing of 12 mineral deposits and shall be subject to reasonable concurrent uses.  Leases 13 [PERMITS] for millsites and tailings disposal may be issued [GRANTED] by the 14 director. The leases [PERMITS] shall be conditioned upon payment of a reasonable 15 annual rent [CHARGE] for the lease [USE] and restriction to [CONTINUANCE OF] 16 the limited use. Timber from land open to mining without lease, except timberland, 17 may be used by a mining claimant or prospecting site locator for the mining or 18 development of the location or adjacent claims under common ownership. On other 19 land, timber may be acquired as provided in this chapter. Use of water shall be made 20 in accordance with AS 46.15. 21 * Sec. 34. AS 38.05.255 is amended by adding a new subsection to read: 22  (b) A lease issued under this section is exempt from the provisions of 23 AS 38.05.075 - 38.05.080. The commissioner, by regulation, shall establish 24 appropriate leasing procedures and annual rent amounts for leases under this section. 25 * Sec. 35. AS 38.05.265 is amended to read: 26  Sec. 38.05.265. ABANDONMENT. Failure to properly record a certificate of 27 location or a statement of annual labor, [FILE WITH THE DIRECTOR WITHIN THE 28 TIME PRESCRIBED A LEASE APPLICATION,] pay any required annual rental, pay 29 any required production royalty, or keep location boundaries clearly marked as 30 required by AS 38.05.185 - 38.05.275 and by regulations adopted under these sections 31 constitutes abandonment of all rights acquired under the mining claim, leasehold 01 location, lease, or site involved, and the claim, location, lease, or site is subject to 02 relocation by others. A locator or claimant of an abandoned location or a successor 03 in interest may not relocate the location until one year after abandonment. A statement 04 of annual labor that does not accurately set out the essential facts is void and of no 05 effect. If an annual rental or a royalty payment is deficient but is otherwise timely 06 paid, abandonment does not result if full payment is made within 07  (1) the period prescribed by a deficiency notice from the commissioner; 08 or 09  (2) 30 days after a final judgment establishing the amount due if the 10 deficiency amount due was contested. 11 * Sec. 36. AS 38.05 is amended by adding a new section to read: 12 ARTICLE 12A. REMOTE RECREATIONAL CABIN SITE SALES AND LEASES. 13  Sec. 38.05.600. REMOTE RECREATIONAL CABIN SITES. (a) The 14 commissioner may provide for the sale or lease of state land for remote recreational 15 cabin sites in areas of the state with dispersed populations if the land is classified for 16 that purpose under the procedures required by AS 38.05.300 and 38.05.945. Sales 17 under this section shall be at fair market value and the purchaser shall reimburse the 18 state for the appraisal, survey, and platting costs for the recreational cabin site. 19  (b) The annual fee for a remote recreational cabin site lease shall be set by the 20 commissioner so as to ensure that the state receives a fair return for the use granted 21 by the lease for the term of the lease. The commissioner shall establish regulations 22 that specify the application procedures for and the terms and conditions of a remote 23 recreational cabin site lease. A lease must be for a term of not more than five years, 24 and may be renewed for one additional five-year period. At any time during the lease, 25 the lessee may purchase the remote recreational cabin site by having the site appraised 26 and surveyed in a manner acceptable to the department and by paying to the state the 27 fair market value for the site. The lease may not be assigned by the original lessee 28 during the term of the lease. 29  (c) A remote recreational cabin site lease may be terminated by the 30 commissioner before the expiration of the term of the lease if a permittee fails to use 31 the land under lease in the manner required by the terms of the lease. After 01 termination of a remote recreational cabin site lease, improvements or personal 02 property on the land subject to the lease shall be managed in the same manner as 03 required by AS 38.05.090. 