SB 357-STATE LAND SALE REQUIREMENTS  4:13 p.m. CHAIRMAN TAYLOR said SB 357 was an act relating to the disposal of State land and interest in State land and providing for an effective date. He said the State of Alaska received 105 million acres of land through the statehood act. He said SB 357 would require DNR to make State land available for sale. The land would be available in adequate parts and available for over-the- counter sales. He said SB 357 would also provide for open entry lands, agricultural lands and purchase by installments. CHAIRMAN TAYLOR said SB 357 would provide for the utilization of municipal zoning surveys to be paid for by the person who was acquiring the property. He said DNR would be required to place a monument at least every five miles for each parcel. He noted the ideas behind SB 357 had been around for some time and had been discussed significantly during the two previous sessions of the legislature. SENATOR COWDERY said there had always been the argument that if the land were opened up to the people it would cost the State a lot of money. He said there was some discussion earlier about waivers. He asked if waivers were legal. CHAIRMAN TAYLOR said waivers could be put in the law so that the State wouldn't be required to provide school services. He said that would burden the land with that process. He said SB 357 was fairly comprehensive in trying to remove as many of the State's obligations as possible. He asked Mr. Dick Mylius to provide testimony. MR. DICK MYLIUS, Resource Assessment & Development Manager, Division of Mining, Land And Water, DNR, said DNR recognized that getting land into private ownership was one of the fundamental responsibilities of DNR as set out in Article 8 of the Constitution of the State of Alaska. He said SB 357 would modify some of the existing land disposal statutes and establish two new land disposal programs. He said the first new program would include a short-term offering of 50,000 acres of subdivisions that would be offered through three different first-come first- serve disposals during the first year and a half of the program. The second program would be a long-term open entry program offering 200,000 acres per year. He said that new program would be a more aggressive land-offering program than the State had ever offered and would require a significant increase in the land sales budget. He said DNR supported some of the proposed changes to existing programs. He said Sec. 3 of SB 357 would change existing law so that when a person defaulted on a lottery land-sale contract the parcel could be immediately offered for sale over-the-counter. He said DNR supported that change. Sec. 4 would change existing law so that when a purchaser in an auction failed to sign a contract of sale or defaulted on a contract of sale DNR could offer that parcel for sale over-the-counter. DNR also supported that change. He said DNR also supported Sec. 5, which would allow DNR to require the purchaser to appraise and survey the parcel and pay for those costs. He said DNR had been able to do this through existing regulations but the statute would clarify their authority. MR. MYLIUS said DNR did not support Sec. 6, which would create two new land disposal programs. He said this was partly because DNR had existing statutes that provided adequate and progressive programs for the sale of State land into private ownership. He said DNR's existing programs included the subdivision sales program, the remote recreational cabin program and re-offering of agricultural tracts. He said DNR offered nearly 50,000 acres for sale in FY 02 and FY 03 under the existing programs. He said DNR's existing budget allowed them to offer between 2,500 and 5,000 acres of new land per year. He said DNR was also transferring over 20,000 acres per year to municipalities, many of which also had land sale programs. He said new land sale programs were not needed to increase land sales. DNR suggested that the most efficient way to increase the amount of State land being offered would be to increase funding for existing programs. He said DNR had several concerns with the new programs. DNR felt the programs would not be workable because they would have unrealistic deadlines and contained unmanageable and potentially unconstitutional procedures for awarding land. He said the new programs would fail to provide for the public interest. He said SB 357 contained conflicting provisions regarding surveys in compliance with municipal platting requirements. He said the provisions that would allow individual appraisals and surveys for parcels of land would result in hundreds of appraisals and surveys that would overwhelm borough platting boards and staff and DNR's appraisal and survey staff. He said the existing programs allowed DNR to consolidate the reviews with the