00 CS FOR HOUSE BILL NO. 282(RES) 01 "An Act relating to access roads; relating to state land; relating to contracts for the sale 02 of state land; relating to the authority of the Department of Education and Early 03 Development to dispose of state land; relating to the authority of the Department of 04 Transportation and Public Facilities to dispose of state land; relating to the authority of 05 the Department of Natural Resources over certain state land; relating to the state land 06 disposal income fund; relating to the sale and lease of state land; relating to covenants 07 and restrictions on agricultural land; and providing for an effective date." 08 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 09 * Section 1. AS 14.07.030(a) is amended to read: 10 (a) The department may 11 (1) establish, maintain, govern, operate, discontinue, and combine area, 12 regional, and special schools; 13 (2) enter into contractual agreements with the Bureau of Indian Affairs 01 or with a school district to share boarding costs of secondary school students; 02 (3) provide for citizenship night schools when and where expedient; 03 (4) provide for the sale or other disposition of abandoned or obsolete 04 buildings and other state-owned school property; 05 (5) prescribe a classification for items of expense of school districts; 06 (6) acquire and transfer personal property, acquire real property, and 07 transfer an interest in real property according to terms, standards, and conditions 08 established by the commissioner [TO FEDERAL AGENCIES, STATE AGENCIES, 09 OR TO POLITICAL SUBDIVISIONS]; 10 (7) enter into contractual agreements with school districts to provide 11 more efficient or economical education services; reasonable fees may be charged by 12 the department to cover the costs of providing services under an agreement, including 13 costs for professional services, reproduction or printing, and mailing and distribution 14 of educational materials; 15 (8) provide for the issuance of elementary and secondary diplomas to 16 persons not in school who have completed the equivalent of an 8th or 12th grade 17 education, respectively, in accordance with standards established by the department; 18 (9) apply for, accept, and spend endowments, grants, and other private 19 money available to the state for educational purposes in accordance with AS 37.07 20 (Executive Budget Act); 21 (10) set student tuition and fees for educational and extracurricular 22 programs and services provided and schools operated by the department under the 23 provisions of (1) of this section and AS 14.07.020(a)(9), (11), and (12); 24 (11) charge fees to cover the costs of care and handling with respect to 25 the acquisition, warehousing, distribution, or transfer of donated foods; 26 (12) establish and collect fees for the rental of school facilities and for 27 other programs and services provided by the schools; 28 (13) develop a model curriculum and provide technical assistance for 29 early childhood education programs; 30 (14) notwithstanding any other provision of this title, intervene in a 31 school district to improve instructional practices under standards established by the 01 department in regulation, including directing the 02 (A) employees identified by the department to exercise 03 supervisory authority for instructional practices in the district or in a specified 04 school; 05 (B) use of appropriations under this title for distribution to a 06 district; 07 (15) notwithstanding any other provision of this title, redirect public 08 school funding under AS 14.17 appropriated for distribution to a school district, after 09 providing notice to the district and an opportunity for the district to respond, 10 (A) when necessary to contract for services to improve 11 instructional practices in the district; 12 (B) when the district has failed to take an action required by the 13 department to improve instructional practices in the district; if funding is 14 redirected under this subparagraph, the department shall provide the redirected 15 funding to the district when the department has determined that the required 16 action is satisfactorily completed; or 17 (C) in accordance with AS 14.07.070, when the district has 18 failed to comply with the school laws of the state or with the regulations 19 adopted by the department. 20 * Sec. 2. AS 19.30.080 is amended to read: 21 Sec. 19.30.080. Construction standards and maintenance. An access road 22 constructed under AS 19.30.060 - 19.30.100 may [SHALL] be of low standard, not 23 necessarily suitable for all weather use. The state is not under obligation to maintain 24 an access road constructed under AS 19.30.060 - 19.30.100. If an access road is 25 constructed outside a municipality that has zoning ordinances, the right-of-way width 26 for the road shall be determined by the division of lands and the Department of 27 Transportation and Public Facilities. If an access road under AS 19.30.060 - 28 19.30.100 is constructed within the boundaries of a municipality that has zoning 29 ordinances, the right-of-way width must [SHALL] conform to the subdivision control 30 ordinances of the municipality in the same manner and to the same extent as 31 private landowners. Contracts for the work on an access road are governed by 01 AS 36.30 (State Procurement Code). 