Legislature(1999 - 2000)
02/10/2000 09:02 AM Senate FIN
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
SENATE BILL NO. 6
"An Act relating to the disposal of state land."
This was the third hearing for this bill before the Senate
Finance Committee and the first held during the second
session. A committee substitute, 1-LS007\H, was adopted as a
Workdraft at the last meeting. Co-Chair Torgerson explained
that this is an act creating a state land commission;
reasonable land disposal advisory boards and provides for
the disposal of 250,000 acres of state land annually.
SENATOR TAYLOR, the bill's sponsor, testified this is a
major decision and "a true policy call" to address the issue
of land availability and to allow the people of Alaska to
purchase and acquire a small portion of the 103 million
acres received at statehood.
Senator Taylor addressed what he called "housekeeping
measures" contained in the bill. He noted there is
approximately 50,000 acres of land that has been surveyed,
platted, subdivided, appraised and even advertised for sale
by the Department of Natural Resources, but not distributed.
Some of the lots had been sold but were turned back to the
state and some of the lots were never purchased, according
to Senator Taylor. He stated that this legislation is to
encourage the department to expedite the sale of that land.
Senator Taylor spoke of his and others' efforts to find and
convey lands to Alaskans. He noted that the state
constitution requires that land can only be sold near the
market value. He said this legislation attempts to meet that
provision since many of the appraisals are outdated.
Senator Taylor offered his comments in generalized terms
saying there are general concepts that need to be discussed
and then implemented. He qualified that the committee
substitute is simply a working document. He spoke about the
policy calls the legislature still must make, such as who
would select the lands for distribution and how lands will
be distributed. Currently, he told the Committee, interested
purchasers stake the sites themselves. He said the question
is whether to keep this system or require that the state
complete surveying and appraisals before land can be
advertised for sale.
Another policy call Senator Taylor pointed out, is whether
to institute a mechanism for the classification of the
available lands. Will there be public input of a regional or
local level and will the people of that area have an
opportunity to address their concerns regarding what lands
should or should not be sold, he posed.
Senator Taylor stated that as a result of many of these
questions, the current committee substitute establishes a
State Land Commission to address land disposal decisions at
the local levels. He said that part of the commission is to
set up a local body to provide public input.
Senator Taylor continued by saying that the land commission
would designate those areas where land disposal would occur,
how much land would be disposed and in what size lots. He
said this is called the "land disposal bank" that appears on
page three of the committee substitute.
Senator Taylor noted that the "minimum of 250,000 acres each
year" language in the same sentence is just a "ballpark"
figure and would be subject to the different circumstances
of each area. He agreed, 250,000 acres seemed like a lot of
land, but countered that this was not very much considering
the state has 103 million acres.
Senator Taylor interjected saying that he believed the
state's economy would be enhanced by this additional land
disposal.
Senator Taylor continued explaining the committee substitute
referring to a provision that requires the Commissioner of
the Department of Natural Resources to notify the
legislature and the governor at the beginning of each
session of what land is suitable for disposal. He noted this
requirement is in existing statute and will not be changed
by this version of the bill.
Senator Taylor then addressed Section 9 on page six of the
committee substitute that stipulates that the request of the
commission must include an analysis and an assessment of the
market demand for the land proposed for disposal. Existing
statutes provide that the commissioner "shall" include the
analysis and assessment. Senator Taylor hoped this would
prevent problems between competing buyers.
Senator Taylor raised the issue of funding, noting a one-
time appropriation would probably be required, but that each
subsequent year, the program would pay for itself off of
land sales. He projected that land sales would far exceed
any expenses of running the program. He suggested it could
be a significant revenue "enhancer" for the state.
Senator Taylor shared the existing land disposal finance
system where a buyer makes a down payment of ten-percent of
the purchase price and makes additional payments of ten
percent each year for ten years. He added that the buyer
also pays interest on the outstanding balance. He compared
this revenue-generating program to having the land remain
vacant, thus earning no revenue for the state.
Senator Taylor estimated approximately ten-percent of the
sales volume would be needed to keep the program running at
a consistent level. He said the actual amount of funding
needed would depend on the amount of work required of the
state. If some of the surveying, appraisal and other presale
steps were done at the expense of the private sector and/or
the buyer, the cost to the state would be lower, according
to Senator Taylor.
Senator Taylor noted that either the legislature or the
Department of Natural Resources have already designated much
of the prime land in the state. He assured that it is not
the intent of this legislation to take on additional
controversy over the classifications already given by the
state. He stated that the lands this program applies to is
unclassified, undesignated lands estimating there is between
three and five million acres of unclassified, undesignated
lands in the State of Alaska.
Senator Taylor next told the Committee the committee
substitute includes procedures for a bidding process in the
case of two parties interested in the same land. Options
were provided for sealed bids and auctions, he stated.
Co-Chair Torgerson stressed that the committee substitute
will not be the final version that reports from Committee,
noting that more work still needs to be done on the bill. He
shared that his intent was to change the bill to an
appropriation bill to cover the up front costs of the first
sales. After that, he said, revenues from future sales would
be deposited into a land disposal fund to be appropriated by
the legislature for the continued sale of land.
Co-Chair Torgerson did not anticipate that two and one-half
million acres would actually be disbursed in ten years but
wanted to set a reasonable number of acres for annual
disbursement and keep to that number each year until all
suitable land is disbursed.
