Legislature(2017 - 2018)BARNES 124
02/07/2017 08:00 AM COMMUNITY & REGIONAL AFFAIRS
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HB 85-MUNICIPAL LAND SELECTIONS: PETERSBURG [Contains discussion of SB 28] 9:01:57 AM CO-CHAIR PARISH announced that the final order of business would be HOUSE BILL NO. 85, "An Act relating to the general grant land entitlement for the Petersburg Borough; and providing for an effective date." REPRESENTATIVE RAUSCHER began a motion at the chair's request to bring HB 85 before the committee; [however, the motion was subsequently deemed unnecessary]. 9:02:25 AM The committee took an at-ease from 9:02 a.m. to 9:03 a.m. 9:03:19 AM CO-CHAIR PARISH [confirmed that before the committee was HB 85]. 9:03:38 AM JONATHAN KREISS-TOMKINS, Alaska State Legislature, as prime sponsor, introduced HB 85. He stated that HB 85 has a companion bill in the Senate. He noted that as part of the process that made Petersburg a borough, it was allowed to select land. Because of idiosyncrasies with the land base from which the borough is allowed to select, there is a minimal amount of acreage available. He explained that HB 85 would recalibrate the acreage to the historic norm that newly formed boroughs in the past in Alaska have been able to select. Representative Kreiss-Tomkins noted that he and Representative Talerico had held a conversation about the issue the day before and learned a lot about the process. He deferred to his staff to present the bill in more detail. 9:05:46 AM BARETT WILBER, Staff, Representative Jonathan Kreiss-Tomkins, Alaska State Legislature, presented HB 85 on behalf of Representative Kreiss-Tomkins, prime sponsor. She conveyed the information from the sponsor's statement, which read as follows [original punctuation provided]: HB 85 would allow the Petersburg Borough to select 14,666 acres of land as part of their land entitlement for incorporating into a borough. The City of Petersburg dissolved in 2013 to become the Petersburg Borough. Under AS 29.65.050, the Borough is entitled to claim a land grant from the state: a percentage of the vacant, unappropriated, unreserved land (as calculated by the Alaska Department of Natural Resources), minus land which belonged to the old city and State land conveyed to the University of Alaska, Alaska Mental Health Trust, Southeast State Forest, and private ownership. This leaves Petersburg with only 1,438.53 acres, or .08% of their actual Borough land area, which is well below the average of other municipalities and is insufficient to meet the borough's development, economic, cultural, and resource needs. Boroughs in Alaska typically request additional land from the legislature by amending AS 29.65.010 on a case by case basis, providing a specific date and amount of land for a newly incorporated municipality. Fourteen such land grants have been given to boroughs across the state since 1990. Petersburg calculated the average amount of land granted through legislation to new boroughs in proportion to their size: on average, they've received .79% of their total land base from the state. This bill would give Petersburg a reasonable and proportionate amount based on their size: 14,666 acres. MS. WILBUR noted that new boroughs have gone through this process 14 times wherein they have edited land entitlement grants through statute, and that is what Petersburg is attempting to do right now. 9:07:27 AM REPRESENTATIVE SADDLER asked the bill sponsor to cite the statute that pertains to the awarding of land to a newly formed borough. 9:07:35 AM REPRESENTATIVE KREISS-TOMKINS deferred to Ms. Wilbur or the Department of Natural Resources. 9:08:27 AM MARTY PARSONS, Deputy Director, Central Office, Division of Mining, Land and Water, Department of Natural Resources (DNR), told Representative Saddler that the particular statute he sought is AS 29.65.030, which established that 10 percent of vacant, unappropriated, unreserved land be available to a newly formed municipality or borough to select to create its land entitlement. 