HB 276: "An Act relating to state land; relating to contracts for the sale and lease of state land; relating to commercial development parks; and providing for an effective date."
00 HOUSE BILL NO. 276 01 "An Act relating to state land; relating to contracts for the sale and lease of state land; 02 relating to commercial development parks; and providing for an effective date." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. AS 38.04.045(b) is amended to read: 05 (b) Before the issuance of [A LONG-TERM LEASE UNDER AS 38.05.070 06 OR OF] a patent for state land, an official cadastral survey shall be accomplished, 07 unless a comparable, approved survey exists that has been conducted by the federal 08 Bureau of Land Management. Before land may be offered under AS 38.08 or 09 AS 38.09, or before land may be offered under AS 38.05.055 or 38.05.057, except 10 land that is classified for agricultural uses, an official rectangular survey grid shall be 11 established. The rectangular survey section corner positions shall be monumented and 12 shown on a cadastral survey plat approved by the state. For those areas where the state 13 may wish to convey surface estate outside of an official rectangular survey grid, the 14 commissioner may waive monumentation of individual section corner positions and
01 substitute an official control survey with control points being monumented and shown 02 on control survey plats approved by the state. The commissioner may not issue more 03 than one conveyance for each section within a township outside of an official 04 rectangular survey grid. Land to be conveyed may not be located more than two miles 05 from an official survey control monument except that the commissioner may waive 06 this requirement on a determination that a single purpose use does not justify the 07 requirement if the existing status of the land is known with reasonable certainty. The 08 lots and tracts in state subdivisions shall be monumented and the cadastral survey and 09 plats for the subdivision shall be approved by the state. Where land is located within a 10 municipality with planning, platting, and zoning powers, plats for state subdivisions 11 shall comply with local ordinances and regulations in the same manner and to the 12 same extent as plats for subdivisions by other landowners. State subdivisions shall be 13 filed and recorded in the district recorder's office. The requirements of this section do 14 not apply to land made available for material sales, for short-term leases, for parcels 15 adjoining a surveyed right-of-way, or for land that has been open to random staking 16 under the homestead program in the past; however, for short-term leases, the lessee 17 shall comply with local subdivision ordinances unless waived by the municipality 18 under procedures specified by ordinance. In this subsection, "a single purpose use" 19 includes a communication site, an aid to navigation, and a park site. 20 * Sec. 2. AS 38.04.045 is amended by adding a new subsection to read: 21 (c) The commissioner may require an official cadastral survey under (b) of 22 this section before issuance of a long-term lease under AS 38.05.070 or 38.05.400. 23 * Sec. 3. AS 38.05.055 is amended to read: 24 Sec. 38.05.055. Auction sale or sealed bid procedures. Unless another 25 method of sale is allowed [REQUIRED] under this chapter, AS 38.08, or AS 38.09, 26 the sale of state land shall be made at public auction or by sealed bid, at the discretion 27 of the director, to the highest qualified bidder as determined by the director. The 28 director may accept bids and sell state land under this section at not less than 70 29 percent of the appraised fair market value of the land. [TO QUALIFY TO 30 PARTICIPATE UNDER THIS SECTION IN A PUBLIC AUCTION OR SALE BY 31 SEALED BID OF STATE LAND THAT IS OTHER THAN COMMERCIAL,
01 INDUSTRIAL, OR AGRICULTURAL LAND, A BIDDER SHALL HAVE BEEN A 02 RESIDENT OF THE STATE FOR AT LEAST ONE YEAR IMMEDIATELY 03 PRECEDING THE DATE OF THE SALE AND SUBMIT PROOF OF THAT FACT, 04 AS THE COMMISSIONER REQUIRES BY REGULATION.] A bidder may be 05 represented by an attorney or agent at a public auction. [AN AGGRIEVED BIDDER 06 MAY APPEAL TO THE COMMISSIONER WITHIN FIVE DAYS AFTER THE 07 SALE FOR A REVIEW OF THE DIRECTOR'S DETERMINATION. THE SALE 08 SHALL BE CONDUCTED BY THE DIRECTOR, AND, AT THE TIME OF SALE, 09 THE SUCCESSFUL BIDDER SHALL DEPOSIT AN AMOUNT EQUAL TO FIVE 10 PERCENT OF THE PURCHASE PRICE. THE DIRECTOR SHALL 11 IMMEDIATELY ISSUE A RECEIPT CONTAINING A DESCRIPTION OF THE 12 LAND OR PROPERTY PURCHASED, THE PRICE BID, AND THE AMOUNT 13 DEPOSITED. THE RECEIPT SHALL BE ACKNOWLEDGED IN WRITING BY 14 THE BIDDER.] 15 * Sec. 4. AS 38.05.055 is amended by adding new subsections to read: 16 (b) To qualify to participate in a public auction or sale by sealed bid of state 17 land under this section that is not commercial, industrial, or agricultural land, a bidder 18 must be a resident of the state for at least one year immediately preceding the date of 19 sale and submit proof of residency as required by the commissioner in regulation. 