Legislature(2019 - 2020)BUTROVICH 205

03/02/2020 03:30 PM Senate RESOURCES

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Heard & Held
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<Bill Hearing Canceled>
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Moved HJR 25 Out of Committee
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Moved SB 159 Out of Committee
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+ Bills Previously Heard/Scheduled TELECONFERENCED
                SB 217-STATE LAND VOUCHER; PFDS                                                                             
3:30:43 PM                                                                                                                    
CHAIR MICCICHE announced  that the first order  of business would                                                               
be  SENATE  BILL  NO.  217,   "An  Act  establishing  state  land                                                               
vouchers;  relating  to  restricted   land  sales  for  veterans;                                                               
relating  to the  veterans' land  purchase discount;  relating to                                                               
the  permanent  fund dividend;  relating  to  the duties  of  the                                                               
Department  of Revenue;  authorizing  the  Department of  Natural                                                               
Resources to accept state land  vouchers; relating to eligibility                                                               
for public assistance; and providing for an effective date."                                                                    
3:31:20 PM                                                                                                                    
MIKE   BARNHILL,  Deputy   Commissioner,  Alaska   Department  of                                                               
Revenue,  Juneau,  Alaska, explained  that  SB  217 provides  the                                                               
ability for  a permanent fund  dividend (PFD) applicant  to forgo                                                               
the cash dividend and elect a land voucher.                                                                                     
He detailed that the land voucher  is calculated as two times the                                                               
statutory  amount of  the PFD.  An  applicant can  take the  land                                                               
voucher and  present it at a  land sale of the  Alaska Department                                                               
of  Natural   Resources  (DNR)  and  purchase   state  land.  The                                                               
overarching purpose  of the  bill is  to get  more land  into the                                                               
hands of Alaskans.                                                                                                              
He  explained  that  land  vouchers  are  deeply  seated  in  the                                                               
history of this  country. The federal government  first used land                                                               
vouchers to compensate American  Revolutionary War veterans. Many                                                               
states and the federal government  have issued land vouchers, but                                                               
vouchers have not been issued for over 100 years.                                                                               
He  summarized that  the  intent  of the  bill  is  to provide  a                                                               
subsidy so that people can get better access to land.                                                                           
CHAIR MICCICHE pointed  out that in the late 1950s,  Alaska had a                                                               
homestead  program   for  returning  veterans,  similar   to  the                                                               
American Revolutionary War.                                                                                                     
3:34:13 PM                                                                                                                    
ANNE WESKE,  Director, Permanent  Fund Dividend  Division, Alaska                                                               
Department of Revenue, Juneau,  Alaska, delivered a presentation,                                                               
SB 217 State  Land Voucher. She paraphrased the text  on slide 2,                                                               
Duties of the Department in accordance with SB 217:                                                                             
   • Provide a method for Alaskans to utilize their                                                                             
       electronic Permanent Fund Dividend application to                                                                        
     purchase State land through a voucher program option.                                                                      
   • Calculate the Statutory Net Income calculation per AS                                                                      
     43.23.025 to determine the value of each voucher.                                                                          
   • Determine PFD eligibility on all Alaskans per AS                                                                           
MS. WESKE  discussed the following  from slide  3, Considerations                                                               
of the Department in accordance with SB 217:                                                                                    
   • The ongoing Statutory Net Income calculation per AS                                                                        
     43.23.025 will  be maintained by  the Department to  be used                                                               
     for purposes of calculating the  value of each land voucher.                                                               
     Twice the value of the SNI  calculation will be the value of                                                               
     each land voucher.                                                                                                         
   • The Land Voucher option will be available only to Adults                                                                   
     filing an electronic application on behalf of themselves.                                                                  
   • In order to maintain consistency with all other voluntary                                                                  
     PFD options,  if an applicant  who chooses the  land voucher                                                               
     option  has not  been  deemed  Eligible by  the  end of  the                                                               
     calendar year in which they  applied, the state land voucher                                                               
     is  voided,  and  the  applicant  will  receive  a  monetary                                                               
She  clarified  that  the  land  voucher  does  not  expire,  but                                                               
eligibility to participate in the voucher must be determined.                                                                   
3:37:29 PM                                                                                                                    
CHAIR MICCICHE  asked what  happens if  the statutory  net income                                                               
(SNI) calculation is changed.                                                                                                   
MR. BARNHILL  answered that if a  new formula is enacted  and the                                                               
citation remains the same, the new valuation will flow through.                                                                 
SENATOR  BISHOP  asked  which  amount  will  be  applied  to  the                                                               
calculation  if the  legislature  only appropriates  half of  the                                                               
statutory PFD calculation.                                                                                                      
MR. BARNHILL answered  that the statutory formula  would be used.                                                               
The legislation  is intentionally  phrased to have  the statutory                                                               
formula control the face value of the voucher.                                                                                  
SENATOR  BISHOP  remarked  that  it  could be  a  good  deal  for                                                               
MR. BARNHILL replied the hope is  that the land voucher will be a                                                               
good deal for many people.                                                                                                      
MS  WESKE   continued  to  discuss  the   Considerations  of  the                                                               
Department in accordance with SB 217 on slide 4:                                                                                
   • The Department will develop and print a State Land Voucher                                                                 
     in accordance with industry standards.                                                                                     
   • Garnishments will take priority over State Land Vouchers.                                                                  
