Legislature(2009 - 2010)BARNES 124

02/11/2010 08:00 AM House COMMUNITY & REGIONAL AFFAIRS


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08:14:46 AM Start
08:14:58 AM HB273
09:31:36 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ HB 273 MUNICIPAL GENERAL GRANT LAND TELECONFERENCED
Heard & Held
+= HB 281 BOARD OF GAME/FISH & GAME COMMISSIONER TELECONFERENCED
<Bill Hearing Rescheduled to 02/16/10>
+ Bills Previously Heard/Scheduled TELECONFERENCED
              HB 273-MUNICIPAL GENERAL GRANT LAND                                                                           
                                                                                                                                
8:14:58 AM                                                                                                                    
                                                                                                                                
CO-CHAIR MUNOZ  announced that the  only order of  business would                                                               
be HOUSE  BILL NO. 273,  "An Act  relating to general  grant land                                                               
entitlements for the City and  Borough of Wrangell; and providing                                                               
for an effective date."                                                                                                         
                                                                                                                                
8:15:26 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE PEGGY  WILSON, Alaska State  Legislature, speaking                                                               
as the sponsor  of HB 273, explained that HB  273 would correct a                                                               
deficit in  the formation process  that resulted in a  small land                                                               
entitlement for the City & Borough  of Wrangell (CBW).  The state                                                               
has an  established policy to  assist formation and  operation of                                                               
new  boroughs, which  is done  via  state land  grants that  will                                                               
benefit  the  long-term  stability   and  address  the  economic,                                                               
cultural, and  resource-based goals of the  residents.  According                                                               
to the Department of Natural  Resources (DNR), the City & Borough                                                               
of Wrangell's  land grant would  be 1,952.5 acres, which  is less                                                               
than any  other borough  created in the  state.   Therefore, this                                                               
legislation proposes a solution to the situation.                                                                               
                                                                                                                                
8:16:36 AM                                                                                                                    
                                                                                                                                
REED  HARRIS,  Staff,  Representative  P.  Wilson,  Alaska  State                                                               
Legislature,  first  directed  the  committee's  attention  to  a                                                               
document  entitled "Borough  Entitlement  Statistics" drafted  by                                                               
CBW's  consultant  Barbara  Sheinberg.     He  pointed  out  that                                                               
information  for  CBW is  incorrect  because  when the  city  was                                                               
formed  DNR  gave  Wrangell  about 500  acres.    Therefore,  the                                                               
entitlement  for  Wrangell is  1,952.5  acres,  which lowers  the                                                               
percentage of total  land in the borough that was  received as an                                                               
entitlement to 0.12  percent.  This entitlement  is obviously the                                                               
smallest percentage of any borough in  the state.  In fact, other                                                               
boroughs received,  on average, 1.13  percent of the  total state                                                               
land within the  borough.  Were Wrangell to  receive 1.13 percent                                                               
of the  total state land within  the borough, it would  amount to                                                               
18,673 acres, which is what HB 273  seeks to entitle to CBW.  Mr.                                                               
Harris explained that upon  borough formation, new municipalities                                                               
receive a  land grant from  the state that  is 10 percent  of the                                                               
vacant,  unappropriated,   unreserved  (VUU)  lands   within  the                                                               
borough.   However, CBW is  currently comprised of  97.28 percent                                                               
federal  lands  and 2.48  state  lands,  which  is why  the  land                                                               
entitlement from DNR would be so small.                                                                                         
                                                                                                                                
8:19:36 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  MUNOZ  asked  if  the  10  percent  is  established  in                                                               
statute.                                                                                                                        
                                                                                                                                
MR.  HARRIS  replied  yes, specifying  that  statute  includes  a                                                               
formula such that  10 percent of the VUU land  within the borough                                                               
is entitled  to the borough.   This formula didn't work  well for                                                               
Wrangell because  the area consists  of about 98  percent federal                                                               
land, mainly the Tongass National Forest.                                                                                       
                                                                                                                                
8:20:05 AM                                                                                                                    
                                                                                                                                
MR. HARRIS,  continuing his presentation, informed  the committee                                                               
that there is  precedence for a proposal  such as in HB  273.  In                                                               
1998,  former Senator  Jerry Mackie  introduced Senate  Bill 281,                                                               
which addressed land grant entitlements  for the City of Yakutat.                                                               
When Yakutat was  formed it was granted 138 acres  of state land,                                                               
which  was determined  by the  aforementioned VUU  lands formula.                                                               
Senate  Bill 281  was passed  and resulted  in Yakutat  receiving                                                               
8,500 total  acres.   The CBW has  approximately 44,000  acres of                                                               
state land,  including Alaska Mental Health  Trust and University                                                               
of Alaska  lands.  The  increased entitlement would  provide land                                                               
for  Wrangell residences  while  leaving  significant state  land                                                               
remaining  within  the  borough.     The  additional  acreage  is                                                               
important  to  provide for  the  needs  of  the borough  and  its                                                               
citizens.   Furthermore,  in  the  current borough  comprehensive                                                               
planning  process  Wrangell   residents  have  identified  future                                                               
energy  and port  development to  enhance economic  opportunities                                                               
within Wrangell.   However, the aforementioned  development can't                                                               
be  accomplished with  only 1,952  acres.   Additionally, CBW  is                                                               
underfunded  in terms  of land,  he  noted.   In conclusion,  Mr.                                                               
Harris requested that CBW receive  a similar land grant amount as                                                               
other boroughs,  1.13 percent of  state lands within  the borough                                                               
or 18,673 acres.                                                                                                                
                                                                                                                                
