Legislature(2023 - 2024)BUTROVICH 205

02/21/2024 03:30 PM Senate RESOURCES

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* first hearing in first committee of referral
+ teleconferenced
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Heard & Held
-- Testimony <Invitation Only> --
+= SB 168 COMPENSATION FOR WRONGFULLY SEIZED GAME TELECONFERENCED
Heard & Held
-- Testimony <Invitation Only> --
+ SB 199 STATE LAND: DISPOSAL/SALE/LEASE/RESTRICT TELECONFERENCED
Heard & Held
-- Testimony <Invitation Only> --
*+ SB 210 SALMON HATCHERY PERMITS TELECONFERENCED
Scheduled but Not Heard
<Bill Hearing Canceled>
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+ Bills Previously Heard/Scheduled TELECONFERENCED
**Streamed live on AKL.tv**
        SB 199-STATE LAND: DISPOSAL/SALE/LEASE/RESTRICT                                                                     
                                                                                                                                
4:13:39 PM                                                                                                                    
CO-CHAIR BISHOP  announced the consideration  of SENATE  BILL NO.                                                               
199 "An  Act relating  to access roads;  relating to  state land;                                                               
relating to  contracts for  the sale of  state land;  relating to                                                               
the  authority   of  the  Department   of  Education   and  Early                                                               
Development to dispose  of state land; relating  to the authority                                                               
of  the Department  of Transportation  and  Public Facilities  to                                                               
dispose  of  state  land;  relating   to  the  authority  of  the                                                               
Department  of   Natural  Resources  over  certain   state  land;                                                               
relating to the state land  disposal income fund; relating to the                                                               
sale  and  lease  of  state   land;  relating  to  covenants  and                                                               
restrictions  on   agricultural  land;   and  providing   for  an                                                               
effective date."                                                                                                                
                                                                                                                                
4:14:37 PM                                                                                                                    
BRENT  GOODRUM,   Deputy  Commissioner,  Department   of  Natural                                                               
Resources (DNR), Anchorage, Alaska,  said Alaska manages over one                                                               
hundred  million  acres  of  uplands  and  65  million  acres  of                                                               
tidelands that belong to the  state's residents. He stated SB 199                                                               
would   create  flexibility   and  responsiveness   within  state                                                               
departments  and generate  additional  opportunities  to put  our                                                               
lands  to work  for everyday  Alaskans. The  bill would  serve to                                                               
streamline  land transfer  functions,  enable  the Department  of                                                               
Transportation   and   Public   Facilities  (DOT&PF),   and   the                                                               
Department of Education and Early  Development (DEED) to directly                                                               
transfer land that  is no longer needed for  its original purpose                                                               
to    private    parties,   therefore    reducing    bureaucratic                                                               
administration  and  complicated  multi-agency  efforts.  SB  199                                                               
would  also work  to create  flexible  leasing requirements  that                                                               
would allow  DNR to decide  when surveys are necessary  for long-                                                               
term leases  to support applicants'  needs and  potentially lower                                                               
costs for  lessees. It would  further incorporate  adaptable road                                                               
standards that  allow for more economical  pioneer road standards                                                               
for  land access  and align  right-of-way  widths with  municipal                                                               
zoning codes.  SB 199 would  provide necessary  financial support                                                               
for the  development of state  lands in preparation for  sales to                                                               
Alaskans, as  well as extend  the contract  terms of sales  to 30                                                               
years.  This legislation  would help  facilitate commercial  land                                                               
sales by  introducing a new  statute for commercial  land leasing                                                               
and sales.  It would expand  agricultural use to be  inclusive of                                                               
activities to  help offset  agricultural development  costs. This                                                               
is an important  piece of legislation that could  help create new                                                               
opportunities  in   making  Alaska's   lands  open   to  everyday                                                               
Alaskans.                                                                                                                       
                                                                                                                                
4:17:05 PM                                                                                                                    
CHRISTY COLLES,  Director, Division  of Mining, Land,  and Water,                                                               
Department  of Natural  Resources  (DNR), moved  to  slide 2  and                                                               
provided an overview and sectional analysis of SB 199:                                                                          
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
     Overview                                                                                                                 
                                                                                                                                
     Authorize   the  Department   of   Education  &   Early                                                                    
     Development    (DEED)    and    the    Department    of                                                                    
     Transportation   &   Public  Facilities   (DOT&PF)   to                                                                    
     directly   dispose  of   surface   land,  rather   than                                                                    
     transferring   land  to   the  Department   of  Natural                                                                    
     Resources (DNR) for conveyance                                                                                             
     Increase  the  cap on  the  Land  Disposal Income  Fund                                                                    
     (LDIF)                                                                                                                     
                                                                                                                                
     Update and  improve provisions  relating to  DNR's land                                                                    
     disposal procedures in AS 19.30, AS 38.04, AS 38.05                                                                        
     Amends agricultural use restrictions                                                                                       
     Add a new statute relating  to leases and sales of land                                                                    
     for commercial development                                                                                                 
                                                                                                                                