     The remaining value of the individual's PFD will determine                                                                 
     the individual's State Land Voucher value.                                                                                 
She explained  that DOR would  need to develop a  calculation for                                                               
individuals  who opt  for a  land voucher  and their  dividend is                                                               
garnished. She suspected that if  50 percent of someone's PFD was                                                               
garnished, they would receive 50 percent of the land value.                                                                     
3:39:58 PM                                                                                                                    
CHAIR MICCICHI calculated  that 50 percent of  the remaining half                                                               
would be 100 percent of the statutory dividend.                                                                                 
MS WESKE said correct.                                                                                                          
CHAIR MICCICHE referred  to the third point on slide  3 and asked                                                               
how someone who is ineligible for  a land voucher can be eligible                                                               
for a monetary dividend.                                                                                                        
MS  WESKE  explained   that  the  scenario  would   occur  if  an                                                               
individual was determined  not eligible in a calendar  year for a                                                               
land  voucher,  but eventually  became  eligible  for a  monetary                                                               
SENATOR GIESSEL referred to the first  point on slide 4 and asked                                                               
why  the  division is  printing  a  paper  voucher. She  said  an                                                               
individual  can  easily  lose  paper  documents,  but  electronic                                                               
documents are easier to keep track of.                                                                                          
MR. BARNHILL  replied the  decision to use  paper vouchers  was a                                                               
cost-effective judgment  call. Paper  vouchers are like  a bearer                                                               
bond where  an individual in  possession of a paper  voucher owns                                                               
it  and can  sell it.  The department  decided not  to set  up an                                                               
electronic voucher tracking system.                                                                                             
He said  the committee  can reconsider  the printed  voucher, but                                                               
the  department believes  that adding  anticounterfeiting to  the                                                               
paper voucher will maintain program integrity.                                                                                  
3:42:10 PM                                                                                                                    
SENATOR KIEHL  pointed out that  the bill says a  creditor cannot                                                               
garnish  the voucher,  only the  cash  value of  the dividend  of                                                               
individuals  who choose  that option.  He  asked if  there was  a                                                               
reason for that.                                                                                                                
MR.  BARNHILL replied  it was  a judgement  call to  maintain the                                                               
current PFD  procedures for garnishments.  For example,  if there                                                               
was a $1,000  cash PFD and a $2,000 voucher,  everyone is subject                                                               
to garnishment  up to  $1,000. There  are no  changes to  the PFD                                                               
system, it is  cost effective, and everyone is  treated the same.                                                               
He  added  that  under  Alaska law,  someone  could  garnish  the                                                               
voucher itself.                                                                                                                 
SENATOR KIEHL said the fiscal  note analysis envisions the notion                                                               
of  a  secondary  market.  He   remarked  that  in  the  case  of                                                               
garnishments, whether  it's an individual  of money or  the state                                                               
getting child support for kids who  need it, it seems it would be                                                               
best to get the maximum value available.                                                                                        
MR. BARNHILL replied it was a  judgement call to use the existing                                                               
PFD system so the program  would be cost effective. He reiterated                                                               
that Child  Support could  garnish the  physical voucher,  but to                                                               
turn that into cash would require a secondary market.                                                                           
3:44:40 PM                                                                                                                    
SENATOR COGHILL asked what the hierarchy is for garnishments.                                                                   
MS WESKE answered  that the Internal Revenue  Service (IRS) comes                                                               
first and  Child Support comes  second. The department  lists the                                                               
order of  the garnishments on  its website. She pointed  out that                                                               
if  an individual  has a  garnishment on  their record,  the land                                                               
voucher  would  not be  usable  until  after the  garnishment  is                                                               
SENATOR COGHILL commented  that it is an open question  as to how                                                               
the IRS will view doubling the value of the voucher.                                                                            
MR. BARNHILL explained that the  land voucher would be subject to                                                               
personal income  tax up to the  amount of the cash  dividend. The                                                               
remaining value of  the land voucher would be  subject to capital                                                               
gains taxes when the individual sells their land.                                                                               
3:47:21 PM                                                                                                                    
MS  WESKE reviewed  the  following costs  for  the department  to                                                               
implement the program on slide 6:                                                                                               
   • Administrative work: $1,500                                                                                                
   • Advertising, Printing, Postage: $15,000                                                                                    
   • Programming: $35,400                                                                                                       
   • Total: $51,900                                                                                                             
She reviewed the $12,900 in estimated costs in subsequent years:                                                                
   • Administrative work: $500                                                                                                  
   • Advertising, Printing, Postage: $10,000                                                                                    
   • Programming: $2,400                                                                                                        
   • Total: $12,900                                                                                                             
CHAIR MICCICHE  asked how the  State plans to track  the vouchers                                                               
after they are issued initially.                                                                                                
3:49:43 PM                                                                                                                    
MR.  BARNHILL replied  DOR has  no plans  to track  the vouchers.                                                               
They  plan  to print  the  vouchers  in  a  way that  makes  them                                                               
distinguishable  with anti-counterfeiting  features  so DNR  will                                                               
accept them when they are presented at land disposal sales.                                                                     
CHAIR MICCICHE asked how it  will work when someone presents four                                                               
