Legislature(2017 - 2018)SENATE FINANCE 532

04/10/2017 09:00 AM FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ SB 107 ALASKA CAPITAL INCOME FUND TELECONFERENCED
Heard & Held
+ SB 88 AK MENTAL HEALTH TRUST LAND EXCHANGE TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
SENATE BILL NO. 88                                                                                                            
                                                                                                                                
     "An Act  authorizing a land  exchange with  the federal                                                                    
     government in which certain  Alaska mental health trust                                                                    
     land is exchanged for certain  national forest land and                                                                    
     relating to  the costs of  the exchange;  and providing                                                                    
     for an effective date."                                                                                                    
                                                                                                                                
9:22:13 AM                                                                                                                    
                                                                                                                                
SENATOR BERT STEDMAN, SPONSOR, introduced the bill.                                                                             
                                                                                                                                
Senator Stedman  discussed the  Sectional Analysis  (copy on                                                                    
file):                                                                                                                          
                                                                                                                                
      Section 1. Describes the purpose of the legislation:                                                                      
                                                                                                                                
          1. Authorize the  Department of Natural Resources,                                                                    
          who  is  acting on  behalf  of  the Alaska  Mental                                                                    
          Health Trust Authority,  to exchange mental health                                                                    
          trust  land  with land  of  equal  value from  the                                                                    
          United States Forest Service;                                                                                         
                                                                                                                                
          2.   Assist  the   Alaska   Mental  Health   Trust                                                                    
          Authority in achieving its goals,  one of which is                                                                    
          to increase trust revenue;                                                                                            
                                                                                                                                
          3. Contribute to the  economic health of Southeast                                                                    
          Alaskan communities; and,                                                                                             
                                                                                                                                
          4.  Preserve  land   adjacent  to  communities  of                                                                    
          Ketchikan,  Petersburg,  Wrangell, Sitka,  Juneau,                                                                    
          and Meyers Chuck                                                                                                      
                                                                                                                                
     Section  2.  Details the  process  of  the exchange  in                                                                    
     which  parties are  subject to  the  provisions of  the                                                                    
     Alaska Mental  Health Trust Land  Exchange Act  of 2017                                                                    
     instead of  AS 38.05.801, AS  38.50, or any  other law;                                                                    
     details  the roles  necessary for  each  party and  the                                                                    
     costs assumed by each party.                                                                                               
                                                                                                                                
     Section 3. Details the  affected lands of approximately                                                                    
     18,258   acres  of   mental  health   trust  land   and                                                                    
     approximately  20,580  acres  of United  States  Forest                                                                    
     Service land, as well as defines the maps used.                                                                            
                                                                                                                                
     Section  4. Provides  a timeline  for the  exchange and                                                                    
     prioritizes  the  order  in which  lands  described  in                                                                    
     Section 3 will be exchanged.                                                                                               
                                                                                                                                
     Section 5.  Provides a process in  which the Department                                                                    
     of Natural  Resources and  the United  States Secretary                                                                    
     of Agriculture will equalize the  exchange if there are                                                                    
     differences in total value after the final appraisal.                                                                      
                                                                                                                                
     Section 6. Provides the  circumstances and actions that                                                                    
     need to occur to allow this Act to be made effective.                                                                      
                                                                                                                                
     Section 7. Provides an effective date.                                                                                     
                                                                                                                                
9:31:49 AM                                                                                                                    
                                                                                                                                
Co-Chair  Hoffman   queried  reconciliation  of   the  acres                                                                    
described  in the  testimony versus  the written  acreage in                                                                    
Section 3.                                                                                                                      
                                                                                                                                
9:32:10 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:33:04 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
9:33:15 AM                                                                                                                    
                                                                                                                                
Senator Stedman  remarked that the numbers  in the sectional                                                                    
analysis  were slightly  inaccurate,  because  there was  an                                                                    
exclusion on  the federal  level of an  island that  was not                                                                    
included in  the exchange.  He stated  that the  language in                                                                    
the bill was correct.                                                                                                           
                                                                                                                                
Co-Chair MacKinnon looked  at page 3 of the  bill, the acres                                                                    
that may be exchanged for federal land was 18,258.                                                                              
                                                                                                                                
Vice-Chair Bishop  queried the diameter of  the 200-year old                                                                    
second  growth   trees.  Senator  Stedman  replied   with  a                                                                    
gesture.  He  announced  that it  was  a  valuable  standing                                                                    
second growth.                                                                                                                  
                                                                                                                                