02 * Sec. 3. AS 35.20.070 is repealed and reenacted to read: 03 Sec. 35.20.070. Vacating and disposing of land; rights in land. (a) The 04 department may vacate an easement acquired for a public works purpose by executing 05 and filing a deed in the appropriate recording district. Upon filing, title to the vacated 06 rights in land inures to the underlying real property owner in the manner and 07 proportion considered equitable by the commissioner and set out in the deed. 08 (b) If the department determines that land or rights in land acquired by the 09 department are no longer necessary for public works purposes, the department shall 10 offer the land to the Department of Natural Resources. If the Department of Natural 11 Resources accepts the offer within 45 days after receiving the offer, the department 12 shall transfer the land to the Department of Natural Resources. If the Department of 13 Natural Resources rejects the offer or fails to accept the offer within 45 days after 14 receiving the offer, the offer is terminated and the department may sell, contract to 15 sell, lease, or exchange the land according to terms, standards, and conditions 16 established by the commissioner. 17 (c) Proceeds received from the sale or lease of land under this section shall be 18 credited to the funds from which the purchase of the land was originally made. 19 * Sec. 4. AS 38.04.022 is amended to read: 20 Sec. 38.04.022. State land disposal income fund. (a) The revenue from the 21 state land disposal program shall be deposited in the state land disposal income fund in 22 the state treasury. On June 30 of each fiscal year, the portion of that fund that exceeds 23 $12,000,000 [$5,000,000] shall be deposited in the state general fund. The legislature 24 may appropriate money from the state land disposal income fund for expenditure by 25 the Department of Natural Resources for necessary costs incurred by the 26 commissioner in the implementation of state land disposal programs authorized under 27 this title or for any other public purpose. 28 (b) Within five days after the legislature convenes in regular session, the 29 Department of Natural Resources shall notify the legislature that a report reflecting all 30 money deposited in the fund established under (a) of this section during the previous 31 [PRIOR] fiscal year is available. The report may include a recommendation to 01 amend the deposit limit established in (a) of this section. 02 * Sec. 5. AS 38.04.045(b) is amended to read: 03 (b) Before the issuance of [A LONG-TERM LEASE UNDER AS 38.05.070 04 OR OF] a patent for state land, an official cadastral survey shall be accomplished, 05 unless a comparable, approved survey exists that has been conducted by the federal 06 Bureau of Land Management. Before land may be offered under AS 38.08 or 07 AS 38.09, or before land may be offered under AS 38.05.055 or 38.05.057, except 08 land that is classified for agricultural uses, an official rectangular survey grid shall be 09 established. The rectangular survey section corner positions shall be monumented and 10 shown on a cadastral survey plat approved by the state. For those areas where the state 11 may wish to convey surface estate outside of an official rectangular survey grid, the 12 commissioner may waive monumentation of individual section corner positions and 13 substitute an official control survey with control points being monumented and shown 14 on control survey plats approved by the state. The commissioner may not issue more 15 than one conveyance for each section within a township outside of an official 16 rectangular survey grid. Land to be conveyed may not be located more than two miles 17 from an official survey control monument except that the commissioner may waive 18 this requirement on a determination that a single purpose use does not justify the 19 requirement if the existing status of the land is known with reasonable certainty. The 20 lots and tracts in state subdivisions shall be monumented and the cadastral survey and 21 plats for the subdivision shall be approved by the state. Where land is located within a 22 municipality with planning, platting, and zoning powers, plats for state subdivisions 23 shall comply with local ordinances and regulations in the same manner and to the 24 same extent as plats for subdivisions by other landowners. State