SB 133-REMOTE RECREATIONAL SITES; SALES; PERMITS  4:10:05 PM CHAIR REVAK announced the consideration of SENATE BILL NO. 133 "An Act relating to the sale or lease of state land for remote recreational sites; relating to permits for remote recreational sites; and providing for an effective date." 4:10:33 PM At ease. 4:11:29 PM CHAIR REVAK reconvened the meeting. 4:11:34 PM LAURA BOOMERSHINE, Legislative Liaison, Department of Natural Resources, Anchorage, Alaska, introduced Ms. Colles who gave an overview of SB 133. 4:12:16 PM CHRISTY COLLES, Operations Manager, Division of Mining, Land, and Water, Department of Natural Resources, Anchorage, Alaska, gave an overview of SB 133. Ms. Colles began the overview with slide 2, What's in SB 133 Overview: • Repeals existing RRCS program and reenacts the Remote Recreational Sites (RRS) program • Establishes the ability for individuals to purchase, lease or permit RRS MS. COLLES said that the biggest difference between the RRS program and the Remote Recreational Cabin Site (RRCS) staking program is that RRS allows an Alaskan to permit a site, purchase a site, lease it for a term longer than previously allowed, and remain in the lease without purchasing. • Provides for Commissioner to identify areas where land is properly classified and offer those lands for staking of RRS • Provides for Alaskans to nominate lands for inclusion 4:14:00 PM MS. COLLES explained that an individual may nominate unclassified lands. The department will review the nomination to determine whether reclassification is necessary to allow for a remote recreational staking opportunity. • Identifies who is eligible to participate in the program MS. COLLES stated that this program is open to Alaskan residents who: - Can show residency in Alaska for one year, and - Have not participated in the program in the last ten years. An individual may participate in the program once every ten years. • Establishes that a 10-acre parcel size may be staked MS. COLLES clarified that an individual may stake less than 10 acres, but the maximum is 10 acres. • Process for handling conflicting staked parcels MS. COLLES stated that if multiple individuals stake the same ground, an established conflict resolution process will resolve staking disputes. The process determines who retains the staked parcel and who should re-stake additional acreage. • Directs the Commissioner to establish regulations to implement the program 4:15:39 PM MS. COLLES advanced to slide 3, What's in SB 133 - Leasing and Sale: • Establishes process for staking, leasing, and/or purchasing a piece of state land square4 Stake parcel, submit a sketch, and an application to lease MS. COLLES said that the lease application is the first step in either a purchase or a long-term lease. First, an individual must stake the parcel, then submit a sketch of the staked property. The details for leasing and purchasing are below. • Process for leasing a remote recreational site square4 Initial 10-year leasing period square4 Two additional 10-year lease renewal periods square4 Restricts assignment of a lease square4 Termination of lease for non-compliance square4 Establishes timeframe for surveying and appraising square4 Requirement for marking of parcel boundaries MS. COLLES stated that an individual may lease up to 30 years. The idea is to have a site for recreational purposes, not monetary or profit-oriented ones. The lease may be assigned through an estate or a will but not sold. Unpaid fees and commercial business operations are examples of non-compliance and cause for termination of the lease. Regulations would establish the stipulations for compliance. The timeframe to complete a site survey and appraisal is 24 months, but the department could authorize additional time. Before completing the survey, the lessee must mark the parcel boundaries outlined in SB 133. Marked, clear boundaries will help future stakers avoid overlapping parcels. • Process for purchase of state land for RRS square4 Sale price is fair market value square4 Applicant must survey and appraise the site MS. COLLES stated that a lessee may purchase the site at fair market value. The same appraisal used to apply for the lease may be reused to purchase the site; this option is available for 24 months. Once 24 months have elapsed, the division would require a new appraisal. The staker is responsible for the cost of a survey and appraisal. 4:18:52 PM SENATOR KIEHL commented that individuals start with good intentions but do not always get the parcel. He asked if the department agrees that the most significant obstacle to the success of remote staking programs is the cost of survey and appraisal. MS. COLLES agreed that the department had issues with previous programs when the cost of the survey and appraisal was entirely the applicant's responsibility. Currently, the RRS program is large tract-based, meaning parcels in a given area are available in bulk amounts with limited staking authorizations. The department covers the actual cost of going out and doing the survey and appraisal, but the stakers still bear the cost. She acknowledged there is some concern about costs, but the hope is that the survey and appraisal will be affordable with the larger parcels. 