Legislature(2015 - 2016)BUTROVICH 205

04/13/2016 03:30 PM RESOURCES

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ HB 216 NAVIGABLE WATER; INTERFERENCE, DEFINITION TELECONFERENCED
Heard & Held
-- Public Testimony --
+ HB 274 STATE LAND; EXCHANGES; LEASE EXTENSIONS TELECONFERENCED
Moved CSHB 274(RES) Out of Committee
-- Public Testimony --
+ HCR 17 SUPPORT AVIATION INDUSTRY; USE STATE LAND TELECONFERENCED
Moved CSHCR 17(TRA) Out of Committee
-- Public Testimony --
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
              SENATE RESOURCES STANDING COMMITTEE                                                                             
                         April 13, 2016                                                                                         
                           3:32 p.m.                                                                                            
                                                                                                                                
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Cathy Giessel, Chair                                                                                                    
Senator Mia Costello, Vice Chair                                                                                                
Senator John Coghill                                                                                                            
Senator Bert Stedman                                                                                                            
Senator Bill Wielechowski                                                                                                       
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Peter Micciche                                                                                                          
Senator Bill Stoltze                                                                                                            
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
CS FOR HOUSE CONCURRENT RESOLUTION NO. 17(TRA)                                                                                  
Supporting  the aviation  industry;  and urging  the governor  to                                                               
make state-owned land available  to the unmanned aircraft systems                                                               
industry for  the management and  operation of  unmanned aircraft                                                               
systems  and   related  research,  manufacturing,   testing,  and                                                               
training.                                                                                                                       
                                                                                                                                
     - MOVED CSHCR 17(TRA) OUT OF COMMITTEE                                                                                     
                                                                                                                                
COMMITTEE SUBSTITUTE FOR HOUSE BILL NO. 216(RES)                                                                                
"An Act relating  to obstruction or interference  with a person's                                                               
free  passage on  or use  of  navigable water;  and amending  the                                                               
definition of 'navigable water' under the Alaska Land Act."                                                                     
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
COMMITTEE SUBSTITUTE FOR HOUSE BILL NO. 274(RES)                                                                                
"An  Act relating  to extensions  of certain  state land  leases;                                                               
relating  to the  exchange of  state  land; and  relating to  the                                                               
definition of 'state land.'"                                                                                                    
                                                                                                                                
     - MOVED CSHB 274(RES) OUT OF COMMITTEE                                                                                     
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: HCR 17                                                                                                                  
SHORT TITLE: SUPPORT AVIATION INDUSTRY; USE STATE LAND                                                                          
SPONSOR(s): REPRESENTATIVE(s) HUGHES                                                                                            
                                                                                                                                
01/29/16       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/29/16       (H)       TRA                                                                                                    
02/02/16       (H)       TRA AT 1:00 PM CAPITOL 17                                                                              
02/02/16       (H)       Heard & Held                                                                                           
02/02/16       (H)       MINUTE(TRA)                                                                                            
02/04/16       (H)       TRA AT 1:00 PM CAPITOL 17                                                                              
02/04/16       (H)       Moved  CSHCR 17(TRA) Out of Committee                                                                  
02/04/16       (H)       MINUTE(TRA)                                                                                            
03/15/16       (H)       TRA AT 1:00 PM CAPITOL 17                                                                              
03/15/16       (H)       Moved  CSHCR 17(TRA) Out of Committee                                                                  
03/15/16       (H)       MINUTE(TRA)                                                                                            
03/16/16       (H)       TRA RPT CS(TRA) 5DP 1NR                                                                                
03/16/16       (H)       DP: NAGEAK, STUTES, CLAMAN, HUGHES,                                                                    
                         FOSTER                                                                                                 
03/16/16       (H)       NR: ORTIZ                                                                                              
03/21/16       (H)       TRANSMITTED TO (S)                                                                                     
03/21/16       (H)       VERSION: CSHCR 17(TRA)                                                                                 
03/23/16       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/23/16       (S)       TRA, RES                                                                                               
04/06/16       (S)       TRA RPT 3DP 1NR                                                                                        
04/06/16       (S)       DP: MICCICHE, EGAN, BISHOP                                                                             
04/06/16       (S)       NR: STEDMAN                                                                                            
04/06/16       (S)       TRA AT 8:30 AM BUTROVICH 205                                                                           
04/06/16       (S)       Moved CSHCR 17(TRA) Out of Committee                                                                   
04/06/16       (S)       MINUTE(TRA)                                                                                            
04/11/16       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
04/11/16       (S)       Scheduled but Not Heard                                                                                
04/13/16       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
                                                                                                                                
BILL: HB 216                                                                                                                  
SHORT TITLE: NAVIGABLE WATER; INTERFERENCE, DEFINITION                                                                          
SPONSOR(s): REPRESENTATIVE(s) TALERICO                                                                                          
                                                                                                                                
01/19/16       (H)       PREFILE RELEASED 1/8/16                                                                                
01/19/16       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/19/16       (H)       RES                                                                                                    
03/16/16       (H)       RES AT 1:00 PM BARNES 124                                                                              
03/16/16       (H)       Heard & Held                                                                                           
03/16/16       (H)       MINUTE(RES)                                                                                            
03/18/16       (H)       RES AT 1:00 PM BARNES 124                                                                              
03/18/16       (H)       Moved  CSHB 216(RES) Out of Committee                                                                  
03/18/16       (H)       MINUTE(RES)                                                                                            
03/21/16       (H)       RES RPT CS(RES) 8DP 1NR                                                                                
03/21/16       (H)       DP: JOHNSON, HERRON, CHENAULT, OLSON,                                                                  
                         TARR, SEATON, TALERICO, NAGEAK                                                                         
03/21/16       (H)       NR: JOSEPHSON                                                                                          
03/23/16       (H)       TRANSMITTED TO (S)                                                                                     
03/23/16       (H)       VERSION: CSHB 216(RES)                                                                                 
03/25/16       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/25/16       (S)       RES                                                                                                    
03/28/16       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
03/28/16       (S)       Scheduled but Not Heard                                                                                
04/11/16       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
04/11/16       (S)       Scheduled but Not Heard                                                                                
04/13/16       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
                                                                                                                                
BILL: HB 274                                                                                                                  
SHORT TITLE: STATE LAND; EXCHANGES; LEASE EXTENSIONS                                                                            
SPONSOR(s): REPRESENTATIVE(s) MUNOZ                                                                                             
                                                                                                                                
01/22/16       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/22/16       (H)       RES                                                                                                    
02/08/16       (H)       RES AT 1:00 PM BARNES 124                                                                              
02/08/16       (H)       -- MEETING CANCELED --                                                                                 
03/18/16       (H)       RES AT 1:00 PM BARNES 124                                                                              
03/18/16       (H)       Heard & Held                                                                                           
03/18/16       (H)       MINUTE(RES)                                                                                            
04/01/16       (H)       RES AT 1:00 PM BARNES 124                                                                              
04/01/16       (H)       Moved  CSHB 274(RES) Out of Committee                                                                  
04/01/16       (H)       MINUTE(RES)                                                                                            
04/04/16       (H)       RES RPT CS(RES) 7DP 2NR                                                                                
04/04/16       (H)       DP: JOHNSON, HERRON, OLSON, SEATON,                                                                    
                         CHENAULT, TALERICO, NAGEAK                                                                             
04/04/16       (H)       NR: JOSEPHSON, TARR                                                                                    
04/09/16       (H)       TRANSMITTED TO (S)                                                                                     
04/09/16       (H)       VERSION: CSHB 216(RES)                                                                                 
04/11/16       (S)       READ THE FIRST TIME - REFERRALS                                                                        
04/11/16       (S)       RES                                                                                                    
04/13/16       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
                                                                                                                                