9:09:02 AM REPRESENTATIVE SADDLER, regarding "historic norms" and the use of term "traditionally," asked if those standards appear in statute or "any place else" or is just "a post-facto construction." REPRESENTATIVE KREISS-TOMKINS mentioned past legislation of former Representative Peggy Wilson from Wrangell, Alaska, which he offered his understanding calibrated the 7.8 percentage of land that a borough or municipality could select. He expressed that limiting a small percentage of land to boroughs may be taking away the incentive of local governments to create, because "they wouldn't have a land base from which to work and offer the local control that helps them function." REPRESENTATIVE SADDLER asked if - since there have been 14 formed municipalities or boroughs that considered it necessary to get an additional land selection - the bill sponsor had ever considered changing the formula to avoid the problem of having the formulaic allocation of land be di minimus. REPRESENTATIVE KREISS-TOMKINS answered that he generally finds an appeal to changing a system to make it more functional rather than addressing a series of stopgap solutions; at the same time he indicated he may proceed cautiously. He suggested perhaps "that could be pursued in parallel." He stated that he was giving his best effort to accelerate the Petersburg issue, but did not think it should be exclusive of a more holistic solution. He expressed willingness to confer with the members of the committee toward that end. REPRESENTATIVE SADDLER indicated there was a request from the Nikiski Borough in the works, as well as "other things." 9:12:57 AM REPRESENTATIVE SADDLER asked what the Borough of Petersburg would do with land that would help support its economy. 9:13:26 AM REPRESENTATIVE KREISS-TOMKINS deferred to representatives of the Borough of Petersburg. Notwithstanding that, he proffered that the community has a keen interest in developing value-added industry with seafood and marine services. He said there is a high cost of living, partly because of a limited land base, which makes it difficult to develop new housing. 9:14:44 AM REPRESENTATIVE RAUSCHER asked, "This went through Boundary Commission, right?" REPRESENTATIVE KREISS-TOMKINS offered his belief that the formation of the Petersburg Borough did go through the local boundary commission. 9:15:03 AM CO-CHAIR PARISH opened public testimony on HB 85. 9:15:21 AM MARK JENSEN, Mayor, related that the Petersburg Borough Assembly had passed Resolution 2017-02, included in the committee packet, which supports HB 85 and its companion bill, SB 28. He confirmed that the residents of Petersburg had gone through the local boundary commission process to form a borough in 2013. He said the borough is asking for the legislature's support to help Petersburg acquire up to 14,666 extra acres within its boundaries. 9:16:51 AM REPRESENTATIVE SADDLER offered his understanding that about 96 percent of the land encompassed by the borough's boundaries is [Tongass] National Forest land. MAYOR JENSEN confirmed that is correct. REPRESENTATIVE SADDLER stated that in general the large area of the Tongass National Forest puts a cap on private development throughout Southeast Alaska. He asked Mayor Jensen, "So, to further push the point, if there were a little bit less national forest in your borough areas, would that open up land for development that could benefit the people of the Petersburg region?" MAYOR JENSEN answered that he imagines so. 9:18:32 AM LIZ CABRERA, Director, Community Development, Petersburg City & Borough, read her written testimony, which read as follows [original punctuation provided, with some formatting changes]: HB 85 increases the general land entitlement of Alaska's newest borough, Petersburg, to be comparable to the land entitlement received by all other boroughs in the state. An amount equal to approximately .79% of a borough's land mass, which in Petersburg's case is 14,666 acres. For those of you who are unfamiliar with our community, the Petersburg Borough is located in central Southeast Alaska and encompasses an area of 3,800 square miles of land and sea. The borough's population center is located on the northern tip of Mitkof Island, which is home to a diverse and prolific commercial fishing fleet and three major seafood processing facilities. In 2013, the residents of Petersburg voted to form a borough for a number of reasons, including having a greater say on land use decisions in our surrounding area, having an opportunity to increase our municipal land base, and many also felt it was important for all area residents to support our school system through local taxes. About 12 months after borough formation, Petersburg received a general land grant entitlement certification from the state indicating we were entitled to 1,896 acres under AS 29.65.010. However, this amount was reduced by the 457.47 acres already received by the City of Petersburg, even though certain tracts of the City's 457.47 acres is restricted from development and only available for public, charitable, or recreational use. After deducting the 457.47 acres, the Borough's land entitlement was 1,438.53 acres. An area roughly 1/3rd the size of the Anchorage International Airport. In making this calculation, DNR uses a statutory