Vice-Chair Bishop remarked that the  "cut line" may not even                                                                    
be noticeable. Senator Stedman agreed.                                                                                          
                                                                                                                                
Senator  Micciche wondered  if  there was  a compromise  for                                                                    
community  growth  by  trading   the  land  to  the  federal                                                                    
government. Senator  Stedman replied that the  vast majority                                                                    
of  the land  in the  exchange was  subject to  the platting                                                                    
authority of  the boroughs.  The communities  were concerned                                                                    
about  their ability  to expand  for future  generations. He                                                                    
stated that the communities supported the land exchange.                                                                        
                                                                                                                                
9:39:18 AM                                                                                                                    
                                                                                                                                
Senator Olson queried the number  of corporations and native                                                                    
allotments  were   affected  by  the   legislation.  Senator                                                                    
Stedman replied that  he was not aware of any  impact on the                                                                    
allotments   or   lack   of  support   from   the   regional                                                                    
corporations. He  felt that the  Alaska Mental  Health Trust                                                                    
Authority (AMHTA) may provide further information.                                                                              
                                                                                                                                
Co-Chair MacKinnon looked  at page 3, line 7,  and queried a                                                                    
definition of  "KARSTA Areas." Senator Stedman  replied that                                                                    
definition protected the below ground fish streams.                                                                             
                                                                                                                                
Co-Chair MacKinnon noted that the  total acreage did not add                                                                    
up  accurately. She  also looked  at  page 6,  line 13,  and                                                                    
read,  "subject to  Section 5  of  this act,  if the  United                                                                    
States Secretary of Agriculture  has conveyed the parcels of                                                                    
federal  land  described  in Section  13(b)  to  the  Alaska                                                                    
Mental  Health Trust  Authority, the  Department of  Natural                                                                    
Resources shall  convey the parcels of  trust land described                                                                    
in Section 3."  She remarked that the totals did  not add up                                                                    
to the  shifted acreage.  She noted  that the  current AMHTA                                                                    
land to be  traded was 15,674 acres, but  noted that Section                                                                    
13(b) totaled 18,180  acres. She queried the  reason for the                                                                    
difference. She  wondered why the  acreage was  not covered.                                                                    
Senator Stedman deferred to AMHTA.                                                                                              
                                                                                                                                
Co-Chair MacKinnon  remarked that there was  a difference in                                                                    
the  land  sizes.  Senator  Stedman   replied  that  it  was                                                                    
important to recheck the land sizes.                                                                                            
                                                                                                                                
9:46:06 AM                                                                                                                    
                                                                                                                                
WYN  MENEFFE, DEPUTY  DIRECTOR, LAND  OFFICE, ALASKA  MENTAL                                                                    
HEALTH  TRUST AUTHORITY,  discussed  the presentation,  "The                                                                    
Alaska Mental Health Trust" (copy on file).                                                                                     
                                                                                                                                
Mr. Meneffe looked at slide 1:                                                                                                  
                                                                                                                                
     •A  perpetual trust  using its  resources  to ensure  a                                                                    
     comprehensive  integrated  mental   health  program  in                                                                    
     Alaska.                                                                                                                    
                                                                                                                                
     •Funding programs  that serve Alaska's  most vulnerable                                                                    
     populations for the past two decades.                                                                                      
                                                                                                                                
     •Providing     programs    for     mental    illnesses,                                                                    
     developmental  disabilities,  Alzheimer's  disease  and                                                                    
     related   dementias,  traumatic   brain  injuries   and                                                                    
     substance abuse disorders.                                                                                                 
                                                                                                                                
Mr. Meneffe highlighted slide 2, "The Trust Land Office":                                                                       
                                                                                                                                
     Manages the Trust owned land  and resources to generate                                                                    
     revenue, used by the Trust  to improve the lives of the                                                                    
     beneficiaries.                                                                                                             
                                                                                                                                
     Our  Mission:  to  protect and  enhance  the  value  of                                                                    
     Alaska Mental Health Trust lands.                                                                                          
                                                                                                                                
Mr.   Meneffe   addressed   slide   3,   "Trust   Management                                                                    
Principles":                                                                                                                    
                                                                                                                                
     1.  Maximize long-term  revenue  and productivity  from                                                                    
     trust land                                                                                                                 
                                                                                                                                
