Legislature(2019 - 2020)BUTROVICH 205
03/18/2020 03:30 PM Senate RESOURCES
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| Audio | Topic |
|---|---|
| Start | |
| SB217 | |
| SB189 | |
| SB204 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 189 | TELECONFERENCED | |
| += | SB 217 | TELECONFERENCED | |
| *+ | SB 204 | TELECONFERENCED | |
SB 217-STATE LAND VOUCHER; PFDS
4:02:52 PM
CHAIR MICCICHE announced that the first order of business would
be SENATE BILL NO. 217, "An Act establishing state land
vouchers; relating to restricted land sales for veterans;
relating to the veterans' land purchase discount; relating to
the permanent fund dividend; relating to the duties of the
Department of Revenue; authorizing the Department of Natural
Resources to accept state land vouchers; relating to eligibility
for public assistance; and providing for an effective date."
He said this is the second hearing and public testimony is open.
4:03:41 PM
MIKE BARNHILL, Deputy Commissioner, Alaska Department of
Revenue, Juneau, Alaska, reminded the committee that the
governor introduced the legislation to give people applying for
their Permanent Fund Dividend (PFD) the option of electing, in
lieu of a cash dividend, a land voucher that is worth two times
the cash dividend.
4:05:23 PM
He said there were questions during the previous hearing about
how the cashflow would work for the land voucher. He directed
attention to slide 2, PFD Land Voucher, Cashflow Hypothetical
and provided the following summary:
• The land voucher calculation is two times the statutory PFD
amount.
• The money that moves from the Earnings Reserve Account
(ERA), to the General Fund (GF), to the PFD Fund, is the
total number of applicants multiplied by the amount that
the legislature has appropriated per person.
• 640,000 eligible applicants at $1,000 per person equals
$640 million moving to the PFD Fund.
• The cash PFD payout to 600,000 people multiplied by $1,000
per person equals $600 million, but $40 million in cash
remains because 40,000 applicants elected the land voucher.
• Under the bill, the $40 million in cash lapses back to the
GF.
• The face value of the land vouchers is $4,600 per person
multiplied by the 40,000 elections which equals $184
million.
• DNR sells $300 million in land with $184 million paid in
land vouchers and $116 million in cash.
• The $116 million in cash goes into the GF as cash on the
land sale, plus the $40 million that lapsed from the PFD
fund which equals a total of $156 million going into the
GF.
MR. BARNHILL noted that the bill provides that DNR can request
some of the money related to the land voucher be appropriated
back to the department for purposes of administering the
program.
SENATOR KIEHL asked what the average acre of state land is
selling for. He said he assumed that the statewide average is
$3,000 to $4,000 per acre.
MR. BARNHILL deferred the question to DNR.
CHAIR MICCICHE said the prices vary dramatically; the value of
an accessible lake parcel is significantly higher than a drier,
less accessible parcel.
4:10:10 PM
MARTIN PARSONS, Director, Division of Mining, Land, and Water,
Alaska Department of Natural Resources, Anchorage, Alaska,
answered that the average price is $3,000 per acre, but it
varies widely. Lands in Southeast Alaska with oceanfront access
will sell for upwards of $70,000 for a 5-acre parcel, whereas
land around Tok or the Richardson Highway may go for $13,000 to
$15,000 for a 5-acre parcel.
SENATOR KIEHL noted that the hypothetical cashflow example would
equate to DNR selling 20,000 to 100,000 acres a year. He asked
if DNR has that acreage surveyed and ready to sell.
MR. PARSONS replied DNR could make 200,000 to 250,000 acres
available by auction time.
SENATOR KIEHL said the information indicates that DNR was
selling 2,000 to 3,000 acres a year so the response is
surprising but interesting.
4:12:15 PM
MR. BARNHILL stated that the purpose of the cashflow
hypothetical was to show how the cash moves. It was not to
suggest the volume of land that DNR would make available. Any
similarity between the implied volume of land in the example and
what Mr. Parson said is purely coincidental, he said.
SENATOR KIEHL responded that the connection is cash to the
general fund from land sales. If the quantity of land that's
available isn't anywhere near $300 million, one can't assume
that level of cash will come in. The bottom line to the general
fund changes dramatically depending on what is really for sale.
MR. BARNHILL reiterated that his intent was to show how the cash
flows, not the amount of money that will be raised in the land
voucher program.
CHAIR MICCICHE responded that the committee understands that and
Senator Kiehl is satisfied with the answer.
MR. BARNHILL said the discussion and comments by the Chair
during the previous hearing persuaded the department to set up a
plan to track transfers of land received through the voucher
program as well as replacement of lost or stolen land vouchers.
He noted the amendment for the committee's consideration that
would allow that to happen.
4:14:58 PM
CHAIR MICCICHE remarked that the amendment strengthens the bill
and said he appreciates that the department changed its
direction.