formula a municipality is entitled to 10% of VUU land within its boundaries. The lands available for selection are designated as VUU or "vacant, unappropriated and unreserved" land by the State of Alaska. These lands are either "unclassified" or classified as "agricultural, grazing, materials, public recreation, settlement, and resource management" but for the most part no development has occurred on any of the VUU lands. You may wonder why we received such a small land entitlement to begin with. The majority of land within the borough, over 96%, is managed by the federal government as the Tongass National Forest. Of the non-federal lands within the borough, 1.73% is owned by the Goldbelt Corporation, 1.34% by the State of Alaska, and .4% by the Alaska Mental Health Trust and University of Alaska. Only .3% is in private ownership and a mere .04% is owned by the municipality. When DNR applied the land entitlement formula to the Petersburg Borough, only a very small amount of land remained in VUU status. As we began to evaluate our potential selection, we realized that our entitlement wasn't adequate for what we were hoping to accomplish and many other boroughs also received small land entitlements initially and then were able to increase these through the legislature. You'll note in HB 85 that Petersburg is listed as the 16th borough, so 15 boroughs out of 18 boroughs have received an increase in their entitlement through the legislature. The most recent example was in 2010 when both Wrangell and Haines received additional acreage. 9:22:45 AM MS. CABRERA continued reading from her written testimony, the remainder of which read as follows [original punctuation provided, with some formatting changes]: Why is this important to Petersburg specifically? As I mentioned previously, just over 96% of our land base is federally managed and of our non-federal lands the major landholder are Goldbelt Corporation and the State of Alaska. In short, while the borough itself is relatively large, the majority of land is not and will never be included in the local tax base1 and most is not available to generate economic return for our residents or the state. The Petersburg Borough would like the opportunity to move some these lands into private ownership and add them to our tax base as residential or commercial developments. We would like the opportunity to secure new sources of rock for construction and maintenance of our roads and other projects. And, we'd like the opportunity to use some of our land to address the requirements of the Army Corps of Engineers compensatory mitigation rule, which effects nearly every new development project within the borough, by establishing a community wetlands mitigation bank. This would directly benefit residents by expediting the process of obtaining a wetlands permit for new development projects, including projects as small as single-family residences. 1,400 acres simply does not provide sufficient developable land to support these goals. In our discussions with the Department of Natural Resources, they explained that the agency generally does not voice support for this type of legislation, but neither does the agency oppose Petersburg's request. We provided a general outline of the lands we would select under HB 85 and DNR did not express any concerns about these potential selections. Lastly, the members of this committee know better than most that these are difficult times. In our own small way, we, in Petersburg, want to be part of the solution, not a casualty of crisis. An increased land base is a key component to the long-term sustainability of our municipality. 9:24:51 AM REPRESENTATIVE SADDLER asked what the characteristics of land Petersburg hopes to acquire are and how the extra land will help the community. MS. CABRERA related that the Department of Natural Resources (DNR) had already provided a "pool" of land that would be acceptable, and it ranges from muskeg in the middle of an island with no road access or utilities, to the top of a mountain, and to some waterfront property. She explained the land selected by DNR is not contiguous. She indicated that the Petersburg Borough put together an ad hoc land selection committee, which included residents, some of which are licensed land surveyors. The committee set criteria by which it then figured out which lands would be suited for what purposes. She said, for example, some land is suitable for settlement, while some has a rock quarry on it that would be useful, because Petersburg is almost out of its rock source. She said the committee is trying to identify where it might have an entire watershed on which it could