Legislature(2023 - 2024)BUTROVICH 205
03/11/2024 03:30 PM Senate RESOURCES
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| Audio | Topic |
|---|---|
| Start | |
| SB164 | |
| SB199 | |
| SB210 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 199 | TELECONFERENCED | |
| += | SB 210 | TELECONFERENCED | |
| *+ | SB 164 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
SB 199-STATE LAND: DISPOSAL/SALE/LEASE/RESTRICT
4:05:45 PM
CO-CHAIR BISHOP announced the consideration of CS FOR SENATE
BILL NO. 199(TRA) "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 acceptance
of gifts, donations, and grants by the Department of Natural
Resources; relating to accounting for certain program receipts;
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."
4:06:21 PM
CHRISTY COLLES, Director, Division of Mining, Land and Water
(DMLW), Department of Natural Resources (DNR), answered
questions related to SB 199. She addressed concerns expressed
about SB 199 and clarified bill provisions. Section 17 of SB 199
outlines a new program for leasing and selling state land for
collection development. The Alaska State Constitution and
statutes require the department to manage state lands for
multiple uses, including retaining land for habitat and
recreational opportunities, while balancing this with the
mandate to develop state land resources. She noted that she
provided committee members with a flow chart to illustrate the
components of Section 17, which proposes the creation of a new
statute, AS 30.05.086. This statute identifies eligible lands
for commercial leases and sales within a qualified opportunity
zone, either by nomination or identification by the
commissioner.
4:08:18 PM
At ease
4:08:26 PM
CO-CHAIR BISHOP reconvened the meeting.
4:08:31 PM
MS. COLLES spoke to step two of the flow chart. She explained
the next steps following the identification of lands. She noted
that step two involves determining the suitability of these
lands for lease and sale for commercial purposes. A "best
interest finding" would be drafted to assess whether the
identified lands serve the state's interests. This process,
governed by AS 38.05.035, includes public notice as required
under AS 38.05.945. The process also involves considering the
reclassification of lands to settlement, with the DNR
Commissioner having the authority to classify and reclassify
lands under AS 38.04.065 and AS 38.05.300 that requires a robust
decision making public process. For current land sale projects,
classification actions occur approximately 40 percent of the
time, and reclassification actions occur around 25 percent of
the time. Lands within legislatively designated areas, such as
park systems, state forests, and special use areas, are not
eligible for reclassification for sale as part of the best
interest finding process. During this process, DNR seeks
comments from agencies and the public on the proposed action.
These comments are considered and may lead to modifications or
disapproval of the lease or sale due to issues such as third-
party interests, mining activity, critical habitat, recreation,
water resources, cultural resources, or other values identified.
The reasons for any modification or disapproval are discussed in
the best interest finding. Public notice is required under AS
38.05.945, mandating a minimum 30-day public comment period.
Notices are posted on the online public notice system and may
also be published in statewide and local newspapers, announced
via public service announcements, posted in conspicuous
locations near the proposed action, or sent to potentially
affected parties. Additionally, notifications are sent to
relevant municipalities, ANCSA regional and village corporations
within 25 miles, postmasters of communities outside of a borough
within 25 miles, and nonprofit community organizations. The
comments received are summarized and addressed in the final best
interest finding.
4:11:33 PM
CO-CHAIR BISHOP asked for confirmation of his understanding that
there are two best interest findings.
4:11:38 PM
MS. COLLES clarified that step two involves a decision for
suitability through a best interest finding and a potential
classification action. These processes can occur simultaneously,
resulting in one or two decision documents being prepared.
Public notice is issued at the same time to ensure that people
understand these processes go hand in hand. This approach helps
the public stay informed and provides transparency in the
decision-making process.
4:12:07 PM
SENATOR KAWASAKI asked when dealing with state land adjacent to
municipalities, what considerations are necessary regarding
municipal boundaries.
