Legislature(2001 - 2002)

03/20/2002 01:05 PM House RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
HB 232-REMOTE RECREATIONAL CABIN SITE SALES                                                                                   
Number 1223                                                                                                                     
CO-CHAIR MASEK announced the final  order of business, HOUSE BILL                                                               
NO. 232,  "An Act permitting  state residents to  purchase remote                                                               
recreational cabin sites."                                                                                                      
Number 1295                                                                                                                     
CO-CHAIR MASEK referred  to list of changes included  in the bill                                                               
packet  and  asked  Representative  Fate  if  those  changes  are                                                               
[incorporated in the new proposed committee substitute (CS)].                                                                   
REPRESENTATIVE FATE, speaking as the  sponsor of HB 232, answered                                                               
in the affirmative.                                                                                                             
Number 1369                                                                                                                     
REPRESENTATIVE STEVENS  moved to  adopt the proposed  CS, version                                                               
22-LS0791\T,  Kurtz, 3/15/02,  as  the working  document.   There                                                               
being no objection, Version T was before the committee.                                                                         
REPRESENTATIVE FATE  indicated the  subcommittee assigned  at the                                                               
hearing on 2/01/02 had developed  some solutions.  He thanked the                                                               
Department  of  Natural Resources  (DNR),  and  Bob Loeffler  and                                                               
Carol  Carroll  specifically, for  the  fine  work on  the  bill.                                                               
Mentioning the  [complexity of the  bill] and  [disagreement with                                                               
the department],  Representative Fate indicated  the subcommittee                                                               
had tried to accommodate the  nominating areas; that language was                                                               
not  clear in  the original  version.   He indicated  one of  the                                                               
biggest problems  DNR had  with the  bill was  [administration of                                                               
the program].                                                                                                                   
REPRESENTATIVE FATE explained that  the "preference rights" issue                                                               
was retained  in [Version  T] but  entails a  individualized best                                                               
interest finding  only on the  preference part; the hope  is that                                                               
the best interest  finding could be applicable to  a larger area.                                                               
For example, somebody  who has been on that  property three years                                                               
would have a preferential right.  Or  a miner who has been on the                                                               
property for years  but who still doesn't own any  of the surface                                                               
[rights]  -  only  the  subsurface   rights  -  would  have  that                                                               
opportunity, as  long as the  miner has been actively  mining for                                                               
two years out of a five-year location on that property.                                                                         
REPRESENTATIVE  FATE offered  his belief  that although  the [new                                                               
provisions] could  place a burden  on DNR, the popularity  of the                                                               
[program] would more than pay for  itself.  He indicated the hope                                                               
that  the  bill would  [generate  money  to  pay for  other  land                                                               
disposal programs] and be another tool  for the state to use.  He                                                               
suggested [HB  232] and  the present  program are  compatible and                                                               
reinforce each other.                                                                                                           
Number 1582                                                                                                                     
REPRESENTATIVE FATE said [HB 232]  provides that the commissioner                                                               
and  the   department  would  identify  rights-of-way   into  the                                                               
properties,  which could  be  [burdensome] but  also  could be  a                                                               
"well-hidden" advantage for Alaska  because the state has "sorely                                                               
needed  programs" that  need to  identify access  but that  don't                                                               
have  it.    He  mentioned  other changes  he  thought  would  be                                                               
beneficial  to  the  department.   Presently,  for  example,  the                                                               
department  only  requires a  5-percent  down  [payment] on  land                                                               
sales, which  has been raised  to 20 percent  [in the bill].   He                                                               
again suggested the  money would be needed for [HB  232] and also                                                               
for [DNR's] own land sales.                                                                                                     
REPRESENTATIVE FATE mentioned problems  because people pay the 5-                                                               
percent  down  payment  and  feel there  is  nothing  vested  and                                                               
therefore "trash"  a place  and walk  away; he  remarked, "That's                                                               
the  last thing  that in  this piece  of legislation  we want  to                                                               
see."   Highlighting  other  aspects  of the  bill,  he said  the                                                               
commissioner would  always have  authority to  deny applications.                                                               
The commissioner  would identify three  years in advance  that an                                                               
area would  be nominated,  which would  ameliorate a  "land rush"                                                               
because  people could  have time  to prepare.   Separation  would                                                               
remain  the same,  but is  worded differently  for administrative                                                               
purposes.  The program would  be for Alaskans; the permanent fund                                                               
dividend  [database]  would  be  used to  verify  an  applicant's                                                               
eligibility.  He  reiterated his appreciation for  the work Carol                                                               
Carroll and Bob Loeffler had done.                                                                                              
Number 1780                                                                                                                     
BOB  LOEFFLER,  Director, Division  of  Mining,  Land and  Water,                                                               
Department  of Natural  Resources, testified  via teleconference,                                                               
saying he appreciated the  cooperative nature Representative Fate                                                               
had  shown and  the opportunity  to [voice]  DNR's concerns.   He                                                               
explained that  [DNR] has serious  concerns with [HB  232], which                                                               
fundamentally  changes the  philosophy  of state  land sales  and                                                               
significantly increases  the cost.   Since Alaska became  a state                                                               
in  1959,  the state  has  never  had  the ability  to  negotiate                                                               
individual  sales  with individual  people.    For example,  land                                                               
offered for sale is offered to  everybody in the state; it cannot                                                               
be  offered  to   just  one  person,  with   some  very  specific                                                               
exceptions  that   are  preference   rights,  which   are  highly                                                               
