CSSB 208(RES): "An Act relating to the sale and lease of state land for agricultural uses; and providing for an effective date."
00 CS FOR SENATE BILL NO. 208(RES) 01 "An Act relating to the sale and lease of state land for agricultural uses; and providing 02 for an effective date." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. AS 38.04.020(i) is amended to read: 05 (i) Nothing in this section prevents the disposal of other land by the 06 commissioner in accordance with AS 38.05.055, 38.05.057, 38.05.059, 38.05.070, the 07 issuance of remote recreational cabin site leases or sales under AS 38.05.600, 08 AS 38.08, AS 38.09, or other law. 09 * Sec. 2. AS 38.05.059 is amended to read: 10 Sec. 38.05.059. Sale of agricultural land. The commissioner, after consulting 11 with the Board of Agriculture and Conservation (AS 03.09.010), may provide for the 12 sale of land classified under AS 38.05.020(b)(6) for agricultural uses in parcels or 13 tracts described by aliquot parts. The parcels or tracts are subject to state subdivision 14 requirements and municipal ordinances. The commissioner shall publish a schedule
01 that provides per-acre prices of land, based on the region within which the land is 02 located. The commissioner shall ensure that the schedule serves the best interest 03 of the state. The commissioner may set land sale prices below the market rate. 04 Money from a sale of agricultural land shall be separately accounted for under 05 AS 37.05.142 and may be appropriated to the agricultural revolving loan fund 06 (AS 03.10.040). The commissioner may offer land classified for agricultural uses 07 for sale at public auction under AS 38.05.057(c), by sealed bid under 08 AS 38.05.055, or as provided in (b) of this section. A parcel or tract sold under 09 this section is subject to AS 38.05.321 and must be used for agricultural uses. 10 * Sec. 3. AS 38.05.059 is amended by adding new subsections to read: 11 (b) The department may solicit applications for the purchase of state 12 agricultural land under this section. A person may apply to purchase a parcel or tract 13 of land offered for sale under this section by submitting an application to the 14 department. An application to purchase agricultural land must include 15 (1) the specific land the applicant wants to purchase; 16 (2) a detailed summary of the proposed agricultural uses the land will 17 be used for; 18 (3) a plan for soil and water conservation; 19 (4) information supporting the financial viability of the applicant's 20 proposed agricultural uses for the land, including any marketing plans; 21 (5) the applicant's relevant qualifications, training, and experience; and 22 (6) additional information and requirements established by the 23 department by regulation, including any application fees. 24 (c) The director shall, in consultation with the director of agriculture, evaluate 25 an application submitted under this section using scoring criteria established in 26 regulation by the department. Criteria developed under this subsection must be 27 flexible in application and account for the range of land offered under this subsection 28 and the variety of agricultural uses that the land may accommodate. The department 29 may provide the applicable criteria, and how an application submitted under this 30 section will be scored under those criteria, in a solicitation of interest for a particular 31 parcel or tract. The criteria must include
01 (1) the department's assessment of the feasibility and value of the 02 proposed agricultural use; 03 (2) applicable conservation and stewardship considerations; 04 (3) applicant qualifications and experience; and 05 (4) financial viability of the proposed agricultural use. 06 (d) If the director, in consultation with the director of agriculture, finds, using 07 the scoring criteria established under (c) of this section, that a sale of agricultural land 08 to an applicant under (b) of this section is in the best interests of the state under 09 AS 38.05.035(e), the commissioner may sell the parcel or tract to the applicant. If the 10 director has received two or more applications for the same parcel or tract, the 11 commissioner may sell the parcel or tract to the applicant whose proposal the director 12 finds, after consulting with the director of agriculture, using the scoring criteria 13 established under (c) of this section, and reviewing the information received under (e) 14 of this section, is in the best interests of the state under AS 38.05.035(e). An 15 application for the purchase of state land under this section, including supporting 16 documentation submitted to the department for review, is a public record subject to 17 AS 40.25.110 - 40.25.220. The commissioner shall publish all applications received 18 for the purchase of the land, including supporting documentation submitted to the 19 department, and the department's evaluation and scoring of the applications under (c) 20 of this section, when the department provides notice of the sale under AS 38.05.945. 21 An aggrieved applicant may appeal to the commissioner for a review of the director's 22 finding within 20 days after receiving notice of the finding. 23 (e) Before the commissioner signs a formal conveyance under this section, the 24 commissioner may hold a hearing to take testimony and shall 25 (1) provide notice and allow opportunity for comment in accordance 26 with AS 38.05.945; and 27 (2) consider all relevant comments or testimony received under this 28 section, AS 38.05.945, and 38.05.946. 29 * Sec. 4. AS 38.05.069(d) is amended to read: 30 (d) When not in conflict with this section, the provisions of 31 (1) AS 38.05.045 - 38.05.105 apply to disposals under this section;