vouchers at a  land sale and another individual  claims they were                                                               
MR.  BARNHILL reiterated  that  DOR  has no  plans  to track  the                                                               
vouchers;  DNR  would  accept land  vouchers  presented  at  land                                                               
disposal sales.                                                                                                                 
CHAIR MICCICHE  commented that the  legislation is  an innovative                                                               
idea; what is essentially a deed will be treated like cash.                                                                     
MR. BARNHILL concurred.                                                                                                         
3:51:58 PM                                                                                                                    
MARTY  PARSONS, Director,  Division  of Mining,  Land and  Water,                                                               
Alaska  Department  of   Natural  Resources,  Anchorage,  Alaska,                                                               
commenced his presentation, SB 217  State Land Voucher: PFD's. He                                                               
displayed slide 2, Land, Alaska Has an Abundance:                                                                               
   • Statehood Land Entitlement                                                                                                 
        o Total Land entitlement: 105.8 million acres                                                                           
        o Entitlement received: 100 million acres                                                                               
        o Remaining entitlement: 5.8 million acres                                                                              
        o Land Bank: 2.5 million acres                                                                                          
He detailed that the land  bank identifies land that is available                                                               
for settlement  or disposal. He  noted that  not all land  in the                                                               
land bank is developable.                                                                                                       
3:53:16 PM                                                                                                                    
MR. PARSONS reviewed the chart on slide 3, Who Owns Alaska:                                                                     
   • Federal                                                                                                                    
        o 219,900,000 acres                                                                                                     
        o 60 percent                                                                                                            
   • State                                                                                                                      
        o 100,644,263 acres                                                                                                     
        o 27.5 percent                                                                                                          
   • Alaska Native Claims Settlement Act (ANCSA) Corp                                                                           
        o 43,782,419 acres                                                                                                      
        o 12.0 percent                                                                                                          
   • Private                                                                                                                    
        o 1,961,022                                                                                                             
        o 0.5 percent                                                                                                           
He said the  governor intends to increase  private land ownership                                                               
and  SB  217 provides  a  program  to  get  more Alaska  land  in                                                               
Alaskans' hands.                                                                                                                
MR. PARSONS addressed  slide 4, How Does Alaska  Dispose of Land,                                                               
as follows:                                                                                                                     
   • Four Primary Programs                                                                                                      
        o Auction: participants bid on pre-subdivided parcel of                                                                 
          land; high bid is awarded the parcel. Open to Alaskans                                                                
        o Over the Counter: Open to anyone who wants to purchase                                                                
          a parcel. Lands not sold at auction are put onto the                                                                  
          website for purchase. Participants select a parcel and                                                                
          purchase either outright or by contract.                                                                              
        o Remote Recreational Cabin Staking: State identifies an                                                                
          area where participants can stake up to 20 acres,                                                                     
          enter into a lease, pay for survey and appraisal then                                                                 
        o Ag Sales: State sells land for agricultural purposes.                                                                 
3:56:04 PM                                                                                                                    
He addressed slide 5, Eligibility/Value/When Applied, as                                                                        
   • An individual who files a PFD application electronically,                                                                  
     may elect to receive a State land voucher instead of a                                                                     
     monetary dividend.                                                                                                         
        o Value of the voucher is twice the statutory value of                                                                  
          the PFD.                                                                                                              
        o May be applied to the purchase of land sold under land                                                                
          sale contracts entered into or after January 1, 2021.                                                                 
He noted that the effective date  of January 1, 2021 is important                                                               
for  protecting $19  million worth  of contracts  that provide  a                                                               
revenue  stream  for  the  Lands  Disposal  Income  Fund  (LDIF).                                                               
Allowing vouchers  to go back  into history and  payoff contracts                                                               
would significantly reduce money for the fund.                                                                                  
He addressed slide 6, Conditions, as follows:                                                                                   
   • May be used once                                                                                                           
   • May be transferred                                                                                                         
   • May be combined with other vouchers                                                                                        
   • May be combined with a Veteran Land Discount or Veteran                                                                    
     Preference purchase                                                                                                        
   • Vouchers do not expire                                                                                                     
He addressed slide 7, Goal, as follows:                                                                                         
   • Help fulfill the Alaska Constitution's mandate to develop                                                                  
     state resources to benefit the public.                                                                                     
   • Make Alaska land more accessible to all by making it easier                                                                
     for Alaskan's to purchase land.                                                                                            
        o No other state has less land in private hands than                                                                    
3:58:44 PM                                                                                                                    
MR. PARSONS addressed slide 8, Land  in the Hands of Alaskans, as                                                               
   • The PFD Land Voucher Bill is a response to the demand, by                                                                  
     helping individual Alaskans realize land ownership.                                                                        
