Legislature(2019 - 2020)BUTROVICH 205

03/18/2020 03:30 PM Senate RESOURCES

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Moved CSSB 189(RES) Out of Committee
-- Public Testimony --
Moved CSSB 217(RES) Out of Committee
-- Public Testimony --
Heard & Held
-- Testimony <Invitation Only> --
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Bills Previously Heard/Scheduled
                SB 217-STATE LAND VOUCHER; PFDS                                                                             
4:02:52 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."                                                                    
He said this is the second hearing and public testimony is open.                                                                
4:03:41 PM                                                                                                                    
MIKE   BARNHILL,  Deputy   Commissioner,  Alaska   Department  of                                                               
Revenue,  Juneau,   Alaska,  reminded  the  committee   that  the                                                               
governor introduced  the legislation to give  people applying for                                                               
their Permanent  Fund Dividend (PFD)  the option of  electing, in                                                               
lieu of a  cash dividend, a land voucher that  is worth two times                                                               
the cash dividend.                                                                                                              
4:05:23 PM                                                                                                                    
He said  there were questions  during the previous  hearing about                                                               
how the  cashflow would  work for the  land voucher.  He directed                                                               
attention  to slide  2, PFD  Land Voucher,  Cashflow Hypothetical                                                               
and provided the following summary:                                                                                             
   • The land voucher calculation is two times the statutory PFD                                                                
   • The money that moves  from  the  Earnings Reserve  Account                                                                 
     (ERA), to  the General Fund  (GF), to  the PFD Fund,  is the                                                               
     total  number of  applicants multiplied  by the  amount that                                                               
     the legislature has appropriated per person.                                                                               
   • 640,000 eligible applicants at  $1,000  per person  equals                                                                 
     $640 million moving to the PFD Fund.                                                                                       
   • The cash PFD payout to 600,000 people multiplied by $1,000                                                                 
     per  person equals  $600 million,  but $40  million in  cash                                                               
     remains because 40,000 applicants elected the land voucher.                                                                
   • Under the bill, the $40 million in cash lapses back to the                                                                 
   • The face value of the land vouchers  is $4,600  per person                                                                 
     multiplied  by  the  40,000   elections  which  equals  $184                                                               
   • DNR sells $300 million in land with  $184 million  paid in                                                                 
     land vouchers and $116 million in cash.                                                                                    
   • The $116 million in cash goes into the  GF as cash  on the                                                                 
     land sale,  plus the  $40 million that  lapsed from  the PFD                                                               
     fund which  equals a  total of $156  million going  into the                                                               
MR. BARNHILL  noted that the  bill provides that DNR  can request                                                               
some of  the money  related to the  land voucher  be appropriated                                                               
back  to  the  department  for   purposes  of  administering  the                                                               
SENATOR  KIEHL asked  what  the  average acre  of  state land  is                                                               
selling for.  He said  he assumed that  the statewide  average is                                                               
$3,000 to $4,000 per acre.                                                                                                      
MR. BARNHILL deferred the question to DNR.                                                                                      
CHAIR MICCICHE  said the prices  vary dramatically; the  value of                                                               
an accessible lake  parcel is significantly higher  than a drier,                                                               
less accessible parcel.                                                                                                         
4:10:10 PM                                                                                                                    
MARTIN PARSONS,  Director, Division  of Mining, Land,  and Water,                                                               
Alaska  Department  of   Natural  Resources,  Anchorage,  Alaska,                                                               
answered  that the  average  price  is $3,000  per  acre, but  it                                                               
varies widely.  Lands in Southeast Alaska  with oceanfront access                                                               
will sell  for upwards  of $70,000 for  a 5-acre  parcel, whereas                                                               
land around Tok  or the Richardson Highway may go  for $13,000 to                                                               
$15,000 for a 5-acre parcel.                                                                                                    
SENATOR KIEHL noted that the  hypothetical cashflow example would                                                               
equate to  DNR selling 20,000 to  100,000 acres a year.  He asked                                                               
if DNR has that acreage surveyed and ready to sell.                                                                             
MR.  PARSONS replied  DNR  could make  200,000  to 250,000  acres                                                               
available by auction time.                                                                                                      
SENATOR  KIEHL  said  the  information  indicates  that  DNR  was                                                               
selling  2,000  to  3,000  acres   a  year  so  the  response  is                                                               
surprising but interesting.                                                                                                     
