Legislature(2021 - 2022)BUTROVICH 205
03/02/2021 03:30 PM Senate STATE AFFAIRS
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| Audio | Topic |
|---|---|
| Start | |
| SB83 | |
| SB84 | |
| SJR1 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 83 | TELECONFERENCED | |
| *+ | SB 84 | TELECONFERENCED | |
| += | SJR 1 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
SB 84-LAND VOUCHERS; PFDS
4:11:07 PM
CHAIR SHOWER reconvened the meeting and announced the
consideration of SENATE BILL NO. 84 "An Act relating to the
veterans' land purchase discount; establishing state land
vouchers; relating to the permanent fund dividend; relating to
the duties of the Department of Revenue; authorizing the
Department of Natural Resources to accept state land vouchers;
relating to eligibility for public assistance; and providing for
an effective date."
He listed the individuals available to answer questions.
4:11:38 PM
MIKE BARNHILL, Deputy Commissioner, Department of Revenue (DOR),
Juneau, Alaska, stated that SB 84 creates a program through the
Permanent Fund Dividend (PFD) that allows applicants to elect a
PFD land voucher in lieu of a cash dividend. The face value
would be two times the statutory formula of the dividend. He
said this is an opportunity for Alaskans to use their vouchers
to purchase state land from the Department of Natural Resources
(DNR). He described the precedent of land vouchers in this
country that started after the American Revolutionary War to
compensate veterans. He said the governor's objective is to get
state land into the hands of Alaskans.
4:13:50 PM
MR. BARNHILL summarized the following sectional analysis for SB
84:
Section 1: Amends AS 38.05.940(c) to allow a veteran
to apply one or more dividend land vouchers issued
under AS 43.23.018 to the one-time purchase of
discounted state land under AS 38.05.940(c) ("Land
purchase price discount for veterans.")
Section 2: Amends AS 38.05.940(d) to limit a person
using a dividend land voucher to purchase land under
AS 43.23.018 to purchasing surface rights only, and to
prohibit a person from applying a dividend land
voucher to costs ineligible for a discount under the
section.
Section 3: Amends AS 38.95 by adding three new
sections.
Proposed AS 38.95.350 directs the Department of
Natural Resources (DNR), on or after Jan. 1, 2022, to
accept one or more dividend land vouchers at their
face value for purchase of state land under land
contracts. It prohibits DNR from accepting vouchers
for payment of rents or fees or land purchases. A
voucher will be exhausted after one use whether it
covered the full land sale price or not, and
applicants are entitled to no refund or other credit
for any portion of the voucher's value remaining after
such a sale.
Mental health trust land is excluded from state land
that can be purchased with a voucher.
Proposed AS 38.95.360, requires DNR to report to the
governor before September 1 of each year the number
and total value of dividend land vouchers it accepted
for payment in the previous fiscal year. The report
shall include a recommendation for any additional
appropriation for the Land Disposal Income Fund to
account for decreases to the fund caused by acceptance
of vouchers to pay for state land. Loss of these
funds, if not replaced by another revenue source, will
result in significant challenges to maintaining DNR's
land sale programs.
Proposed AS 38.95.400 defines "department" to be DNR.
Section 4: Adds a new section, AS 43.23.018.
Subsection (a) directs DOR to allow a person using the
electronic application for a Permanent Fund dividend
and not a person or public agency applying on behalf
of another individual, or an assignee of the right to
receive a dividendto make an irrevocable election to
receive a single dividend land voucher instead of a
monetary dividend. It directs DOR, if unable during a
dividend year to determine whether an applicant is
eligible to receive a dividend, to void that
applicant's election to receive a dividend land
voucher; if later determined to be eligible, the
applicant will be eligible to receive a monetary
dividend, but not to elect to receive a dividend land
voucher.
Subsection (b) sets the value of a dividend land
voucher at twice the value of a monetary dividend as
calculated under AS 43.23.025 if 50 percent of income
available distribution was deposited into the Fund's
dividend fund under AS 37.13.145(b).
Subsection (c) limits the use of vouchers only to
purchase of land under AS 38.95.350.
Subsection (d) provides that vouchers issued under
this section do not expire.
Subsection (e) makes vouchers transferable to any
person. The Department of Revenue is required to keep
records of voucher transfers. An action against the
state related to transfer of a state land voucher is
prohibited.
Subsection (f) provides that issuing a land dividend
voucher creates no obligation on DNR to make any state
land available for sale or to enter any land sale
contract, nor does it confer eligibility to purchase
state land.
Subsection (g) provides that the value of a voucher
subject to garnishment is set under AS 43.23.140(e).
The Department of Revenue shall issue land vouchers
for the value remaining after such collection.
Section 5: Amends AS 43.23.045 by adding a new
subsection (f), directing that the cash from foregone
PFDs resulting from individual elections to receive
state land will, after garnishment under AS 43.23.140,
lapse to the General Fund.
Section 6: Amends AS 43.23.055 to conform the Revenue
commissioner's duties to include issuing state land
vouchers under AS 43.23.180; directs Revenue to
develop regulations to establish procedures and time
limits for voucher issuance and use, as well as for
replacing a lost, stolen or destroyed land voucher;
and directs Revenue to report annually to DNR both the
number of individuals electing to receive land
vouchers instead of monetary dividends, and the number
and value of such vouchers issued.
Sections 7-8: Amends AS 43.23.140 by adding a new
subsection (e) to specify that the value of a land
voucher may only be garnished up to the amount
available for garnishment from a monetary dividend.