01 and 02 (2) AS 38.05.084 apply to leases issued under this section. 03 * Sec. 5. AS 38.05.070(c) is amended to read: 04 (c) A lease may be issued for a period up to 55 years, if the commissioner 05 determines it to be in the best interests of the state. The commissioner shall consider 06 the useful life of any improvements proposed and approved under AS 38.05.075 in 07 determining the term of the lease. The [IF THE] commissioner may declare a lease 08 void if the commissioner determines that 09 (1) the land or a part of it which is the subject of a grazing lease is not 10 being used for the purpose issued; or 11 (2) land leased under AS 38.05.084 is not being used for 12 agricultural uses [, THE LEASE MAY BE DECLARED VOID]. 13 * Sec. 6. AS 38.05.070(e) is amended to read: 14 (e) The director may renew a lease issued under this section, AS 38.05.075, 15 38.05.083, 38.05.084, or 38.05.810 upon its expiration if the lease is in good standing 16 and the lease renewal is determined to be in the best interests of the state. A renewal 17 issued under this subsection is not subject to AS 38.05.035(e). The director shall 18 provide notice of the lease renewal decision. A lease under 19 (1) this section, AS 38.05.075, or 38.05.810 may be renewed only once 20 for a term not longer than the initial term of the lease; and 21 (2) AS 38.05.084 may be renewed for a term of 20 years under 22 AS 38.05.084(f) [. THE DIRECTOR SHALL PROVIDE NOTICE OF THE LEASE 23 RENEWAL DECISION]. 24 * Sec. 7. AS 38.05.075(a) is amended to read: 25 (a) Except as provided in AS 38.05.035, 38.05.070, 38.05.073, 38.05.081, 26 38.05.082, 38.05.083, 38.05.084, 38.05.087, 38.05.102, 38.05.565, 38.05.600, 27 38.05.810, and this section, when competitive interest has been demonstrated or the 28 commissioner determines that it is in the state's best interests, leasing shall be made at 29 public auction or by sealed bid, at the discretion of the director, to the highest qualified 30 bidder as determined by the commissioner. A bidder may be represented by an 31 attorney or agent at a public auction. In the public notice of a lease to be offered at
01 public auction or by sealed bid, the commissioner shall specify a minimum acceptable 02 bid and the lease compensation method. The lease compensation method shall be 03 designed to maximize the return on the lease to the state and shall be a form of 04 compensation set out in AS 38.05.073(m). An aggrieved bidder may appeal to the 05 commissioner within five days for a review of the determination. The leasing shall be 06 conducted by the commissioner, and the successful bidder shall deposit at the public 07 auction or with the sealed bid the first year's rental or other lease compensation as 08 specified by the commissioner, or that portion of it that the commissioner requires in 09 accordance with the bid. The commissioner shall require, under AS 38.05.860, 10 qualified bidders to deposit a sum equal to any survey or appraisal costs reasonably 11 incurred by another qualified bidder acting in accordance with the regulations of the 12 commissioner or incurred by the department under AS 38.04.045 and AS 38.05.840. If 13 a bidder making a deposit of survey or appraisal costs is determined by the 14 commissioner to be the highest qualified bidder under this subsection, the deposit shall 15 be paid to the unsuccessful bidder who incurred those costs or to the department if the 16 department incurred the costs. All costs for survey and appraisal shall be approved in 17 advance in writing by the commissioner. The commissioner shall immediately issue a 18 receipt containing a description of the land or interest leased, the price bid, and the 19 terms of the lease to the successful qualified bidder. If the receipt is not accepted in 20 writing by the bidder under this subsection, the commissioner may offer the land for 21 lease again under this subsection. A lease, on a form approved by the attorney general, 22 shall be signed by the successful bidder and by the commissioner. 23 * Sec. 8. AS 38.05 is amended by adding a new section to read: 24 Sec. 38.05.084. Leases of state land for agricultural uses. (a) The 25 commissioner may lease state land classified under AS 38.05.020(b)(6) for 26 agricultural uses. Money from the lease of agricultural land shall be separately 27 accounted for under AS 37.05.142 and may be appropriated to the agricultural 28 revolving loan fund (AS 03.10.040). The commissioner may offer agricultural land for 29 lease to the public at public auction, by sealed bid under AS 38.05.075, by negotiation 30 under AS 38.05.070, or as provided in this section. State land that is not classified as 31 agricultural land under AS 38.05.020(b)(6) may be leased for agricultural uses under
