Legislature(1997 - 1998)
04/15/1998 09:12 AM Senate FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATE BILL NO. 108
"An Act relating to the disposal of state land by
lottery."
CS FOR SENATE BILL NO. 108(RES)
"An Act relating to the disposal of state land and
interests in state land; and providing for an effective
date."
MEL KROGSENG, staff to Senator Robin Taylor was invited to
join the committee. She gave a brief review of the sponsor
statement. She said the bill presently before the committee
no longer offered land under a lottery system. Two other
approaches had been taken; land over the counter, and an
open entry program, programmed after the old program of the
early '70's. She said an amendment had been drafted to fix
the glitch in section five. This glitch had arisen when
sections three and four were adopted in the Resources
committee. She continued her review and said there was
approximately 581,000 acres in the land bank. However,
since there was no legal description for the land they
eliminated reference to the land bank from the bill.
Further provisions of the bill were no requirement for the
State to provide schools on agricultural lands, no
requirement to construct roads, and surveys would be at
buyer's expense. Potential buyers would have to pay a
security of ten percent and the State would provide maps and
a list of qualified real-estate appraisers. In summing up
she noted a provision for an immediate effective date.
Senator Torgerson asked about page 2 under intent and asked
about the settlement land monies that would go into the
public school trust fund. Currently only half of one
percent is going to that trust fund of all lands that are
sold. He asked why would they now want to put one hundred
percent in. Ms. Krogseng said that because they do have to
fund schools it would be a good way to put money aside for
them. Senator Torgerson voiced concern that the money would
be locked up. Currently they could only spend the interest
on that account which was up to $227 million. Seven million
is appropriated to school education. He asked further on
page 2, line 24 why "shall" had been changed to "may". Ms.
Krogseng said this was language requested by the department
and they could explain the change.
Senator Phillips suggested that on page 7, lines 11 - 15 the
five-year lease be extended another five years with twenty
percent down up front once the survey had been done. This
would keep people serious about getting land.
Ms. Krogseng said they wanted to make land available to all
Alaskans. Asking twenty percent down would limit the
ability for acquisition. She explained there was
approximately 50,000 acres, which equaled 5,000 parcels that
had been previously offered. This land has already been
surveyed and can be easily identified and put on the
counter.
Senator Phillips said his concern was that some land had
been sold and for some reason the buyer did not complete the
requirements and it was put back on the counter again. He
said he would like to see people have land and complete it.
Not have a partial structure built and then walk away from
it and leave the State holding the bag.
Ms. Krogseng said that in working on this piece of
legislation she has learned that the State has entered into
contracts on the land that states that one is required by
law to remove the structure. However, if it is not removed,
the department has the authority to go forward and sell that
particular parcel or that structure. If they derive more
than $10,000 the residual must be given to the person who
did the actual construction. She said she had been involved
in real estate for many years and had never seen such a
contract. But she doesn't know how to get out of it or what
to do about people who have left the State and no longer in
touch.
In further response to Senator Phillips, she believes that
most defaults occurred during the slump of the 1980's. She
hoped now the State was a little smarter and things would be
arranged a little differently.
Senator Adams asked about land disposal under Title 38 and
CSSB 108(RES). Ms. Krogseng said that as far as land
classifications, one land classification had been included
that was not in current statute. That was private
recreation land. There are no open entry programs on the
books at this time. As far as the fiscal impacts this
legislation would provide a mechanism for the department to
put the up-front costs and appraisals on the potential
buyer, as opposed to the department funding those costs and
the Legislature having to appropriate those funds. She said
there was some concern for the fiscal notes and they did not
feel that it should require that much money. Other agencies
and entities, such as the Mental Health Trust, that were
doing land disposals for a far less amount of money than was
listed on the fiscal note attached to this bill. She would
hope that this program would pay for itself in the long run.
Senator Torgerson referred to pages seven and eight which
talked about roads required to be built if a person divides
their land. He noted the road was to be constructed to the
standards of the Department of Transportation and Public
Facilities. That meant to him that an individual that
purchased land and had to build a right-of-way or extend the
end of a gravel road would have to build that road up to the
specifications of the current road and they couldn't put in
a dirt road to their property.
Ms. Krogseng said the department advised her they had
standards for trails, however as far as roads it would
depend on what is in the area. The intent of that language
was so that one would not go in and create a road that would
be winding all over the place and encroach on another's
property. Senator Torgerson said he agreed with the route,
but still had problems with the construction to the
standards set by the department. It would only be valid if
the department were to take over maintenance.
