Legislature(1997 - 1998)

04/27/1998 08:07 AM House CRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
        HOUSE COMMUNITY AND REGIONAL AFFAIRS                                   
                 STANDING COMMITTEE                                            
                   April 27, 1998                                              
                     8:07 a.m.                                                 
                                                                               
                                                                               
MEMBERS PRESENT                                                                
                                                                               
Representative Ivan Ivan, Chairman                                             
Representative Fred Dyson                                                      
Representative Joe Ryan                                                        
Representative Jerry Sanders                                                   
Representative Albert Kookesh                                                  
Representative Reggie Joule                                                    
                                                                               
MEMBERS ABSENT                                                                 
                                                                               
Representative Scott Ogan                                                      
                                                                               
COMMITTEE CALENDAR                                                             
                                                                               
CS FOR SENATE BILL NO. 281(RES)                                                
"An Act relating to general grant land entitlements for the City               
and Borough of Yakutat; and providing for an effective date."                  
                                                                               
     - MOVED HCSCSSB 281(CRA) OUT OF COMMITTEE                                 
                                                                               
(* First public hearing)                                                       
                                                                               
PREVIOUS ACTION                                                                
                                                                               
BILL: SB 281                                                                   
SHORT TITLE: YAKUTAT GENERAL GRANT LAND ENTITLEMENT                            
SPONSOR(S): SENATOR(S) MACKIE                                                  
                                                                               
Jrn-Date    Jrn-Page           Action                                          
 2/06/98      2426     (S)  READ THE FIRST TIME - REFERRAL(S)                  
 2/06/98      2426     (S)  CRA, RES                                           
 2/23/98               (S)  CRA AT  1:30 PM BUTROVICH ROOM 205                 
 2/23/98               (S)  MINUTE(CRA)                                        
 2/24/98      2629     (S)  CRA RPT  CS  1DP 3NR      SAME TITLE               
 2/24/98      2629     (S)  DP: MACKIE NR: HOFFMAN, PHILLIPS,                  
                            WILKEN                                             
 2/24/98      2630     (S)  FISCAL NOTE TO SB & CS (DNR)                       
 2/24/98      2630     (S)  FIN REFERRAL ADDED: RES THEN FIN                   
 3/20/98               (S)  RES AT  3:30 PM BUTROVICH ROOM 205                 
 3/23/98               (S)  RES AT  3:30 PM BUTROVICH ROOM 205                 
 3/23/98               (S)  MINUTE(RES)                                        
 4/17/98      3335     (S)  RES RPT  CS  2DP 4NR      SAME TITLE               
 4/17/98      3336     (S)  DP: TORGERSON, LEMAN; NR: HALFORD,                 
 4/17/98      3336     (S)  LINCOLN, SHARP, GREEN                              
 4/17/98      3336     (S)  FISCAL NOTE TO CS (DNR)                            
 4/21/98               (S)  FIN AT  9:00 AM SENATE FINANCE 532                 
 4/21/98               (S)  RLS AT 12:15 PM FAHRENKAMP RM 203                  
 4/21/98      3411     (S)  FIN RPT  4DP 3NR (RES)CS                           
 4/21/98      3411     (S)  DP: PEARCE, SHARP, ADAMS, TORGERSON                
 4/21/98      3411     (S)  NR: PHILLIPS, PARNELL, DONLEY                      
 4/21/98      3411     (S)  PREVIOUS FN (DNR)                                  
 4/22/98      3435     (S)  RULES TO CALENDAR  4/22/98                         
 4/22/98      3439     (S)  READ THE SECOND TIME                               
 4/22/98      3439     (S)  RES  CS ADOPTED UNAN CONSENT                       
 4/22/98      3439     (S)  ADVANCED TO THIRD READING UNAN                     
                       CONSENT                                                 
 4/22/98      3439     (S)  READ THE THIRD TIME  CSSB 281(RES)                 
 4/22/98      3439     (S)  PASSED Y19 N- E1                                   
 4/22/98      3445     (S)  TRANSMITTED TO (H)                                 
 4/23/98      3209     (H)  READ THE FIRST TIME - REFERRAL(S)                  
 4/23/98      3209     (H)  CRA, FINANCE                                       
 4/27/98               (H)  CRA AT  8:00 AM CAPITOL 124                        
                                                                               
