Legislature(2003 - 2004)

05/10/2004 09:51 AM Senate FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                                                                                                                                
     SENATE CS FOR CS FOR HOUSE BILL NO. 319(RES)                                                                               
     "An  Act relating  to the disposal  of state  land by  lottery;                                                            
     relating  to the  reservation of  rights by  the state in  land                                                            
     contracts  and deeds; relating to the disposal,  including sale                                                            
     or  lease, of remote  recreational cabin  sites; and  providing                                                            
     for an effective date."                                                                                                    
                                                                                                                                
                                                                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
Co-Chair  Wilken stated  that  this bill  would establish  a  public                                                            
nomination  lottery process through  which remote cabin sites  could                                                            
be sold.  He  noted that  the bill's  sponsor,  Representative  Hugh                                                            
Fate,  has voiced  concern in  regard to  some changes  made in  the                                                            
Senate Resources  committee substitute, SCS CS HB  319(RES), Version                                                            
23-LS0477\B,  that  is before  the  Committee.  He stated  that,  in                                                            
addition  to fiscal notes  #4 and  #5 that pertain  to Version  "B,"                                                            
Members'  packets include fiscal  notes #2  and #3 that would  apply                                                            
were a  forthcoming amendment  adopted. He  remarked that this  is a                                                            
"controversial" bill.                                                                                                           
                                                                                                                                
REPRESENTATIVE HUGH FATE,  the bill's sponsor, stated that this bill                                                            
evolved  from "a  simple concept"  of  developing  a method  through                                                            
which  people  could  select  State   land,  have  it  surveyed  and                                                            
privately appraised  at their own expense or appraised  by the State                                                            
under a reimbursement  arrangement, and subsequently  be granted fee                                                            
simple  title.  Continuing,  he noted  that  while the  concept  was                                                            
simple, the details  of the process became complex,  and that it has                                                            
taken four years to reach this point.                                                                                           
                                                                                                                                
Representative  Fate characterized  the bill  as a land acquisition                                                             
bill  that   has  no   intent  of  furthering   subsurface   mineral                                                            
development issues such  as those that have recently occurred in the                                                            
Matanuska  Susitna (Mat-Su)  Borough as he  recalled, at one  point,                                                            
the  bill   contained   language   that  would   have  allowed   the                                                            
Commissioner  of the  Department of  Natural  Resources to  withdraw                                                            
from consideration  land  with high mineral  content, including  gas                                                            
and oil. He declared that  the regulations associated with this land                                                            
selection legislation are "very strict."                                                                                        
                                                                                                                                
Representative   Fate  reiterated   "that  the  very  core   of  the                                                            
legislation"  is to provide  individuals the  ability to nominate  a                                                            
piece of State land that  he or she wishes to purchase. He clarified                                                            
that, at any point  in the process, the Commissioner  could withdraw                                                            
the land from consideration.                                                                                                    
                                                                                                                                
Representative  Fate reminded the Committee that currently  the only                                                            
method  through  which  individuals  could  acquire  State  land  is                                                            
through a lottery  or auction process. He shared that  approximately                                                            
40-percent  of State  land  that is  available through  the  lottery                                                            
method is acquired  and that the remaining land selections,  as well                                                            
as  those acquired  but  repossessed by  the  State due  to lack  of                                                            
payment,  are disposed  of over-the-counter.  He  argued "that  very                                                            
seldom  is an individual  able to"  acquire land  of their  choosing                                                            
under the current  land disposal methods. This, he  declared, is the                                                            
reason this  legislation is  being brought  forward. He stated  that                                                            
were  this  legislation  enacted,   it  "would  be  a  very  popular                                                            
program." He shared that  the House bill, CS HB 319(FIN) am, Version                                                            
23-LS0477\X.A, that was  transmitted to the Senate for consideration                                                            
would have  required general funds  to support start-up expenses  in                                                            
the first few  years, but that, beginning with the  fourth year, the                                                            
program  would have  generated money  for the State.  He also  noted                                                            
that  Version  "X.A"  would  require   the  creation  of  eight  new                                                            
positions.                                                                                                                      
                                                                                                                                
Representative  Fate informed  the  Committee that  the Version  "B"                                                            
committee substitute  would require lower start-up  costs, would not                                                            
require an  increase in  personnel, and would,  like Version  "X.A,"                                                            
generate funds for the  State. However, he communicated that he does                                                            
not  support  Version   "B"  as  it  changes  the  concept   of  the                                                            
legislation  and would probably  "meld" the  program into a  lottery                                                            
program,  which, he declared  "would be disheartening"  as  it would                                                            
not allow people to select land.                                                                                                
                                                                                                                                
Co-Chair  Wilken asked  for further  information  regarding how  the                                                            
bill's language  was changed in Version  "B," specifically  language                                                            
in Section  4, subsection (f) on page  three, beginning on  line 24.                                                            
                                                                                                                                