4:12:15 PM                                                                                                                    
MR.   BARNHILL  stated   that  the   purpose   of  the   cashflow                                                               
hypothetical  was to  show  how the  cash moves.  It  was not  to                                                               
suggest the  volume of  land that DNR  would make  available. Any                                                               
similarity between the implied volume  of land in the example and                                                               
what Mr. Parson said is purely coincidental, he said.                                                                           
SENATOR  KIEHL  responded that  the  connection  is cash  to  the                                                               
general  fund from  land sales.  If the  quantity of  land that's                                                               
available  isn't anywhere  near  $300 million,  one can't  assume                                                               
that level of  cash will come in. The bottom  line to the general                                                               
fund changes dramatically depending on what is really for sale.                                                                 
MR. BARNHILL reiterated that his intent  was to show how the cash                                                               
flows, not  the amount of money  that will be raised  in the land                                                               
voucher program.                                                                                                                
CHAIR MICCICHE responded that the  committee understands that and                                                               
Senator Kiehl is satisfied with the answer.                                                                                     
MR.  BARNHILL  said the  discussion  and  comments by  the  Chair                                                               
during the previous hearing persuaded  the department to set up a                                                               
plan  to track  transfers of  land received  through the  voucher                                                               
program as well  as replacement of lost or  stolen land vouchers.                                                               
He  noted the  amendment for  the committee's  consideration that                                                               
would allow that to happen.                                                                                                     
4:14:58 PM                                                                                                                    
CHAIR MICCICHE  remarked that the amendment  strengthens the bill                                                               
and  said   he  appreciates  that  the   department  changed  its                                                               
MR.  BARNHILL  said  his  hope is  that  the  proposed  amendment                                                               
accomplishes the intention of Chair Micciche's recommendation.                                                                  
He  directed attention  to the  land voucher  mockup in  the bill                                                               
packets and detailed  that it looks like a  traditional bond with                                                               
a  serial  number  for identification,  the  $4,600  hypothetical                                                               
value, verbiage  from the bill  about what  it can and  cannot be                                                               
used for,  information on how  to register and transfer  with the                                                               
Alaska Department of  Revenue, a statement that  the land voucher                                                               
does  not expire,  and  the name  of the  person  the voucher  is                                                               
issued  to is  on  the  document. He  added  that the  department                                                               
anticipates adding  some anti-counterfeiting features  to protect                                                               
the authenticity of the document.                                                                                               
MR.  BARNHILL   noted  that  Shawnda  O'Brien   from  the  Alaska                                                               
Department of Health and Social  Services (DHSS) was available to                                                               
answer  questions such  as the  one  Senator Kiehl  posed at  the                                                               
previous hearing  about the  exclusion of  the land  voucher from                                                               
the hold harmless clause.                                                                                                       
CHAIR MICCHICHE  asked Mr.  Milks from  the Alaska  Department of                                                               
Law to first address the  committee's questions from the previous                                                               
hearing on SB 217.                                                                                                              
4:18:51 PM                                                                                                                    
WILLIAM MILKS, Assistant Attorney  General, Civil Division, Labor                                                               
and  State Affairs  Section, Alaska  Department  of Law,  Juneau,                                                               
Alaska, noted  that a  committee member  asked a  question during                                                               
the  previous  meeting  about  the  equal  protection  clause  in                                                               
relation  to  SB 217.  He  explained  that the  equal  protection                                                               
clause  is in  the  United  States Constitution  as  well as  the                                                               
Alaska  Constitution.  It  is often  raised  because  legislation                                                               
frequently makes distinctions between individuals.                                                                              
MR. MILKS  said Department  of Law's  view is  the State  has the                                                               
rational basis  to provide  a land voucher  to its  residents who                                                               
meet the residency requirements in  the bill. The department does                                                               
not see  the land  voucher raising  a constitutional  issue about                                                               
equal protection  because like the PFD,  qualification requires a                                                               
residency period.                                                                                                               
He detailed that the Alaska  Supreme Court at different times has                                                               
reviewed   the  constitutionality   of   the   PFD  program   and                                                               