4:21:00 PM MS. COLLES continued with slide 4, What's in SB 133 Permits, stating this is an entirely new approach from the past to remote recreational staking sites. The department has not had permits recently. The personal use cabin program was repealed, but the department still has managed cabin permits on the books. SB 133 allows individuals that are not ready to purchase, to get an RRS permit: • Establishes process for permitting an RRS • 25-year term MS. COLLES compared the duration of the proposed 25-year RRS permit term to the considerably shorter 5-year commercial permit and six-year personal use cabin permit. The permit term for this authorization is much longer. • Revocable at will MS. COLLES said that the RRS permit is revocable at will because it is not a disposal. If necessary, for any reason, the option to revoke the permit remains available to the state. • May not be assigned or renewed • May be terminated for any reason, including failure to use the permitted land as required by the terms of the permit MS. COLLES explained that the department may terminate the permit for a noncompliance issue, such as: - nonpayment - permit used for commercial purposes, in which case, the permittee might need to switch to a commercial use permit. • Permit holder may apply to lease or purchase the permitted site MS. COLLES stated that during the 25-year permit term, the individual may apply to lease or purchase. The permittee might have to go through the nomination process to reclassify the RRS, which would require the commissioner's recommendation. 4:23:12 PM CHAIR REVAK asked for more detail about "revocable at will. MS. COLLES answered that all the permits are considered revocable at will. She emphasized that revocations occur for cause, not haphazardly. For example, if it were in the state's best interest to utilize a permit for a large infrastructure or access project, the state would consider the permit a revocable interest. Conversely, a lease or sale would require the agreement of the landowner. MS. COLLES outlined the process to revoke a permit. The department: - notifies the individual, - the department works with the individual, and - the department looks for ways to work around the property. She emphasized that permits are not, in no way, a disposal of state interests. CHAIR REVAK commented that the Department of Natural Resources acts responsibly with its revocable at will decisions; however, inholding issues exist with the state's federal partners. 4:25:12 PM SENATOR STEVENS asked how much land is transferred to Alaskans annually under the current remote recreational cabin program. MS. COLLES answered that since 2001, the state had 14 offerings and 81 staking areas. She defined offerings as public notification that land is available to stake. Of the 14 offerings, 807 parcels were sold, totaling 50,462 acres. SENATOR STEVENS commented that in 22 years, 807 parcels are not that many sales. He sought assurance that the data was correct. MS. COLLES answered that is correct; the number of parcels sold was 807. She noted that currently, 5 to 20 acres per parcel are available for staking. She referenced slide 13 to show remote recreational cabin site parcels offered in the past. She noted that East Fork Pass had 16,350 acres with a maximum of 60 staking authorizations, so up to 1,200 acres (60 staking authorizations multiplied by a 20-acre staking maximum) were available for staking. The idea is to give an individual enough space to retain the remote setting, in contrast to subdivision sales which share lot lines. SENATOR STEVENS calculated the sales average is about 20 parcels [37 parcels] per year. He asked if the goal was to increase the number of sales. MS. COLLES answered yes. The goal is to identify areas and constantly put out as much land as possible. The department seeks areas that are desirable to purchasers. It takes time to sort out issues, research area plans, work with communities, and go through a best interest finding, which is a two-step decision. This bill proposes to exempt the best-interest finding, as required by AS 38.05.035, in lieu of maybe a less extensive decision document. Public notice would continue to be required but not at the current level, because it could delay projects currently in development.   SENATOR STEVENS re-asked how many parcels and acres were sold in the remote recreational cabin program since 2001. MS. COLLES answered that 50,462 acres and 807 parcels were sold since 2001. Slide 11, History of the Current Remote Recreational Cabin Site Program, shows these figures. 4:29:21 PM SENATOR KIEHL asked about the average size of those RRCS parcels. MS. COLLES replied that she needed a moment to calculate the average parcel size. SENATOR KIEHL calculated that the average size of an RRCS parcel is over 60 acres. He concluded that a problem exists with the figures as the maximum parcel size in the RRCS program is limited to 20 acres. MS. COLLES agreed. She stated that she would check the figures. CHAIR REVAK requested that Ms. Colles send corrected figures to the committee. SENATOR KIEHL noted that in 21 years, 807 parcels were sold. He asked, of those 807 parcels, how many were staked. MS. COLLES replied that she would get that information to the committee. 