subdivisions shall be 25 filed and recorded in the district recorder's office. The requirements of this section do 26 not apply to land made available for material sales, for short-term leases, for parcels 27 adjoining a surveyed right-of-way, or for land that has been open to random staking 28 under the homestead program in the past; however, for short-term leases, the lessee 29 shall comply with local subdivision ordinances unless waived by the municipality 30 under procedures specified by ordinance. In this subsection, "a single purpose use" 31 includes a communication site, an aid to navigation, and a park site. 01 * Sec. 6. AS 38.04.045 is amended by adding a new subsection to read: 02 (c) The commissioner may require an official cadastral survey under (b) of 03 this section before the issuance of a long-term lease under AS 38.05.070. 04 * Sec. 7. AS 38.05.055 is repealed and reenacted to read: 05 Sec. 38.05.055. Auction sale or sealed bid procedures. (a) Unless another 06 method of sale is allowed under this chapter, AS 38.08, or AS 38.09, the sale of state 07 land shall be made at public auction or by sealed bid, at the discretion of the director, 08 to the highest qualified bidder as determined by the director. The director may accept 09 bids and sell state land under this section at not less than 70 percent of the appraised 10 fair market value of the land. 11 (b) To qualify to participate under this section in a public auction or sale by 12 sealed bid of state land that is other than commercial, industrial, or agricultural land, a 13 bidder must be a resident of the state for at least one year immediately preceding the 14 date of the sale and submit proof of that fact as required by regulation. A bidder may 15 be represented by an attorney or agent at a public auction. 16 (c) An aggrieved bidder may appeal to the commissioner within five days after 17 the sale for a review of the director's determination. 18 (d) The director shall conduct a sale under this section. The successful bidder 19 at a public auction, or, for a sealed bid, each bidder when submitting a bid, shall 20 provide an earnest money deposit in the amount of at least five percent of the bid 21 amount. Not later than 10 days after the public auction or sale by sealed bid, the 22 director shall issue a receipt to the successful bidder. The director's receipt shall 23 contain a description of the land or property purchased, the bid price, and the amount 24 deposited. If the bidder fails to enter into a contract to purchase or defaults in the 25 payment of the bid amount, five percent of the bid amount shall be forfeited to the 26 state. 27 * Sec. 8. AS 38.05.065(a) is amended to read: 28 (a) A [THE] contract of sale for land, an interest in land, or property sold 29 under this chapter, including under AS 38.05.057, may be issued for [AT PUBLIC 30 AUCTION OR BY SEALED BID UNDER AS 38.05.055 SHALL REQUIRE] the 31 remainder of the purchase price to be paid in monthly, quarterly, or annual 01 installments over a period of not more than 30 [20] years, with interest at the rate 02 provided in (i) of this section. Installment payments plus interest shall be set on the 03 level-payment basis. 04 * Sec. 9. AS 38.05.065(c) is amended to read: 05 (c) The director shall, for contracts under (a) [, (b),] or (h) of this section, set 06 out in the contract for each sale the period for the payment of installments and the total 07 purchase price plus interest. The director, with the consent of the commissioner, may 08 also include in contracts under this section conditions, limitations, and terms 09 considered necessary and proper to protect the interest of the state. Violations of any 10 provision of this chapter or the terms of the contract of sale subject the purchaser to 11 appropriate administrative and legal action, including but not limited to specific 12 performance, termination [FORECLOSURE], ejectment, or other legal remedies in 13 accordance with applicable state law. 14 * Sec. 10. AS 38.05.065(d) is amended to read: 15 (d) If a contract for a sale of state land has been breached, the director may 16 issue a decision to [FORECLOSE AND] terminate the contract at any time 31 days 17 after delivering by certified mail a written notice of the breach to the address of record 18 of the purchaser. A breach caused by the failure to make payments required by the 19 contract may be cured within 30 days after the notice of the breach has been received 20 by the purchaser by payment of the sum in default together with the larger of a fee of 21 $50 or five percent of the sum in default. If there are material facts in dispute between 22 the state and the purchaser, the purchaser may submit a written request for a public 23 hearing for the review of the facts within 30 days after the notice of the breach has 24 been received. 