SENATE RESOURCES COMMITTEE March 25, 1998 3:40 P.M. MEMBERS PRESENT Senator Rick Halford, Chairman Senator Lyda Green, Vice Chairman Senator Loren Leman Senator Bert Sharp Senator Robin Taylor Senator John Torgerson Senator Georgianna Lincoln MEMBERS ABSENT Senator Bert Sharp COMMITTEE CALENDAR HOUSE BILL NO. 310 "An Act relating to the utilization of groundfish; and providing for an effective date." - PASSED CSHB 310(RLS) OUT OF COMMITTEE SENATE BILL NO. 108 "An Act relating to the disposal of state land by lottery." - PASSED CSSB 108(RES) OUT OF COMMITTEE PREVIOUS SENATE COMMITTEE ACTION HB 310 - No previous action to consider. SB 108 - See Resource Committee minutes dated 3/2/97, 3/24/97, 3/26/97, 3/2/98, 3/4/98, 3/18/98, 3/20/98, and 3/23/98. WITNESS REGISTER Ms. Amy Daugherty, Staff Representative Alan Austerman State Capitol Bldg. Juneau, AK 99811 POSITION STATEMENT: Commented on HB 310 for sponsor. Mr. Rick Lauber Pacific Seafood Processors 321 Highland Dr. Juneau, AK 99801 POSITION STATEMENT: Supported HB 310. Ms. Kris Blackburn Kodiak, AK (907)486-3033 POSITION STATEMENT: Supported HB 310. Ms. Mel Krogseng, Staff Senator Robin Taylor State Capitol Bldg. Juneau, AK 99811-1182 POSITION STATEMENT: Commented on SB 108 for sponsor. Ms. Jane Angvik, Director Division of Land Department of Natural Resources 3601 C Street, Ste.1122 Anchorage, AK 99503-5947 POSITION STATEMENT: Opposed SB 108. Mr. Dick Mylius Resource Assessment and Development Division of Lands Department of Natural Resources 3601 C Street, Ste. 1122 Anchorage, AK 99503-5947 POSITION STATEMENT: Opposed SB 108. ACTION NARRATIVE TAPE 98-22, SIDE A Number 001 HB 310 - UTILIZATION OF GROUNDFISH CHAIRMAN HALFORD called the Senate Resources Committee meeting to order at 3:40 p.m. and announced HB 310 to be up for consideration. MS. AMY DAUGHERTY, Staff to Representative Austerman, sponsor of HB 310, said it is a very straight-forward bill. It extends the current ban on pollock to groundfish using the concept of improved retention and utilization(IR/IU). The North Pacific Fisheries Management Council has been moving toward requiring certain utilization in the offshore fleet and the Board has found they have the authority to do the same thing in State waters, but only on vessels. Inshore processors were left out of the picture. SB 310 enables the Board to include them. Number 68 MR. RICK LAUBER, Pacific Seafood Processors, said he is also representing the North Pacific Fishery Management Council of which he is chairman. He said they need to conform the State law to what the Council has done. The State has, for many years, been a forerunner in reduction of waste and discards and this will make no change in business practices of the onshore processors. It will conform the State law to the federal regulations enacted by the Council and the National Marine Fisheries Service. Number 97 MS. KRIS BLACKBURN, Kodiak Processors, testified that the Kodiak, Dutch Harbor, and Akutan Processors are all in favor of this bill. SENATOR TORGERSON moved to pass CSHB310(RLS) out of Committee with individual recommendations and the accompanying fiscal note. There were no objections and it was so ordered. SB 108 - STATE LAND LOTTERY PROGRAM CHAIRMAN HALFORD announced SB 108 to be up for consideration. MS. MEL KROGSENG, Staff to Senator Taylor, sponsor, said there has been a new Section Two added which is substantially different. The intent has been stated that 10 percent of the total receipts go to the Department for implementation of requirements of the Act. The remaining 90 percent, depending on what classification the land is, would go into their corresponding funds, and unclassified lands would go into the Public School Trust Fund. Another clarification was made to recreational land which the Department asked to have left out, but they left it in because the State has private recreational land. The new Section Three deals with land that has fallen off the counter. According to the drafter, Mr. Jerry Luckhaupt, the appraisal and survey costs should cover any problems the Department may have with lands that have fallen off the counter. If the only problem has to do with their ability to have it appraised or surveyed, this would allow the buyer to take on that responsibility. The Department would approve a list of licensed appraisers that are familiar with appraising raw land. Section Four lists specific lands that are exempt. Leases have been changed slightly to say if you have a lease and that property is going to be offered for sale, you have first right of refusal. The third section of Section Four is the eligibility requirements which are the same. There are some amendments regarding lands that are to be offered. Ms. Jane Angvik, Director, Division of Lands, asked them to not ask for an amount over 5,000 acres which seems to be small. They have moved the date up to October 1 for the Department to select not less than 15,000 acres, six months later another 15,000 acres, and six months after that 20,000 acres to be put on the counter for sale. The Department would then be allowed to require the buyer to pay for the appraisal and survey and the State could ask to be reimbursed for the survey. The Department would then take an aggregate of 200,000 acres of land to be designated open-to-entry and the staking requirements are not changed from the last draft. The rest of the bill is just about the same except for deleting the mapping. MS. KROGSENG