8:21:59 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE CISSNA  asked if there  are any residences  in the                                                               
new area that is being added.                                                                                                   
                                                                                                                                
REPRESENTATIVE P.  WILSON replied that there  are some residences                                                               
in the  additional acreage, albeit  the residences  are sprinkled                                                               
throughout  the  additional  acreage.   In  further  response  to                                                               
Representative  Cissna, Representative  P. Wilson  clarified that                                                               
the additional acreage would be within the borough boundaries.                                                                  
                                                                                                                                
8:24:23 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  MUNOZ   recalled  working   on  the   university  lands                                                               
legislation, in  which the date  was altered to  provide Wrangell                                                               
additional time  to make its  land selections.   She asked  if HB
273 would  comply with  the date change  in the  university lands                                                               
legislation.                                                                                                                    
                                                                                                                                
REPRESENTATIVE P. WILSON replied yes.                                                                                           
                                                                                                                                
8:25:01 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   KELLER  surmised   that  there   would  be   tax                                                               
ramifications  on  those  residences in  the  additional  acreage                                                               
being requested.                                                                                                                
                                                                                                                                
REPRESENTATIVE  P. WILSON  clarified  that  these residences  are                                                               
already part  of the  borough, and therefore  there won't  be any                                                               
new tax  ramifications.  She  further clarified that  in Wrangell                                                               
the  city and  borough are  one,  not separate.   The  additional                                                               
acreage will  help with economic  development and the  ability to                                                               
use the land existing within  the borough boundaries.  In further                                                               
response to Representative Keller, she  nodded her head that this                                                               
additional acreage isn't of concern for private citizens.                                                                       
                                                                                                                                
8:26:12 AM                                                                                                                    
                                                                                                                                
BARBARA  SHIENBERG, Community  &  Strategic Planning  Consultant,                                                               
Sheinberg Associates,  informed the committee that  over the past                                                               
year  she has  been  working  with CBW  to  help  it perform  its                                                               
comprehensive  plan, which  was required  after formation  of the                                                               
borough.  Over the last year,  about 10 work public sessions were                                                               
held  in  Wrangell, 2  town  meetings,  and a  community  opinion                                                               
survey.   She noted that  after the borough formation  a property                                                               
tax was instituted.   The property tax role  specifies that there                                                               
are about  433 privately owned parcels  scattered throughout four                                                               
to five  communities in the additional  acreage.  As part  of the                                                               
process, Ms. Sheinberg visited all  of the communities within the                                                               
proposed expanded  area.   At each  locale, residents  were asked                                                               
about their current situation and  future with regard to the land                                                               
necessary  to  sustain  themselves  and  their  children  in  the                                                               
future.  The information from  the aforementioned meetings led to                                                               
the identification  of land  Wrangell wanted  to select  from the                                                               
borough to  support itself and  its residents.  She  also created                                                               
future growth maps for the entire borough.                                                                                      
                                                                                                                                
MS. SHEINBERG said that the land  selection process was done in a                                                               
fashion  that was  blind to  the numbers  in order  to have  real                                                               
justification  for  the  land  selected.   At  first  blush,  the                                                               
process resulted in  the selection of about 10,000  acres.  After                                                               
comparing  the 10,000  acres  with  the 2,500  to  which CBW  was                                                               
originally  entitled, there  was  review of  whether [the  10,000                                                               
acres] was reasonable.   Upon review, it was  apparent that CBW's                                                               
entitlement  was smaller  than  any other  borough had  received.                                                               
The group then reviewed what  other boroughs have received versus                                                               
the land  in the borough.   The request, she opined,  is based on                                                               
the real  need to satisfy  economic development,  recreation, and                                                               
other needs.   Although she acknowledged that  the requested land                                                               
is a large portion of the state's  land base in the CBW, about 75                                                               
percent of  VUU land  in the  area, it's the  amount of  land CBW                                                               
needs to sustain  itself.  She questioned whether  it mattered if                                                               
the state  or the borough owns  the land as the  land will likely                                                               
be used in  the same manner.  In closing,  Ms. Sheinberg asked if                                                               
because there  is so  little state land  in the  borough Wrangell                                                               
should be  penalized and  not opportunities,  such as  a regional                                                               
solid  waste   disposal,  an   industrial  port,   protection  of                                                               
fisheries to generate  income for itself and its  residents.  She                                                               
opined that Wrangell should be able  to select more land than the                                                               
statutory formula  specifies.  She then  directed the committee's                                                               
attention  to  the  Earl  West  Cove  Future  Growth  Map,  which                                                               
illustrates the  large portion  of VUU  land, about  3,500 acres,                                                               
from which CBW  can select.  The aforementioned parcel  is just 1                                                               
of 20 places CBW has selected.   She pointed out that the portion                                                               
highlighted in  orange is part  of what  CBW is interested  in as                                                               
part of its entitlement.  This  land is also part of CBW's future                                                               
growth maps,  which it would  like to use for  remote residential                                                               
development.   She pointed out  another selection that  CBW would                                                               
like as  it's part of a  timber harvest area.   The borough would                                                               
like to contribute  to an upcoming timber sale in  the area.  She                                                               
then  directed attention  to the  map  of Thoms  Place, which  is                                                               
located within  CBW.  She pointed  out the two areas  of VUU land                                                               
that  are owned  by the  state  and are  eligible for  selection.                                                               
Outlined in  orange are  the two  small areas  CBW would  like to                                                               
select.  This is the area,  she related, where CBW wants to place                                                               
a residential  disposal in order  to make more land  available to                                                               
residents.   There is also  a portion that includes  high quality                                                               
timber in  which CBW  is interested.   Ms. Sheinberg  opined that                                                               
Wrangell  has  systematically  moved  through  this  process  and                                                               
identified between 10-18,000 acres that  they would like in order                                                               
to support itself.                                                                                                              
                                                                                                                                