Co-Chair Torgerson told the Committee of three barriers to
implementing the program: 1) the Best Interest Finding, 2)
plotting requirements of local governments, and 3)
appraisals. He explained the local plotting procedure, which
required the registered owner of the land to appear before
the local planning commission to get authority to subdivide
and/or offer the land for sale.
Co-Chair Torgerson directed the members' attention to an e-
mail he received from a constituent suggesting that Alaskans
be given the option of applying future permanent fund
dividends toward the purchase of state land. He thought the
matter should be considered, although he was unsure if it
could be incorporated into this bill.
Senator P. Kelly noted land disposal bank language on page
three, "a minimum of 250,000 acres each year shall be
disposed of by the state." He asked if the bill has a
provision in case there is no interest in all 250,000 acres.
Senator Taylor reminded the Committee that this number was
selected as a starting point for discussion. He had no idea
what the demand would be and would not know until the
program began. He spoke about an option of requiring the
land to be at least put into the land bank if not sold. He
stated that this provision ensures that the specified amount
of land is offered for sale.
Senator P. Kelly then asked about the residency requirement
for bidders and whether it is constitutional. Senator Taylor
did not think it would be an issue based on the permanent
fund dividend program and other programs' residency
requirements. He said these requirements are legal provided
they are objective, fair and reasonable.
Senator P. Kelly spoke of a situation with a landowner near
Fairbanks who operates a tourism business on her property.
According to Senator P. Kelly, this landowner garners
support from people outside the state to oppose any
development on nearby land. While he supported the bill, he
was concerned about nonresidents buying large chunks of land
for conservation purposes and gave an example of Ted Turner
and Jane Fonda. Senator Taylor shared this concern and noted
a restriction already in statute and said that restrictions
must be included in this bill as well.
Senator Leman suggested removing "250,000 acres of" from the
title, as he didn't think it is necessary.
Senator Leman was uncertain about the language limiting the
commission to meeting once a year. He suggested meetings
could be held via teleconference if the need arose. Senator
Taylor agreed that the number of meetings should be flexible
as long as the commission meets at least annually.
Senator Leman also questioned the interest rate provisions.
He thought 10.5 percent was too high and might restrict
people from being able to purchase land. He wanted to make
the process fair to both buyers and to the state. Senator
Taylor agreed the rate should "float with the market" but
noted existing statutes, which he didn't clarify. He said he
would leave these details up to the Committee to resolve.
Senator Green spoke of an earlier suggestion to replace
"disposal" with "offered" in the language pertaining to the
amount of acres to be disposed of. However, she didn't know
if this would accomplish the sponsor's and her goals for the
program. She spoke of a commissioner who has publicly stated
that the role of the Department of Natural Resources is not
to dispose of land to private individuals. Senator Green did
not know how strongly the language needed to be to ensure
compliance.
ED MARTIN, testified via teleconference from Cooper Landing
about his e-mail message to the chair that suggested
allowing permanent fund dividend recipients apply future
dividends to the purchase of state land. He agreed with
Senator Green's suggestion of replacing "offer" with
"dispose", saying it would ensure competition.
Tape: SFC - 00 #24, Side A 10:44 AM
Mr. Martin spoke at length of his support for the bill. He
concluded by saying he hoped it would be signed into law.
LES GARA testified via teleconference from Anchorage about
his involvement in fishing. He had concerns about the
inability to freely travel up and down the banks of streams
and lakeshores on private property. He requested a setback
of 100 feet from streambeds. He predicted that if there is
not a demand for 250,000 acres, the land would be sold for
too low of a price. He also had concerns about damage done
by development along the rivers.
BOB LOEFFLER, Director, Division of Mining, Land and Water,
Department of Natural Resources testified via teleconference
from Anchorage that the state is not selling land in a
manner he believed most Alaskans wish. He did not think the
current version before the Committee addresses that problem,
noting that money is needed in order to sell land. Given the
state's budget gap, he recognized that the process needs to
be done cheaper, but stressed that money is still needed. He
looked forward to working with the Committee to develop a
land disposal program.
Co-Chair Torgerson asked for an estimate of the amount of
land available for sale. Mr. Loeffer replied the state has
approximately three million acres classified for settlement
or agriculture and approximately 2.2 million acres within
area plans, some of which is high value land along roads or
in coastal areas of Southeast, but that about three-quarters
or 1.6 acres is suitable for remote disposal. Of the 1.6
million acres, he noted that about one-quarter cannot be
offered for new remote disposals because it has either
already been subdivided or already offered.
Mr. Loeffler stressed that in a remote disposal, or "stake-
it-yourself", the gross acres offered is between four and
ten times the amount of land actually sold.
Co-Chair Torgerson asked how many acres are involved in the
upcoming disposal. Mr. Loeffer qualified that the amount of
land the department is able to offer is directly tied to the
amount of funding granted by the legislature. He stated that
in FY 01, the department plans to use funding from the last
two years to offer 130 parcels of previously offered land,
100 parcels in a remote, "stake-it-yourself" program and 105
parcels of new subdivisions.
Co-Chair Torgerson asked how many acres. Mr. Loeffer
answered approximately 2000 acres. Co-Chair Torgerson
thought that this was not enough and promised to assist in
making more land sales possible.
Co-Chair Torgerson ordered the bill HELD in Committee.
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