     (f) A resident may nominate a parcel for disposal under this                                                               
     section. The commissioner shall review the nomination and may                                                              
          (1) offer the nominated parcel for sale;                                                                              
          (2) offer additional parcels within the surrounding area                                                              
     for sale; or                                                                                                               
          (3) find that the parcel or area is not appropriate for                                                               
     disposal.                                                                                                                  
                                                                                                                                
JIM POUND, Staff  to Representative Fate, expounded  that Section 4,                                                            
subsection (f) of Version  "B" would allow the Department of Natural                                                            
Resources  to convert  the program  into a lottery.  Continuing,  he                                                            
noted  that as  in Version  "W.A", an  individual  could nominate  a                                                            
specific  parcel;  however,  contrary  to Version  "W.A",  once  the                                                            
Commissioner  approved  the  land  for nomination,  the  person  who                                                            
nominated  the  land  would,  rather than  being  able  to  pursuing                                                            
purchasing  that land,  would be placed  on equal  footing with  any                                                            
other person who might become interested in that parcel of land.                                                                
                                                                                                                                
Mr.  Pound  voiced  that  many  Alaskans   would  be  interested  in                                                            
acquiring land  through the land nomination  program and  that, were                                                            
an individual  to seek  out and  nominate a  specific parcel,  there                                                            
would  be the  "assumption  that they  have  a prerogative  to  that                                                            
parcel."  He warned that  the language proposed  in the Version  "B"                                                            
committee substitute  could be costly  to the State as were  someone                                                            
to nominate  a parcel and not be awarded  it, they could  argue that                                                            
they have an assumption of prerogative.                                                                                         
                                                                                                                                
Co-Chair  Wilken understood  therefore,  that the  language in  this                                                            
section is the difference  between the House bill Version "W.A," and                                                            
the Senate Resources bill, Version "B".                                                                                         
                                                                                                                                
Senator Dyson  observed that the language  in Section 4,  subsection                                                            
(f) of Version  "B" continues the original goal of  the legislation,                                                            
as, he contended,  it would allow a person to select  land which the                                                            
Commissioner could nominate for sale.                                                                                           
                                                                                                                                
Mr. Pound affirmed;  however, he explained that while  both versions                                                            
of the  bill would  allow a  person to  nominate a  parcel of  land,                                                            
Version "B" differs  from Version "W.A" in that, under  Version "B",                                                            
once  the   selected  land  is  approved   for  nomination   by  the                                                            
Commissioner,  the Department has  indicated that the land  would be                                                            
disposed of via a lottery  or auction process rather than selling it                                                            
to an individual.                                                                                                               
                                                                                                                                
Senator  Dyson  understood  therefore, that  the  Department  "would                                                            
absolutely ignore this clear direction from the Statute."                                                                       
                                                                                                                                
Mr. Pound responded that  the Department "will interpret it in a way                                                            
that they wish to interpret  it, which so far, it has been indicated                                                            
to us that their  interpretation is that they can  put it into their                                                            
existing program which is a lottery or auction."                                                                                
                                                                                                                                
Senator Dyson  surmised therefore,  that the  problem lies  with the                                                            
Department's  interpretation of the  language in Version  "B" rather                                                            
than with the language.                                                                                                         
                                                                                                                                
Mr. Pound replied  that, during the  bill's progression through  the                                                            
House,  "a  negotiated  agreement"   between  the  sponsor  and  the                                                            
Division  of Mining,  Land and Water  in the  Department of  Natural                                                            
Resources  had been  reached regarding  such things  as the size  of                                                            
nominated  parcels;  the  timeframe   allowed  for  the  survey  and                                                            
appraisal;  buffer zone requirements;  and the provisions  providing                                                            
the Commissioner  the authority to make the determination  regarding                                                            
the land  selection.  He declared  that the language  in Section  4,                                                            
subsection  (f) of the  Senate Resources  committee substitute  "has                                                            
nothing to  do with what was agreed  to between this office  and the                                                            
Division. This  was decided by a third  member of the Division  who,                                                            
to my  knowledge, at  been advised  to stay out  of the process  and                                                            
decided to, when he came to Senate Resources, to get involved."                                                                 
                                                                                                                                
Representative  Fate, responding to Senator Dyson's  comment, stated                                                            
that the  Senate  Resources Committee's  adoption  of the  amendment                                                            
that added  Section 4,  subsection (f)  to the  bill appeared  to be                                                            
"innocuous" in that it  changed the application fee for a nomination                                                            
from $100 to $25. He stated  that upon questioning, it was explained                                                            
that the  fee was  lowered because  applicants have  less chance  of                                                            
having  their  name  drawn  in  a  lottery  process.   Upon  further                                                            
investigation,  he explained, it was discovered "that  there was the                                                            
assumption"  within  the  Department  that this  program  "would  be                                                            
melded into the present  lottery program." He exclaimed that he "was                                                            
really startled"  that the addition of this amendment  opened up the                                                            
lottery interpretation  by the Department,  "and that was  what they                                                            
were going  to do in fact."  He reiterated  that this direction  was                                                            
not the intent of the legislation.                                                                                              
                                                                                                                                
