Legislature(2003 - 2004)

03/24/2003 03:36 PM RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
      CSHB 139(RES)-CLOSING CERTAIN LAND TO MINERAL ENTRY                                                                   
                                                                                                                                
REPRESENTATIVE MIKE HAWKER, sponsor of HB 139, gave the                                                                         
following explanation of the measure.                                                                                           
                                                                                                                                
     This is  a rare  opportunity for me  to come before  you                                                                   
     and  ask  you  to  extend  for  10  years  a  moratorium                                                                   
     against   mining  claims.  It's   kind  of  an   unusual                                                                   
     circumstance.  HB  139 affects  a  certain area  in  the                                                                   
     upper  Girdwood Valley  - an  area  that is  immediately                                                                   
     adjacent to  the current Alyeska Ski  Resort development                                                                   
     area. This  land, 5,740 acres,  that exists  adjacent to                                                                   
     the  current ski  resort, was  closed to  - or a  mining                                                                   
     closure  was issued  on this  10 years  ago. That  order                                                                   
     has  expired. This  bill -  and  actually then,  through                                                                   
     the   process,  the   Administration  reauthorized   the                                                                   
     order.  We,  as the  legislative  body, need  to  affirm                                                                   
     that authorization  for it  to remain  in effect  and we                                                                   
     have  until  April 20  for  that  closure to  remain  in                                                                   
     effect.                                                                                                                    
                                                                                                                                
     This is  a 10-year  extension of  the moratorium  on new                                                                   
     mining claims  in this area,  specifically to  allow the                                                                   
     owners of  the property, which  is a combination  of the                                                                   
     State of  Alaska, the  Municipality of Anchorage  (MOA),                                                                   
     Heritage  Land Bank,  to issue  a  request for  proposal                                                                   
     and  seek for additional  major world  class alpine  ski                                                                   
     resort  development. The  area that  is subject to  this                                                                   
     closure  had been  mined in  the late  1800s. It  pretty                                                                   
     much ceased  being mined in the mid-20th  Century. There                                                                   
     were  additional claims  staked on  it in  the 1980s  by                                                                   
     the  Toohey (ph)  family,  who operates  commercial  and                                                                   
     recreational  mining  areas on  the  other side  of  the                                                                   
     valley  - also I  was going  to say on  the far side  of                                                                   
     this particular parcel.                                                                                                    
                                                                                                                                
     When  the mining  area was  first closed  10 years  ago,                                                                   
     there  were no  takings - I  have to  emphasize -  there                                                                   
     were  no takings  involved.  The claims  that folks  had                                                                   
     were  purchased  out,  fee  simple  purchases,  and  the                                                                   
     entire  community concurred  that the  best and  highest                                                                   
     development  for  this property  would  not  be for  the                                                                   
     commercial  mining but  would be  for recreation  resort                                                                   
     development.                                                                                                               
                                                                                                                                
     Your   bill    package   includes   the    spectrum   of                                                                   
     endorsements  we've   got  to  extend  this   closure  -                                                                   
     probably  the  most  important   to  us  is  the  Alaska                                                                   
     Miners'  Association   has  specifically   endorsed  the                                                                   
     continuation   of  this   closure,  then   all  of   the                                                                   
     community   interests   -    the   Girdwood   Board   of                                                                   
     Supervisors,   Heritage  Land   Bank,  Municipality   of                                                                   
     Anchorage,  the Department  of Natural Resources  (DNR),                                                                   
     as  well as  personal conversations  I've  had with  the                                                                   
     Toohey   family   of   not   only   non-objection,   but                                                                   
     endorsement  of this  project.  It's  important to  note                                                                   
     the  [Department  of] Natural  Resources  document  here                                                                   
     indicates  that the prospect  of commercial  development                                                                   
     in   this  area   is   minimal.  There's   very   little                                                                   
     [indisc.].  From the standpoint  of mining, it's  really                                                                   
     at  best  a  recreational  mining  area.   The  use  for                                                                   
     recreational  mining   is  not  incompatible   with  ski                                                                   
     resort  development.  It's  my understanding  that  that                                                                   
     use  would  not be  closed  by  this order.  This  order                                                                   
     again would  apply only  to commercial development  that                                                                   
     would  impede  the  ability  to  use  this  land  or  to                                                                   
     further lease  this land for  ski resort development.  I                                                                   
     would  be very happy  to entertain  your questions  but,                                                                   
     again, would  certainly hope  you'd be able  to continue                                                                   
     to  help us  move  this bill  along and  get  it to  the                                                                   
     Governor before April 20th.                                                                                                
                                                                                                                                
