Legislature(2005 - 2006)CAPITOL 124
04/26/2006 01:00 PM House RESOURCES
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| Adjourn |
* first hearing in first committee of referral
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= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 497 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE RESOURCES STANDING COMMITTEE
April 26, 2006
1:34 p.m.
MEMBERS PRESENT
Representative Jay Ramras, Co-Chair
Representative Jim Elkins
Representative Carl Gatto
Representative Gabrielle LeDoux
Representative Kurt Olson
Representative Paul Seaton
Representative Harry Crawford
Representative Mary Kapsner
MEMBERS ABSENT
Representative Ralph Samuels, Co-Chair
COMMITTEE CALENDAR
HOUSE BILL NO. 497
"An Act providing for the transfer of property at Clark Bay to
the Inter-Island Ferry Authority."
- HEARD AND HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 497
SHORT TITLE: TRANSFER CLARK BAY TERMINAL
SPONSOR(s): TRANSPORTATION
03/29/06 (H) READ THE FIRST TIME - REFERRALS
03/29/06 (H) RES, FIN
04/26/06 (H) RES AT 1:00 PM CAPITOL 124
WITNESS REGISTER
JENNIFER BAXTER, Staff
to Representative Jim Elkins
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HB 497 on behalf of Representative
Elkins, sponsor.
REPRESENTATIVE BILL THOMAS
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 497.
JOHN PEARSON, Volunteer
Project Planning and Coordination
Hyder Board of Trade, Inc.
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 497.
DICK MYLIUS, Director
Division of Mining, Land and Water
Department of Natural Resources
Anchorage, Alaska
POSITION STATEMENT: Testified in opposition to HB 497.
ACTION NARRATIVE
CO-CHAIR JAY RAMRAS called the House Resources Standing
Committee meeting to order at 1:34:38 PM. Representatives
Olson, Ramras, Elkins, Seaton, and Gatto were present at the
call to order. Representatives Kapsner, Crawford, and LeDoux
arrived as the meeting was in progress.
HB 497-TRANSFER CLARK BAY TERMINAL
CO-CHAIR RAMRAS announced that the only order of business would
be HOUSE BILL NO. 497, "An Act providing for the transfer of
property at Clark Bay to the Inter-Island Ferry Authority."
REPRESENTATIVE SEATON moved to adopt the committee substitute
(CS) for HB 497 labeled 24-LS1740\Y, Kurtz/Bullock, 4/17/06 as a
work draft. Hearing no objections, Version Y was before the
committee.
JENNIFER BAXTER, Staff to Representative Elkins, presented the
CS to HB 497, which will authorize the Department of Natural
Resources (DNR) to transfer property at Clark Bay to the Inter-
Island Ferry Authority for the operation of a terminal on Prince
of Wales Island. The terminal will provide more efficient ferry
service to Ketchikan, Prince of Wales Island and adjacent areas.
It will implement the intent of the memorandum of agreement
between Alaska and the Inter-Island Ferry Authority, she stated.
The CS also includes authorization for DNR to transfer land to
the Hyder Board of Trade, Inc. for marine and economic
development initiatives. She stated that the Roanan Corporation
will work with the board of trade to acquire and develop
unoccupied tidelands between its waterfront property and the
Hyder causeway. She said "this area" is the same size that the
board of trade seeks to have transferred. She pointed out that
there is information in the packet about the [the board of
trade] plans. She noted that if either the Inter-Island Ferry
Authority or the Hyder Board of Trade Inc. ceases to exist, the
lands will revert back to DNR.
REPRESENTATIVE ELKINS suggested addressing the Clark Bay land
transfer first.
1:39:13 PM
REPRESENTATIVE BILL THOMAS, Alaska State Legislature, said he
supports the CS of HB 497. He has communities that are
dependent on the Clark Bay land transfer. He represents Hyder
and told the committee that he asked that their request be
included in the bill. He said the Department of Transportation
& Public Facilities (DOT&PF) supports the Clark Bay transfer.
REPRESENTATIVE GATTO asked about AS 38.05.027 regarding the
authority of the DNR commissioner to transfer lands after
determining if it is in the best interest of the public. He
surmised that a best-interest finding will be required.
1:42:01 PM
REPRESENTATIVE ELKINS said the land transfer is fulfilling a
commitment to the Inter-Island Ferry Authority, and he does not
know if a best-interest finding has been done.