boroughs internally, which was a much more efficient way of doing business. He said the proposed AS 38.14.010 would allow DNR to sell land that was unclassified or classified as forestry, agricultural, settlement and recreational. Existing programs allowed DNR to sell agricultural and settlement lands. He said DNR didn't feel that forest or recreational lands should be considered for sale because the public supported retaining these types of land in State ownership. He said past experience had shown that sale of timber lands would automatically create a large number of people opposed to timber harvest in their area. He said subsection (c) of the proposed AS 38.14.010 on page 4 of SB 357 would exempt land sales from the provisions of AS 38.04 and AS 38.05, which protected public access, public resources of the land and access to subsurface resources and had requirements dealing with retaining State ownership of minerals. MR. MYLIUS said the proposed 38.14.040, beginning on page 5, would require purchasers to appear in person in order to acquire a parcel. He said this was similar to a previous requirement that had been found unconstitutional by the courts. He said the budget and revenue projections reflected in the fiscal note were very rough and would need to be refined as SB 357 moved through the process and into the Senate Finance Committee. He said the cost, revenues and general summary were those that were used in 2000 when the existing land disposal programs were being considered in SB 283. SENATOR COWDERY asked how much land DNR had sold to the public in the previous eight years. MR. MYLIUS said there wasn't really a land disposal program until the previous two years. He said over the previous two years, DNR offered approximately 25,000 acres. He said DNR was proposing to offer another 20,000 acres, which were mostly parcels that were previously subdivided and came back to DNR or were never sold. He said approximately 2,400 parcels had been offered that fiscal year and 350 of those had been sold. SENATOR COWDERY asked how much defaulted property had been resold to the public. MR. MYLIUS said it was difficult to say because land that had been defaulted on was lumped in with other types of offerings. SENATOR THERRIAULT asked for the location of the language requiring personal appearance in order to purchase land. MR. MYLIUS said that was in the proposed Sec. 38.14.040 beginning on page 5. The actual language was in lines 1-3 on page 6. He said that provision was very similar to a previous requirement that intended to give local residents a preference in land sales. He said some people who couldn't attend a land sale because it was held during the week filed suit and it was determined that land had to be sold with equal access to all Alaskans. SENATOR COWDERY said that same subsection said, "The sale price of the land shall be the fair market value of the land as determined by an appraiser selected from a list of appraisers approved by the department under AS 38.14.160." He asked who those appraisers would be. MR. MYLIUS said DNR had a list of appraisers who were licensed and certified to appraise State lands and wanted to do so. SENATOR COWDERY asked if the appraisers looked at property values in the vicinity when they did their appraisals. MR. MYLIUS said they did. CHAIRMAN TAYLOR asked how to modify Sec. 38.14.040 to bring it into compliance with the court's determination regarding appearing in person in order to purchase land. MR. MYLIUS said he would delete the language regarding appearing in person. CHAIRMAN TAYLOR asked if he would place a period after "chapter" on page 6, line 1. MR. MYLIUS said he would. He said there were several ways to do land sales without requiring the personal appearance of the purchaser. The first was to do sealed bid options. He said there were also lotteries if more than one person wanted a parcel. He said there was also the option of an outcry auction, in which people could have an agent present. He said outcry auctions were inefficient because each parcel needed an individual auction. TAPE 02-14, SIDE B    CHAIRMAN TAYLOR moved Amendment 1 placing a period after the word "chapter" on page 6, line 1 and deleting "who appears in person to purchase the land at the site or sites designated by the department for the sale of land" in lines 1 through 3. He said that would hopefully bring that into compliance with the constitutional concerns raised by Mr. Mylius. There being no objection, Amendment 1 was adopted. CHAIRMAN TAYLOR asked if there was anybody else who wished to testify on SB 357. There was nobody. SENATOR COWDERY moved CSSB 357(JUD) out of committee with attached fiscal note and individual recommendations. There being no objection, CSSB 357(JUD) moved out of committee with attached fiscal note and individual recommendations.