01 this section. A lease issued under this section must include land use restrictions and 02 authorizations consistent with the agricultural use of the lease. However, the 03 commissioner shall permit a person leasing land under this section to construct 04 housing for farmers and farm laborers. 05 (b) A person may apply to lease state land for an agricultural use under this 06 section by submitting an application to the department. An application to lease 07 agricultural land must include 08 (1) the specific location, description, and amount of land the applicant 09 wants to lease; 10 (2) a detailed summary of the proposed agricultural uses the land will 11 be used for; 12 (3) an agricultural development plan that 13 (A) details proposed crop plans or livestock production; 14 (B) includes a timeline for agricultural production and 15 infrastructure development on the land; 16 (C) provides how soil and water will be conserved; 17 (4) information supporting the financial viability of the proposal, 18 including any marketing plans; 19 (5) the applicant's relevant qualifications, training, and experience; and 20 (6) additional information and requirements established by the 21 department by regulation, including any application fees. 22 (c) The director shall, in consultation with the director of agriculture, evaluate 23 an application submitted under this section using scoring criteria established in 24 regulation by the department under AS 38.05.059(c). Upon the director's request, an 25 applicant may amend and resubmit an application provided under this section before 26 the director approves or denies the application. 27 (d) Upon receiving an application to lease state land for agricultural uses 28 under this section, the department shall solicit competitive interest by issuing a public 29 notice in the manner prescribed in AS 38.05.945. The notice must contain an 30 announcement seeking competitive interest. If, following notice, the director has 31 received only one application and finds, using the scoring criteria established in
01 regulation by the department under AS 38.05.059(c), that the lease is in the best 02 interests of the state under AS 38.05.035(e), the commissioner may award a lease to 03 the applicant. If, following notice, the director has received two or more applications 04 for the same land, the commissioner may award a lease to the applicant whose 05 proposal the director finds, using the scoring criteria established in regulation by the 06 department under AS 38.05.059(c) and information received under (e) of this section, 07 is in the best interests of the state under AS 38.05.035(e) and conveys the greatest 08 public benefit to the state, notwithstanding the proposed monetary consideration. An 09 application for the lease of state land under this section, including supporting 10 documentation submitted to the department for review, is a public record subject to 11 AS 40.25.110 - 40.25.220. The commissioner shall publish all applications received 12 for the lease of the land, including supporting documentation submitted to the 13 department, and the department's evaluation and scoring of the applications under (c) 14 of this section, when the department provides notice of the lease under AS 38.05.945. 15 An aggrieved applicant may appeal to the commissioner for a review of the director's 16 finding within 20 days after receiving notice of the finding. 17 (e) Before the commissioner awards a lease for agricultural land under this 18 section, the commissioner may hold a hearing to take testimony and shall 19 (1) provide notice and allow opportunity for comment in accordance 20 with AS 38.05.945; 21 (2) consider all relevant comments or testimony received under this 22 section, AS 38.05.945, and 38.05.946. 23 (f) Notwithstanding AS 38.05.070(f), a lease for state land under this section 24 is for 20 years with an option for 20-year renewals as long as the lessee continues to 25 meet the terms of the lease. The director shall establish by regulation criteria for lease 26 termination, lease renewal, and requirements for returning land to the state. The 27 commissioner may terminate a lease under this section if the lessee fails to use the 28 leased land for agricultural uses or otherwise fails to adhere to the terms and 29 conditions of the agricultural development plan approved by the director under this 30 section. However, the commissioner may modify a lessee's agricultural development 31 plan if the commissioner makes a written finding that the plan should be modified
01 because of economic hardship or other extenuating circumstances. 02 (g) Land leased under this section may be subleased or assigned as provided in 03 AS 38.05.095 if the sublessee or assignee agrees in writing to adhere to the terms and 04 conditions of the agricultural development plan for the land approved by the director 05 under this section, and provides a copy of the agreement to the director. 06 (h) If the commissioner determines that it is in the best interests of the state to 07 sell land leased under this section, the commissioner shall grant a lessee who has used 08 the land for agricultural uses for at least seven years and who is in compliance with the 09 terms and conditions of the lease a first option to purchase the land by sealed bid 10 under AS 38.05.059. If a lessee does not use the land leased under this section for 11 agricultural uses for at least seven years, the lessee is not eligible for a preference 12 under this subsection. 