HB 353: "An Act relating to the sale and lease of agricultural land; defining 'agricultural purposes' under the Alaska Land Act; and providing for an effective date."
00 HOUSE BILL NO. 353 01 "An Act relating to the sale and lease of agricultural land; defining 'agricultural 02 purposes' under the Alaska Land Act; and providing for an effective date." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. The uncodified law of the State of Alaska is amended by adding a new section 05 to read: 06 LEGISLATIVE INTENT. It is the intent of the legislature that state procedures for the 07 sale and lease of agricultural land support agricultural development in the state and improve 08 food security by encouraging increased in-state production of animal and agricultural products 09 and reducing state residents' reliance on food imported from outside the state. 10 * Sec. 2. AS 38.04.020(i) is amended to read: 11 (i) Nothing in this section prevents the disposal of other land by the 12 commissioner in accordance with AS 38.05.055, 38.05.057, 38.05.059, 38.05.070, the 13 issuance of remote recreational cabin site leases or sales under AS 38.05.600, 14 AS 38.08, AS 38.09, or other law.
01 * Sec. 3. AS 38.05.059 is amended to read: 02 Sec. 38.05.059. Sale of agricultural land. The commissioner, after consulting 03 with the Board of Agriculture and Conservation (AS 03.09.010), may provide for the 04 sale of land classified under AS 38.05.020(b)(6) for agricultural uses in parcels or 05 tracts described by aliquot parts. The parcels or tracts are subject to state subdivision 06 requirements and municipal ordinances. Money from a sale of agricultural land shall 07 be separately accounted for and may be appropriated to the agricultural revolving loan 08 fund (AS 03.10.040). A parcel or tract sold under this section 09 (1) is subject to AS 38.05.321 and must be used for agricultural 10 purposes; 11 (2) may not be less than five acres or more than 320 acres in total. 12 * Sec. 4. AS 38.05.059 is amended by adding new subsections to read: 13 (b) A person may apply to purchase a parcel or tract of land for an agricultural 14 purpose under this section by submitting an application to the department. An 15 application to purchase agricultural land must include 16 (1) the specific location, description, and amount of land the applicant 17 wants to purchase; 18 (2) a detailed summary of the proposed agricultural purposes the land 19 will be used for and a description of likely agricultural production from the land under 20 the proposal; and 21 (3) additional information and requirements established by the 22 department in regulation, including any application fees. 23 (c) Upon receiving an application to purchase a parcel or tract of state land for 24 agricultural purposes under this section, the department shall solicit competitive 25 interest by issuing a public notice in the manner prescribed in AS 38.05.945. The 26 notice must contain an announcement seeking competitive interest. If competing 27 applications are received following notice, the commissioner will make the sale under 28 (d) of this section. 29 (d) If the director receives two or more applications for the same parcel or 30 tract, the director shall consider reasonable factors in awarding the sale, including 31 proposed monetary consideration, the value to the state, the potential agricultural
01 production from the proposed uses of the land, and any additional requirement 02 established by the department in regulation. If one or more applicants have proposed 03 different agricultural uses for a parcel or tract, the director shall consider each 04 applicant's proposal and select the proposal the commissioner determines is likely to 05 make a greater contribution to agricultural production in the state notwithstanding the 06 proposed monetary consideration. An application for the purchase of state land under 07 this section, including supporting documentation submitted to the department for 08 review, is a public record subject to AS 40.25.110 - 40.25.220. An aggrieved applicant 09 may appeal to the commissioner for a review of the director's determination within 20 10 days after receiving notice of the determination. 11 (e) Before signing a formal conveyance under this section, the director must 12 (1) evaluate information received during a solicitation of competitive 13 interest under (c) of this section; and 14 (2) find under AS 38.05.035(e) that the sale of the land for the 15 proposed agricultural purpose is in the best interests of the state; the findings must 16 include 17 (A) estimated agricultural production from the land; 18 (B) the proposed monetary consideration under the agreement; 19 (C) the value of the land's potential agricultural production to 20 the state; and 21 (D) a summary of public comments received in response to the 22 solicitation of competitive interest required under (c) of this section and the 23 department's response to those comments. 24 (f) Before a final decision to dispose of agricultural land under this section, the 25 commissioner may hold a hearing to take testimony and shall 26 (1) provide notice and allow opportunity for comment in accordance 27 with AS 38.05.945; and 28 (2) consider all relevant comments or testimony received under this 29 section, AS 38.05.945, and 38.05.946. 30 (g) Before signing the formal conveyance, the commissioner may reject all 31 bids or offers for a parcel of agricultural land if the commissioner determines that the
