Legislature(2003 - 2004)
03/29/2004 03:19 PM House FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE BILL NO. 319
An Act relating to the disposal of state land by
lottery; and relating to the disposal, including sale
or lease, of remote recreational cabin sites.
REPRESENTATIVE HUGH FATE explained that the legislation was
first introduced four years ago as HB 232, and since that
time it has evolved with assistance from the environmental
community, the Alaska Miners' Association, and the
Department of Natural Resources (DNR). He said that the bill
basically would move some public sector lands into private
hands. It also designates which lands are available. He
noted that high mineral-value lands, military reservations
and selections by boroughs would be off limits. It
designates those areas of land up for nomination, giving an
individual the ability to nominate and choose land that he
prefers. The DNR Commissioner makes the final decision
whether the land is compatible with the nomination, and the
Department would formulate regulations to address the
program.
Representative Fate explained that the fiscal note includes
DNR's low figure of about $900 per acre, multiplied by the
number of acres sold, to show a profit in the second, third
and fourth years. He advised that during the first year,
there would be expenditures in formulating regulations and
public notices. He estimated that sales could be three to
four times the conservative figures in the fiscal note.
Representative Joule asked if the bill would limit how much
land an individual could obtain in various regions of the
state. Representative Fate answered that nothing limits the
number of locations where an individual could purchase land,
but there is a 5-acre limit.
Representative Joule asked the type of title that would be
involved. Representative Fate replied that it is fee simple,
and clarified that the minerals are reserved by the State
and the buyer wouldn't have subsurface rights. He reiterated
that the high-mineral potential areas are off limits for
staking. He pointed out that the bill includes safeguards
against lawsuits by the buyer if someone comes in to exploit
the subsurface minerals.
Representative Foster noted that the backup is limited to
Southcentral Alaska and the Copper Valley, and he asked if
land would be available in Northwest Alaska. Representative
Fate stated that it is anywhere there is available state
land that is not encumbered. The final application would be
reviewed by the DNR.
JIM POUND, STAFF TO REPRESENTATIVE FATE, explained that
Amendment #1 removes contractual language that was in the
original bill. The contractual language is used by the
Department of Natural Resources for all their land sales,
and Legal felt it was unnecessary. The sponsor also wanted
to delete the 150% lawsuit in Section 3 of the bill.
Amendment #1 reads:
Page 1, lines 1-2:
Delete "relating to the reservation of rights by
the state in land contracts and deeds;"
Page 2, line 1, through page 3, line 15:
Delete all material.
Renumber the following bill sections accordingly.
Page 5, lines 2-5:
Delete all material.
Representative Croft asked if the deleted language included
provisions that the mining industry wanted as a penalty to
any lawsuits. Representative Fate replied that the mining
industry never requested the 150% and he had included it for
a high threshold but the penalty would have been more than
the land was worth.
Representative Croft asked what protections remain in the
bill. Mr. Pound replied that the language in Section 2, even
though deleted from the bill, would still apply to the
contract between the DNR and the purchaser.
Co-Chair Harris asked if Amendment #1 deletes all of
Sections 2 & 3. Mr. Pound affirmed.
Co-Chair Harris expressed concern that this bill might
create a situation similar to that in the Mat-Su Valley with
coal bed methane. He reiterated that under the
Constitution, the State owns the subsurface rights. He noted
limited protection in the bill for the private property
owner who desires protection from drilling or mining on his
property. He expressed that if this bill makes the situation
worse, his intention is not to support it. He spoke to the
need to strike a balance between mining and people's private
property rights.
Co-Chair Harris asked if the deletion of Section 2
eliminates the problem. Mr. Pound replied that the language
in Section 2 is in existing statute, and it would still be
used in the land contracts between the Department and the
purchasers. He was unsure of the language in the Mat-Su
Valley private sector contracts, but he thought that this
language was more specific. Co-Chair Harris said that he
would talk to Representative Fate.
Representative Chenault referred to the new fiscal note that
shows 7 full-time and one half-time employees in 2006.