WITNESS REGISTER                                                               
                                                                               
SENATOR JERRY MACKIE                                                           
Alaska State Legislature                                                       
Capitol Building, Room 427                                                     
Juneau, Alaska  99801                                                          
Telephone:  (907) 465-4925                                                     
POSITION STATEMENT:  Sponsor of CSSB 281(RES).                                 
                                                                               
DARYL JAMES, Mayor                                                             
City and Borough of Yakutat                                                    
P.O. Box 411                                                                   
Yakutat, Alaska 99689                                                          
Telephone:  (907) 784-3323                                                     
POSITION STATEMENT:  Testified in support of the proposed                      
                     HCSCSSB 281(CRA).                                         
                                                                               
DICK MYLIUS                                                                    
Resource Assessment and Development                                            
Division of Land                                                               
Department of Natural Resources                                                
3601 "C" Street, Suite 1130                                                    
Anchorage, Alaska 99503-5947                                                   
Telephone:  (907) 269-8532                                                     
POSITION STATEMENT:  Commented on HCSCSSB 218(CRA).                            
                                                                               
ACTION NARRATIVE                                                               
                                                                               
TAPE 98-23, SIDE A                                                             
Number 0001                                                                    
                                                                               
CHAIRMAN IVAN IVAN called the House Community and Regional Affairs             
Standing Committee meeting to order at 8:07 a.m.  Members present              
at the call to order were Representatives Ivan, Dyson, Ryan,                   
Sanders, Kookesh and Joule.                                                    
                                                                               
CSSB 281 (RES) - YAKUTAT GENERAL GRANT LAND ENTITLEMENT                        
                                                                               
Number 003                                                                     
                                                                               
CHAIRMAN IVAN announced the committee would address CSSB 281(RES)              
"An Act relating to general grant land entitlements for the City               
and Borough of Yakutat; and providing for an effective date,"                  
sponsored by Senator Mackie.                                                   
                                                                               
SENATOR JERRY MACKIE came before the committee to explain CSSB 281.            
He read the following statement into the record:                               
                                                                               
"Senate Bill 281 was introduced to complete the formation of the               
Yakutat Borough and the land entitlements that the state grants to             
support local government.  Initially, the petition of the people of            
Yakutat to incorporate as a borough in 1992 was considerably                   
reduced in size by the Local Boundary Commission.  The land                    
entitlement for the new borough by the formula of 10 percent of                
'vacant, unappropriated, and unreserved (VUU)' state lands was a               
mere 138 acres is what the community received.                                 
                                                                               
"The City and Borough of Yakutat subsequently petitioned the Local             
Boundary Commission to reclaim much of the area on its northern                
boarder.  In a reversal of its earlier decision, the Local Boundary            
Commission approved the annexation which contains a substantial                
amount of state VUU lands.  It is estimated that if the annexed                
area had been included for the original borough formation, the                 
municipal entitlement would amounted to about 33,000 acres.                    
                                                                               
"It has been a long established policy for the state to assist the             
formation and operation of local governments with generous grants              
of state land.  Senate Bill 281 corrects the defects in the borough            
formation process that resulted in such a small land entitlement               
for the City and Borough of Yakutat by increasing its entitlement              
to 21,500 acres.  The [Senate] Resources Committee version reduced             
the additional entitlement to 8,552 [acres].  The bill also extends            
the authority of the director of the Division of Lands in the                  
Department of Natural Resources to condition and restrict any of               
the municipality's selections made under this increased grant."                
                                                                               
SENATOR MACKIE explained that the bill would give the City and                 
Borough of Yakutat the land in the same fashion any other borough              
that is formed would receive land.  He noted that on page 1, line              
6 through page 2, line 6, other boroughs are listed that have                  
received land.  He said the mayor of Yakutat and several other                 
people have been working on this for a number of years.  They have             
gone way out of their way to accommodate everyone involved.                    
Senator Mackie explained the area is a myriad of streams and                   
tributaries.  It is a habitat area that is real critical to the                
fishing industry and a lot of other state agencies.  He pointed out            
that there is university land, Chugach Native Corporation land,                
department of Natural Resources (DNR) and fish and game concerns.              
He referred to mental health lands and said that was the last                  
stumbling block they had to deal with and those concerns were all              
worked out.                                                                    
                                                                               
