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SENATE BILL NO. 224
IN THE LEGISLATURE OF THE STATE OF ALASKA
THIRTY-FOURTH LEGISLATURE - SECOND SESSION
BY THE SENATE RULES COMMITTEE BY REQUEST OF THE GOVERNOR
Introduced: 1/23/26
Referred: Resources, Finance
A BILL
FOR AN ACT ENTITLED
"An Act relating to state land; relating to contracts for the sale and lease of state land; 1
relating to commercial development parks; and providing for an effective date." 2
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 3
* Section 1. AS 38.04.045(b) is amended to read: 4
(b) Before the issuance of [A LONG -TERM LEASE UNDER AS 38.05.070 5
OR OF] a patent for state land, an official cadastral survey shall be accomplished, 6
unless a comparable, approved survey exists that has been conducted by the federal 7
Bureau of Land Management. Before land may be offered under AS 38.08 or 8
AS 38.09, or before land may be offered under AS 38.05.055 or 38.05.057, except 9
land that is classified for agricultural uses, an official rectangular survey grid shall be 10
established. The rectangular survey section corner positions shall be monumented and 11
shown on a cadastral survey plat approved by the state. For those areas where the state 12
may wish to convey surface estate outside of an official rectangular survey grid, the 13
commissioner may waive monumentation of individual section corner positions and 14
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substitute an official control survey with control points being monumented and shown 1
on control survey plats approved by the state. The commissioner may not issue more 2
than one conveyance for each section within a township outside of an official 3
rectangular survey grid. Land to be conveyed may not be located more than two miles 4
from an official survey control monument except that the commissioner may waive 5
this requirement on a determination that a single purpose use does not justify the 6
requirement if the existing status of the land is known with reasonable certainty. The 7
lots and tracts in state subdivisions shall be monumented and the cadastral survey and 8
plats for the subdivision shall be approved by the state. Where land is located within a 9
municipality with planning, platting, and zoning powers, plats for state subdivisions 10
shall comply with local ordinances and regulations in the same manner and to the 11
same extent as plats for subdivisions by other landowners. State subdivisions shall be 12
filed and recorded in the district recorder's office. The requirements of this section do 13
not apply to land made available for material sales, for short -term leases, for parcels 14
adjoining a surveyed right -of-way, or for land that has been open to random staking 15
under the homestead program in the past; however, for short -term leases, the lessee 16
shall comply with local subdivision ordinances unless waived by the municipality 17
under procedures specified by ordinance. In this subsection, "a single purpose use" 18
includes a communication site, an aid to navigation, and a park site. 19
* Sec. 2. AS 38.04.045 is amended by adding a new subsection to read: 20
(c) The commissioner may require an official cadastral survey under (b) of 21
this section before issuance of a long-term lease under AS 38.05.070 or 38.05.400. 22
* Sec. 3. AS 38.05.055 is amended to read: 23
Sec. 38.05.055. Auction sale or sealed bid procedures. Unless another 24
method of sale is allowed [REQUIRED] under this chapter, AS 38.08, or AS 38.09, 25
the sale of state land shall be made at public auction or by sealed bid, at the discretion 26
of the director, to the highest qualified bidder as determined by the director. The 27
director may accept bids and sell state land under this section at not less than 70 28
percent of the appraised fair market value of the land. [TO QUALIFY TO 29
PARTICIPATE UNDER THIS SECTION IN A PUBLIC AUCTION OR SALE BY 30
SEALED BID OF STATE LAND THAT IS OTHER THAN COMMERCIAL, 31
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INDUSTRIAL, OR AGRICULTURAL LAND, A BIDDER SHALL HAVE BEEN A 1
RESIDENT OF THE STATE FOR AT LEAST ONE YEAR IMMEDIATELY 2
PRECEDING THE DATE OF THE SALE AND SUBMIT PROOF OF THAT FACT, 3
AS THE COMMISSIONER REQUIRES BY REGULATION.] A bidder may be 4
represented by an attorney or agent at a public auction. [AN AGGRIEVED BIDDER 5
MAY APPEAL TO THE COMMISSIONER WITHIN FIVE DAYS AFTER THE 6
SALE FOR A REVIEW OF THE DIRECTOR'S DETERMINATION. THE SALE 7
SHALL BE CONDUCTED BY THE DIRECTOR, AND, AT THE TIME OF SALE, 8
THE SUCCESSFUL BIDDER SHALL DEPOSIT AN AMOUNT EQUAL TO FIVE 9
PERCENT OF THE PURCHASE PRICE. THE DIRECTOR SHALL 10
IMMEDIATELY ISSUE A RECEIPT CONTAINING A DESCRIPTION OF THE 11
LAND OR PROPERTY PURCHASED, THE PRICE BID, AND THE AMOUNT 12
DEPOSITED. THE RECEIPT SHALL BE ACKNOWLEDGED IN WRITING BY 13
THE BIDDER.] 14
* Sec. 4. AS 38.05.055 is amended by adding new subsections to read: 15
(b) To qualify to participate in a public auction or sale by sealed bid of state 16
land under this section that is not commercial, industrial, or agricultural land, a bidder 17