circumscribed in  statute and which  [DNR] has  reasonably little                                                               
discretion  on.   Mr. Loeffler  said  he believed  that's how  it                                                               
should be.  Furthermore, if the  state is going to offer land for                                                               
sale, it  should be offered to  all Alaskans.  However,  [HB 232]                                                               
authorizes DNR to  do private land sales, in three  [parts of the                                                               
MR. LOEFFLER indicated [the bill]  is specific with regard to who                                                               
is  eligible to  negotiate with  the  state for  the [land],  and                                                               
would  exclude other  Alaskans  [from the  process].   He  turned                                                               
attention to  Section 3,  [page 3]  line 5,  which read  in part,                                                               
"Sales  under this  section may  be at  public or  private sale."                                                             
Mr.  Loeffler  noted, "That  is  a  general authorization  for  a                                                               
person to  walk in [off]  the street,  and I negotiate  with them                                                               
but  nobody  else."    He suggested  [line  5]  is  fundamentally                                                               
different  from  the  policy  established  [at]  statehood.    He                                                               
further  suggested  [he doesn't  have  the  ability to  negotiate                                                               
exclusively  with one  individual  and not  another].   He  again                                                               
offered his belief that when  he sells the state's resources, all                                                               
Alaskans should have equal opportunity.                                                                                         
Number 1940                                                                                                                     
MR. LOEFFLER turned attention to  Section 4, subsection (g) [page                                                               
3,  beginning on  line  20], which  he said  would  allow him  to                                                               
negotiate "any land  anywhere" under the bill  if the [applicant]                                                               
can [verify]  three consecutive years  of recreational use.   For                                                               
example, if  someone had  snowmobiled or camped  on the  land for                                                               
three years,  that person could negotiate  exclusively with [DNR]                                                               
and  nobody else  would get  the opportunity,  although [DNR]  is                                                               
required to  do a  best interest  finding.   He told  members, "I                                                               
don't believe that's correct."                                                                                                  
MR.  LOEFFLER  also  expressed concern  that  [Version  T]  would                                                               
require at  least five years  of use by the  [nominating] person,                                                               
including two  years of active  mining under a mining  claim, and                                                               
that  would give  the person  the right  [to the  parcel] at  the                                                               
discretion of  DNR.  He  cautioned members, "I believe  this will                                                               
make  our mining  laws not  for mining,  but this  will make  our                                                               
mining laws  a subterfuge  to ... gain  land that  other Alaskans                                                               
won't  get."   Mr.  Loeffler indicated  active  mining areas  are                                                               
typically  closed  to  settlement because  conflicts  over  lands                                                               
between fee ownership and a mining district are significant.                                                                    
MR. LOEFFLER pointed  out that [Version T] would  provide that in                                                               
those areas closed to the general  public, miners and no one else                                                               
would have access  to the land; he remarked, "I  just don't think                                                               
that's right."   Mr. Loeffler explained that  his first objection                                                               
is that [HB 232] changes the  fundamental thrust of how the state                                                               
disposes  of  its  resources,  which   to  his  belief  has  been                                                               
consistent  since statehood.   Second,  he  believes [Version  T]                                                               
raises that cost because it  provides a maximum number of staking                                                               
authorizations that the department may  issue, which would be two                                                               
times the number of square miles in a staking area.                                                                             
MR. LOEFFLER  offered that [DNR]  has a "workable"  remote parcel                                                               
program that is in the first year  of use and is very popular; it                                                               
offers 295  authorizations.  He  remarked, "We're quite  proud of                                                               
it."   He said  he'd gone through  the authorizations  that [DNR]                                                               
has approved  through borough platting  laws and figured  out how                                                               
many  [authorizations DNR]  could have  offered if  [HB 232]  had                                                               
been  in   place.    Currently,  512   authorizations  have  been                                                               
approved:  295  for last year and  some for the coming  year.  He                                                               
said [DNR] would  also "do others" that hadn't  been approved for                                                               
the coming year.  Under  the maximum guidelines, [DNR] would have                                                               
been able to  offer 213 [authorizations out of] 512.   The [bill]                                                               
therefore decreases the  density by about half.   He reminded the                                                               
committee  that the  numbers are  approximate, depending  on what                                                               
[DNR] offers, and shouldn't be taken literally.                                                                                 
MR. LOEFFLER  suggested the department  would have to  find twice                                                               
as  many  [parcels   under  HB  232,  Version   T],  which  would                                                               
significantly  raise  the  cost.   Additionally,  the  land  sale                                                               
program makes  money for the  state, but remote lands  makes less                                                               
than  the "reoffer  program,"  which he  called  "the real  money                                                               
maker."   He cautioned that  the [proposed] program is  in danger                                                               
of  costing more  than the  return  would be  to the  state.   He                                                               
suggested [HB  232] privatizes land  sales, rather  than allowing                                                               
all Alaskans to compete, and it raises the cost.                                                                                
MR. LOEFFLER pointed out that  [subsection] (h) stipulates that a                                                               
purchaser can't  make improvements until half  the total purchase                                                               
price has  been paid.   The department  has 20-year  contracts on                                                               
some  [parcel]  sales, and  [subsection  (h)]  would prevent  the                                                               
purchaser  from  building  on  the  parcel  for  10  years.    He                                                               
remarked,  "While  I  appreciate  the sentiment,  I  don't  think                                                               
that's necessary."                                                                                                              
MR.  LOEFFLER also  pointed  out that  the  [bill stipulates]  an                                                               
appraisal and  a survey would  be completed within 12  months; he                                                               
told members, "We  don't think that's possible  on remote sales."                                                               
