Legislature(2021 - 2022)SENATE FINANCE 532

04/28/2021 09:00 AM Senate FINANCE

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Audio Topic
09:02:18 AM Start
09:03:48 AM SB97
09:32:39 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
-- Invited & Public Testimony --
-- <Time Limit May Be Set> --
+ Bills Previously Heard/Scheduled TELECONFERENCED
                 SENATE FINANCE COMMITTEE                                                                                       
                      April 28, 2021                                                                                            
                         9:02 a.m.                                                                                              
9:02:18 AM                                                                                                                    
CALL TO ORDER                                                                                                                 
Co-Chair Bishop called the Senate Finance Committee meeting                                                                     
to order at 9:02 a.m.                                                                                                           
MEMBERS PRESENT                                                                                                               
Senator Click Bishop, Co-Chair                                                                                                  
Senator Bert Stedman, Co-Chair                                                                                                  
Senator Lyman Hoffman                                                                                                           
Senator Donny Olson                                                                                                             
Senator Natasha von Imhof                                                                                                       
Senator Bill Wielechowski                                                                                                       
Senator David Wilson                                                                                                            
MEMBERS ABSENT                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
Marty  Parsons,  Director,  Division of  Mining,  Land,  and                                                                    
Water,  Department of  Natural  Resources (DNR),  Anchorage;                                                                    
David Schade, Director, Division  of Agriculture, DNR, Eagle                                                                    
SB 97     STATE LAND SALES AND LEASES; RIVERS                                                                                   
          SB 97 was HEARD and HELD in committee for further                                                                     
SENATE BILL NO. 97                                                                                                            
     "An  Act  relating  to  state  land;  relating  to  the                                                                    
     authority  of the  Department  of  Education and  Early                                                                    
     Development to  dispose of state land;  relating to the                                                                    
     authority  of  the  Department  of  Transportation  and                                                                    
     Public Facilities  to dispose  of state  land; relating                                                                    
     to  the   authority  of   the  Department   of  Natural                                                                    
     Resources  over certain  state  land;  relating to  the                                                                    
     state  land  disposal  income  fund;  relating  to  the                                                                    
     leasing  and   sale  of   state  land   for  commercial                                                                    
     development;  repealing   establishment  of  recreation                                                                    
     rivers  and recreation  river corridors;  and providing                                                                    
     for an effective date."                                                                                                    
9:03:48 AM                                                                                                                    
MARTY  PARSONS,  DIRECTOR,  DIVISION OF  MINING,  LAND,  AND                                                                    
WATER,  DEPARTMENT  OF  NATURAL RESOURCES  (DNR),  ANCHORAGE                                                                    
(via  teleconference), discussed  the  presentation, "SB  97                                                                    
State Land  Sales and Leases"  (copy on file).  He displayed                                                                    
slide  2, "Authority  to Department  of Education  and Early                                                                    
Development  (DEED)  and  Department of  Transportation  and                                                                    
Public Facilities (DOT) ":                                                                                                      
     Authority to DOT/PF and DEED to Dispose of State Land                                                                      
     Provides   authority  to   ease   disposal  of   excess                                                                    
     buildings around the state                                                                                                 
     ? The bill amends current  statutes to allow DOT/PF and                                                                    
     DEED to acquire and  transfer excess buildings and land                                                                    
     that  is  no longer  needed  for  the purposes  of  the                                                                    
     original acquisition                                                                                                       
     ? This will streamline  the disposal process and reduce                                                                    
     multi-agency efforts                                                                                                       
9:05:36 AM                                                                                                                    
Co-Chair Bishop  asked that  there be  a pause  between each                                                                    
slide for questions.                                                                                                            
Senator Hoffman  wondered whether  there was map  of parcels                                                                    
available for  consideration by the  citizens of  Alaska. He                                                                    
stressed that there were many  people in western Alaska that                                                                    
did not have access to state  lands because they were not in                                                                    
close proximity to those lands.                                                                                                 
Mr. Parsons  shared that there  were many parcels  that were                                                                    
scattered throughout  the state.  He stated that  there were                                                                    
also lands available at auction.  He remarked that there was                                                                    
an attempt to make many parcels available in the state.                                                                         
Senator  Olson assumed  that  "private  sector" referred  to                                                                    