must be a resident of the state for at least one year immediately preceding the date of 18
sale and submit proof of residency as required by the commissioner in regulation. 19
(c) The director shall conduct a sale under this section. The successful bidder 20
at a public auction and every bidder for a sealed bid shall provide an earnest money 21
deposit in an amount of at least five percent of the bid amount. The director shall issue 22
a receipt to a successful bidder no later than 10 days after the public auction or sale by 23
sealed bid. The receipt will contain a description of the land or property purchased, the 24
bid price, and the amount of the deposit. If a successful bidder fails to enter into a 25
contract to purchase, five percent of the bid amount shall be forfeited to the state. 26
(d) An aggrieved bidder may appeal a decision of the director under this 27
section to the commissioner within five days of the decision. 28
* Sec. 5. AS 38.05.065(a) is amended to read: 29
(a) A [THE] contract of sale for land , an interest in land, or property sold 30
under this chapter, including under AS 38.05.057, may provide for [AT PUBLIC 31
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AUCTION OR BY SEALED BID UNDER AS 38.05.055 SHALL REQUIRE] the 1
remainder of the purchase price to be paid in monthly, quarterly, or annual 2
installments over a period of not more than 30 [20] years, with interest at the rate 3
provided in (i) of this section. Installment payments plus interest shall be set on the 4
level-payment basis. 5
* Sec. 6. AS 38.05.065(c) is amended to read: 6
(c) The director shall, for contracts under (a) [, (b),] or (h) of this section, set 7
out in the contract for each sale the period for the payment of installments and the total 8
purchase price plus interest. The director, with the consent of the commissioner, may 9
also include in contracts under this section conditions, limitations, and terms 10
considered necessary and proper to protect the interest of the state. Violations of any 11
provision of this chapter or the terms of the contract of sale subject the purchaser to 12
appropriate administrative and legal action, including but not limited to specific 13
performance, termination [FORECLOSURE], ejectment, or other legal remedies in 14
accordance with applicable state law. 15
* Sec. 7. AS 38.05.065(d) is amended to read: 16
(d) If a contract for a sale of state land has been breached, the director may 17
issue a decision to [FORECLOSE AND] terminate the contract at any time 31 days 18
after delivering by certified mail a written notice of the breach to the address of record 19
of the purchaser. A breach caused by the failure to make payments required by the 20
contract may be cured within 30 days after the notice of the breach has been received 21
by the purchaser by payment of the sum in default together with the larger of a fee of 22
$50 or five percent of the sum in default. If there are material facts in dispute between 23
the state and the purchaser, the purchaser may submit a written request for a public 24
hearing for the review of the facts within 30 days after the notice of the breach has 25
been received. 26
* Sec. 8. AS 38.05.065(e) is amended to read: 27
(e) On a determination that there has been a breach of the contract based on 28
the administrative record and the evidence presented at a hearing, if requested, the 29
director shall issue a decision [FORECLOSING THE INTEREST OF THE 30
PURCHASER AND] terminating the contract. The obligation to make payments 31
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under the contract continues through the date of the director's decision to terminate 1
the contract [FORECLOSE BY THE DIRECTOR]. 2
* Sec. 9. AS 38.05.065(f) is amended to read: 3
(f) The director shall deliver the decision to [FORECLOSE AND] terminate 4
the contract personally to the purchaser or send it certified mail, return receipt 5
requested, to the address of record of the purchaser. If the breach is a failure to make 6
payments required by the contract, the decision shall include a notice to the purchaser 7
that if within 30 days the purchaser pays to the state the full amount of the unpaid 8
contract price, including all accrued interest, and any fees assessed under (d) of this 9
section, the department shall issue to the purchaser a deed to the land. If full payment 10
is not made within 30 days or the breach is for other than failure to make payment, the 11
decision [FORECLOSES AND] terminates all legal and equitable rights the purchaser 12
has in the land. 13
* Sec. 10. AS 38.05.065(h) is amended to read: 14
(h) The commissioner, after consulting with the commissioner of agriculture, 15
(1) shall provide that, notwithstanding (a) [AND (b)] of this section, in 16
a contract for the sale of land classified under AS 38.05.020(b)(6) for agricultural 17
uses, the interest rate to be charged on installment payments may not exceed 9.5 18
percent; and 19
(2) may declare a moratorium of up to five years on payments on land 20