04 * Sec. 37. AS 38.05.810(a) is amended to read: 05  (a) Except as otherwise provided in AS 38.05.183(h), the (1) lease, sale, or 06 other disposal of state land or resources may be made to a state or federal agency or 07 political subdivision, (2) [THE] lease, sale, or disposal of coal deposits suitable for 08 mining may be made to a utility owned and operated by a government agency or 09 nonprofit cooperative association organized to participate under the Federal Rural 10 Electrification Act for the purpose of generating electric power and energy or the 11 production of process steam, or both, (3) [OR THE] sale or other disposal of state land 12 may be made to a tax-exempt, nonprofit corporation, association, club, or society 13 organized and operated exclusively for the management of a cemetery or a solid waste 14 facility, or (4) sale or other disposal of land within a state subdivision may be 15 made to that subdivision's nonprofit, tax-exempt homeowners' association, for less 16 than the appraised value as determined by the director and approved by the 17 commissioner to be fair and proper and in the best interests of the public, with due 18 consideration given to the nature of the public services or function rendered by the 19 applicant [AGENCY, SUBDIVISION, TAX-EXEMPT, NONPROFIT 20 CORPORATION, ASSOCIATION, CLUB, OR SOCIETY, OR UTILITY MAKING 21 APPLICATION], and of the terms of the grant under which the land was acquired by 22 the state.  The commissioner shall ensure, by regulation, deed restriction, covenant, 23 or otherwise, that disposals of land under this subsection serve a public purpose 24 and are in the public interest. 25 * Sec. 38. AS 38.05.850(a) is amended to read: 26  (a) The director, without the prior approval of the commissioner, may issue 27 permits, rights-of-way or easements on state land for roads, trails, ditches, field 28 gathering lines or transmission and distribution pipelines not subject to AS 38.35, 29 telephone or electric transmission and distribution lines, log storage, oil well drilling 30 sites and production facilities for the purposes of recovering minerals from adjacent 31 land under valid lease, and other similar uses or improvements, or revocable, 01 nonexclusive permits for the [LIMITED] personal or commercial use or removal of 02 resources that the director has determined to be of limited value [OF TIMBER OR 03 MATERIALS]. The commissioner, upon recommendation of the director, shall 04 establish a reasonable rate or fee schedule to be charged for these uses, subject to the 05 exception for nonprofit cooperative associations specified in (b) of this section. In the 06 granting, suspension or revocation of a permit or easement of land, the director shall 07 give preference to that use of the land which will be of greatest economic benefit to 08 the state and the development of its resources. However, first preference shall be 09 granted to the upland owner for the use of a tract of tideland, or tideland and 10 contiguous submerged land, which is seaward of the upland property of the upland 11 owner and which is needed by the upland owner for any of the purposes for which the 12 use may be granted. 13 * Sec. 39. AS 38.05.945(a) is amended to read: 14  (a) This section establishes the requirements for notice given by the department 15 for the following actions: 16  (1) classification or reclassification of state land under AS 38.05.300 17 and the closing of land to mineral leasing or entry under AS 38.05.185; 18  (2) zoning of land under applicable law; 19  (3) issuance of a 20  (A) preliminary written finding under AS 38.05.035(e)(5)(A) 21 regarding the sale, lease, or disposal of an interest in state land or resources for 22 oil and gas subject to AS 38.05.180(b); 23  (B) final written finding under AS 38.05.035(e)(5)(B) regarding 24 the sale, lease, or disposal of an interest in state land or resources for oil and 25 gas subject to AS 38.05.180(b); 26  (C) written finding for the sale, lease, or disposal of an interest 27 in state land or resources under AS 38.05.035(e)(6); 28  (4) a competitive disposal of an interest in state land or resources after 29 final decision under AS 38.05.035(e); 30  (5) [A PUBLIC HEARING UNDER AS 38.05.856(b); 31  (6)] a preliminary finding under AS 38.05.035(e) [AND 38.05.855(c)] 01 concerning sites for aquatic farms and related hatcheries; 02   (6) [(7)] a decision under AS 38.05.132 - 38.05.134 regarding the sale, 03 lease, or disposal of an interest in state land or resources. 04 * Sec. 40. AS 38.08.030(b) is amended to read: 05  (b) Fees for filing an application may not exceed $25 [$10]. 06 * Sec. 41. AS 38.08.040(a) is amended to read: 07  (a) An applicant meeting the qualifications for homesite entry under 08 AS 38.08.030 and selected under (f) of this section shall be issued a revocable permit 09 to occupy and improve the homesite in order to qualify for issuance of patent as 10 provided in this chapter.  The holder of a homesite entry permit shall pay, in 11 advance, an annual rental fee of $100. [THE APPLICATION FEE IS THE SOLE 12 RENT CHARGEABLE ON THE PERMIT FOR ITS DURATION.] 