CHAIR OGAN  announced that  Senator Lincoln  joined the  committee                                                              
shortly after  the meeting  convened. He then  asked if  voting in                                                              
favor of this  bill would ruin his zero rating  with environmental                                                              
groups.                                                                                                                         
                                                                                                                                
REPRESENTATIVE  HAWKER  expressed  concern  that might  occur.  He                                                              
then  said this  is a  unique opportunity  in  which very  diverse                                                              
interests   have  agreed   that   the  highest,   best,   economic                                                              
development of this area is for recreational activities.                                                                        
                                                                                                                                
CHAIR OGAN asked who is anticipated to develop this area.                                                                       
                                                                                                                                
REPRESENTATIVE HAWKER  said he learned, in his  conversations with                                                              
the  current management  at Alyeska,  that  Alyeska is  interested                                                              
but  doubts it  would  be the  prevailing  party.  This bill  will                                                              
actually bring competition to that area.                                                                                        
                                                                                                                                
CHAIR OGAN asked  if a 10-year moratorium will  create a situation                                                              
in which  no development  will occur  for 9  years and  whether it                                                              
would be  more advantageous  to implement  a 5-year moratorium  to                                                              
encourage development sooner.                                                                                                   
                                                                                                                                
REPRESENTATIVE  HAWKER said  if  commercial  development does  not                                                              
begin  within 10  years, the  area would  automatically reopen  to                                                              
mining. There  has been some debate  on the time frame  and window                                                              
but,   considering   the   magnitude   of   the   projects   under                                                              
consideration and  current world economics, he believes  a 10-year                                                              
window is appropriate.                                                                                                          
                                                                                                                                
3:45 p.m.                                                                                                                     
                                                                                                                                
SENATOR LINCOLN read from the Alaska Miners' Association letter:                                                                
                                                                                                                                
     ...Our concern is that lands not be permanently closed                                                                     
     to mineral entry in the case that the ski area is not                                                                      
     developed.                                                                                                                 
                                                                                                                                
She then  said, according  to the  memorandum  dated March  6 from                                                              
Kathryn Kurtz, legislative  counsel, Section 4 of the  bill has an                                                              
effective date of  2012 and provides that the repeal  in Section 4                                                              
will  take effect  unless the  commissioner  of natural  resources                                                              
certifies on  or before April 2  that development of a  resort has                                                              
begun  in the closed  area. She  asked whether  a minor  structure                                                              
would fit that description.                                                                                                     
                                                                                                                                
REPRESENTATIVE HAWKER  said the reference  she made to  the letter                                                              
from the  Alaska Miners'  Association referenced  the first  draft                                                              
of this bill. It  required that an affirmative action  be taken by                                                              
the  administration of  the State  of Alaska  for the  area to  be                                                              
reopened  to  mining. The  Alaska  Miners'  Association  preferred                                                              
that  the reopening  happen automatically,  rather than  requiring                                                              
an  affirmative  action. The  bill  that  passed  the House  is  a                                                              
committee   substitute   (CS)   in  which   the   Alaska   Miners'                                                              
Association concern was accommodated.                                                                                           
                                                                                                                                
SENATOR LINCOLN  asked Representative Hawker to cite  that section                                                              
in CSHB 139(RES).                                                                                                               
                                                                                                                                
REPRESENTATIVE HAWKER  said that can be  found on page  3, lines 3                                                              
through   7.  He   explained  that   section  provides   important                                                              
parameters in  that someone  will not be  able to slap  together a                                                              
structure at  the last minute and  ask to keep the area  closed to                                                              
mining.   The   development   must   be  in   concert   with   the                                                              
comprehensive  land  use plans  developed  for  this area  by  the                                                              
state and MOA.                                                                                                                  
                                                                                                                                
SENATOR  LINCOLN  said she  does  not  interpret that  section  to                                                              
apply to  development of the  full resort  or to a  specific stage                                                              
of development.  It only adds  that the  development plan is  in a                                                              
land use  plan. She  asked if the  Alaska Miners' Association  has                                                              
endorsed CSHB 139(RES).                                                                                                         
                                                                                                                                