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
GINGER BLAISDELL, staff to Representative Shelley Hughes                                                                        
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Commented on HCR 17 for the sponsor.                                                                     
                                                                                                                                
REPRESENTATIVE HUGHS                                                                                                            
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Sponsor of HCR 17.                                                                                       
                                                                                                                                
REPRESENTATIVE DAVID TALERICO                                                                                                   
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Sponsor of HB 216.                                                                                       
                                                                                                                                
CHAD HUTCHINSON, staff to Senator John Coghill                                                                                  
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Commented on HB 216.                                                                                    
                                                                                                                                
ED FOGELS, Deputy Commissioner                                                                                                  
Department of Natural Resources (DNR)                                                                                           
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Commented on HB 216.                                                                                     
                                                                                                                                
RICHARD BISHOP, representing himself                                                                                            
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  Supported HB 216.                                                                                        
                                                                                                                                
ROD ARNO, Executive Director                                                                                                    
Alaska Outdoor Council                                                                                                          
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Supported HB 216.                                                                                        
                                                                                                                                
REPRESENTATIVE CATHY MUÑOZ                                                                                                      
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Sponsor of HB 274.                                                                                       
                                                                                                                                
CRYSTAL KOENEMAN, staff to Representative Muñoz                                                                                 
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Provided a sectional analysis of HB 274.                                                                 
                                                                                                                                
ALPHEUS BULLARD                                                                                                                 
Legislative Legal Services                                                                                                      
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Answered questions on HB 274.                                                                            
                                                                                                                                
WYN MENEFEE, Deputy Director                                                                                                    
Alaska Mental Health Trust Land Office                                                                                          
Department of Natural Resources (DNR)                                                                                           
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Answered questions on HB 274.                                                                            
                                                                                                                                
DOUG ISAACSON, General Manager                                                                                                  
Minto Development Corporation                                                                                                   
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  Supported HB 274.                                                                                        
                                                                                                                                
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
3:32:06 PM                                                                                                                    
CHAIR  CATHY   GIESSEL  called  the  Senate   Resources  Standing                                                             
Committee meeting  to order at 3:32  p.m. Present at the  call to                                                               
order  were  Senators  Stedman,   Costello,  Coghill,  and  Chair                                                               
Giessel.                                                                                                                        
                                                                                                                                
        HCR 17-SUPPORT AVIATION INDUSTRY; USE STATE LAND                                                                    
                                                                                                                                
3:32:44 PM                                                                                                                    
CHAIR GIESSEL  announced consideration  of HCR 17  [CSHCR 17(TRA)                                                               
was before the committee].                                                                                                      
                                                                                                                                
GINGER BLAISDELL, staff to  Representative Shelley Hughes, Alaska                                                               
State  Legislature,  said  this  measure  was  brought  to  their                                                               
attention by  the Unmanned Aircraft System's  Task Force, because                                                               
one individual was able to  secure a contract with the Department                                                               
of Natural Resources  (DNR) to test his  unmanned aircraft system                                                               
equipment  by using  state lands.  The task  force put  this idea                                                               
together and HCR 17 is the result.                                                                                              
                                                                                                                                
REPRESENTATIVE SHELLEY HUGHES,  Alaska State Legislature, Juneau,                                                               
Alaska, sponsor  of HCR  17, said the  task force's  top priority                                                               
has  been safety  and  privacy,  but they  are  also tasked  with                                                               
promoting economic  activities related to this  industry and that                                                               
is what HCR 17 does.                                                                                                            
                                                                                                                                
She  said Alaska  has a  lot of  space, which  is unique,  and if                                                               
state  land can  be made  available,  industry could  use it  for                                                               
research  testing, training,  manufacturing  and maintenance  and                                                               
operations of the systems. She  said this will be a multi-billion                                                               
industry and would be a good  thing for the state. These are high                                                               
tech jobs  and young people are  very interested in this  kind of                                                               
activity. It could open the door for some of them in the future.                                                                
                                                                                                                                
3:36:27 PM                                                                                                                    
CHAIR GIESSEL commented that the  University of Alaska, Fairbanks                                                               
(UAF)  has the  Poker Flats  Research area  where her  son worked                                                               
developing  the  initial  Unmanned  Aircraft  Program  (UAP).  He                                                               
counted  walrus in  the  Aleutians with  a  little aircraft  that                                                               
could fly over  them without them being concerned at  all, but if                                                               
a regular  aircraft went over,  even if  it was higher,  they all                                                               
jumped into the  water. It has multiple uses and  was also tested                                                               
on the TransAlaska Pipeline System (TAPS).                                                                                      
                                                                                                                                
SENATOR  COSTELLO thanked  the sponsor  for  this resolution  and                                                               
asked if she had run into any  privacy issues or if there are any                                                               
privacy guidelines to oversee this industry.                                                                                    
                                                                                                                                
REPRESENTATIVE HUGHES replied  that privacy is always  a topic on                                                               
their agenda  and Alaska  has statutes that  do apply.  Right now                                                               
they are  working with  law enforcement to  create tools  to deal                                                               
with situations  if they  don't already  exist. It's  tricky, but                                                               
she  has  a draft  bill  for  next  year. Congress  is  currently                                                               
looking at the  FAA reauthorization bill and there  is talk about                                                               
restricting states  as to what they  can do and whether  they can                                                               
even specify unmanned  aircraft systems in their  statutes. It is                                                               
an  evolving technology  and she  doesn't want  to penalize  this                                                               
industry specifically if laws are  already on the books that will                                                               
work.                                                                                                                           
                                                                                                                                
3:39:20 PM                                                                                                                    
She  said concerns  about  privacy were  expressed  on the  House                                                               
floor  and a  bill was  passed a  couple of  years ago  requiring                                                               
search  warrants in  conjunction with  the use  of drones.  There                                                               
were attempts  to put  privacy language  in this  resolution, but                                                               
this  bill  is about  economic  opportunities,  and another  bill                                                               
would be a proper vehicle for that.                                                                                             
                                                                                                                                
CHAIR  GIESSEL opened  public comment.  Finding none,  she closed                                                               
public testimony.                                                                                                               
                                                                                                                                
3:40:36 PM                                                                                                                    
SENATOR  COSTELLO  moved to  report  CSHCR  17(RES), version  29-                                                               
LS1327\E,  from  committee  with individual  recommendations  and                                                               
attached zero  fiscal note. There  were no objections and  it was                                                               
so ordered.                                                                                                                     
                                                                                                                                
3:41:07 PM                                                                                                                    
At ease                                                                                                                         
                                                                                                                                
        HB 216-NAVIGABLE WATER; INTERFERENCE, DEFINITION                                                                    
                                                                                                                                
3:41:40 PM                                                                                                                    
CHAIR  GIESSEL called  the meeting  back to  order and  announced                                                               
that  consideration  of  HB  216.  [CSHB  216(RES),  labeled  29-                                                               
LS0995\N, was before the committee.]                                                                                            
                                                                                                                                
REPRESENTATIVE DAVID TALERICO,  Alaska State Legislature, sponsor                                                               
of  HB 216,  testified  that  this measure  has  to  do with  the                                                               
state's  navigable  waters.  The  Submerged  Lands  Act  of  1953                                                               
recognized  each state  as holding  the title  for any  submerged                                                               
land under a navigable waterway  within its boundaries. This term                                                               
is  defined in  AS 38.05.965  (14), which  specifies a  number of                                                               
activities that can  be conducted in a body of  water in order to                                                               
deem  the body  as navigable.  While  the list  of activities  is                                                               
lengthy, there  are a  few omissions that  HB 216  hopefully will                                                               
address.                                                                                                                        
                                                                                                                                