specifically the eligibility requirements.  It has concluded that                                                               
the PFD eligibility requirements  are constitutional because they                                                               
meet the rational basis test  and focus on ensuring and verifying                                                               
actual bonified residency for the benefit.                                                                                      
MR.  MILKS summarized  that in  the department's  mind, the  land                                                               
voucher  program  passes  constitutional   muster  on  the  equal                                                               
protection  clause  due   to  its  similarity  to   the  PFD  and                                                               
university tuition reduction for residents.                                                                                     
4:23:04 PM                                                                                                                    
SENATOR  COGHILL specified  that his  question from  the previous                                                               
hearing  related  to possible  inequality  where  DNR deems  cash                                                               
offers  for land  as being  more valuable  than offers  with land                                                               
MR. MILKS  replied it is  DOL's view that  the dollar sum  of the                                                               
voucher is equal to cash.                                                                                                       
SENATOR COGHILL said  he would take the answer at  face value and                                                               
think more about how it might be challenged.                                                                                    
SENATOR KIEHL  asked Ms.  O'Brien why, unlike  the PFD,  the bill                                                               
entirely exempts the land voucher  program from the hold harmless                                                               
provisions for asset exclusion testing.                                                                                         
4:27:00 PM                                                                                                                    
SHAWNDA O'BRIEN, Director, Division  of Public Assistance, Alaska                                                               
Department  of   Health  &   Social  Services,   Juneau,  Alaska,                                                               
explained  that  the hold  harmless  provisions  apply to  public                                                               
assistance  eligibility  so that  recipients  do  not lose  their                                                               
benefits.  The  asset  resource  test  allows  up  to  $2,000  as                                                               
countable and anything above that  counts against the eligibility                                                               
criteria. She confirmed  that the State counts the  PFD as income                                                               
against program eligibility criteria.                                                                                           
MS.  O'BRIEN specified  that the  State will  not count  the land                                                               
voucher  against  a  participant's  program  eligibility  if  the                                                               
individual  uses the  voucher for  a primary  residence. However,                                                               
the   State  will   count  the   land  voucher   against  program                                                               
eligibility   if   the   individual    uses   the   voucher   for                                                               
nonresidential   property.   Each    individual   case   requires                                                               
evaluation to assess different parameters or circumstances.                                                                     
MS.  O'BRIEN said  the hold  harmless rules  are federal  and the                                                               
State could  incur significant costs for  maintaining eligibility                                                               
in lieu of following federal rules.                                                                                             
4:30:24 PM                                                                                                                    
SENATOR KIEHL  noted that  the committee  saw stirring  images in                                                               
the  previous hearing  of Alaskans  getting a  piece of  land and                                                               
building self-sufficiency.  He asked  if using the  land vouchers                                                               
makes sense for someone to use towards self-sufficiency.                                                                        
MS. O'BRIEN  replied it depends  on the individual  situation and                                                               
whether  the  land  voucher would  become  the  person's  primary                                                               
residence, or it would be excluded from the asset resource test.                                                                
SENATOR  KIEHL pointed  out that  DHSS did  not provide  a fiscal                                                               
note. He noted that the well-know  principle for over 30 years is                                                               
that a PFD  is not going to  hurt a person's ability  to get help                                                               
feeding  their children.  He  asked what  DHSS  would require  to                                                               
properly educate  clients to avoid family  assistance mistakes in                                                               
electing a land voucher                                                                                                         
MS. O'BRIEN  answered that DHSS  would need to  work considerably                                                               
on informing  people to  make sure they  know what  the potential                                                               
impact would  be. While DHSS is  not in the business  of advising                                                               
people of what they should or  should not do, people need to know                                                               
how  the   land  voucher  would   count  towards   their  program                                                               
CHAIR  MICCICHE  announced  that  the  committee  would  move  to                                                               
amendments. He said he considers the amendments as friendly.                                                                    
4:33:55 PM                                                                                                                    
SENATOR COGHILL moved Amendment 1, A.1.                                                                                         
                          AMENDMENT 1                                                                                       
     OFFERED IN THE SENATE              BY SENATOR MICCICHE                                                                     