In previous  systems, he reported,  people have had 10  years [to                                                               
complete  the  appraisal  and survey],  which  [DNR]  is  "really                                                               
tightening  ... up  now."   Mr. Loeffler  further explained  that                                                               
staking is done  one year; surveying is done the  next year; once                                                               
[DNR] approves the survey, the  appraisal is done the third year;                                                               
and [DNR]  also provides  a fourth year  "just in  case something                                                               
goes wrong."   He expressed doubt that an  [appraisal and survey]                                                               
could be completed in 12 months.                                                                                                
Number 2214                                                                                                                     
REPRESENTATIVE  GREEN  asked  if  [HB 232]  would  impede  future                                                               
development for resources.                                                                                                      
MR. LOEFFLER replied:                                                                                                           
     If we  didn't locate them  properly, it would.   If ...                                                                    
     we  allowed  you  to  stake   land  in  a  place  where                                                                    
     development was  likely to occur,  I think  the example                                                                    
     of  "True   North  (ph)"  clearly  shows   it  has  the                                                                    
     potential  to impede  ... development.   Certainly,  if                                                                    
     you stake the location of  Pogo road, the same would be                                                                    
     true,  although the  bill does  give  me discretion  to                                                                    
     disapprove it.                                                                                                             
REPRESENTATIVE  GREEN suggested  that  directional drilling  [for                                                               
oil or gas] would not be as big an issue as mining.                                                                             
MR. LOEFFLER concurred.                                                                                                         
Number 2286                                                                                                                     
CO-CHAIR SCALZI  asked:   If the  state wanted  to create  a mine                                                               
lease  where parcels  were located,  would  it have  to buy  back                                                               
those  sites  through  eminent domain  and  compensate  the  land                                                               
MR. LOEFFLER  answered that  [DNR] tries not  to allow  people to                                                               
stake land where expected development  would be impeded.  He said                                                               
[DNR] would do an evaluation  and wouldn't allow [people to stake                                                               
land]  in  areas  with  active   mining  districts,  "except  for                                                               
[subsection] (g) of this bill."                                                                                                 
CO-CHAIR SCALZI  asked if there  is an obligation to  ensure that                                                               
access is available by land to the [parcel] sites.                                                                              
MR.  LOEFFLER replied  that [DNR]  goes through  borough platting                                                               
requirements, but  the boroughs  have [authorized]  fly-in access                                                               
for sufficiently dispersed areas.                                                                                               
CO-CHAIR  SCALZI asked  if any  state laws  would be  violated in                                                               
regard to access.                                                                                                               
MR. LOEFFLER answered no.                                                                                                       
Number 2398                                                                                                                     
REPRESENTATIVE CHENAULT  asked how  many acres  of land  had been                                                               
returned to the private sector since statehood.                                                                                 
MR.  LOEFFLER  said  [DNR dispensed]  roughly  less  than  10,000                                                               
parcels from  1980-1999, at an average  of 460 a year,  mostly in                                                               
the early 1980s.  Over the  last two years, the rate of offerings                                                               
had been  drastically increased,  and [DNR]  [is offering]  a lot                                                               
more this year and next year.                                                                                                   
REPRESENTATIVE CHENAULT  asked whether  [HB 232] would  impede or                                                               
help with the process of returning land to the private sector.                                                                  
MR. LOEFFLER offered his belief  that [DNR] has a "very workable"                                                               
remote cabin program;  he expressed pride in it.   The program is                                                               
much more  efficient, he  said, noting that  DNR has  offered 295                                                               
authorizations  this year  and  that more  are  expected for  the                                                               
coming year.  He said the  impediment to offering land has always                                                               
been that  it takes  money to  do so.   Mr. Loeffler  offered his                                                               
belief  that [HB  232] increases  the cost  of land  offering and                                                               
would be an impediment to transferring land to the public.                                                                      
Number 2497                                                                                                                     
CO-CHAIR  SCALZI  asked if  there  is  a  way  to make  [HB  232]                                                               
workable  so  that miners  with  legitimate  claims could  obtain                                                               
rights  to  the  property.    He also  asked  whether  there  are                                                               
stringent guidelines  available so  that people wouldn't  use [HB
232] as a ruse.                                                                                                                 
MR.  LOEFFLER  offered  his  belief  that  the  "self-initiating"                                                               
mining law is  the foundation of the mining industry.   He added,                                                               
"I don't believe  there is any way  to say it - that  I will give                                                               
land to miners  and other Alaskans - that will  not endanger that                                                               
law, and that remains fair to Alaskans."                                                                                        
REPRESENTATIVE KERTTULA asked [if there  was a program that gave]                                                               
preference  for recreational  use for  nominating or  giving land                                                               
out to other types of users.                                                                                                    
MR. LOEFFLER said there was no other program.                                                                                   
REPRESENTATIVE  GREEN  offered  hypothetical  examples  regarding                                                               
whether development could occur on a remote cabin site.                                                                         
MR.   LOEFFLER  mentioned   leases   and   noted  that   people's                                                               
expectations of  remoteness typically  get in the  way of  such a                                                               
REPRESENTATIVE GREEN asked whether,  through subterfuge, the bill                                                               
could provide  access to  land or maybe  "forced access  to land"                                                               
for development that wouldn't be possible without the bill.                                                                     
MR. LOEFFLER said:                                                                                                              
     We  have the  ability to  lease land  for that  kind of                                                                    