Co-Chair  Wilken  asked  the  Department  of  Natural  Resources  to                                                            
explain their interpretation of Section 4, subsection (f).                                                                      
                                                                                                                                
NANCY  WELCH,  Special   Assistant,  Office  of  the  Commissioner,                                                             
Department of  Natural Resources, testified via teleconference  from                                                            
an offnet site  in Anchorage, to explain that the  amendment adopted                                                            
by the  Senate Resources  Committee addressed  the Department's  on-                                                            
going position  of being "fundamentally opposed" to  the right of an                                                            
individual to  nominate a parcel and then "perfect  that into a sale                                                            
through whatever means."  Version "B" she continued, would allow the                                                            
Department  to accept  land nominations  that would  then be  melded                                                            
into the  Department's current  land disposal  lottery program.  The                                                            
cost  of  disposing  land  through  the  lottery  program  would  be                                                            
substantially less than  the land nomination program outlined in the                                                            
House bill,  Version "W.A"  as it would require  fewer personnel  to                                                            
operate.  She reiterated,  however,  that the  Version "B"  proposal                                                            
would not entail "individual processing."                                                                                       
                                                                                                                                
Co-Chair Wilken  asked the Administration's  position regarding  the                                                            
Version "B" committee substitute.                                                                                               
                                                                                                                                
Ms. Welch  responded that  the Administration  supports the  Version                                                            
"B" committee substitute.                                                                                                       
                                                                                                                                
Co-Chair  Wilken  asked  whether  the  Department  had  developed  a                                                            
position on the House bill, Version "X.A."                                                                                      
                                                                                                                                
Ms.  Welch responded  that,  while  no official  position  had  been                                                            
developed  regarding the House  version of  the bill, attempts  were                                                            
undertaken to move away  from individual processing. She stated that                                                            
the Department agreed to  accept such issues as parcel sizes, buffer                                                            
zones, and appraisal/survey  language "against our better judgment,"                                                            
because  the bill's  sponsor  had agreed  to language  allowing  the                                                            
Commissioner,  at  his discretion,  the  right to  remove  nominated                                                            
parcels from consideration.                                                                                                     
                                                                                                                                
Senator Dyson  questioned  the reason for  the Department not  being                                                            
supportive  of  the  individual  Alaskan  land  selection   process,                                                            
provided  all criteria  is met;  particularly since  the State  "has                                                            
such vast State holdings."                                                                                                      
                                                                                                                                
Ms. Welch replied  that the Department  is fundamentally  opposed to                                                            
the  individual selection  process  as its  position  is that  State                                                            
"land should  be offered to all Alaskans  equally." She stated  that                                                            
the Department  questions allowing a person to nominate  land and to                                                            
be given  the first right  to purchase it.  She noted that  this was                                                            
the  aspect  opposed  by the  Senate  Resources  Committee  as  they                                                            
questioned  providing someone the  first right to land that  perhaps                                                            
other  people  were   also  interested  in  or  objected   to  being                                                            
privatized,  as it might,  for example, be  someone else's  favorite                                                            
hunting ground.                                                                                                                 
                                                                                                                                
Senator  Dyson, recalling  that  discussion,  noted  that "the  flip                                                            
side"  to the Department's  position  is that  someone might,  after                                                            
months  of exploring  perhaps by  air or  by foot,  locate a  remote                                                            
piece of  land that others  had not demonstrated  an interest  in or                                                            
had not  utilized,  go through  the lengthy  process of determining                                                             
whether  the land is  acceptable for  nomination,  and then be  told                                                            
that  all their  efforts were  for naught  as the  Department  would                                                            
allow that parcel  of land to be disposed of via a  lottery in which                                                            
numerous people could participate.                                                                                              
                                                                                                                                
Ms. Welch responded  that, in the Department's experience,  the vast                                                            
majority of people  who apply for staking authorization  are able to                                                            
receive  that authorization;  however,  she noted  that when  people                                                            
realize  the difficulty  of reaching  and developing  property,  the                                                            
staking rates  drop. She acknowledged that while some  parcels might                                                            
draw no other  interest and would,  thereby, allow the applicant  to                                                            
stake the land,  it would be unfair to allow one individual  to have                                                            
the advantage to a very popular parcel.                                                                                         
                                                                                                                                
Amendment #1: This amendment  would delete the words "in regulation"                                                            
in Section  4, subsection  (d) (1) in Version  "X.A" on page  three,                                                            
line 14. This section currently reads as follows.                                                                               
                                                                                                                                