4:18:02 PM                                                                                                                    
MS. COLLES moved  to slide 3 and explained the  authority for the                                                               
direct disposal of state land:                                                                                                  
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
     Authority for Direct Disposal of State Land                                                                              
                                                                                                                                
        • Proposed amendments allow the Department of                                                                           
          Education and Early Development (amending AS                                                                          
          14.07.030) and Department of Transportation &                                                                         
          Public Facilities (amending AS 35.20.070) to sell                                                                     
          land directly to private parties                                                                                      
                                                                                                                                
        - Streamlining land disposals, reducing multi-                                                                          
          agency involvement                                                                                                    
        - Expanding eligible recipients beyond federal,                                                                         
          state agencies, and political subdivisions                                                                            
                                                                                                                                
        • Department of Natural Resources first right of                                                                        
          refusal for disposal of lands no longer needed                                                                        
          for transportation public facilities                                                                                  
                                                                                                                                
MS. COLLES said  this amendment would eliminate the  need for DNR                                                               
to  include any  restrictions imposed  by department  statutes in                                                               
the disposal  process, as these requirements  may be inconsistent                                                               
with the needs  of sister agencies. This change  would expand the                                                               
pool of  eligible recipients beyond  federal and  state agencies,                                                               
as   well   as   political   subdivisions.   Under   the   Alaska                                                               
Constitution,  DEED  would  comply  with art.VIII,  sec.  10  for                                                               
public notice  and art. IX, sec.  6 for a public  purpose. SB 199                                                               
would also  repeal and  reenact DOT&PF's  authority under  AS 35.                                                               
This amendment would streamline  the disposal process by removing                                                               
the  multi-agency  factor  and any  constraints  imposed  by  DNR                                                               
statutes. The  bill would  require DOT  and public  facilities to                                                               
offer land deemed  suitable for disposal to  DNR before disposing                                                               
of it themselves. DNR would then  have 45 days to accept, reject,                                                               
or ignore the offer. If land  is not accepted within 45 days, DOT                                                               
could dispose of  the land according to  standards established by                                                               
the commissioner.  If SB 199  becomes law, DOT would  have direct                                                               
disposal authority  for lands acquired for  Public Facilities and                                                               
projects under  AS 35. If  these lands  are no longer  needed for                                                               
such projects, DOT&PF's current  disposal regulations would apply                                                               
and these  actions would be  conducted under DOT's  public notice                                                               
requirements  that  implement art.VIII,  sec.  10  of the  Alaska                                                               
Constitution.                                                                                                                   
                                                                                                                                
4:19:52 PM                                                                                                                    
CO-CHAIR BISHOP asked for confirmation  of his understanding that                                                               
the goal  of SB  199 is  to streamline the  process to  make more                                                               
state  lands  available  for  public   purchase  or  leasing  and                                                               
eliminate the  10-year survey  requirement. He  asked if  DNR has                                                               
the first right of refusal between DEED and DOT.                                                                                
                                                                                                                                
4:20:26 PM                                                                                                                    
MS. COLLES replied yes. She said  that the provision was added in                                                               
the Senate Transportation  Committee to give DNR  the first right                                                               
of refusal  for the DOT piece,  but the provision is  excluded in                                                               
the section specific to DEED.                                                                                                   
                                                                                                                                
4:20:50 PM                                                                                                                    
MS.  COLLES moved  to  slide  4 and  reviewed  the land  disposal                                                               
income fund (LDIF):                                                                                                             
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
     Land Disposal Income Fund (LDIF)                                                                                         
                                                                                                                              
        • The LDIF holds deposits from the state land                                                                           
          disposal program                                                                                                      
        • Under current law, the portion of the fund in                                                                         
          excess of $5 million is to be deposited in the                                                                        
          state general fund                                                                                                    
        • The bill raises state land disposal income fund                                                                       
          cap from $5 million to $12 million                                                                                    
        • Boosts spending authority for larger projects                                                                         
        • Addresses inflation since 2000; cap unchanged for                                                                     
          20 years                                                                                                              
        • Adjustment to funding cap, not appropriation                                                                          
        • Department can request limit increase in annual                                                                       
          report                                                                                                                
                                                                                                                                
     Capital authority operates over multiple years. SB 199                                                                     
         also includes provisions that authorize gifts,                                                                         
     donations, and grants in accordance with memo.                                                                             
                                                                                                                                
