Legislature(2017 - 2018)BARNES 124
03/27/2017 01:00 PM House RESOURCES
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| Audio | Topic |
|---|---|
| Start | |
| Confirmation Hearing(s):|| Alaska Gasline Development Corporation Board of Directors | |
| Commissioner-designee - Department of Natural Resources | |
| HB155 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| *+ | HB 155 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
HB 155-AK MENTAL HEALTH TRUST LAND EXCHANGE
2:43:04 PM
CO-CHAIR JOSEPHSON announced that the final order of business
would be HOUSE BILL NO. 155, "An Act authorizing a land exchange
in which certain Alaska mental health trust land is exchanged
for certain national forest land and relating to the costs of
the exchange; and providing for an effective date."
2:43:28 PM
REPRESENTATIVE DAN ORTIZ, Alaska State Legislature, as the prime
sponsor, introduced HB 155. He explained that the bill would
authorize a land exchange between the Alaska Mental Health Trust
Authority ("Trust") and the U.S. Forest Service (USFS). The
bill would be a triple win, he said, because it would protect
viewsheds, enhance the timber industry, and help fund the
Trust's mental health programs. Lands vital to the recreation
and tourism industries would be protected, such as Ketchikan's
Deer Mountain, while at the same time the exchange would make
available other lands of comparable value to the timber
industry. Projects would be created, he continued, that would
act as a "bridge" in the industry until young-growth timber is
ready to be logged, which would address Representative
Rauscher's question about what can be done to stimulate logging
in the state. Because the bill would allow for time-sensitive
logging it would help sustain the timber industry, which is
beneficial to Southeast Alaska's economy. The Trust would gain
resources and revenue from the timber industry to fund programs
that serve some of the most vulnerable people in Alaska, he
said. The Trust provides funding to programs and services
across the state that benefit people with mental illness,
developmental disabilities, Alzheimer's disease, traumatic brain
injuries, and substance abuse disorders. He noted that the
Alaska Mental Health Trust Land Office has been working with the
U.S. Forest Service, communities, and interest groups to conduct
an administrative land exchange between the Trust and the USFS.
Additionally, he explained, U.S. Senator Lisa Murkowski and U.S.
Senator Dan Sullivan have introduced similar legislation in the
U.S. Congress with Senate Bill 131, and U.S. Representative Don
Young introduced [House Resolution] 513. Also, Senator Stedman
has introduced parallel legislation [SB 88] in the Alaska State
Senate. Overall, he said, HB 155 would increase revenue for
mental health programs and the timber industry, while still
protecting iconic lands used for recreation and tourism.
REPRESENTATIVE BIRCH asked whether an assessment of the mineral
value and other economic assessments have been done on the lands
that would be exchanged.
REPRESENTATIVE ORTIZ assured the committee the Trust would not
trade away lands for less valuable lands.
2:48:15 PM
REPRESENTATIVE JOHNSON requested the sponsor to expound on why
he thinks the Trust would not trade for lands of lesser value.
REPRESENTATIVE ORTIZ responded that the Trust was established
initially with land grants across the state and its activities
are funded through the monetization of these lands. The Trust
is bound to act in its own best interest, he said, so it can
further the goals for which it was founded. If the Trust
currently controls lands that offer large monetization potential
through mining, he wouldn't think the Trust would trade away
that land because it would go against the Trust's basic tenant
to maximize the potential of the lands it has been given.
REPRESENTATIVE RAUSCHER drew attention to the bill, beginning on
page 1, line 14, and continuing to page 2, lines 1-2, which name
the Southeast communities of Wrangell, Sitka, Juneau, Meyers
Chuck, Petersburg, and Ketchikan. He inquired whether the bill
is specific to "an area only."
REPRESENTATIVE ORTIZ answered it is his understanding that the
lands that would be exchanged with USFS are primarily lands in
Southeast Alaska and so in that sense it is region specific. In
further response to Representative Rauscher, he said the bill
could not apply to other lands in the state, but affects lands
illustrated by maps in the committee packet describing the lands
that are part of this exchange. He said his understanding is
that all the lands described on those maps are within Southeast
Alaska.
REPRESENTATIVE TALERICO offered his understanding that for the
exchange to happen, a bill must be passed by the Alaska State
Legislature as well as an action by Congress to authorize an
exchange between USFS and the Trust.
REPRESENTATIVE ORTIZ responded yes, the legislature needs to do
what it needs to do on the state's end, but the exchange won't
happen unless Congress also passes federal legislation. They
both must happen for this exchange to take place.
REPRESENTATIVE TALERICO opined moving HB 155 forward would help
with the decision-making in Congress.
REPRESENTATIVE ORTIZ agreed.
2:53:04 PM
REPRESENTATIVE RAUSCHER inquired whether this has been vetted
through all the important channels.