     (1)  prepare a schedule  of land offerings  under this  section                                                            
     and  identify  the parcels  for disposal  each  year; the  land                                                            
     offering may not include  mineral land selected by the state or                                                            
     land  identified by  the department  as having  a high  mineral                                                            
     potential;  the department's  identification  of land having  a                                                            
     high mineral  potential shall be based on standards  adopted by                                                            
     the department  in regulation  and shall include consideration                                                             
     of a geophysical survey  or geological evaluation, if any, that                                                            
     was  conducted within  15 calendar  years before  the year  for                                                            
     which the schedule is prepared:                                                                                            
                                                                                                                                
In addition, this  amendment would delete Section  4, subsection (f)                                                            
in Version "X.A" and replace it with the following language:                                                                    
                                                                                                                                
     (f) A  resident may nominate  a parcel for disposal  under this                                                            
     section.  The commissioner shall review the nomination  and, if                                                            
     the nomination is  accepted, will advertise the parcel for sale                                                            
     or lease.  The commissioner  shall accept  bids for the  parcel                                                            
     during  a period  not  to exceed  45 days.  At the  end of  the                                                            
     period for  accepting bids, the resident nominating  the parcel                                                            
     shall have  the first right of refusal to purchase  the land or                                                            
     apply for a lease  under (b) of this section. After receiving a                                                            
     nomination under this  subsection, the commissioner may provide                                                            
     for  the  sale  or  lease  of  additional  parcels  within  the                                                            
     surrounding area or  may find that the nominated parcel or area                                                            
     is not appropriate for disposal.                                                                                           
                                                                                                                                
Co-Chair Wilken moved for  the adoption of Amendment #1 and objected                                                            
for discussion.                                                                                                                 
                                                                                                                                
SENATOR  SCOTT  OGAN,  Chair  of  the Senate  Resources   Committee,                                                            
testified  in opposition  to the amendment.  He  stated that  in his                                                            
experience, individuals  would "cherry pick some of  the best land;"                                                            
specifically popular hunting  or fishing spots. While he agreed with                                                            
the bill's sponsor that  more State land should be made available to                                                            
its citizens,  he stated that "this amendment is bad  public policy"                                                            
and that  the compromised  bill was  good in that  it allowed  for a                                                            
nomination   process.  Furthermore,   he  opined  that  the   Senate                                                            
Resources bill was good  in that it would allow the Commissioner, at                                                            
his  discretion,   to  make  available  additional   land  around  a                                                            
nominated  parcel. This,  he attested  would provide  for good  land                                                            
management.   This  amendment,  he   declared,  would  require   the                                                            
Department to  provide "a best interest finding for  each individual                                                            
parcel,"  thereby tying  "up  a lot of  staff time."  Therefore,  he                                                            
declared  that allowing  the  Department to  issue  a best  interest                                                            
finding on  a whole area would better  serve the State. He  exampled                                                            
that,   in  this   scenario,   the   Department  could   take   into                                                            
consideration  the fact that an area had historically  been utilized                                                            
by a  lot of  people for  hunting and  fishing camps  as opposed  to                                                            
limiting the review to an individual parcel within that area.                                                                   
                                                                                                                                
Senator Ogan stated that  this issue "should be done right" and that                                                            
the Senate Resources version of the bill strikes a good balance.                                                                
                                                                                                                                
Co-Chair  Wilken understood,  therefore, that  Senator Ogan,  rather                                                            
than objecting  "to the land being  claimed and owned", objects  "to                                                            
the manner through which  this" would be done. Continuing, he voiced                                                            
the understanding  that  the Senate  Resources version  of the  bill                                                            
would treat the land disposal as a lottery.                                                                                     
                                                                                                                                
Senator Ogan disagreed.  He stated that the Resources version of the                                                            
bill specifies,  in  the aforementioned  subsection  (f), that  this                                                            
land nomination disposal  program would be separate from the lottery                                                            
program.                                                                                                                        
                                                                                                                                
Co-Chair Wilken understood,  however, that the Department of Natural                                                            
Resources  would  interpret that  section  of the  Senate  Resources                                                            
language, to provide them  the authority to establish the program as                                                            
a lottery.                                                                                                                      
                                                                                                                                
Representative  Fate reiterated  that this  is his understanding  of                                                            
the  Department's  interpretation  of  that  section  and  that  the                                                            
testimony from Ms. Welch upheld that position.                                                                                  
                                                                                                                                
Ms.  Welch   responded  that  subsection   "f"  would  provide   the                                                            
Department   the  required   authorization   to  process  the   land                                                            
nomination through the Department's lottery program.                                                                            
                                                                                                                                
Co-Chair  Wilken   clarified,  therefore,  that  while   the  Senate                                                            
Resources Committee  version of the  bill would continue  to support                                                            
the  land nomination  process,  it  would  allow the  Department  to                                                            
conduct a  lottery process  as opposed to  the House version  of the                                                            
bill that would allow land to be nominated and claimed.                                                                         
                                                                                                                                
Senator Ogan concurred.                                                                                                         
                                                                                                                                