8:37:10 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE CISSNA expressed interest  in whether those in the                                                               
selected land want to be part of the community [borough].                                                                       
                                                                                                                                
MS. SHEINBERG  characterized this as  a great planning job.   She                                                               
related  that Meyers  Chuck  was very  much  supportive of  being                                                               
within CBW.   She explained that she traveled  throughout the CBW                                                               
with Wrangell's economic development  director, police chief, and                                                               
a  key  firefighter.    The   main  livelihood  of  these  remote                                                               
locations  is  commercial fishing  or  light  tourism, which  the                                                               
residents  want  to  be  able  to  continue.    Therefore,  these                                                               
residents  wanted good  communication ability.   After  carefully                                                               
listening  to  the requests  of  the  residents, these  municipal                                                               
entitlement selections were chosen.                                                                                             
                                                                                                                                
8:40:39 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  CISSNA   asked  if  the  interview   process  Ms.                                                               
Sheinberg performed  is being built  into the future  planning of                                                               
the area.                                                                                                                       
                                                                                                                                
MS. SHEINBERG replied yes.  In  fact, the public hearing draft is                                                               
almost ready  to be  issued.   She noted that  within the  plan a                                                               
chapter is dedicated  to each of the remote areas  as well as for                                                               
the overall borough itself.                                                                                                     
                                                                                                                                
8:41:34 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE CISSNA asked if anyone was opposed to HB 273.                                                                    
                                                                                                                                
MS. SHEINBERG  replied no, which  she attributed to  the planning                                                               
honoring  the  wishes of  the  residents,  especially the  remote                                                               
residents, in the entitlement selections.                                                                                       
                                                                                                                                
8:42:01 AM                                                                                                                    
                                                                                                                                
CO-CHAIR MUNOZ highlighted that  the remote residents are already                                                               
part of the  borough, and this legislation  requests selection of                                                               
land outside [the borough].                                                                                                     
                                                                                                                                
MS.  SHEINBERG replied  yes, adding  that the  remote residential                                                               
opportunities were  selected away from existing  residents with a                                                               
buffer and  near where timber  harvests are already  occurring on                                                               
federal lands.                                                                                                                  
                                                                                                                                