He  said the  Submerged Lands  Act,  the Statehood  Act, and  the                                                               
Alaska  National Interest  Lands Conservation  Act (ANILCA)  have                                                               
provisions about  the state's  ability to  use its  waterways. He                                                               
takes this  seriously because our waterways  provide commerce for                                                               
some  people   and  they  provide  recreation,   exploration  and                                                               
subsistence,  as well.  Waterways in  several of  his communities                                                               
are highways.                                                                                                                   
                                                                                                                                
3:42:44 PM                                                                                                                    
SENATOR WIELECHOWSKI joined the committee.                                                                                      
                                                                                                                                
REPRESENTATIVE   TALERICO  said   he  had   conferred  with   the                                                               
Department  of  Natural  Resources  (DNR)  about  an  unambiguous                                                               
definition,  one that  was a  good enough  so there  would be  no                                                               
ambiguity about  where Alaska  stands on  its waterways  He noted                                                               
that there was an amendment to consider.                                                                                        
                                                                                                                                
3:44:39 PM                                                                                                                    
SENATOR COGHILL moved Amendment 1.                                                                                              
                                                                                                                                
                                                 29-LS0995\N.1                                                                  
                                                      Bullard                                                                   
                                                      4/13/16                                                                   
                                                                                                                                
                                                                                                                                
                          AMENDMENT 1                                                                                       
                                                                                                                                
                                                                                                                                
     OFFERED IN THE SENATE               BY SENATOR COGHILL                                                                     
          TO: CSHB 216(RES)                                                                                                     
                                                                                                                                
                                                                                                                                
     Page 2, line 7, following "season":                                                                                    
          Insert ", whether in a frozen or liquid state,"                                                                   
                                                                                                                                
     Page 2, lines 9 - 13:                                                                                                      
          Delete "harvesting of ice, state or federal                                                                       
     military  training, landing  and  takeoff of  aircraft,                                                                
     operation  of boats  or  other watercraft,  hovercraft,                                                                
     snow   machines,   all-terrain  vehicles,   and   other                                                                
     motorized   or   nonmotorized  vehicles,   storage   of                                                                
     vehicles,  and  [PUBLIC   BOATING,]  trapping,  hunting                                                                
     [WATERFOWL AND AQUATIC ANIMALS]"                                                                                           
          Insert "landing and takeoff of aircraft, and                                                                          
        public boating, trapping, hunting waterfowl and                                                                         
     aquatic animals"                                                                                                           
                                                                                                                                
SENATOR COGHILL  explained that this amendment  would "slim down"                                                               
the definition,  because of concerns  that this  definition would                                                               
actually make it tougher for  land dispositions within Alaska. It                                                               
deletes  the  harvesting  of ice  and  the  nonmotorized  vehicle                                                               
storage  and  inserts landing  and  takeoff  of aircraft,  public                                                               
boating, trapping,  hunting, water  fowl and aquatic  animals. It                                                               
also  says water  is  navigable  whether it's  in  the frozen  or                                                               
liquid  state.  He didn't  want  existing  verbiage to  create  a                                                               
problem  for Alaska  on  land disposals  or  create places  where                                                               
people could hide things in case law.                                                                                           
                                                                                                                                
SENATOR  STEDMAN objected  for discussion  and clarification.  He                                                               
liked the  direction the amendment  was going, but  was concerned                                                               
about how  it would  affect the southern  coastal regions  of the                                                               
state.  Some people  who moved  up here  from the  Lower 48  find                                                               
airplane   noise   objectionable,   and  it   seems   like   more                                                               
restrictions have  been put on  airplanes for ingress  and egress                                                               
to  peoples' properties.  One way  to restrict  them is  by using                                                               
municipal planning  ordinances. He wanted the  "pecking order" to                                                               
be clear  about how  this statute would  mesh with  municipal and                                                               
city ordinances.                                                                                                                
                                                                                                                                
SENATOR  COGHILL referenced  Alaska's Public  Trust Doctrine  and                                                               
enjoyment of  public waterways  on public  trust lands  is pretty                                                               
significant. So,  they want  to make sure  planes have  access on                                                               
water and on  frozen land. The language was meant  to assure that                                                               
the  Public  Trust  Doctrine was  upheld  without  creating  more                                                               
difficulties in disposal of public land in Alaska.                                                                              
                                                                                                                                
3:49:23 PM                                                                                                                    
SENATOR  STEDMAN  said to  put  a  finer  point on  it,  planning                                                               
departments or commissions  take property rights away  and it's a                                                               
very  sensitive  subject   when  municipalities  start  stripping                                                               
peoples' access  rights. He  wanted it  clear what  authority the                                                               
state has over municipalities with  this statute change. He wants                                                               
to make  it as  difficult as  possible for  folks that  showed up                                                               
fairly recently  to get away  from where  they live to  come here                                                               
and  make  it  just  like  the  place  they  left.  He  wanted  a                                                               
conversation  on that  issue. Then  he removed  his objection  to                                                               
adopting Amendment 1.                                                                                                           
                                                                                                                                
3:50:36 PM                                                                                                                    
CHAD  HUTCHINSON, staff  to Senator  John  Coghill, Alaska  State                                                               
Legislature, said  he had done  research on this issue  and there                                                               
are  multiple  definitions  of   navigable  waters  depending  on                                                               
whether you  are dealing with  a federal  or a state  agency. For                                                               
instance,  "navigable waters"  has  a separate  definition as  it                                                               
relates to the EPA and the Clean  Water Act as opposed to what HB                                                               
216  is  trying to  do.  There  is  a definition  for  "navigable                                                               
servitude"  as it  relates  to  the commerce  clause  when a  new                                                               
channel is built, particularly as  it pertains to the Coast Guard                                                               
and the  military. There  is a  definition of  "navigable waters"                                                               
under the  Quiet Title Act,  evidenced by the Sturgeon  Case, and                                                               
whether the determination can be  made in federal district court,                                                               
something the  state has struggled  with for years.  Another case                                                               
in the year  2000 tried to assert jurisdiction  under the federal                                                               
Quiet  Title Act,  and the  federal court  system basically  said                                                               
because they hadn't made a  determination as to navigability yet,                                                               
they could move  to dismiss and the state would  have to wait for                                                               
some  sort of  legislative change  from Congress,  which is  what                                                               
they are attempting to do right now.                                                                                            
                                                                                                                                
HB  216 references  the  state Public  Trust  Doctrine, which  is                                                               
distinct  from  those  other definitions.  Every  state's  public                                                               
trust doctrine  is different, he  explained, but they  have three                                                               
common elements:  they handle commerce and  focus on navigability                                                               
and on  fisheries. Those are  the three  things that are  held in                                                               
trust  for the  beneficiaries. The  trustees are  the legislative                                                               
branch and they make a determination  as to what they consider to                                                               
be important  to be held in  trust for the public.  In this case,                                                               
the  existing statute  says that  float planes  and aircraft  are                                                               
important.   The Public Trust  Doctrine has  multiple definitions                                                               
depending on  what the state  deems to be important:  ie, cutting                                                               
ice, bathing, and  swimming, on an open  beach. The determination                                                               
has  been made  that there  is a  public interest  in maintaining                                                               
some sort of access into remote  areas of Alaska for float planes                                                               
and that is why it is included in the current definition.                                                                       
                                                                                                                                
MR. HUTCHINSON said expanding the  Public Trust Doctrine too much                                                               
or  adding  multiple  definitions can  adversely  affect  private                                                               
property interests  in the surrounding adjacent  areas. For state                                                               
land disposals they have to  fit into the statutory definition of                                                               
allowable uses.  Depending on what  region you are in  in Alaska,                                                               
aircraft have  a significant  influence for  just getting  in and                                                               
out  of a  community. The  amendment  is balanced  to assure  the                                                               
adjacent private  property owners' interest isn't  damaged versus                                                               
the  sponsor's intent  of  having  some sort  of  analysis as  it                                                               
relates to frozen water conditions.                                                                                             
                                                                                                                                