20 (c) The director shall conduct a sale under this section. The successful bidder 21 at a public auction and every bidder for a sealed bid shall provide an earnest money 22 deposit in an amount of at least five percent of the bid amount. The director shall issue 23 a receipt to a successful bidder no later than 10 days after the public auction or sale by 24 sealed bid. The receipt will contain a description of the land or property purchased, the 25 bid price, and the amount of the deposit. If a successful bidder fails to enter into a 26 contract to purchase, five percent of the bid amount shall be forfeited to the state. 27 (d) An aggrieved bidder may appeal a decision of the director under this 28 section to the commissioner within five days of the decision. 29 * Sec. 5. AS 38.05.065(a) is amended to read: 30 (a) A [THE] contract of sale for land, an interest in land, or property sold 31 under this chapter, including under AS 38.05.057, may provide for [AT PUBLIC
01 AUCTION OR BY SEALED BID UNDER AS 38.05.055 SHALL REQUIRE] the 02 remainder of the purchase price to be paid in monthly, quarterly, or annual 03 installments over a period of not more than 30 [20] years, with interest at the rate 04 provided in (i) of this section. Installment payments plus interest shall be set on the 05 level-payment basis. 06 * Sec. 6. AS 38.05.065(c) is amended to read: 07 (c) The director shall, for contracts under (a) [, (b),] or (h) of this section, set 08 out in the contract for each sale the period for the payment of installments and the total 09 purchase price plus interest. The director, with the consent of the commissioner, may 10 also include in contracts under this section conditions, limitations, and terms 11 considered necessary and proper to protect the interest of the state. Violations of any 12 provision of this chapter or the terms of the contract of sale subject the purchaser to 13 appropriate administrative and legal action, including but not limited to specific 14 performance, termination [FORECLOSURE], ejectment, or other legal remedies in 15 accordance with applicable state law. 16 * Sec. 7. AS 38.05.065(d) is amended to read: 17 (d) If a contract for a sale of state land has been breached, the director may 18 issue a decision to [FORECLOSE AND] terminate the contract at any time 31 days 19 after delivering by certified mail a written notice of the breach to the address of record 20 of the purchaser. A breach caused by the failure to make payments required by the 21 contract may be cured within 30 days after the notice of the breach has been received 22 by the purchaser by payment of the sum in default together with the larger of a fee of 23 $50 or five percent of the sum in default. If there are material facts in dispute between 24 the state and the purchaser, the purchaser may submit a written request for a public 25 hearing for the review of the facts within 30 days after the notice of the breach has 26 been received. 27 * Sec. 8. AS 38.05.065(e) is amended to read: 28 (e) On a determination that there has been a breach of the contract based on 29 the administrative record and the evidence presented at a hearing, if requested, the 30 director shall issue a decision [FORECLOSING THE INTEREST OF THE 31 PURCHASER AND] terminating the contract. The obligation to make payments
01 under the contract continues through the date of the director's decision to terminate 02 the contract [FORECLOSE BY THE DIRECTOR]. 03 * Sec. 9. AS 38.05.065(f) is amended to read: 04 (f) The director shall deliver the decision to [FORECLOSE AND] terminate 05 the contract personally to the purchaser or send it certified mail, return receipt 06 requested, to the address of record of the purchaser. If the breach is a failure to make 07 payments required by the contract, the decision shall include a notice to the purchaser 08 that if within 30 days the purchaser pays to the state the full amount of the unpaid 09 contract price, including all accrued interest, and any fees assessed under (d) of this 10 section, the department shall issue to the purchaser a deed to the land. If full payment 11 is not made within 30 days or the breach is for other than failure to make payment, the 12 decision [FORECLOSES AND] terminates all legal and equitable rights the purchaser 13 has in the land. 14 * Sec. 10. AS 38.05.065(h) is amended to read: 15 (h) The commissioner, after consulting with the commissioner of agriculture, 16 (1) shall provide that, notwithstanding (a) [AND (b)] of this section, in 17 a contract for the sale of land classified under AS 38.05.020(b)(6) for agricultural 18 uses, the interest rate to be charged on installment payments may not exceed 9.5 19 percent; and 20 (2) may declare a moratorium of up to five years on payments on land 21 sold under this section for land classified under AS 38.05.020(b)(6) for agricultural 22 uses if 23 (A) the commissioner determines that the moratorium is in the 24 best interest of the state; 25 (B) the commissioner certifies and the contract purchaser 26 agrees to perform farm development, crop production, and harvesting, not 27 including land clearing or related activity, requiring the expenditure of 28 amounts equivalent to the payments that would otherwise be made during the 29 moratorium; 30 (C) the sale of the agricultural land takes place after July 1, 31 1979; and