both individuals and businesses.                                                                                                
Mr.  Parsons replied  that the  attempts as  related to  the                                                                    
efforts  with the  Department of  Transportation and  Public                                                                    
Facilities (DOT)  and the Department of  Education and Early                                                                    
Development   (DEED),  those   departments'  statutes   were                                                                    
determined   the  disposal   of   land.   He  assumed   that                                                                    
individuals  could bid  on the  parcels,  because there  was                                                                    
nothing in the legislation that prohibited that action.                                                                         
Senator  Olson wondered  how there  could be  a leveling  to                                                                    
ensure that both individuals  and corporations could acquire                                                                    
the land.                                                                                                                       
Mr. Parsons replied that the  conversation must be done with                                                                    
DOT and DEED to see how they would dispose of the land.                                                                         
9:10:50 AM                                                                                                                    
Mr. Parsons highlighted slide 3,  "Land Disposal Income Fund                                                                    
     Increase Land Disposal Income Fund (LDIF) Cap                                                                              
     Increase spending  authority from the LDIF  for project                                                                    
     The cap  on the LDIF  is proposed to be  increased from                                                                    
     $5M  to  $12M to  provide  additional  capital for  the                                                                    
     department to  develop and dispose  of state  lands and                                                                    
     to offset  inflation since the fund  was established in                                                                    
     ? The $5M cap has not been adjusted in 20 years                                                                            
     ?  Personnel  and   Development  costs  have  increased                                                                    
     significantly,   reducing    the   available   "working                                                                    
     ? This will  result in more acreage  available for sale                                                                    
     and construction of access                                                                                                 
     ? This  is not an  increase in appropriation  simply an                                                                    
     adjustment to the funding cap                                                                                              
Senator Hoffman requested the most  recent five years of the                                                                    
income fund expenditures.                                                                                                       
Mr. Parsons agreed to provide that information.                                                                                 
Co-Chair Bishop requested a list of the efforts that were                                                                       
not followed through.                                                                                                           
Mr. Parsons agreed to provide that information.                                                                                 
9:14:18 AM                                                                                                                    
Mr. Parsons pointed to slide 4, "Commercial Use":                                                                               
     Commercial Use Land Sales                                                                                                  
     This  new statute  governing the  leasing  and sale  of                                                                    
     state    lands   deemed    suitable   for    commercial                                                                    
     development, within  Qualified Opportunity Zones  or in                                                                    
     state determined commercial development areas                                                                              
     ? Land can be nominated by the public                                                                                      
     ? Leasing option to complete  requirements for sale and                                                                    
     allow immediate commercial activity                                                                                        
     ? After  conclusion of the lease  requirements for sale                                                                    
     will occur                                                                                                                 
     ?  Individuals have  requested a  program to  allow for                                                                    
     such sales                                                                                                                 
     ?  The   number  of   acres  identified   for  proposed                                                                    
     development  will  be  significant and  the  number  of                                                                    
     acres conveyed will depend on the proposals received                                                                       
Co-Chair Bishop wondered whether a green energy project be                                                                      
allowed commercial use.                                                                                                         
Mr. Parsons replied in the affirmative.                                                                                         
9:18:45 AM                                                                                                                    
DAVID SCHADE, DIRECTOR, DIVISION OF AGRICULTURE, DNR, EAGLE                                                                     
RIVER (via teleconference), addressed slide 5, "Agriculture                                                                     
    Reduced Restrictions to Agricultural Land Disposals                                                                         
     Statutes  are   modified  to  reduce   restrictions  on                                                                    
     agricultural land to private ownership                                                                                     
     ? Reduces parcel size from a  minimum of 40 acres to 20                                                                    
     acres when subdividing                                                                                                     
     ? Increases  the number  of parcels  from a  maximum of                                                                    
     four parcels to eight parcels when subdividing                                                                             
     ?  Allows  for  land use  and  improvements,  including                                                                    
     those   that  do   not  limit   the  primary   use  for                                                                    
     agricultural purposes                                                                                                      