SENATOR MACKIE said when the bill was introduced, it asked that the            
state award 30,000 acres to Yakutat.  The Senate Community and                 
Regional Affairs Committee reduced that amount to 21,500.  That                
figure was the number that everyone could agree to and everybody               
supported it.  It was reduced because the Mental Health Trust                  
Authority and the university had some concerns.  All the issues                
were worked out.  Senator Mackie informed the committee that before            
any of the lands can be given to Yakutat, it first has to be                   
nominated.  The director of the Division of Lands in DNR will look             
at the area, consider other concerns from state agencies and then              
make a decision as to whether to allow lands to be selected.  Once             
the lands are selected, the City and Borough of Yakutat will have              
to have it surveyed, et cetera, at their own expense.  Senator                 
Mackie encouraged the committee to consider the 21,500 acre number.            
                                                                               
Number 133                                                                     
                                                                               
REPRESENTATIVE JOE RYAN said, "I remember back in my municipal days            
that this land was supposed to be used as a basis for them to get              
the money together to get the government but everybody got a                   
municipal entitlement and they're sitting the land.  Up in                     
Fairbanks, when I served on the assembly, they still got 108,000               
out of 112,000 and it was given 30 years ago.  Is there any                    
guarantee these guys are going to let this land loose because I'd              
love to see  land get away from the state if somebody would put it             
into private hands.  You know, I would really like to facilitate               
that.  But are we going to give these folks 20,000 they're going to            
sit on for 30 years or what's the plan?"                                       
                                                                               
SENATOR MACKIE said some of the land probably will not be able to              
be developed because of how it is designated and whether it is in              
habitat areas.  He stated there is a very viable forest industry in            
the Yakutat Borough.  They work together with the forest companies             
and build consensus on things and that is how they will do it with             
this land.  Senator Mackie pointed out that currently they have                
only 138 acres.  The land will be used for municipal needs,                    
watershed needs and other types of home sites if they choose to                
make land available to the public.  He explained that the Yakutat              
Borough is the newest borough in the state and they have every                 
interest of progressing and trying to become more self sufficient              
and viable.  Without the land base, they won't be able to do that.             
                                                                               
Number 170                                                                     
                                                                               
REPRESENTATIVE FRED DYSON said, "It seems like last session there              
was a Yakutat land selection boundary commission step.  How does               
that relate to this?"                                                          
                                                                               
SENATOR MACKIE explained it was the annexation that was approved.              
The final designation of the boundaries of the Yakutat Borough was             
approved by the Local Boundary Commission.  What was before the                
legislature last year was a resolution to overturn that annexation             
by the Local Boundary Commission.  He said the House Community and             
Regional Affairs Committee, after taking testimony, did not allow              
that to happen.  The state land within those boundaries is what is             
of issue today in terms of what amount of that land will actually              
go the ownership of the municipality.                                          
                                                                               
REPRESENTATIVE DYSON asked if the committee is currently addressing            
the 8,500 acres.                                                               
                                                                               
SENATOR MACKIE said that is correct.                                           
                                                                               
REPRESENTATIVE DYSON asked how it got from 28,000 acres down to                
8,000 acres.                                                                   
                                                                               
SENATOR MACKIE explained the change was made in the Senate                     
Resources Committee.  Senator Halford changed it from 21,000 acres             
to 8,552.  Senator Mackie said he doesn't support that as the final            
number.                                                                        
                                                                               
REPRESENTATIVE DYSON asked what the arguments were against 21,000              
acres or 30,000 acres.                                                         
                                                                               