8:43:44 AM                                                                                                                    
                                                                                                                                
DICK  MYLIUS,  Director, Division  of  Mining,  Land, and  Water,                                                               
Department of Natural Resources,  reminded the committee that the                                                               
division  administers  the  municipal  entitlement  program  that                                                               
transfers state land to municipalities.   This legislation amends                                                               
AS  29.65.010(a) to  increase the  City &  Borough of  Wrangell's                                                               
entitlement from approximately  1,952 acres to 18,675  acres.  He                                                               
explained  that new  municipalities  receive a  land grant  based                                                               
upon  the   amount  of  state  land   within  the  municipality's                                                               
boundary, specifically  10 percent of  VUU state land  within the                                                               
municipality's   boundary.      The   VUU  is   based   on   land                                                               
classifications and  excludes any  land that the  legislature has                                                               
set aside, such as state parks  and game refuges.  Under existing                                                               
statute  and  using the  10  percent  formula, CBW's  entitlement                                                               
would've been  1,952 acres.   However, based on the  averaging of                                                               
the 13 boroughs  listed in AS 29.65.010(a),  the borough believes                                                               
it deserves an entitlement that  is significantly larger than the                                                               
10 percent  of VUU land prescribed  in statute.  In  fact, HB 273                                                               
would  increase  CBW's entitlement  to  75  percent of  VUU  land                                                               
within the corporate  boundaries or 50 percent of  all state land                                                               
within the  borough.  Mr.  Mylius stated that  the aforementioned                                                               
is a  far higher percentage  than received by other  boroughs and                                                               
is  a significant  deviation from  the formula  that has  been in                                                               
place since 1978.  The  existing law was implemented to establish                                                               
a  consistent   policy  with  regard  to   how  entitlements  are                                                               
determined.    In fact,  prior  to  the  existing law  there  was                                                               
significant  litigation  between  the  state  and  municipalities                                                               
regarding how to calculate municipal  entitlements.  The existing                                                               
formula  has  been  applied  to  practically  all  municipalities                                                               
formed since  1978, save Yakutat.   Mr. Mylius  acknowledged that                                                               
CBW's  formula  driven entitlement  is  small  because the  state                                                               
doesn't own a  lot of land in  the borough.  He  related that DNR                                                               
suggests   that   the   acreage  being   requested   be   reduced                                                               
significantly and that the borough  not be allowed to acquire the                                                               
majority of state-owned  land in the borough.   This legislation,                                                               
he  opined,  will  have significant  negative  impacts  on  state                                                               
forestry  management, future  state land  sales, and  potentially                                                               
public  recreational use  of  state lands.    However, the  exact                                                               
impacts are difficult  to assess because DNR isn't  aware of what                                                               
specific lands the  borough would select.  He  predicted that CBW                                                               
will likely  select land proposed  for inclusion in  the Southern                                                               
Southeast  State  Forest that  was  approved  by the  House  last                                                               
session  and will  be  considered in  the  Senate.   Furthermore,                                                               
passage of this legislation will  significantly reduce the amount                                                               
of  land  available for  transfer  to  the University  of  Alaska                                                               
should University  of Alaska lands  legislation pass.   Moreover,                                                               
the   department   is   concerned  about   deviation   from   the                                                               
aforementioned long-standing  state policy.   The proposal  in HB
273  is based  on the  total amount  of land  within the  borough                                                               
regardless  that  most  of  the  land isn't  state  owned.    The                                                               
aforementioned    establishes    a    precedent    that    future                                                               
municipalities  may attempt  to  follow  and would  significantly                                                               
diminish the  state's land base.   Mr. Mylius clarified  that DNR                                                               
isn't necessarily  opposed to an  increased entitlement,  but the                                                               
18,675 acres request  that takes away 75 percent of  the VUU land                                                               
and 57 percent of all state land is too much.                                                                                   
                                                                                                                                
8:48:21 AM                                                                                                                    
                                                                                                                                
MR. MYLIUS turned  to the topic of timber harvest.   He explained                                                               
that the amount  of timber that can be harvested  from state land                                                               
in  southern Southeast  Alaska is  based on  the sustained  yield                                                               
calculation based on the amount  of state land within the state's                                                               
timber base.   By  removing the two  proposals proposed  in CBW's                                                               
land selection,  the land would likely  go to the borough  and be                                                               
removed  from the  state's  timber base.    Therefore, the  state                                                               
would be able to harvest less  timber from those state lands.  He                                                               
noted  that although  CBW is  saying that  it can  perform timber                                                               
harvests and land  sales, often that has not  been the experience                                                               
of DNR.   The aforementioned then places more pressure  on DNR to                                                               
perform timber  harvests and land  sales on less  suitable lands.                                                               
The department  has transferred much land  to municipalities, but                                                               
very few  have aggressive  land sale  programs, which  results in                                                               
pressure  from the  public and  legislature to  continue to  sell                                                               
state land even when DNR has  given away the best state lands for                                                               
land  sales to  municipalities.   Similarly, municipalities  have                                                               
had great  difficulty harvesting  timber from  their lands.   For                                                               
example, in the  Mat-Su Borough timber harvests  on borough lands                                                               
is   far   more  controversial   than   when   on  state   lands.                                                               
Furthermore, the  state's timber  program is designed  to support                                                               
local, small  scale mills.   Although the  state has  been fairly                                                               
successful with the  aforementioned, municipalities haven't been.                                                               
Again,  DNR  would like  to  review  the specific  parcels  being                                                               
selected and  would request  that CBW reduce  the amount  of land                                                               
for its entitlement.                                                                                                            
                                                                                                                                