REPRESENTATIVE  HAWKER  said  it  has.  He  repeated  the  10-year                                                              
window  is for  the  beginning of  the  construction  of a  viable                                                              
resort as described.  It is not for completion of that facility.                                                                
                                                                                                                                
SENATOR  ELTON asked  if anyone  is  planning to  develop the  ski                                                              
resort at this time.                                                                                                            
                                                                                                                                
REPRESENTATIVE  HAWKER said no  one is "waiting  in the  wings" at                                                              
this time. He  said this is not special interest  legislation and,                                                              
in fact,  the current issue of  the Turnagain Times  features this                                                            
resort in  the Girdwood  2020 organization.  The article  says the                                                              
next step, following  the passage of CSHB 139(RES),  is a two-year                                                              
plan  to  update a  10-year  old  feasibility  study and  issue  a                                                              
formal request for proposals to develop the area.                                                                               
                                                                                                                                
SENATOR  ELTON  asked   if  the  only  reason   CSHB  139(RES)  is                                                              
necessary  is   to  preclude  staking   that  might  be   done  on                                                              
speculation.                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HAWKER  said that  is  correct; CSHB  139(RES)  is                                                              
preemptive.                                                                                                                     
                                                                                                                                
SENATOR  LINCOLN  asked if  the  subsurface  rights on  the  5,740                                                              
acres will remain with the state.                                                                                               
                                                                                                                                
REPRESENTATIVE HAWKER  deferred to  George Cannelos for  an answer                                                              
to that question.                                                                                                               
                                                                                                                                
CHAIR OGAN  said the  state will still  own the subsurface  rights                                                              
and could not lease those rights to anyone during that time.                                                                    
                                                                                                                                
MR. GEORGE  CANNELOS, Heritage  Land Bank,  MOA, said  he believes                                                              
the state  would maintain ownership  of the subsurface  rights but                                                              
deferred to DNR for more detailed information.                                                                                  
                                                                                                                                
MR.  BOB  LOEFFLER,  Division  of Mining,  Land  and  Water,  DNR,                                                              
affirmed  that   the  state  would   maintain  ownership   to  the                                                              
subsurface rights.  He noted that of the 5,740  acres, 1,000 acres                                                              
are  owned by  the  MOA  and 4,700-plus  acres  are  owned by  the                                                              
state.                                                                                                                          
                                                                                                                                
CHAIR OGAN asked if the MOA land is fee simple.                                                                                 
                                                                                                                                
MR.  LOEFFLER said  it  is fee  simple only  with  respect to  the                                                              
surface rights. The state retains the subsurface rights.                                                                        
                                                                                                                                
MR. CANNELOS  stated support for  CSHB 139(RES) as it  provides an                                                              
opportunity  for the  state, the  MOA, and the  private sector  to                                                              
partner  together  to  test  the  feasibility  of  developing  the                                                              
Glacier  Winner Creek  area as the  next major  alpine ski  resort                                                              
area for Girdwood.  The Heritage Land Bank wants to  do two things                                                              
this  year.  First,  it  would  like to  issue  a  request  for  a                                                              
proposal  to  update  the  development concept  and  look  at  the                                                              
economics of the  project again. Some excellent  studies were done                                                              
about 10  years ago,  but they  need to  be updated. Second,  when                                                              
that is concluded,  it wants to  go out to the private  sector and                                                              
solicit interest  from a prime  developer. Regarding  the question                                                              
asked about the  participation of Alyeska, while  Alyeska has said                                                              
it probably will  not be a direct partner, the  $200 million hotel                                                              
was located halfway  between Alyeska Mountain and  the new Glacier                                                              
Winner  Creek resort.  Regarding  the  10-year period,  he  agrees                                                              
with Representative  Hawker that a project of  this magnitude will                                                              
be built in phases so 10 years is a reasonable time frame.                                                                      
                                                                                                                                
SENATOR STEVENS arrived.                                                                                                        
                                                                                                                                
MR. LOEFFLER  stated support  for CSHB 139(RES)  and said  DNR has                                                              
reviewed this bill with a critical eye.                                                                                         
                                                                                                                                
There  being no  further  questions  or testimony,  SENATOR  DYSON                                                              
moved    CSHB   139(RES)    from    committee   with    individual                                                              
recommendations and its zero fiscal note.                                                                                       
                                                                                                                                
CHAIR OGAN  noted that without  objection, the motion  carried. He                                                              
then announced the committee would take up SB 70.                                                                               

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