01 best interests of the state justify this action. If the commissioner rejects a bid or offer 02 for a parcel of agricultural land under this section, the commissioner shall provide the 03 bidder or offeror with written findings stating the reasons for the rejection. 04 (h) A parcel of land sold under this section is subject to appraisal under 05 AS 38.05.840 only if the commissioner determines in writing that the parcel is subject 06 to appraisal under AS 38.05.840. 07 (i) Before disposing of a parcel of agricultural land under this section, the 08 commissioner shall require the purchaser to post a performance bond or provide other 09 security to ensure compliance with the terms of the sale, including restoration of the 10 land in the event of abandonment. 11 (j) This section does not affect the disposal of minerals under AS 38.05.135 - 12 38.05.183. 13 * Sec. 5. AS 38.05.069(a) is amended to read: 14 (a) After consulting with the Board of Agriculture and Conservation 15 (AS 03.09.010), on a determination that the highest and best use of unoccupied land is 16 for agricultural purposes and that it is in the best interests of the state to sell or lease 17 the land, the commissioner shall grant to an Alaska resident owning and using or 18 leasing and using land for agricultural purposes a first option to purchase or lease the 19 unoccupied land situated adjacent to land presently held by the Alaska resident for the 20 amount of the high bid received at public auction or by sealed bid. If more than one 21 Alaska resident qualifies for a first option under this section, eligibility for the first 22 option shall be determined by lot, and the option must be exercised on the conclusion 23 of the public auction or opening of sealed bids. A parcel of agricultural land sold 24 under this section is subject to the acreage requirements of AS 38.05.059 [MAY 25 NOT BE LESS THAN 20 ACRES, AND A PARCEL OF AGRICULTURAL LAND 26 THAT IS ACQUIRED BY EXERCISE OF THE OPTION GRANTED IN THIS 27 SUBSECTION MAY NOT EXCEED 320 ACRES]. Agricultural land that is acquired 28 under this section must be used for agricultural purposes as required by AS 38.05.321 29 [LAW]. 30 * Sec. 6. AS 38.05.069(d) is amended to read: 31 (d) When not in conflict with this section, the provisions of
01 (1) AS 38.05.045 - 38.05.105 apply to disposals under this section; 02 and 03 (2) AS 38.05.084 apply to leases issued under this section. 04 * Sec. 7. AS 38.05.070(c) is amended to read: 05 (c) A lease may be issued for a period up to 55 years, if the commissioner 06 determines it to be in the best interests of the state. The commissioner shall consider 07 the useful life of any improvements proposed and approved under AS 38.05.075 in 08 determining the term of the lease. The [IF THE] commissioner may declare a lease 09 void if the commissioner determines that 10 (1) the land or a part of it which is the subject of a grazing lease is not 11 being used for the purpose issued; or 12 (2) land leased under AS 38.05.084 is not being used for 13 agricultural purposes [, THE LEASE MAY BE DECLARED VOID]. 14 * Sec. 8. AS 38.05.070(e) is amended to read: 15 (e) The director may renew a lease issued under this section, AS 38.05.075, 16 38.05.083, or 38.05.810 upon its expiration if the lease is in good standing and the 17 lease renewal is determined to be in the best interests of the state. A renewal issued 18 under this subsection is not subject to AS 38.05.035(e). The director shall provide 19 notice of the lease renewal decision. A lease under 20 (1) this section, AS 38.05.075, or 38.05.810 may be renewed only once 21 for a term not longer than the initial term of the lease; and 22 (2) AS 38.05.084 may be renewed for a term not longer than 20 23 years [. THE DIRECTOR SHALL PROVIDE NOTICE OF THE LEASE RENEWAL 24 DECISION]. 25 * Sec. 9. AS 38.05.081(a) is amended to read: 26 (a) The commissioner may lease state land for carbon management purposes. 27 However, the commissioner may exclude from consideration land for which a person 28 has submitted a lease application under AS 38.05.083 or 38.05.084 if the 29 commissioner finds that excluding the land from consideration is in the public interest. 30 A lease agreement under this section must include land use restrictions and 31 authorizations consistent with the carbon management purpose of the lease.