4:30:40 PM MS. COLLES advanced to slide 5, SB 133 Provides Multiple Ways for Alaskans to Procure a Piece of Alaska. This slide summarizes what SB 133 proposes to accomplish: • The Department of Natural Resources (DNR) will maintain a list of lands available for Remote Recreational Sites (RRS) MS. COLLES stated that the RRS available lands list would include vacant, unappropriated, and unreserved (VUU) land. The inclusion of VUU lands will result in a bigger area. • The State will identify areas where land is properly classified for settlement and may be staked for RRS • Individuals can nominate open state land not included in the annual state offering for RRS MS. COLLES stated that Alaskans may nominate areas not properly classified for inclusion in the program. The nomination entitles an individual right of priority to the parcel. The individual must stake the parcel within 90 days and submit a lease application with an attached sketch to retain first right. If the individual fails to fulfill the bill's requirements, the commissioner will include the land with the commissioner's regularly scheduled annual offerings. 4:31:49 PM MS. COLLES pointed out that SB 133 proposes the following three- tier system to increase an individual's ability to procure a site. • Multiple ways to procure a site: square4 Purchase MS. COLLES explained that an individual may purchase a site. However, if the fair market value is not affordable, an individual may opt to remain in a lease. The option to purchase remains open for the term of the lease. square4 Lease MS. COLLES explained that an individual could lease longer. The lessee can enjoy the land well beyond the period of time it took to prove up with a survey and appraisal. square4 Permit 4:32:32 PM SENATOR KIEHL commented that the map on slide 6 highlights an area of Douglas Island popular with deer hunters, berry pickers, and snowmobilers. He asked how the land nomination would work without a best interest finding, whether the department decisions were appealable, and how a community would weigh in on a nomination. MS. COLLES answered that the constitution requires public notice. AS 38.05.035 defines the process for disposals through a written finding. The department will continue to conduct public notice of its actions. The commissioner will still have to study the areas on the Statewide VUU Map, slide 6. The commissioner will be required to verify the land is classified correctly and provide public notice of the nomination and intent to lease those lands to eligible Alaskans. There will still be a process, but it will not be the same process the department currently uses for its land sales program. SENATOR KIEHL commented that a best interest finding could be challenged all the way to court. He asked if this process would be subject to the same sort of appeal right. MS. COLLES answered any department decision is appealable. Even permit decisions, which do not dispose of state interests, are appealable. She stated that unless she is missing something, any department decision is appealable, and she expressed her belief that the Department of Law would agree. 4:35:20 PM CHAIR REVAK stated that permits are revocable at will. He expressed his belief that the department wants to avoid controversial situations. MS. COLLES stated one positive of the permit option is that permits are revocable. So, if the department issued a permit in error, the department has the authority to revoke it. It is more difficult to revoke a lease. The scenario is completely different for a sale which is more difficult to revoke. A court ruling can overturn a department's decision. Most of the time, an appeal stays the decision, so the department suspends action until the administrative process is complete. 4:36:31 PM SENATOR KIEHL asked whether a transition from permit to lease is also publicly noticed and subject to a decisional document. MS. COLLES answered that the department follows the process outlined in the lease. Nominated land that is not properly classified must go through a classification process. Whether or not a permit to lease transaction is publicly noticed or subject to a decisional document would be decided on a cases-by-case basis. Determining factors would include the location of the permit, how it is classified, and whether the commissioner's identified lands include the permitted site. CHAIR REVAK asked Senator Kiehl if he had a follow-up question. SENATOR KIEHL said that the Department of Law might be able to provide details and information on the standards that apply to public notice and decisional documents when a parcel transitions from a permit to a lease. 4:37:54 PM MS. COLLES advanced to slide 6, Statewide VUU Map. She stated that approximately 47,000,000 acres of state land are considered VUU and could be part of this program. 4:38:28 PM CHAIR REVAK requested a detailed map. MS. COLLES answered that the department is conserving resources until the bill advances further in the legislative process to create a detailed map. She stated that, in the meantime, a better map will be piecemealed together to provide more clarity. 4:39:44 PM CHAIR REVAK held SB 133 in committee.