     development  now, and  I  would hope  we  would use  it                                                                    
     aggressively.   And we  have the  ability, if  you want                                                                    
     land and  suggest that  we sell  it under  [the] remote                                                                    
     recreation cabin  program, for us  to sell it.   One of                                                                    
     the innovations of  this bill that we  disagree with is                                                                    
     that if you  suggest it, we then would sell  it only to                                                                    
     you  and not  offer it  to other  Alaskans.   And that,                                                                    
     plus the additional cost is, frankly, my main worry.                                                                       
REPRESENTATIVE GREEN posed another hypothetical example:                                                                        
     If by doing this, as opposed  to saying I would like to                                                                    
     go into  this area and  see about developing  that, and                                                                    
     there may be ten or  twelve people that want to compete                                                                    
     on that,  have I  created a problem  with ten  of these                                                                    
     special remote [cabin]  sites in there - in  my favor -                                                                    
MR.  LOEFFLER  indicated it  may  be  possible  but said  he  was                                                               
Number 2753                                                                                                                     
JERALD  STAMSEL,  Pilot,  testified   via  teleconference.    Mr.                                                               
Stamsel told the  committee he was in agreement with  HB 232.  He                                                               
offered his belief that [the  citizens] of this country need more                                                               
land.  He spoke about his  adult children and the difficulties of                                                               
purchasing  remote  land for  recreational  purposes.   He  said,                                                               
"It's about  time we had  something like [HB  232].  And  I think                                                               
it's a good job,  and it's a great deal for  this country, and we                                                               
need it bad, and I am in agreement."                                                                                            
Number 2805                                                                                                                     
RUDY   VETTER  testified   via   teleconference,  informing   the                                                               
committee that he was in agreement  with HB 232.  He acknowledged                                                               
it would have  some complications that need to be  "worked out as                                                               
usual."  Mr. Vetter suggested  [language in] the bill would "take                                                               
care of anything" pertaining to minerals,  gas, and oil.  He also                                                               
suggested  the administrative  code  of  1962 covered  [minerals,                                                               
gas,  and  oil].    He  referred  to  a  bill  passed  when  "the                                                               
legislature  was  forming  some   of  the  laws"  and  referenced                                                               
"administrative code number seven."  He said:                                                                                   
     Anyone  that  might  accidentally  or  purposely  place                                                                    
     themselves upon [a] mineralized  zone is subject to the                                                                    
     fact that  they will be paid  adequate compensation, as                                                                    
     determined  by the  commissioner,  for their  property.                                                                    
     In  other words,  they cannot  go  in there  and tie  a                                                                    
     piece  of potential  oil, mine,  gas, or  other natural                                                                    
     resources up.                                                                                                              
MR. VETTER turned attention to  page 3, subsection (g), and said,                                                               
"I take exception  about the fact that you're  only offering this                                                               
to  one  specific  person."    He  identified  the  key  word  in                                                               
subsection  (g) as  "before", because  it specifies  that "before                                                               
offering the parcel for disposal  to the public, the commissioner                                                               
may  offer the  parcel to  the person  nominating the  parcel for                                                               
disposal."   He suggested some considerations  and conflicts have                                                               
to be worked out.                                                                                                               
MR.  VETTER told  members, "We  need  more land."   He  indicated                                                               
miners  are especially  in need  of  more land  because they  are                                                               
"producing"  a natural  resource at  no cost  to the  government.                                                               
Mr. Vetter mentioned the development  of Fort Knox and True North                                                               
and  his endeavors  as  a miner  in  the past.    He spoke  about                                                               
[minerals as]  "true money"  in comparison  to paper  [money] and                                                               
referred to  the recent Enron  [accounting scandal  that resulted                                                               
in  the loss  of millions  of dollars  to investors  and employee                                                               
retirement funds].  Mr. Vetter  reiterated his support for HB 232                                                               
and  added that  most  people won't  find this  land  to be  free                                                               
because it requires work under any circumstances.                                                                               
TAPE 02-17, SIDE B                                                                                                              
Number 2990                                                                                                                     
REPRESENTATIVE FATE responded to  testimony that suggested HB 232                                                               
was  not fair  to  all  Alaskans and  did  not  provide the  same                                                               
opportunity.   He reported that he  knew of people who  had tried                                                               
to [acquire land] under the  present lottery system who felt they                                                               
were  treated unfairly  and didn't  have  an opportunity  because                                                               
they "weren't  lucky enough to  get their  name drawn out  of the                                                               
hat."   He  suggested HB  232 would  make it  possible for  every                                                               
Alaskan to [acquire remote recreational  sites], that it is fair,                                                               
and  that   the  nominating  process   ensures  control   by  the                                                               
REPRESENTATIVE FATE  reflected on his  experience as a  miner and                                                               
noted  that  a person  [wouldn't  put  forth  the time]  to  mine                                                               
property for  two years, which  is extremely  cost-intensive, and                                                               
have the property for five years just  to "prove up on a piece of                                                               
property" to  get two  and a  half acres in  the wilderness.   He                                                               
mentioned that  HB 232  is a change  in philosophy  and indicated                                                               
[it  would provide  all Alaskans  with an  equal right  to remote                                                               
recreational sites] as long as  the [site] wasn't encumbered by a                                                               
Native   allotment,   village   corporation,   other   fee-simple                                                               
property, or  previously staked mining  property.  He  added that                                                               