   • The PFD Land Voucher Bill would be a win-win for both the                                                                  
     individual Alaskan and the state treasury.                                                                                 
SENATOR GIESSEL  noted that the  State does have land  sales from                                                               
time  to time,  but the  locations are  remote. Individuals  with                                                               
land   vouchers  are   going  to   have  to   have  sophisticated                                                               
transportation  methods to  get to  some of  the land  sites. She                                                               
asked what type of response does  DNR get from some of their land                                                               
MR. PARSONS  answered that remote  locations is  a consideration.                                                               
The State  has conveyed most of  the lands along the  road system                                                               
to municipalities  as part of  their municipal  entitlement. Land                                                               
vouchers could free up other  cash to allow individuals to invest                                                               
in remote transportation.                                                                                                       
4:00:42 PM                                                                                                                    
SENATOR GIESSEL noted that there  is land ownership that requires                                                               
access  across  lands  owned   by  Native  corporations,  village                                                               
corporations, and municipalities. She  reiterated that there is a                                                               
huge challenge in accessing some of the remote locations.                                                                       
MR. PARSONS explained that one of  the things that DNR must do is                                                               
sell  land with  access.  Access includes  easements, lakes,  and                                                               
SENATOR  KIEHL asked  him to  review the  four categories  of DNR                                                               
land sales in  addition to providing data on the  number of acres                                                               
that DNR sells in a year.                                                                                                       
MR. PARSONS answered that the  department sells approximately 200                                                               
parcels that  average 5  acres. The  land data  strictly includes                                                               
subdivision and over-the-counter sales.                                                                                         
SENATOR KIEHL asked  how many acres of  agricultural sales occurs                                                               
MR. PARSONS  replied that agricultural sales  "depends." Over the                                                               
last  several years  the department  has sold  three agricultural                                                               
parcels. He said  he will follow up  with additional agricultural                                                               
sales data.                                                                                                                     
SENATOR  KIEHL noted  that DNR  uses estimated  market value  for                                                               
over-the-counter  sales.  He  asked   what  the  relationship  is                                                               
between market value and the State's realized value at auctions.                                                                
4:03:45 PM                                                                                                                    
MR. PARSONS  answered that the over-the-counter  sales depends on                                                               
the location. For example,  land in the Tok area may  be 10 or 15                                                               
percent  above  the  department's   fair  market  appraisal,  but                                                               
Southeast Alaska  may have  parcels that are  two to  three times                                                               
above  the  appraised  value  due   to  scarcity.  Lands  near  a                                                               
population center  will be 20  to 25 percent above  appraisal. He                                                               
summarized that  the department sells over-the-counter  lands for                                                               
the fair market appraisal.                                                                                                      
SENATOR BISHOP  asked if the State  could carry the notes  on the                                                               
auction and over-the-counter land sales.                                                                                        
MR. PARSONS answered yes. He explained  that DNR can enter into a                                                               
contract with the individual to finance the land sale.                                                                          
4:05:48 PM                                                                                                                    
CHAIR MICCICHE said  he is interested in knowing  how DNR selects                                                               
lands. He asked  why DNR does not have a  process like the Alaska                                                               
Mental Health  Trust Authority where interested  parties can make                                                               
offers  on a  piece  of  property. He  asked  if  DNR would  ever                                                               
consider surveying,  platting, and offering at  fair market value                                                               
even if the  property must go to competitive  bid where closer-in                                                               
properties may become available.                                                                                                
MR.  PARSONS  answered  yes. He  explained  that  the  department                                                               
allows nominated parcels  of land to go up to  a competitive bid.                                                               
The  department   has  proposed  legislation  that   allows  land                                                               
nomination for economic development  opportunities. The bill will                                                               
allow the  department to define subdivision  development areas to                                                               
take advantage of economies of  scale associated with development                                                               
He said  there are opportunities  where people look  for specific                                                               
parcels.  The  department  tries to  balance  between  individual                                                               
parcel  availability and  the potential  of  blocking access  for                                                               
resource  development. He  noted  that in  the  1970s, the  State                                                               
allowed  individuals to  stake  up to  five  acres wherever  they                                                               
wanted  that resulted  in a  gauntlet  between a  major road  and                                                               
4:08:11 PM                                                                                                                    
SENATOR KIEHL addressed slide 8  where the final sentence states,                                                               
"The  PFD Land  Voucher  Bill would  be a  win-win  for both  the                                                               
individual Alaskan and  the state treasury." He said  he does not                                                               
see  a win  for the  state treasury  where the  department incurs                                                               
surveying and  platting costs,  but 25 percent  of the  land sale                                                               
price goes  to the general fund.  He asked if the  State would be                                                               
better  off  if  the  department  received  more  funds  to  plat                                                               
neighborhoods  and  subdivisions and  then  sell  the land  under                                                               
current  terms  for  fair  market or  something  just  over  fair                                                               
MR. PARSONS emphasized that the State  is trading a chunk of land                                                               
for dollars to remain in  the general fund versus distribution to                                                               
MR. BARNHILL explained that section  5 provides that the foregone                                                               
cash amount for the PFD lapses  into the general fund and it sort                                                               
of functions  as a down payment  because 50 percent of  the value                                                               
