Legislature(1997 - 1998)

04/15/1997 08:12 AM House FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
  SENATE BILL 109                                                              
                                                                               
       "An Act relating to land used for agricultural purposes                 
       and to state land classified for agricultural  purposes                 
       or subject to  the restriction of use  for agricultural                 
       purposes   only;   and   annulling    certain   program                 
       regulations of the Department of Natural Resources that                 
       are inconsistent with the amendments made by this Act."                 
                                                                               
  SENATOR  LYDA  GREEN  noted  that  SB  109  was  similar  to                 
  legislation passed last year as SB  162.  Last year, it  was                 
  vetoed  by  the Governor;  the  override vote,  according to                 
  Judge Weeks of Juneau, came a day late.                                      
                                                                               
  She listed the key provisions of the bill:                                   
                                                                               
       1.   The State  of Alaska  will be  taken off  the                      
            title to the  land.   An essential aspect  if                      
            farmers with agricultural land are to have an                      
            opportunity to finance their  operations with                      
            private funding.                                                   
                                                                               
       2.   Numerous  regulations  will be  repealed that                      
            provide for micro-management of private farms                      
            by  the State.    The Department  of  Natural                      
            Resources (DNR) has no objection to repealing                      
            those regulations.                                                 
                                                                               
       3.   An original  agricultural parcel  can now  be                      
            subdivided into any number of parcels as long                      
            at they are  no smaller than  40 acres.   The                      
                                                                               
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            subdivisions do  not include  the ability  to                      
            build  a  home  on  the  property.   However,                      
            current law provides  for a  home site to  go                      
            along  with  any subdivision  of  an original                      
            parcel as  long as the parcel is at least 640                      
            acres.                                                             
                                                                               
       4.   For a subdivided parcel which includes a home                      
            site,  must be under  640 acres, and conveyed                      
            to  someone  outside  the   owners  immediate                      
            family.  There will be two options:                                
                                                                               
                 *    Option  #1  would  provide an  increased                 
                      value fee of $6 thousand dollars payable                 
                      to the State.                                            
                                                                               
                 *    Option #2  would allow for the  owner to                 
                      do an  appraisal and pay  the difference                 
                      in the increased value from agricultural                 
                      land with a home site and without a home                 
                      site.                                                    
                                                                               
       5.   Agricultural use  would  be  protected  by  a                      
            perpetual  covenant  running  with the  land.                      
            Any citizen, municipality or  the State could                      
            bring  suit in  civil  court  to enforce  the                      
            covenant.    The  process  should  reduce  or                      
            eliminate frivolous suits.                                         
                                                                               
       6.   A limited liability  report would be required                      
            to indemnify the State during the transfer of                      
            title.                                                             
                                                                               
       7.   Existing requirements for a survey before the                      
            State can  offer agricultural  land to  allow                      
            the Commissioner of the Department of Natural                      
            Resources to waive the expensive process.                          
                                                                               
  The legislation will remove unnecessary regulations, promote                 
  family  farming,   allow  farmers  the  option   of  private                 
  financing, promote  more  offerings  of  agricultural  land,                 
  allow a limited number additional home sites on agricultural                 
  land and guarantee continued agricultural use of the land.                   
                                                                               
  Co-Chair Therriault asked when the $6 thousand dollar charge                 
  would be made.   Senator  Green explained that  the fee  was                 
  determined as the cost  of building a second home  and would                 
  be revenue for the State.  She suggested to establish a flat                 
  fee would discourage  the small 40  acre parcel farmer  from                 
  building.    She  clarified  that  family members  would  be                 
  exempted from paying  the $6 thousand dollars.   There would                 
  be no fee coming back to the State until the parcel was sold                 
                                                                               
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  out of the family.   The definition of "family" is  the same                 
  as that indicated  in the Legislative Ethics  Bill.  Senator                 
  Green pointed out  that language was being  reconsidered and                 
  would be changed to $4 thousand dollars.                                     
                                                                               
  Co-Chair  Therriault  questioned  the   "limited  liability"                 
  provision.  Senator Green  explained that in the  process of                 
  changing the title from agriculture  rights to the perpetual                 
  covenant,  a  limited  liability  policy  would be  offered,                 
  provided to Department of Natural Resources (DNR), who would                 
  then provide a  new "deed of conveyance".  In  the period of                 
  time that the farmer conveys his land  back to the State for                 
  the purposes of the  transaction, the State did not  want to                 
  have liability over  actions occurring  on the farmers  land                 
  during  that  period.    The   State  requested  a  "limited                 
  liability" clause to  protect them  during the  time of  the                 
  transaction.                                                                 
                                                                               