13 (i) The director shall establish by regulation an agricultural fee schedule for 14 compensation for a lease under this section. The fee schedule must ensure fair 15 compensation to the state. Rent may be set below fair market rate. 16 (j) State land leased for agricultural uses under this section is subject to 17 (1) appraisal under AS 38.05.840 only if the commissioner determines 18 in writing that the site is subject to appraisal under AS 38.05.840; 19 (2) survey under AS 38.04.045(b) only if the commissioner determines 20 in writing that the site is subject to appraisal under AS 38.04.045(b); and 21 (3) inspection by the department under (k) of this section to ascertain 22 and enforce compliance with the terms and conditions of a lease under this section. 23 (k) The department shall inspect land leased under this section at least once 24 biennially. An inspection under this section, at the discretion of the department, may 25 be conducted virtually or employ an unmanned aircraft system. In this subsection, 26 "unmanned aircraft system" has the meaning given in AS 18.65.909. 27 (l) A lessee who violates a provision of this section may be assessed a civil 28 penalty by the director. The director shall establish by regulation a schedule of 29 (1) applicable fines that a person may be required to pay under this 30 section; and 31 (2) administrative and enforcement actions applicable to violation of
01 the terms and conditions of a lease issued under this section. 02 (m) The commissioner shall adopt regulations establishing a lease-purchase 03 program under which, if a lessee purchases leased land under AS 38.05.059, the sale 04 price of the land may be reduced by an amount equal to a portion of the lessee's lease 05 payments made to the state. The regulations must require that the lessee have used the 06 land for agricultural uses during the lessee's tenancy to qualify for the program. 07 (n) In this section, "agricultural uses" means 08 (1) the commercial production of useful plants and animals; 09 (2) the construction of improvements for animals or improvements that 10 are reasonably required for or related to agricultural use; 11 (3) the use of gravel reasonably required or related to agricultural 12 production on the leased land; and 13 (4) the removal and disposal of timber on the leased land to bring the 14 land into agricultural use. 15 * Sec. 9. AS 38.05.102 is amended to read: 16 Sec. 38.05.102. Lessee preference. Except for a lease under AS 38.05.081, 17 [OR] 38.05.083, or 38.05.084, if land within a leasehold created under AS 38.05.070 - 18 38.05.105 is offered for sale or long-term lease at the termination of the existing 19 leasehold, the director may, upon a finding that it is in the best interest of the state, 20 allow a holder in good standing of the existing leasehold to purchase or lease the land 21 for its appraised fair market value at the time of the sale or long-term lease. If land 22 within a leasehold created under AS 38.05.084 is offered for sale, the director 23 may, upon a finding that it is in the best interest of the state, allow a holder of the 24 lease to purchase the land under AS 38.05.059. 25 * Sec. 10. AS 38.05.321(g) is amended to read: 26 (g) A perpetual covenant described in (a) of this section may be enforced by 27 the department under (k) of this section or [ONLY] by a civil action brought by the 28 state, a municipality, or a resident. If a municipality or a resident brings an action 29 under this subsection, the municipality or resident shall also serve a copy of the 30 summons and complaint on the state in the manner prescribed by the Alaska Rules of 31 Civil Procedure for service on the state. An action may be maintained under this
01 subsection only if 02 (1) commenced within six years after the cause of action has accrued; 03 and 04 (2) the plaintiff has first notified in writing the appropriate soil and 05 water conservation district under AS 41.10 of the violation of the covenant at least 90 06 days before the civil action is filed. 07 * Sec. 11. AS 38.05.321 is amended by adding a new subsection to read: 08 (k) If a landowner does not cooperate with a soil and water conservation 09 district as required by (d)(1) of this section, fails to prepare and implement a schedule 10 of agricultural development required by the commissioner under (d)(2) of this section, 11 or violates the covenant described in (a) of this section, the department may assess 12 civil penalties. In accordance with a schedule adopted in regulation, the department 13 may assess and collect these and other civil penalties for violations of this section and 14 regulations adopted under this section. 15 * Sec. 12. The uncodified law of the State of Alaska is amended by adding a new section to 16 read: 17 REGULATIONS. The Department of Natural Resources may adopt regulations 18 necessary to implement this Act. The regulations take effect under AS 44.62 (Administrative 19 Procedure Act), but not before the effective date of this section. 20 * Sec. 13. Section 12 of this Act takes effect immediately under AS 01.10.070(c). 21 * Sec. 14. Except as provided in sec. 13 of this Act, this Act takes effect January 1, 2027.