MR. BARNHILL said his hope is that the proposed amendment
accomplishes the intention of Chair Micciche's recommendation.
He directed attention to the land voucher mockup in the bill
packets and detailed that it looks like a traditional bond with
a serial number for identification, the $4,600 hypothetical
value, verbiage from the bill about what it can and cannot be
used for, information on how to register and transfer with the
Alaska Department of Revenue, a statement that the land voucher
does not expire, and the name of the person the voucher is
issued to is on the document. He added that the department
anticipates adding some anti-counterfeiting features to protect
the authenticity of the document.
MR. BARNHILL noted that Shawnda O'Brien from the Alaska
Department of Health and Social Services (DHSS) was available to
answer questions such as the one Senator Kiehl posed at the
previous hearing about the exclusion of the land voucher from
the hold harmless clause.
CHAIR MICCHICHE asked Mr. Milks from the Alaska Department of
Law to first address the committee's questions from the previous
hearing on SB 217.
4:18:51 PM
WILLIAM MILKS, Assistant Attorney General, Civil Division, Labor
and State Affairs Section, Alaska Department of Law, Juneau,
Alaska, noted that a committee member asked a question during
the previous meeting about the equal protection clause in
relation to SB 217. He explained that the equal protection
clause is in the United States Constitution as well as the
Alaska Constitution. It is often raised because legislation
frequently makes distinctions between individuals.
MR. MILKS said Department of Law's view is the State has the
rational basis to provide a land voucher to its residents who
meet the residency requirements in the bill. The department does
not see the land voucher raising a constitutional issue about
equal protection because like the PFD, qualification requires a
residency period.
He detailed that the Alaska Supreme Court at different times has
reviewed the constitutionality of the PFD program and
specifically the eligibility requirements. It has concluded that
the PFD eligibility requirements are constitutional because they
meet the rational basis test and focus on ensuring and verifying
actual bonified residency for the benefit.
MR. MILKS summarized that in the department's mind, the land
voucher program passes constitutional muster on the equal
protection clause due to its similarity to the PFD and
university tuition reduction for residents.
4:23:04 PM
SENATOR COGHILL specified that his question from the previous
hearing related to possible inequality where DNR deems cash
offers for land as being more valuable than offers with land
vouchers.
MR. MILKS replied it is DOL's view that the dollar sum of the
voucher is equal to cash.
SENATOR COGHILL said he would take the answer at face value and
think more about how it might be challenged.
SENATOR KIEHL asked Ms. O'Brien why, unlike the PFD, the bill
entirely exempts the land voucher program from the hold harmless
provisions for asset exclusion testing.
4:27:00 PM
SHAWNDA O'BRIEN, Director, Division of Public Assistance, Alaska
Department of Health & Social Services, Juneau, Alaska,
explained that the hold harmless provisions apply to public
assistance eligibility so that recipients do not lose their
benefits. The asset resource test allows up to $2,000 as
countable and anything above that counts against the eligibility
criteria. She confirmed that the State counts the PFD as income
against program eligibility criteria.
MS. O'BRIEN specified that the State will not count the land
voucher against a participant's program eligibility if the
individual uses the voucher for a primary residence. However,
the State will count the land voucher against program
eligibility if the individual uses the voucher for
nonresidential property. Each individual case requires
evaluation to assess different parameters or circumstances.
MS. O'BRIEN said the hold harmless rules are federal and the
State could incur significant costs for maintaining eligibility
in lieu of following federal rules.
4:30:24 PM
SENATOR KIEHL noted that the committee saw stirring images in
the previous hearing of Alaskans getting a piece of land and
building self-sufficiency. He asked if using the land vouchers
makes sense for someone to use towards self-sufficiency.
MS. O'BRIEN replied it depends on the individual situation and
whether the land voucher would become the person's primary
residence, or it would be excluded from the asset resource test.
SENATOR KIEHL pointed out that DHSS did not provide a fiscal
note. He noted that the well-know principle for over 30 years is
that a PFD is not going to hurt a person's ability to get help
feeding their children. He asked what DHSS would require to
properly educate clients to avoid family assistance mistakes in
electing a land voucher
MS. O'BRIEN answered that DHSS would need to work considerably
on informing people to make sure they know what the potential
impact would be. While DHSS is not in the business of advising
people of what they should or should not do, people need to know
how the land voucher would count towards their program
eligibility.
CHAIR MICCICHE announced that the committee would move to
amendments. He said he considers the amendments as friendly.
4:33:55 PM
SENATOR COGHILL moved Amendment 1, A.1.
31-GS2064\A.1
Radford
3/16/20
AMENDMENT 1
OFFERED IN THE SENATE BY SENATOR MICCICHE
TO: SB 217
Page 3, lines 16 - 17:
Delete "The department may not approve or deny
any transfer."