Section 9: Adds a new subsection AS 43.23.240(d),
directing the Department of Health and Social Services
to consider a land voucher as income or resources of
an applicant, in calculating that applicant's
eligibility for public assistance programs it
administers, and to notify all public assistance
recipients of the effects of receiving a dividend land
voucher.
Section 10: Adds a new subsection AS 43.23.250(b), to
require financial needs-based programs administered by
the state or by a state instrumentality or a
municipality to consider the value of a dividend land
voucher held by an applicant as income or resources in
determining whether the person is eligible for the
program.
Section 11: Adds a new subsection to AS 43.23.270.
New subsection (f) applies the same penalties for
violations of state law relating to Permanent Fund
dividend eligibility and application, to dividend land
vouchers eligibility and application.
Section 12: Establishes as the bill's effective date
as January 1, 2022.
MR. BARNHILL deferred to Mr. Parsons to offer the Department of
Natural Resources' (DNR) perspective of the bill.
4:17:56 PM
MARTY PARSONS, Director, Division of Mining, Land, and Water,
Department of Natural Resources (DNR) Anchorage, Alaska,
described SB 84 as a means to fulfill the constitutional mandate
to help develop the land and resources of Alaska in the public
interest. He said he views the voucher as a win for both
individuals and the state treasury. It is an opportunity to get
more land into the hands of Alaskans.
CHAIR SHOWER asked how many acres of state land are eligible
under the state land sale program and where it is located.
4:20:59 PM
MR. PARSONS stated that just over 2 million acres are classified
as "settlement" and could be included in the land sale program.
Much of it is remote, but there is some near Tok, Glenallen,
Wasilla, and Fairbanks. He noted the lack of infrastructure in
the state and said the department has tried to ensure that the
land it offers has buildable sites.
CHAIR SHOWER asked him to talk about the size of the properties
relative to the size of the PFD.
MR. PARSONS said five-acre parcels are about the average size
and the cost is about $3,000 per acre or $15,000 for a five-acre
parcel. He also noted the state's generous financing program for
state land sales.
CHAIR SHOWER asked if unrelated individuals could pool resources
to purchase a piece of land.
MR. PARSONS said he doesn't believe there are limitations but he
would defer to Mr. Barnhill.
4:26:40 PM
MR. BARNHILL clarified that the legislation does not prevent
individuals from pooling their land vouchers.
CHAIR SHOWER asked how the land is titled.
MR. BARNHILL said he assumes the title would be the same as
would be granted in any other state land sale, but he would
defer to Mr. Parsons.
MR. PARSONS confirmed that the title would be similar to any
other land purchased from the state.
SENATOR HOLLAND asked how often the previous PFD voucher program
was used.
MR. BARNHILL replied that legislation was never enacted into
law.
SENATOR HOLLAND asked if the money stays in the Earnings Reserve
Account (ERA) or transferred "to some portion of the state for
the property."
4:28:24 PM
MR. BARNHILL referred to the hypothetical cash flow on page 4 of
the PowerPoint to answer the question. He noted that he prepared
the hypothetical at the committee's request last year when it
considered similar legislation. He clarified that the
hypothetical was not a projection; it showed how the money
moves.
The example shows a statutory PFD of $2,300 per person, actual
appropriation of $1,000 per person, and the land voucher under
this bill of $4,600 per person. Of the 640,000 PFD applicants,
600,000 elect the cash PFD and 40,000 elect the PFD land
voucher.
The total amount appropriated from the ERA to the general fund
(GF) to the PFD fund is 640,000 times $1,000 or $640 million. Of
this, cash PFDs total $600 million, $40 million lapses to the GF
because of land voucher elections (40,000 times $1,000 or $40
million), and the face value of the land vouchers is $4,600 per
person times 40,000 participants or $184 million.
The hypothetical assumes $300 million in land sales to which
$184 million in land sales is applied, leaving $116 million that
the purchasers would need to supply from personal resources to
complete the $300 million purchase.
The result of this hypothetical shows $116 million in cash from
the purchases plus $40 million in unelected cash PFDs or $156
million going to the general fund.
MR. BARNHILL displayed a mock-up of the land voucher to conclude
the presentation.
CHAIR SHOWER found no questions and asked if he had any closing
comments.
MR. BARNHILL reiterated that the purpose of SB 83 is to get
state land into the hands of Alaskans and move residents to a
higher degree of self-sufficiency.
CHAIR SHOWER stated support for the concept then highlighted the
cost barrier to access the land.
4:33:10 PM
CHAIR SHOWER held SB 84 in committee.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 84 Dept of Revenue PPT.pdf |
SSTA 3/2/2021 3:30:00 PM |
SB 84 |
| SB 84 Sectional Analysis.pdf |
SSTA 3/2/2021 3:30:00 PM |
SB 84 |
| SB 84 Bill.PDF |
SSTA 3/2/2021 3:30:00 PM |
SB 84 |
| SB 83 Sectional Analysis version A.pdf |
SSTA 3/2/2021 3:30:00 PM |
SB 83 |
| SB 83 Sponsor Statement version A.pdf |
SSTA 3/2/2021 3:30:00 PM |
SB 83 |
| SB 83 A.PDF |
SSTA 3/2/2021 3:30:00 PM |
SB 83 |
| SB 83-1-2-021221-GOV-N.PDF |
SSTA 3/2/2021 3:30:00 PM |
SB 83 |