MS. COLLES said the proposed increase  to $12 million to the land                                                               
disposal  income  fund  aims  to bolster  the  LDIF  balance  and                                                               
facilitate  the  department's  efforts in  land  development  and                                                               
disposal, while  accounting for inflation since  its inception in                                                               
2000. Concern over  a minimal fund balance  resulting from fiscal                                                               
sweeps,  revenue expenditures,  disparities, and  escalating land                                                               
development  costs  underscore  the necessity  for  the  proposed                                                               
increase.  DNR is  closely monitoring  the fund's  status and  is                                                               
adjusting general  fund expenses including core  costs. Elevating                                                               
the   cap  is   an  initial   measure  to   sustain  the   funds'                                                               
effectiveness  in supporting  multi-year large-scale  development                                                               
projects.   Capital   authority  for   subdivision   improvements                                                               
operates over  multiple fiscal years  with vigilant  oversight of                                                               
contractual  agreements to  prevent revenue  shortfalls. However,                                                               
funding  constraints  may  hinder  land  preparation  for  future                                                               
sales.  This request  is  not  for an  appropriation,  but for  a                                                               
higher fund  balance for  land sale  receipts. LDIF  supports the                                                               
Division of  Mining, Land  and Water (DMLW)  and the  Division of                                                               
Agriculture  within DNR.  SB 199  also  includes provisions  that                                                               
authorize  DNR to  accept gifts,  donations, and  grants for  the                                                               
purpose of  providing signage for  an asset under the  control of                                                               
the department  in accordance with a  memorandum of understanding                                                               
agreed on by the donor and the department.                                                                                      
                                                                                                                                
4:22:20 PM                                                                                                                    
MS. COLLES moved  to slide 5 and explained  the agricultural land                                                               
lease and sale procedures:                                                                                                      
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
     Agricultural Land Lease and Sale Procedures                                                                              
                                                                                                                                
        • Amendment to AS 38.05.321 allows broader use of                                                                       
          agricultural land and improvements                                                                                    
        • Currently an agricultural landowner can only use                                                                      
          the land for purposes that are incidental to and                                                                      
          not inconsistent with agricultural land                                                                               
        • Proposed    amendment   would    now   allow    an                                                                    
          agricultural landowner to use land for purposes                                                                       
          that are consistent with and do not interfere                                                                         
          with the primary purpose                                                                                              
                                                                                                                                
MS. COLLES conveyed  that SB 199 proposes  amendments to existing                                                               
statutes that would broaden the  scope of agricultural activities                                                               
beyond primary  use. These would enable  ancillary endeavors like                                                               
bed  and   breakfast  operations  to  supplement   and  alleviate                                                               
agricultural  development  expenses.  While   it  is  crucial  to                                                               
preserve agricultural land for its  intended purpose, the limited                                                               
availability  of  land  underscores  the  need  for  flexibility.                                                               
Granting the  director greater discretion and  permitting diverse                                                               
economic activities  within agricultural farm  developments could                                                               
foster a  more robust  economic framework  for farmers  and ripen                                                               
greater success.                                                                                                                
                                                                                                                                
4:23:06 PM                                                                                                                    
SENATOR DUNBAR asked  how primary use and ancillary  land use are                                                               
determined.                                                                                                                     
                                                                                                                                
4:23:29 PM                                                                                                                    
MS. COLLES deferred the question.                                                                                               
                                                                                                                                
4:23:50 PM                                                                                                                    
BRYAN SCORESBY, Director, Division  of Agriculture, Department of                                                               
Natural Resources (DNR), Palmer,  Alaska, responded that he would                                                               
follow  up  with the  committee  with  additional information  in                                                               
writing.                                                                                                                        
                                                                                                                                
4:24:21 PM                                                                                                                    
MS.  COLLES   moved  to  slide   6  and  explained   access  road                                                               
construction:                                                                                                                   
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
     Access Road Construction                                                                                                 
                                                                                                                              
      Amends AS 19.30.080 to specify that access roads to                                                                       
        surface disposals may be developed at a pioneer                                                                         
     standard                                                                                                                   
       Clarifying language on right-of-way widths within                                                                        
     municipal boundaries                                                                                                       
      Align with municipal zoning requirements to the same                                                                      
     extent as private developers                                                                                               
                                                                                                                                
4:24:51 PM                                                                                                                    
SENATOR WIELECHOWSKI  asked whether  SB 199, Section  2, requires                                                               
municipalities  to  maintain  the  roads  that  are  built  under                                                               
Section 2 of SB 199.                                                                                                            
                                                                                                                                
4:25:20 PM                                                                                                                    
MS.  COLLES replied  yes  and  said if  the  roads  are within  a                                                               
municipality  or borough  and they  are  the designated  planning                                                               
authority and that signs the  plat, they would be responsible for                                                               
road maintenance.                                                                                                               
                                                                                                                                
4:25:34 PM                                                                                                                    
SENATOR WIELECHOWSKI  asked if  the state  could take  away local                                                               
control  and   prevent  a  municipality  from   mandating  higher                                                               
standards for access roads.                                                                                                     
                                                                                                                                
4:25:57 PM                                                                                                                    
MS. COLLES  replied no  and said the  existing zoning  code helps                                                               
DNR plan for a subdivision.  She stated if the planning authority                                                               
wants to mandate a higher  requirement for a subdivision than for                                                               
a private  owner, it  becomes cost prohibitive.  DNR seeks  to be                                                               
treated with the same standards as private land developers.                                                                     
                                                                                                                                