01 (D) the contract purchaser is in compliance with the 02 development plan specified in the purchase contract at the time the purchaser 03 applies for a moratorium under this paragraph and remains in compliance with 04 the development plan during the moratorium; for the payments subject to the 05 moratorium declared under this paragraph, interest payments are subject to the 06 moratorium but interest continues to accrue during the moratorium. 07 * Sec. 11. AS 38.05.065 is amended by adding new subsections to read: 08 (j) If a sale of state land is to be made by means other than as prescribed by 09 AS 38.05.055, the director shall require a person applying to purchase land, interest in 10 land, or property to submit an earnest money deposit of at least five percent of the 11 purchase price with the application for the contract to purchase. The earnest money 12 deposit shall be applied toward the purchase price. If the applicant fails to enter into a 13 contract to purchase or defaults in the payment of the purchase price, five percent of 14 the purchase price shall be forfeited to the state. 15 (k) Notwithstanding (a) of this section, the commissioner may, on a best 16 interest finding, determine that the purchase price for a parcel of land with existing 17 improvements valued at greater than $10,000 must be paid in full within 120 days of 18 sale. 19 * Sec. 12. AS 38.05.075(a) is amended to read: 20 (a) Except as provided in AS 38.05.035, 38.05.070, 38.05.073, 38.05.081, 21 38.05.082, 38.05.083, 38.05.087, 38.05.102, 38.05.400, 38.05.565, 38.05.600, 22 38.05.810, and this section, when competitive interest has been demonstrated or the 23 commissioner determines that it is in the state's best interests, leasing shall be made at 24 public auction or by sealed bid, at the discretion of the director, to the highest qualified 25 bidder as determined by the commissioner. A bidder may be represented by an 26 attorney or agent at a public auction. In the public notice of a lease to be offered at 27 public auction or by sealed bid, the commissioner shall specify a minimum acceptable 28 bid and the lease compensation method. The lease compensation method shall be 29 designed to maximize the benefit of [RETURN ON] the lease to the state, 30 considering its economic benefit, and shall be a form of compensation set out in 31 AS 38.05.073(m). An aggrieved bidder may appeal to the commissioner within five
01 days for a review of the determination. The leasing shall be conducted by the 02 commissioner, and the successful bidder shall deposit at the public auction or with the 03 sealed bid the first year's rental or other lease compensation as specified by the 04 commissioner, or that portion of it that the commissioner requires in accordance with 05 the bid. The commissioner shall require, under AS 38.05.860, qualified bidders to 06 deposit a sum equal to any survey or appraisal costs reasonably incurred by another 07 qualified bidder acting in accordance with the regulations of the commissioner or 08 incurred by the department under AS 38.04.045 and AS 38.05.840. If a bidder making 09 a deposit of survey or appraisal costs is determined by the commissioner to be the 10 highest qualified bidder under this subsection, the deposit shall be paid to the 11 unsuccessful bidder who incurred those costs or to the department if the department 12 incurred the costs. All costs for survey and appraisal shall be approved in advance in 13 writing by the commissioner. The commissioner shall immediately issue a receipt 14 containing a description of the land or interest leased, the price bid, and the terms of 15 the lease to the successful qualified bidder. If the receipt is not accepted in writing by 16 the bidder under this subsection, the commissioner may offer the land for lease again 17 under this subsection. A lease, on a form approved by the attorney general, shall be 18 signed by the successful bidder and by the commissioner. 19 * Sec. 13. AS 38.05.075(f) is amended to read: 20 (f) If, after completion of the procedures required by (e) of this section, the 21 commissioner determines that there is only one qualified bidder, the commissioner 22 may issue a lease without competitive bidding at the approved, appraised market value 23 of the land determined under AS 38.05.840 or by another form of lease compensation 24 specified by the commissioner from among those set out in AS 38.05.073(m) and 25 designed to maximize the benefit of [RETURN ON] the lease to the state. The 26 commissioner may establish terms and conditions for entry to the land pending survey 27 and appraisal of the land. The commissioner shall issue the lease as soon as is 28 practicable following the survey and appraisal of the land subject to the provisions of 29 AS 38.05.035(e). 30 * Sec. 14. AS 38.05 is amended by adding a new section to read: 31 Article 13: Economic Development on State Land.
