Legislature(1995 - 1996)

03/08/1996 08:07 AM RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
               HOUSE RESOURCES STANDING COMMITTEE                              
                         March 8, 1996                                         
                           8:07 a.m.                                           
                                                                               
                                                                               
 MEMBERS PRESENT                                                               
                                                                               
 Representative Joe Green, Co-Chairman                                         
 Representative William K. "Bill" Williams, Co-Chairman                        
 Representative Scott Ogan, Vice Chairman                                      
 Representative Alan Austerman                                                 
 Representative John Davies                                                    
 Representative Pete Kott                                                      
                                                                               
 MEMBERS ABSENT                                                                
                                                                               
 Representative Ramona Barnes                                                  
 Representative Don Long                                                       
 Representative Irene Nicholia                                                 
                                                                               
 COMMITTEE CALENDAR                                                            
                                                                               
 CS FOR SENATE BILL NO. 162(FIN)                                               
 "An Act relating to land used for agricultural purposes and to                
 state land classified for agricultural purposes or subject to the             
 restriction of use for agricultural purposes only; and annulling              
 certain program regulations of the Department of Natural Resources            
 that are inconsistent with the amendments made by this Act."                  
                                                                               
      - PASSED CSSB 162(FIN) OUT OF COMMITTEE                                  
                                                                               
 HOUSE BILL 394                                                                
 "An Act authorizing a program of natural gas and coal bed methane             
 development licensing and leasing; relating to regulation of                  
 certain natural gas exploration facilities and coal bed methane               
 exploration facilities for purposes of preparation of discharge               
 prevention and contingency plans and compliance with financial                
 responsibility requirements; amending the duties of the Alaska Oil            
 and Gas Conservation Commission as they relate to natural gas                 
 exploration activities and coal bed methane exploration activities;           
 and amending the exemption from obtaining a waste disposal permit             
 for disposal of waste produced from coal bed methane drilling."               
                                                                               
      - HEARD AND HELD                                                         
                                                                               
 *HOUSE BILL 511                                                               
 "An Act relating to deposits into the fish and game fund."                    
                                                                               
      - SCHEDULED BUT NOT HEARD                                                
                                                                               
 (* First Public Hearing)                                                      
                                                                               
 PREVIOUS ACTION                                                               
                                                                               
 BILL:  SB 162                                                               
 SHORT TITLE: AGRICULTURAL LAND                                                
 SPONSOR(S): SENATOR(S) GREEN, Torgerson, Lincoln; REPRESENTATIVE(S)           
 Austerman                                                                     
                                                                               
 JRN-DATE     JRN-PG                 ACTION                                    
 04/20/95      1108    (S)   READ THE FIRST TIME - REFERRAL(S)                 
 04/20/95      1108    (S)   RES, FIN                                          
 10/24/95              (S)   RES AT  2:00 PM MAT-SU LIO                        
 10/24/95              (S)   MINUTE(RES)                                       
 01/17/96              (S)   RES AT  3:30 PM BUTROVICH ROOM 205                
 01/17/96              (S)   MINUTE(RES)                                       
 01/22/96              (S)   RES AT  3:30 PM BUTROVICH ROOM 205                
 01/24/96      2212    (S)   RES RPT  CS  5DP 1NR 1AM  SAME TITLE              
 01/24/96      2212    (S)   FISCAL NOTE TO SB (DNR-#1)                        
 01/30/96      2250    (S)   FISCAL NOTE TO SB & CS (DNR-#2)                   
 01/30/96      2250    (S)   FISCAL NOTE TO CS (DNR-#3)                        
 01/24/96      2214    (S)   COSPONSOR(S):  TORGERSON                          
 02/01/96              (S)   FIN AT  9:00 AM SENATE FINANCE 532                
 02/01/96              (S)   MINUTE(FIN)                                       
 02/07/96              (S)   FIN AT  9:00 AM SENATE FINANCE 532                
 02/09/96              (S)   FIN AT  9:00 AM SENATE FINANCE 532                
 02/09/96              (S)   MINUTE(FIN)                                       
 02/14/96      2423    (S)   FIN RPT  CS  3DP 3NR      SAME TITLE              
 02/14/96      2423    (S)   FISCAL NOTES TO CS (DNR-2)                        
 02/19/96              (S)   RLS AT 11:35 AM FAHRENKAMP RM 203                 
 02/19/96              (S)   MINUTE(RLS)                                       
 02/21/96      2489    (S)   RULES TO CALENDAR  2/21/96                        
 02/21/96      2493    (S)   READ THE SECOND TIME                              
 02/21/96      2493    (S)   FIN  CS ADOPTED Y18 N- E1 A1                      
 02/21/96      2494    (S)   ADVANCE TO 3RD RDG FLD Y11 N8 X1                  
 02/21/96      2494    (S)   THIRD READING 2/23 CALENDAR                       
 02/23/96      2517    (S)   READ THE THIRD TIME  CSSB 162(FIN)                
 02/23/96      2517    (S)   PASSED Y16 N2 E2                                  
 02/23/96      2518    (S)   DUNCAN  NOTICE OF RECONSIDERATION                 
 02/26/96      2540    (S)   RECON TAKEN UP - IN THIRD READING                 
 02/26/96      2541    (S)   PASSED ON RECONSIDERATION Y16 N4                  
 02/26/96      2540    (S)   COSPONSOR(S):   LINCOLN                           
 02/26/96      2550    (S)   TRANSMITTED TO (H)                                
 02/28/96      2897    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 02/28/96      2897    (H)   RESOURCES, FINANCE                                
 03/08/96              (H)   RES AT  8:00 AM CAPITOL 124                       
                                                                               
 BILL:  HB 394                                                               
 SHORT TITLE: GAS & COAL METHANE LICENSES & LEASES                             
 SPONSOR(S): REPRESENTATIVE(S) OGAN, ROKEBERG, James, Kohring                  
                                                                               
 JRN-DATE     JRN-PG                 ACTION                                    
 01/05/96      2369    (H)   PREFILE RELEASED                                  
 01/08/96      2370    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 01/08/96      2370    (H)   O&G, RESOURCES, FINANCE                           
 02/08/96              (H)   O&G AT 10:00 AM CAPITOL 124                       
 02/08/96              (H)   MINUTE(O&G)                                       
 02/13/96              (H)   O&G AT 10:00 AM CAPITOL 124                       
 02/13/96              (H)   MINUTE(O&G)                                       
 02/21/96      2846    (H)   COSPONSOR(S): JAMES                               
 02/27/96              (H)   O&G AT 10:00 AM CAPITOL 124                       
 02/27/96              (H)   MINUTE(O&G)                                       
 02/28/96      2909    (H)   O&G RPT  CS(O&G) NT 2DP 4NR 1AM                   
 02/28/96      2910    (H)   DP: ROKEBERG, OGAN                                
 02/28/96      2910    (H)   NR: BRICE, B.DAVIS, G.DAVIS, WILLIAMS             
 02/28/96      2910    (H)   AM: FINKELSTEIN                                   
 02/28/96      2910    (H)   FISCAL NOTE (DNR)                                 
 02/28/96      2910    (H)   ZERO FISCAL NOTE (DEC)                            
 02/29/96      2972    (H)   COSPONSOR(S): KOHRING                             
 03/08/96              (H)   RES AT  8:00 AM CAPITOL 124                       
                                                                             