SENATOR MACKIE explained when Yakutat became a borough, if they had            
the boundaries that they currently have, they would have been                  
entitled to about 33,000 acres.  He referred to the Senate                     
Community and Regional Affairs Committee and said during the                   
negotiations with all the different entities, they actually looked             
at the lands that would possibly be selected and that actually                 
would be usable.  In terms of that negotiation process, 21,000                 
acres was the number that they believes everybody could support                
because it eliminated certain parcels of land that people had                  
concern with.  Senator Mackie said the Senate Resources Committee              
decided that was too much land and reduced the amount to 8,552                 
acres.  He said the basis was that if they save 10 percent VUU land            
at this current time, if it just now became a borough today, the               
vacant VUU land would be 8,552 which is 10 percent of 8,500 acres.             
They had, in their mind, a formula that worked.  Again, this is an             
arbitrary type of decision that the legislature could make.                    
Senator Mackie said he wouldn't say that that formula was totally              
flawed or anything else.  He stated it was another way of looking              
at it which reduced the size of the land.  Senator Mackie said he              
was told that the real concern was in the Cape Yakataga area, if               
Prince William Sound ever wanted to become a borough, that they had            
to leave some land in order to have them come down.  The borough               
boundaries of the City and Borough of Yakutat have already been                
set.  He said he didn't buy that argument because they're not going            
to come in and just take away half the Yakutat Borough after they              
just went through all of this process.  So all the land that's                 
being nominated here within the 21,500 acres is clearly within the             
boundaries of the Yakutat Borough.  It's clearly a decision that               
the legislature can make and has made in all these different                   
instances where we've given out the land.  He said the only reason             
that he's supporting the 21,500 is because that's what everybody               
agrees to and there is no opposition to that whatsoever.                       
                                                                               
REPRESENTATIVE DYSON said the 21,000 acres eliminates the concerns             
for competing claims for the land.                                             
                                                                               
SENATOR MACKIE responded that the 21,000 acres is only about 25                
percent of the vacant VUU land.  There is in excess of 85,000 acres            
of state land.  This would only be about one-quarter of that.  He              
explained 8,500 acres represents 10 percent of the vacant VUU land             
of state land and 21,000 acres would represent approximately 25                
percent.  He noted the formula is the same formula that was used               
for Anchorage, Juneau, Sitka, Bristol Bay, Fairbanks, Haines,                  
Kenai, Ketchikan, Kodiak, Lake and Peninsula, Mat-Su and North                 
Slope.                                                                         
                                                                               
Number 323                                                                     
                                                                               
REPRESENTATIVE ALBERT KOOKESH moved an amendment and asked to speak            
on it.  The amendment read as follows:                                         
                                                                               
     Page 2, line 5, following "Yakutat":                                      
          Delete "8,552"                                                       
          Insert "21,500"                                                      
                                                                               
REPRESENTATIVE RYAN objected for the purpose of an explanation.                
                                                                               
REPRESENTATIVE KOOKESH said, "Yakutat, when it decided to form a               
borough, is doing what most of the majority members in the House               
and Senate want unorganized areas of the state to do and that is to            
form a borough so that they would take charge of their own destiny             
- that they would be responsible for some of the government                    
services that need to be offered in that area."  Representative                
Kookesh said to offer them 138 is an insult.  He said 21,500 acres             
is still not the entire entitlement that they're entitled to but               
that is what everybody agreed to.  He stated he agrees with the                
sponsor in that the Borough of Yakutat and the other entities                  
involved have agreed that is a number everyone can agree to.  There            
is no objection to it and it should be passed on.  The borough                 
needs that kind of acreage to survive."                                        
                                                                               
REPRESENTATIVE KOOKESH explained that there is a tax consequence in            
that if it is any less, it would impact the borough.  If the                   
borough is under funded, at least with land, it would be a                     
disservice and it would put them at a negative impasse immediately             
on the formation of their borough.  Representative Kookesh said                
there is a letter from their assembly stating that if the amount of            
land is below 21,500, maybe the bill should die which is sad for               
two reasons.  "One, because we're the ones that want them to form              
a borough in the first place; and secondly, if they let this bill              
die then their next step is to dissolve the borough."  He stated               
they would dissolve the borough because they don't have enough land            
to operate.  Representative Kookesh said there is no formula that              
says anybody is entitled to a certain amount.  He said, "I                     
understand the Anchorage scenario where they got 44,000 acres but              
at the same time you look at the value of that 44,000 acres                    
compared to the value of the acreage, for example, in the Fairbanks            
North Star Borough - 112,000 acres.  That 44,000 acres is certainly            
worth a lot more."                                                             
                                                                               