4:12:24 PM
MS. COLLES responded that DNR would collaborate with the
municipality in a similar manner to the public process. They
would provide public notice of the project to the municipality
and adhere to any zoning requirements set by the municipality
for any development on the property.
4:12:49 PM
SENATOR WIELECHOWSKI asked if the best interest finding is
appealable.
4:12:53 PM
MS. COLLES replied yes.
4:12:58 PM
SENATOR WIELECHOWSKI asked which section of the statute AS
38.05.035 is located in.
4:13:07 PM
MS. COLLES asked him to clarify his question.
4:13:14 PM
SENATOR WIELECHOWSKI asked her to specify which section under
references the best interest finding.
4:13:09 PM
MS. COLLES replied that it is located under AS 38.05.035(e).
4:13:38 .PM
MS. COLLES described the third step as the request for proposals
(RFP). After completing the agency and public process and
issuing a final best interest finding that deems nominated or
commissioner-identified lands eligible and best suited for
proposed commercial activities, the Commissioner will issue a
public notice of the RFP for at least 30 days. Proposals must
include a development plan detailing the type of development,
location, description of activities, size of the parcel, and
other requirements determined by regulation, including how the
proposed activities would stimulate economic development in the
area. Proposals will be vetted to ensure they meet program
requirements, and any that do not will be rejected. If two or
more suitable proposals exist for the same land, a public
auction will be held, limited to those who submitted proposals.
4:14:33 PM
MS. COLLES outlined that step four involves a second decision
point for the department. The proposed statute requires
completing a second best interest finding under AS 38.05.035(e)
and issuing public notice under AS 38.05.945. This process
mirrors the rigorous steps previously described to assess
whether the proposals received for lease and sale are in the
best interest of the state.
4:15:04 PM
SENATOR KAWASAKI asked whether a best interest finding made
under AS 38.05.035(e), even if deemed in the best interest of
the state, would still be subject to appeal by a local
government or local government body.
4:15:22 PM
MS. COLLES replied yes. She said anyone who participates in the
public notice process, including agencies that comment or are
affected by the decision, has the right to appeal the decision.
4:15:37 PM
SENATOR KAWASAKI asked where the final authority lies if the
commissioner determines that a proposal is in the best interest
of the state, but a nearby local municipality disagrees. He
inquired whether the matter would ultimately be resolved in
court.
4:15:57 PM
MS. COLLES replied yes, the matter would need to go through the
court system at that point, which would stay the decision. Any
disposal of state land remains on hold if it is appealed,
meaning the department cannot proceed with the action until the
court has made a final determination.
4:16:14 PM
SENATOR KAWASAKI noted that he was considering situations where
a municipality seeks to expand its borough or boundaries,
mentioning that similar issues have occurred in the North Star
Borough and with the city. He pointed out that there have been
disagreements between the borough and city sides in such cases.
4:16:43 PM
SENATOR DUNBAR inquired about the process regarding the second
proposal that triggers an auction. He asked at what point a
second proposal could be submitted, specifically whether it
could come in after the public notice for the first proposal.
4:17:01 PM
MS. COLLES explained that DNR envisions having a set timeframe
for submitting all proposals. Similar to programs like aquatic
farming, where applications are accepted within a specific
period and then reviewed collectively, DNR would close the
submission period once it ends. This approach ensures that all
applications are considered at once, allowing DNR to address any
competing interests.
4:17:30 PM
SENATOR DUNBAR asked why, from the state's perspective of
maximizing value, the process doesn't involve taking the first
proposal, setting it as a floor price, and then conducting a
public auction for every parcel. He noted that people might miss
the initial proposal window but could be willing to offer more
through an auction. He inquired about the downside of setting
the proposal price as the floor and then holding a public
auction.
4:17:59 PM
MS. COLLES replied that the current process involves receiving a
lease application and then soliciting additional interest if
necessary. She noted that some companies have concerns about
this approach, as they may develop a great idea and then face
the risk of someone else coming in, outbidding them, and taking
the opportunity. To address this, DNR aims to provide applicants
the chance to propose their ideas without immediately exposing
them to competitive bids, allowing them to present their plans
and potentially stimulate the economy without the fear of losing
their proposal to others who might simply outbid them.