[HB 232] provides protections.                                                                                                  
REPRESENTATIVE  FATE  turned attention  to  the  fiscal note  and                                                               
     We  haven't received  the fiscal  note  yet, even  with                                                                    
     this,  because  of  ... the  nature  of  the  committee                                                                    
     substitute.   We ran our  own ... fiscal note  on this,                                                                    
     and  the break-even  point was  80 people,  if they  do                                                                    
     their  own survey  and appraisal,  which this  provides                                                                    
     for; they don't have to  - the commissioner can say no,                                                                    
     it's  close enough  ... in  a block  that we'll  do it.                                                                    
     So, it's  ... cost-effective;  it's not  going to  be a                                                                    
     cost to  the State of  Alaska if  you go in  and survey                                                                    
     and have your own appraisal  done.  It doesn't cost the                                                                    
     state a darn thing.                                                                                                        
Number 2852                                                                                                                     
REPRESENTATIVE  FATE  mentioned  researching the  cost  of  state                                                               
land, which  he said ranges  from about  $700 to $4,000  an acre.                                                               
He  estimated it  takes about  eighty  people to  locate land  to                                                               
offset  the cost  to the  State  of Alaska,  provided that  those                                                               
people do their own surveying  and appraisals.  He indicated that                                                               
the increased  cost in the  original bill was  because, according                                                               
to  his reading,  it required  seven  people to  do the  mapping,                                                               
which would call for an increase in personnel.                                                                                  
REPRESENTATIVE   FATE   referred   to   the   bill   packet   and                                                               
[unspecified] statements  that [indicate  mapping would  take one                                                               
person an hour and a  half, provided there was global positioning                                                               
satellite  (GPS)  information].     Mentioning  other  statements                                                               
indicating it  would only require  one hour, he pointed  out that                                                               
even if  mapping required two people,  it would be far  less than                                                               
seven.   He acknowledged that small  changes may need to  be made                                                               
to the bill, but said it is a  good first step and a good bill to                                                               
get remote sites to people in Alaska.                                                                                           
Number 2782                                                                                                                     
REPRESENTATIVE FATE talked about raising  the cost in remote land                                                               
parcels  and how  the State  of  Alaska has  literally made  town                                                               
sites,  which he  suggested have  been cheaper  to survey  and to                                                               
appraise parcels  that are  lumped together.   However,  he said,                                                               
they cease to  be remote parcels and instead  become remote sites                                                               
with all kinds  of parcels.  He said that's  not what many people                                                               
want; they want a remote parcel  at least one-half mile away from                                                               
their  neighbors, instead  of 200-300  feet away.   He  mentioned                                                               
other  requirements that  keep  [sites]  remote.   Representative                                                               
Fate  suggested  [HB 232]  doesn't  endanger  anything and  won't                                                               
impede  mining.   He mentioned  that [HB  232] was  a "hold-over"                                                               
from the previous year and said:                                                                                                
     As a matter  of fact, we worked on that  aspect of this                                                                    
     piece  of  legislation,  and we  worked  very  hard  to                                                                    
     satisfy  the  mining  industry,   and  we've  had  many                                                                    
     conversations  with Steve  Borell, who's  the executive                                                                    
     director of the Alaska  Miners Association, until we've                                                                    
     come to this  point where it's, I  think, acceptable to                                                                    
     them.  And so it's not  a dodge now, all of the sudden,                                                                    
     to hear that it isn't  acceptable because of the nature                                                                    
     that might impede mining on mineralized ground.                                                                            
Number 2720                                                                                                                     
REPRESENTATIVE FATE said  the commissioner has the  option of not                                                               
nominating the  [site] if it  is mineralized.  He  also mentioned                                                               
protections  in the  [bill] in  regard to  subsurface rights;  he                                                               
referred to Section 2, subsection (a).                                                                                          
Number 2673                                                                                                                     
CO-CHAIR SCALZI  mentioned that the  Kenai Peninsula  Borough had                                                               
to  inherit  some mining-selected  sites  that  were under  state                                                               
lease.    Under state  law,  people  were  allowed  to put  up  a                                                               
temporary shack, but instead they  built $100,000 homes.  He said                                                               
the  leases  ran out;  [the  borough]  tried to  negotiate  sales                                                               
palatable to  the buyer but  couldn't come to agreement,  and the                                                               
homeowners were forced  to move the homes.   He expressed concern                                                               
about the  intent of people  trying to acquire sites  and related                                                               
it to  the aforementioned incident.   Representative Scalzi asked                                                               
for  an explanation  of  the problem  with  continuing the  lease                                                               
Number 2592                                                                                                                     
REPRESENTATIVE  FATE said  there's  nothing  wrong; however,  the                                                               
lease program is  not a fee-simple program, whereas this  is.  He                                                               
spoke   to  Co-Chair   Scalzi's  concerns   and  reiterated   the                                                               
protections provided in the bill.   He referred to True North and                                                               
said the bill was gone  through thoroughly; there is nothing that                                                               
can prevent a [legal] suit.   He said warnings can be posted that                                                               
the land is  subject to mineralization and mining;  however, if a                                                               
person  wants to  build  there,  he/she cannot  be  stopped.   He                                                               
indicated that  if the  site is  nominated, the  commissioner can                                                               
stop  [building  from  occurring].     He  described  this  as  a                                                               
deterrent and  a way  of control  so that  people can't  build in                                                               
these areas.                                                                                                                    