 WITNESS REGISTER                                                              
                                                                               
 SENATOR LYDA GREEN                                                            
 Alaska State Legislature                                                      
 Capitol Building, Room 423                                                    
 Juneau, AK  99801                                                             
 Telephone:  (907) 465-3805                                                    
 POSITION STATEMENT:  Sponsor of SB 162                                        
                                                                               
 BRETT HUBER, Legislative Assistant                                            
   to Senator Lyda Green                                                       
 Alaska State Legislature                                                      
 Capitol Building, Room 423                                                    
 Juneau, AK  99801                                                             
 Telephone:  (907) 465-3805                                                    
 POSITION STATEMENT:  Available for questions on SB 162.                       
                                                                               
 RON SWANSON, Deputy Director                                                  
 Division of Land                                                              
 Department of Natural Resources                                               
 3601 C  Street, Suite 1122                                                    
 Anchorage, AK  99503-5947                                                     
 Telephone:  (907) 269-8503                                                    
 POSITION STATEMENT:  Answered questions on SB 162.                            
                                                                               
 MICHAEL SWAN                                                                  
 Alaska Soil & Water Conservation Board                                        
 P. O. Box 987                                                                 
 Soldotna, AK  99669                                                           
 Telephone:  (907) 262-1014                                                    
 POSITION STATEMENT:  Supports SB 162.                                         
                                                                               
 RAY DEVILBIS                                                                  
 HC 04 Box 9190                                                                
 Palmer, AK  99645                                                             
 POSITION STATEMENT:  Testified on SB 162.                                     
                                                                               
 BILL WARD                                                                     
 Ward Farms                                                                    
 P. O. Box 350                                                                 
 Soldotna, AK  99669                                                           
 Telephone:  (907) 262-5135                                                    
 POSITION STATEMENT:  Supports SB 162.                                         
                                                                               
 PETE ROBERTS                                                                  
 Fox R. Cattleman                                                              
 P. O. Box 1134                                                                
 Homer, AK  99603                                                              
 Telephone:  (907) 235-4113                                                    
 POSITION STATEMENT:  Supports SB 162.                                         
                                                                               
 ED BOSTROM                                                                    
 P. O. Box 56822                                                               
 North Pole, AK  99705                                                         
 Telephone:  (907) 488-3940                                                    
 POSITION STATEMENT:  Supports SB 162.                                         
                                                                               
 DAVE SCHMITZ                                                                  
 P. O. Box 57268                                                               
 North Pole, AK  99705                                                         
 Telephone:  (907) 488-4984                                                    
 POSITION STATEMENT:  Supports SB 162.                                         
                                                                               
 JIM ELLISON                                                                   
 P. O. Box 55590                                                               
 North Pole, AK  99705                                                         
 Telephone:  (907) 488-1970                                                    
 POSITION STATEMENT:  Supports SB 162.                                         
                                                                               
 ANNE CRANE                                                                    
 4790 A University Drive                                                       
 Anchorage, AK  99508                                                          
 Telephone:  (907) 563-0224                                                    
 POSITION STATEMENT:  Testified on SB 162.                                     
                                                                               
 ALLAN KLATT                                                                   
 411 West 123 Avenue                                                           
 Anchorage, AK  99515                                                          
 Telephone:  (907) 522-5528                                                    
 POSITION STATEMENT:  Supports SB 162.                                         
                                                                               
 MIKE CROUCH                                                                   
 HC 62 Box 5780                                                                
 Delta Junction, AK  99737                                                     
 Telephone:  (907) 895-4329                                                    
 POSITION STATEMENT:  Supports SB 162.                                         
                                                                               
 JON DUFENDACH                                                                 
 P. O. Box 309                                                                 
 Delta Junction, AK  99737                                                     
 Telephone:  (907) 895-4309                                                    
 POSITION STATEMENT:  Supports SB 162.                                         
                                                                               
 BILL SPENCER                                                                  
 Nenana, AK  99760                                                             
 Telephone:  (907) 832-5280                                                    
 POSITION STATEMENT:  Supports SB 162.                                         
                                                                               
 SCOTT SCHULTZ                                                                 
 Schultz Farm, Inc.                                                            
 HC 62 Box 5440                                                                
 Delta Junction, AK  99737                                                     
 Telephone:  (907) 895-4865                                                    
 POSITION STATEMENT:  Supports SB 162.                                         
                                                                               
 SARA HANNAN, Executive Director                                               
 Alaska Environmental Lobby                                                    
 419 6th Street                                                                
 Juneau, AK  99801                                                             
 Telephone:  (907) 463-3366                                                    
 POSITION STATEMENT:  Testified on SB 162.                                     
                                                                               
 WILLIAM H. MONTANO                                                            
 597 Kay Street                                                                
 Fairbanks, AK  99709                                                          
 Telephone:  (907) 479-4418                                                    
 POSITION STATEMENT:  Supports SB 162.                                         
                                                                               
 ACTION NARRATIVE                                                              
                                                                               
 TAPE 96-28, SIDE A                                                            
 Number 000                                                                    
                                                                               
 CO-CHAIRMAN JOE GREEN called the House Resources Committee meeting            
 to order at 8:07 a.m.  Members present at the call to order were              
 Representatives Green, Williams, Ogan, Austerman and Davies.                  
 Representative Kott arrived late.  Representatives Barnes, Long and           
 Nicholia were absent.                                                         
                                                                               
 CO-CHAIRMAN GREEN announced that SB 162 and HB 394 would be heard,            
 but HB 511 was postponed.  He invited Senator Lyda Green to                   
 testify.                                                                      
                                                                               
 SB 162 - AGRICULTURAL LAND                                                  
                                                                               
 Number 100                                                                    
 The first order of business was CSSB 162(FIN) "An Act relating to             
 land used for agricultural purposes and to state land classified              
 for agricultural purposes or subject to the restriction of use for            
 agricultural purposes only; and annulling certain program                     
 regulations of the Department of Natural Resources that are                   
 inconsistent with the amendments made by this Act."                           
                                                                               
 SENATOR LYDA GREEN, Sponsor of the measure, recounted that                    
 agriculture parcel owners and potential agriculture parcel owners             
 experiencing or anticipating  ownership problems contacted her and            
 requested changes in the law.  SB 162 was introduced to address               
 those concerns and to assist in encouraging agriculture production,           
 thereby assisting the state, as agriculture consumers, to take part           
 in an industry that is in excess of $30,000,000 in Alaska.                    
                                                                               
 SENATOR GREEN stated that the primary intent of SB 162 provides for           
 the conveyance of fee simple title to agriculture lands subject to            
 a restrictive covenant running with the land, limiting the use to             
 agricultural purposes.                                                        
                                                                               