     2. Protect corpus                                                                                                          
                                                                                                                                
     3.  Encourage diverse  revenue-producing uses  of trust                                                                    
     land                                                                                                                       
                                                                                                                                
     4. Manage  trust land  prudently, efficiently  and with                                                                    
     accountability to the trust and its beneficiaries                                                                          
                                                                                                                                
Mr.  Meneffe  discussed  slide 4,  "Land  Distribution."  He                                                                    
remarked that  the trust was  not disposing all  its assets.                                                                    
He  stressed  that  there  was   still  land  available  for                                                                    
development.                                                                                                                    
                                                                                                                                
9:50:24 AM                                                                                                                    
                                                                                                                                
Mr. Meneffe looked at slide 5, "Land Exchange Details":                                                                         
                                                                                                                                
     17,341   acres  of   Trust   lands   adjacent  to   the                                                                    
     communities of  Ketchikan, Wrangell,  Petersburg, Sitka                                                                    
     and Juneau would be transferred to the USFS                                                                                
                                                                                                                                
     20,580 acres of  remote land on Prince  of Wales Island                                                                    
     and Shelter Cove would be  transferred to the Trust for                                                                    
     development and timber harvest                                                                                             
                                                                                                                                
     Equal value exchange                                                                                                       
                                                                                                                                
    Phase I complete in 1 year and Phase II in 2 years                                                                          
                                                                                                                                
Mr. Meneffe displayed  slide 6, "Trust Land  To Be Exchanged                                                                    
in   Southeast  Alaska;   National   Service   Land  to   be                                                                    
Exchanged." He  outlined the details  of the map.  The areas                                                                    
were  removed  from  the communities,  and  eliminated  some                                                                    
concerns about logging the lands.                                                                                               
                                                                                                                                
Mr. Meneffe highlighted slide 7, "Land Exchange Benefits":                                                                      
                                                                                                                                
     Consolidates Trust land ownership                                                                                          
                                                                                                                                
     Replaces lands adjacent to communities with lands that                                                                     
     are more conducive to revenue production such as from                                                                      
     timber harvest                                                                                                             
                                                                                                                                
     Protects timber and tourism industries                                                                                     
                                                                                                                                
     Protects jobs and economies in SE Alaska                                                                                   
                                                                                                                                
     Protects viewsheds, watersheds, and certain old growth                                                                     
     timber stands                                                                                                              
                                                                                                                                
9:55:15 AM                                                                                                                    
                                                                                                                                
Mr. Meneffe addressed slide 8, "Why Now?":                                                                                      
                                                                                                                                
     Result of 10 years of planning and public input                                                                            
                                                                                                                                
     Extensive negotiations with USFS                                                                                           
                                                                                                                                
     Addressing concerns from conservation groups and other                                                                     
     interests                                                                                                                  
                                                                                                                                
     USFS timber supplies have dwindled                                                                                         
                                                                                                                                
     Timber industry, a key revenue generator for the                                                                           
     Trust, is at risk because of low timber supply                                                                             
                                                                                                                                
Vice-Chair Bishop  looked at slide  7, and remarked  that it                                                                    
was important to maintain a  workforce. He stressed that the                                                                    
timber industry was a year-round industry.                                                                                      
                                                                                                                                
Co-Chair Hoffman queried  the status of all  the native land                                                                    
selections  in Southeast  Alaska. Mr.  Meneffe replied  that                                                                    
the bill did not affect the native corporation lands.                                                                           
                                                                                                                                
Co-Chair   Hoffman  wondered   whether   there  were   still                                                                    
negotiations. Mr.  Meneffe responded there were  some native                                                                    
allotments that  were unresolved,  but there were  no native                                                                    
allotments in the exchange.                                                                                                     
                                                                                                                                
Mr.  Meneffe  discussed  slide 9,  "USFS  Forest  Plan."  He                                                                    
stated that the map was  a representation of the U.S. Forest                                                                    
Service   Dilemma.  He   remarked  that   there  were   many                                                                    
designations that prevented timber harvest.                                                                                     
                                                                                                                                
Mr. Meneffe addressed slide 10, "Federal Legislation":                                                                          
                                                                                                                                
     •S. 131 introduced by Senator Murkowski and Sullivan                                                                       
     in January 2017                                                                                                            
                                                                                                                                
