03/27/2000 03:25 PM Senate RES

                                                                                                                                
             SB 283-NAT RES.REVENUE: FISH/TIMBER/LAND                                                                       
                                                                                                                                
CHAIRMAN HALFORD called the Senate Resources Committee meeting to                                                               
order at 3:25 p.m. and announced SB 283 to be up for consideration.                                                             
                                                                                                                                
MR. BOB LOEFFLER, Director of the Division of Mining, Land, and                                                                 
Water in the Department of Natural Resources (DNR), said this is a                                                              
simple  bill. Many  Alaskans  consider the  sale of  state lands  to                                                            
private citizens to be  one service their government should provide.                                                            
Unfortunately,  it costs a  lot to sell land  despite the fact  that                                                            
sales bring  a profit to the treasury.   This bill is an  attempt to                                                            
solve  that  problem  by  providing  a  stable  funding  source  and                                                            
assuring  that the land disposal  program provides  a return  to the                                                            
State  beyond  the  cost of  selling  land.   By  using  a  separate                                                            
accounting system,  DNR hopes this bill will provide  a mechanism to                                                            
enable  the legislature  to understand  the fiscal  consequences  of                                                            
land sales.  The  program receipts would have to be  appropriated by                                                            
the legislature to the land sales program each year.                                                                            
                                                                                                                                
CHAIRMAN HALFORD commented  that SB 283 will create a new state land                                                            
disposal revenue  category in designated program receipts.   It will                                                            
ensure funding for a program that generates revenue.                                                                            
                                                                                                                                
SENATOR MACKIE asked how much land DNR sold last year.                                                                          
                                                                                                                                
MR. LOEFFLER answered  that in 1999, DNR sold 120  parcels, equaling                                                            
about 2,000  acres worth $1.5 million.   The actual revenue  will be                                                            
received  in years to come.  In fiscal year  1999, $2.4 million  was                                                            
received based on land sales from previous years.                                                                               
                                                                                                                                
SENATOR MACKIE  asked if the program  has an ongoing revenue  stream                                                            
because of the time period provided to pay for the land.                                                                        
                                                                                                                                
MR. LOEFFLER  said that is  correct and that  contracts extend  from                                                            
two to 20 years.                                                                                                                
                                                                                                                                
SENATOR  MACKIE  asked  if  any amount  over  $5  million  would  go                                                            
directly to the general fund and why DNR chose $5 million.                                                                      
                                                                                                                                
MR. LOEFFLER  said DNR  believes the program  should return  revenue                                                            
not just  for the  sake of  more land  sales, but  also because  the                                                            
privatization  of  state  land  should  provide  a  return  for  all                                                            
Alaskans.  DNR ran a number  of different projections and found that                                                            
once the fund reaches $5  million, DNR could have a reasonably large                                                            
land sale program  and earn tens of thousands in interest  per year.                                                            
                                                                                                                                
CHAIRMAN  HALFORD  said  he  supports   a  maximum  of  $5  million,                                                            
otherwise  the  program  will  accumulate  a  lot of  money  and  be                                                            
targeted  for  something  else.  He  asked  Mr.  Loeffler  what  his                                                            
position  would be if the  committee added  another program  to this                                                            
bill that follows the same program receipt format.                                                                              
                                                                                                                                
MR. LOEFFLER responded he thought that would be fine.                                                                           
                                                                                                                                
CHAIRMAN HALFORD  said the committee  would hold SB 283 for  further                                                            
work.