 SENATOR GREEN said other provisions of the bill provide greater               
 autonomy for the farmer or the agriculture parcel owner ensuring              
 that the state's interests are still protected.  Under this bill,             
 agricultural owners and operators have greater autonomy and ability           
 to make business decisions based on their particular needs and                
 circumstances.                                                                
                                                                               
 SENATOR GREEN advised that SB 162 has gained great support among              
 agriculture industry supporters across the state.  It is good for             
 Alaska's producers as well as consumers.                                      
                                                                               
 CO-CHAIRMAN GREEN noted the arrival of Representative Pete Kott and           
 mentioned that the meeting was on statewide teleconference.                   
                                                                               
 Number 324                                                                    
                                                                               
 CO-CHAIRMAN GREEN asked Senator Green to explain fee simple, is it            
 inclusive of subsurface.                                                      
                                                                               
 SENATOR GREEN responded that it is not.                                       
                                                                               
 CO-CHAIRMAN GREEN asked if the bill included gravel or water.                 
                                                                               
 SENATOR GREEN said gravel was included.                                       
                                                                               
 Number 354                                                                    
                                                                               
 REPRESENTATIVE JOHN DAVIES clarified that gravel was included but             
 only if it was directly used for agricultural purposes such as                
 building roads.                                                               
                                                                               
 Number 413                                                                    
 REPRESENTATIVE DON LONG wondered if the gravel was considered a               
 mineral resource.                                                             
                                                                               
 Number 453                                                                    
                                                                               
 REPRESENTATIVE DAVIES advised that he had several amendments and              
 would hold them until after testimony.                                        
                                                                               
 Number 480                                                                    
                                                                               
 CO-CHAIRMAN BILL WILLIAMS asked explanation of certain restrictive            
 covenants, "If you have the land, would you immediately be able to            
 borrow money on it?  What happens to the land after that?                     
                                                                               
 SENATOR GREEN said one of the impediments to an agricultural land             
 holder or producer who does not have other assets to collateralize            
 is the inability to borrow money for development based on using               
 that land as collateral because lending institutions will not do              
 that if it is agriculture rights only.                                        
                                                                               
 SENATOR GREEN stated that there are private vendors who would be              
 delighted to have access to this market and would likely have                 
 competitive rates to offer farmers and agricultural producers who             
 are in need of money.                                                         
                                                                               
 SENATOR GREEN advised that there are federal reinsurance or                   
 "reborrowing" monies that are offered at a competitive rates.                 
                                                                               
 Number 603                                                                    
                                                                               
 CO-CHAIRMAN WILLIAMS asked the procedure should the borrower be               
 unable to repay the money.                                                    
                                                                               
 SENATOR GREEN said that is between the landowner and the lender.              
                                                                               
 Number 649                                                                    
                                                                               
 REPRESENTATIVE DAVIES understood that if that situation arose and             
 the bank foreclosed, the agricultural covenant would follow with              
 the land.  The bank would have fee simple title but the covenant              
 would still be on the land so the agricultural use of the land is             
 protected.                                                                    
                                                                               
 Number 679                                                                    
                                                                               
 CO-CHAIRMAN WILLIAMS expressed concern that after borrowing money             
 on a piece of state acquired land, the money was lost and the state           
 loses title to the property.                                                  
                                                                               
 SENATOR GREEN clarified that the state sold the land to these                 
 agricultural parcel owners, but it is agricultural rights only and            
 some have explained it as "lifetime tenant farmer."                           
 Number 735                                                                    
                                                                               
 CO-CHAIRMAN GREEN added that was probably the lending institution's           
 concern that the land would revert to the state as opposed to                 
 having fee simple and they have a commodity to recover their loss.            
                                                                               
 REPRESENTATIVE ALAN AUSTERMAN inquired whether a farmer having                
 title to the land, has a better value than just having agricultural           
 rights only, subject to the covenant.                                         
                                                                               
 CO-CHAIRMAN GREEN responded that should the farmer acquire fee                
 simple title to the land, it is still restricted to agricultural              
 uses only and subject to the covenant meaning that it is not free             
 to subdivide and turn into a parking lot, for example.                        
                                                                               
 Number 821                                                                    
                                                                               
 REPRESENTATIVE DAVIES agreed and stated that the value of the land            
 would rise up to some intermediate value between agricultural                 
 rights only and pure fee simple ownership.  He wondered then if the           
 land would be subject to increased property tax and, if in the                
 process of acquiring this increase in value, subject to IRS taxes.            
                                                                               
 Number 861                                                                    
                                                                               
 SENATOR GREEN said the utilization of the land remains unchanged,             
 it is still agricultural covenant land, and an increase in value is           
 not anticipated.  She elaborated on the tracking of various sizes             
 of agricultural parcels.                                                      
                                                                               
 Number 941                                                                    
                                                                               
 BRETT HUBER, Legislative Staff to Senator Lyda Green, said the                
 question of the tax assessed or the IRS assessed value was based on           
 the utilization of the land not the form of title.  The category is           
 agricultural utilization and the utilization does not change under            
 these provisions.  It does change from rights only to a covenant              
 situation but the utilization remains the same.                               
                                                                               
 Number 1026                                                                   
                                                                               
 REPRESENTATIVE DAVIES theorized that in a free market, the value of           
 the land rises and the ability to subdivide and sell off a portion            
 makes it a more desirable commodity.  More desirable commodities              
 generally increase in price, and if the price increases, it seems             
 there would be some tax liability associated.                                 
                                                                               
 Number 1050                                                                   
                                                                               
 CO-CHAIRMAN GREEN agreed stating that if the evaluation does go up            
 the land owner would be subject to that taxation.                             
                                                                               
 SENATOR GREEN said, "This is an applicant driven process and if you           
 are a parcel owner who did not desire to avail yourself of the                
 change in title, you would not have to."                                      
                                                                               
 Number 1086                                                                   
                                                                               
 REPRESENTATIVE ALAN AUSTERMAN expressed his support of SB 162 but             
 inquired about the rationale of the state giving the land owner the           
 benefit of the land and a banking institution willing to lend money           
 on it, but not willing to lend money on merely the agricultural               
 ability of the land.  He wondered what that perceived value is by             
 the bank, to lay its money on the line that it did not have before.           
                                                                               
 Number 1174                                                                   
                                                                               
 CO-CHAIRMAN GREEN and Representative Austerman debated several                
 analogies and hypothetical situations involving banking                       
 institutions willingness to lend.                                             
                                                                               
 Number 1220                                                                   
                                                                               
 REPRESENTATIVE SCOTT OGAN pointed out that the state is giving                
 someone the opportunity to make a living and that is a significant            
 difference than a recreational situation.                                     
                                                                               
 CO-CHAIRMAN GREEN asked Ron Swanson to respond.                               
                                                                               