01 Sec. 38.05.400. Commercial development parks. (a) For purposes of 02 stimulating economic development in the state, the department may designate state 03 land identified under (b) of this section as a commercial development park and dispose 04 of the land by lease or sale as provided in this section. 05 (b) After public notice under AS 38.05.945 and a finding under 06 AS 38.05.035(e) that the designation is in the best interest of the state, the department 07 may designate suitable land as a commercial development park from the following 08 categories: 09 (1) state land identified or nominated as a qualified opportunity zone 10 under 26 U.S.C. 1400Z-1 and 1400Z-2; 11 (2) state land nominated by a person; 12 (3) any other state land the commissioner deems appropriate for 13 commercial development. 14 (c) Land in a commercial development park designated under (b) of this 15 section may be leased or sold without further notice or a finding under 16 AS 38.05.035(e). 17 (d) The department may lease all or part of a commercial development park to 18 a person who intends to conduct business on the parcel for a period not to exceed 55 19 years and may offer to a lessee in good standing an option to renew for one additional 20 period. The terms of a lease under this section must require that the lessee operate a 21 business on the leased parcel during the entire period of the lease and provide for 22 performance benchmarks. A lessee may not assign the lease or sublease without the 23 written authorization of the department. 24 (e) The department may terminate a lease prior to the expiration based on a 25 determination that the lessee has breached any material term. On expiration of the 26 term of a lease or the termination of the lease before expiration, improvements to or 27 personal property on the land subject to the lease shall be managed in the manner 28 required by AS 38.05.090. 29 (f) A lessee in good standing shall have an option to purchase all or a portion 30 of the leased parcel at any time prior to expiration of the lease. Lease payments shall 31 be credited toward the purchase price.
01 (g) The department may sell all or part of a commercial development park to a 02 person who intends to conduct business on the parcel. The department shall retain a 03 reversionary interest in a parcel sold under this subsection in the event that the parcel 04 should ever cease to be used for business purposes, except that the department may 05 waive the reversionary interest on a written determination that the waiver is in the 06 public interest. 07 (h) The department shall establish compensation for a lease or sale under this 08 section to obtain a fair return to the state, considering the economic benefit to the state. 09 (i) If more than one person offers to lease or purchase the same parcel within a 10 commercial development park, the department shall lease or sell the parcel to the 11 person and on the terms that the department determines are most conducive to 12 economic development in the state 13 (j) The department shall adopt regulations under AS 44.62 (Administrative 14 Procedure Act) to implement this section. Regulations adopted to implement this 15 section must, at a minimum, establish criteria that the department will apply to 16 determine 17 (1) whether the designation of state land as a commercial development 18 park under (b) of this section is in the state's best interest; 19 (2) the level of compensation under (h) of this section, by offsetting 20 the fair market value of the parcel based on the economic benefit to the state from the 21 activities conducted on the premises; and 22 (3) which offer to lease or purchase under (i) of this section is most 23 conducive to the economic development of the state. 24 * Sec. 15. AS 38.05.965 is amended by adding new paragraphs to read: 25 (29) "good standing" means a person is in substantial compliance with 26 all material requirements and stipulations of every authorization issued by the 27 department for the benefit of the person or has submitted a plan approved by the 28 department to come into compliance; 29 (30) "public auction" means a public oral outcry auction or a public 30 online auction. 31 * Sec. 16. AS 16.20.030(a)(8), 16.20.030(a)(9); AS 38.05.065(b); AS 41.21.518, 41.21.520,
01 and 41.21.522 are repealed. 02 * Sec. 17. Sections 2, 3, and 4, ch. 132, SLA 1992, are repealed. 03 * Sec. 18. This Act takes effect January 1, 2027.