Legislature(1995 - 1996)
04/27/1995 01:30 PM House FIN
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
HOUSE BILL 191
"An Act relating to the management and disposal of
state land and resources; relating to certain remote
parcel and homestead entry land purchase contracts and
patents; and providing for an effective date."
Representative Therriault explained that HB 191 was a
housekeeping measure intended to clarify certain Title 38
statutes governing the Department of Natural Resources (DNR)
management of State land and resources. HB 191 was intended
to bring greater efficiency to the management of state lands
without sacrificing public involvement in land use
decisions.
He concluded that the bill was not intended to be a complete
rewrite of Title 38, pointing out that it was supported by
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the Administration in anticipation of streamlining state
government.
Representative Therriault MOVED to adopt work draft #9-
LS0766\M, Luckhaupt, 4/25/95, as the version before the
Committee. There being NO OBJECTION, it was adopted.
RON SWANSON, DIRECTOR, DIVISION OF LAND, DEPARTMENT OF
NATURAL RESOURCES, provided the Committee members a
sectional analysis of the legislation.
Representative Brown asked for further clarification of the
agricultural disposal section. Mr. Swanson replied that
Section #21 addresses preference rights and provides the
Department discretion to review the qualifications of those
bidding. Section #22 would change the terminology of the
approximate vicinity.
Representative Therriault noted that it was his intention
that when dealing with the Department regarding sale or
utilization of State land, the State should receive fair
market value of leasing and sales. Representative Brown
agreed with Representative Therriault's intention. She
asked if the legislation would address the conditions and
requirements attached to the agricultural disposal.
Mr. Swanson explained that those conditions would be a part
of that program. The initial portion of the lease requires
a development plan. Representative Brown asked the
Department's current plans for the agricultural disposal.
Mr. Swanson advised that the Division of Agriculture is
currently in charge of those parcels and that a small amount
of disposals continue to occur each year.
Representative Grussendorf asked if the work draft contained
language which could create management problems for the
Department. Mr. Swanson advised that the legislation had
been worked on for several months and that the Department
was satisfied with the result.
Co-Chair Hanley asked if the set net lease costs would be
substantially increased. Mr. Swanson noted that currently
only the administrative costs would be recuperated. The
leases range from $150-$300 per year depending on when the
lease was issued. Set net sites in the Cook Inlet average
selling price would be $24 thousand dollars. He noted that
the permit could not be sold without the lease and that
amount should include the total combined cost. Co-Chair
Hanley disagreed explaining that depending on the site
location, a person would pay much more than the amount
suggested by Mr. Swanson. Mr. Swanson agreed it would be
site specific.
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Representative Therriault reminded Committee members that
those people were using State land for economic benefit. He
pointed out that in Statute a cap existed limiting the value
to $300 dollars.
Co-Chair Hanley pointed out "may" had been used in the
legislation. Currently, one does not need a lease. He
asked if everyone would be charged for tideland use or would
they not apply for a lease. Mr. Swanson replied that there
are currently two thousand set net licenses issued. When
the Department goes to "fair market value", some of those
will not continue their lease. Although, with the increased
permit cost, income brought to the State will triple.
Representative Brown questioned the impact of Section #29
which deals with post mining location corners. She asked if
that section would allow someone to stake a new mining claim
on the surface of land which is already owned. Mr. Swanson
responded, Section #29 would reserve the mineral estate as
required by law to the State which would allow anyone to
come in and stake whatever mineral interests exist. If
there is any discovery or development, compensation must be
made to the surface owner.
Representative Brown thought that Section #29 was worded so
as to allow a person to stake land prior to getting the
surface owners involved. She thought the language would
establish a mining conflict between the land owner and the
State. Mr. Swanson agreed, although, he noted that once the
earth is being turned over, a bond must be posted or
compensation must be made to the surface owner.
Mr. Swanson explained that Section #29, specifies that a
bond must be posted when the earth is turned except when
going in and posting the corners. That would be the only
case when a bond would not need to be posted.
Representative Brown asked how private surface parcels
currently are staked. Mr. Swanson noted that on State
disposal land, a variety of possibilities exist. If it were
a small subdivision, it would be closed to mineral entry
prior to the sale of the subdivision.
Representative Brown asked how that would be affected by the
change offered in Section #31. Mr. Swanson acknowledged
that current language would close it to mining but not to
mineral location. Those gaps would be closed.
Representative Brown inquired in passage of the bill, would
any current land parcels be affecting someone's residence.
Mr. Swanson commented that any small size surface disposal
done by the State would be closed after the mineral entry.
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A conflict could be created within municipalities because
they are left open at their request due to mineral entry.
Representative Brown asked if the provision contained in
Section #29 would be available also to municipalities. Mr.
Swanson noted that they would be because the land originally
came from the State who reserves those subsurface rights.
The State controls what happens beneath the ground.
Representative Brown asked what mechanism would be available
to the surface owner to prevent staking of the claims on
their land. Mr. Swanson explained that there would be two
methods:
1. Request that the State close it to mineral
entry;
2. File their own mining claim.
Discussion followed between Representative Brown and Mr.