4:26:53 PM                                                                                                                    
SENATOR DUNBAR conveyed  that a common concern he  has heard from                                                               
Anchorage residents is that too  much responsibility is placed on                                                               
private  developers for  planning.  However,  there is  extensive                                                               
negotiation  with  every  project   that  involves  planning  and                                                               
zoning.  Oftentimes, there  are  additional  standards placed  on                                                               
private landowners. He  asked how to define  equal standards when                                                               
private  landowners   are  often  held  to   different  standards                                                               
depending on the project.                                                                                                       
                                                                                                                                
4:27:52 PM                                                                                                                    
MS. COLLES  replied that DNR  has experienced the  Mat-Su Borough                                                               
holding it to  a higher standard. Not  holding private landowners                                                               
to a  higher standard should receive  consideration. However, DNR                                                               
perceives that it has been held  to a higher standard and seeks a                                                               
level playing field.                                                                                                            
                                                                                                                                
4:28:22 PM                                                                                                                    
SENATOR  DUNBAR  opined  that there  is  a  non-uniform  standard                                                               
shortcoming of local law. It  is often political forces that push                                                               
to  increase   development  costs  for  certain   developers.  He                                                               
expressed uncertainty that the phrasing  in SB 199 would overcome                                                               
the issue.                                                                                                                      
                                                                                                                                
4:28:48 PM                                                                                                                    
CO-CHAIR BISHOP  requested an example  of how the  standard would                                                               
apply.                                                                                                                          
                                                                                                                                
4:28:58 PM                                                                                                                    
MS. COLLES stated  that DNR seeks to analyze  the municipality or                                                               
borough zoning  codes and  design and  plan for  road development                                                               
based on  those codes. She noted  it often takes up  to two years                                                               
to go  through the plat  process. The department does  not always                                                               
have  extra  funds  available  to extend  the  process  and  make                                                               
changes when  the municipality  adds new  criteria. SB  199 holds                                                               
municipalities to the standards that  they have written in zoning                                                               
codes.                                                                                                                          
                                                                                                                                
4:30:11 PM                                                                                                                    
CO-CHAIR  BISHOP provided  a hypothetical  scenario and  asked if                                                               
the amendment applies to DNR-owned land within a municipality.                                                                  
                                                                                                                                
4:30:20 PM                                                                                                                    
MS. COLLES replied that is correct.                                                                                             
                                                                                                                                
4:30:29 PM                                                                                                                    
SENATOR CLAMAN  asked if DNR wants  to build to the  pioneer road                                                               
rather than the municipal road standard.                                                                                        
                                                                                                                                
4:30:41 PM                                                                                                                    
MS. COLLES  replied DNR has  little land within  the municipality                                                               
of Anchorage.  However, it  does have land  in and  near boundary                                                               
lines of  boroughs. She referenced the  Matanuska-Susitna Borough                                                               
as an example.  DNR would have to follow  the zoning requirements                                                               
of all boroughs and municipalities.                                                                                             
                                                                                                                                
4:31:17 PM                                                                                                                    
CO-CHAIR BISHOP commented that the  Alaska Highway was originally                                                               
a pioneer road.                                                                                                                 
                                                                                                                                
4:31:26 PM                                                                                                                    
SENATOR  CLAMAN asked  whether DNR  would build  to pioneer  road                                                               
standards  or the  Mat-Su  Borough standards  given  the land  is                                                               
inside and alongside the borough.                                                                                               
                                                                                                                                
4:31:50 PM                                                                                                                    
MS. COLLES  said DNR would build  to the standards of  the Mat-Su                                                               
Borough, but  it does not  want to  be held to  higher standards.                                                               
The  department designs  plats  off of  borough  codes. DNR  then                                                               
takes the plat  to the borough for signing, but  the borough then                                                               
raises the ban on its requirements.                                                                                             
                                                                                                                                
4:32:27 PM                                                                                                                    
SENATOR CLAMAN asked if the  concern is that boroughs can elevate                                                               
development  standards on  DNR  projects, so  DNR  is seeking  to                                                               
limit this authority.                                                                                                           
                                                                                                                                
4:32:41 PM                                                                                                                    
MS. COLLES replied that is correct.                                                                                             
                                                                                                                                
4:32:51 PM                                                                                                                    
CO-CHAIR BISHOP  opined that "pioneer"  may be wrong term  to use                                                               
because  DNR  only  wants  the   same  zoning  requirements  that                                                               
municipalities require.                                                                                                         
                                                                                                                                
4:33:16 PM                                                                                                                    
MR. GOODRUM said DNR worked  closely with Alaska Municipal League                                                               
on the provision under SB  199 to ensure consistency with several                                                               
municipalities and  boroughs. He  conveyed the  department worked                                                               
to find an  agreement and did not receive  any disputes regarding                                                               
the provision.                                                                                                                  
                                                                                                                                
