Legislature(1997 - 1998)

04/15/1998 09:12 AM Senate FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
                                                                               
 SENATE BILL NO. 108                                                           
"An Act relating to the disposal of state land by                              
lottery."                                                                      
                                                                               
                                                                               
CS FOR SENATE BILL NO. 108(RES)                                                
                                                                               
"An Act relating to the disposal of state land and                             
interests in state land; and providing for an effective                        
date."                                                                         
                                                                               
MEL KROGSENG, staff to Senator Robin Taylor was invited to                     
join the committee.  She gave a brief review of the sponsor                    
statement.  She said the bill presently before the committee                   
no longer offered land under a lottery system.  Two other                      
approaches had been taken; land over the counter, and an                       
open entry program, programmed after the old program of the                    
early '70's.  She said an amendment had been drafted to fix                    
the glitch in section five.  This glitch had arisen when                       
sections three and four were adopted in the Resources                          
committee.  She continued her review and said there was                        
approximately 581,000 acres in the land bank.  However,                        
since there was no legal description for the land they                         
eliminated reference to the land bank from the bill.                           
Further provisions of the bill were no requirement for the                     
State to provide schools on agricultural lands, no                             
requirement to construct roads, and surveys would be at                        
buyer's expense.  Potential buyers would have to pay a                         
security of ten percent and the State would provide maps and                   
a list of qualified real-estate appraisers.  In summing up                     
she noted a provision for an immediate effective date.                         
                                                                               
Senator Torgerson asked about page 2 under intent and asked                    
about the settlement land monies that would go into the                        
public school trust fund.  Currently only half of one                          
percent is going to that trust fund of all lands that are                      
sold.  He asked why would they now want to put one hundred                     
percent in.   Ms. Krogseng said that because they do have to                   
fund schools it would be a good way to put money aside for                     
them.  Senator Torgerson voiced concern that the money would                   
be locked up.  Currently they could only spend the interest                    
on that account which was up to $227 million.  Seven million                   
is appropriated to school education.   He asked further on                     
page 2, line 24 why "shall" had been changed to "may".  Ms.                    
Krogseng said this was language requested by the department                    
and they could explain the change.                                             
                                                                               
Senator Phillips suggested that on page 7, lines 11 - 15 the                   
five-year lease be extended another five years with twenty                     
percent down up front once the survey had been done.   This                    
would keep people serious about getting land.                                  
                                                                               
Ms. Krogseng said they wanted to make land available to all                    
Alaskans.  Asking twenty percent down would limit the                          
ability for acquisition.  She explained there was                              
approximately 50,000 acres, which equaled 5,000 parcels that                   
had been previously offered.  This land has already been                       
surveyed and can be easily identified and put on the                           
counter.                                                                       
                                                                               
Senator Phillips said his concern was that some land had                       
been sold and for some reason the buyer did not complete the                   
requirements and it was put back on the counter again.  He                     
said he would like to see people have land and complete it.                    
Not have a partial structure built and then walk away from                     
it and leave the State holding the bag.                                        
                                                                               
Ms. Krogseng said that in working on this piece of                             
legislation she has learned that the State has entered into                    
contracts on the land that states that one is required by                      
law to remove the structure.  However, if it is not removed,                   
the department has the authority to go forward and sell that                   
particular parcel or that structure.  If they derive more                      
than $10,000 the residual must be given to the person who                      
did the actual construction.  She said she had been involved                   
in real estate for many years and had never seen such a                        
contract.  But she doesn't know how to get out of it or what                   
to do about people who have left the State and no longer in                    
touch.                                                                         
                                                                               
In further response to Senator Phillips, she believes that                     
most defaults occurred during the slump of the 1980's.  She                    
hoped now the State was a little smarter and things would be                   
arranged a little differently.                                                 
                                                                               
Senator Adams asked about land disposal under Title 38 and                     
CSSB 108(RES).  Ms. Krogseng said that as far as land                          
classifications, one land classification had been included                     
that was not in current statute.  That was private                             
recreation land.  There are no open entry programs on the                      
books at this time.  As far as the fiscal impacts this                         
legislation would provide a mechanism for the department to                    
put the up-front costs and appraisals on the potential                         
buyer, as opposed to the department funding those costs and                    
the Legislature having to appropriate those funds.  She said                   
there was some concern for the fiscal notes and they did not                   
feel that it should require that much money.  Other agencies                   
and entities, such as the Mental Health Trust, that were                       
doing land disposals for a far less amount of money than was                   
listed on the fiscal note attached to this bill.  She would                    
hope that this program would pay for itself in the long run.                   
                                                                               
Senator Torgerson referred to pages seven and eight which                      
talked about roads required to be built if a person divides                    
their land.  He noted the road was to be constructed to the                    
standards of the Department of Transportation and Public                       
Facilities.  That meant to him that an individual that                         
purchased land and had to build a right-of-way or extend the                   
end of a gravel road would have to build that road up to the                   
specifications of the current road and they couldn't put in                    
a dirt road to their property.                                                 
                                                                               
Ms. Krogseng said the department advised her they had                          
standards for trails, however as far as roads it would                         
depend on what is in the area.  The intent of that language                    
was so that one would not go in and create a road that would                   
be winding all over the place and encroach on another's                        
property.  Senator Torgerson said he agreed with the route,                    
but still had problems with the construction to the                            
standards set by the department.  It would only be valid if                    
the department were to take over maintenance.                                  
                                                                               