Swanson regarding the value of the surface being affected by
a mining claim and the surface versus the subsurface
bonding. Representative Therriault reiterated that the
legislation would allow the State to protect it's subsurface
rights. Representative Brown thought that Section #29 could
establish a situation of conflict and could cause problems
for those who have acquired service. Under current law, if
someone wanted to do that, they would need to negotiate in
advance the compensation. She understood that in the
language of the bill, once the staking rights had occurred,
the rights would then exist. Representative Brown noted
that the surface owner would be in a weakened position to
receive fair compensation for their property.
Representative Therriault pointed out that the State would
close the rights before the surface title was transferred.
(Tape Change HFC 95-103, Side 2).
Representative Brown asked if it would be a problem for the
Department if Section #29 was changed. Mr. Swanson
responded that Section #29 was requested by the Department,
although, pointed out that there was currently a Supreme
Court decision which negates the premise of Section #29.
Representative Therriault provided Committee members with a
memorandum response to that Superior Court decision from
Kerwin Krause, Mineral Property Manager, Department of
Natural Resources. [Attachment #1]. Mr. Swanson explained
why Section #29 would be more beneficial to the State
stating that if a higher subsurface value exists, then the
surface being used for should be discovered. He advised
that concern exists by private land owners being able to
control what happens to the State's subsurface.
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Representative Brown agreed with Mr. Swanson, although,
noted concern of staking by private parties on private lands
without the State's knowledge, involvement or control. Mr.
Swanson advised that the State would know, as claims legally
have to be posted. He did not think inclusion of Section
Mr. Swanson instructed that the provision would not change
people posting "nuisance" mining claims. The State will
determine if the claim is valid. Representative Brown asked
whose responsibility would it be for the private land owner,
who had a "nuisance" mining claim on their property, to
execute the law and the decision. Mr. Swanson replied that
it would be the State's responsibility to respond to a
nuisance mining claim regardless of who the property was
registered to.
Representative Brown questioned how many "nuisance" claims
had been eliminated resulting from action of the Department.
Mr. Swanson did not know, although pointed out that the
number of "nuisance" claims have been decreasing due to
filing procedures.
Representative Therriault referenced Section #32 of the
legislation. Mr. Swanson explained the changes to that
section. The intent of that section makes State interest in
line with that of the federal government. Currently, an
alien from a country with "like privileges" can receive
authority to stake claims. That privilege has not been
exercised thus the inclusion of that language in Section
Representative Brown asked if provisions were contained in
the legislation which would affect the oil and gas leasing
program. Mr. Swanson stated that Section #30 contained one
provision which would affect oil and gas by removing the
requirement that the director of that division be bonded.
Representative Brown inquired if policy changes existed in
the proposed legislation. Mr. Swanson commented that policy
changes would be made to land disposals placing them under
fair market value consideration rather than "give away".
Representative Therriault added that Section #51 addresses
railroad and utility realignment.
Representative Brown questioned the status of land and
resources previously disposed of before 1982. Mr. Swanson
referenced two provisions; first, Section #52 which provides
a savings cost to the Department for home site permits. The
other provision deals with remote parcels and the way they
are issued. Representative Brown disclosed that she was the
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owner of a remote parcel which could be affected by that
provision. Discussion followed regarding the restrictions
currently in law which reduce fair market value by 50%.
REED STOOPS, AJ ASSOCIATES, JUNEAU, testified in opposition
to Section #29. He explained that Section #29 had been
included in the bill resulting from a recent court case
regarding a mining claim located on private land. In that
case, the judge ruled that in order to do prospecting and
file a mining location on land which has been conveyed to a
private individual and not closed to private entry, it would
be the obligation of the person filing the claim to go to
the land owner for consent or to the Department and file a
bond to compensate for damages which might be done.
He continued, Section #29 would change that decision by
providing the person filing the claim permission to enter on
private property without the permission of the land owner
and without the permission of DNR to file a claim. He
emphasized that it would not make sense for someone to
trespass on private property without the permission of the
landowner. The current decision has been filed in the
Supreme Court, placing the land owner in conflict with the
mining claimant. Mr. Stoops noted that the factual
information provided in Attachment #1 was incorrect.
Representative Therriault advised that there are currently
techniques being developed to look into the ground in order
to find mineral deposits without drilling or digging. He
asked if there was an alternative to by-passing the land
owner, and going directly to DNR to receive approval and
posting for bond. Mr. Stoops noted that under current law,
the miner is allowed to go to the Department and file a
bond.
Mr. Swanson spoke against posting of bonds for the
aeromagnetic investigation activity. Mr. Stoops noted that
there exists a question if aeromagnetic investigation would
be sufficient to constitute a "discovery". He added, two
different circumstances are at stake, private and public
lands. Representative Therriault noted that since this
section was controversial and that there currently exists a
court case, he would not object to removing the Section #29.
Representative Brown MOVED to delete Section #29. There
being NO OBJECTION, it was adopted.
Representative Therriault MOVED to report CS HB 191 (FIN)
out of Committee with individual recommendations and with
the accompanying fiscal notes. There being NO OBJECTION, it
was so ordered.
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CS HB 191 (FIN) was reported out of Committee with a "do
pass" recommendation and with a fiscal note by the
Department of Natural Resources and a zero fiscal note by
the Department of Fish and Game dated 4/10/95.
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