REPRESENTATIVE KOOKESH referred to being familiar with the Yakutat             
area and said there is a lot of marsh in that area.  A lot of that             
land will probably be unusable for development.  Representative                
Kookesh said he believes it is in the best interest of the state               
and the borough that the amendment be accepted and allow the                   
Yakutat Borough to start off on equal footing with the rest of the             
boroughs in the state.  As a last point, Representative Kookesh                
pointed out that there are enough other rural areas of the state               
that are watching the Yakutat Borough and the legislature as it                
relates to organizing a borough.  If they perceive a negative                  
reaction from the legislature, that is a further reason for other              
rural areas not to organized.  There needs to be a path for                    
unorganized rural areas to be able to go forward to organize and to            
get a fair land entitlement in order to survive.                               
                                                                               
Number 384                                                                     
                                                                               
CHAIRMAN IVAN asked Representative Ryan if he still maintained his             
objection.                                                                     
                                                                               
REPRESENTATIVE RYAN withdrew his objection.                                    
                                                                               
CHAIRMAN IVAN announced the amendment by Representative Kookesh had            
been adopted.                                                                  
                                                                               
Number 389                                                                     
                                                                               
DARYL JAMES, Mayor, City and Borough of Yakutat, came before the               
committee.  He explained that as stated by Senator Mackie, the City            
and Borough of Yakutat has negotiated with all interested parties              
to bring about a consensus to land selections.  The original bill              
included 30,000 acres and it was brought down to 21,000 acres by               
the interaction with the concerned parties.  As the economy and                
state funding continues to decrease, the cities and boroughs are               
looking more to developing their areas economically.  He referred              
to the area in question and said there are fishermen who have land             
leases with the state of Alaska and they would like to have their              
areas turned over to them as private land so they can use it                   
without continuing leases with the state.  Mr. James stated his                
emphasis, as mayor over the last six years, is to look at the                  
economic development of the area.  Over the past six years, the                
economy has continued to drop not only in fisheries but in all                 
resources.  The land basis is needed to spread out the property                
taxes to help offset the continuing decreases in both state and                
federal funding.                                                               
                                                                               
Number 423                                                                     
                                                                               
DICK MYLIUS, Resource Assessment and Development, Division of Land,            
Department of Natural Resources, testified via teleconference from             
Anchorage.  He stated DNR supports granting the City and Borough of            
Yakutat an additional land entitlement.  Mr. Mylius said the                   
department feels that Yakutat deserves an additional entitlement               
because it received a very small entitlement under the formula in              
AS 29.65.  The reason they support it is because there simply was              
very little land in the original borough.  The borough subsequently            
added a large block of state land to the borough in an area that               
they clearly have desired to have included in the original borough             
proposal.  Had this area been included initially, they would have              
received an additional entitlement which would have been 33,000                
acres.  However, subsequent to that, the DNR has done the Yakataga             
area plan and settled litigation over the University of Alaska's               
timber rights in that area.  Therefore, the department believes                
they couldn't come up with 30,000 acres of land to convey to the               
City and Borough of Yakutat because the situation there had changed            
from the time of when they originally proposed to include this area            
in the borough.  Mr. Mylius explained DNR supported the bill at                
21,500 acres.  They prefer, in a way, the smaller amount proposed              
by the Senate but would be willing work to convey them the 21,500              
acres.  He said the department believes it is going to be difficult            
to come up with 21,500 acres of entitlement because of the existing            
uses in the area and the delicate balance struck between timber                
harvest, wildlife and recreation.  The department has agreed to try            
to come up with that amount of acreage should that be the acreage              
specified in the bill.  He informed the committee members that the             
City and Borough of Yakutat is in a real unique situation because              
of the interaction of the original borough proposal, the planning              
process and then coming back through annexation.  If they were to              
add this area to the borough today by forming a borough, their                 
entitlement would have been the 8,552 figure.  That is basically               
what applying the 10 percent formula would have given them.  The 10            
percent formula is really not arbitrary, it's what the department              
has used for other municipalities.                                             
                                                                               