Page 3, line 17:
Delete "may not"
Insert "shall"
Page 5, line 24, following "voucher":
Insert "and for replacing a lost, stolen, or
destroyed state land voucher"
Page 5, line 28, following "issued":
Insert ";
(14) maintain a registry of state land
voucher transfers"
CHAIR MICCICHE objected for discussion purposes.
MR. BARNHILL explained that the first part of the amendment
deletes the language that says the department may not approve or
deny any transfer and that change allows the Alaska Department
of Revenue to approve and deny transfers. Language on page 3,
line 17, conforms with that. Lines 8 and 9 authorizes DOR to
replace stolen, lost, or destroyed state land vouchers, and
lines 11-13 authorizes the department to maintain a registry of
voucher transfers.
4:35:08 PM
CHAIR MICCICHE removed his objection and announced that without
further objection Amendment 1 is adopted.
4:35:24 PM
SENATOR COGHILL moved conceptual Amendment 2. He explained that
the amendment inserts on page 2, line 11, the phrase "other than
Mental Health Trust land" after the word "land."
CHAIR MICCICHE objected for discussion purposes. He asked Mr.
Barnhill to comment.
MR. BARNHILL said his understanding is that the amendment would
make Mental Health Trust land not part of the land voucher
program. He asked Senator Coghill to confirm that that was his
intention.
SENATOR COGHILL answered that he was carrying the amendment for
Mr. Barnhill.
CHAIR MICCICHE explained that Amendment 2 is an Alaska
Department of Natural Resources (DNR) amendment to clarify that
the land vouchers are not available for Mental Health Trust
land.
4:36:51 PM
CHAIR MICCICHE removed his objection and announced that without
further objection, conceptual Amendment 2 is adopted.
4:37:08 PM
CHAIR MICCICHE opened public testimony.
4:37:18 PM
AUSTIN WILLIAMS, Alaska Director of Law and Policy, Government
Affairs, Trout Unlimited Alaska, Anchorage, Alaska, testified in
opposition to SB 217. He said SB 217 in its broader context is
an important companion to SB 204, the state land sales bill. For
many Alaskans, public lands are an essential part of their daily
life to fish, hunt, camp, and ski. Some state lands are iconic
like the Chugach or Denali state parks, but the bill would
affect Alaska's fishing and hunting that takes place on DNR
managed lands outside of the state park system.
He said he understands the immense fiscal pressure on the State
and Permanent Fund, but any solutions must responsibly consider
the long-term implications and future costs. State land and the
immense resources they contain are Alaska's most valuable
assets. State lands contain fish and wildlife that fills
freezers, provides reliable sources of income through commercial
fishing, guiding, and tourism, and acts as cultural
centerpieces.
MR. WILLIAMS concluded saying that SB 217 increases
privatization of state lands at deeply discounted rates that
will not solve the State's financial woes.
4:40:37 PM
KATIE BOTZ, representing self, Juneau, Alaska, testified in
opposition of SB 217. She said her family hunts on state lands
to support a subsistence way of living. She said SB 217 will
impact subsistence hunting by privatizing land. She noted that
she also questioned whether individuals would have access to
land offered in the land voucher program.
4:43:25 PM
ED MARTIN, representing self, Cooper Landing, Alaska, testified
in support of SB 217. He said the bill will benefit the 187,000
children that live in the state by providing them the
opportunity to realize the American dream. He noted that his
family benefited from homesteading in Alaska. He added that the
bill will utilize funds held back from the Alaska Permanent
Fund.
He stated that the idea for land vouchers has been around for a
long time. He said he believes that he has been the catalyst for
the governor to bring the bill forward. He reiterated that the
bill would get land into the hands of Alaska's children for
their future.
CHAIR MICCICHE concurred that Mr. Martin has been a catalyst for
the bill. Finding no further testimony or questions from the
committee, he solicited the will of the committee.
4:47:14 PM
SENATOR COGHILL moved to report CSSB 217, work order 31-GS2064\A
as amended, from committee with individual recommendations and
attached fiscal notes.
CHAIR MICCHICHE asked if there was an objection.
SENATOR KIEHL objected to comment that the amendment exempting
Mental Health Trust land was illustrative. He pointed out that
the Mental Health Trust must get the full value of the resource.
By contrast, the bill generates, at best, 25 cents on the dollar
for Alaska's land, which he does not believe is fiscally
responsible. Also, the bill raises significant issues regarding
access to lands for Alaskans.
SENATOR KIEHL removed his objection.
SENATOR COGHILL pointed out that about one percent of Alaska
land is private and he applauds the governor for taking a unique
way of addressing private land ownership. He said he struggles
with the land voucher program, but the bill should move forward
for further consideration.
CHAIR MICCICHE said with all due respect to those that testified
against the bill, the amount of private land in the state is
minuscule. He stated that the land voucher concept is valuable
and important to many Alaskans.
4:49:53 PM
CHAIR MICCICHE found no further objection and CSSB 217(RES) was
reported from the Senate Resources Standing Committee.