8:50:27 AM                                                                                                                    
                                                                                                                                
MR. MYLIUS said  that most boroughs have followed  the 10 percent                                                               
formula.  In fact, the boroughs  that have formed since 1978 that                                                               
aren't   listed   in   statute  all   used   the   formula-driven                                                               
entitlement.   However, when Yakutat Borough  initially formed it                                                               
contained little  state land, and  thus had a  small entitlement.                                                               
Subsequently, the  Yakutat Borough  annexed a very  large portion                                                               
of state  land in the Cape  Yagataga area, over 200,000  acres of                                                               
state land.   The Yakutat  Borough asked the legislature  to give                                                               
it  a percentage  of that  large  parcel of  state land  acquired                                                               
through  annexation.   He  noted that  under  existing statute  a                                                               
municipality that  annexes a  large piece  of state  land doesn't                                                               
result in  an increase in  that municipality's entitlement.   The                                                               
legislature   agreed  to   the  aforementioned   because  Yakutat                                                               
originally requested  that portion of  state land be  included in                                                               
the  borough, but  the Local  Boundary Commission  (LBC) rejected                                                               
that  request.   Therefore,  the Yakutat  Borough  decided to  go                                                               
through  the  annexation  process,  through  which  it  succeeded                                                               
because it  had a large  land base from  which it could  draw its                                                               
increased  entitlement.    Similarly,   the  Lake  and  Peninsula                                                               
Borough  sought a  legislative fix.   In  the Lake  and Peninsula                                                               
Borough's case  although there was  a large amount of  state land                                                               
within the  borough, because  of the planning  very little  of it                                                               
was in  VUU land.  Therefore,  there was an exception  made.  Mr.                                                               
Mylius highlighted  that the  exceptions were  based on  the fact                                                               
that  there was  a large  amount of  state land.   He  reiterated                                                               
DNR's concerns  that CBW's 18,675 acre  entitlement request would                                                               
take a  significant amount of  state land within the  borough and                                                               
limit the state's  ability for timber harvests and  land sales in                                                               
the future as well as sets a precedent.                                                                                         
                                                                                                                                
8:52:47 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GARDNER  asked  if  Mr. Mylius  considered  it  a                                                               
credible  argument  that without  adequate  land  to support  the                                                               
needs of  CBW, it would  discourage the formation of  boroughs in                                                               
other regions.                                                                                                                  
                                                                                                                                
MR.  MYLIUS  replied no,  explaining  that  in most  areas  where                                                               
boroughs would form there is  a significant amount of state land,                                                               
especially in  the unorganized  borough areas.   The  reality, he                                                               
related, is that  boroughs don't receive a  significant amount of                                                               
revenue from  land management activities.   However, the boroughs                                                               
do  have  interest in  those  state  lands for  providing  public                                                               
services, community development.   Still, the land  isn't a great                                                               
revenue  source  for  most  of   the  municipalities,  which  can                                                               
partially be  attributed to the  fact that the state  retains the                                                               
oil and gas rights.                                                                                                             
                                                                                                                                
8:54:34 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GARDNER  then asked  if Mr. Mylius  would consider                                                               
the fact that a newly formed  borough doesn't have enough land to                                                               
meet its needs a reasonable argument.                                                                                           
                                                                                                                                
MR.  MYLIUS  characterized   it  as  a  concern.     However,  he                                                               
maintained the  need to see CBW's  map and associated needs.   He                                                               
reminded the committee  that Ms. Sheinberg said  CBW, through its                                                               
planning  effort,  determined  a  need for  about  10,000  acres.                                                               
However, this  request is  for 18,675.   He further  reminded the                                                               
committee that  DNR is open  to an increased entitlement,  but it                                                               
should be based on need.                                                                                                        
                                                                                                                                
8:55:39 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  CISSNA   inquired  as  to  whether   the  process                                                               
requires the borough request specific  parcels of land or can the                                                               
borough  request  a  total  amount of  acreage  and  then  select                                                               
specific parcels.                                                                                                               
                                                                                                                                
MR. MYLIUS  explained that DNR  determines the  calculation based                                                               
on  the 10  percent  of  VUU land  without  knowing the  specific                                                               
lands,  the  borough  then   submits  applications  for  specific                                                               
parcels.    The  statute  specifies timelines.    The  department                                                               
doesn't certify until  the borough has been in  existence for two                                                               
years, then  there's a six-month  period in which to  certify the                                                               
acreage.   From that point,  the borough has  a year to  file its                                                               
selections.     Therefore,  the   department  doesn't   have  any                                                               
knowledge  as to  what lands  will  be selected  until after  the                                                               
acreage is  determined.   Mr. Mylius echoed  his concern  that HB
273  essentially eliminates  the existing  formula and  creates a                                                               
new  formula that's  applied  to CBW.   If  that  new formula  is                                                               
applied for future municipalities  or existing municipalities, it                                                               
would be of great concern to the department, he remarked.                                                                       
                                                                                                                                
8:57:53 AM                                                                                                                    
                                                                                                                                
CO-CHAIR MUNOZ noted that the  committee packet includes a letter                                                               
from DNR  in response to  a request for an  expedited entitlement                                                               
certification.  The  letter specifies that the  decision would be                                                               
in effect January 11, 2010, if  no appeal is filed.  She inquired                                                               
as to  the definition of  an expedited  entitlement certification                                                               
as  well  as how  it  pertains  to  the  process the  borough  is                                                               
pursuing.                                                                                                                       
                                                                                                                                