4:33:42 PM                                                                                                                    
CO-CHAIR  BISHOP  expressed appreciation  for  the  end goal  and                                                               
stated  he frequently  hears about  the shortage  of housing  and                                                               
land in  Alaska. He  stated the aim  of SB 199  is to  ease these                                                               
burdens to make more homes available for first-time homeowners.                                                                 
                                                                                                                                
4:34:15 PM                                                                                                                    
MS. COLLES moved to slide 7 and explained land sale procedures:                                                                 
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
     Land Sale Procedures                                                                                                     
                                                                                                                              
        • Land sale disposal contracts                                                                                          
       - Longer purchase terms from 20 years to 30 years                                                                        
        - Consistency in terms from "Foreclosure" to                                                                            
          "Termination"                                                                                                         
        - Allows for paid in full purchase when existing                                                                        
          infrastructure   would   increase   liability   of                                                                    
          financing a land sale purchase contract                                                                               
                                                                                                                                
MS.  COLLES added  that the  terminology is  more consistent  and                                                               
aligns with  administrative processes rather than  banking terms.                                                               
She  said the  provision also  includes a  definition for  public                                                               
auction  that  would pave  the  way  for online  auctions.  While                                                               
traditional  DNR  sale  methods   would  persist  under  SB  199,                                                               
defining public  auctions would enhance  the structure  of online                                                               
platforms.  Through a  best interest  finding, DNR  could require                                                               
payment  in full  within 120  days  following the  sale of  land.                                                               
Infrastructure   that  exceeds   $10  thousand,   this  amendment                                                               
protects  the state  from receiving  the  infrastructure in  poor                                                               
condition and having higher liability.                                                                                          
                                                                                                                                
4:35:12 PM                                                                                                                    
MS. COLLES  moved to  slide 8  and explained  survey requirements                                                               
for leases:                                                                                                                     
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
     Survey Requirements for Leases                                                                                           
                                                                                                                                
        • Discretion of cadastral surveys for long-term                                                                         
          leases                                                                                                                
        - Survey could be required where infrastructure                                                                         
          boundaries or access management is in the best                                                                        
          interest of the state                                                                                                 
        - Reduces the financial and administrative burden                                                                       
          on industries                                                                                                         
        - Industry is challenged by current requirements                                                                        
     Ex: Renewable energy projects, grazing leases                                                                              
                                                                                                                                
MS. COLLES  said SB 199  proposes several amendments that  aim to                                                               
streamline  processes  and  reduce barriers  for  development  on                                                               
state  land. She  stated  that AS  38.04.045(b)  would grant  the                                                               
commissioner  through  a  best interest  finding  the  option  to                                                               
determine the necessity of a  cadastral survey that would provide                                                               
flexibility while maintaining  state oversight. Statute provision                                                               
AS  38.05.070 would  eliminate the  requirement  for surveys  for                                                               
long-term  leases.  This  change acknowledges  that  surveys  and                                                               
appraisals for  leases exceeding  ten years can  pose significant                                                               
hurdles for  industries seeking  land development,  especially in                                                               
grazing,  renewable energy,  and  agricultural industries.  These                                                               
requirements  not   only  deter   development,  but   also  incur                                                               
prohibitive costs, especially for  industries with extensive land                                                               
needs.  These  amendments  aim  to  promote  economic  growth  by                                                               
reducing   unnecessary   administrative  burdens   and   expenses                                                               
associated with  land development  processes. DNR  would maintain                                                               
the ability to require a survey if desired.                                                                                     
                                                                                                                                
4:36:19 PM                                                                                                                    
CO-CHAIR BISHOP asked  if a miner would have ten  years to obtain                                                               
and convert a survey to a lease.                                                                                                
                                                                                                                                
4:36:43 PM                                                                                                                    
MS. COLLES  said DNR does  not require surveys for  mining leases                                                               
because it  is a  different type  of land  right. She  stated the                                                               
amendment is  specific to  land leases such  as one  obtained for                                                               
agricultural farming.  Some developments  are remote  and require                                                               
$20,000  - $30,000  to complete  the survey.  If land  is remote,                                                               
alternative proof could be provided  to the department in lieu of                                                               
a  survey,   such  as  GPS   coordinates,  to   demonstrate  land                                                               
boundaries. If  the developer  wanted to  purchase the  land, the                                                               
survey would be required.                                                                                                       
                                                                                                                                
4:37:45 PM                                                                                                                    
CO-CHAIR BISHOP asked her to repeat the cost of the survey.                                                                     
                                                                                                                                
4:37:50 PM                                                                                                                    
MS.  COLLES  replied  that  the cost  ranges  between  $20,000  -                                                               
$40,000 dollars.                                                                                                                
                                                                                                                                
4:37:57 PM                                                                                                                    
CO-CHAIR GIESSEL requested the definition of a cadastral survey.                                                                
                                                                                                                                
