HB 282-STATE LAND: DISPOSAL/SALE/LEASE/RESTRICT  2:14:16 PM CHAIR MCKAY announced that the next order of business would be HOUSE BILL NO. 282, "An Act relating to access roads; relating to state land; relating to contracts for the sale of 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 sale and lease of state land; relating to covenants and restrictions on agricultural land; and providing for an effective date." 2:14:48 PM BRENT GOODRUM, Deputy Commissioner, Department of Natural Resources (DNR), presented opening remarks for HB 282, state land disposals. He explained the state manages over 100 million acres of land within the state and 65 million acres of tideland belonging to citizens of the state of Alaska. This legislation [HB 282] would serve to cut red tape; create flexibility and responsiveness within state departments; and open additional opportunities for everyday Alaskans. The bill would streamline land transfer functions from the state that would allow the Department of Transportation and Public Facilities and the Department of Education and Early Development to directly transfer lands no longer needed for their original purposes to private parties. The bill would also work to create flexible leasing requirements; incorporate adaptable road standards; and provide necessary financial support for the development of state lands in preparation for sales to Alaskans. The legislation would also help facilitate commercial sales by introducing a new statute for land leasing and sales and would enable expanded agricultural use to be inclusive of land activities such as bed and breakfasts to offset agricultural costs. The result opens lands for the use of everyday Alaskans. 2:17:15 PM CHRISTY COLLES, Director, Division of Mining, Land, and Water, Alaska Department of Natural Resources, on behalf of the sponsor, House Rules by request of the governor, gave a PowerPoint presentation, titled "HB 282 State Land: Disposal/Sale/Lease/Restrict," [hardcopy included in the committee packet]. She presented slide 1, "Overview," which read as follows [original punctuation provided]: • Authorize the Department of Education & Early Development (DEED) and the Department of Transportation & Public Facilities (DOT&PF) to directly dispose of surface land, rather than transferring land to the Department of Natural Resources (DNR) for conveyance • Increase the cap on the Land Disposal Income Fund (LDIF) • Update and improve provisions relating to DNR's land disposal procedures in AS 19.30, AS 38.04, AS 38.05 • Amends agricultural use restrictions • Add a new statute relating to leases and sales of land for commercial development MS. COLLES moved to slide 2, "Authority for Direct Disposal of State Land," which read as follows [original punctuation provided]: • Proposed amendments allow the Department of Education and Early Development (amending AS 14.07.030) and Department of Transportation & Public Facilities (amending AS 35.20.070) to sell land directly to private parties Streamlining land disposals, reducing multi-agency involvement Expanding eligible recipients beyond federal, state agencies, and political subdivisions MS. COLLES said the amendments would streamline the conveyance of land by removing a duplicative multi-agency process. Two recent examples where the Department of Education and Early Development (DEED) has transferred title to DNR for conveyance to a third party are Japonski Island in Sitka and Telephone Hill in Juneau. Public notices and other regulations would still apply to such conveyances. 2:19:47 PM REPRESENTATIVE MEARS questioned what mechanisms DEED and the Department of Transportation & Public Facilities (DOT&PF) use for taking over and selling land. MS. COLLES pointed out that the lands in question would be very specific. She deferred to Lori Weed of DEED and Heather O'Claray of DOT&PF for additional information. 2:20:40 PM HEATHER O'CLARAY, Chief, State Right of Way, Division of Statewide Design and Engineering Services, Department of Transportation & Public Facilities, responded to Representative Mears' question by briefly describing the department's existing authority for disposing of properties, specifically facilities properties. REPRESENTATIVE MEARS questioned whether a separate fiscal note was needed rather than a line item in the bill's fiscal note. MS. O'CLARAY explained that currently DOT&PF has existing regulations, and this falls withing their purview. 2:22:46 PM LORI WEED, Acting Facilities Manager, School Finance and Facilities Section, Department of Education and Early Development, explained that DEED has existing authority to dispose of land parcels to certain entities; the department has someone on staff who deals with conveyance of properties. 2:23:38 PM MS. COLLES continued with the next slide, "Land Disposal Income Fund (LDIF)," which read as follows [original punctuation provided]: • The LDIF holds deposits from the state land disposal program • Under current law, the portion of the fund in excess of $5 million is to be deposited in the state general fund • The bill raises state land disposal income fund cap from $5 million to $12 million • Boosts spending authority for larger projects • Addresses inflation since 2000; cap unchanged for 20 years • Adjustment to funding cap, not appropriation • Department can request limit increase in annual report 2:24:47 PM REPRESENTATIVE SADDLER clarified that this does not represent a new appropriation but rather just a larger account that money can go into. He asked what the most immediate impact of expanding the Land Disposal Income Fund (LDIF) would be. MS. COLLES agreed about the fund and explained that it was an initial step for growth. 2:25:52 PM MS. COLLES returned to the PowerPoint and moved to slide 5, "Agricultural Land Lease and Sale Procedures," which read as follows [original punctuation provided]: • Amendment to AS 38.05.321 allows broader use of agricultural land and improvements • Currently an agricultural landowner can only use the land for purposes that are incidental to and not inconsistent with agricultural land • Proposed amendment would now allow an agricultural landowner to use land for purposes that are consistent with and do not interfere with the primary purpose 2:26:33 PM REPRESENTATIVE MEARS asked where the income from selling land would go into the LDIF. She questioned how using the LDIF met the appropriations standards. MS. COLLES explained how the LDIF worked. MR. GOODRUM provided additional information regarding the LDIF and appropriations. 