REPRESENTATIVE ELKINS said the bill deals with a ferry run that
the state did not want to operate and turned over to a private
entity. It then surpassed every passenger and vehicle ridership
levels from Prince of Wales Island, he stated. "They got in the
service business and provided a service to the people on Prince
of Wales." Ketchikan Gateway Borough guaranteed the bonds for
the first vessel, he said, and the federal government built a
ship to service Wrangell and Petersburg. "They don't have a
ferry terminal and this would fulfill that obligation."
The committee took an at-ease from 1:43 p.m. to 1:48:54 PM.
JOHN PEARSON, Volunteer, Hyder Board of Trade, Inc., said he is
retired from being an economic development specialist with the
Alaska Department of Commerce. He said the board is a 501c6
organization designed to spearhead sustainable economic
activities in Hyder. He said Hyder is the eastern most
community in Alaska and 164 miles by boat to Ketchikan. Primary
access is the Cassiar Highway, and Hyder is neighbors with
Stewart, British Columbia, Canada, he noted. It is an
unincorporated community, and to incorporate the community needs
an economic base. This bill provides a unique opportunity to
create valuable jobs in Hyder and Ketchikan. The marine
infrastructure is critical, he opined. Currently the state has
a 1,700-foot-long island on a trestle into the Portland Canal
that float planes use. He showed a photo and said the massive
gravel deposits of the Salmon River include 7.5 million cubic
yards of new gravel every year. It is plugging up the river,
which "sits about nine feet above the community."
MR. PEARSON said the gravel is clean and of high quality, and
the state would get royalties of $1.50 per cubic yard. The
project will inject significant money into the state. "The
project is to secure two parcels of tideland." One is surveyed
and used by the community, and the other is unsurveyed tideland.
One piece is 0.4 acres, and the other is 1.9 acres, he stated.
1:56:10 PM
MR. PEARSON said the Roanan Corporation is a "major, major
holder of land in Hyder." He said it has been a good corporate
neighbor and will step to the plate and provide an equal amount
of adjacent land to expand the project.
MR. PEARSON said Roanan is "heavy into mining and construction
and built the majority of the Cassiar Highway." The board wants
to attract the small cruise industry. There are small ecotour
vessels, but homeland security requirements are getting
stringent, he noted. The vessels require security but the state
requires public access to the state float, which is about to
collapse, he stated.
1:58:22 PM
MR. PEARSON said a float will be added to allow large traffic to
come to Hyder. He is not pushing for ferry service, but "once
fresh fish hits Hyder" it can be delivered to Chicago in hours.
He said securing the two parcels will put the community in a
position to show that rural partnerships can work. He noted
that the Denali Commission and others will participate.
2:00:01 PM
REPRESENTATIVE ELKINS asked about the Roanan Corporation moving
people [to Hyder].
MR. PEARSON said there will be about 100 new people coming into
Hyder--very significant to a town of 130. There are massive
mining operations in British Columbia, he said, and the port can
handle the raw material going out. Hyder is one of two ports in
the nation that is exempt from the Jones Act, which will be very
significant to the movement of pipe to the gas line.
MR. PEARSON said Savannah, Georgia is also exempt from the Jones
Act. Hyder was exempted because it was used by Canadian miners
in the 1920s.
2:02:58 PM
CO-CHAIR RAMRAS read the fiscal note stating that these are
small parcels with minimal fiscal impact, and the Division of
Land, Mining, and Water staff will prepare the best-interest
finding, which will include public review.
REPRESENTATIVE ELKINS said the head of the Roanan Corporation
was in his office expressing great interest and that the future
of Hyder is to become incorporated. "His goal is, when he gets
his employees in there, to convince them to facilitate that
matter, so that's another plus...for this community." He said
DNR should be excited because of the gravel royalties. The
corporation is willing to donate an equal amount of land to make
this possible. He said [Hyder] decided to sell water, and
Canadians from the neighboring community laid the water lines.
He said Hyder children used to go to Stewart schools.
2:05:39 PM
REPRESENTATIVE GATTO asked about the land for a ferry terminal,
"or is it just for a causeway?"
REPRESENTATIVE ELKINS said the tidelands will be filled and will
be used to unload barges and dock ships. It will also be used
to haul gravel out of the gravel pit, and Canadian ore will be
shipped out from there, he added.