SENATOR STEDMAN  said his  district doesn't  have the  ice issues                                                               
that  people in  the north  have.  When water  freezes over  here                                                               
people don't  put skis on planes;  they just don't fly.  But they                                                               
do fly into bays  to drop off and pick up  people from the beach,                                                               
from their home on the water  front, or from a public easement on                                                               
the  beach. That  type of  ingress/egress is  his concern  in his                                                               
district. It  is a  very sensitive  topic, because  it infuriates                                                               
Alaskans when  people come up here  and want to shut  down access                                                               
because they  don't like  propeller noise  for three  minutes. He                                                               
wants to  protect the rights  that Alaskans have to  access their                                                               
property as  much as  absolutely possible  and not  be interfered                                                               
with by people paddling around  in some "non-motorized gizmo." He                                                               
wanted  a clearer  definition of  how this  language change  will                                                               
interact with that policy.                                                                                                      
                                                                                                                                
3:57:49 PM                                                                                                                    
SENATOR COGHILL said  he totally agreed with  Senator Stedman and                                                               
that  is why  the measure  talks specifically  about landing  and                                                               
take-off of aircraft, public boating, trapping and hunting.                                                                     
                                                                                                                                
CHAIR GIESSEL, finding  no further questions, invited  the DNR to                                                               
testify.                                                                                                                        
                                                                                                                                
3:58:16 PM                                                                                                                    
ED FOGELS,  Deputy Commissioner, Department of  Natural Resources                                                               
(DNR),  said  DNR deals  with  two  navigability issues:  one  is                                                               
fighting  for state  ownership of  lands under  navigable waters.                                                               
They challenge  the Bureau  of Land Management  any time  a state                                                               
land parcel  is conveyed to  make sure that navigable  waters are                                                               
identified,  because  those  lands under  navigable  waters  were                                                               
already state-owned  at statehood.  Therefore, they  shouldn't be                                                               
part  of Alaska's  statehood  land entitlement.  He  said HB  216                                                               
doesn't really  affect that task,  at all, because it  focuses on                                                               
the state's  definition of navigability.  But in looking  at this                                                               
bill, he  saw perhaps some  unintended consequences  with impacts                                                               
on private property, but the amendment addresses those concerns.                                                                
                                                                                                                                
SENATOR STEDMAN  said he  has had  numerous conversations  in his                                                               
office on  this subject  over the  years. A  lot of  state leases                                                               
were  transferred  to most  of  the  major Southeast  communities                                                               
several years ago  and the regulatory environment  that the state                                                               
imposed  was much  more amenable  to the  public than  when these                                                               
leases were  turned over to  the municipalities. A lot  of people                                                               
were  infuriated  because   property  rights  were  inadvertently                                                               
stripped away, and that is where  they are stuck today. He wanted                                                               
to know  how this measure  interacts on the municipal  level with                                                               
potential removal of  property rights folks have  under the state                                                               
guidance.                                                                                                                       
                                                                                                                                
MR. FOGELS answered that this  bill with the amendment won't have                                                               
any impact  on the status  quo. If there is  a body of  water the                                                               
state  believes  is  navigable   today  under  current  law  this                                                               
amendment would ensure that definition  would hold in all seasons                                                               
and even  if the body of  water is frozen. The  actual water body                                                               
itself would still be accessible as it is today.                                                                                
                                                                                                                                
MR. FOGELS  explained that the  state definition  of navigability                                                               
comes  into play  when the  DNR conveys  land to  municipalities,                                                               
because  it can't  convey ownership  of  navigable waters.  These                                                               
waters have to be identified  and excluded from conveyance to the                                                               
municipalities.  They   are  retained  in  state   ownership  and                                                               
easements  would likely  be reserved  along  those water  bodies.                                                               
This bill won't change that in any way.                                                                                         
                                                                                                                                
SENATOR STEDMAN  gave him  another example:  Senator Wielechowski                                                               
wants to go trout  fishing and grabs his fly rod  and wants to be                                                               
picked up  in front of  his house or  from a state  easement; his                                                               
concern is the  restriction that may be imposed on  him to have a                                                               
plane come in and pick him up  and take him trout fishing for the                                                               
day or load his family's camping gear  in a Beaver and go to some                                                               
lake. This  trend is very  slow, but  it is definitely  in place,                                                               
and he  wants state statute to  be as tight as  possible to block                                                               
it. "If  they don't want to  hear float planes, Southeast  is not                                                               
the place to live," Senator Stedman exclaimed.                                                                                  
                                                                                                                                
MR. FOGELS said this bill would not add further restrictions.                                                                   
                                                                                                                                
SENATOR STEDMAN  said he recognizes  that, but he wanted  to know                                                               
if this  bill interacts with  any municipal ordinances  when some                                                               
municipalities  may not  want  airplane noise  before  9 a.m.  in                                                               
after 5 p.m.                                                                                                                    
                                                                                                                                
4:05:22 PM                                                                                                                    
MR.  FOGELS  responded  that  the   intent  of  the  navigability                                                               
definition  is   to  define  where   state  ownership   is  among                                                               
municipal, private, and state lands,  and it was beyond his level                                                               
of expertise  to know if the  state of Alaska and  a municipality                                                               
disagree on  how float  planes should be  regulated on  a typical                                                               
pond.  But  typically,  the  state   would  defer  to  the  local                                                               
government to manage that activity if push came to shove.                                                                       
                                                                                                                                
SENATOR STEDMAN removed his objection  to adopting the amendment,                                                               
but he wanted  the opportunity for his staff to  work on the bill                                                               
for  a day  to make  sure they  leave no  stone unturned  to keep                                                               
property rights embedded with Alaskans who own the property.                                                                    
                                                                                                                                
SENATOR  COSTELLO said  she had  identified a  drafting error  on                                                               
page  1, line  12,  where  the number  should  be  2. After  some                                                               
discussion, it was decided that there was no error.                                                                             
                                                                                                                                
CHAIR GIESSEL opened public comment.                                                                                            
                                                                                                                                
4:08:43 PM                                                                                                                    
RICHARD   BISHOP,   representing  himself,   Fairbanks,   Alaska,                                                               
supported HB 216. One thing caught  his attention on page 1, line                                                               
8:                                                                                                                              
     Section 1(a)(1) authorized by law or regulation or by                                                                  
      a permit issued by a federal or [AGENCY AND A] state                                                              
     agency;                                                                                                                    
                                                                                                                                
He said  the Sturgeon case has  been very prominent in  the news.                                                               
The Supreme Court told the Ninth  Circuit Court to go back to the                                                               
drawing  board and  get  it right.  That  promises ongoing  court                                                               
deliberation over some period of  time. The National Park Service                                                               
issued a news release saying  this hadn't really changed anything                                                               
and that they  would continue business as  usual in administering                                                               
lands. That  raises the question  of what sort of  regulations or                                                               
permits  they  may  apply  during the  course  of  further  court                                                               
deliberations on  the question of  the extent of  their authority                                                               
over  state navigable  waters. He  said  it is  a very  dangerous                                                               
precedent  to have  state statute  that  says "authorized  by...a                                                               
permit   issued  by   the  federal   government."  It   would  be                                                               
appropriate  to  qualify that  as  a  "valid federal  permit"  or                                                               
simply  leave reference  to "federal  permit"  out. In  political                                                               
gamesmanship   in  the   legal   arena  it   would  be   entirely                                                               
inappropriate for the  state to tacitly concede  that any federal                                                               
permit without  qualification would be cause  for restricting the                                                               
use  of state  navigable  waters. Wording  should  be changed  to                                                               
avoid that  implication. Otherwise he  supports the bill  and the                                                               
amendment.                                                                                                                      
                                                                                                                                