said she understood why the Department thinks this won't work, because out of 117 people who work for the Division of Lands, there is only one person working on land disposal state- wide. She has suggested that they borrow from some of their other programs to assist in land disposals. Number 244 SENATOR TAYLOR moved to adopt the CS to SB 108. There were no objections and it was so ordered. MS. JANE ANGVIK, Director, Division of Lands, said they are opposed to the bill as it is presently written. They have worked on proposed language to use existing Title 38 programs to enhance land disposal programs. Their biggest challenge has been a lack of funding to do a land disposal program and the last one was done in 1985. She said the program in SB 108 would overwhelm the market which would end up in reduced land value for the State and the private sector that would be selling land as well. They also believe there will be conflicts in uses and think it is inadvisable to sell forestry lands because the sustained yield principal established by the State's Constitution indicates the State will sell land for timber access predicated on what is the total of timber lands we hold in the whole State. They also do not currently have a classification called recreation and this proposal would sell agricultural lands in exactly the same manner as every other kind of land, fee simple. It would, therefore, defund the purpose of SB 109 that was adopted last year to provide some protection for the continuation of agriculture lands in the State of Alaska. Additionally, she believes it would very difficult to track the amount of acres a person gathers in a life time. It would be very difficult and expensive to try to implement the eligibility requirements. Providing school might apply to the individuals who purchase the land from the State, but it might not apply to anyone they might eventually end up selling it to. Finally, MS. ANGVIK said, the six percent interest rate is well below market. Currently the State sells land at prime plus three which was a provision in last year's change to Title 38. There are some difficulties associated with the staking program that Mr. Mylius would explain. Number 303 MR. DICK MYLIUS, Division of Land, said he had two concerns with proposed Section 38.14.050 (c) on page 5. There is a requirement that purchasers may not stake within 100 yards of private land or previously staked land and that would create slivers of land the State would be left to manage which would be unmanageable and of very little value to the State. Adjacent land owners would eventually use those parcels, because they would be the only ones who would have access to those areas. There is a provision that allows an exception to that based on neighbors which would be extremely difficult to enforce and expensive to deal with and he preferred those restrictions to be removed from the bill. There is also concern about the guidance the bill gives regarding stream or water frontage. One sentence says not to exceed one third of the total exterior boundary and the next says not exceeding approximately four times its width. MS. ANGVIK said the recommendations set out on page 4, line 24 for disposal would be very difficult to achieve. She thought they could do the 5,000 parcels they have in the course of a year and a half, but they can't do all of the acreage in the bill in the time frame allowed. To propose 200,000 for open-to-entry would cost a significant amount of money. She said they want to be in the land disposal business and she had submitted their modifications to existing programs so they would produce land more efficiently. She reminded them that there was a $300,000 capital improvement program that had been submitted to the Legislature for consideration that would assist them in underwriting the cost of land disposals. The reason she has only one person dedicated to land disposal is because it is not funded in her budget. If they give her the money, she'll sell the land. CHAIRMAN HALFORD said that Sections 8 and 9 of the Administration's response make the existing programs that are not repealed work better and are not in conflict. He thought they should be added to the bill. SENATOR TAYLOR agreed with that and moved to amend SB 108 to include those Sections 8 (38.05.0579f) and 9 (38.05.969) that were handed out by DNR. There were no objections and it was so ordered. SENATOR TAYLOR asked Ms. Angvik if she said they couldn't put out 15,000 acres of land by October 1. MS. ANGVIK answered that they could put out the 5,000 parcels they have in the course of a year, but she couldn't guarantee 15,000 by October 1. SENATOR TAYLOR asked what size the parcels averaged. MR. MYLIUS answered somewhere between five and 10. SENATOR TAYLOR asked if he would be able to put out 2,000 of the 5,000 parcels by October 1. MR. MYLIUS said it would be difficult to get any parcels by October 1, simply because they are carrying out a whole new land disposal program. MS. ANGVIK said it requires them to go through the five thousand parcels. She explained that many of the parcels were offered and no one purchased them or they have been returned to the State. The Division has to go through the process of preparing materials for the public so they are familiar with what is being offered. SENATOR TAYLOR asked if her objections about overwhelming the market, other public uses and sustained yield of timber, and that they