MR. PEARSON explained to Representative Gatto that the inter-
island ferry is not associated with this project; "however, the
facilities that we will build will be multi-use, so that we can
handle resource barges, we can handle the [Alaska Marine Highway
System], we could handle the [indecipherable] if is was
necessary, and small cruise ships." The ferry issue is
important, he said, because a homeland security event in Seattle
would impact Alaska's [ferry] access, so his facility would be
built to AMHS specifications.
2:09:35 PM
REPRESENTATIVE GATTO said now the discussion is getting into
homeland security and monstrous gravel resources.
DICK MYLIUS, Director, Division of Mining, Land and Water, said
the bill requires that DNR transfer four parcels of land. Two
parcels are subject to a management agreement between DNR and
DOT&PF, and DOT&PF has a subsequent agreement with the ferry
authority regarding the management of the facilities, but the
facilities are still owned by DOT&PF. He said the legislature
has been reluctant to transfer tidelands out of state ownership
because the constitution requires the protection of public trust
values of the tidelands. The state has generally felt that
keeping tidelands in public ownership is the best way to protect
public use, he said. Transferring tidelands is usually only to
municipalities and with restrictions that are not included in
this bill. The objectives can be met with leasing instead of
transferring lands, he noted, so DNR opposes the transfer.
2:13:20 PM
MR. MYLIUS said the Clark Bay parcel could also be done through
a lease, and the undeveloped parcel could be sold. If the bill
goes forward, it should clarify if the commissioner is given
authority to transfer the land or if the bill requires that it
be transferred. He also asked about the price paid to the
state. He said DNR would request public access and public trust
rights for the land. He added that he would be happy to talk
with the entities about options under existing statutes.
REPRESENTATIVE KAPSNER asked about the Salmon River being
clogged up unless the gravel is removed. She surmised it would
be in the state's best interest to take the gravel out.
2:14:52 PM
MR. MYLIUS said gravel can be removed. DNR sells gravel from
state land, so if the gravel is on the tidelands, DNR could sell
it "if somebody wanted to remove it."
REPRESENTATIVE KAPSNER asked if that is being done now.
MR. MYLIUS said gravel sales are market driven and nobody has
come to DNR to express interest in the gravel.
REPRESENTATIVE SEATON, referring to the provision where the land
reverts back to DNR if the ferry authority ceases to exist,
asked if this is really an ownership transfer.
MR. MYLIUS said the bill would require a transfer and that
clause is not uncommon. He expressed his concern that this
transfer doesn't prohibit the new owners from selling the land
to another entity.
REPRESENTATIVE LEDOUX noted that on page 2 the bill states that
the land may not be transferred to another person.
MR. MYLIUS said that is for the transfer to the board of trade,
and there is not a similar provision for the ferry parcel.
CO-CHAIR RAMRAS surmised that DNR opposes the bill as written.
MR. MYLIUS said yes.
2:17:31 PM
REPRESENTATIVE ELKINS said the bill could be amended to apply
the same non-transfer standard for the Clark Bay property.
CO-CHAIR RAMRAS asked Mr. Mylius what would need to be addressed
in order to make DNR comfortable with HB 497.
MR. MYLIUS said DNR needs to know if it is being directed to
transfer the lands or if it has the authority to do it once a
best-interest finding and public notice is done. The bill needs
to clarify whether the state is selling the land at fair market
value or giving it away for free. There must be provisions for
protecting public access and public trust values of the land, he
explained. Regarding the board of trade parcel, DNR would
oppose any actual transfer of title because it would not go to a
public entity. It would go against a state policy that has been
intact since statehood. If it were a lease, there would be no
need for legislation, he stated.
2:20:38 PM
REPRESENTATIVE SEATON asked if both transfers could be leases
instead, and if that has been requested and then denied.
MR. MYLIUS said there have been no applications submitted for
either parcel. There have been preliminary discussions with the
Roanan Corporation, but "we haven't said no to anything."
2:21:55 PM
REPRESENTATIVE SEATON asked about the time frame for a lease.
MR. MYLIUS said it can take a couple of years, and it depends on
how complete the application is when it arrives at DNR. There
will be best-interest findings, public notice, and land surveys.
REPRESENTATIVE SEATON asked if the legislature could direct an
expedited lease.