4:12:20 PM                                                                                                                    
ROD  ARNO, Executive  Director, Alaska  Outdoor Council,  Juneau,                                                               
Alaska,  supported HB  216. He  also supported  Senator Coghill's                                                               
amendment. He  had the same  concerns as Mr. Bishop  about having                                                               
some qualifier on the federal permitting.                                                                                       
                                                                                                                                
CHAIR  GIESSEL,  finding  no  further  testimony,  closed  public                                                               
comment  on  HB  216.  Finding no  further  objection,  she  said                                                               
Amendment 1 is adopted.                                                                                                         
                                                                                                                                
SENATOR COGHILL  asked the sponsor  to respond to  "authorized by                                                               
law or by a permit".                                                                                                            
                                                                                                                                
REPRESENTATIVE TALERICO  said he talked about  Alaska's potential                                                               
to develop  hydroelectric projects in  the future, and  wanted to                                                               
"massage" a provision  giving the state the ability  to work with                                                               
the  federal  government on  permitting  those  projects. He  had                                                               
discussed  inserting "valid"  in front  of "permit",  but he  was                                                               
open to  suggestions. He shared Senator  Stedman's sentiments and                                                               
would strengthen that language if possible.                                                                                     
                                                                                                                                
4:15:39 PM                                                                                                                    
MR. HUTCHINSON said he talked  with Mr. Bishop earlier today, and                                                               
the Sturgeon case in some  respects is a slightly different issue                                                               
as  it  relates to  state  statute  and  the state  Public  Trust                                                               
Doctrine. The  Sturgeon issue is  on federal navigability  on the                                                               
Nation River  in the Yukon.  It has been  sent back to  the Ninth                                                               
Circuit with instructions,  but the actual specifics  of the case                                                               
have not been determined. He  understands the possible confusion,                                                               
which is worthy of further consideration.                                                                                       
                                                                                                                                
CHAIR GIESSEL announced  that she would hold HB  216 in committee                                                               
to allow the opportunity to work on it.                                                                                         
                                                                                                                                
         HB 274-STATE LAND; EXCHANGES; LEASE EXTENSIONS                                                                     
                                                                                                                                
4:17:13 PM                                                                                                                    
CHAIR GIESSEL  announced consideration of HB  274 [CSHB 274(RES),                                                               
version 29-LS0234\N, was before the committee.]                                                                                 
                                                                                                                                
REPRESENTATIVE  CATHY MUÑOZ,  Alaska  State Legislature,  Juneau,                                                               
Alaska, sponsor of  HB 274 said about four or  five years ago she                                                               
was  contacted by  a local  non-profit who  had been  working for                                                               
many  years  on a  potential  land  exchange  with the  State  of                                                               
Alaska. The  state wanted  to acquire the  trail land  that leads                                                               
out to  a state park that  is on private property,  and the owner                                                               
of the trail  wanted a piece of nearby land  to get better access                                                               
to their camp.  Discussions to try to initiate  and finalize this                                                               
land exchange began in early 2000.                                                                                              
                                                                                                                                
REPRESENTATIVE MUNOZ  said when she  became involved she  found a                                                               
number of  inefficiencies in land exchange  statute. Two sections                                                               
of  code  govern  land  exchanges; one  is  land  exchanges  with                                                               
municipalities, and that  section of code works  pretty well, and                                                               
the other  is private  land exchanges,  which is  very cumbersome                                                               
and  almost impossible  to finalize  a  successful land  exchange                                                               
under.                                                                                                                          
                                                                                                                                
The section of code that  governs private land exchanges includes                                                               
private  entities,  the  Mental Health  Trust  Authority,  tribal                                                               
entities as well  as the federal government.  The last successful                                                               
land exchange  under this section  of code happened in  2006 near                                                               
Skagway where a piece of state  land was exchanged for a piece of                                                               
federal  land near  Gustavus for  the  Falls Creek  Hydroproject.                                                               
That took close to 20 years to finalize.                                                                                        
                                                                                                                                
REPRESENTATIVE MUNOZ explained  that the reason it  takes so long                                                               
is  because  one  needs  to  have exact  value  between  the  two                                                               
parcels, which  is very difficult  to achieve, and the  fact that                                                               
the appraisal is only good for  one year. So, after going through                                                               
an  extensive public  process, the  best interest  finding, three                                                               
public hearings, the  surveying and the appraisal, at  the end of                                                               
the one  year the  whole process  has to  start over  because the                                                               
appraisal is only  good for one year. Under  this legislation the                                                               
best interest finding will continue,  but instead of exact value,                                                               
it  calls for  approximate equal  value. It  has the  same notice                                                               
provisions  under   AS  38.05.945   and  best   interest  finding                                                               
provisions  that are  used for  all  oil and  gas leases,  timber                                                               
sales, and leasing of mineral land.                                                                                             
                                                                                                                                
4:21:26 PM                                                                                                                    
HB 274 has  language that affirms that a mineral  estate can only                                                               
be  executed  consistent  with the  State  Constitution  or  with                                                               
federal  law. In  particular the  Statehood Act,  Section (6)(i),                                                               
affirms that  the state can only  convey a mineral estate  to the                                                               
federal government.  Other language  requires the exchange  to go                                                               
before the  legislature for review  and approval if  the exchange                                                               
has a value of $5 million or more.                                                                                              
                                                                                                                                
REPRESENTATIVE MUNOZ summarized  that the main changes  in HB 274                                                               
are that the exchange procedures  will follow AS 38.05.035(e) and                                                               
the   notice  provisions   under  AS   35.05.945.  The   one-year                                                               
limitation has been  removed on the validity of  an appraisal and                                                               
approximate equal  value is used  instead of exact value  for the                                                               
potential exchanges.                                                                                                            
                                                                                                                                
4:22:59 PM                                                                                                                    
CHAIR GIESSEL asked for a sectional analysis.                                                                                   
                                                                                                                                
4:23:07 PM                                                                                                                    
CRYSTAL  KOENEMAN, staff  to Representative  Muñoz, Alaska  State                                                               
Legislature, provided a sectional analysis of HB 274 as follows:                                                                
                                                                                                                                
Section  1.  Removes  a  reference   in  AS  38.05.030(c)  to  AS                                                               
38.05.090 which is repealed in sec. 13 of the bill.                                                                             
                                                                                                                                
Section 2.  Adds two new  subsections to AS 38.05.070.  The first                                                               
subsection   permits   the   Department  of   Natural   Resources                                                               
(department) to extend  certain existing land leases if  it is in                                                               
the  best  interest   of  the  state  and   necessary  while  the                                                               
department   considers   applications.  The   second   subsection                                                               
provides that the  extensions are not subject  to AS 38.05.035(e)                                                               
and  it requires  public notice  of a  lease extension  under the                                                               
section.                                                                                                                        
                                                                                                                               
Section  3.  Applies  existing notice  standards  to  state  land                                                               
exchanges.                                                                                                                      
                                                                                                                                
4:24:13 PM                                                                                                                    
Section 4.  Clarifies that in AS  38.05 the terms "state  land ''                                                               
and "land"  include shoreland and  tideland. It was  suggested by                                                               
Legislative Legal Division as cleanup language.                                                                                 
                                                                                                                                
Section 5. Amends AS 38.50.010  to add two new requirements: when                                                               
the director disposes of state land  or an interest in state land                                                               
the disposal  must be in the  best interest of the  state and the                                                               
director must provide notice under AS 38.05.945.                                                                                
                                                                                                                                