 Number 1246                                                                   
                                                                               
 RON SWANSON, Deputy Director, Division of Land, Department of                 
 Natural Resources, explained that currently the department does               
 convey the land in fee simple but subject to an agricultural                  
 covenant that says the state may enter the land and recoup it if it           
 is not being used for agricultural purposes.                                  
                                                                               
 MR. SWANSON said, under this bill, conveying fee simple with a                
 covenant means going to court instead of the administrative process           
 and the state will not get the land back.  The department can only            
 afford the agricultural covenant meaning that a person can keep               
 doing what they are doing, and without the agricultural purpose,              
 the burden of proof is on the state.                                          
                                                                               
 MR. SWANSON said the advantage of what the bill's sponsor is trying           
 to do is to be able to borrow money from a different source where             
 the person that retains title to the land does not have to worry              
 about the state coming in and taking it away.                                 
                                                                               
 Number 1313                                                                   
                                                                               
 MR. HUBER confirmed with Mr. Swanson that the state basically ends            
 up in court anyway.  He said the reversionary clause of the current           
 title transfer is the major concern of lending institutions not the           
 agricultural utilization or the agricultural process of the farm              
 but the reversionary clause itself.                                           
                                                                               
 MR. SWANSON responded that is correct, "Most of the time you do end           
 up going to court under the existing system because the person has            
 the right to appeal an administrative process and go to court.  The           
 difference is that the burden of proof is on the applicant instead            
 of the state which would happen under this case."                             
                                                                               
 Number 1347                                                                   
                                                                               
 MR. HUBER explained several areas of judiciary action and said the            
 court will issue an immediate injunctive relief to stop whatever              
 action is taking place on the land outside of the covenant.                   
                                                                               
 SENATOR GREEN elaborated that there are greater opportunities for             
 a neighbor, borough representative or a city official, and nothing            
 to prohibit the state from doing this as well, to say that land is            
 not being utilized as agricultural land.  She said SB 162 takes the           
 responsibility out of the sole hands of the commissioner of the               
 Department of Natural Resources.                                              
                                                                               
 Number 1420                                                                   
                                                                               
 MR. HUBER indicated to Chairman Green that today's testimony would            
 reflect that agricultural rights land owners contend that they have           
 bought and are working the land, yet are not afforded due process.            
                                                                               
 Number 1454                                                                   
                                                                               
 REPRESENTATIVE DAVIES asked Ron Swanson to address earlier question           
 about the increase in value of the land and whether the land is               
 being used according to the covenant.  Specifically, the management           
 plans and how that is affected by this bill.                                  
                                                                               
 MR. SWANSON replied that the change in the type of deed the                   
 department would issue would make a negligible increase in the                
 appraisal.  He said the advantage definitely goes to the land                 
 holder and his ability to borrow money.                                       
                                                                               
 MR. SWANSON stated that the department only uses management plans             
 when they prequalify bidders which the department has not done for            
 many years.                                                                   
                                                                               
 Number 1520                                                                   
                                                                               
 SENATOR GREEN responded to Chairman Green that the issuances of               
 agricultural land is applicant driven.                                        
                                                                               
 Number 1600                                                                   
                                                                               
 MR. HUBER repeated Mr. Swanson's testimony that the value is very             
 negligible. "The sponsor began this bill with a broader subdivision           
 allowance and looked at two ways of addressing the situation, (1)             
 is there increased value; and (2) how would the state be paid for             
 that increased value.  Senator Green took the route through the               
 committee process on the Senate side with limiting the subdivision            
 under four parcels and a one-time only subdivision."                          
                                                                               
 MR. HUBER said the big concern with increased valuation is that a             
 thousand acre tract turned into scores of 40 acre tracts means more           
 money will be made on that than the change in title.                          
                                                                               
 Number 1665                                                                   
                                                                               
 SENATOR GREEN theorized subdividing a parcel requiring departmental           
 approval and the future possibility of surveying and subdividing at           
 the expense of the owner, but the only thing that can be done with            
 that subdivided parcel is a crop or grazing.  There can be no                 
 facilities and no structures.                                                 
                                                                               
 SENATOR GREEN said there are cases where people have bought these             
 subdivided pieces and now cannot build structures or live there or            
 be resident farmers.                                                          
                                                                               
 Number 1749                                                                   
                                                                               
 REPRESENTATIVE AUSTERMAN wanted to know who classifies the land as            
 agricultural, the state?  The municipality?                                   
                                                                               
 MR. SWANSON responded that the state classifies the land for                  
 agricultural purposes and currently there are 550,000 acres of                
 classified agricultural land around the state.                                
                                                                               
 REPRESENTATIVE AUSTERMAN asked if there is a revert clause that if            
 land is lying dormant, not being used as agricultural land, that it           
 reverts back to the state for reclassification.                               
                                                                               
 MR. SWANSON replied that there is a clause in the contract that               
 says if the land is not being used for the purposes designated, it            
 can come back to the state.  Once the land has been conveyed to the           
 land owner, it is out of the state's hands.                                   
                                                                               
 Number 1800                                                                   
                                                                               
 MR. HUBER addressed Representative Austerman that the bill still              
 provides that the department and the commissioner establish farm              
 development plans and set benchmarks through the regulation                   
 process.                                                                      
                                                                               
 Number 1899                                                                   
                                                                               
 SENATOR GREEN addressed Chairman Green that there is always the               
 opportunity to retrieve the land through non-utilization of the               
 land as agricultural land.  It is the same standard that is held              
 now.  She said the question is how many inspections are there and             
 how many parcel owners are having their land taken back for non-              
 utilization as agricultural rights land.                                      
                                                                               
 Number 1947                                                                   
                                                                               
 MR. SWANSON replied there is no difference between before or after.           
 The covenant states that the land can be used for agricultural land           
 only.  If a community wanted to expand on that area they have to              
 condemn it and buy the additional rights to be able to use it for             
 other than agricultural purposes.                                             
                                                                               
 MR. SWANSON responded to the Chair that the community would pay the           
 state because the state is the owner of the other interests.                  
                                                                               
 CO-CHAIRMAN GREEN understood that if the land is paid off and the             
 surface rights are vested with the individual, even though the                
 subsurface rights are still with the state, we are talking here               
 about a rezoning on the surface only.                                         
                                                                               
 MR. SWANSON agreed with Chairman Green's statement.                           
                                                                               
 CO-CHAIRMAN GREEN wanted to know who pays in an ownership situation           
 of fee land subject to agricultural restrictions.                             
                                                                               
 Number 1993                                                                   
                                                                               
 MR. SWANSON explained the land use planning process end result                
 being land reclassification.  At that point, if somebody buys the             
 land, the agricultural rights would be held by the land owner and             
 all other rights would be purchased from the state.                           
                                                                               
 Number 2009                                                                   
                                                                               
 MR. HUBER said what we have is a patent transfer between the state            
 and individual landowners that says the surface rights of the state           
 in fee simple is transferred.  He said the major changes in this              
 bill is how the state enforces that: SB 162 makes it by civil                 
 proceeding instead of administrative action and removes the                   
 condition subsequent, or the reversionary clause, in the title.               
 Other than that there is no great change in what is currently                 
 transferred, it is just transferred in a different way by a                   
 covenant instead of a condition subsequent under the current title.           
                                                                               