2:28:44 PM REPRESENTATIVE RAUSCHER asked about the reasons for changing the cap from $5 million to $12 million. MS. COLLES described the reverse sweep in fiscal year 2022 (FY 22) and how the money listed is an adjustment to the funding cap rather than an appropriation. REPRESENTATIVE RAUSCHER asked whether $12 million would be spent in a year. MS. COLLES responded that it would depend and described how the LDIF is similar to a bank account. 2:31:01 PM MS. COLLES presented slide 6, "Agricultural Land Lease and Sale Procedures," which read as follows [original punctuation provided]: • Amendment to AS 38.05.321 allows broader use of agricultural land and improvements • Currently an agricultural landowner can only use the land for purposes that are incidental to and not inconsistent with agricultural land • Proposed amendment would now allow an agricultural landowner to use land for purposes that are consistent with and do not interfere with the primary purpose MS. COLLES continued with slide 7, "Access Road Construction," which read as follows [original punctuation provided]: • Amends AS 19.30.080 to specify that access roads to surface disposals may be developed at a pioneer standard Clarifying language on right-of-way widths within municipal boundaries Align with municipal zoning requirements to the same extent as private developers MS. COLLES moved to slide 8, "Land Sale Procedures," which read as follows [original punctuation provided]: • Land sale disposal contracts Longer purchase terms from 20 years to 30 years Consistency in terms from "Foreclosure" to "Termination" Allows for paid in full purchase when existing infrastructure would increase liability of financing a land sale purchase contract 2:32:56 PM REPRESENTATIVE RAUSCHER asked about the use of the term "termination" rather than "foreclosure" of contracts and whether DNR has terminated contracts. MS. COLLES explained how DNR contracts differ from banking contracts and confirmed that the department has terminated contracts. MS. COLLES advanced to slide 8, "Survey Requirements for Leases," which read as follows [original punctuation provided]: • Discretion of cadastral surveys for long-term leases Survey could be required where infrastructure boundaries or access management is in the best interest of the state Reduces the financial and administrative burden on industries Industry is challenged by current requirements • Ex: Renewable energy projects, grazing leases 2:34:36 PM REPRESENTATIVE MEARS commented about the accuracy of satellite surveys and inquired about setbacks and whether there is a buffer to reduce conflicts. MS. COLLES answered that there is nothing in statute that addresses such a buffer, but it is something that could be done by statute or regulation. A description of commercial and public development was continued with slide 9, "Land for Commercial Development," which read as follows [original punctuation provided]: • Stimulate economic development • Offers land for leasing, and sale, by requesting proposals For state land identified or nominated as a Qualified Opportunity Zone For state land nominated by the public • Land nominated cannot exceed 640 acres For any other state land the commissioner deems appropriate for commercial development • Nominated land may need to be reclassified Provide additional public notice beyond normal AS 38.05.945 2:37:40 PM REPRESENTATIVE MEARS inquired about state land nominated for the public and what process private individuals would use. MS. COLLES described how the nomination process for commercial development would work and what would happen if there was competition for a parcel. 2:39:06 PM MS. COLLES presented the sectional analysis of HB 282, slides 10 through 13, which read as follows [original punctuation provided]: • Section 1: Amends AS 14.07.030 to expand authority for land disposals for Dept. of Education and Early Development • Section 2: Amends AS 19.30.080 for access road development related to surface disposals within a municipal boundary • Section 3: Reenacted authority to Dept. of Transportation & Public Facilities to expand authority to vacate and dispose of land • Section 4: Raises state land disposal income fund cap from $5 million to $12 million • Section 5: Removes the requirement of a cadastral survey for a long-term lease under AS 38.05.070 • Section 6: Grants the commissioner discretion to require a cadastral survey for a long-term lease issued under AS 38.05.070 • Section 7: Repeals and reenacts AS 38.05.055 to clarify requirements for public auction or sealed bid as the default methods for sale of state land • Section 8: Amends AS 38.05.065(a) to allow a longer term of 30 years for contracts • Section 9-12: Updates AS 38.05.065(c), (d), and (f) with consistent industry terms • Section 13: Amends AS 38.05.065(h) for consistency in land sale disposals • Section 14: Adds new section (j) to AS 38.05.065 for consistency in land sale disposals and new section (k) to reduce liability to the state • Section 15: Adds new section to AS 38.05 (AS 38.05.086) for nomination, lease, and sale of land for commercial development • Section 16: Amends AS 38.05.321 to expand allowable uses on conveyed agricultural land • Section 17: Amends AS 38.05.965 to include term definitions • Section 18: Repeals AS 38.05.065(b) to conform with updates in previous section 13 • Section 19: Provides immediate effective date 2:43:21 PM REPRESENTATIVE RAUSCHER asked how many land disposal programs the state has currently. MS. COLLES replied that there were two land sales currently. In response to a follow-up question, she explained that none of the lands for sale were Mental Health Trust Land. MS. COLLES presented the fiscal note on slide 14, which read as follows [original punctuation provided]: • FY 2025 $655.4 (5 positions) • Two Permanent Full-Time Natural Resource Specialists 3 • Two Permanent Full-Time Natural Resource Specialist 2 • One Permanent Full-Time Appraiser 1 These positions will support timely adjudication of the expanded Land Sales with Commercial Development program applications • FY 2026-2030 $630.4 annually 2:45:20 PM CHAIR MCKAY announced an amendment deadline of February 27. 2:45:54 PM CHAIR MCKAY announced that HB 282 was set aside.