of the land  voucher goes directly to the  Alaska Permanent Fund.                                                               
He referenced his previous example  that $1,000 would go from the                                                               
fund for  the PFD into  the general fund  and function as  a down                                                               
4:10:54 PM                                                                                                                    
CHAIR MICCICHE asked Senator Kiehl  if he understood the previous                                                               
SENATOR KIEHL answered that he did not.                                                                                         
CHAIR MICCICHE said  he would like to see Mr.  Barnhill's math on                                                               
how the  net to  the State  is the  same or  better for  the land                                                               
voucher program.                                                                                                                
MR.  BARNHILL agreed  to provide  the information.  He reiterated                                                               
that  the person  who does  not  elect the  $1,000 cash  dividend                                                               
receives  a  $2,000 voucher  and  the  $1,000  goes back  to  the                                                               
general fund.                                                                                                                   
SENATOR  GIESSEL pointed  out that  the money  would actually  go                                                               
back to  the general fund  because money appropriated to  the PFD                                                               
fund first goes to the general fund.                                                                                            
She noted that  land was subdivided years ago in  Willow to build                                                               
a new  capitol. She asked  if the State  owns the land  in Willow                                                               
and if the State has offered the land for sale.                                                                                 
4:13:04 PM                                                                                                                    
MR.  PARSONS  answered  that  the  State does  own  land  in  the                                                               
borough.  However,  the  department  has issues  with  costs  for                                                               
development.  There is  land to  offer  in the  areas of  Willow,                                                               
Wasilla, Kenai  Peninsula Borough,  and the Fairbanks  North Star                                                               
Borough, but high development costs are the issue.                                                                              
SENATOR  BISHOP  asked  Mr.  Barnhill  to  provide  a  cash  flow                                                               
schematic at the next bill hearing.                                                                                             
MR. BARNHILL replied he will comply.                                                                                            
SENATOR COGHILL said  people will receive a  voucher that creates                                                               
a  trading  stock for  either  trading  with  DNR or  selling  to                                                               
individuals  that want  to  combine multiple  vouchers  to buy  a                                                               
piece of  property. He pointed  out that a situation  could occur                                                               
where people bidding  strictly with cash on  properties will feel                                                               
disadvantaged versus individuals bidding with vouchers.                                                                         
MR. BARNHILL noted that there  have been discussions on the point                                                               
that  Senator Coghill  addressed.  He suggested  that the  Alaska                                                               
Department  of  Law  should  answer  Senator  Coghill's  question                                                               
because the concern he raised is one that will certainly occur.                                                                 
CHAIR MICCICHE asked for the sectional analysis.                                                                                
4:16:40 PM                                                                                                                    
MR. BARNHILL  presented the following  sectional analysis  for SB
     Section 1                                                                                                                
     Amends AS 38.05.940(c) to allow  a veteran to apply one                                                                    
     or  more   dividend  land  vouchers  issued   under  AS                                                                    
     43.23.018 to the one-time  purchase of discounted state                                                                    
     land  under  AS   38.05.940(c)  ("Land  purchase  price                                                                    
     discount for veterans.")                                                                                                   
     Section 2                                                                                                                
     Amends  AS  38.05.940(d)  to limit  a  person  using  a                                                                    
     dividend  land  voucher  to   purchase  land  under  AS                                                                    
     43.23.018  to purchasing  surface rights  only, and  to                                                                    
     prohibit  a  person  from   applying  a  dividend  land                                                                    
     voucher to  costs ineligible for  a discount  under the                                                                    
     Section 3                                                                                                                
     Amends  AS  38.95  by  adding  two  new  sections.  New                                                                    
     section AS 38.95.350 directs  the Department of Natural                                                                    
     Resources (DNR), except as  provided under AS 38.05.067                                                                    
     as  (modified by  Section  1), to  accept  one or  more                                                                    
     dividend   land  vouchers   (issued  under   provisions                                                                    
     enacted in Section 6) at  their face value for purchase                                                                    
     of state  land under  land contracts. It  prohibits DNR                                                                    
     from accepting  vouchers for payment  of rents  or fees                                                                    
     or  land  purchases  other than  as  provided  in  this                                                                    
     section,  or for  state  land  sales contracts  entered                                                                    
     into  before  January  1,  2021.   A  voucher  will  be                                                                    
     exhausted  after one  use whether  it covered  the full                                                                    
     land sale price or not,  and applicants are entitled to                                                                    
     no  refund  or other  credit  for  any portion  of  the                                                                    
     voucher's value remaining after such a sale.                                                                               
     The second  new section, AS 38.95.360,  requires DNR to                                                                    
     report to the governor before  September 1 of each year                                                                    
     the number  and total  value of dividend  land vouchers                                                                    
     it accepted  for payment in  the previous  fiscal year.                                                                    
     Such  reports may  include recommendations  for changes                                                                    
     in the  requested appropriation  for the  Land Disposal                                                                    
     Income Fund (LDIF). This  provision is required because                                                                    
     acceptance of state  land vouchers will proportionately                                                                    
     reduce revenues  generated from  state land  sales that                                                                    
     are deposited  into the LDIF.  Loss of these  funds, if                                                                    
     not replaced by another  revenue source, will result in                                                                    
     significant challenges  to maintaining DNR's  land sale                                                                    
     Section 4                                                                                                                