MR. MYLIUS said he doesn't know how legislative intent would
expedite the process. Under state law the land cannot be sold
to the board of trade, and the improved parcels cannot be sold
to the Inter-Island Ferry Authority.
2:24:06 PM
REPRESENTATIVE SEATON referred to a November 2005 letter noting
that the state can enter into an agreement with the ferry
authority to utilize the facilities.
REPRESENTATIVE ELKINS said all of Alaska's harbors were
transferred to municipalities without a finding, "so I don't
think that holds very much water." He said the intent of the
legislation is to mandate the transfer of this land, "not the
bureaucratic discretion that could take the rest of my lifetime,
which I don't care to wait for." He said public agencies can't
move as fast as Mr. Mylius is suggesting.
2:25:12 PM
REPRESENTATIVE GATTO asked about the term "authorize" on page 1
and asked if it is permissive or a requirement.
MR. MYLIUS said "authorize" usually means it is discretionary,
but the following line doesn't sound discretionary, and the lack
of clarity could lead to a future legal argument.
REPRESENTATIVE GATTO asked about replacing the language to read
"may be transferred."
MR. MYLIUS said some sort of language like that should work.
REPRESENTATIVE KAPSNER said it could all be "shall" language to
meet the intent of the sponsor.
2:27:36 PM
MR. MYLIUS said, in response to Representative Seaton, there is
a fundamental concern about creating statutory authority to
transfer land to the Hyder Board of Trade.
REPRESENTATIVE SEATON asked about an expedited process.
MR. MYLIUS said there is a small backlog of lease applications.
The legislature could move an application to the front of the
line, but other applicants might not be happy about it, he said.
But it is difficult to speed up the mandatory public notice and
statute appeal period. The surveys and appraisals are done by
the private sector and take considerable time as well.
REPRESENTATIVE SEATON asked if the university land transfers are
completed.
MR. MYLIUS said the agreement was for DNR to go out for a
[request for proposal] to do the deed and title work. It will
be a three-year process, he noted.
2:30:34 PM
REPRESENTATIVE GATTO asked if a survey and appraisal would need
to be done for any land transfer or lease.
MR. MYLIUS said the survey would be required, but the appraisal
requirement is not clear from the bill.
REPRESENTATIVE GATTO asked about running afoul of other statutes
and ultimately bringing the process to a standstill.
MR. MYLIUS said there is no problem with transferring to the
ferry authority, except DNR has no authority to transfer the
improvements without legislative approval. The Hyder land
transfer has constitutional issues.
2:32:31 PM
REPRESENTATIVE SEATON asked about the 2005 letter to Thomas
Briggs from Malcolm Menzies. He asked if that problem goes away
if the buildings are demolished or removed.
MR. MYLIUS said it sounds like that may be within the authority
of DOT&PF.
REPRESENTATIVE SEATON asked if leases need to reflect fair
market rates and how that would be determined for land to be
filled.
2:34:29 PM
MR. MYLIUS said at Clark Bay there is authority to do a lease at
less than fair market value because it is a public entity, so an
appraisal wouldn't be an issue. The other parcel would be
appraised as it currently is-undeveloped tidelands.
REPRESENTATIVE SEATON surmised that gravel from the Salmon River
could be sold under current regulations.
MR. MYLIUS said selling state-owned gravel would not need to be
part of this legislation.
REPRESENTATIVE ELKINS said, "I think you've given me every
reason under the sun why we don't want to get involved with a
lease--why I don't want to get involved with a lease--and I'm
sure the people down there in Hyder don't. It would seem to me
that you got to get off of your thumbs and get behind this
project so you can start getting some income off of that gravel;
you could get...up to $10 million a year, instead of the way
it's going. You're setting on your hands and trying to impede
this development down there. Sometimes it is no wonder people
shy away with wanting to do business with the State of Alaska."
REPRESENTATIVE SEATON said there has been no application for a
lease for these projects. He doesn't want to blame DNR.
REPRESENTATIVE ELKINS said, "I do."
REPRESENTATIVE SEATON asked if his intention is to give the land
away or to sell it at fair market value.
REPRESENTATIVE ELKINS said, "My intent was to transfer these
lands to the entities without discretion, and tomorrow's not
soon enough--at no cost."
2:37:39 PM
REPRESENTATIVE SEATON asked if he was amenable to a requirement
that the land can't be sold or transferred.