25 * Sec. 11. AS 38.05.065(e) is amended to read: 26 (e) Upon [ON] a determination that there has been a breach of the contract 27 based on the administrative record and the evidence presented at a hearing, if 28 requested, the director shall issue a decision [FORECLOSING THE INTEREST OF 29 THE PURCHASER AND] terminating the contract. The obligation to make payments 30 under the contract continues through the date of the director's decision to terminate 31 the contract [FORECLOSE BY THE DIRECTOR]. 01 * Sec. 12. AS 38.05.065(f) is amended to read: 02 (f) The director shall deliver the decision to [FORECLOSE AND] terminate 03 the contract personally to the purchaser or send it certified mail, return receipt 04 requested, to the address of record of the purchaser. If the breach is a failure to make 05 payments required by the contract, the decision shall include a notice to the purchaser 06 that if within 30 days the purchaser pays to the state the full amount of the unpaid 07 contract price, including all accrued interest, and any fees assessed under (d) of this 08 section, the commissioner [DEPARTMENT] shall issue to the purchaser a deed to the 09 land. If full payment is not made within 30 days or the breach is for other than failure 10 to make payment, the decision [FORECLOSES AND] terminates all legal and 11 equitable rights the purchaser has in the land. 12 * Sec. 13. AS 38.05.065(h) is amended to read: 13 (h) The commissioner, after consulting with the Board of Agriculture and 14 Conservation (AS 03.09.010), 15 (1) shall provide that, notwithstanding (a) [AND (b)] of this section, in 16 a contract for the sale of land classified under AS 38.05.020(b)(6) for agricultural 17 uses, the interest rate to be charged on installment payments may not exceed 9.5 18 percent; and 19 (2) may declare a moratorium of up to five years on payments on land 20 sold under this section for land classified under AS 38.05.020(b)(6) for agricultural 21 uses if 22 (A) the commissioner determines that the moratorium is in the 23 best interest of the state; 24 (B) the commissioner certifies and the contract purchaser 25 agrees to perform farm development, crop production, and harvesting, not 26 including land clearing or related activity, requiring the expenditure of 27 amounts equivalent to the payments that would otherwise be made during the 28 moratorium; 29 (C) the sale of the agricultural land takes place after July 1, 30 1979; and 31 (D) the contract purchaser is in compliance with the 01 development plan specified in the purchase contract at the time the purchaser 02 applies for a moratorium under this paragraph and remains in compliance with 03 the development plan during the moratorium; for the payments subject to the 04 moratorium declared under this paragraph, interest payments are subject to the 05 moratorium but interest continues to accrue during the moratorium. 06 * Sec. 14. AS 38.05.065 is amended by adding new subsections to read: 07 (j) If a sale of state land is to be made by means other than as prescribed by 08 AS 38.05.055, the director shall require a person applying to purchase land, an interest 09 in land, or property to submit an earnest money deposit of at least five percent of the 10 purchase price with the application for a contract to purchase land, an interest in land, 11 or property. The earnest money deposit shall be applied toward the purchase price. If 12 the applicant fails to enter into a contract to purchase or defaults in the payment of the 13 purchase price, five percent of the purchase price shall be forfeited to the state. 14 (k) Notwithstanding (a) of this section, the commissioner may, upon a best 15 interest finding, determine that the purchase price for a parcel of land with existing 16 improvements valued at greater than $10,000 must be paid in full within 120 days of 17 closing. 18 * Sec. 15. AS 38.05 is amended by adding a new section to read: 19 Sec. 38.05.086. Leases and sales of land for commercial development. (a) 20 For purposes of stimulating economic development in the state, the commissioner may 21 offer land identified under (b) of this section for lease for commercial development by 22 issuing a request for proposals. A lessee eligible under (m) of this section may 23 purchase the leased land. 24 (b) The commissioner may identify land appropriate for commercial 25 development from any or all of the following categories: 26 (1) state land identified or nominated as a qualified opportunity zone 27 under 26 U.S.C. 1400Z-1 and 1400Z-2; 28 (2) state land nominated by the public; a public nomination may not 29 exceed 640 acres in size; 30 (3) any other state land the commissioner deems appropriate for 31 commercial development. 