 Number 2116                                                                   
                                                                               
 REPRESENTATIVE DON LONG understood that the bill makes a multiple             
 use land transfer of agricultural land and once the owner has                 
 possession it is up to the owner to determine the use of that land            
 whether it be agricultural, recreational, mining or transportation.           
                                                                               
 SENATOR GREEN said the bill is agricultural only, it does spell out           
 agricultural related businesses but it does not expand to anything            
 else.  It is still agricultural covenant land and the use and                 
 utilization has not changed.                                                  
                                                                               
 CO-CHAIRMAN GREEN discussed instances with Mr. Swanson concerning             
 ownership of agricultural land and state subsurface rights and who            
 gets compensation for damage or loss of use of the surface.                   
                                                                               
 Number 2224                                                                   
                                                                               
 REPRESENTATIVE DAVIES comprehended the motivation of the bill                 
 saying he had learned that banks do not want to loan money on the             
 agricultural rights situation that exists now.  He had a hard time            
 understanding that if so little is changed by what we are doing               
 here and SB 162 only eliminates the reversionary clause, why is it            
 that the banks have so much heartburn.                                        
                                                                               
 REPRESENTATIVE DAVIES asked why banks would not loan money if they            
 ended up with, in a developed situation, the agricultural rights to           
 the land.  Why can't they sell the rights to another person who               
 wants to farm the land.                                                       
                                                                               
 Number 2304                                                                   
                                                                               
 MR. HUBER disclosed that financial institutions, as well as real              
 estate attorneys and title companies, have expressed that the                 
 biggest problem with the agricultural rights only transfer is the             
 cloudy title.  He said no title insurance company will come in and            
 insure this because of the title and until a determination is made            
 by the court, nobody is sure where that title is going to be.  It             
 is such a cloudy title that no one will issue title insurance on              
 it.                                                                           
                                                                               
 MR. HUBER said SB 162 brings the issue to a specific one entity               
 title and the title insurance companies do not have a problem with            
 coming in and doing insurance.  If there is a change in value, then           
 it is a very minimal change.                                                  
                                                                               
 REPRESENTATIVE DAVIES debated that Mr. Swanson had testified that             
 the state has title to all other rights on the land so the state              
 still has multiple ownership of the land.  The person who gets this           
 new fee simple title with the covenant on it, only has agricultural           
 rights on the land and that individual cannot do anything else with           
 the land.  The subsurface rights are still with the state.                    
                                                                               
 Number 2424                                                                   
                                                                               
 MR. SWANSON explained that currently an individual had difficulty             
 borrowing from an outside institution, meaning not the state,                 
 because the state can take the land back and the bank is stuck with           
 the third party holding the money and has no way to recoup the                
 loss.                                                                         
                                                                               
 MR. SWANSON further explained that under this bill's process, the             
 individual would borrow money, the state could only go to court and           
 get the agricultural issues protected. If the bank thought the land           
 was not being used for agricultural purposes they could foreclose             
 on it and then own that agricultural interest themselves.                     
 Basically, they have something to attach as collateral.                       
                                                                               
 Number 2453                                                                   
                                                                               
 REPRESENTATIVE DAVIES asked why the bank could not foreclose and              
 end up with the agricultural rights now.                                      
                                                                               
 MR. SWANSON responded that it goes to the state.                              
                                                                               
 SENATOR GREEN reaffirmed that the reversionary reverts to the                 
 state.                                                                        
                                                                               
 Number 2466                                                                   
                                                                               
 REPRESENTATIVE AUSTERMAN expressed interest in understanding the              
 bill and conjectured about a hypothetical situation.....(change               
 tape)                                                                         
                                                                               
 TAPE 96-28, SIDE B                                                            
 Number 000                                                                    
                                                                               
 REPRESENTATIVE AUSTERMAN was concerned about the individual who               
 speculates on a piece of property and then holds it because he was            
 unsuccessful as a farmer and, years later, finds that land has                
 substantial value.                                                            
                                                                               
 CO-CHAIRMAN GREEN asked Mr. Swanson whether the transfer of title             
 allows that land not utilized for agriculture to remain idle or               
 does the covenant express that it must be used for agriculture or             
 it reverts.                                                                   
                                                                               
 Number 110                                                                    
                                                                               
 MR. SWANSON said the land can only be used for agricultural                   
 purposes but it can lay dormant.  He said the department is not               
 considering a person's economic conditions, the department's only             
 concern is that the land be used for agricultural purposes.                   
                                                                               
 Number 139                                                                    
                                                                               
 MR. HUBER wondered if Mr. Swanson would elaborate on the problems             
 that were encountered when Pt. McKenzie and Delta were put out with           
 performance criteria.                                                         
                                                                               
 CO-CHAIRMAN GREEN announced that a plethora of people were waiting            
 to testify on the teleconference network.                                     
                                                                               
 Number 174                                                                    
                                                                               
 REPRESENTATIVE OGAN voiced his support of SB 162 and stated his               
 opinion that agriculture has had a bad rap through state controlled           
 programs in the past.  He said the Agriculture Revolving Loan Fund            
 funding is threatened and may need to be recapitalized in the near            
 future.  That fund capitalizes the farmers and the state has a                
 tremendous amount of land coming available because of the mental              
 health trust land resolution and emphasized that land become                  
 available in fee simple.  This bill is a major shift in policy and            
 provides less government control.  He said the state has a track              
 record of micromanagement, which he felt, caused farmers to fail.             
 He said that SB 162 will help to bring Alaskan farming into a free            
 enterprise market driven business that will allow them to prosper.            
                                                                               
 Number 275                                                                    
                                                                               
 MICHAEL SWAN, President, Alaska Soil & Water Conservation District,           
 and Chairman, Kenai Soil & Water Conservation District, testified             
 in support of SB 162 and urged passage by the committee.                      
                                                                               
 Number 300                                                                    
                                                                               
 RAY DEVILBIS, Mat-Su farmer, said he agreed with Representative               
 Davies assertion that a value is being given away.  He recommended            
 that fee simple title not be retroactive but set aside for the                
 future.  He referred to Senator Green's statement about fee simple            
 title being applicant driven and wanted to know how this will work            
 in future.                                                                    
                                                                               
 Number 373                                                                    
                                                                               
 BILL WARD representing the Alaska Farm Bureau, Board of Directors,            
 read a resolution from the Bureau supporting SB 162 and encouraging           
 passage of the legislation.                                                   
                                                                               