9:20:40 AM                                                                                                                    
Co-Chair  Bishop wondered  whether the  program would  allow                                                                    
for continued agriculture,  but also allow for  a subsidy of                                                                    
the farm.                                                                                                                       
Mr.  Schade   replied  that  it   was  the  intent   of  the                                                                    
Mr. Parsons pointed to slide 6, "Development":                                                                                  
     Road Development and Minimum Lot Size Standards                                                                            
     The   bill   clarifies   statutes   relating   to   the                                                                    
    development of roads and minimum lot size standards                                                                         
     ?  Provides  statute  language  to  ensure  State  land                                                                    
     disposals  are held  to the  same  platting and  zoning                                                                    
     requirements  as all  municipal projects  for both  lot                                                                    
     size and constructed access                                                                                                
Senator Wilson wondered  whether there was a  desire to sell                                                                    
the  lots  to  developers  after  meeting  the  minimum,  or                                                                    
whether they would be sold in subsections.                                                                                      
Mr.  Parsons  responded  that,  currently,  it  would  be  a                                                                    
subdivision  development  that  the state  would  build  the                                                                    
roads and offer  lots for sale. He shared that  there was an                                                                    
examination of  larger parcel sales  to a developer  with no                                                                    
infrastructure    in   place,    therefore   putting    that                                                                    
responsibility on the developer.                                                                                                
9:25:31 AM                                                                                                                    
Senator Wilson remarked that many  preferred that the larger                                                                    
lots be sold to a developer.                                                                                                    
Mr.  Parsons noted  that the  small  lots would  be sold  at                                                                    
once, to individuals, but understood the concern.                                                                               
Mr.  Parsons  looked  at  slide  7,  "Additional  Sales  and                                                                    
     Provides for ease of Land Sales purchase contracts and                                                                     
     ?    Modifies   auction    requirements   for    easier                                                                    
     administration of land offerings                                                                                           
          o Allows for more modern sale options, including                                                                      
          online auctions                                                                                                       
     ? Increases max contract term to 30 years                                                                                  
          o Currently capped at 20 years                                                                                        
          o Allows for longer financing of higher value                                                                         
     ? Language referencing "foreclosure" is modified to                                                                        
     "termination" to align with the current administrative                                                                     
Senator Wilson  queried the normal  state rate of  return on                                                                    
the land sales.                                                                                                                 
Mr.  Parsons  replied  that  it  varied,  depending  on  the                                                                    
location  of the  sold  land.  He stated  that  land in  the                                                                    
Interior would  sell for approximately  $3000 and  acre, but                                                                    
land  closer to  road  construction increased  the cost.  He                                                                    
shared  that land  in Southeast  was  valued higher,  mainly                                                                    
because  it  was  often waterfront.  He  agreed  to  provide                                                                    
further information.                                                                                                            
Senator  Wilson  queried  the   typical  interest  rate  for                                                                    
financing in the slide.                                                                                                         
Mr. Parsons replied that it was prime plus two.                                                                                 
Mr. Parsons concluded his presentation.                                                                                         
9:30:35 AM                                                                                                                    
Co-Chair Bishop OPENED and CLOSED public testimony.                                                                             
Senator Wilson wondered whether  there was opposition to the                                                                    
Co-Chair Bishop replied that there  was slight opposition in                                                                    
the Senate  Resource Committee,  so there  was removal  of a                                                                    
Senator von Imhof furthered that the impetus of the bill                                                                        
would begin to look at a 30-year-old plan related to                                                                            
recreational rivers to determine modernization.                                                                                 
Co-Chair Bishop discussed the following day's agenda.                                                                           
SB 97 was HEARD and HELD in committee for further                                                                               
9:32:39 AM                                                                                                                    
The meeting was adjourned at 9:32 a.m.                                                                                          

Document Name Date/Time Subjects
SB 97 Summary of Changes.pdf SFIN 4/28/2021 9:00:00 AM
SB 97
SB 97 Sponsor Statement 2.26.21.pdf SFIN 4/28/2021 9:00:00 AM
SB 97
SB 97 SFIN Land Sales 4.28.21.pdf SFIN 4/28/2021 9:00:00 AM
SB 97
SB 97 Sectional Analysis 4-28-21.pdf SFIN 4/28/2021 9:00:00 AM
SB 97
SB 97 Land Disposal Letter of Support.pdf SFIN 4/28/2021 9:00:00 AM
SB 97
SB 97 HB120 Land Surface Disposal White Paper 4.28.2021.pdf SFIN 4/28/2021 9:00:00 AM
HB 120
SB 97