          TO: SB 217                                                                                                            
     Page 3, lines 16 - 17:                                                                                                     
          Delete "The department may not approve or deny                                                                        
     any transfer."                                                                                                             
     Page 3, line 17:                                                                                                           
          Delete "may not"                                                                                                      
          Insert "shall"                                                                                                        
     Page 5, line 24, following "voucher":                                                                                      
          Insert "and for replacing a lost, stolen, or                                                                          
     destroyed state land voucher"                                                                                              
     Page 5, line 28, following "issued":                                                                                       
          Insert ";                                                                                                           
             (14) maintain a registry of state land                                                                             
     voucher transfers"                                                                                                         
CHAIR MICCICHE objected for discussion purposes.                                                                                
MR.  BARNHILL explained  that  the first  part  of the  amendment                                                               
deletes the language that says  the department may not approve or                                                               
deny any  transfer and that  change allows the  Alaska Department                                                               
of Revenue  to approve  and deny transfers.  Language on  page 3,                                                               
line 17,  conforms with  that. Lines  8 and  9 authorizes  DOR to                                                               
replace  stolen,  lost, or  destroyed  state  land vouchers,  and                                                               
lines 11-13 authorizes  the department to maintain  a registry of                                                               
voucher transfers.                                                                                                              
4:35:08 PM                                                                                                                    
CHAIR MICCICHE  removed his objection and  announced that without                                                               
further objection Amendment 1 is adopted.                                                                                       
4:35:24 PM                                                                                                                    
SENATOR COGHILL  moved conceptual Amendment 2.  He explained that                                                               
the amendment inserts on page 2,  line 11, the phrase "other than                                                               
Mental Health Trust land" after the word "land."                                                                                
CHAIR  MICCICHE objected  for discussion  purposes. He  asked Mr.                                                               
Barnhill to comment.                                                                                                            
MR. BARNHILL said  his understanding is that  the amendment would                                                               
make  Mental Health  Trust  land  not part  of  the land  voucher                                                               
program. He  asked Senator Coghill  to confirm that that  was his                                                               
SENATOR COGHILL answered  that he was carrying  the amendment for                                                               
Mr. Barnhill.                                                                                                                   
CHAIR  MICCICHE   explained  that   Amendment  2  is   an  Alaska                                                               
Department of  Natural Resources (DNR) amendment  to clarify that                                                               
the  land vouchers  are  not available  for  Mental Health  Trust                                                               
4:36:51 PM                                                                                                                    
CHAIR MICCICHE  removed his objection and  announced that without                                                               
further objection, conceptual Amendment 2 is adopted.                                                                           
4:37:08 PM                                                                                                                    
CHAIR MICCICHE opened public testimony.                                                                                         
4:37:18 PM                                                                                                                    
AUSTIN WILLIAMS,  Alaska Director  of Law and  Policy, Government                                                               
Affairs, Trout Unlimited Alaska,  Anchorage, Alaska, testified in                                                               
opposition to  SB 217. He said  SB 217 in its  broader context is                                                               
an important companion to SB 204,  the state land sales bill. For                                                               
many Alaskans, public lands are  an essential part of their daily                                                               
life to  fish, hunt, camp, and  ski. Some state lands  are iconic                                                               
like  the Chugach  or  Denali  state parks,  but  the bill  would                                                               
affect  Alaska's fishing  and  hunting that  takes  place on  DNR                                                               
managed lands outside of the state park system.                                                                                 
He said he  understands the immense fiscal pressure  on the State                                                               
and Permanent  Fund, but any solutions  must responsibly consider                                                               
the long-term implications  and future costs. State  land and the                                                               
immense  resources  they  contain   are  Alaska's  most  valuable                                                               
assets.  State  lands  contain   fish  and  wildlife  that  fills                                                               
freezers, provides reliable sources  of income through commercial                                                               
fishing,   guiding,   and   tourism,   and   acts   as   cultural                                                               