01 (c) If land identified in (b) of this section is classified in a manner that does 02 not allow disposal of the land, the commissioner may classify or reclassify the land 03 under AS 38.04.065 and AS 38.05.300. Before classifying or reclassifying land under 04 this subsection, the commissioner shall provide public notice under AS 38.05.945. 05 Notwithstanding AS 38.05.945(c)(2) and (3), regardless of whether the land is located 06 inside or outside a municipality, the commissioner shall provide notice to a 07 (1) regional corporation if the boundaries of the corporation as 08 established by 43 U.S.C. 1606(a) (sec. 7(a), Alaska Native Claims Settlement Act) 09 encompass the land; 10 (2) village corporation organized under 43 U.S.C. 1607(a) (sec. 8(a), 11 Alaska Native Claims Settlement Act) if the land is within 25 miles of the village for 12 which the corporation was established. 13 (d) Upon a finding under AS 38.05.035(e) that the lease and sale of the land 14 within the areas opened is in the best interests of the state, the commissioner may 15 request in writing proposals to lease land within the areas identified in (b) of this 16 section for commercial development. 17 (e) A person may apply to develop land within the areas by responding to the 18 commissioner's request for proposals and paying an application fee established by 19 regulation. In addition to information requested by the commissioner in the request for 20 proposals, a response to the request for proposals must include the specific 21 (1) type of commercial development proposed; and 22 (2) location, description, and size of the land for the proposed 23 commercial development; the size of land requested in a response to a request for 24 proposals may not exceed 20 acres and must be reasonably compact. 25 (f) The commissioner's request for proposals must be posted on the Alaska 26 Online Public Notice System (AS 44.62.175) for at least 30 consecutive days and must 27 be furnished in electronic format or by mail to each person who received notice of the 28 decision issued under AS 38.05.035(e). 29 (g) A response to the commissioner's request for proposals must be in writing 30 and submitted by the deadline set by the commissioner. The commissioner may reject 31 a proposal that does not meet the requirements of this section or that the commissioner 01 determines in writing is not in the best interests of the state. The commissioner's 02 decision to reject a proposal is subject to appeal or a petition for reconsideration under 03 AS 44.37.011. 04 (h) If the commissioner determines that only one suitable proposal for a 05 specific area of land exists, the commissioner may issue a lease to that person as 06 provided in this section as long as the proposal is in the best interests of the state. If 07 the commissioner determines that there are two or more suitable proposals for the 08 same or overlapping land, the commissioner shall hold a public auction or sealed bid, 09 limited to those persons who submitted proposals for the same or overlapping land, 10 and award the lease to the highest bidder as long as the proposal of the highest bidder 11 is in the best interests of the state. 12 (i) If a potential lessee selected under (h) of this section declines the lease 13 offer, the commissioner may begin negotiations with the potential lessee who provided 14 the next highest bid to develop the terms and conditions for a lease. 15 (j) The commissioner shall set, using a method of compensation set out in 16 AS 38.05.073(m), an annual fee for a commercial land lease under this section to 17 ensure that the state receives, for the term of the lease, a fair return for the use of the 18 land granted by the lease. 19 (k) A lease under this section may only be assigned by a lessee at the 20 discretion of the director. The initial term of the lease may not be more than five years. 21 At the director's discretion and only if the lease is in good standing, the lease may 22 renewed for one additional term of not more than five years. The director may extend 23 a lease in good standing for up to two years beyond the renewal term if the director 24 determines the extension will facilitate sale of the parcel to the lessee. 25 (l) The commissioner may terminate a commercial land lease under this 26 section before the expiration of the lease for a breach of the terms of the lease, 27 including a failure to use the land in a manner required by the lease. Upon expiration 28 of the term of a lease or the termination of the lease before expiration, improvements 29 to or personal property on the land subject to the lease shall be managed in the manner 30 required by AS 38.05.090. 31 (m) At any time during the lease, a lessee in good standing may submit an 01 application to the department to purchase all or a portion of the land leased under this 02 section for the fair market value of the land at the time of purchase. The lessee shall 03 pay an application fee provided by regulation. 