REPRESENTATIVE  FATE reiterated  that  people  cannot be  stopped                                                               
from  filing   lawsuits,  although   it  costs  both   parties  a                                                               
tremendous  amount  of money.    He  emphasized his  belief  that                                                               
protections  are  provided  in  Section 2,  subsection  (a),  and                                                               
through  the commissioner's  power  to reject  applications.   He                                                               
said, "We  tried to write  in as  much protection as  we possibly                                                               
could within this piece of legislation."                                                                                        
CO-CHAIR  SCALZI compared  HB 232  to  other legislation,  noting                                                               
that  site selection  is  done by  DNR.   He  said  it takes  the                                                               
individual out  of it, which is  a good part of  the process, but                                                               
creates  the problem  of  negotiating with  one  individual.   He                                                               
mentioned remedying the situation to  create a more open process,                                                               
such as an auction.                                                                                                             
REPRESENTATIVE  FATE  said  it's "nonnegotiation"  and  that  the                                                               
protection in  [the bill] is  instated.  There's a  best interest                                                               
finding on  preference rights.  If  two or more people  want [the                                                               
same site]  and have  had use of  the property,  the commissioner                                                               
would do a  best interest finding with regard  to the preferences                                                               
relating to  the property.   In response  to Co-Chair  Scalzi, he                                                               
indicated  the  reason  for  getting  away  from  an  auction  or                                                               
lottery  system is  because people  don't get  the property  they                                                               
CO-CHAIR  SCALZI asked  if  the public  trust  doctrine would  be                                                               
satisfied by having the commissioner make the determination.                                                                    
REPRESENTATIVE  FATE  said  the   commissioner  could  make  that                                                               
determination under the best interest finding.                                                                                  
CO-CHAIR SCALZI reiterated the question.                                                                                        
REPRESENTATIVE FATE said, "I think so."                                                                                         
Number 2345                                                                                                                     
REPRESENTATIVE KERTTULA asked if a  best interest finding is done                                                               
only at the preference point and whether it is upfront.                                                                         
REPRESENTATIVE  FATE said  the best  interest finding  has to  be                                                               
done on the nominated area.                                                                                                     
REPRESENTATIVE KERTTULA asked whether  a conflict would be solved                                                               
with another  best interest finding  if two people  nominated the                                                               
same area.                                                                                                                      
REPRESENTATIVE  FATE  said  that   would  be  the  commissioner's                                                               
REPRESENTATIVE  KERTTULA  asked  how the  best  interest  finding                                                               
would be conducted.                                                                                                             
REPRESENTATIVE FATE  responded that he couldn't  answer that, but                                                               
said the commissioner would have to make the decision.                                                                          
MR. LOEFFLER suggested, if more  than one person wanted a parcel,                                                               
the only fair  way would be through an auction  if the [site] had                                                               
been surveyed, or a lottery if it had not.                                                                                      
REPRESENTATIVE KERTTULA  asked if that  would be a  best interest                                                               
MR. LOEFFLER answered  that the best interest  finding would have                                                               
to  be  done before  the  property  was  offered  for sale  in  a                                                               
preference-right type of offering, auction, or lottery.                                                                         
REPRESENTATIVE KERTTULA  asked what would  be done if  two people                                                               
had the same preferences for the same [site].                                                                                   
MR. LOEFFLER replied  that he'd have to put it  up for auction or                                                               
CO-CHAIR  SCALZI remarked  that Representative  Fate is  assuming                                                               
[DNR]  would have  to  develop  criteria for  a  judgment on  who                                                               
better  qualifies  for  a  parcel and  is  using  "best  interest                                                               
finding"  as a  term  to help  the  commissioner determine  which                                                               
applicant is  more suited.   He asked whether  [DNR had a  way to                                                               
determine if  one person  should be awarded  a site  over another                                                               
MR. LOEFFLER  offered his belief  that the bill doesn't  give him                                                               
the direction to  determine whether one person  is more deserving                                                               
than another.   He said, "If multiple Alaskans want  it, I have a                                                               
responsibility to  serve them all  equally."  He  reiterated that                                                               
if more  than one person wanted  a [site], he would  be forced to                                                               
go through a lottery or an auction.                                                                                             
Number 2157                                                                                                                     
REPRESENTATIVE   FATE  called   attention  to   an  [unspecified]                                                               
communication  from Mr.  Loeffler that  Representative Fate  said                                                               
conveyed the  following, "By authorizing  or directing DNR  to do                                                               
private land  sales, we have  to do  individual preference-right-                                                               
type  best  interest  findings."     Representative  Fate  added,                                                               
"That's  where I  got my  information  to make  the statements  I                                                               
REPRESENTATIVE  KERTTULA suggested  [it  wouldn't  apply] if  two                                                               
people had the same preference -  for example, a husband and wife                                                               
with the same  qualifications who were divorcing  and both wanted                                                               
the same site.                                                                                                                  
REPRESENTATIVE FATE  replied that going  back to a lottery  or an                                                               
auction isn't acceptable and does  away with the whole concept of                                                               
the bill.   He suggested [HB 232] is the  fairest method, so that                                                               
people don't  have to take the  chance of a lottery  or for those                                                               
who don't have the money to bid high on property.                                                                               
REPRESENTATIVE  McGUIRE asked  Mr. Loeffler  if he  could address                                                               
the issues without using a lottery or auction.                                                                                  
MR. LOEFFLER answered no.  He elaborated:                                                                                       