     •HR. 513 introduced by Representative Young in January                                                                     
     2017                                                                                                                       
                                                                                                                                
     •Language compatible with SB 88 and HB 155                                                                                 
                                                                                                                                
     •Directs the USFS to complete the exchange                                                                                 
                                                                                                                                
10:00:55 AM                                                                                                                   
                                                                                                                                
Mr. Meneffe remarked that there  were many supporters of the                                                                    
bill. He stressed  that the exchange was  a positive revenue                                                                    
generating exchange.  The provision was timely,  because the                                                                    
timber industry needed the timber immediately.                                                                                  
                                                                                                                                
Co-Chair  Hoffman   queried  the  positive  impact   of  the                                                                    
exchange  from  the  U.S.   Forest  Service  viewpoint.  Mr.                                                                    
Meneffe  replied  that  the  U.S.  Forest  Service  saw  the                                                                    
legislation  as "buffering  their  landholdings." He  stated                                                                    
that  they did  not like  to be  adjacent to  private lands,                                                                    
because  of trespassing  issues. He  remarked that  the U.S.                                                                    
Forest  Service  wanted   land  that  provided  recreational                                                                    
opportunities. He  stated that  the U.S. Forest  Service had                                                                    
become  a recreation  management organization,  more than  a                                                                    
timber agency.                                                                                                                  
                                                                                                                                
Co-Chair MacKinnon OPENED public testimony.                                                                                     
                                                                                                                                
10:03:35 AM                                                                                                                   
                                                                                                                                
JON BOLLING,  CITY ADMINISTRATOR, CITY OF  CRAIG, CRAIG (via                                                                    
teleconference), spoke in support of the bill.                                                                                  
                                                                                                                                
10:07:02 AM                                                                                                                   
                                                                                                                                
DAVID   LANDIS,   MAYOR   OF   KETCHIKAN,   KETCHIKAN   (via                                                                    
teleconference), testified in support of the legislation.                                                                       
                                                                                                                                
10:09:27 AM                                                                                                                   
                                                                                                                                
OWEN GRAHAM, EXECUTIVE  DIRECTOR, ALASKA FOREST ASSOCIATION,                                                                    
KETCHIKAN  (via teleconference),  spoke  in  support of  the                                                                    
legislation.                                                                                                                    
                                                                                                                                
Co-Chair MacKinnon CLOSED public testimony.                                                                                     
                                                                                                                                
10:12:03 AM                                                                                                                   
                                                                                                                                
Vice-Chair Bishop discussed the fiscal note.                                                                                    
                                                                                                                                
Co-Chair MacKinnon  announced that  amendments were  due the                                                                    
following day  by 5pm. She  discussed the  afternoon meeting                                                                    
agenda.                                                                                                                         
                                                                                                                                
SB  88  was   HEARD  and  HELD  in   committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
Senator Dunleavy  shared that  there was  a concern  about a                                                                    
line item  in the budget  that there  be a mandate  to close                                                                    
two pioneer homes. He wanted clarification on that issue.                                                                       
                                                                                                                                
10:14:48 AM                                                                                                                   
AT EASE                                                                                                                         
                                                                                                                                
10:15:53 AM                                                                                                                   
RECONVENED                                                                                                                      
                                                                                                                                
In response  to a  question from Senator  Dunleavy, Co-Chair                                                                    
MacKinnon  stated that  the  budget  identified the  largest                                                                    
areas  where UGF  were utilized  in departments.  She shared                                                                    
that the Pioneer  Home had large UGF  spending. She remarked                                                                    
that   there   were   also   two   sections   that   allowed                                                                    
administrations  to move  those  allocations  for cuts.  She                                                                    
stated that it was up  to the administration to send notice,                                                                    
but that there was continual discussion on the budget.                                                                          
                                                                                                                                
Senator Dunleavy  surmised that  the budget  had reductions,                                                                    
but did not specifically  target the pioneer homes. Co-Chair                                                                    
MacKinnon  replied  that she  did  not  draft the  operating                                                                    
budget.  She shared  that she  had been  told that,  "if the                                                                    
department  chooses to  take the  entire the  reduction from                                                                    
the Pioneer Home, that was the choice of the department."                                                                       
                                                                                                                                

Document Name Date/Time Subjects
SB 107 Sponsor Statement version A 04.05.2017.pdf SFIN 4/10/2017 9:00:00 AM
SB 107