sold under this section for land classified under AS 38.05.020(b)(6) for agricultural 21
uses if 22
(A) the commissioner determines that the moratorium is in the 23
best interest of the state; 24
(B) the commissioner certifies and the contract purchaser 25
agrees to perform farm development, crop production, and harvesting, not 26
including land clearing or related activity, requiring the expenditure of 27
amounts equivalent to the payments that would otherwise be made during the 28
moratorium; 29
(C) the sale of the agricultural land takes place after July 1, 30
1979; and 31
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(D) the contract purchaser is in compliance with the 1
development plan specified in the purchase contract at the time the purchaser 2
applies for a moratorium under this paragraph and remains in compliance with 3
the development plan during the moratorium; for the payments subject to the 4
moratorium declared under this paragraph, interest payments are subject to the 5
moratorium but interest continues to accrue during the moratorium. 6
* Sec. 11. AS 38.05.065 is amended by adding new subsections to read: 7
(j) If a sale of state land is to be made by means other than as prescribed by 8
AS 38.05.055, the director shall require a person applying to purchase land, interest in 9
land, or property to submit an earnest money deposit of at least five percent of the 10
purchase price with the application for the contract to purchase. The earnest money 11
deposit shall be applied toward the purchase price. If the applicant fails to enter into a 12
contract to purchase or defaults in the payment of the purchase price, five percent of 13
the purchase price shall be forfeited to the state. 14
(k) Notwithstanding (a) of this section, the commissioner may, on a best 15
interest finding, determine that the purchase price for a parcel of land with existing 16
improvements valued at greater than $10,000 must be paid in full within 120 days of 17
sale. 18
* Sec. 12. AS 38.05.075(a) is amended to read: 19
(a) Except as provided in AS 38.05.035, 38.05.070, 38.05.073, 38.05.081, 20
38.05.082, 38.05.083, 38.05.087, 38.05.102, 38.05.400, 38.05.565, 38.05.600, 21
38.05.810, and this section, when competitive interest has been demonstrated or the 22
commissioner determines that it is in the state's best interests, leasing shall be made at 23
public auction or by sealed bid, at the discretion of the director, to the highest qualified 24
bidder as determined by the commissioner. A bidder may be represented by an 25
attorney or agent at a public auction. In the public notice of a lease to be offered at 26
public auction or by sealed bid, the commissioner shall specify a minimum acceptable 27
bid and the lease compensation method. The lease compensation method shall be 28
designed to maximize the benefit of [RETURN ON] the lease to the state , 29
considering its economic benefit, and shall be a form of compensation set out in 30
AS 38.05.073(m). An aggrieved bidder may appeal to the commissioner within five 31
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days for a review of the determination. The leasing shall be conducted by the 1
commissioner, and the successful bidder shall deposit at the public auction or with the 2
sealed bid the first year's rental or other lease compensation as specified by the 3
commissioner, or that portion of it that the commissioner requires in accordance with 4
the bid. The commissioner shall require, under AS 38.05.860, qualified bidders to 5
deposit a sum equal to any survey or appraisal costs reasonably incurred by another 6
qualified bidder acting in accordance with the regulations of the commissioner or 7
incurred by the department under AS 38.04.045 and AS 38.05.840. If a bidder making 8
a deposit of survey or appraisal costs is determined by the commissioner to be the 9
highest qualified bidder under this subsection, the deposit shall be paid to the 10
unsuccessful bidder who incurred those costs or to the department if the department 11
incurred the costs. All costs for survey and appraisal shall be approved in advance in 12
writing by the commissioner. The commissioner shall immediately issue a receipt 13
containing a description of the land or interest leased, the price bid, and the terms of 14
the lease to the successful qualified bidder. If the receipt is not accepted in writing by 15
the bidder under this subsection, the commissioner may offer the land for lease again 16
under this subsection. A lease, on a form approved by the attorney general, shall be 17
signed by the successful bidder and by the commissioner. 18
* Sec. 13. AS 38.05.075(f) is amended to read: 19
(f) If, after completion of the procedures required by (e) of this section, the 20
commissioner determines that there is only one qualified bidder, the commissioner 21
may issue a lease without competitive bidding at the approved, appraised market value 22
of the land determined under AS 38.05.840 or by another form of lease compensation 23
specified by the commissioner from among those set out in AS 38.05.073(m) and 24