MR.  MYLIUS  reminded  the  committee   that  DNR  certifies  the                                                               
entitlement three  years after the  borough is formed.   However,                                                               
there is also  a provision that allows the borough  to request an                                                               
expedited certification  prior to  the two  years and  six months                                                               
specified in  statute.  The  aforementioned is what CBW  is doing                                                               
and to  which the  letter refers.   The CBW  has administratively                                                               
appealed the  decision, which  he attributed  to the  low acreage                                                               
and the  borough's concern with  regard to crediting  the acreage                                                               
the  state had  previously given  to the  City of  Wrangell.   He                                                               
explained  that  originally  Wrangell's  entitlement  was  around                                                               
2,500  acres, but  the City  of Wrangell  had already  been given                                                               
land from  the state.   Therefore, when  the borough  was formed,                                                               
all the interests  of the city transferred to the  borough.  That                                                               
land given  to the  city was  then taken by  the department  as a                                                               
credit  to  the  total  2,500  acre  borough  entitlement.    The                                                               
aforementioned   is   under    administrative   appeal   to   the                                                               
commissioner.  In further response  to Co-Chair Munoz, Mr. Mylius                                                               
deferred to the  attorneys regarding the impact of  the appeal on                                                               
the city's deadlines.   However, he pointed out that  HB 273 does                                                               
include  a  provision that  extends  the  selection deadline,  to                                                               
which DNR has no opposition.                                                                                                    
                                                                                                                                
9:00:47 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GARDNER  recalled  that Ms.  Sheinberg  testified                                                               
that the lands  Wrangell has identified include  lands that would                                                               
support a landfill  with a deep water port, a  possible harbor to                                                               
support  timber  harvest,  and home  sites  for  residential  and                                                               
recreational uses.  Representative  Gardner asked if DNR contends                                                               
that if  CBW was held  to lower  acreage, it would  have adequate                                                               
land to meet needs laid out in its planning document.                                                                           
                                                                                                                                
MR.  MYLIUS  reiterated  that  DNR   believes  that  it's  likely                                                               
appropriate for  CBW to  receive a  larger entitlement  than that                                                               
specified  using the  existing statutory  formula.   However, the                                                               
concern is  that the  entitlement shouldn't  be the  18,675 acres                                                               
and the  acreage shouldn't be  based on  a formula that  isn't in                                                               
statute.   If CBW  desires ownership of  specific tracts  of land                                                               
that it has  identified for specific purposes,  the department is                                                               
open  to reviewing  those and  basing the  entitlement on  actual                                                               
need as opposed  to the proposal in HB 273.   In further response                                                               
to  Representative  Gardner, Mr.  Mylius  confirmed  that in  the                                                               
department's  experience  those  boroughs that  have  been  given                                                               
timber  lands  haven't  followed  through  with  development  and                                                               
adversely  impacted  the  state  timber harvest.    As  mentioned                                                               
earlier,  the   Mat-Su  Borough   is  a   good  example   of  the                                                               
aforementioned.  Furthermore, the amount  of timber the state can                                                               
cut is based  on the total timber  base and the take  is based on                                                               
the sustained yield.  Whatever amount  of the timber base that is                                                               
taken out  of state ownership  proportionally reduces  the amount                                                               
of timber the state can offer for sale.                                                                                         
                                                                                                                                
9:04:14 AM                                                                                                                    
                                                                                                                                
MR. MYLIUS, in response to  Representative Keller, explained that                                                               
the 18,675 acres Wrangell is requesting  is 75 percent of the VUU                                                               
lands,  which  is  land  that   is  identified  for  land  sales,                                                               
recreation, and  general use.   However, the  18,675 acres  is 57                                                               
percent of  all state  lands.  Therefore,  the lands  that aren't                                                               
VUU  lands  are  mainly  lands  that  have  been  identified  for                                                               
wildlife habitat.  He clarified  that the VUU lands don't include                                                               
Mental Health  Trust lands  because it's not  managed by  DNR and                                                               
not  considered  state land  in  terms  of determining  municipal                                                               
entitlements and selections.                                                                                                    
                                                                                                                                
9:06:26 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE CISSNA  asked if the state  listens to communities                                                               
when performing  timber selections  in order  to ensure  that the                                                               
visual  assets  of the  community,  from  which they  could  make                                                               
money, are protected.                                                                                                           
                                                                                                                                
MR. MYLIUS  replied yes, but  noted that the department  also has                                                               
to  listen  to residents  statewide  because  the state  land  is                                                               
managed  in  terms   of  the  best  interest   of  all  Alaskans.                                                               
Therefore, there  are times in  which the statewide  interest may                                                               
be  greater  and  perhaps  override   the  local  interest.    In                                                               
Wrangell, two areas have been  indentified within the borough for                                                               
timber harvest through the public  process and those are proposed                                                               
for inclusion in the state forest,  which has also gone through a                                                               
fair   amount  of   public  discussion   and   approval  by   the                                                               
legislature.   This legislation  would likely  result in  some of                                                               
those lands  transferring to borough  ownership.   The department                                                               
recognized  that possibility  when the  State Forest  legislation                                                               
was put together.  However, the  amount of land the borough might                                                               
receive  wasn't recognized  because  it was  envisioned that  the                                                               
borough's entitlement would be somewhere closer to 2,500 acres.                                                                 
                                                                                                                                
9:09:33 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  CISSNA  asked  if  this  legislation  deals  with                                                               
changes beyond the formula.   He asked if the department foresees                                                               
changes in the selection choices the community is making.                                                                       
                                                                                                                                