Co-Chair Wilken  summarized that the  method through which  the land                                                            
is disposed of is the issue.                                                                                                    
                                                                                                                                
Senator Dyson stated that  it appears that the Department is putting                                                            
"their own spin" on the  interpretation of the Senate Resources bill                                                            
language,  and  is "very  close  to the  edge  of defying  what  the                                                            
Legislature, as the policy  body, is saying." He declared this to be                                                            
of "great concern".                                                                                                             
                                                                                                                                
Co-Chair Wilken  understood Senator Dyson's comments  to be that the                                                            
language  in Section  4,  subsection  (f)  "doesn't say  what  we're                                                            
hearing" from the Department of Natural Resources.                                                                              
                                                                                                                                
Senator Dyson affirmed.                                                                                                         
                                                                                                                                
Co-Chair Wilken stated that he shares that concern.                                                                             
                                                                                                                                
Senator  B.  Stevens  recalled   that,  over  time,  the  State  has                                                            
identified  certain regions  of the State as  areas in which  people                                                            
could  survey  and stake  a  parcel of  land  and then  negotiate  a                                                            
purchase agreement with  the State. Continuing, he asked whether the                                                            
Department  would  specify  a region  of  the  State to  which  this                                                            
legislation  would apply  or whether  this land  selection  proposal                                                            
would apply to any State land holding.                                                                                          
                                                                                                                                
Representative  Fate responded  that, while  the Department  has the                                                            
authority  to select  areas for  land disposal  for  such things  as                                                            
lotteries or auctions,  there are not parameters currently  in place                                                            
that would  allow people  to go out  and select  parcels of  land in                                                            
areas that have not been identified.                                                                                            
                                                                                                                                
Senator B.  Stevens asked how the  proposed program compares  to the                                                            
State's Homesteading  program through which people  go out and stake                                                            
land in designated areas.                                                                                                       
                                                                                                                                
Representative  Fate stated that this  program would allow  a person                                                            
to identify,  stake, and  nominate a  piece of land  for a cabin  as                                                            
opposed  to the Homestead  program  that identified  areas in  which                                                            
people  were allowed  to live  and  develop a  piece of  land for  a                                                            
certain amount of time  and then petition for title to it. He stated                                                            
that the Senate  Resources committee  substitute would additionally                                                             
allow the  State to select  an area surrounding  a nominated  parcel                                                            
and  allow it  to become  available  through either  their  existing                                                            
lottery/auction   program  or  through  the  proposed   program.  He                                                            
characterized  the proposed  legislation as  being "another  tool in                                                            
the toolbox"  in that it would provide  the Department, in  addition                                                            
to its lottery/auction  program, another means through  which people                                                            
could acquire land.                                                                                                             
                                                                                                                                
Senator B. Stevens asked  for confirmation that the Department would                                                            
have the final  determination as to whether or not  a parcel of land                                                            
could be nominated.                                                                                                             
                                                                                                                                
Representative  Fate affirmed  that  the Department  would have  the                                                            
ability to withdraw  a parcel of land from being nominated  based on                                                            
best interest findings.                                                                                                         
                                                                                                                                
Senator Olson asked Senator  Ogan whether he is comfortable with the                                                            
decision-making opportunity  provided to the Department by Amendment                                                            
#1.                                                                                                                             
                                                                                                                                
Senator  Olson responded  that he  "is not always  comfortable  with                                                            
bureaucratic  decisions;"  however, he  stated that  there are  good                                                            
professional   people  in  the  Department  of  Natural   Resources.                                                            
Continuing,  he  voiced being  uncomfortable  with  the amendment's                                                             
language that  would provide an individual  with the right  of first                                                            
refusal to  purchase or buy  the land. He  pondered how the  process                                                            
would work.                                                                                                                     
                                                                                                                                
Senator Olson  voiced concern that  Department of Natural  Resources                                                            
staffing  changes, over  time, might  be an issue.  In addition,  he                                                            
asked  whether  Native   corporations  have  presented   a  position                                                            
regarding this legislation.                                                                                                     
                                                                                                                                
Representative  Fate responded that  comment time has been  provided                                                            
during  the hearing  process. For  further clarification,  he  noted                                                            
that encumbered lands would not be included in this program.                                                                    
                                                                                                                                
Senator Dyson  requested that the Department provide  "language that                                                            
would  close the  loophole by  which they  have slipped  out of  the                                                            
intentions of  both" the sponsor's and the Resource  versions of the                                                            
bill.                                                                                                                           
                                                                                                                                
Co-Chair Wilken concurred.                                                                                                      
                                                                                                                                
Co-Chair Wilken moved to withdraw Amendment #1.                                                                                 
                                                                                                                                
There  being   no  objection,  Amendment   #1  was  WITHDRAWN   from                                                            
consideration.                                                                                                                  
                                                                                                                                