     Adds  a  new  section,  AS  43.23.018.  Subsection  (a)                                                                    
     directs  DOR to  allow  a person  using the  electronic                                                                    
     application for a  Permanent Fund dividend    and not a                                                                    
     person or  public agency applying on  behalf of another                                                                    
     individual, or  an assignee of  the right to  receive a                                                                    
     dividend  to make an irrevocable  election to receive a                                                                    
     single  dividend land  voucher  instead  of a  monetary                                                                    
     dividend. It makes an assignee  of the right to receive                                                                    
     a dividend  ineligible to elect  to receive  a dividend                                                                    
     land  voucher.  It  directs DOR,  if  unable  during  a                                                                    
     dividend  year to  determine  whether  an applicant  is                                                                    
     eligible   to  receive   a  dividend,   to  void   that                                                                    
     applicant's  election   to  receive  a   dividend  land                                                                    
     voucher;  if  later  determined  to  be  eligible,  the                                                                    
     applicant  will  be  eligible  to  receive  a  monetary                                                                    
     dividend, but not  to elect to receive  a dividend land                                                                    
     Subsection  (b)  sets  the value  of  a  dividend  land                                                                    
     voucher at  twice the value  of a monetary  dividend as                                                                    
     calculated under  AS 43.23.025 if 50  percent of income                                                                    
     available  distribution was  deposited into  the Fund's                                                                    
     dividend  fund under  AS  37.13.145(b). Subsection  (c)                                                                    
     limits the  use of  vouchers only  to purchase  of land                                                                    
     under  AS   38.95.350  (as   enacted  by   Section  4).                                                                    
     Subsection  (d)  provides  that vouchers  issued  under                                                                    
     this  section  do  not  expire.  Subsection  (e)  makes                                                                    
     vouchers   transferable  to   any   person,  bars   the                                                                    
     department  from  preventing   or  keeping  records  of                                                                    
     transfers;  and prohibits  bringing action  against the                                                                    
     state  related to  transfer of  a  state land  voucher.                                                                    
     Subsection (f)  provides that  issuing a  land dividend                                                                    
     voucher creates no obligation on  DNR to make any state                                                                    
     land  available for  sale  or to  enter  any land  sale                                                                    
     contract, nor  does it represent DNR's  statement as to                                                                    
     the  person's  eligibility   to  purchase  state  land.                                                                    
     Subsection  (g) provides  that the  value of  a voucher                                                                    
     subject to attachment for debt  collection is set under                                                                    
     AS 43.23.140(e), and DNR shall  issue land vouchers for                                                                    
     the value remaining after such collection.                                                                                 
4:18:13 PM                                                                                                                    
CHAIR MICCICHE  referred to  AS 43.23.025(b),  noting that  he is                                                               
worried if the  legislature changes the dividend  program and the                                                               
statute no longer exists. He said  the bill does not seem to have                                                               
language  that  says,  "or current  statutory  calculation  under                                                               
another citation."                                                                                                              
MR. BARNHILL  replied the suggestion  is fair and  the department                                                               
is happy to  accept that as a friendly amendment.  The purpose is                                                               
that  the land  voucher  calculation be  based  on the  statutory                                                               
value of the cash PFD  wherever enacted into law. The legislative                                                               
drafter may have  expected that a formula change  would happen in                                                               
AS  43.23.025. However,  if the  change does  occur in  the noted                                                               
statute,  the   words  offered  as   a  friendly   amendment  are                                                               
completely fine.                                                                                                                
4:19:45 PM                                                                                                                    
MR.  BARNHILL continued  the  sectional analysis  for  SB 217  as                                                               
     Section 5                                                                                                                
     Amends  AS 43.23.045  by adding  a new  subsection (f),                                                                    
     directing that  any value  of Permanent  Fund dividends                                                                    
     remaining  in  the  Alaska  Permanent  Fund's  dividend                                                                    
     account  after individual  elections  to receive  state                                                                    
     land  vouchers  instead  of  monetary  dividends  will,                                                                    
     after application  of collection or  garnishment action                                                                    
     under AS 43.23.140, lapse back to the General Fund.                                                                        
     Section 6                                                                                                                
     Amends    AS   43.23.055    by   expanding    the   DOR                                                                    
     commissioner's  duties to  include  issuing state  land                                                                    
     vouchers  under AS  43.23.180; directs  DOR to  develop                                                                    
     regulations  to establish  procedures  and time  limits                                                                    
     for  voucher  issuance  and use;  and  directs  DOR  to                                                                    
     report annually  to DNR both the  number of individuals                                                                    
     electing to  receive land vouchers instead  of monetary                                                                    
     dividends, and  the number and  value of  such vouchers                                                                    
     Section 7                                                                                                                
     Amends  AS  43.23.140(a)  to refer  to  the  additional                                                                    
     exception (enacted  in Section 9)  to the rule  that 20                                                                    
     percent of  an individual's Permanent Fund  dividend is                                                                    
     exempt from  levy, execution,  garnishment, attachment,                                                                    
     or any other remedy for the collection of debt.                                                                            
     Section 8                                                                                                                
     Amends AS 43.23.140  by adding a new  subsection (e) to                                                                    
     specify that  the value of  a land voucher may  only be                                                                    
     attached  up to  the amount  available for  garnishment                                                                    