13 * Sec. 42. AS 38.08.040 is amended by adding a new subsection to read: 14  (f) If only one application for a homesite parcel is received, the commissioner 15 shall offer an entry permit for the parcel to the applicant provided the applicant is 16 otherwise qualified. If more than one application is received for a parcel, the 17 commissioner shall select by lottery the applicant who is entitled to receive the permit 18 for the parcel. The lottery shall be conducted under regulations adopted by the 19 commissioner that are to the maximum extent practicable consistent with the provisions 20 of AS 38.05.057 and the regulations adopted under that section. 21 * Sec. 43. AS 38.09.010(g) is amended to read: 22  (g) The commissioner may limit the number of persons permitted to obtain 23 [STAKE] homestead entries within an area designated under (a) of this section by a 24 lottery of qualified applicants. [THE COMMISSIONER MAY CONDUCT A 25 LOTTERY HELD UNDER THIS SUBSECTION IN THE COMMUNITY THAT IS 26 CLOSEST TO THE AREA DESIGNATED FOR HOMESTEAD ENTRY. THE 27 COMMISSIONER MAY REQUIRE THAT EACH PARTICIPANT IN THE 28 LOTTERY BE PRESENT UNLESS ATTENDANCE AT THE LOTTERY IS 29 PREVENTED BY 30  (1) MEDICAL REASONS, ATTENDANCE AT SCHOOL, OR 31 MILITARY SERVICE OUTSIDE THE STATE; OR 01  (2) A MANDATORY, UNAVOIDABLE EMPLOYMENT 02 COMMITMENT DETERMINED VALID BY THE COMMISSIONER BEFORE THE 03 SALE.] 04 * Sec. 44. AS 38.09.030(a) is amended to read: 05  (a) An applicant for a homestead entry permit shall 06  (1) submit proof acceptable to the commissioner that the applicant is 07 at least 18 years of age and has been a resident of the state for not less than one year 08 immediately before the date of application; and 09  (2) pay a fee of $5 per acre according to the description provided by 10 the applicant if the entry is on land classified agricultural, or $20 per acre if the 11 entry is on land not classified agricultural; 12  (3) agree to comply with the requirements of AS 38.09.050 [; 13  (4) CERTIFY THAT THE CORNERS OF THE LAND ENTERED 14 HAVE BEEN STAKED AND THE BOUNDARIES HAVE BEEN FLAGGED; OR 15  (5) ASSUME FULL RESPONSIBILITY FOR THE ACCURACY OF 16 THE DESCRIPTION OF THE LAND FILED WITH THE COMMISSIONER UNDER 17 AS 38.09.020(b)]. 18 * Sec. 45. AS 38.09.050(a) is amended to read: 19  (a) The commissioner shall issue a patent to homestead entry land if the permit 20 holder 21  (1)  either 22  (A) resides and lives on the homestead entry land for not less 23 than 25 months within five years after the issuance of the homestead entry 24 permit and reimburses the state for the survey and platting of the 25 homestead parcel; 26  (B) within five years pays the state the fair market value of 27 the homestead parcel at the time of patent and reimburses the state for the 28 survey and platting of the homestead parcel; or 29  (C) pays to the state the fair market value of the homestead 30 parcel under the terms of a contract under AS 38.05.065 to purchase the 31 parcel, entered into within five years of the issuance of the permit, and 01 reimburses the state for the survey and platting of the parcel; under this 02 subparagraph, the fair market value of the homestead parcel shall be 03 determined as of the date of the contract; and 04  (2) [SUBMITS AN ALIQUOT PARTS DESCRIPTION OR 05 COMPLETES AN APPROVED SURVEY OF THE LAND IN AN AREA WHERE 06 THE COMMISSIONER WAIVES THE RECTANGULAR SURVEY GRID WITHIN 07 FIVE YEARS AFTER THE ISSUANCE OF THE PERMIT; 08  (3) ERECTS A HABITABLE, PERMANENT DWELLING ON THE 09 HOMESTEAD WITHIN THREE YEARS AFTER THE ISSUANCE OF THE 10 HOMESTEAD ENTRY PERMIT; 11  (4) BRUSHES THE BOUNDARIES OF THE LAND NOT 12 DESCRIBED BY ALIQUOT PARTS OR AS A LOT OF RECORD WITHIN 90 13 DAYS AFTER THE ISSUANCE OF THE PERMIT; 14  (5)] clears and either puts into production or prepares for cultivation 15 either 25 percent of the land classified for agricultural use or 50 percent of the 16 cropland soils, whichever is less, within five years after issuance of the permit. 17 * Sec. 46. AS 38.09.050(b) is amended to read: 18  (b) Nothing in this chapter prohibits a homestead entry permit holder from 19 residing in a temporary dwelling on the homestead [BEFORE ERECTION OF THE 20 PERMANENT DWELLING]. 21 * Sec. 47. AS 38.09 is amended by adding a new section to read: 22  Sec. 38.09.105. REMOVAL OF CONDITIONS ON REMOTE PARCEL AND 23 HOMESTEAD ENTRY LAND. (a) The commissioner may not include the 24 conditions of former AS 38.05.078(d) in a remote parcel purchase contract issued on 25 or after the effective date of this section. 