Representative   Fate   reiterated  that   the   concern  with   the                                                            
legislation  lies  with  the  Department's   intent  to  change  the                                                            
proposal into a lottery system.                                                                                                 
                                                                                                                                
Co-Chair Wilken  asked the sponsor  to work with the Department  and                                                            
others to further clarify the bill.                                                                                             
                                                                                                                                
Co-Chair  Wilken ordered  the  bill HELD  in Committee  for  further                                                            
consideration.                                                                                                                  
                                                                                                                                
[NOTE: This bill was re-addressed later in the meeting.]                                                                        
                                                                                                                                
                                                                                                                                
     SENATE CS FOR CS FOR HOUSE BILL NO. 319(RES)                                                                               
     "An  Act relating  to the disposal  of state  land by  lottery;                                                            
     relating  to the  reservation of  rights by  the state in  land                                                            
     contracts  and deeds; relating to the disposal,  including sale                                                            
     or  lease, of remote  recreational cabin  sites; and  providing                                                            
     for an effective date."                                                                                                    
                                                                                                                                
                                                                                                                                
[NOTE: This bill was heard earlier in the meeting.]                                                                             
                                                                                                                                
JIM POUND, Staff to Representative  Bud Fate, stated that, following                                                            
the morning  hearing  on the bill,  discussions  ensued between  the                                                            
sponsor  and Commissioner  Tom Irwin  of the  Department of  Natural                                                            
Resources.  As a result, he continued,  language was developed  that                                                            
one:  meets the  sponsor's intent  for the  bill; and  two: has  the                                                            
approval of the Department.                                                                                                     
                                                                                                                                
[NOTE: Amendment #2 was not offered for consideration.]                                                                         
                                                                                                                                
Amendment  #3:  This   amendment  amends  language   in  Section  4,                                                            
subsection  (f), on  page three,  beginning  on line  24 to read  as                                                            
follows:                                                                                                                        
                                                                                                                                
     (f)  a resident  may nominate  a parcel  or  area for  disposal                                                            
     under  this section,  and, if  the resident  has not leased  or                                                            
     purchased land under  this section during the three-year period                                                            
     preceding  the date  of nomination,  may apply  for a right  to                                                            
     stake the  nominated parcel with the intent to  lease under (b)                                                            
     of this section.  The commissioner shall review  the nomination                                                            
     and may                                                                                                                    
          (1) offer {THE NOMINATED] the right to stake a parcel for                                                             
     lease through  a sealed-bid or outcry auction  and subsequently                                                            
     purchase the parcel for fair market value;                                                                                 
          (2) offer the parcel and additional parcels within the                                                                
     surrounding  area for sale in  a simultaneous filing  period in                                                            
     the manner  provided for lottery parcels by AS  38.05.057; [OR]                                                            
          (3) offer already surveyed and platted parcels for sale                                                               
     at  a  sealed-bid  or  outcry  auction  as  provided  under  AS                                                            
     38.05.055; or                                                                                                              
          (4) find that the parcel or area is not appropriate for                                                               
     disposal.                                                                                                                  
                                                                                                                                
                                                                                                                                
Co-Chair  Wilken  moved  to  adopt Amendment  #3  and  objected  for                                                            
explanation.                                                                                                                    
                                                                                                                                
Mr. Pound explained  that this amendment  addresses several  sponsor                                                            
and Department of Natural  Resources concerns including: the process                                                            
pertaining  to  how  an individual  nominating  a  parcel  would  be                                                            
recognized  in the process; the length  of time required  between an                                                            
individual's ability  to stake additional parcels;  clarification of                                                            
the   staking  language   pertaining   to   the  leasing/purchasing                                                             
provision;   and  language   providing  the   Commissioner   of  the                                                            
Department  of Natural Resources the  ability to offer for  disposal                                                            
land surrounding  a nominated parcel  or to deny a nominated  parcel                                                            
for disposal.                                                                                                                   
                                                                                                                                
Co-Chair  Wilken asked  for further  clarification  regarding  how a                                                            
person would nominate land.                                                                                                     
                                                                                                                                
Mr. Pound responded that  a person would locate a parcel of land and                                                            
file  for  the right  to  stake  that  particular  parcel  with  the                                                            
Department of Natural Resources.                                                                                                
                                                                                                                                
Co-Chair Wilken understood  that this would entail a written request                                                            
for the right  to stake the land. In other words,  he continued, the                                                            
individual is requesting  the right to lease and eventually purchase                                                            
that parcel of land.                                                                                                            
                                                                                                                                
Mr. Pound  responded  that the request  would entitle  someone  to a                                                            
five-year lease  with a five-year renewal option.  He noted that "at                                                            
any time you have a lease, you have the right to purchase."                                                                     
                                                                                                                                
Co-Chair Wilken asked the  sequence of events that would occur after                                                            
the land  has  been staked;  specifically  whether a  sealed bid  or                                                            
outcry auction would occur.                                                                                                     
                                                                                                                                