Section  6.  Adds three  new  subsections  to AS  38.50.010  that                                                               
establish  procedures  for  the  exchange of  state  land  or  an                                                               
interest  in  state  land  and  requires  legislative  review  of                                                               
exchanges valued at $5 million or more.                                                                                         
                                                                                                                                
4:25:11 PM                                                                                                                    
Section  7.  Removes  a  requirement   that  the  director,  when                                                               
negotiating  a  land  exchange involving  more  than  one  party,                                                               
"consider only the  land and other consideration  which the state                                                               
would convey and receive if the exchange were executed."                                                                        
                                                                                                                                
Section 8.  Removes an existing  limitation in AS  38.50.050 that                                                               
was deemed by the Legislative  Legal Division to not add anything                                                               
and references "significant public  purpose" which is not defined                                                               
in statute nor is it used anywhere  else and there is no case law                                                               
referencing  it.  It is  clean  up  language clarifies  that  any                                                               
conveyances must be  authorized by the Constitution  of the State                                                               
of Alaska and by applicable federal law.                                                                                        
                                                                                                                                
Section 9.  Amends AS 38.50.070  to provide that,  unless waived,                                                               
the appropriate  state agency will  continue to  administer valid                                                               
existing rights in land, or  interests in land, conveyed under AS                                                               
38.50 and that revenue derived  from existing rights in the land,                                                               
or an  interest in  land, will  continue to  accrue to  the state                                                               
until the land is conveyed under AS 38.50 .150                                                                                  
                                                                                                                                
4:26:42 PM                                                                                                                    
Section 10. Changes the requirement  that the director hold three                                                               
public hearings  concerning the exchange  of land valued  at more                                                               
than $5,000,000 to a requirement  that the director hold at least                                                               
two public  meeting, one  of which  must be held  in person  in a                                                               
municipality close to the proposed land exchange.                                                                               
                                                                                                                                
Section 11. Conforms AS 38.50.140 to  changes made in secs. 6 and                                                               
13 (repeal of AS 38.50.020). Makes de minimus editorial changes.                                                                
                                                                                                                                
Section 12. Clarifies  that in AS 38.50 the terms  "state land ''                                                               
and "land" include shoreland and  tideland and was recommended by                                                               
Legislative Legal.                                                                                                              
                                                                                                                                
4:27:39 PM                                                                                                                    
Section  13.  Repeals   AS  38.50.020,  38.50.040,  38.50.080(b),                                                               
38.50.090,  38.50.100,  38.50.110, 38.50.120(b),  and  38.50.130.                                                               
She said  an explanation was in  their packets, but she  would go                                                               
over those if that was the committee's will.                                                                                    
                                                                                                                                
4:28:06 PM                                                                                                                    
SENATOR  STEDMAN   asked  for  clarification  of   references  to                                                               
"submerged lands  below mean  low tide and  tidelands up  to mean                                                               
high tide" and "in-shoreland."                                                                                                  
                                                                                                                                
MS.  KOENEMAN said  that Alpheus  Bullard from  Legislative Legal                                                               
was on line to clarify.                                                                                                         
                                                                                                                                
SENATOR  STEDMAN   asked  Mr.   Bullard  to   define  "shoreland,                                                               
tideland, and submerged land."                                                                                                  
                                                                                                                                
4:28:57 PM                                                                                                                    
ALPHEUS  BULLARD, Legislative  Legal,  Alaska State  Legislature,                                                               
Juneau, Alaska,  answered that shoreland and  tideland don't have                                                               
a specific definition  in statute. These changes  are included in                                                               
this bill to  make all the provisions consistent.  So, instead of                                                               
calling "shore or  tide," now they say  "shoreland and tideland."                                                               
The  normal understanding  of those  words is  that shoreland  is                                                               
along  the shore  and tideland  is land  that is  touched by  the                                                               
tide.                                                                                                                           
                                                                                                                                
SENATOR STEDMAN  said he  wanted some help  from DNR,  because he                                                               
thought  there  was  a clear  delineation  of  separate  property                                                               
rights  whether one  is  in  the uplands  or  shoreland versus  a                                                               
tideland versus submerged lands.                                                                                                
                                                                                                                                
CHAIR GIESSEL said that could be done.                                                                                          
                                                                                                                                
REPRESENTATIVE  MUNOZ interrupted  that that  Ms. Koenaman  would                                                               
read the definition into the record.                                                                                            
                                                                                                                                
MS. KOENEMAN read from AS 38.05.965, subsection (23):                                                                           
                                                                                                                                
     Shoreland means  land belonging to the  state, which is                                                                    
     covered by non-tidal water that  is navigable under the                                                                    
     laws of  the United  States up  to ordinary  high water                                                                    
     mark as modified by accretion, erosion or election.                                                                        
                                                                                                                                
4:30:58 PM                                                                                                                    
SENATOR WIELECHOWSKI  asked if "when  it is in the  best interest                                                               
of the state"  on line 5 in section 5  is an appealable decision,                                                               
and  if  it  is  subject  to  a lawsuit  and  if  there  are  any                                                               
recommendations on how the department  is supposed to define what                                                               
is in the best interest of the state.                                                                                           
                                                                                                                                
REPRESENTATIVE MUNOZ  replied that  the best interest  finding is                                                               
necessary and is  outlined in statute. That same  finding is used                                                               
on all  existing land lease deals  with DNR. It is  an appealable                                                               
decision.  That was  affirmed by  Wyn  Menefee, Deputy  Director,                                                               
Alaska  Mental   Health  Lands   Trust,  Department   of  Natural                                                               
Resources (DNR), who was also in the audience.                                                                                  
                                                                                                                                
SENATOR WIELECHOWSKI  said line 8  looks like a  very significant                                                               
change, but he was  told it is not. It says  the director has the                                                               
right  to dispose  of state  land or  interest in  land and  then                                                               
language is added: including the  land estate, the mineral estate                                                               
or both.  And when they  start talking about mineral  estate that                                                               
means oil  and gas, which  triggers a  lot of strong  emotions in                                                               
this  committee.  He  asked  her to  explain  the  rationale  for                                                               
including mineral estate and to  reassure him they are not giving                                                               
the director  the ability to  give away oil  and gas rights  to a                                                               
private individual.                                                                                                             
                                                                                                                                
REPRESENTATIVE  MUNOZ  replied  that  an exchange  of  a  mineral                                                               
estate  can  only  be  conveyed  by  the  state  to  the  federal                                                               
government  and  the  section   8  language  is  consistent  with                                                               
existing  statute. It  says "exchanges  must be  pursuant to  the                                                               
State  Constitution  and applicable  federal  law,  which is  the                                                               
Statehood Act,  Section (6)(i), which  requires the state  not to                                                               
dispose of those  interests to any entity other  than the federal                                                               
government." However, the state can  receive a mineral estate and                                                               
having that language is helpful in clarifying that.                                                                             
                                                                                                                                
SENATOR  WIELECHOWSKI said  it  looks like  language  on page  3,                                                               
lines  10-14, deletes:  "exchanges shall  be for  the purpose  of                                                               
consolidating state  land holdings, creating land  ownership, and                                                               
use patterns, which will permit  more effective administration of                                                               
the  state public  domain, facilitating  the objectives  of state                                                               
programs or  other public purposes."  He asked the  rationale for                                                               
taking that out.                                                                                                                
                                                                                                                                
REPRESENTATIVE   MUNOZ  replied   that  language   is  considered                                                               
superfluous.  The department  is  focusing on  just  five or  six                                                               
categories, when  in fact  there might  be a  broader opportunity                                                               
which is  covered through  the best  interest finding.  The state                                                               
would not  enter into an  exchange unless  it clearly was  in the                                                               
state's best interest.                                                                                                          
                                                                                                                                