create a "wetlands mitigation bank." She added that hopefully that would be land for which there is no other use. 9:27:24 AM REPRESENTATIVE WESTLAKE asked, "How much acreage does the state have down there for granting your wish?" He asserted that Alaskans absolutely believe in home rule and creating their own destinies. He queried, "By everything said and done, will we [emphasis on 'we'] have land (indisc.) state of Alaska?" MS. CABRERA responded that while she does not know the entire amount the state has, she does know that there are 18,000 acres in vacant, unappropriated, and unreserved (VUU) status. She said that leaves out a large acreage in the center of Petersburg's main population area, which includes the airport and any developed facilities. She explained, "So, all of the things that the state has used for a state function have already been developed and set aside. And so, all we're looking at is a portion of that land that they haven't used anything for." She said she could get the numbers for the committee. 9:28:56 AM REPRESENTATIVE TALERICO asked if it would be a fair assessment to describe Petersburg as a community with a desire and drive to be self-sufficient. MS. CABRERA answered yes. 9:29:31 AM CO-CHAIR PARISH, after ascertaining that there was no one else who wished to testify, closed public testimony on HB 85. 9:29:59 AM REPRESENTATIVE SADDLER said the state apparently has a system in which the formula under statute does not give sufficient land to local boroughs, thus there is an ad hoc selection process by modifying AS 29.65.030. He asked Mr. Parsons, "After all the adjustments are made, what have we come up with? About what percentage of the VUU land do boroughs actually have now - obviously with an eye towards looking at possibly modifying the formula to reflect the ... end state?" 9:30:52 AM MR. PARSONS answered that AS 29.65.010 provides a list of communities and boroughs in the state that have received entitlement. He said it is important to remember that 12 of those are under that statute as part of an historic memorialization of pre-1978 land selections, and those were "approximately 10 percent of the VUU land within the borough." He indicated that the Aleutians East Borough reduced its entitlement, because it did not feel comfortable managing the vast amount of VUU land. Mr. Parsons noted that recently the City & Borough of Wrangell and the City & Borough of Haines requested an additional entitlement above and beyond the 10 percent VUU land, but primarily the amount is calculated under AS 29.65.030, which is 10 percent of the VUU land within the borough. REPRESENTATIVE SADDLER asked for confirmation that Mr. Parsons was saying that historical boundaries are 10 percent, but Wrangell and Haines - and now Petersburg - have requested more. MR. PARSONS confirmed that 10 percent is the historical average. He added, "Regardless of how many acres are contained within the boundaries of the borough, it's only those state lands that are considered VUU that are used in the calculation." REPRESENTATIVE SADDLER ventured that Petersburg is a special case because of the preponderance of land that is locked up in the Tongass National Forest. MR. PARSONS advised that Haines received an additional amount [of land] to bring its land to 21 percent of the VUU land within its borough; Wrangell negotiated for 42 percent of the VUU land within its borough. He stated that the Wrangell Borough also contains a large percentage of the Tongass National Forest. 9:33:53 AM REPRESENTATIVE RAUSCHER asked if passage of HB 85 would open the door for "past municipalities to ask for a little more." 9:34:16 AM CO-CHAIR PARISH directed Representative Rauscher's question to Mr. Parsons and offered his understanding that Representative Rauscher was asking if the proposed legislation would open the door for municipalities that had already been granted land allotments to ask for more. 9:34:26 AM MR. PARSONS answered that although he could not predict what would happen, when Wrangell asked for more land, Haines followed suit; therefore, "it would not be outside the realm of possibility that other boroughs would ... decide that they would like to increase their entitlement through this process." 9:35:27 AM REPRESENTATIVE KREISS-TOMKINS suggested that some history and precedent might inform the question. He offered his understanding that in the past when boroughs were formed, they got their allotment and tried to "take care of it then and there," and he is not aware of previously formed boroughs coming back many years after the fact asking for more. He advised that the Petersburg Borough just formed, so this is all part of the borough creation process. He ventured that the Denali Borough had a similar proportion of land during its process; therefore, it may ask for more, "because in proportional terms, it's all quite equitable." 