designed to maximize the benefit of [RETURN ON] the lease to the state. The 25
commissioner may establish terms and conditions for entry to the land pending survey 26
and appraisal of the land. The commissioner shall issue the lease as soon as is 27
practicable following the survey and appraisal of the land subject to the provisions of 28
AS 38.05.035(e). 29
* Sec. 14. AS 38.05 is amended by adding a new section to read: 30
Article 13: Economic Development on State Land. 31
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Sec. 38.05.400. Commercial development parks. (a) For purposes of 1
stimulating economic development in the state, the department may designate state 2
land identified under (b) of this section as a commercial development park and dispose 3
of the land by lease or sale as provided in this section. 4
(b) After public notice under AS 38.05.945 and a finding under 5
AS 38.05.035(e) that the designation is in the best interest of the state, the department 6
may designate suitable land as a commercial development park from the following 7
categories: 8
(1) state land identified or nominated as a qualified opportunity zone 9
under 26 U.S.C. 1400Z-1 and 1400Z-2; 10
(2) state land nominated by a person; 11
(3) any other state land the commissioner deems appropriate for 12
commercial development. 13
(c) Land in a commercial development park designated under (b) of this 14
section may be leased or sold without further notice or a finding under 15
AS 38.05.035(e). 16
(d) The department may lease all or part of a commercial development park to 17
a person who intends to conduct business on the parcel for a period not to exceed 55 18
years and may offer to a lessee in good standing an option to renew for one additional 19
period. The terms of a lease under this section must require that the lessee operate a 20
business on the leased parcel during the entire period of the lease and provide for 21
performance benchmarks. A lessee may not assign the lease or sublease without the 22
written authorization of the department. 23
(e) The department may terminate a lease prior to the expiration based on a 24
determination that the lessee has breached any material term. On expiration of the 25
term of a lease or the termination of the lease before expiration, improvements to or 26
personal property on the land subject to the lease shall be managed in the manner 27
required by AS 38.05.090. 28
(f) A lessee in good standing shall have an option to purchase all or a portion 29
of the leased parcel at any time prior to expiration of the lease. Lease payments shall 30
be credited toward the purchase price. 31
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(g) The department may sell all or part of a commercial development park to a 1
person who intends to conduct business on the parcel. The department shall retain a 2
reversionary interest in a parcel sold under this subsection in the event that the parcel 3
should ever cease to be used for business purposes, except that the department may 4
waive the reversionary interest on a written determination that the waiver is in the 5
public interest. 6
(h) The department shall establish compensation for a lease or sale under this 7
section to obtain a fair return to the state, considering the economic benefit to the state. 8
(i) If more than one person offers to lease or purchase the same parcel within a 9
commercial development park, the department shall lease or sell the parcel to the 10
person and on the terms that the department determines are most conducive to 11
economic development in the state 12
(j) The department shall adopt regulations under AS 44.62 (Administrative 13
Procedure Act) to implement this section. Regulations adopted to implement this 14
section must, at a minimum, establish criteria that the department will apply to 15
determine 16
(1) whether the designation of state land as a commercial development 17
park under (b) of this section is in the state's best interest; 18
(2) the level of compensation under (h) of this section, by offsetting 19
the fair market value of the parcel based on the economic benefit to the state from the 20
activities conducted on the premises; and 21
(3) which offer to lease or purchase under (i) of this section is most 22
conducive to the economic development of the state. 23
* Sec. 15. AS 38.05.965 is amended by adding new paragraphs to read: 24
(29) "good standing" means a person is in substantial compliance with 25
all material requirements and stipulations of every authorization issued by the 26
department for the benefit of the person or has submitted a plan approved by the 27
department to come into compliance; 28
(30) " public auction" means a public oral outcry auction or a public 29
online auction. 30
* Sec. 16. AS 16.20.030(a)(8), 16.20.030(a)(9); AS 38.05.065(b); AS 41.21.518, 41.21.520, 31
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and 41.21.522 are repealed. 1
* Sec. 17. Sections 2, 3, and 4, ch. 132, SLA 1992, are repealed. 2
* Sec. 18. This Act takes effect January 1, 2027. 3