4:34:35 PM                                                                                                                    
SENATOR  WIELECHOWSKI asked  the  rationale for  the repealer  in                                                               
section 13.38.50.080(b) that says:                                                                                              
                                                                                                                                
     The  director in  implementing the  provisions of  this                                                                    
     chapter  may  not alienate  or  agree  not to  exercise                                                                    
     selection  rights granted  to the  state in  the Alaska                                                                    
     Statehood Act  or other applicable law  authorizing the                                                                    
     state to select land or interest in land.                                                                                  
                                                                                                                                
MS. KOENEMAN replied  that the state has already  selected all of                                                               
its land  under the  Alaska Statehood  Act, and  since it  has no                                                               
further  ability to  select land,  that subsection  is no  longer                                                               
necessary. She  added that the state  hasn't necessarily received                                                               
the selections.                                                                                                                 
                                                                                                                                
CHAIR  GIESSEL pointed  out that  it is  actually explained  on a                                                               
page in the document, which is on BASIS.                                                                                        
                                                                                                                                
SENATOR  WIELECHOWSKI asked  for  the rationale  for removing  AS                                                               
38.50.090 language on coordinating with other state agencies.                                                                   
                                                                                                                                
MS. KOENEMAN replied that language  was removed, because there is                                                               
now reference  to AS 38.05.035(e),  which includes  a requirement                                                               
for state agencies to provide  a summary through public comments.                                                               
The  department  would collect  those  public  comments from  the                                                               
other  agencies and  work  with the  other  departments on  their                                                               
concerns. Basically, it ties back to another version of statute.                                                                
                                                                                                                                
4:37:08 PM                                                                                                                    
WYN  MENEFEE, Deputy  Director, Alaska  Mental Health  Trust Land                                                               
Office, Department  of Natural  Resources (DNR),  Juneau, Alaska,                                                               
said he was chief of operations  for the Division of Mining, Land                                                               
and Water for 12.5 years and  this issue is very important to DNR                                                               
as they have  had "much trouble" getting  exchanges done, because                                                               
of existing language.                                                                                                           
                                                                                                                                
Many  needs are  coming  before them,  he  said, everything  from                                                               
consolidation   of  land   ownership  and   access  to   business                                                               
opportunities where  a lease  or an  easement doesn't  handle the                                                               
problem, and numerous people have been turned away.                                                                             
                                                                                                                                
He  said  the department  disposes  of  a  huge amount  of  state                                                               
interests   through   AS   38.05.035(e)  decisions,   which   are                                                               
appealable and can  be taken to court. If they  do something that                                                               
is not in  the best interest of the state,  the public surely can                                                               
challenge them. The department needs  a very supportable decision                                                               
if  they are  going  to go  through with  an  exchange, but  they                                                               
believe that can be done with this modification.                                                                                
                                                                                                                                
SENATOR  WIELECHOWSKI  asked him  to  provide  some exchanges  he                                                               
would  consider doing  under  this language  that  have not  been                                                               
considered before.                                                                                                              
                                                                                                                                
MR.  MENEFEE answered  that there  have  been proposed  exchanges                                                               
from  native corporations  and private  individuals for  purposes                                                               
that were wholly  for their purposes and weren't  in the interest                                                               
of the state, at  all.  Those were easy to  turn away. But others                                                               
offer up  something that would  be very beneficial to  the state,                                                               
for instance creating a landownership  pattern or maybe a mineral                                                               
estate  offering that  would be  good for  miners to  develop, or                                                               
maybe  the state  has been  wanting to  do work  on some  sort of                                                               
project and  hasn't been able  to without  the land. He  has seen                                                               
exchanges  proposed  for  conservation purposes  and  development                                                               
purposes, but only a few have been successful.                                                                                  
                                                                                                                                
He  explained  that  because  of   the  decision  process  in  AS                                                               
38.05.133(e)  the department  has to  describe why  it is  in the                                                               
best  interest of  the  state to  do an  exchange.  They have  to                                                               
articulate the analysis  of things they have  considered and what                                                               
it will do for the state that is good.                                                                                          
                                                                                                                                
SENATOR WIELECHOWSKI  asked what  deference the court  would give                                                               
to the best interest finding.                                                                                                   
                                                                                                                                
MR. MENEFEE  answered that there  is a lot  of case law  on state                                                               
best interest,  and the court  does not replace its  judgment for                                                               
the department's  as long  as it is  not acting  capriciously and                                                               
arbitrarily. They  look at whether  the statutes  and regulations                                                               
have been followed and if a  logical train of thought was used in                                                               
explaining  why it  is in  the best  interest of  the state.  The                                                               
courts  have said  they  don't want  to  define "best  interest,"                                                               
because it changes over time.                                                                                                   
                                                                                                                                
4:43:05 PM                                                                                                                    
SENATOR  WIELECHOWSKI said  this  measure really  is investing  a                                                               
huge amount  of power in  the DNR director and  commissioner, and                                                               
maybe  it would  be  good and  maybe not.  The  courts have  very                                                               
little say about the arbitrary  and capricious standard and it is                                                               
"extremely  difficult" to  overcome.  He asked  if  opening up  a                                                               
whole lot of land for exchanges is a big policy call.                                                                           
                                                                                                                                
MR.  MENEFEE responded  that he  thinks there  will be  plenty of                                                               
opportunities for  land exchanges.  He didn't  think it  opens up                                                               
anything more  grandiose than  before other  than the  process is                                                               
cleaner.  The   department  still  must  make   sound  defensible                                                               
decisions  and  the public  can  challenge  their decisions.  The                                                               
courts have told them numerous  times when they have gone astray;                                                               
so he feels the system has a check and balance.                                                                                 
                                                                                                                                
SENATOR  WIELECHOWSKI  said  it  doesn't  appear  that  they  are                                                               
changing  any legal  standards  that  a court  would  look at  as                                                               
diminishing the public process.                                                                                                 
                                                                                                                                
4:45:18 PM                                                                                                                    
MR.  MENEFEE agreed  with that  and added  the only  exception is                                                               
that "hearings" was  changed to "meetings" in one  section and it                                                               
went from three to two, the  main reason being they would have to                                                               
go through the  whole legislative process again  on anything that                                                               
fits into that one area of the statute.                                                                                         
                                                                                                                                
4:45:48 PM                                                                                                                    
DOUG  ISAACSON, General  Manager, Minto  Development Corporation,                                                               
Fairbanks, Alaska,  said he supported  HB 274. He noted  at least                                                               
three  letters  of  support  in   their  packets:  one  from  his                                                               
president,  Roxanne Frank,  one  from  their parent  corporation,                                                               
Seth-De-Ya-Ha Corporation, and one  from Edna Riley, president of                                                               
the Board of Directors.  There  was also a letter of support from                                                               
Mike  Kelly  who is  the  COO  of  the Dinyea  Corporation.  They                                                               
support it, because it cleans up the process.                                                                                   
                                                                                                                                
He appreciated  Senator Wielechowski's question about  it causing                                                               
a stampede,  and his corporation  in applying will have  to prove                                                               
that it's a  good idea for the state. When  he contemplates doing                                                               
some development on the Steese  Highway, he has his shareholders'                                                               
interest  at heart,  but he  also has  workforce development  and                                                               
benefits to the local community in  mind. But they aren't able to                                                               
use that  as a consideration  without the language in  this bill.                                                               
They still  have to  meet high  hurdles, but  this will  make the                                                               
process worth looking at.                                                                                                       
                                                                                                                                