     from a  monetary dividend, before  the land  voucher is                                                                    
     issued,  notwithstanding  exceptions enumerated  in  AS                                                                    
     43.23.140(a)  (established  under  Section 10)  and  AS                                                                    
     Section 9                                                                                                                
     Adds a  new subsection  AS 43.23.240(d),  directing the                                                                    
     Department  of Health  and  Social  Services (DHSS)  to                                                                    
     consider a  land voucher issued  under AS  43.23.018 as                                                                    
     income  or resources  of an  applicant, in  calculating                                                                    
     that  applicant's  eligibility  for  public  assistance                                                                    
     programs  it  administers,  and to  notify  all  public                                                                    
     assistance  recipients of  the effects  of receiving  a                                                                    
     dividend land voucher.                                                                                                     
MR.  BARNHILL detailed  that Section  9 makes  it clear  that the                                                               
value of  the land voucher  is not  subject to the  Hold Harmless                                                               
Program for  Medicaid eligibility. He  pointed out that  the land                                                               
voucher becomes an  asset and counted as  income towards Medicaid                                                               
4:21:32 PM                                                                                                                    
SENATOR  KIEHL asked  if the  Medicaid eligibility  considers the                                                               
land voucher as  income at cash value or face  value. He inquired                                                               
if  Medicaid eligibility  will consider  the land  voucher as  an                                                               
asset for asset exclusions.                                                                                                     
MR.  BARNHILL  replied  that  income   and  asset  testing  would                                                               
consider the land  voucher at face value. He  suggested that DHSS                                                               
provide further explanation on Medicaid eligibility.                                                                            
SENATOR KIEHL  asked if  a needs-based  program will  consider an                                                               
individual's  sale of  a  land voucher  as  income for  assessing                                                               
program eligibility.                                                                                                            
MR. BARNHILL suggested DHSS follow  up and answer his question on                                                               
Medicaid eligibility.                                                                                                           
CHAIR   MICCICHE  commented   that  Senator   Kiehl  asked   good                                                               
questions,  primarily  due to  the  lack  of accountability  when                                                               
there is  no voucher record.  People can say that  they purchased                                                               
or sold land  vouchers for any price because  the department does                                                               
not care.                                                                                                                       
He noted  that the land voucher  has a combination of  face value                                                               
and cash value. The voucher has a  face value when not used and a                                                               
cash value  when used to purchase  land. He said he  did not know                                                               
how the  voucher's combination value  would work with tax  law or                                                               
with DHSS. He agreed that  the committee should have DHSS address                                                               
the  voucher's impact  on eligibility.  He said  a family  of six                                                               
could save land vouchers for three  years and have an asset worth                                                               
something, particularly to purchase state land.                                                                                 
MR.  BARNHILL  pointed out  that  children  are not  eligible  to                                                               
participate in the land voucher program.                                                                                        
CHAIR MICCICHE  summarized that outside  of combining  with adult                                                               
children,  strictly a  family with  a  single adult  or a  couple                                                               
could apply for a voucher.                                                                                                      
MR. BARNHILL answered correct.                                                                                                  
4:24:58 PM                                                                                                                    
MR. BARNHILL continued the sectional analysis for SB 217:                                                                       
     Section 10                                                                                                               
     Adds  a  new  subsection AS  43.23.250(b),  to  require                                                                    
     financial  needs-based  programs  administered  by  the                                                                    
     state or  by a state instrumentality  or a municipality                                                                    
     to consider the  value of a dividend  land voucher held                                                                    
     by an  applicant as income or  resources in determining                                                                    
     whether the person was eligible for the program.                                                                           
     Section 11                                                                                                               
     Adds a  new subsection to AS  43.23.270. New subsection                                                                    
     (f) applies the same  penalties for violations of state                                                                    
     law  relating to  Permanent  Fund dividend  eligibility                                                                    
     and application, to  dividend land vouchers eligibility                                                                    
     and application.                                                                                                           
     Section 12                                                                                                               
     Establishes as the bill's effective  date as January 1,                                                                    
CHAIR MICCICHE  said he  can cover  the fiscal  note at  the next                                                               
meeting when discussing  cash flow. He added  that the department                                                               
will  remove verbiage  in the  legislation as  referenced in  the                                                               
last sentence on slide 8.                                                                                                       
MR.  BARNHILL said  the DOR  fiscal note  was covered  during the                                                               
presentation. He  said he did not  know if DNR had  a fiscal note                                                               
to present.                                                                                                                     
4:26:16 PM                                                                                                                    
MR.  PARSONS explained  that DNR's  fiscal note  is indeterminate                                                               
because the  number of voucher  participants is unknown.  He said                                                               
there are  so many  possibilities that  the department  could not                                                               
present a solid number. There will  be an affect on cash flow and                                                               
the LDIF  going forward.  However, the  voucher program  does not                                                               
take  effect  until 2021  and  will  not immediately  affect  the                                                               
CHAIR MICCICHE replied that is fair.                                                                                            
He questioned  the department's ability  to initiate  the program                                                               