26  (b) The commissioner shall amend a remote parcel or homestead entry land 27 purchase contract or patent issued before the effective date of this section to remove 28 the conditions of former AS 38.05.078(d) or former AS 38.09.050(e) if the holder of 29 the purchase contract or patent 30  (1) requests the amendment; 31  (2) pays the reasonable administrative costs of the amendment as 01 determined by the commissioner; and 02  (3) pays the difference, as established by the commissioner, between 03 the land's fair market value before the amendment and the estimated fair market value 04 after the amendment. 05 * Sec. 48. AS 38.95 is amended by adding a new section to read: 06 ARTICLE 7. NO OBLIGATION TO PROVIDE SERVICES TO DISPOSALS 07 OF STATE LAND; NO LIMITATION ON FURTHER DISPOSALS. 08  Sec. 38.95.300. DISCLAIMER APPLICABLE TO STATE DISPOSALS. 09 Except as otherwise specifically provided, nothing in this title 10  (1) obligates the state to provide services to land that is disposed of by 11 the state, or any grantee of the state, or is the subject of any disposal program; 12  (2) limits the authority of the state to dispose of land or any interest 13 in land or resources in the area of the current disposal, provides any exclusive right 14 or interest in the area of the disposal, or implies or requires that any disposals made 15 will be limited in type or any other manner. 16 * Sec. 49. AS 38.04.020(c), 38.04.020(f), 38.04.020(j), 38.04.020(k); 17 AS 38.05.035(e)(6)(F), 38.05.040, 38.05.057(g), 38.05.057(j), 38.05.079, 38.05.207, 38.05.855, 18 38.05.856, 38.05.945(g), 38.05.946(b); AS 38.08.090; AS 38.09.010(e), 38.09.020, 19 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, 20 38.09.070, 38.09.090, 38.09.900(1), 38.09.900(3), and 38.09.900(4) are repealed. 21 * Sec. 50. Notwithstanding AS 41.21.120 - 41.21.125, within Township 10 North, Range 22 1 East, Seward Meridian, the commissioner of natural resources may 23 (1) convey a property interest in land to the Alaska Railroad Corporation for 24 the purpose of realigning the railroad in conjunction with the relocation of the Seward 25 Highway, provided that the property interest conveyed must be equivalent to that conveyed 26 to the state-owned railroad under 45 U.S.C. 1201 - 1214 (Alaska Railroad Transfer Act of 27 1982) and shall be held and managed by the Alaska Railroad Corporation under AS 42.40; 28 (2) grant a 300 foot wide highway easement to the Department of 29 Transportation and Public Facilities for the relocated Seward Highway; 30 (3) grant a 100 foot wide utility easement to Chugach Electric Association, 31 Inc., for the relocation of the 115 kilovolt electric transmission line (Federal Power 01 Commission project no. 2170, AA-39417, and ADL 32417) and the electric distribution line 02 (A-029885) located within the Chugach State Park. 03 * Sec. 51. A disposal by the Department of Natural Resources of a homesite under 04 AS 38.08 by lottery, on or after July 6, 1984, and before the effective date of this section, is 05 valid and effective, notwithstanding the fact that the disposal was by lottery, if the disposal 06 otherwise complied with the requirements of AS 38.08. 07 * Sec. 52. APPLICABILITY. The change to the interest rate to be charged on contracts 08 for the sale of land under AS 38.05.065, made by secs. 17 - 19 of this Act, applies to all 09 contracts under AS 38.05.065 sent by the Department of Natural Resources to purchasers for 10 signature on or after the effective date of secs. 17 - 19 of this Act. 11 * Sec. 53. REVISOR'S INSTRUCTION. The amendments to AS 38.05.082(b), made by 12 sec. 24 of this Act, do not affect the amendments made to that subsection by sec. 3, ch. 27, 13 SLA 1991, effective January 1, 1997. Unless amended or repealed by Act of the legislature 14 after the effective date of this section, the amendments to AS 38.05.082(b), made by sec. 24 15 of this Act, continue in effect after the amendments made by sec. 3, ch. 27, SLA 1991, take 16 effect January 1, 1997. 17 * Sec. 54. TRANSITIONAL PROVISIONS: REGULATIONS. (a) Notwithstanding 18 sec. 55 of this Act, the Department of Natural Resources may proceed to adopt regulations 19 necessary to implement the changes made by this Act. The regulations take effect under 20 AS 44.62 (Administrative Procedure Act), but not before July 1, 1995. 21 (b) To the extent they are consistent with AS 38.08, regulations governing the 22 selection of applicants for homesite parcels under AS 38.08 in effect on the effective date of 23 secs. 41 - 42 of this Act remain in effect notwithstanding the amendment to AS 38.08.040, 24 made by secs. 41 - 42 of this Act, until the regulations are amended, repealed, or superseded. 25 * Sec. 55. Except for sec. 54 of this Act, this Act takes effect July 1, 1995. 26 * Sec. 56. Section 54 of this Act takes effect immediately under AS 01.10.070(c).