4:38:05 PM                                                                                                                    
MS. COLLES replied  that the cadastral survey  mandates that land                                                               
must be marked with survey markers, which is often costly.                                                                      
                                                                                                                                
4:38:33 PM                                                                                                                    
CO-CHAIR BISHOP recalled  seeing a local survey  marker marked in                                                               
concrete.                                                                                                                       
                                                                                                                                
4:38:45 PM                                                                                                                    
MS.  COLLES  moved  to  slide  9  and  described  land  used  for                                                               
commercial development:                                                                                                         
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
     Land for Commercial Development                                                                                          
                                                                                                                              
        • Stimulate economic development                                                                                        
        • Offers land for leasing, and sale, by requesting                                                                      
          proposals                                                                                                             
                                                                                                                                
        - For state land identified or nominated as a                                                                           
          Qualified Opportunity Zone                                                                                            
        - For state land nominated by the public                                                                                
        - For any other state land the commissioner deems                                                                       
          appropriate for commercial development under 640                                                                      
          acres                                                                                                                 
        - Nominated land may need to be reclassified                                                                            
        - Provide additional public notice beyond normal AS                                                                     
          38.05.945                                                                                                             
                                                                                                                                
MS. COLLES  said under AS.38.05.840,  DNR would need  to evaluate                                                               
land   nominations,  identify   land   offering  areas,   prepare                                                               
documents relating to planning  and classification, prepare best-                                                               
interest  findings under  AS.38.05.035(e),  title due  diligence,                                                               
title report issuance, and provide  an appraisal of the land. The                                                               
DNR commissioner would  be required to prepare a  report for each                                                               
property  deemed  appropriate  for  commercial  development.  The                                                               
report  would  highlight  the   municipal  and  state  government                                                               
services that  the commissioner anticipates as  necessary for the                                                               
area. It also  includes municipal and state  tax revenue required                                                               
to  provide  these  services if  the  land  undergoes  commercial                                                               
development.                                                                                                                    
                                                                                                                                
4:39:43 PM                                                                                                                    
SENATOR  DUNBAR asked  her to  define commercial  development and                                                               
wondered whether there are any restrictions for land use.                                                                       
                                                                                                                                
4:40:03 PM                                                                                                                    
MS.  COLLES  replied  that  DNR  seeks  individuals  who  hold  a                                                               
business  license and  are  willing to  invest  capital into  the                                                               
property. Initially,  a developer enters into  a lease agreement.                                                               
Therefore,  DNR   would  like  to   see  evidence  of   a  viable                                                               
development plan and proof of  a commercial enterprise operation.                                                               
Proof of  immediate profit is  unnecessary given the time  it may                                                               
take for operations  to generate revenue. She  noted that hunting                                                               
guides  have  previously  shown  interest  in  obtaining  lodges,                                                               
uncertainty of  land ownership makes  it challenging for  them to                                                               
invest capital.                                                                                                                 
                                                                                                                                
4:40:59 PM                                                                                                                    
SENATOR  DUNBAR  asked  if  any  activities  are  prohibited  for                                                               
commercial development, such as mining, oil, or gas operations.                                                                 
                                                                                                                                
4:41:15 PM                                                                                                                    
MS. COLLES  replied that no  activities are  currently prohibited                                                               
under  commercial  operations.   However,  subsurface  activities                                                               
would  require  additional   authorization  for  operations.  The                                                               
provision is specific to surface  operations, so subsurface lands                                                               
could not be purchased under the provision.                                                                                     
                                                                                                                                
4:41:44 PM                                                                                                                    
SENATOR WIELECHOWSKI  asked what discretion the  commissioner has                                                               
in  the  reclassification  of  land   and  wondered  whether  any                                                               
parameters exist.                                                                                                               
                                                                                                                                
4:41:59 PM                                                                                                                    
MS.  COLLES replied  there are  statutes that  mandate DNR  to go                                                               
through a public process to  reclassify lands that often take 2-5                                                               
years  and involve  much public  input. She  said documents  that                                                               
demonstrate  that the  reclassification of  land is  in the  best                                                               
interest of the state are  required, as well as coordination with                                                               
sister agencies.                                                                                                                
                                                                                                                                
4:42:31 PM                                                                                                                    
SENATOR  WIELECHOWSKI  asked  if   a  best  interest  finding  is                                                               
required for reclassification.                                                                                                  
                                                                                                                                
4:42:40 PM                                                                                                                    
MS. COLLES replied that the process  is not identical to the best                                                               
interest finding under  AS 38.05.035, but it  requires a decision                                                               
under its own  statute. She stated that plans  that determine the                                                               
decision are appealed on a regular basis.                                                                                       
                                                                                                                                
4:43:02 PM                                                                                                                    
SENATOR  WIELECHOWSKI asked  if land  would go  to a  competitive                                                               
auction  if  a developer  requested  to  purchase and  reclassify                                                               
property.                                                                                                                       
                                                                                                                                