 Number 480                                                                    
                                                                               
 PETE ROBERTS, Fox R. Cattleman Ranch, testified that he has an                
 agricultural rights parcel in Homer. He related past participation            
 on the Alaska Soil and Water Conservation Board and his involvement           
 in developing fee simple title 12 years ago because of the same               
 issue with the banks.  The issue was right of reentry, the                    
 revisionary clause, meaning bureaucrats in the state wanted to have           
 the first right to reenter if they did not like what the farmer was           
 doing.  He encouraged passage of the bill and suggested the bill be           
 amended to not let the state micromanage.  He said, "A farmer                 
 cannot be in the tractor repair business, his wife cannot be in the           
 weaving business, they cannot run a bed and breakfast and they                
 cannot be in the wilderness ranch/lodge business."  He said parcels           
 would lend themselves to an economic agricultural unit if the                 
 people could also have guests on the place.  He emphasized that the           
 requirements need to be changed.                                              
                                                                               
 Number 632                                                                    
                                                                               
 CO-CHAIRMAN GREEN confirmed with Ron Swanson that a tractor repair            
 service would be a permissible business on agricultural land but a            
 bed and breakfast would not.                                                  
                                                                               
 Number 710                                                                    
                                                                               
 REPRESENTATIVE OGAN expressed support for farmers to have the means           
 of making their farms economically viable.  It is a very realistic            
 concern.                                                                      
                                                                               
 Number 763                                                                    
                                                                               
 MR. HUBER stated that the language in the bill provides for a                 
 business as long as it is not inconsistent with the primary intent            
 of agricultural use.  He noted that 90 percent of the farms in the            
 lower 48 do not survive on sole farm income.                                  
                                                                               
 Number 800                                                                    
                                                                               
 ED BOSTROM testified in support of SB 162 stating that he is owner            
 of a 240 acre agricultural parcel in the Eielson agricultural                 
 project which is 40 tracts totalling 3,500 acres twenty miles south           
 of Fairbanks.  He related personal background information of                  
 developing his agricultural property emphasizing that the state's             
 regulations have been detrimental to the agricultural economic                
 development.                                                                  
                                                                               
 Number 1041                                                                   
                                                                               
 REPRESENTATIVE DAVIES said that SB 162 addresses agricultural                 
 purposes but does not reference horticulture and stated that he was           
 considering an amendment to add horticulture.                                 
                                                                               
 CO-CHAIRMAN GREEN announced to the teleconference sites that the              
 committee would not have time to hear HB 394.                                 
                                                                               
 Number 1100                                                                   
                                                                               
 DAVE SCHMITZ testified in support of SB 162 stating that he is a              
 new farmer recently purchasing 160 acre farm on Eielson Farm Road             
 near Fairbanks.  Present regulations are restricting his ability to           
 construct additional permanent structures on the farm, hamstringing           
 his ability to best utilize the farm's potential.  Senate Bill 162            
 will stimulate agricultural and economic development.                         
                                                                               
 Number 1202                                                                   
 JIM ELLISON, Owner, Farm Alaska, stated that his business is an               
 equipment repair shop slated toward agriculture equipment.  He                
 pointed out that one American farmer feeds 128 people because the             
 farmer owns the land and can control the financial concern.  Senate           
 Bill 162, "it's about time."                                                  
                                                                               
 Number 1311                                                                   
                                                                               
 MR. SWANSON clarified that Section 8 fixes the interest rate at no            
 higher than 9.5 percent which is the only land type program with              
 that cap.  He wanted to make it clear that the department will not            
 do any refinancing for existing contracts.                                    
                                                                               
 Number 1367                                                                   
                                                                               
 MR. SWANSON referenced Section 9, by current regulation you can               
 subdivide into 40 acre parcels but you can not do any construction            
 with this bill you would be able to do some additional                        
 construction.  There is possibly some increase in value in that but           
 there are only four subdivisions and I think pretty minimal.                  
                                                                               
 Number 1407                                                                   
                                                                               
 REPRESENTATIVE DAVIES presumed that Mr. Swanson did not have a                
 problem with the deletion of the prequalification language.                   
                                                                               
 MR. SWANSON said there was not a problem, there have been no                  
 prequalifications since Point McKenzie went to court.  The court              
 found that prequalifications were illegal and the statute was                 
 changed to allow prequalifications but it has not been done since.            
                                                                               
 Number 1440                                                                   
                                                                               
 REPRESENTATIVE DAVIES asked if the Division of Land had any                   
 problems with the change in survey requirements.                              
                                                                               
 MR. SWANSON said the language was changed to may, the commissioner          
 still has the authority to require a survey where necessary, it is            
 not a mandatory issue.                                                        
                                                                               
 Number 1459                                                                   
                                                                               
 REPRESENTATIVE OGAN asked Mr. Swanson to address the size, or the             
 maximum acreage, of the current agricultural parcels.                         
                                                                               
 MR. SWANSON responded there are, currently, 150 parcels of zero to            
 100 acres; 100 parcels at 100 - 160 acres; 200 parcels at 160 - 640           
 acres; and 54 parcels at 640 acres or more.                                   
                                                                               
 Number 1502                                                                   
                                                                               
 REPRESENTATIVE OGAN inferred that, a 640 acre parcel subdivided               
 into a total of four parcels, the smallest that one of those                  
 subdivided parcels could be is 40 acres.                                      
                                                                               
 Number 1535                                                                   
                                                                               
 ANNE CRANE, Trapper Creek, testified in support of SB 162, "It is             
 a step in the right direction, but it does not solve my problem."             
 She stated that her parcel is classified as "Class VI Soil," it               
 does not meet the statutory definition of agricultural land which             
 is 60 percent Class II and III soil.  She explained that her land             
 is essentially useless and requested that the legislature provide             
 some remedy for people who do not have agricultural soil.                     
                                                                               
 CO-CHAIRMAN GREEN informed Ms. Crane that her recommended solution            
 did not address this legislation.                                             
                                                                               
 Number 1758                                                                   
                                                                               
 REPRESENTATIVE DAVIES asked Mr. Swanson what kind of remedies might           
 be available to Ms. Crane.  He felt a solution for land which is              
 clearly not suitable for agricultural should be reclassified so it            
 could be disposed of some other way.                                          
                                                                               
 Number 1781                                                                   
                                                                               
 MR. SWANSON responded that solution is a possibility that the land            
 could be reclassified and those additional (indisc.) parts be                 
 purchased by the landowner.                                                   
                                                                               
 Number 1811                                                                   
                                                                               
 ALAN KLATT testified in support of SB 162 explaining that he is an            
 agricultural parcel owner at Moose Creek.                                     
                                                                               
 Number 1920                                                                   
                                                                               
 MIKE CROUCH, Alaskan resident since 1977, farming in the Copper               
 River Valley, the Mat-Su Valley and Delta stated that the biggest             
 benefit of SB 162, which he supports, is the ability to divert the            
 five-year operation and be more like the farming operations in the            
 lower 48.  He said, "When you go through a farming area in the                
 lower 48 there all kinds of agricultural related businesses that              
 help support that community and diversify the income base."                   
                                                                               