MR. MYLIUS explained that the 1978 legislation that set out the                
numbers for the Fairbanks North Star Borough, the Municipality of              
Anchorage and the City and Borough of Juneau was based on a formula            
that was roughly 10 percent, but it did factor in population and               
other factors.  Since that time, any new municipality that has                 
formed got strictly the 10 percent.  For example, the Denali                   
Borough, the Northwest Arctic Borough and the Aleutian East Borough            
had the 10 percent applied - 10 percent of vacant, unappropriated,             
unreserved state lands.  The exception was the Lake and Peninsula              
Borough because the land use planning for that area resulted in                
their entitlement being what they thought was unrealistically low              
and the legislature gave them a larger entitlement.                            
                                                                               
MR. MYLIUS said that there was a cap for several years that said               
that municipalities could only get 20 acres per person.  That                  
existed for about two years.  He said he believes that the only                
municipality that would have been applied to would have been the               
Northwest Arctic Borough.  The legislation was changed so it                   
wouldn't apply to them.  If such a cap were applied to the City and            
Borough of Yakutat, their entitlement would be about 16,000 acres              
because their population is 802 people - 802 X 20 = 16,040.                    
                                                                               
MR. MYLIUS stated DNR agreed to the 21,500 acres in their                      
discussion with Yakutat because DNR felt that they were a unique               
situation because of the interaction of their original                         
incorporation proposal, the planning, et cetera.  He said he would             
answer any questions the committee may have.                                   
                                                                               
Number 479                                                                     
                                                                               
REPRESENTATIVE RYAN asked what the time frame is going to be for               
the transfer of the land to the borough if the legislation passes.             
                                                                               
MR. MYLIUS responded, "That depends on whether or not the City and             
Borough of Yakutat is willing to pay.  Basically, the way we set it            
up right now is we've got a huge back load of municipal                        
entitlements as a result of formation of some of those boroughs I              
mentioned, particularly Northwest Arctic, Denali, Lake and Pen.  So            
we've got a backlog of over 600,000 acres owed to other                        
municipalities and with our current staffing, it's going to take               
many years to convey that.  And the City and Borough of Yakutat                
basically goes to the end of the line and so it could be as long as            
15 to 20 years before they get the bulk of their land.  However, if            
they are willing to essentially pay to have a DNR staff person                 
available to help expedite some of their lands, we could speed that            
up significantly.  And some of the other boroughs like Lake and                
Peninsula Borough has thought about doing that to get their land               
and we've talked about that with the City and Borough of Yakutat.              
In fact, if you've noticed there is fiscal note attached to this               
bill and in that fiscal note we have the amount of money that it               
would cost to transfer the lands to the city and borough.  It shows            
up under program receipts in the source of the funding.  That would            
be because if we were to process these expeditiously, we'd want the            
city and borough to pay, otherwise in fairness to those other                  
boroughs that have been waiting for their land, we'd essentially               
put them to the end of the line.  However, if there is a chunk of              
land they need immediately for a community development project or              
something, we try to process those as soon as we can.  For example,            
I mentioned the Denali Borough is waiting for a bunch of their land            
but we've also conveyed them about 4,000 acres of land, so there is            
mostly subdivision lots they can turn around and sell in the near              
future.  Even though we've got a large outstanding debt to all                 
these municipalities, we still try to get them land they need for              
immediate needs."                                                              
                                                                               
Number 513                                                                     
                                                                               
REPRESENTATIVE DYSON made a motion to move CSSB 281, as amended,               
out of committee with individual recommendations and with the                  
attached the fiscal note.  There being no objection, HCSCSSB
218(CRA) moved out of House Community and Regional Affairs Standing            
Committee.                                                                     
                                                                               
ADJOURNMENT                                                                    
                                                                               
Number 521                                                                     
                                                                               
CHAIRMAN IVAN adjourned the House Community and Regional Affairs               
Standing Committee at 8:44 a.m.                                                

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