MR. MYLIUS  said that  the legislation  only changes  the formula                                                               
for Wrangell  and the concern is  that it would be  precedent for                                                               
future municipalities.   However, the legislation  doesn't change                                                               
what lands  the borough  can select as  the borough  would remain                                                               
limited to VUU  lands.  There is a provision  in the State Forest                                                               
legislation that would  allow CBW to select lands  outside of the                                                               
state forest if the legislature sets it aside.                                                                                  
                                                                                                                                
9:11:11 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE CISSNA asked  if Mr. Mylius has  any suggestion to                                                               
change  the legislation  such that  [the  formula] isn't  changed                                                               
enough to  establish a precedent, while  providing enough acreage                                                               
to meet the hopes of Wrangell in terms of development.                                                                          
                                                                                                                                
MR. MYLIUS reiterated  that the department doesn't  have the maps                                                               
specifying  the selections  to determine  how  they would  impact                                                               
state land management.   He indicated that having  the maps could                                                               
help the department  enter a dialogue with CBW to  develop a more                                                               
acceptable  acreage  figure.   However,  he  didn't  believe  the                                                               
legislature needed to approve the specific parcels.                                                                             
                                                                                                                                
9:12:58 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GARDNER  asked if,  in broad  terms, it's  fair to                                                               
say  that CBW  is in  a unique  position in  comparison to  other                                                               
boroughs because of the small proportion of VUU lands.                                                                          
                                                                                                                                
MR. MYLIUS  replied no, adding that  it's the same issue  in most                                                               
areas in Southeast  Alaska.  He attributed  the aforementioned to                                                               
the nature of the state  land selections under the Statehood Act,                                                               
which placed  significant restraint  on how  much land  the state                                                               
could acquire from  the Tongass National Forest.   Therefore, any                                                               
community located in the Tongass  or Chugach National Forest will                                                               
have a  relatively small  land entitlement.   The  communities of                                                               
Juneau, Ketchikan,  and Sitka have  the larger  land entitlements                                                               
because  there was  a fairly  large exclusion  from the  National                                                               
Forest around those  communities.  Therefore, the  state was able                                                               
to select  more land.  He  mentioned that the problem  of a small                                                               
land  entitlement  would be  the  case  for communities  such  as                                                               
Petersburg and Prince of Whales  Island, and other communities in                                                               
the National Forest.                                                                                                            
                                                                                                                                
REPRESENTATIVE  GARDNER  surmised  then that  it's  necessary  to                                                               
develop a solution for CBW if  the desire is to encourage borough                                                               
formation in other communities within the National Forest lands.                                                                
                                                                                                                                
MR. MYLIUS opined  that the lands haven't been  the impediment to                                                               
borough formation.   He reiterated his supposition  that [were HB
273  to become  law] boroughs  such  as Wrangell  that decide  to                                                               
organize will likely desire the same fix as Wrangell.                                                                           
                                                                                                                                
9:16:40 AM                                                                                                                    
                                                                                                                                
DONALD MCCONACHIE,  Mayor, City  & Borough of  Wrangell, informed                                                               
the  committee that  Wrangell  has a  history  of developing  its                                                               
timber  resources.   In  fact,  in the  last  few years  Wrangell                                                               
developed two recent  timber sales in order to  support the local                                                               
mill  and keep  it  operational,  one of  which  was through  the                                                               
Alaska  Mental Health  Trust lands.   Moreover,  in the  last few                                                               
months  Wrangell   has  reviewed  developing  a   regional  waste                                                               
authority.   Wrangell,  he opined,  intends to  use the  selected                                                               
lands.   He related that  there was little opposition  to borough                                                               
formation in Wrangell.                                                                                                          
                                                                                                                                
9:19:23 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE CISSNA inquired as to  where the mayor stands with                                                               
regard to working [with the  department] toward less of a rewrite                                                               
of the  formula and  meeting both the  borough's and  the state's                                                               
needs.                                                                                                                          
                                                                                                                                
MAYOR  MCCONACHIE  said  he  didn't  want  to  set  a  precedent.                                                               
However, he opined  that there's a unique  situation in Southeast                                                               
Alaska  and  the  National  Forest   lands,  which  needs  to  be                                                               
addressed in an equitable manner for those communities and DNR.                                                                 
                                                                                                                                
9:21:10 AM                                                                                                                    
                                                                                                                                
TIMOTHY ROONEY,  Manager, City &  Borough of  Wrangell, suggested                                                               
that  the  formula  has  worked  well  in  those  areas  with  an                                                               
abundance  of state  lands.   However,  that's not  the case  for                                                               
Wrangell.   Without an increase in  the formula-based entitlement                                                               
acreage, Wrangell has difficulty  protecting the interests of the                                                               
residents  of  those within  the  remote  areas of  the  borough.                                                               
While  the  18,675  acre  request  may be  more  than  DNR  feels                                                               
appropriate, CBW is  willing to develop a figure  that allows for                                                               
the  necessary protection  for  some  of the  remote  areas.   He                                                               
stated that the  amount necessary for protection  would amount to                                                               
at least 10-12,000 acres.                                                                                                       
                                                                                                                                