 Number 1999                                                                   
                                                                               
 JON DUFENDACH, Delta farmer since 1967, testified in support of SB
 162.  He said this legislation will make farming more economically            
 viable, and stated he felt that the banking institutions would be             
 more sensible to loans.  He said landowners rights will be more               
 flexible without destroying the intent and he appreciates the due             
 process the bill brings.                                                      
 Number 2146                                                                   
                                                                               
 BILL SPENCER testified that he had met his neighbors, there are 18            
 agricultural holders in the Nenana area, and they unanimously ask             
 the committee to support and pass SB 162.                                     
                                                                               
 Number 2220                                                                   
                                                                               
 SCOTT SCHULTZ, Delta Junction resident since 1982, testified in               
 support of SB 162.  He explained that his family is more interested           
 in combining agricultural parcels than subdividing them.  He                  
 encouraged the committee to pass the bill as soon as possible....             
 (END TAPE).                                                                   
                                                                               
 TAPE 96-29, SIDE A                                                            
 Number 000                                                                    
                                                                               
 SCOTT MILLER, President, Delta Junction Farm Bureau, informed that            
 the organization passed a resolution unanimously supporting SB 162.           
 He related that at the February board meeting of the Agricultural             
 Revolving Loan Fund, $600,000 was approved in loans for Delta                 
 alone.  He said, "If anybody thinks that agriculture is not                   
 happening in Alaska, particularly, in Delta, then they are not                
 paying attention."  He also related that agriculture development              
 was voted the most popular economic development idea for Delta's              
 long term economic stability.                                                 
                                                                               
 Number 165                                                                    
                                                                               
 SARA HANNAN, Executive Director, Alaska Environmental Lobby, said             
 that the Lobby does not necessarily support the bill but neither do           
 they oppose it.  She reported that Senator Green's office had                 
 addressed many initial concerns of the AEL.  Primarily, the AEL               
 constituency was concerned that agricultural land would be turned             
 into strip malls, such as the lower 48.  As communities expanded,             
 green space and productive economic liability of farms disappeared            
 as there were much higher values to use them as real estate                   
 development and second homes.                                                 
                                                                               
 MS. HANNAN felt that Senator Green's bill is fairly narrow in scope           
 and meets a real concern of economic farmers in Alaska.  The AEL              
 wants to see farmers in Alaska farming on land, but in the                    
 deliberations of this morning, the legislature is raising questions           
 that should be addressed for future land use policies that are                
 outside the scope of this bill.                                               
                                                                               
 Number 240                                                                    
                                                                               
 MS. HANNAN said two concerns were that the land would stay in                 
 agricultural development and that it not be subdivided into small             
 enough parcels that someone would be encouraged to subdivide to               
 make a profit off their land.                                                 
 MS. HANNAN encouraged the committee to think about some problems              
 the state has had in land use development where the state has given           
 people specific rights to mine, or to develop a shell fish farm and           
 they received a lease hold from the state.  "People do not have               
 access to fee simple land so what we have found is that within the            
 Kenai Peninsula Borough the people were getting a lease to mine but           
 using it as a primary residence.  Ongoing litigation has erupted              
 and evictions have taken place, it put policies in conflict with              
 users.  Neighbors in conflict with neighbors, when people get a               
 leasehold, a right to do something on the land and they are paying            
 for a very narrow scope of use, but their neighbors have paid a               
 higher value for more use, they have built a home and they want to            
 live there.  You have heard today from active farmers, those people           
 are in a tough economic situation and this bill remedies the                  
 conflict that has arisen by them not having fee simple title.  You            
 did not hear, and you will not hear, from someone who is a                    
 speculator who bought agricultural rights land and is not working             
 it.  If the land is laying dormant and you were a speculator, you             
 probably had the cash and not looking for a bank to help you with             
 your ongoing economic interests.  You are waiting for the future              
 when the land goes up."                                                       
                                                                               
 Number 434                                                                    
                                                                               
 MS. HANNAN asked the committee to think about looking at those                
 agricultural lands in the future.  She said, "What we want in                 
 Alaska is some economic stimulus from land that we put out under              
 agreement to provide economic stimulus.  Keep the bill narrowly               
 crafted and keep looking at crafting some other language to address           
 policy questions raised today."                                               
                                                                               
 Number 486                                                                    
                                                                               
 REPRESENTATIVE DAVIES referred to the second covenant, on page 6,             
 which specifies that not more than four divisions, not less than 40           
 acres each, and asked Ms. Hannan if the AEL is comfortable with               
 that language.                                                                
                                                                               
 MS. HANNAN responded that the AEL is comfortable with that section.           
                                                                               
 Number 573                                                                    
                                                                               
 WILLIAM H. MONTANO, Delta parcel owner, referred to page 3, line 29           
 "(7) waive, postpone or otherwise modify the development                      
 requirements of a contract for the sale of agricultural land, if"             
 and page 4, lines 1 and 2.  He said, "I have been discussing this             
 with the Department of Natural Resources for the past ten years and           
 we are being held to standards that were set up, they have taken              
 some of these parcels away from people and given them much more               
 (indisc.) clearing schedules."  He said there needs to be some                
 flexibility in dealing with these agricultural parcels to deal with           
 the changes in times.                                                         
 Number 700                                                                    
                                                                               
 CO-CHAIRMAN GREEN closed teleconferenced testimony and stated that            
 Representative Davies had several amendments.                                 
                                                                               
 Number 712                                                                    
                                                                               
 REPRESENTATIVE DAVIES stated that some concerns had been alleviated           
 by testimony and withdrew two amendments. He moved Amendment No. 1.           
                                                                               
 Page 7, line 10: Following "are"  Delete "not in violation of the             
 minimum parcel size set out in (a)(2) of this section."                       
                                                                               
 Insert "consistent with the covenants described in (a)."                      
                                                                               
 Number 750                                                                    
                                                                               
 REPRESENTATIVE OGAN objected.                                                 
                                                                               
 REPRESENTATIVE DAVIES said his concern was subsection (C) "the                
 landowner's right to subdivide and sell the land," and the only               
 constraint is the covenant in (a)(2).  He felt the landowners right           
 to subdivide and/or sell the land should be subject to both of the            
 covenants in subsection (a): the agricultural rights and the parcel           
 size.  The amendment does not change the intent, but clarifies that           
 when the landowner has a right to subdivide and sell, it is subject           
 to both of the covenants.                                                     
                                                                               
 Number 857                                                                    
                                                                               
 MR. HUBER replied that the covenant section limits the parcel                 
 subdivision.  "The intent of Section 11, subsection 3, the                    
 commissioner may not limit.  So, we are back to making this not a             
 decision of the Administration on the subdivision which it                    
 currently is.  You have to go through the process of applying to              
 the division and at the discretion of the commissioner whether you            
 can or cannot subdivide.  What we are saying is those subdivision             
 rights will be inherent with the agricultural covenant.  It                   
 references the agricultural covenant but the agricultural covenant            
 itself is the one that allows the subdivision down to 40 acres, no            
 more than four parcels.  The reference in Section 11, back to                 
 Section 9, basically says that it is not the commissioner's call,             
 it is a call of the covenant and then those subdivision rights will           
 be part of the covenants that will conveyed with the title                    
 document."  "There is a question of who gets to subdivide and that            
 is all done through the sale.  If I have the initial land and I               
 want to sell half of my 640, 320 acres, to somebody else then it              
 will be part of sale whether I retain the rest of the subdivision             
 rights or the subdivision rights go from there.  So, we are just              
 basically trying to take it out of a call of the commissioner and             
 putting it in with the covenant and saying that the commissioner              
 may not limit what is described in the covenants."                            
 Number 949                                                                    
                                                                               