4:43:25 PM                                                                                                                    
MS. COLLES deferred the question.                                                                                               
                                                                                                                                
4:43:37 PM                                                                                                                    
RACHEL LONGACRE,  Chief of Operations,  Division of  Mining, Land                                                               
and  Water   (DMLW),  Department  of  Natural   Resources  (DNR),                                                               
Anchorage,  Alaska,   replied  that   in  the  instance   of  two                                                               
overlapping  nominations  with  solicited interest,  there  is  a                                                               
competitive process in which the highest bid is collected.                                                                      
                                                                                                                                
4:44:08 PM                                                                                                                    
SENATOR WIELECHOWSKI  acknowledged that a separate  bill included                                                               
similar provisions and wondered  how the reclassification process                                                               
would  unfold under  SB  199. He  envisioned  that a  substantial                                                               
number of  people could  request to  convert land  for commercial                                                               
use  and asked  whether there  is a  requirement for  fair market                                                               
value.                                                                                                                          
                                                                                                                                
4:44:54 PM                                                                                                                    
MS.  LONGACRE replied  that the  highest bidder  would enter  the                                                               
lease, but the lease requirements  would include terms that prove                                                               
the commercial  aspect. She  said the actual  land sale  would be                                                               
for  fair  market  value  and  go  through  the  normal  disposal                                                               
process.  The highest  bidder would  need to  meet the  necessary                                                               
threshold.                                                                                                                      
                                                                                                                                
4:45:32 PM                                                                                                                    
CO-CHAIR BISHOP asked how fair market value is determined.                                                                      
                                                                                                                                
4:45:37 PM                                                                                                                    
MS. LONGACRE responded that DMLW follows an appraisal process.                                                                  
                                                                                                                                
4:45:48 PM                                                                                                                    
SENATOR DUNBAR wondered if the public  has a chance to bid in the                                                               
nomination  process to  eliminate an  unfair advantage  of first-                                                               
mover parties.                                                                                                                  
                                                                                                                                
4:46:29 PM                                                                                                                    
MS.  LONGACRE replied  that  once the  nominated  land meets  the                                                               
program  requirements,  it goes  through  a  public process  that                                                               
solicits public interest.                                                                                                       
                                                                                                                                
4:46:45 PM                                                                                                                    
SENATOR DUNBAR asked for clarification  of his understanding that                                                               
interested parties  without a  first-mover advantage  could place                                                               
bids.                                                                                                                           
                                                                                                                                
4:46:53 PM                                                                                                                    
MS.  LONGACRE   replied  that   is  correct   and  said   with  a                                                               
solicitation  of  interest,  a  bid  proposal  is  required.  The                                                               
proposal  must   be  vetted  against  program   requirements  for                                                               
commercial development.                                                                                                         
                                                                                                                                
4:47:13 PM                                                                                                                    
SENATOR CLAMAN  provided a hypothetical of  two competing parties                                                               
seeking  land  nomination.  He asked  if  commercial  development                                                               
would  hold  an advantage  over  residential  development in  the                                                               
nomination process.                                                                                                             
                                                                                                                                
4:47:56 PM                                                                                                                    
MS.  LONGACRE replied  that the  advantage would  only apply  for                                                               
settlement  lands.  She  said  there is  a  detailed  process  to                                                               
determine  the eligibility  for obtaining  a commercial  lease on                                                               
state land.  Residential or subdivision land  undergoes a similar                                                               
assessment  process. This  in  not opening  new  land. This  tool                                                               
serves to  provide commercial land options  alongside subdivision                                                               
or  remote recreational  land, rather  than introducing  entirely                                                               
new land, so the settlement classification remains.                                                                             
                                                                                                                                
4:48:58 PM                                                                                                                    
SENATOR CLAMAN asked whether that  would prompt DNR to reconsider                                                               
its assessment  regarding the allocation  of land  for commercial                                                               
or residential purposes.                                                                                                        
                                                                                                                                
4:49:20 PM                                                                                                                    
MS. LONGACRE replied  that it would be included  in the analysis.                                                               
She  said if  DNR determines  that the  land is  best suited  for                                                               
residential  use,  the  state would  proceed  with  developing  a                                                               
subdivision  in   that  area  while  ensuring   critical  habitat                                                               
preservation is  part of the  assessment. Conversely, if  an area                                                               
is  deemed  most  suitable for  commercial  activity,  DNR  would                                                               
assess what is in the  state's best interest. She emphasized that                                                               
there  isn't  necessarily  competition  between  residential  and                                                               
commercial uses,  but rather a  determination of what  best suits                                                               
the land  in that  particular area. The  state currently  has the                                                               
option  to offer  land for  sale under  the subdivision  disposal                                                               
program,  which  could  eventually  be  utilized  for  commercial                                                               
purposes  once under  private ownership.  The program  allows the                                                               
state to ensure  that offering the tracks of  land would generate                                                               
commercial  enterprises  on  the  land that  would  help  support                                                               
community economics in the area.                                                                                                
                                                                                                                                