04 (n) If an application to purchase land under (m) of this section is approved, 05 before closing, the lessee, at the lessee's expense, shall have the parcel appraised and 06 surveyed in a manner acceptable to the department. 07 (o) An eligible lessee under (m) of this section may apply the amount of the 08 lease payments made under the lease to the purchase price of the land. Other amounts 09 paid, including fees, penalties, survey costs, and appraisal costs, may not be applied to 10 the purchase price of the land. 11 (p) If an application to purchase land under (m) of this section is denied, the 12 lessee may continue to hold the lease according to the terms of the lease, and may 13 reapply to purchase the land. A subsequent application to purchase the land must 14 address the reasons the previous application was denied. 15 (q) The commissioner shall adopt regulations under AS 44.62 (Administrative 16 Procedure Act) to implement this section. Regulations adopted under this subsection 17 must, at a minimum, address 18 (1) the application procedures for a commercial land lease or sale 19 under this section; 20 (2) the auction or sealed bid process to be used, if necessary, under (h) 21 of this section; 22 (3) the terms and conditions that may be included in a commercial land 23 lease under this section; 24 (4) the method for resolving competitive bidding disputes and issues; 25 (5) the procedure for requesting proposals; 26 (6) the criteria for assessing proposals; and 27 (7) any administrative fees. 28 (r) The commissioner shall reserve easements and rights-of-way on and across 29 land made available for commercial development under this section after providing 30 regional corporations, village corporations, tribes, municipal governments, and other 31 interested parties an opportunity to review and comment on the proposed reserved 01 easements and rights-of-way, and an opportunity to appeal a decision under 02 AS 44.37.011. The commissioner shall reserve easements and rights-of-way under this 03 section for trails that have an established history of use for commerce, recreation, 04 transportation, or providing access to a traditional outdoor activity. In this subsection, 05 "traditional outdoor activity" has the meaning given in AS 38.04.200. 06 (s) Before leasing or disposing of land under this section, the commissioner 07 shall provide notice under AS 38.05.945 and prepare a best interest finding in writing 08 in accordance with AS 38.05.035(e). In making a best interest finding under this 09 subsection, the commissioner shall consider the effects of the lease or sale on 10 subsistence uses, fish and wildlife habitat and populations and their uses, and 11 historical and cultural resources. 12 (t) In this section, "good standing" means that a lessee is not in default on any 13 material term of a lease under this section and has satisfied all the development 14 requirements of the lease. 15 * Sec. 16. AS 38.05.321(d) is amended to read: 16 (d) For state land classified as agricultural land that is conveyed under (a) of 17 this section, 18 (1) the commissioner may require the landowner to cooperate with the 19 appropriate soil and water conservation district under AS 41.10 in the development 20 and implementation of soil conservation plans as authorized by AS 41.10.110(6); 21 (2) as a condition of the conveyance, the commissioner may not 22 require preparation and implementation of a schedule of planned agricultural 23 development or a farm development plan specified in a land purchase contract unless 24 the commissioner permits modification of a plan in cases of economic hardship or 25 other extenuating circumstances; 26 (3) the commissioner may not 27 (A) limit the right of the landowner to use the land and 28 improvements for purposes that are consistent and do not interfere 29 [INCIDENTAL TO AND NOT INCONSISTENT] with the primary use of the 30 land for agricultural purposes; 31 (B) except as provided by (i) of this section, limit the right of a 01 landowner to construct housing for the landowner and farm laborers, to 02 construct improvements for animals, or to construct improvements that are 03 reasonably required for or related to agricultural use on the original parcel and 04 on additional subdivided parcels, not to exceed the limits and restrictions set by 05 (a)(2) of this section; and 06 (C) limit the right of the landowner to subdivide and convey 07 the land if the resulting parcels are not in violation of the limits and restrictions 08 set out in (a)(2) of this section. 09 * Sec. 17. AS 38.05.965 is amended by adding a new paragraph to read: 10 (29) "public auction" means a public oral outcry auction or a public 11 online auction. 12 * Sec. 18. AS 38.05.065(b) is repealed. 13 * Sec. 19. This Act takes effect immediately under AS 01.10.070(c).