4:48:16 PM                                                                                                                    
SENATOR WIELECHOWSKI  said a  new section  is being  added saying                                                               
that land or  an interest in land exchange  must be approximately                                                               
of equal value,  and then it says the director  may enter into an                                                               
exchange with a  finding that the value of  the property received                                                               
together  with  the  value  of other  public  benefit  equals  or                                                               
exceeds  the value  of the  property relinquished  by the  state.                                                               
He surmised  that some people will  want to trade swamp  land for                                                               
valuable state land  and he wanted "some findings"  on the record                                                               
about  what  "approximately  equal   value"  means  in  terms  of                                                               
protecting the citizens from that happening.                                                                                    
                                                                                                                                
MR. MENEFEE replied the rationale  behind going with "approximate                                                               
equal value"  rather than "appraised  fair market value  only" is                                                               
that when  you start taking "other  considerations" into account,                                                               
the  Universal  Standards   of  Professional  Appraisal  Practice                                                               
(USPAP), which is used nationwide  for coming up with fair market                                                               
value  doesn't   allow  using   "other  considerations"   in  the                                                               
valuation.                                                                                                                      
                                                                                                                                
For example, he said currently  an exchange is happening at Point                                                               
Bridget and  because of  the survey  an appraisal  couldn't quite                                                               
get to an exact equal value.  Two things could be done to resolve                                                               
the issue. It  could be equalized with cash or  one could say the                                                               
value is pretty  close, because the state now has  road access to                                                               
a state park,  which it did not have before  and the private land                                                               
owner  could have  shut down  access  to that  park. People  were                                                               
trespassing across it at all times  to get to the state park, and                                                               
the question  becomes is  that public  access valuable  enough to                                                               
warrant  covering the  difference  in value.  The decision  would                                                               
have to articulate  that and then it would have  to go before the                                                               
legislature.                                                                                                                    
                                                                                                                                
SENATOR WIELECHOWSKI asked  him to clarify when they  have to get                                                               
legislative approval.                                                                                                           
                                                                                                                                
MR. MENEFEE replied for unequal values.                                                                                         
                                                                                                                                
SENATOR  WIELECHOWSKI asked  if the  value is  unequal by  $1, do                                                               
they still have come to the legislature for approval.                                                                           
                                                                                                                                
MR. MENEFEE  replied because there was  terminology about unequal                                                               
value in previous statute, regulations  had clarified that it had                                                               
to be a small percentage.                                                                                                       
                                                                                                                                
4:52:45 PM                                                                                                                    
SENATOR  WIELECHOWSKI  asked  how he  would  define  "approximate                                                               
equal value."                                                                                                                   
                                                                                                                                
MR. MENEFEE replied that regulations  go through a public process                                                               
and  they think  that  would  be a  good  way  to further  define                                                               
"approximate equal  value" if  this measure  passes. In  his view                                                               
the  intent  is to  always  try  to  reach  equal value,  but  in                                                               
thinking  of "other  considerations"  it's hard  to  get to  that                                                               
exact equal value.  In the case of Point Bridget,  because of the                                                               
way the subdivision went, it  threw off the appraisal, making the                                                               
values  a little  off. So,  in that  case they  would have  to go                                                               
through another  cycle of trying  to do another  subdivision plat                                                               
to make it equal. Maybe one  could get close enough with $1000 to                                                               
$5000; it's hard to say, because  if you are dealing with a small                                                               
parcel an  unequal value  is going to  be a big  deal, but  for a                                                               
larger parcel that unequal value is a little bit more.                                                                          
                                                                                                                                
SENATOR WIELECHOWSKI  said hypothetically someone has  a piece of                                                               
swamp land that  is worth $50,000 and it happens  to be access to                                                               
a river where people want to go  and fish - the Kenai River - and                                                               
they  want to  swap that  for a  half-million dollar  parcel. The                                                               
director says  that piece is  only worth  $100,000, but it  has a                                                               
$400,000  approximately  value  to  the public,  because  of  the                                                               
access. So, they deem it to  be of approximately equal value. The                                                               
court gives them  broad deference in their decision.  As he reads                                                               
it that  wouldn't have  to come before  the legislature.  Is that                                                               
correct?                                                                                                                        
                                                                                                                                
4:55:15 PM                                                                                                                    
MR. MENEFEE replied  that his hypothetical would  come before the                                                               
legislature,  because he  would  consider that  an unequal  value                                                               
land   exchange.  Approximate   equal  value   gives  them   that                                                               
flexibility for  when the exchange  can't be made exact  and that                                                               
is the flexibility they are looking for.                                                                                        
                                                                                                                                
SENATOR WIELECHOWSKI countered that  the statute they are passing                                                               
gives the  director the ability  to say approximate  equal value,                                                               
but  also  the ability  to  include  the  value of  other  public                                                               
benefits in  that consideration.  So, could he  not say  we think                                                               
the value of access to this river is worth $450,000?                                                                            
                                                                                                                                
MR. MENEFEE replied for the  department to feel secure with that,                                                               
they would have  to be ready to  go to court and  uphold it. They                                                               
would  have to  say  why they  think the  other  benefit of  that                                                               
access is  worth that much  in monetary  terms. That could  be in                                                               
lost opportunities where the department  can say it knows it will                                                               
have to  later buy that  access for this  much or they  will lose                                                               
this opportunity that  will make the state this  many millions of                                                               
dollars. He would work to state the value in terms of money.                                                                    
                                                                                                                                
4:57:20 PM                                                                                                                    
SENATOR WIELECHOWSKI  said he appreciated  the dialogue  and sees                                                               
where he is  trying to get, but he is  naturally suspicious about                                                               
a bad deal escaping legislative oversight.                                                                                      
                                                                                                                                
MS.  KOENEMAN closed  by thanking  the committee  for considering                                                               
the bill.                                                                                                                       
                                                                                                                                
SENATOR COGHILL  moved to report  CSHB 274(RES), version  N, from                                                               
committee  with  individual  recommendations  and  attached  zero                                                               
fiscal note. There were no objections and it was so ordered.                                                                    
                                                                                                                                
4:58:50 PM                                                                                                                    
CHAIR  GIESSEL finding  no further  business to  come before  the                                                               
committee, adjourned  the Senate  Resources Committee  meeting at                                                               
4:58 p.m.                                                                                                                       

Document Name Date/Time Subjects
HB274 Sponsor Statement Ver. N.pdf SRES 4/13/2016 3:30:00 PM
HB 274
HB274 Legislation Ver. N.PDF SRES 4/13/2016 3:30:00 PM
HB 274
HB 274 Explanation of Changes Version N.pdf SRES 4/13/2016 3:30:00 PM
HB 274
HB 274 Sectional Analysis Version N.pdf SRES 4/13/2016 3:30:00 PM
HB 274
HB274 Fiscal Note-DNR.PDF SRES 4/13/2016 3:30:00 PM
HB 274
HB274 Supporting Documents-Letters of Support-Dinyea 041216.pdf SRES 4/13/2016 3:30:00 PM
HB 274
HB274 Supporting Documents-Letters of Support-Minto 020316.pdf SRES 4/13/2016 3:30:00 PM
HB 274
HB274 Supporting Documents-Letters of Support-Seth-De-Ya-Ah 020316.pdf SRES 4/13/2016 3:30:00 PM
HB 274
HB274 Supporting Documents-Repealer Explanation.pdf SRES 4/13/2016 3:30:00 PM
HB 274
CSHB216(RES)-Amendment in SRES-Coghill-4-13-2016.PDF SRES 4/13/2016 3:30:00 PM
HB 216
HB274-Updated Fiscal Note-DNR-4-13-2016.pdf SRES 4/13/2016 3:30:00 PM
HB 274
CSHB216-Updated Fiscal Note-DNR-4-13-2016.pdf SRES 4/13/2016 3:30:00 PM
HB 216