JANE ANGVIK, Director, Division of Lands, Department of
Natural Resources testified via teleconference from
Anchorage. She opposed the bill. It would create a new
program and have a negative affect on land sales. It would
further flood the market with approximately 200,000
acres/year causing a devaluation of private land. (Poor
quality of teleconference is noted.) She referred to a memo
from the Division of Land, which had proposed legislation
that would enhance the existing program. She still
believed, however, that there were ways the department could
work with the Legislature to enhance the disposal program.
She made a brief reference to the fiscal note attached to
her memo. She said the largest land disposal was in 1981
for a total of 79,000 acres.
Senator Adams asked under the RES version of this bill what
would happen to the value of private landowners. Ms. Angvik
said the department was not trying to compete with private
realtors, however they would depress the value of private
land. Senator Adams further asked about fiscal notes. She
said there was a significant cost involved for the State to
sell property and she explained those additional related
costs. However, she felt income could be generated over
time if done in an orderly fashion. She agreed this could
address the needs of Alaskans wishing to acquire State
lands. Subdivided land could also be sold over the counter.
She also stated that the department had outlined its
anticipated income for the State in their fiscal note.
Senator Adams asked if the department's proposal had been
given to Senate Resources and Ms. Angvik indicated it had
been.
In response to Senator Torgerson, Ms. Angvik explained the
requirements for State land purchase. Senator Torgerson
asked how many appraisals had been rejected. Ms. Angvik
said she did not have the information at present but would
get it and submit it to the committee.
Senator Phillips asked what the time frame for a normal
person from the time they submit their application for
disposal of land and the time they get the actual title in
hand? Ms. Angvik said the time would depend on whether they
paid cash or not. Senator Phillips clarified from the time
of payoff. Ms. Angvik said when individuals were purchasing
land over time from the State they were required to pay ten
percent down and then they have twenty years to pay off the
rest. On average people take twenty years.
ALLEN MINISH, professional land surveyor testified via
teleconference from Anchorage. He said he supported the
bill. He further testified that a partial structure was a
problem and was not usually an asset to the State on
returned property. He felt there needed to be language
regarding these partial structures and about the removal of
such. He suggested a down payment at the time of building,
which could be used by the State to remove the structure if
the purchase requirements were not completed.
Senator Phillips said he was the one who brought up the
partial structure problem and asked if the five-year lease
with the five-year extension that he had proposed would be a
good idea? Mr. Minish indicated that he was not a fan of
this type of leasing program. He did support having the
buyer do the surveys and appraisals.
(Tape #121, Side A was switched to Side B.)
CLIFF EAMES, Alaska Standard for the Environment testified
via teleconference from Anchorage. He noted for the
committee they had offices in Anchorage and Mat-Su and
enjoyed a membership of approximately 8,000 families. He
said they opposed SB 108. This would lock up land enjoyed
by the public and put it into private use. As the
Department of Natural Resources has testified it would cost
a great deal of money that could be better spent on other
programs that the State had to cut. They did support a more
modest program, similar to what has been discussed, that
would re-offer already offered lands. It would, however,
have to be funded and very little funding has been made
available over the past few years. Contrary to popular
belief, there was a significant amount of private land
available in Alaska and many other ways to obtain such
private land. For instance one could make use of classified
ads and realtors. There was also land available through
the Mental Health rust Authority and the University. In
summing up he suggested the committee look at the Department
of Natural Resources proposal.
Senator Torgerson MOVED amendment #1. Senator Adams
OBJECTED. Ms. Krogseng explains this is a technical
amendment. Senator Adams REMOVED his objection. WITHOUT
OBJECTION amendment #1 was ADOPTED.
Senator Torgerson MOVED amendment #2. WITHOUT OBJECTION it
was ADOPTED.
Senator Torgerson MOVED amendment #3. He said on page 8,
line 1, this amendment would delete the remainder of the
sentence after the word "municipality" and insert "and if
the person purchasing the land applies to the Department of
Transportation and Public Facilities or a municipality for
the road to be included in their maintenance program then
the road must be constructed to the standards set out by the
affected agency." Senator Adams OBJECTED. (Amendment #3
was copied and handed out to committee members.) Senator
Adams REMOVED his objection. WITHOUT OBEJCTION amendment #3
was ADOPTED.
Co-chair Sharp asked what was the pleasure of the committee.
Senator Adams suggested referring the bill back to Senate
Resources. He voiced concern on disposing of land and said
that it should be worked out with the department. There was
also a problem with the fiscal note.
Co-chair Sharp HELD SB 108 in committee. He said he did not
want to move a bill with a substantial fiscal note attached
to it without proper review. He then called HB 467.
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