HOUSE BILL NO. 319 An Act relating to the disposal of state land by lottery; and relating to the disposal, including sale or lease, of remote recreational cabin sites. Representative Fate MOVED to ADOPT Amendment #2 which replaces the previous Amendment #2. Co-Chair Williams OBJECTED for purposes of discussion. Amendment #2, Version W.5 dated 4-19-04, reads: Page 1, line 2, following "deeds;": Delete "and" Page 1, line 3, following "sites": Insert "; and providing for an effective date" Page 3, lines 6 - 7: Delete "Sales under this section may be at public or  private sale under (g) of this section." Page 3, lines 25 - 28: Delete all material and insert: "(f) A resident may nominate a parcel for disposal under this section and, if the resident has not leased or purchased land under this section during the three-year period preceding the date of nomination, may apply for a lease for the nominated parcel under (b) of this section." Page 3, line 29: Delete "five" Insert "10" Page 4, line 2: Delete "400" Insert "700" Page 4, line 6, following ";": Insert "and" Page 4, lines 7 - 9: Delete all material. Page 4, line 10: Delete "(4)" Insert "(3)" Page 4, following line 11: Insert a new bill section to read:  "* Sec. 5. AS 38.05.600(f) as enacted in sec. 4 of this Act, takes effect January 1, 2005." JIM POUND, STAFF TO REPRESENTATIVE FATE, explained that Amendment #2, Version W.5, adds an effective date clause in the bill title. The language on page 3, lines 6-7 addresses and eliminates private sales, which had been a concern. Paragraph (f) in Section 4 eliminates the first right of refusal clause and allows an individual to file for a lease. The amendment expands "not to exceed" from five to ten acres because several organized boroughs have platting rules requiring a minimum of ten acres for cabin sites. This change would make more land available within those boroughs. Representative Chenault asked which of the boroughs require 10-acre parcels. Mr. Pound replied that both the Mat-Su and North Star Boroughs have 10-acre requirements. Mr. Pound explained that because of the expansion to 10 acres, the waterfront language has been changed from 400 feet to "may not exceed 700 feet." The meander mile has been eliminated because it was a buffer zone inadvertently left in paragraph 3 when the 660-foot buffer zone was removed. The amendment also adds applicability to be effective January 1, 2005. Currently the Department of Natural Resources (DNR) has remote recreational cabin staking in excess of 13 acres and if the bill takes effect before that process is completed, it would change the rules in mid- stream. Co-Chair Williams removed his objection. Amendment #2 Version W.5 was adopted. JIM DERRINGER, STAFF TO REPRESENTATIVE FATE, explained that the sponsor had worked with the DNR on the fiscal note to arrive at an agreement on the revenues, which the sponsor set higher than the Department's figures. The revenues nearly doubled when the parcels changed from 5 acres to 10 acres. The Department's initial cost to implement the program increased from $300 thousand to $390 thousand, which is justifiable. He said that the program would begin to break even after the third year, and would start to generate revenue for the State thereafter. NICO BUS, DIRECTOR, ADMINISTRATIVE SERVICES, DEPARTMENT OF NATURAL RESOURCES, agreed that the DNR had worked with the sponsor on the fiscal note. The revenue has increased with the shift to 10-acre parcels, but he thought that the timing of the revenue stream was "optimistic." Representative Chenault asked how Mr. Bus foresaw the two programs working simultaneously. Mr. Bus deferred to Mr. Mylius for explanation. DICK MYLIUS, DEPUTY DIRECTOR, DIVISION OF MINING LAND AND WATER, DEPARTMENT OF NATURAL RESOURCES, VIA TELECONFERENCE, ANCHORAGE, said that the DNR hadn't figured out how the two programs would operate, although the differences between them aren't as great with the new Amendment #2. The main change is that under this proposal, individuals would be nominating specific parcels. Mr. Mylius stated that if nominations were in an area where more parcels were offered, the DNR would roll those into the existing program. These would not be entirely distinct programs. Representative Chenault pointed out that the fiscal note reflects 5 full-time and one part-time staff, and expands to 7 full-time and one part-time staff in 2010. He commented that if the two programs were combined at some point, he would expect the fiscal note to drop. Mr. Mylius replied that the DNR initially envisions two separate programs because many people would apply for the parcels. The largest initial cost under HB 319 would involve processing individual applications for specific parcels. Representative Fate MOVED to report CSHB 319(FIN) out of Committee with individual recommendations and accompanying fiscal notes. There being NO OBJECTION, it was so ordered. CSHB 319(FIN) was REPORTED out of Committee with individual recommendations and with two new fiscal impact notes.