might make agricultural lands fee simple are policy calls that should be made by the legislature as opposed to the executive. MS. ANGVIK said they are policy calls the legislature has already made in existing statutes in 38.04 and 38.05, but this program would be separate from them taking all lands and making them different. Changing the policy is a decision the legislature is entitled to make, but the Administration has not done that. The Department is implementing the legislature's current policy. SENATOR TAYLOR asked if they were opposing the legislation because they are changing the policy they would have to carry out. MS. ANGVIK replied she would carry out their policy; but, for instance, if they are going to change agricultural lands to be sold as fee simple without any provision that they be retained for agricultural purposes (which would be the effect of this bill), then it's her responsibility to advise them that the probability is there would be no more agricultural lands in Alaska. SENATOR TAYLOR asked her where she found that. MS. ANGVIK explained the speculation the Division is making is predicated on the experience both in Alaska and the outside that if agricultural lands are not protected for agricultural purposes, those lands that are located near communities (like Mat-Su) would become more valuable for development than for agricultural purposes. The taxation of the government would change to accommodate that increased development and the agricultural land owners would not be able to afford the taxation that would ensue. Number 428 SENATOR TAYLOR asked if they should use a similar restrictive covenant for any land they sell and said apparently the free market system is not allowed to work when it comes to what her Department believes is a segment of the land base that they wish to preserve and protect. He asked her how much land was available for agricultural purposes. MS. ANGVIK responded that the State of Alaska currently owns 600,000 acres of agricultural classified lands. She doesn't know how much land is held privately available for sale in Alaska. SENATOR TAYLOR asked of the 600,000 acres what is available for sale today. MR. MYLIUS responded that none of it is for sale and the reason is because there is no staff to make it available for sale. SENATOR TAYLOR asked who made that choice and answered that the Director did. MS. ANGVIK explained that the one person works on parson's rights which are individuals who had an interest in the land before it came to the State of Alaska. He has demonstrated under the terms of existing State statutes that they are entitled to be able to purchase it. CHAIRMAN HALFORD asked for the agricultural covenant provision statute number. MR. MYLIUS answered AS 38.05.321. CHAIRMAN HALFORD asked if the assumption in the bill was correct about agricultural lands that are sold no longer being subject to agricultural covenants. MR. JERRY LUCKHAUPT, Legislative Drafter, answered that is a correct statement. Number 482 There are two ways to fix it: take out the agricultural land on page 3, line 3 or include in the disclaimer "not withstanding any other provision in this title other than..." CHAIRMAN HALFORD said he wanted agricultural land to be available, but under the terms of the covenant to remain in agricultural use. SENATOR TAYLOR responded that he wanted agricultural land to be fee simple owned, but he would yield because there are concerns about preserving that socialistic covenant that has never worked well out there. We end up with people stuck on land they can't earn a living farming, but they have to somehow try to pay the State back for loans to try a dream that never came true. SENATOR GREEN asked if it would be appropriate to require that it not be all one type of land in one place, but a variety of lands in the selection they bring forward, so there is a mix. SENATOR TAYLOR moved conceptually to say that if agricultural lands are purchased, they have to abide by 321. There were no objections and it was so ordered. Number 532 SENATOR LINCOLN said of page 3, line 10 that it seemed as though they just went in a circle by exempting disposals from requirements of AS 38.04 and 38.05, but requiring prior public notice under the State Constitution. MR. LUCKHAUPT clarified that the Constitution doesn't refer to AS 38. He explained that the bill leaves it up to DNR to determine what reasonable public notice is. They don't have to utilize the procedures under AS 38.04. or 38.05. The disposals are basically a self-contained system. SENATOR LINCOLN asked how they would provide the public notice, in reference to page 4, line 30, of land to people who are off the road system. How would they know about the sales if they weren't getting a newspaper. MS. ANGVIK said she wasn't sure, but they would make every effort to communicate to people. They would probably give people 30 days notice and use both electronic means and mailing to make it as widespread as possible. TAPE 98-22, SIDE B MR. MYLIUS said they normally allow people to apply for land through the mail, but requiring people to be physically present at a specific location to buy a piece of land could be a potential problem. SENATOR TAYLOR moved to pass CSSB 108(RES) out of committee with individual recommendations. SENATOR LINCOLN objected. SENATORS GREEN, TAYLOR, LEMAN, TORGERSON, and HALFORD voted yes and the motion was so ordered. CHAIRMAN HALFORD adjourned the meeting at 4:30.