9:22:48 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  KELLER  inquired  as   to  Mr.  Rooney's  opinion                                                               
regarding  testimony that  land  transferred to  CBW wouldn't  be                                                               
developed and sold.                                                                                                             
                                                                                                                                
MR.  ROONEY  said that  rural  residents  want to  protect  their                                                               
interests  while  the  borough  moves  forward  with  development                                                               
strategies.   There are some  unique residential settings  in the                                                               
borough,  which it  would like  to expand  upon while  keeping in                                                               
mind the desires of the residents of the area.                                                                                  
                                                                                                                                
REPRESENTATIVE  KELLER remarked  that if  he had  nice beachfront                                                               
property, he may not be excited about surrounding development.                                                                  
                                                                                                                                
9:24:35 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  CISSNA  requested  that  the  committee  be  kept                                                               
abreast of the process with CBW.                                                                                                
                                                                                                                                
9:25:50 AM                                                                                                                    
                                                                                                                                
CO-CHAIR MUNOZ announced  that HB 273 will be held  over.  During                                                               
that time,  she encouraged the  manager and mayor of  Wrangell to                                                               
meet  with Mr.  Mylius  regarding specific  proposals within  the                                                               
land selections in order to develop a compromise.                                                                               
                                                                                                                                
9:26:51 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GARDNER   related  her  understanding   that  the                                                               
university has  said it doesn't  care if specific parcels  in the                                                               
Wrangell area are taken out of the university land grants list.                                                                 
                                                                                                                                
REPRESENTATIVE  P. WILSON  confirmed  that to  be  the case,  and                                                               
added  that  the university  land  grant  legislation includes  a                                                               
section regarding borough formation.                                                                                            
                                                                                                                                
REPRESENTATIVE GARDNER then  asked if there are  other within the                                                               
university land  grant legislation  slated for the  university in                                                               
which CBW might be interested.                                                                                                  
                                                                                                                                
REPRESENTATIVE P. WILSON said that  although she wasn't sure, the                                                               
University of  Alaska was made  aware of  lands [in which  CBW is                                                               
interested] some  time ago  and agreed to  those.   She confirmed                                                               
that the University of Alaska  is not particularly concerned with                                                               
the parcels CBW desires.                                                                                                        
                                                                                                                                
9:28:23 AM                                                                                                                    
                                                                                                                                
MR. MYLIUS,  in response to Co-Chair  Munoz, said that he  or his                                                               
planning  staff would  be available  to work  with CBW  regarding                                                               
specific land  proposals.  He  noted that  he would be  in Juneau                                                               
next  week  and  could  meet  with Ms.  Sheinberg.    In  further                                                               
response to Co-Chair Munoz, Mr.  Mylius agreed to meet [with CBW]                                                               
in order to come to some agreement in the coming weeks.                                                                         
                                                                                                                                
9:29:24 AM                                                                                                                    
                                                                                                                                
CO-CHAIR MUNOZ  announced that public  testimony on HB  273 would                                                               
be left open.                                                                                                                   
                                                                                                                                
9:29:43 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE P.  WILSON, in closing,  related that  Wrangell is                                                               
an independent  town, which  has struggled in  the last  10 years                                                               
with economic  development.  Traditionally, Wrangell  is a timber                                                               
and fishing town,  and therefore the residents  are accustomed to                                                               
those industries.  Furthermore, she  emphasized that the land CBW                                                               
receives will  be used in  a way to further  economic development                                                               
for the borough.  Representative  P. Wilson expressed the need to                                                               
avoid  penalizing Wrangell  for the  lack of  state lands  in the                                                               
area.                                                                                                                           
                                                                                                                                
[HB 273 was held over.]                                                                                                         

Document Name Date/Time Subjects
HB 273 - Borough Entitlement Statistics.PDF HCRA 2/11/2010 8:00:00 AM
HCRA 2/25/2010 8:00:00 AM
HB 273
HB 273 - Cert. of Entitlement LTR.PDF HCRA 2/11/2010 8:00:00 AM
HCRA 2/25/2010 8:00:00 AM
HB 273
HB 273 - Municipal Selection Eligible Map.pdf HCRA 2/11/2010 8:00:00 AM
HCRA 2/25/2010 8:00:00 AM
HB 273
HB 273 - Municipal Selection Land Status Map.pdf HCRA 2/11/2010 8:00:00 AM
HCRA 2/25/2010 8:00:00 AM
HB 273
HB 273 - Sponsor Statement.PDF HCRA 2/11/2010 8:00:00 AM
HCRA 2/25/2010 8:00:00 AM
HB 273
HB 273 - Yakatat Borough Acreage Press Release.PDF HCRA 2/11/2010 8:00:00 AM
HCRA 2/25/2010 8:00:00 AM
HB 273
HB 273-DNR-TAD-02-08-2010.pdf HCRA 2/11/2010 8:00:00 AM
HCRA 2/25/2010 8:00:00 AM
HB 273