4:50:34 PM                                                                                                                    
SENATOR  WIELECHOWSKI   referred  to   Section  17  of   SB  199,                                                               
highlighting  that it  grants the  commissioner the  authority to                                                               
identify land  suitable for commercial development.  He expressed                                                               
concern  over the  broad scope  of these  standards, which  could                                                               
potentially  open up  a vast  amount  of land  across the  state.                                                               
While  acknowledging that  the consensus  favors opening  up more                                                               
land, certain  areas, such  as state  parks or  wildlife refuges,                                                               
may not  be suitable  for commercial  development. He  noted that                                                               
according  to the  statute,  the  commissioner could  potentially                                                               
open up any land.                                                                                                               
                                                                                                                                
4:51:54 PM                                                                                                                    
MS.  LONGACRE  replied  that  the  land  must  be  classified  as                                                               
settlement land for  DNR to go through the  disposal process. She                                                               
said land  identified under any  other classification  would need                                                               
to   be    reclassified.   Statute   provisions    indicate   how                                                               
reclassification goes through  a public process and  would not be                                                               
amendment by SB 199.                                                                                                            
                                                                                                                                
4:52:29 PM                                                                                                                    
MS.  COLLES  clarified  that legislatively-designated  areas  and                                                               
parks could be reclassified or  disposed of. DNR follows a public                                                               
process and  allows for appeals  if the  public is affected  by a                                                               
decision. This provision  serves as another tool  in the process.                                                               
While there  are existing private programs,  none currently exist                                                               
for commercial  use, which  is why  DNR is  seeking this  type of                                                               
authority.                                                                                                                      
                                                                                                                                
4:53:26 PM                                                                                                                    
SENATOR DUNBAR referenced the  subsection on reclassification and                                                               
asked  whether  the commissioner  already  has  the authority  to                                                               
classify  or reclassify  lands. He  said he  does not  understand                                                               
what subsection (c) changes under SB 199.                                                                                       
                                                                                                                                
4:54:00 PM                                                                                                                    
MS.  COLLES replied  that DNR  seeks to  make it  known that  the                                                               
reclassification of land  could occur and aims  to ensure clarity                                                               
moving forward.                                                                                                                 
                                                                                                                                
4:54:43 PM                                                                                                                    
SENATOR DUNBAR  referenced slide  3 and  said he  understands the                                                               
desire to  remove DNR from  the process, noting there  is already                                                               
an  established  disposal  process  in place.  He  asked  for  an                                                               
explanation of  differences between DEED, Public  Facilities, and                                                               
DNR processes.  He suggested that  DEED may have  less experience                                                               
with the reclassification process compared to DNR.                                                                              
                                                                                                                                
4:55:57 PM                                                                                                                    
MS. COLLES said she would provide follow-up information to the                                                                  
committee.                                                                                                                      
                                                                                                                                
4:56:44 PM                                                                                                                    
CO-CHAIR BISHOP held SB 199 in committee.                                                                                       

Document Name Date/Time Subjects
SB 168 ADFG Fiscal Note 02.10.24.pdf SRES 2/21/2024 3:30:00 PM
SB 168
SB 168 Sponsor Statement Ver. A. 02.21.24.pdf SRES 2/21/2024 3:30:00 PM
SB 168
SB 168 Sectional Analysis Ver A. 02.21.24.pdf SRES 2/21/2024 3:30:00 PM
SB 168
SB 190 Public Testimony as of 02.21.24.pdf SRES 2/21/2024 3:30:00 PM
SB 190
SB 199 Ver. S.pdf SRES 2/21/2024 3:30:00 PM
SB 199
SB 199 Explanation of Changes v. A to S.pdf SRES 2/21/2024 3:30:00 PM
STRA 2/20/2024 1:30:00 PM
SB 199
SB 199 Presentation DNR SRES Ver. S.pdf SRES 2/21/2024 3:30:00 PM
SB 199
HB 282, SB 199 State Land_Disposal_Sale_ Briefing Paper 02.13.2024.pdf HTRA 2/13/2024 1:30:00 PM
SRES 2/21/2024 3:30:00 PM
HB 282
SB 199
SB 199 Transmittal Letter 01.22.2024.pdf SRES 2/21/2024 3:30:00 PM
SB 199
SB 199 Fiscal Note DNR 02.12.2024.pdf SRES 2/21/2024 3:30:00 PM
STRA 2/13/2024 1:30:00 PM
SB 199
SB 199 Fiscal Note DEED 01.24.2024.pdf SRES 2/21/2024 3:30:00 PM
STRA 2/13/2024 1:30:00 PM
SB 199
SB 190 Amendment 1.pdf SRES 2/21/2024 3:30:00 PM
SB 190
SB 199 Sectional Analysis Ver. S. 02.21.24.pdf SRES 2/21/2024 3:30:00 PM
SB 199