  In  response  to   Representative  Grussendorf's   question,                 
  Senator Green explained  that a  40 acre plot  could not  be                 
  subdivided into smaller  parcels for another family  member.                 
  If the person owned  80 acres, there would be no  fee to the                 
  State to  divide it for  a family member.   If it  was given                 
  outside the family, a fee would be charged.                                  
                                                                               
  (Tape Change HFC 97-95, Side 2).                                             
                                                                               
  Representative  Grussendorf  asked the  average size  of the                 
  agricultural plots.   Senator Green replied that  every size                 
  parcel imaginable exists.  There will be no net loss of land                 
  for agriculture use.                                                         
                                                                               
  Representative Martin  spoke to  the "family  farm" concept.                 
  He asked if the bill had provisions to keep the farmers from                 
  selling-out  to  the  federal  government.    Senator  Green                 
  explained that SB  109 did  not address that  concern.   She                 
  commented  that the  40 acre  parcel was  the  minimum below                 
  which you can go, although, would allow a retention within a                 
  family which would allow for a  family farm member to have a                 
  homesite on that plot.                                                       
                                                                               
  Co-Chair Therriault questioned language included  on Page 7,                 
  Line  4:  "Housing  for the  landowner  and  farm laborers".                 
  Senator Green  advised that  seasonal workers  could need  a                 
  bunk-house to live in; that would be tied to the appropriate                 
  use for agricultural  purposes.  She stressed  that language                 
  of the bill would not permit building a condo.                               
                                                                               
  Representative  G.  Davis  asked  how the  Department  would                 
  monitor the area  once the parcel  was conveyed.  He  voiced                 
  concern implementing the legislation with the current budget                 
  cuts.  Senator  Green reiterated  that anyone  in the  State                 
                                                                               
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  would have the authority  to address when farm land  was not                 
  being used  as it should  be.   The change  of title  should                 
  reflect any restriction possibilities.                                       
                                                                               
  TUCKERMAN BABCOCK,  STAFF, SENATOR  LYDA GREEN,  added, last                 
  year, the bill only allowed  the State authority to initiate                 
  civil  action;  in  response  to the  Department's  concern,                 
  Senator Green included authority  for the municipalities  to                 
  file civil action.  He  believed sufficient oversight exists                 
  in the legislation.                                                          
                                                                               
  MIKE CROUCH,  (TESTIFIED VIA TELECONFERENCE),  EAGLES' RIDGE                 
  RANCH, DELTA JUNCTION, spoke in  support of the legislation.                 
  Aspects of the  legislation which  he specifically  embraced                 
  were:                                                                        
                                                                               
       *    The  right of  the individual  to farm  their                      
            lands as  deemed necessary to  make a  living                      
            without   micro-management   by   the   State                      
            agencies; and                                                      
                                                                               
       *    The  ability  of  current law  to  appeal any                      
            process when in violation.                                         
                                                                               
  He urged Committee members to move  the bill from Committee.                 
                                                                               
                                                                               
  Representative Martin inquired  what Mr. Crouch would  think                 
  about a prohibition  on the small family  farmer selling-out                 
  to the federal government.  Mr. Crouch replied that decision                 
  should  be  the right  of  the individual  to  determine the                 
  future of his  operations and then make  that consideration.                 
  He believed  that would  create a  conservation program  and                 
  would be based on placing marginal  farm land to better use.                 
                                                                               
                                                                               
  MIKE  SCHULTZ,  (TESTIFIED VIA  TELECONFERENCE),   PRODUCER-                 
  GRAIN  FARMER,  DELTA JUNCTION,  noted  his support  for the                 
  legislation, agreeing  that Pt. MacKenzie  should be treated                 
  separately.  He explained that Pt. MacKenzie has local,  not                 
  statewide,  problems.   The  proposed legislation  addresses                 
  concerns  experienced  by the  farming  industry  which have                 
  existed  for  twenty years  when  the original  ag-title was                 
  created.    He  urged  Committee   members  to  support  the                 
  legislation.                                                                 
                                                                               
  LAURIE KNOPP, (TESTIFIED VIA  TELECONFERENCE),  KNOPP DAIRY,                 
  DELTA JUNCTION,  testified in  support  of the  legislation.                 
  She spoke  to her concern regarding a  employee housing unit                 
  on her property.   Co-Chair Therriault clarified  that there                 
  would be no  added assessment to  the employee house on  her                 
  property.                                                                    
                                                                               