Mr. Pound stated  that, were another individual to  express interest                                                            
in a  parcel of land  to which a  right to stake  has been filed,  a                                                            
bidding process would be implemented.                                                                                           
                                                                                                                                
Co-Chair Wilken asked how  public notification regarding the staking                                                            
request would occur.                                                                                                            
                                                                                                                                
Mr.  Pound  explained   that  a  public  notice  process   would  be                                                            
implemented.                                                                                                                    
                                                                                                                                
Co-Chair  Wilken asked  for confirmation  that, were  more than  one                                                            
person  interested  in a  parcel  of land,  the  Commissioner  would                                                            
determine whether a sealed bid or outcry auction would occur.                                                                   
                                                                                                                                
Mr. Pound affirmed.                                                                                                             
                                                                                                                                
Co-Chair Wilken  understood that the land's purchase  price would be                                                            
based on fair market value.                                                                                                     
                                                                                                                                
Mr. Pound concurred.                                                                                                            
                                                                                                                                
Senator Bunde  asked regarding language pertaining  to someone being                                                            
able  to stake  a parcel  of land  every three  years; specifically                                                             
whether this would entail  relinquishing a parcel of land previously                                                            
received through this program.                                                                                                  
                                                                                                                                
Mr. Pound  responded  that another  parcel of land,  in addition  to                                                            
previously   received  parcels,  could   be  staked  at   three-year                                                            
intervals.                                                                                                                      
                                                                                                                                
Senator Bunde  opined that "there is a limited amount"  of desirable                                                            
land  available  for  remote  cabin  sites.  Continuing,  he  voiced                                                            
concern that the provision  allowing individuals to acquire numerous                                                            
parcels of land could result in "land barons."                                                                                  
                                                                                                                                
Co-Chair  Wilken asked whether  Senator Bunde  wished to propose  an                                                            
amendment to address this concern.                                                                                              
                                                                                                                                
Senator  Bunde responded  that  two options  exist  to address  this                                                            
concern:  one being that  were a person to  desire to stake  another                                                            
parcel of land  any previous land  they had acquired in this  manner                                                            
must  be relinquished;  or  two,  a longer  timeframe  between  land                                                            
nominations could be required.  He reiterated his concern that, even                                                            
though the  State has vast  land holdings,  suitable land with  such                                                            
things as a water  source and accessibility is limited  and that one                                                            
individual might" tie that up."                                                                                                 
                                                                                                                                
Senator Bunde  suggested that the  timeframe between nominations  be                                                            
increased to between six and ten years.                                                                                         
                                                                                                                                
Senator Dyson  opined that, over time, the people  who receive these                                                            
lands would probably develop  and perhaps sell their land to others.                                                            
He voiced that  this would be beneficial,  as it would open  up more                                                            
sites to others.  Furthermore, he stated that the  expenses involved                                                            
with surveying and developing  land might be a deterrent to the land                                                            
baron issue. Therefore,  he commented that he does not share Senator                                                            
Bunde's concern "that this would be abused."                                                                                    
                                                                                                                                
Senator  Bunde  stated that  this  legislation  could  also lead  to                                                            
frustration  in that  someone might  desire to  access a  particular                                                            
valley and find  it staked or that the person who  staked the valley                                                            
might be upset to have another person trespassing on their land.                                                                
                                                                                                                                
Amendment-to-Amendment   #3:  This  amendment  proposes   to  change                                                            
language  in subsection  (f)  in that the  length  of time  required                                                            
before  an  individual  could   stake  another  parcel  of  land  be                                                            
increased from three-years to five-years.                                                                                       
                                                                                                                                
Senator Bunde moved to adopt the Amendment-to-Amendment #3.                                                                     
                                                                                                                                
Co-Chair Wilken objected for discussion.                                                                                        
                                                                                                                                
Senator  Olson  agreed  that  the  amount  of  desirable  land  with                                                            
suitable  water and other  amenities is limited.  He also  supported                                                            
Senator Bunde's  concern regarding the potential for  a "land baron"                                                            
scenario.                                                                                                                       
                                                                                                                                
Senator B. Stevens  voiced the understanding that  a person would be                                                            
responsible  for staking  the land  and having  it surveyed,  before                                                            
purchasing it.                                                                                                                  
                                                                                                                                
Mr. Pound concurred.                                                                                                            
                                                                                                                                
Senator B.  Stevens commented, "that  the value of the land  is only                                                            
intrinsic  to the person who  wants to go  pay and go out  there and                                                            
stake it  and survey  it." He stated  that the  market value  of the                                                            
land is  probably less than  the cost of  the survey. Therefore,  he                                                            
voiced being opposed to  the amendment-to-Amendment #3, as he opined                                                            
that the amount  of State land that is available now  and not bought                                                            
is  indicative  of the  fact  that  not a  lot  of people  would  be                                                            
clambering to pursue this land acquisition proposal.                                                                            
                                                                                                                                