JANE ANGVIK, Director, Division of Lands, Department of                        
Natural Resources testified via teleconference from                            
Anchorage.  She opposed the bill.  It would create a new                       
program and have a negative affect on land sales.  It would                    
further flood the market with approximately 200,000                            
acres/year causing a devaluation of private land. (Poor                        
quality of teleconference is noted.)  She referred to a memo                   
from the Division of Land, which had proposed legislation                      
that would enhance the existing program.  She still                            
believed, however, that there were ways the department could                   
work with the Legislature to enhance the disposal program.                     
She made a brief reference to the fiscal note attached to                      
her memo.  She said the largest land disposal was in 1981                      
for a total of 79,000 acres.                                                   
                                                                               
Senator Adams asked under the RES version of this bill what                    
would happen to the value of private landowners.  Ms. Angvik                   
said the department was not trying to compete with private                     
realtors, however they would depress the value of private                      
land.  Senator Adams further asked about fiscal notes.  She                    
said there was a significant cost involved for the State to                    
sell property and she explained those additional related                       
costs.  However, she felt income could be generated over                       
time if done in an orderly fashion.  She agreed this could                     
address the needs of Alaskans wishing to acquire State                         
lands.  Subdivided land could also be sold over the counter.                   
She also stated that the department had outlined its                           
anticipated income for the State in their fiscal note.                         
Senator Adams asked if the department's proposal had been                      
given to Senate Resources and Ms. Angvik indicated it had                      
been.                                                                          
                                                                               
In response to Senator Torgerson, Ms. Angvik explained the                     
requirements for State land purchase.  Senator Torgerson                       
asked how many appraisals had been rejected.  Ms. Angvik                       
said she did not have the information at present but would                     
get it and submit it to the committee.                                         
                                                                               
                                                                               
Senator Phillips asked what the time frame for a normal                        
person from the time they submit their application for                         
disposal of land and the time they get the actual title in                     
hand?  Ms. Angvik said the time would depend on whether they                   
paid cash or not.  Senator Phillips clarified from the time                    
of payoff.  Ms. Angvik said when individuals were purchasing                   
land over time from the State they were required to pay ten                    
percent down and then they have twenty years to pay off the                    
rest.  On average people take twenty years.                                    
                                                                               
                                                                               
ALLEN MINISH, professional land surveyor testified via                         
teleconference from Anchorage.  He said he supported the                       
bill.  He further testified that a partial structure was a                     
problem and was not usually an asset to the State on                           
returned property.  He felt there needed to be language                        
regarding these partial structures and about the removal of                    
such.  He suggested a down payment at the time of building,                    
which could be used by the State to remove the structure if                    
the purchase requirements were not completed.                                  
                                                                               
Senator Phillips said he was the one who brought up the                        
partial structure problem and asked if the five-year lease                     
with the five-year extension that he had proposed would be a                   
good idea?  Mr. Minish indicated that he was not a fan of                      
this type of leasing program.  He did support having the                       
buyer do the surveys and appraisals.                                           
                                                                               
(Tape #121, Side A was switched to Side B.)                                    
                                                                               
CLIFF EAMES, Alaska Standard for the Environment testified                     
via teleconference from Anchorage.  He noted for the                           
committee they had offices in Anchorage and Mat-Su and                         
enjoyed a membership of approximately 8,000 families.  He                      
said they opposed SB 108.  This would lock up land enjoyed                     
by the public and put it into private use.  As the                             
Department of Natural Resources has testified it would cost                    
a great deal of money that could be better spent on other                      
programs that the State had to cut. They did support a more                    
modest program, similar to what has been discussed, that                       
would re-offer already offered lands.  It would, however,                      
have to be funded and very little funding has been made                        
available over the past few years.  Contrary to popular                        
belief, there was a significant amount of private land                         
available in Alaska and many other ways to obtain such                         
private land.  For instance one could make use of classified                   
ads and realtors.   There was also land available through                      
the Mental Health rust Authority and the University.  In                       
summing up he suggested the committee look at the Department                   
of Natural Resources proposal.                                                 
                                                                               
Senator Torgerson MOVED amendment #1.  Senator Adams                           
OBJECTED.  Ms. Krogseng explains this is a technical                           
amendment.  Senator Adams REMOVED his objection.  WITHOUT                      
OBJECTION amendment #1 was ADOPTED.                                            
                                                                               
Senator Torgerson MOVED amendment #2.  WITHOUT OBJECTION it                    
was ADOPTED.                                                                   
                                                                               
Senator Torgerson MOVED amendment #3.  He said on page 8,                      
line 1, this amendment would delete the remainder of the                       
sentence after the word "municipality" and insert "and if                      
the person purchasing the land applies to the Department of                    
Transportation and Public Facilities or a municipality for                     
the road to be included in their maintenance program then                      
the road must be constructed to the standards set out by the                   
affected agency."  Senator Adams OBJECTED.  (Amendment #3                      
was copied and handed out to committee members.)  Senator                      
Adams REMOVED his objection.  WITHOUT OBEJCTION amendment #3                   
was ADOPTED.                                                                   
                                                                               
Co-chair Sharp asked what was the pleasure of the committee.                   
Senator Adams suggested referring the bill back to Senate                      
Resources.  He voiced concern on disposing of land and said                    
that it should be worked out with the department.  There was                   
also a problem with the fiscal note.                                           
                                                                               
Co-chair Sharp HELD SB 108 in committee.  He said he did not                   
want to move a bill with a substantial fiscal note attached                    
to it without proper review.  He then called HB 467.                           
                                                                               

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