01 * Sec. 10. AS 38.05.081(c) is amended to read: 02 (c) Upon receiving an application to use state land for carbon management 03 purposes, unless the land applied for is excluded from consideration by the 04 commissioner under (a) of this section, the department shall solicit competitive 05 interest by issuing a public notice in the manner prescribed in AS 38.05.945. The 06 notice must contain an announcement seeking competitive interest. If competing 07 carbon management applications are received following notice, the applications will 08 be awarded under (d) of this section. In addition to issuing notice under AS 38.05.945, 09 the department shall provide public notice of an application received under this section 10 to a person leasing, or who has applied to lease, land under AS 38.05.083 or 38.05.084 11 that is within 25 miles of the land proposed for lease in the application received under 12 this section. 13 * Sec. 11. AS 38.05 is amended by adding a new section to read: 14 Sec. 38.05.084. Agricultural leases. (a) The commissioner, after consulting 15 with the Board of Agriculture and Conservation, may provide for the lease of land 16 classified under AS 38.05.020(b)(6) for agricultural purposes. The commissioner may 17 offer agricultural land for lease to the public at public auction, by sealed bid under 18 AS 38.05.075, by negotiation under AS 38.05.070, or as provided in this section. 19 Money from the lease of agricultural land shall be separately accounted for and may 20 be appropriated to the agricultural revolving loan fund (AS 03.10.040). A parcel 21 leased under this section 22 (1) must be used for agricultural purposes; 23 (2) may not be less than five acres or more than 320 acres in total. 24 (b) A person may apply to lease state land for an agricultural purpose under 25 this section by submitting an application to the department. An application to lease 26 agricultural land must include 27 (1) the specific location, description, and amount of land the applicant 28 wants to lease; 29 (2) a detailed summary of the proposed agricultural purposes the land 30 will be used for and a description of likely agricultural production from the leased land 31 under the proposal; and
01 (3) additional information and requirements established by the 02 department in regulation, including any application fees. 03 (c) Upon receiving an application to lease state land for agricultural purposes 04 under this section, the department shall solicit competitive interest by issuing a public 05 notice in the manner prescribed in AS 38.05.945. The notice must contain an 06 announcement seeking competitive interest. If competing applications are received 07 following notice, the commissioner will award the lease under (d) of this section. 08 (d) If the director receives two or more applications for the same land, the 09 director shall consider reasonable factors in awarding the lease, including proposed 10 monetary consideration, the value to the state, the potential agricultural production 11 from the proposed uses of the land, and any additional requirement established by the 12 department in regulation. If one or more applicants have proposed different 13 agricultural uses for a parcel or tract of land, the director shall consider each 14 applicant's proposal and select the proposal the commissioner determines is likely to 15 make a greater contribution to agricultural production in the state notwithstanding the 16 proposed monetary consideration. An application for the lease of state land under this 17 section, including supporting documentation submitted to the department for review, 18 is a public record subject to AS 40.25.110 - 40.25.220. An aggrieved applicant may 19 appeal to the commissioner for a review of the director's determination within 20 days 20 after receiving notice of the determination. 21 (e) Before entering into a lease of agricultural land under this section, the 22 director must 23 (1) evaluate information received during a solicitation of competitive 24 interest under (c) of this section; and 25 (2) find under AS 38.05.035(e) that leasing the land for the proposed 26 agricultural purpose is in the best interests of the state; the findings must include 27 (A) the reasonably foreseeable agricultural production from the 28 lease; 29 (B) anticipated annual revenue that the lease will yield to the 30 state; 31 (C) the value of the land's potential agricultural production to