Co-Chair Green inquired  as to whether other State land disbursement                                                            
programs have look-back provisions or limiting factors.                                                                         
                                                                                                                                
NANCY  WELCH,  Special   Assistant,  Office  of  the  Commissioner,                                                             
Department  of Natural Resources testified  via teleconference  from                                                            
an offnet  site in  Anchorage and  informed the  Committee that  the                                                            
Homestead program  has a minimum five-year  limiting provision.  She                                                            
clarified    that   this    legislation's    three-year    timeframe                                                            
specification  applies to the nomination process rather  than to the                                                            
acquisition.                                                                                                                    
                                                                                                                                
Co-Chair Green clarified  that the three-year time limitation refers                                                            
to the right to stake rather than the purchase.                                                                                 
                                                                                                                                
Ms. Welch specified  that the three-year  time frame would  apply to                                                            
an individual's  "right to  nominate a parcel  and if they  actually                                                            
not required one  in three years then they can apply  for a right to                                                            
stake the  nominated parcel."  Therefore,  she summarized,  "it only                                                            
applies  to the  provision  of applying  for  a right  to stake  the                                                            
nominated  parcel; it  doesn't apply  if the person  just wanted  to                                                            
participate  in  any  land sale  program  other  than  this  special                                                            
provision for staking a special parcel."                                                                                        
                                                                                                                                
Representative  Fate  voiced   no  objection  to  the  amendment  to                                                            
Amendment  #3, as  he recounted  this provision  had,  at one  time,                                                            
specified  a five-year  timeframe.  He stated  that  the reason  for                                                            
reducing the timeframe  to three years was to allow  more land to be                                                            
sold.                                                                                                                           
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR: Senator Olson, Senator Bunde, and Co-Chair Wilken                                                                     
                                                                                                                                
OPPOSED: Senator Dyson, Senator B. Stevens, and Co-Chair Green                                                                  
                                                                                                                                
ABSENT: Senator Hoffman                                                                                                         
                                                                                                                                
The motion FAILED (3-3-1)                                                                                                       
                                                                                                                                
The Amendment-to-Amendment #3 FAILED to be adopted.                                                                             
                                                                                                                                
Amendment #3 was again before the Committee.                                                                                    
                                                                                                                                
Mr. Pound reiterated that  Amendment #3 would allow the Commissioner                                                            
of the Department  of Natural Resources to offer additional  parcels                                                            
surrounding  a  nominated   parcel.  He  also  noted  that  were  an                                                            
individual  to nominate a  parcel and then  decide not to stake  it,                                                            
the amendment would allow  the Commissioner to offer that parcel for                                                            
disposal  through  other land  disposal  programs.  In addition,  he                                                            
noted that  were already surveyed  and platted lands not  purchased,                                                            
this amendment would allow  those lands to be made available through                                                            
a sealed bid or outcry auction.                                                                                                 
                                                                                                                                
Co-Chair Wilken removed his objection to Amendment #3.                                                                          
                                                                                                                                
There being no further objection, Amendment #3 was ADOPTED.                                                                     
                                                                                                                                
Conceptual   Amendment  #4:  This   amendment  specifies   that  the                                                            
provisions of this legislation would terminate in ten years.                                                                    
                                                                                                                                
Co-Chair Wilken  moved to adopt Amendment #4. He stated  that due to                                                            
the fact that this bill  is "plowing new ground" and has encountered                                                            
some controversy, it would  be advantageous to review the outcome of                                                            
the bill at a later time.                                                                                                       
                                                                                                                                
Representative  Fate  stated that  a ten-year  time  frame would  be                                                            
acceptable. He  noted that, as reflected in the accompanying  fiscal                                                            
note,  the State  would not  begin to  realize the  benefits of  the                                                            
legislation for at least five years.                                                                                            
                                                                                                                                
There being no objection, Amendment #4 was ADOPTED.                                                                             
                                                                                                                                
Co-Chair  Wilken asked whether  the adopted  amendments would  alter                                                            
the bill's fiscal notes.                                                                                                        
                                                                                                                                
Mr. Pound stated  that the fiscal  note that accompanied  the Senate                                                            
Resources version of the  bill would not be affected by the changes.                                                            
                                                                                                                                
Senator Bunde  moved to report the bill, as amended,  from Committee                                                            
with individual recommendations and accompanying fiscal notes.                                                                  
                                                                                                                                
There  being no  objection, SCS  CS HB  319(FIN)  was REPORTED  from                                                            
Committee  with zero  fiscal note  #4, dated  May 8,  2004 from  the                                                            
Division of Oil  & Gas, Department of Natural Resources  and $69,000                                                            
fiscal note #5, dated May  8, 2004 from the Division of Mining, Land                                                            
and Water, Department of Natural Resources.                                                                                     
                                                                                                                                

Document Name Date/Time Subjects