JIM DERRINGER explained that pages 7 and 8 of the fiscal
note backup describe the 7-1/2 positions in the fiscal note.
The sponsor increased the staff by one position over the
Department's request. Representative Chenault noted that the
older fiscal note backup showed 6-1/2 positions, and Mr.
Derringer clarified that there would be 7-1/2 positions.
Representative Hawker referred to the analysis in the
previously published Fiscal Note #1 prepared by Land
Sales/Municipal Entitlements in DNR. He noted the language,
"The new program would have DNR negotiate private, non-
competitive sales. (This is a significant change from the
existing policy of only public, competitive land sales.)"
He asked if that is an accurate statement. Mr. Pound replied
that the bill authorizes an individual to select a parcel
and request a first right of refusal, which could be
considered a private sale, but it is ultimately up to the
Commissioner whether it would be a private sale.
Representative Hawker commented that, as written, it is not
quite an accurate statement. Mr. Pound agreed.
Representative Joule requested a sectional analysis of the
bill. Mr. Pound said that he would provide one.
MATT DAVIDSON, EXECUTIVE DIRECTOR, ALASKA CONSERVATION
VOTERS, commented that the group had been involved in this
legislation during the previous legislature. He explained
that the Alaska Conservation Voters (ACV) could not support
the bill at this time. The ACV supports land sales that
safeguard important lands for public access, recreational
opportunities, and fish and wildlife habitat. He said that
HB 319 is unnecessary and unfair, and it would invite
conflict with other users of these lands. Mr. Davidson urged
the committee not to take quick action on the bill.
Mr. Davidson thought the fiscal note figures were optimistic
regarding how much land would be sold, and said that State
land disposal programs don't make money. He referred to the
April 2003 Alaska Conservation Alliance report (copy on
file.) that shows that past state land sales haven't made
money. The Department of Natural Resources has worked hard
to make the state land sale program more efficient, and HB
319 is a step backward. He said that best interest findings
for every single application would be cumbersome. The
Department's estimate of over $400 thousand a year to
process the applications would make it difficult for the
state to make any money. The Department would be prohibited
from selling land directly adjacent to these properties. If
HB 319 isn't fully funded, and existing land sale programs
stay in the budget, DNR resources would be drained for the
existing programs.
Mr. Davidson continued, expressing that the best interest
findings by DNR would lead to the expectation of a decision
to rule in the applicant's favor. He argued that because the
bill language is noncompetitive and gives individuals the
right of first refusal to the land selected, only Alaskans
with access to the backcountry would have knowledge of these
areas, and only the most powerful Alaskans would obtain the
land. The bill has no mechanism to deal with conflicts that
may arise. He discussed potentially conflicting adjacent
uses that have not been addressed in the bill. He concluded
that when the state builds a new subdivision in wild areas,
it results in an over-harvest of fish and game resources.
Co-Chair Harris asked if the Alaska Conservation Voters
supports any more land going into public hands. Mr.
Davidson affirmed that it supports the current DNR land sale
program. Co-Chair Harris asked if the ACV supports any
natural resource development. Mr. Davidson replied,
"absolutely." Co-Chair Harris asked when in the past couple
years the ACV has supported natural resource development.
Mr. Davidson replied that natural resource development
should pay its own way, provide jobs for Alaskans, not
overly harm the environment, and be supported by locals. He
asserted that in the coal bed methane development, three of
those four principles were not met by the State.
Co-Chair Harris asked if the ACV supports opening ANWR. Mr.
Davidson replied the ACV does not have a position on it, but
it would be fair to say that it does not support it.
Co-Chair Harris commented that Mr. Davidson's critique of
the bill was against public land going to the private
sector, although he did express support for the Department's
land lottery. He pointed out that Alaska has the most
federal lands of any state in the nation, and Alaskans want
to be able to own land.
Mr. Davidson responded that the majority of state lands are
neither high quality nor accessible. He said that there
would be a lot of competition for the parcels in Southeast
if the bill moves forward. He thought that there would be
competition to use those parcels for public uses as well,
and the lands have other values.
HB 319 was heard and HELD in Committee for further
consideration.
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