01 the state; and 02 (D) a summary of public comments received in response to the 03 solicitation of competitive interest required under (c) of this section and the 04 department's response to those comments. 05 (f) Before a final decision to lease agricultural land under this section, the 06 commissioner may hold a hearing to take testimony and shall 07 (1) provide notice and allow opportunity for comment in accordance 08 with AS 38.05.945; and 09 (2) consider all relevant comments or testimony received under this 10 section, AS 38.05.945, and 38.05.946. 11 (g) The commissioner may deny an application if the commissioner 12 determines that the best interests of the state justify this action. If the commissioner 13 rejects an application for issuance of a lease of agricultural land, the commissioner 14 shall provide the applicant with written findings stating the reasons for the rejection. 15 (h) A parcel of land leased under this section is subject to appraisal under 16 AS 38.05.840 only if the commissioner determines in writing that the parcel is subject 17 to appraisal under AS 38.05.840. 18 (i) Subject to (a)(1) of this section, a person leasing land under this section 19 may sublease or assign the leased land under AS 38.05.095. 20 (j) Before issuing a lease under this section, the commissioner shall require the 21 lessee to post a performance bond or provide other security to ensure compliance with 22 the terms of the lease, including restoration of the land in the event of abandonment. 23 (k) The commissioner shall adopt regulations establishing criteria for the 24 issuance, denial, and renewal of leases of agricultural land and for limiting the amount 25 of agricultural land leased in an area to protect environmental and natural resources 26 and community interests. The regulations must provide for the consideration of 27 whether the proposed use of a parcel of agricultural land is compatible with the 28 traditional and existing uses of the area in which the parcel is located. 29 (l) When not in conflict with this section, the provisions of AS 38.05.070 - 30 38.05.105 apply to leases under this section. 31 (m) The commissioner shall adopt regulations establishing a lease-purchase
01 program under which, if a lessee purchases leased land under AS 38.05.059, the sale 02 price of the land may be reduced by an amount equal to a portion of the lessee's lease 03 payments made to the state. The regulations must require that the lessee have used the 04 land for agricultural purposes during the lessee's tenancy to qualify for the program. 05 (n) This section does not affect the disposal of minerals under AS 38.05.135 - 06 38.05.183. 07 (o) A parcel leased under this section is subject to survey under AS 38.04.045 08 only if the commissioner determines in writing that the parcel is subject to survey 09 under AS 38.04.045. 10 * Sec. 12. AS 38.05.102 is amended to read: 11 Sec. 38.05.102. Lessee preference. Except for a lease under AS 38.05.081, or 12 38.05.083, or 38.05.084 if land within a leasehold created under AS 38.05.070 - 13 38.05.105 is offered for sale or long-term lease at the termination of the existing 14 leasehold, the director may, upon a finding that it is in the best interest of the state, 15 allow a holder in good standing of the existing leasehold to purchase or lease the land 16 for its appraised fair market value at the time of the sale or long-term lease. If land 17 within a leasehold created under AS 38.05.084 is offered for sale at the 18 termination of the existing leasehold, the director may, upon a finding that it is in 19 the best interest of the state, allow a holder of the lease to purchase the land 20 under AS 38.05.059. 21 * Sec. 13. AS 38.05.102 is amended by adding a new subsection to read: 22 (b) A lessee under AS 38.05.084 may apply to purchase the leased agricultural 23 land from the department under AS 38.05.059. The commissioner shall establish in 24 regulation the length of time a lessee of a parcel or tract of agricultural land under 25 AS 38.05.084 must use the land for agricultural purposes before the lessee is eligible 26 to purchase the land. If the commissioner finds that a lessee has used the leased land 27 for agricultural purposes for the length of time prescribed in regulation, the 28 commissioner shall notify the lessee and the lessee may apply to purchase the land 29 under AS 38.05.059. However, the director may not accept a proposal to purchase 30 leased land under AS 38.05.059 from a lessee who is otherwise qualified under this 31 subsection if the lessee is not currently using the leased land for agricultural purposes.
01 * Sec. 14. AS 38.05.965 is amended by adding a new paragraph to read: 02 (29) "agricultural purposes" includes 03 (A) the commercial production or processing of crops, 04 livestock, or livestock products; 05 (B) dairying; 06 (C) the operation of greenhouses and hydroponic facilities for 07 the production of agricultural crops; 08 (D) the production, cultivation, rotation, fertilization, growing, 09 harvesting, storage, packaging, and preservation of an agricultural, 10 floricultural, apicultural, or horticultural crop or commodity; 11 (E) soil and land improvements that enhance the agricultural 12 productivity of the land; 13 (F) agricultural-tourism activities, including farm tours, 14 educational programs, and on-site marketing of agricultural products. 15 * Sec. 15. AS 38.05.069(f)(2) and 38.05.321(j) are repealed. 16 * Sec. 16. This Act takes effect July 1, 2026.