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  Ms. Knopp read testimony from Scott  Miller in support of SB
  109.  Mr. Miller elaborated  the legislation would keep  the                 
  State from  micro-managing farms, concluding  that farm land                 
  must be protected.                                                           
                                                                               
  CHARLES    THOMPSON,    (TESTIFIED    VIA   TELECONFERENCE),                 
  AGRICULTURE  CREDIT DIRECTOR,  ALASKA  FARM SERVICE  AGENCY,                 
  U.S.  DEPARTMENT  OF  AGRICULTURE,  PALMER,  noted that  the                 
  Alaska  Farm  Service Agency's  interest  in the  bill would                 
  favor the fee-simple title passed on  through the bill.  The                 
  U.S. Department of  Agriculture shares  a loan program  with                 
  bankers   of  Nationwide.    Including  the  guarantee  loan                 
  incentive, the loan process  could be expedited and be  more                 
  responsive to the needs of farmers.  To date, the banks have                 
  not been willing to accept title as it currently exists.  He                 
  recommended passage of the legislation.                                      
                                                                               
  SIGMUND RESTAD,  (TESTIFIED VIA  TELECONFERENCE),   NORTHERN                 
  PIONEER RANCH, PALMER, voiced appreciation for the Senator's                 
  consideration   of  previous   voiced   concerns  with   the                 
  legislation.  He spoke to the  40 acre subdivision clause, a                 
  parcel  size which  would  not lend  itself  to a  practical                 
  operation.    A   profitable  farm   must  allow  itself   a                 
  substantial rotation process.                                                
                                                                               
  (Tape Change HFC 97-96, Side 1).                                             
                                                                               
  RAY  DEVILBISS,  (TESTIFIED  VIA   TELECONFERENCE),  FARMER,                 
  PALMER,  suggested that the  legislation would  increase the                 
  price of  agricultural land.   He  added that  SB 109  would                 
  allow  present owners  of ag-right  titles to apply  for and                 
  receive the new title without value being hindered, whereas,                 
  new purchasers of that land from  the State in future sales,                 
  must pay  for it at  that time.   Such an action  could make                 
  some owners more "equal" than others.                                        
                                                                               
  Mr. Devilbiss  questioned how  long would  it take  before a                 
  concern  surfaces  over  the loss  of  ag-land  turning into                 
  primary residence for  off-farm wage earners.   He suggested                 
  there would  be pressure at that time  for the State to buy-                 
  back the developed lands.                                                    
                                                                               
  HARVEY BASKIN, (TESTIFIED VIA TELECONFERENCE), DAIRY FARMER,                 
  WASILLA,  stated that any  farmer making a  living in Alaska                 
  can not  afford to subdivide.   The State is  the major land                 
  holder and current laws are not logical.                                     
                                                                               
  GERHARD GROESCHEZ, (TESTIFIED  VIA TELECONFERENCE),  FARMER,                 
  PT. MACKENIZE, spoke to the fiasco  the State has created in                 
  the dairy  industry at Pt.  MacKenzie.  He  recommended that                 
  the  State  continue to  keep  the covenant  with  the dairy                 
                                                                               
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  facility on that land.   Mr. Groeschez spoke to  his support                 
  for passage of SB 109.                                                       
                                                                               
  GENE WILLIAMS, (TESTIFIED VIA TELECONFERENCE), RANGE FARMER,                 
  PALMER,  informed Committee  members  of  the difficulty  of                 
  farming  in  Alaska  where the  weather  conditions  and the                 
  shortness  of  the season  dramatically  affect  the growing                 
  season.   She admitted that many people  have made a "go" of                 
  it.  Ms.  Williams encouraged for  more people to have  that                 
  opportunity, requires subdividing to 40  acres parcels.  She                 
  supported keeping it "ag-only land" and urged passage of the                 
  legislation.                                                                 
                                                                               
  HARRY  WASSINK,  (TESTIFIED VIA  TELECONFERENCE), ANCHORAGE,                 
  commented that SB 109  provides a good title for  farmers in                 
  Alaska.  He noted his support for the legislation.                           
                                                                               
  GARY STROMBERG, (TESTIFIED  VIA TELECONFERENCE), FARMER, PT.                 
  MACKENIZE, testified in support of SB 109.                                   
                                                                               
  BILL  WARD, (TESTIFIED  VIA TELECONFERENCE),  FARMER, KENAI,                 
  spoke in support of the proposed legislation.  The intent of                 
  the bill  would diversify the  economy and help  the farming                 
  industry grow  successfully.  He  urged members to  move the                 
  bill from Committee.                                                         
                                                                               
  SB 109 was HELD in Committee for further consideration.                      

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