     I do not see a way for  me to say I think berry pickers                                                                    
     are  less deserving  than  snowmobilers,  who are  more                                                                    
     deserving  than skiers,  who  are  less deserving  than                                                                    
     miners.   And I can't  see saying people who  have been                                                                    
     here  16 years  are  more deserving  than people  being                                                                    
      here 15 years, or parents more deserving than people                                                                      
      with grandchildren.  So those are determinations of                                                                       
     value that I don't believe are for me to make.                                                                             
REPRESENTATIVE  McGUIRE asked  whether,  after  the initial  best                                                               
interest finding had been made,  [a preference] such as "first in                                                               
time,  first  in  right"  [could  be used  in  making  the  final                                                               
MR. LOEFFLER replied,  "If the bill gave me  that direction, then                                                               
that is, of course, what I would do."                                                                                           
REPRESENTATIVE    FATE    indicated   Representative    McGuire's                                                               
suggestion  was in  the original  [bill language],  but that  "we                                                               
basically got talked out of it by the department."                                                                              
REPRESENTATIVE McGUIRE suggested [the bill] be two-tiered.                                                                      
REPRESENTATIVE  KERTTULA  responded  that  the  subcommittee  had                                                               
already considered that,  but it could possibly  lead to inequity                                                               
[or] a res nullius problem.                                                                                                     
Number 1890                                                                                                                     
CO-CHAIR MASEK  asked Representative Fate  if there was a  way to                                                               
reach his goal with the bill and satisfy the state process.                                                                     
REPRESENTATIVE FATE  indicated he didn't  see one currently.   He                                                               
reiterated  earlier statements  and said  he anticipated  that if                                                               
the bill  passed, it would  ultimately be amended at  some point.                                                               
He  said he  envisioned the  program  would be  utilized more  in                                                               
staking private  land for a fee  simple and would "fill  up" that                                                               
land fund much  more readily than suspected.  He  said he'd based                                                               
this off of the number of  people who'd expressed support for the                                                               
bill, which  he estimated to  be over 100.   He spoke  about [the                                                               
first-come, first-served]  problem and whether it  was serious or                                                               
not.  He indicated  he was in favor of moving  the bill and spoke                                                               
about resolving the problems.                                                                                                   
Number 1726                                                                                                                     
REPRESENTATIVE  GREEN  called attention  to  line  5 [Section  3,                                                               
which amends AS  38.05.600(a), page 3], which  read, "Sales under                                                             
this section  may be at public  or private sale."   He compared a                                                             
public  sale  to  an  auction  and  asked  what  protections  are                                                               
available  for the  person who  wants to  acquire the  [site] but                                                               
doesn't want the sale to be open to the public.                                                                                 
REPRESENTATIVE FATE responded:                                                                                                  
     I can't remember, except "public  sale" was a result of                                                                    
     two or  more people  wanting the same  parcel.   But if                                                                    
     you do that  - open it up  to a public sale  - then, to                                                                    
     be fair, you have to open it  up to a public sale.  The                                                                    
     private sale  takes care of  itself:  that's  where the                                                                    
     individual   stakes  the   ground,  goes   through  the                                                                    
     procedure of appraisal, surveying,  whether or not it's                                                                    
     adjudicated that  he does it.   And this, again,  is in                                                                    
     the bill.   Or  the commissioner  has the  authority to                                                                    
     have it done by the state, which ever be cheaper.                                                                          
     To me, it's  must more efficient and  effective, but we                                                                    
     did try and accommodate DNR  on this, because they felt                                                                    
     that in  some instances  it was  less costly  and maybe                                                                    
     more efficient  for them to do  it.  And I  didn't deny                                                                    
     that, but  we did leave  open room, at least,  for that                                                                    
     individual who staked  that ground to ...  pay the cost                                                                    
     of his own appraisal and his own survey.                                                                                   
     So,  to answer  your  question  specifically, that  ...                                                                    
     public sale  would come about  in the event  that there                                                                    
     were two or  more people that wanted the  same piece of                                                                    
     ground.   Once  that  public sale  came about,  though,                                                                    
     you'd  have to  open it  up  for all  people that  were                                                                    
     interested, and  then it would  become more or  less an                                                                    
     auction, ...  in that specific circumstance  - but it's                                                                    
     not an option  for parcels or a parcel such  as done at                                                                    
     the present time; there's a differentiation.                                                                               
REPRESENTATIVE  GREEN  offered  his   belief  that  "sale"  would                                                               
indicate  others  could  be  there,   as  opposed  to  having  an                                                               
agreement between the  state and one individual.   He asked, "How                                                               
would they  know before they  decided to make  it a private  or a                                                               
public sale?"                                                                                                                   
REPRESENTATIVE FATE  explained that a private  sale would consist                                                               
of the applicant's staking the  ground, having the site surveyed,                                                               
and going through the process.   If there were no contest, a sale                                                               
would take place between that individual and the state.                                                                         
REPRESENTATIVE GREEN  asked how it  would be known  that somebody                                                               
else is interested in that [site].   If the commissioner grants a                                                               
private sale, does he/she [provide public] notice of the sale?                                                                  
REPRESENTATIVE FATE  suggested somebody  would say, "I  have also                                                               
staked this parcel, ... and I  find that somebody else staked it,                                                               