REPRESENTATIVE ELKINS said yes, and the federal government sees
the board of trade as a legal entity "down there to do business
with." He said DOT&PF has also recognized it, and "that's a
pretty weak call that DNR is taking."
REPRESENTATIVE SEATON explained to Co-Chair Ramras that there is
a difference in opinion between DNR and the sponsor. The lease
of Clark Bay wouldn't need a survey or appraisal because it is a
public entity. There is a constitutional problem to transfer
land to the board of trade. The sponsor's intent is to provide
the lands free of charge.
2:39:45 PM
REPRESENTATIVE ELKINS said there is a private corporation that
will donate land, and if anything went wrong, the land would go
back to the state. "Something is being paid if you look at it
from that standpoint," he said.
CO-CHAIR RAMRAS said he is exited that a remote community can
add 100 jobs and add quality of life to people, so "I am always
going to side on that side." He said he is with Representative
Elkins and will work on it tomorrow. He said there is consensus
to work through this for the benefit of the Hyder community. He
asked what approach the committee needs to take in order to
modify the bill and stay within constitutional boundaries.
2:42:57 PM
REPRESENTATIVE SEATON said the bill should be broken into two
sections, because the only constitutional problem is with the
Hyder lands. He noted that Representative Elkins said that land
from the Roanan Corporation would revert to the state if
"something happens," but that is not in the bill. If that is
the intent, then that should be added, he said.
2:44:05 PM
REPRESENTATIVE ELKINS said he ask the corporation tomorrow.
REPRESENTATIVE GATTO said he doesn't know if the committee can
overrule the constitution, particularly regarding access.
CO-CHAIR RAMRAS said, "We're going to try [very] hard."
REPRESENTATIVE GATTO said, "If you have a way around it, I am
dying to hear it." He said he was referring to transferring
state property that isn't for the benefit of the public, and
guaranteeing access. He thinks leasing the land instead of
transferring it "has merit."
MR. MYLIUS said DNR can do a lease under existing authority with
the ability to deal with public trust concerns. For the Clark
Bay lands, the lease can be for less than fair market value, he
noted. He said DNR has not received any applications from
either entity.
REPRESENTATIVE SEATON said a letter of intent can move the
leases to the head of the line, but with a survey it could be a
longer process.
CO-CHAIR RAMRAS asked when the corporation wants to come in with
a workforce of 100 people to increase the vitality of Hyder.
2:46:46 PM
MR. PEARSON said the first people will be on site next month,
but "they will not be focusing on this particular...they've got
other things they need to do."
CO-CHAIR RAMRAS asked if time is of the essence.
MR. PEARSON said, "What we would like to do is in 2008 be in a
position to start doing construction."
REPRESENTATIVE GATTO asked if the legislature can direct DNR to
enter into a lease agreement and name the parties.
2:47:41 PM
MR. MYLIUS said DNR has that authority. "They just need to
apply."
REPRESENTATIVE GATTO asked how the legislature could direct DNR
to enter into talks.
MR. MYLIUS said the message is clear, but without an applicant,
DNR can't do anything. It takes some commitment on their part;
there would need to be a development plan with some idea of what
they are planning to do. DNR has received nothing, he stated.
2:49:19 PM
REPRESENTATIVE GATTO said he has seen a plan. If an application
were submitted would it go to the bottom of the pile? He asked
how the committee could get DNR to deal with it quickly.
MR. MYLIUS said the normal process is first in, first up. Some
applications are for pipedreams and some things are ready to go,
"so the guy with the checkbook usually gets moved to the front
of the line."
REPRESENTATIVE SEATON asked if the committee needs to indicate
that the Clark Bay lease should be less than fair market value.
MR. MYLIUS said that would qualify under statute already.
2:51:34 PM
REPRESENTATIVE SEATON asked if Hyder became incorporated, would
DNR be able to work with them.
MR. MYLIUS said yes, under a different statute.
REPRESENTATIVE SEATON asked if access is required on the uplands
and tidelands.
MR. MYLIUS said the issue is access along and to the tidelands
for navigation "and such." If Hyder became a community, DNR
could convey title to the municipality.
2:52:56 PM
CO-CHAIR RAMRAS asked Representative Elkins if he has enough
guidelines to craft "something for us."
[HB 497 was held over]
ADJOURNMENT
There being no further business before the committee, the House
Resources Standing Committee meeting was adjourned at 2:54 PM.
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