MR.   WILLIAMS   concluded   saying   that   SB   217   increases                                                               
privatization  of state  lands at  deeply  discounted rates  that                                                               
will not solve the State's financial woes.                                                                                      
4:40:37 PM                                                                                                                    
KATIE  BOTZ,  representing  self, Juneau,  Alaska,  testified  in                                                               
opposition of  SB 217. She said  her family hunts on  state lands                                                               
to support  a subsistence  way of  living. She  said SB  217 will                                                               
impact subsistence  hunting by privatizing  land. She  noted that                                                               
she  also questioned  whether individuals  would  have access  to                                                               
land offered in the land voucher program.                                                                                       
4:43:25 PM                                                                                                                    
ED MARTIN,  representing self, Cooper Landing,  Alaska, testified                                                               
in support of  SB 217. He said the bill  will benefit the 187,000                                                               
children  that   live  in  the   state  by  providing   them  the                                                               
opportunity  to realize  the American  dream. He  noted that  his                                                               
family benefited from  homesteading in Alaska. He  added that the                                                               
bill  will utilize  funds  held back  from  the Alaska  Permanent                                                               
He stated that  the idea for land vouchers has  been around for a                                                               
long time. He said he believes  that he has been the catalyst for                                                               
the governor  to bring the  bill forward. He reiterated  that the                                                               
bill  would get  land into  the  hands of  Alaska's children  for                                                               
their future.                                                                                                                   
CHAIR MICCICHE concurred that Mr.  Martin has been a catalyst for                                                               
the  bill. Finding  no further  testimony or  questions from  the                                                               
committee, he solicited the will of the committee.                                                                              
4:47:14 PM                                                                                                                    
SENATOR COGHILL moved to report  CSSB 217, work order 31-GS2064\A                                                               
as amended,  from committee  with individual  recommendations and                                                               
attached fiscal notes.                                                                                                          
CHAIR MICCHICHE asked if there was an objection.                                                                                
SENATOR KIEHL  objected to comment  that the  amendment exempting                                                               
Mental Health  Trust land was  illustrative. He pointed  out that                                                               
the Mental Health Trust must get  the full value of the resource.                                                               
By contrast, the bill generates, at  best, 25 cents on the dollar                                                               
for  Alaska's  land,  which  he  does  not  believe  is  fiscally                                                               
responsible. Also,  the bill raises significant  issues regarding                                                               
access to lands for Alaskans.                                                                                                   
SENATOR KIEHL removed his objection.                                                                                            
SENATOR  COGHILL pointed  out that  about one  percent of  Alaska                                                               
land is private and he applauds  the governor for taking a unique                                                               
way of  addressing private land  ownership. He said  he struggles                                                               
with the land  voucher program, but the bill  should move forward                                                               
for further consideration.                                                                                                      
CHAIR MICCICHE said with all  due respect to those that testified                                                               
against the  bill, the  amount of  private land  in the  state is                                                               
minuscule. He  stated that the  land voucher concept  is valuable                                                               
and important to many Alaskans.                                                                                                 
4:49:53 PM                                                                                                                    
CHAIR MICCICHE found  no further objection and  CSSB 217(RES) was                                                               
reported from the Senate Resources Standing Committee.                                                                          

Document Name Date/Time Subjects
SB 217 DNR Land Sales Averages 3.06.20.pdf SRES 3/18/2020 3:30:00 PM
SB 217
SB 217 DOR Presentation 03.18.2020.pdf SRES 3/18/2020 3:30:00 PM
SB 217
SB 217 DRAFT Land Voucher layout (2).PDF SRES 3/18/2020 3:30:00 PM
SB 217
SB 217 Draft Amendment v. A.1.pdf SRES 3/18/2020 3:30:00 PM
SB 217
SB 204 v. A.PDF SRES 3/18/2020 3:30:00 PM
SB 204
SB 204 Sponsor Statement 2.25.20.pdf SRES 3/18/2020 3:30:00 PM
SB 204
SB 204 Sectional Analysis 2.25.2020.pdf SRES 3/18/2020 3:30:00 PM
SB 204
SB 204 Fiscal Note DOT-COM 02.18.2020.pdf SRES 3/18/2020 3:30:00 PM
SB 204
SB 204 Fiscal Note DNR-MLW 02.18.2020.pdf SRES 3/18/2020 3:30:00 PM
SB 204
SB 204 DNR Presentation 03.18.2020.pdf SRES 3/18/2020 3:30:00 PM
SB 204
SB 189 ADF&G Followup answers to committee questions.pdf SRES 3/9/2020 3:30:00 PM
SRES 3/18/2020 3:30:00 PM
SB 189
SB 189 Support Document - Stocking FAQ 02.29.2020.pdf SRES 3/9/2020 3:30:00 PM
SRES 3/18/2020 3:30:00 PM
SB 189
SB 189 Support Document - ADFG Response 3.4.20.pdf SRES 3/9/2020 3:30:00 PM
SRES 3/18/2020 3:30:00 PM
SB 189
SB 189 Support Document - Surcharge Revenue Breakdown revised- 03.04.2020.pdf SRES 3/9/2020 3:30:00 PM
SRES 3/18/2020 3:30:00 PM
SB 189
SB 189 Draft Amendment A.2.pdf SRES 3/18/2020 3:30:00 PM
SB 189
SB 189 Draft Amendment A.3.pdf SRES 3/18/2020 3:30:00 PM
SB 189
SB 189 Written Testimony SEAGO 03.18.2020.pdf SRES 3/18/2020 3:30:00 PM
SB 189
SB 217 Draft amendment A.2.pdf SRES 3/18/2020 3:30:00 PM
SB 217
SB 189 Conceptual Amendment #1 to amendment #2 A.3.docx SRES 3/18/2020 3:30:00 PM
SB 189