 REPRESENTATIVE DAVIES said, "Surely, the commissioner cannot permit           
 something to occur that is in violation of the basic, underlying,             
 agricultural rights covenant."  He expressed concern that the state           
 would be placed in a position for potential litigation because a              
 portion of the statute appears to allow the commissioner make the             
 decision.                                                                     
                                                                               
 MR. HUBER countered that the issue was clearly covered in the                 
 covenant itself.  The covenant is the instrument that will define             
 what subdivisions are allowable and how it is allowable.                      
                                                                               
 Number 1006                                                                   
                                                                               
 CO-CHAIRMAN GREEN clarified whether Mr. Huber felt Representative             
 Davies amendment conflicted with the intent.                                  
                                                                               
 MR. HUBER said he did not feel the amendment would change the                 
 intent but believed that it is clear and defined in the covenant.             
                                                                               
 CO-CHAIRMAN GREEN asked for a roll call vote.                                 
                                                                               
 Number 1057                                                                   
                                                                               
 Representatives Davies and Long voted in favor of Amendment Number            
 1.  Representatives Austerman, Kott, Ogan, Williams and Green voted           
 against the amendment.  The amendment failed.                                 
                                                                               
 Number 1093                                                                   
                                                                               
 REPRESENTATIVE DAVIES moved that on page 7, line 16, following                
 "trees."  Insert "flowering plants."                                          
                                                                               
 REPRESENTATIVE KOTT objected for purposes of discussion.                      
                                                                               
 REPRESENTATIVE DAVIES explicated that agricultural purposes is                
 understood to, generally, include horticulture.  In the list of               
 examples on line 16, there is not a single illustration of                    
 horticultural purpose, and explained that he wanted the statute to            
 be more explicit in providing one example of horticulture.                    
                                                                               
 REPRESENTATIVE DAVIES reported that in the Fairbanks area, about 50           
 percent of the market value in agriculture is in horticulture, as             
 in greenhouse (indisc.) and flowering plant sales.  The amendment             
 would add one example of horticulture to this list.                           
                                                                               
 CO-CHAIRMAN GREEN asked if marijuana has a flower.                            
                                                                               
 Number 1212                                                                   
                                                                               
 REPRESENTATIVE KOTT stated that the amendment would only clog up              
 the statutes.  He felt the language on lines 15 and 16, "including            
 forage and sod crops, grains, etc.," was not meant to be all                  
 inclusive.  He maintained that the amendment was unnecessary.                 
                                                                               
 Number 1249                                                                   
                                                                               
 REPRESENTATIVE AUSTERMAN remembered a prior problem with Christmas            
 trees.  He said that he did not have a problem with the amendment             
 and thought that it would clarify the language.                               
                                                                               
 Number 1277                                                                   
                                                                               
 SENATOR GREEN felt the amendment was superfluous.                             
                                                                               
 REPRESENTATIVE DAVIES argued that it was not necessary either to              
 specify fruits, trees, vegetables or dairy animals. "All those                
 things are clearly agricultural purposes.  The purpose of the                 
 string in here is to be illustrative of what we mean by                       
 agricultural purposes and it concerns me, slightly, that there is             
 not a single horticultural example in this list.  Sometimes, courts           
 do weird things with constructing statutes."  He explained, they              
 look at a list like that and see agricultural purposes and there is           
 a long list of illustrations there that are all on the food side              
 and none on the horticulture side, some court, in the future, might           
 construe that to be significant.                                              
                                                                               
 Number 1383                                                                   
                                                                               
 Representatives Austerman, Davies and Long voted in favor of                  
 Amendment Number 2.  Representatives Kott, Ogan, Williams and Green           
 voted against the amendment.  So the amendment failed.                        
                                                                               
 REPRESENTATIVE DAVIES moved Amendment Number 3, page 9, lines 2-5,            
 delete all material.  He debated that it is unnecessary for the               
 legislature to annul these regulations.  He said the statutory                
 language will take care of the regulations.                                   
                                                                               
 REPRESENTATIVE OGAN objected.                                                 
                                                                               
 Number 1425                                                                   
                                                                               
 MR. HUBER recalled that testimony today indicated that overly                 
 restrictive regulations have got in the way of a lot of farmers and           
 agricultural producers doing business and being able to                       
 successfully do business.  "We believe that all of these are                  
 inconsistent with statutory changes made in this Act.  We would               
 like to make sure that the department does go out and promulgate              
 regulations that fall under the statutory guidelines of this Act              
 and relieve those burdens.  It would be our position that we ought            
 to repeal those specific regulations and let them go back to the              
 regulatory process under the new statutory language."                         
                                                                               
 Number 1463                                                                   
                                                                               
 REPRESENTATIVE DAVIES said this is an issue of separation of                  
 powers, the regulations is the Administrative function.  He said              
 he, personally, had not had the time to go through each one of the            
 regulations.  He further said, "Our purview here is to deal with              
 the statutes and it is the Administration's purview, who understand           
 the details of how the statutes are implemented through regulation,           
 to deal with the regulations."                                                
                                                                               
 Number 1512                                                                   
                                                                               
 SENATOR GREEN stated that the department had no objection to the              
 repeal of these specific amendments knowing that they would be                
 promulgating new regulations.                                                 
                                                                               
 Representative Davies vote in favor of Amendment Number 3.                    
 Representatives Austerman, Kott, Long, Ogan, Williams and Green               
 voted against the amendment.  So Amendment Number 3 failed.                   
                                                                               
 Number 1551                                                                   
                                                                               
 CO-CHAIRMAN WILLIAMS moved that CSSB 162(FIN) move from the House             
 Resources Committee with individual recommendations and attached              
 fiscal note.  There being no objection, it was so ordered.                    
                                                                               
 HB 394 - GAS & COAL METHANE LICENSES & LEASES                               
                                                                               
 Number 1580                                                                   
                                                                               
 CO-CHAIRMAN GREEN brought committee substitute for HB 394 before              
 the committee to adopt the committee substitute.                              
                                                                               
 REPRESENTATIVE OGAN moved for the adoption of CSHB 394(RES),                  
 Version "M," dated 03/07/96 as a work draft for discussion on                 
 03/11/96.  Hearing no objection, it was so ordered.                           
                                                                               
 ADJOURNMENT                                                                   
                                                                               
 There being no further business to come before the House Resources            
 Committee, Chairman Green adjourned the meeting at 10:07 a.m.                 
                                                                               

Document Name Date/Time Subjects