for $51,000 in  the first year, an amount that  would probably be                                                               
higher  for  a  legislator putting  similar  legislation  forward                                                               
versus the administration.  He said more power  to the department                                                               
if they can  mechanically pull off the program in  the first year                                                               
for $51,000.                                                                                                                    
CHAIR  MICCICHE said  the bill  is  fascinating and  he likes  it                                                               
because  Alaskans  are  hungry  for   land.  He  noted  that  the                                                               
administration  has talked  about back  PFDs quite  a bit  in the                                                               
last couple of years. However,  the voucher program moves forward                                                               
from  the January  1, 2021  effective date  and does  not include                                                               
back PFDs in value.                                                                                                             
MR. BARNHILL  answered correct.  He said  the primary  purpose of                                                               
the bill  is to get  land into the  hands of Alaskans  faster. He                                                               
admitted that one could make an  argument that a biproduct of the                                                               
bill is that it does provide  some compensation for PFDs not paid                                                               
according to the  formula. However, the intent of the  bill is to                                                               
accelerate the disposal of land.                                                                                                
4:28:41 PM                                                                                                                    
SENATOR REVAK  asked that the  next time the committee  hears the                                                               
bill  that   the  department  addresses  voucher   numbering  and                                                               
trackability  to  the  individual.  He said  he  did  not  really                                                               
understand the anonymity of the voucher program.                                                                                
MR. BARNHILL replied he will submit  a voucher mockup at the next                                                               
meeting   that  shows   some   anticounterfeiting  features.   He                                                               
explained that  the official-looking  voucher will have  a serial                                                               
number, a name, and look like a bearer bond.                                                                                    
CHAIR MICCICHE stated that the  committee should consider whether                                                               
to support  the bill moving  forward, especially due to  its out-                                                               
of-the-box approach for the disposing  of state land to Alaskans,                                                               
a  topic he  hears weekly  about from  constituents. He  admitted                                                               
that he is worried about the  lack of trackability as well as the                                                               
department not  including transfer recording in  its fiscal note.                                                               
He  pointed out  that tracking  does  not need  a dollar  amount.                                                               
However,  not having  trackability leaves  the program  wide open                                                               
for theft, elder  abuse, and all kinds of things  that come along                                                               
with  untraceable  assets.  He  said he  will  focus  on  voucher                                                               
tracking and  asked that the  department provide its  thoughts on                                                               
trackability moving forward.                                                                                                    
4:30:52 PM                                                                                                                    
SENATOR BISHOP  asked Mr.  Parsons if  the department  has enough                                                               
land to meet the interest.                                                                                                      
MR. PARSONS answered that land  availability will be a challenge.                                                               
The department  will need to  aggressively move forward  with the                                                               
decision-making   process  to   get  the   lands  prepared.   The                                                               
department will also  have to go back and look  at developed area                                                               
plans  to identify  and reclassify  adjacent lands.  He said  the                                                               
program will be  a lift for the department but  is confident that                                                               
the staff will keep up.                                                                                                         
MR. BARNHILL  said the department  is happy to engage  in further                                                               
discussion on trackability. He admitted  that the department made                                                               
a  judgement call  to not  include trackability  in an  effort to                                                               
make the program as efficient as possible.                                                                                      
CHAIR MICCICHE said  what should be clear is that  over the years                                                               
a young family  could forgo receiving a PFD and  build up quite a                                                               
portfolio of  land vouchers. However, not  everyone keeps records                                                               
equally and something could go  horribly wrong without a tracking                                                               
system when individuals  decide to purchase their  dream piece of                                                               
4:33:18 PM                                                                                                                    
[CHAIR MICCICHE held SB 217 in committee.]                                                                                      
                SB 217-STATE LAND VOUCHER; PFDS                                                                             
4:41:35 PM                                                                                                                    
CHAIR MICCICHE  returned attention  to SB  217 and  opened public                                                               
4:41:50 PM                                                                                                                    
VIKKI JO  KENNEDY, representing  self, Kodiak,  Alaska, testified                                                               
in support of SB  217. She said she likes the  idea of being able                                                               
to buy  land with vouchers. She  noted that there is  very little                                                               
public  sector land  available on  Kodiak  Island's 80-mile  road                                                               
system.  She asked  if the  January 2021  effective date  for the                                                               
bill applies to the 2020 or 2021 PFD.                                                                                           
4:46:32 PM                                                                                                                    
CHRIS  EICHENLAUB,  representing  self,  Eagle  River, testified                                                                
in support  of  SB 217.  He said  the land  voucher  is the  gift                                                               
that keeps  on giving.                                                                                                          
4:47:30 PM                                                                                                                    
CHAIR MICCICHE  held SB  217 in  committee with  public testimony                                                               

Document Name Date/Time Subjects
SB 217 v. A.PDF SRES 3/2/2020 3:30:00 PM
SB 217
SB 217 Transmittal Letter 2.20.2020.pdf SRES 3/2/2020 3:30:00 PM
SB 217
SB 217 Sectional Analysis 2.25.2020.pdf SRES 3/2/2020 3:30:00 PM
SB 217
SB 217 Fiscal Note DNR-MLW 02.20.2020.pdf SRES 3/2/2020 3:30:00 PM
SB 217
SB 217 Fiscal Note DOR-PFD 02.20.2020.pdf SRES 3/2/2020 3:30:00 PM
SB 217
HJR 25 ver. M.PDF SRES 3/2/2020 3:30:00 PM
HJR 25
HJR 25 Sponsor Statement 02.12.2020.pdf SRES 3/2/2020 3:30:00 PM
HJR 25
HJR 25 Fiscal Note-LEG-SESS-02.11.2020.pdf SRES 3/2/2020 3:30:00 PM
HJR 25
HJR 25 News Article AP News 02.24.2020.pdf SRES 3/2/2020 3:30:00 PM
HJR 25
SB 217 PFD Presentation 03.2.2020.pdf SRES 3/2/2020 3:30:00 PM
SB 217
SB 217 DNR-MLW Presentation 03.02.2020.pdf SRES 3/2/2020 3:30:00 PM
SB 217