9:36:35 AM REPRESENTATIVE TALERICO added that the Denali Borough, with just under 2,000 residents, was given a land grant of 44,000 acres. He continued as follows: I think probably the real difficulty would be the borough approaching the state and passing the red-face test to ask for ... more land. The limit here, I think, in Petersburg, is all about their economic development, being sufficient. ... If you look at the grants that most of the other municipalities have been given, it's been reasonably substantial piece[s] of land. ... I know that the Denali Borough was certainly aware of when the formation of the Wrangell and Haines [Boroughs] came about, but I don't remember any discussions of approaching the state to try and acquire more. REPRESENTATIVE TALERICO quipped that his borough over-selected in hopes that the state would not notice, but the state stuck to its "original acreage." He said he thinks most of the organized boroughs have a substantial land grant now. He added, "I don't believe all of the selections have even been done with the larger municipalities; I think several of them still have land to select." 9:38:08 AM REPRESENTATIVE SADDLER asked the bill sponsor what drove the Petersburg formation from the City of Petersburg to the City & Borough of Petersburg. REPRESENTATIVE KREISS-TOMKINS answered that there had been a spirited discussion in Petersburg. He noted there were areas on Mitkof Island that were receiving various municipal services but were not part of the City of Petersburg. The current request from Petersburg is an attempt to create a more coherent means by which to deliver local services, including fire and school. He said there may have been other motivation, as well. He said he thinks the local boundary commission process was both engaging and complex, and there were interactions with the City & Borough of Juneau related to jurisdiction. REPRESENTATIVE SADDLER asked if the additional acreage being requested under HB 85 would be sufficient for the City & Borough of Petersburg to adequately provide fire, road, and educational services. REPRESENTATIVE KREISS-TOMKINS answered yes. He commented that many communities are acknowledging there could be less state support in the coming years and are moving toward increased self-sufficiency. REPRESENTATIVE SADDLER offered that he did not know whether state educational support had, in fact, been reduced in Petersburg. REPRESENTATIVE KREISS-TOMKINS responded that he believed that statement is accurate. 9:41:45 AM REPRESENTATIVE SADDLER asked whether DNR had ever considered changing the formula under which land is made available, such as increasing the percentage of VUU land, to avoid the "circle back to pick up some spare acres." 9:42:10 AM MR. PARSONS answered that because the formula is in statute, it would take legislative amendment of statute to modify the percentage of VUU land from which boroughs can select. REPRESENTATIVE SADDLER said that is true, but pointed out that the governor does request bills from time to time. 9:42:40 AM CO-CHAIR PARISH noted that the proposed legislation had another committee of referral, the House Finance Committee. 9:42:59 AM CO-CHAIR FANSLER moved to report HB 85 out of committee with individual recommendations and the accompanying fiscal notes. 9:43:25 AM REPRESENTATIVE SADDLER objected for purposes of discussion. He indicated there had been prior discussion about moving bills out of committee after only a single hearing, and at that time [one of the committee co-chairs] had said that if a bill had been heard by a previous committee, then "that might mitigate towards ... passing out a bill after just one hearing." He offered his understanding that the House Community and Regional Affairs Standing Committee was the first committee of referral for HB 85, and he questioned, "Is that consistent with your policy?" 9:43:50 AM CO-CHAIR PARISH answered, "The policy, as clarified by my co- chair, is going to be pretty case by case. In such cases as the bill only has one committee of referral, then I think it's very reasonable to hold it over for at least two hearings. In the event that it has additional committees of referral and there'll be additional occasion for public testimony, I see no reason to hold it over." 9:44:18 AM REPRESENTATIVE SADDLER removed his objection. There being no further objection, HB 85 was reported out of the House Community and Regional Affairs Standing Committee.