and I'd like it too."                                                                                                           
Number 1457                                                                                                                     
CAROL   CARROLL,   Director,   Division  of   Support   Services,                                                               
Department of Natural Resources, told  the committee the best way                                                               
to know  if there is a  parcel that somebody had  staked would be                                                               
through the  best interest  finding.  If  an individual  wants to                                                               
nominate a parcel,  it would require that  the department provide                                                               
public notice and  take comments.  She indicated DNR  has to do a                                                               
best interest finding on any [land] disposals.                                                                                  
REPRESENTATIVE  KERTTULA offered,  "So,  what  you're saying  is,                                                               
really, you'd  never be able  to do  a private sale,  and because                                                               
this says "may be at", it just isn't going to be an issue."                                                                   
MS. CARROLL replied  that if there were no  other public comments                                                               
that  disagreed or  reflected  another  person's interest,  [DNR]                                                               
could do a  sale to the individual; she added,  "We just will not                                                               
do it in  the dark."  She reiterated that  public notice would be                                                               
given because it is a land disposal sale.                                                                                       
Number 1358                                                                                                                     
REPRESENTATIVE  KERTTULA  indicated  that  if  the  language  had                                                               
gotten so  specific, then  it would  no longer  be discretionary.                                                               
She mentioned  that there  are [court] cases  relating to  use of                                                               
the  word "may,"  which require  the department  to do  something                                                               
because of the way [the language]  is set out.  She suggested the                                                               
language in [HB 232] may be to that point.                                                                                      
MS. CARROLL said the department had not looked at the language.                                                                 
REPRESENTATIVE  KERTTULA surmised  that  the department's  intent                                                               
would not  be to  do the  truly private  sale in  this particular                                                               
section [Section 3].                                                                                                            
MS.  CARROLL  reiterated that  [DNR]  would  need  to do  a  best                                                               
interest finding.                                                                                                               
REPRESENTATIVE GREEN  referred to a  drawing and asked  about the                                                               
number of sites that can be staked within a certain area.                                                                       
MS.  CARROLL responded  that there  are limitations  on how  many                                                               
people  can stake  in certain  areas.   In further  response, she                                                               
suggested it  was Representative Fate's intention  to ensure that                                                               
[the sites] are  remote, so there aren't  "subdivisions" in those                                                               
REPRESENTATIVE  FATE concurred.   He  indicated preferences  were                                                               
included because of existing cabins  on the "meander line" of the                                                               
river that are  closer than one-half mile.  He  said those cabins                                                               
wouldn't  be removed  just  because they  don't  comply with  the                                                               
half-mile  separation.   However, a  new entry  for a  site would                                                               
comply with the setback criteria.                                                                                               
CO-CHAIR MASEK  noted that the bill  would be going to  the House                                                               
Finance  Committee if  moved, and  suggested Representative  Fate                                                               
would continue to work on the bill during that time.                                                                            
Number 0945                                                                                                                     
REPRESENTATIVE  McGUIRE  moved  to  report HB  232  [version  22-                                                               
LS0791\T,  Kurtz,  3/15/02]  out  of  committee  with  individual                                                               
recommendations and the accompanying zero  fiscal note.  She said                                                               
she had  faith that Representative  Fate recognized the  bill had                                                               
problems that would be addressed before it went to the floor.                                                                   
Number 0895                                                                                                                     
REPRESENTATIVE   KERTTULA   objected.       She   indicated   the                                                               
subcommittee had  worked hard  on trying  to resolve  the issues.                                                               
However, Alaska  and the public lands  in the state are  based on                                                               
the  public  trust  doctrine and  maintaining  equal  access  for                                                               
people.    She expressed  concern  about  ramifications in  other                                                               
areas and  added, "I'm afraid  that no  matter what we  do, we're                                                               
always going  to wind up at  that blockade."  She  contended that                                                               
the problems  should be addressed  in the current  committee, but                                                               
conveyed respect  for the sponsor's intentions  of helping people                                                               
who traditionally have been going to an area for years.                                                                         
Number 0777                                                                                                                     
REPRESENTATIVE  FATE mentioned  concerns about  timing.   He said                                                               
there is  one contentious  [issue] and that  he didn't  think the                                                               
department would ever be fully  satisfied because of the existing                                                               
[land  disposal]  program,  which  he  believed  [HB  232]  would                                                               
augment.   He  remarked, "Even  if it  were left  ... the  way it                                                               
were, it would  be better than what we've ever  had before, which                                                               
is exactly zero."                                                                                                               
REPRESENTATIVE GREEN agreed  the problem was one  for the current                                                               
committee to address,  and said it would be a  mistake to send it                                                               
to  another   committee.    He   inquired  about   the  sponsor's                                                               
CO-CHAIR MASEK  suggested holding  the bill  over to  address the                                                               
REPRESENTATIVE  FATE indicated  his  intention to  have the  bill                                                               
reviewed  from  a  legal  standpoint.   He  again  mentioned  his                                                               
concern about timing.                                                                                                           
Number 0570                                                                                                                     
REPRESENTATIVE McGUIRE withdrew her motion to move the bill.                                                                    
REPRESENTATIVE  FATE  reiterated  his intention  to  resolve  the                                                               
problem.  [HB 232 was held over.]                                                                                               

Document Name Date/Time Subjects