4:18:42 PM
SENATOR DUNBAR expressed concern about the potential for
sweetheart deals or reduced value for the state if decisions are
made quietly and swiftly, despite public notice. They argued
that, while addressing immediate concerns, it is crucial to
consider the long-term impact on maximizing value for the state
and ensuring transparency.
4:19:13 PM
MS. COLLES that the requirement to pay fair market value for the
parcel prevents sweetheart deals. They explained that appraisals
are conducted and reviewed by a certified licensed appraiser on
staff to ensure accuracy and compliance with market standards.
4:19:42 PM
MS. COLLES spoke to step four on the flow chart. She outlined
the lease process for land development, stating that if a
proposal is deemed in the state's best interest, the lessee may
begin development in line with lease restrictions and
regulations. At a minimum, the lease must include an annual fee
for an initial five-year term, with an optional five-year
renewal. The department will assess the lessee's performance and
may terminate the lease for breach of terms or if renewal is not
in the state's best interest. During the lease, lessees in good
standing may apply to purchase all or part of the leased land,
with the parcel surveyed and appraised at the lessee's expense.
The purchase price will be the appraised fair market value minus
lease payments. Leases may be assigned only at the director's
discretion and can be terminated for breaches, including
improper land use. Additionally, the bill mandates the
reservation of easements and rights of way for established
trails used for commerce, recreation, transportation, or
traditional outdoor activities. All departmental decisions are
appealable to the commissioner under AS 44.37.011 and 11 AAC 02,
including classification actions and government authority
expansions.
4:21:37 PM
CO-CHAIR BISHOP asked for a definition of commercial use.
4:21:51 PM
MS. COLLES described the ideal lessee as someone with a
development plan that includes creating jobs, contributing to
the local economy, and offering services, tourism, or industry
that benefits the community. They emphasized that the
development should ideally impact the local tax base if situated
within a borough or municipality. The focus is on lessees with
substantive plans that contribute goods or services, rather than
those seeking the land for recreational use.
4:22:33 PM
MS. COLLES continued speaking to the fourth step. She addressed
concerns about expanding government authority to dispose of
public lands. SB 199 proposes removing the Department of Natural
Resources (DNR) from certain lease and disposal processes,
thereby granting the Department of Education and Early
Development (DEED) the authority to sell land to private
parties, beyond just government agencies. This includes
decommissioned BIA school sites, which pose safety risks as they
deteriorate. With this authority, DEED could transfer these
properties to native village corporations, allowing the land to
be used productively before it becomes hazardous. Currently,
DEED can only dispose of land to state entities or remove
facilities, leaving remaining land dormant. Additionally, CSSB
199 allows the Department of Transportation and Public
Facilities (DOT&PF) to dispose of excess land or land rights
after first offering it to DNR for disposal.
4:23:55 PM
MS. COLLES addressed concerns about the impact of increasing
lease terms to 10 years and its effect on revenue. She said the
bill extends the maximum term for land sale contracts, which is
separate from leasing, from 20 to 30 years, allowing purchasers
of high-value land to spread out payments and reduce monthly
costs. This change applies to land sale contracts, not leases,
and does not affect how purchase prices or interest rates are
determined. While a longer contract term might result in higher
total interest paid to the state, purchasers are not required to
use the full term and can pay off their contract early without
penalty. Additionally, under existing AS 30.05.05, the director
of lands can reduce the purchase price to 70 percent of fair
market value, a provision unchanged by the bill, which has
historically been used for unsold parcels after a significant
period of time. SB 199 does not alter the current authority for
DNR to issue leases for up to 55 years.
4:25:37 PM
CO-CHAIR BISHOP said he believes the intent of SB 199 is good.
4:26:02 PM