REPRESENTATIVE ORTIZ said yes.
REPRESENTATIVE PARISH noted the letters of opposition propose a
federal buyout of the land [instead of an exchange], but
observed that a buyout would not create jobs in the timber
industry, which is one of the primary benefits of the bill. He
asked whether there is something the legislature would need to
do to accommodate a buyout option if at a federal level it
became a possibility.
REPRESENTATIVE ORTIZ replied he is not prepared to answer that
question at this time. He agreed that a buyout option might
help the Trust and the tourism industry, but not the timber
industry, which is the third part of his "win-win-win."
REPRESENTATIVE PARISH inquired as to how many "job years" would
be enabled under the bill, job years meaning one job for one
year.
REPRESENTATIVE ORTIZ deferred to Mr. Wyn Menefee for an answer.
The bill is about making timber offerings more of a possibility,
he said, but it is out of his realm to quantify how much.
CO-CHAIR JOSEPHSON announced that a sectional analysis of HB 155
will be presented at the bill's next hearing and that a proposed
committee substitute will also be discussed at that time. He
then invited Mr. Menefee to provide a presentation on the bill.
2:55:50 PM
WYN MENEFEE, Deputy Director, Alaska Mental Health Trust Land
Office, Office of the Commissioner, Department of Natural
Resources (DNR), provided a PowerPoint presentation entitled,
"HB 155 - Alaska Mental Health Trust Land Exchange with the
USFS." Displaying slide 2, he explained that the Alaska Mental
Health Trust ("Trust") is a perpetual trust with the purpose of
improving the lives of its beneficiaries. The Trust has
programs that it funds to help create a comprehensive integrated
mental health program in Alaska, as the enabling Act dictated
for it to do. For example, he said, the Trust puts about $20
million a year in projects and activities at state agencies and
nonprofits, has provided about $3 million in grants since 2013
in Southeast Alaska, approved $10 million to help fund Medicare,
and a sundry of other things.
MR. MENEFEE turned to slide 3, and noted that the Trust puts out
money to help mental health. It needs money to do that, which
leads to the Alaska Mental Health Trust Land Office (Trust Land
Office). The job of the Trust Land Office, he said, is to make
money off the non-cash assets of the Trust and to improve the
lives of the beneficiaries. The land office manages multiple
asset classes and timber is one of those asset classes.
Although he is within the Department of Natural Resources, the
Trust Land Office basically acts as a contractor to the Alaska
Mental Health Trust Authority and manages the Trust's lands.
MR. MENEFEE provided slide 4, that illustrated Trust lands are
managed according to [four] principles as follows: make money
by maximizing long-term revenue from the land; protect and
improve the corpus; encourage diverse revenue-producing uses of
trust land; manage trust land. He said timber harvest is just
one aspect of a diverse portfolio, and the land exchange will
help diversify the Trust's portfolio and increase the Trust's
revenue stream, which will directly benefit beneficiaries. The
land exchange will protect the corpus by not allowing the timber
assets to become devalued, which could happen "if the timber
industry goes away." The Trust cannot sell timber if there is
nobody to buy it, he said, and revenue would be lost at that
point. It is very important to sell timber to a timber industry
while it still exists.
MR. MENEFEE displayed slide 5, "Land Distribution," and said the
map depicts the Trust's approximate land holdings that are
located throughout Southeast Alaska.
MR. MENEFEE addressed slide 6, that was a map showing that about
18,000 acres of Trust lands are adjacent to the communities of
Wrangell, Petersburg, Sitka, Juneau, Meyers Chuck, [and
Ketchikan]. The Trust also holds land in No Name Bay, he said.
The U.S. Forest Service has about 20,000 acres of remote land on
Prince of Wales Island and Shelter Cove. The reason for the
different acreages, he explained, is that it is an expected
amount of acreages that are being offered; however, it is an
equal value land exchange, which means that after the lands are
appraised, an equal value exchange must be done and so at the
end it won't be those acreages. Those acreages are being put on
the table and it is specific to just those parcels. It is done
in two phases, he continued. The first phase is exchanged
within one year. The key about rushing through the first year,
giving a smaller amount exchange, is the need to get timber to
market. The rest is exchanged within two years and this is when
parcels may be adjusted to equalize the value.
MR. MENEFEE brought attention to slide 7 depicting two maps, one
entitled, "Trust Land To Be Exchanged in Southeast Alaska," and
one entitled, "National Forest Service Land to be Exchanged."
He said the exchange is a consolidation [of Trust land
ownership].
3:00:55 PM
MR. MENEFEE turned to slide 8, and stated that the Trust Land
Office expects to receive between $40 and $60 million over the
next 20 years from timber sales from these parcels if they are
acquired through this exchange. Right now, he advised, trying
to cut timber on the lands currently owned by the Trust does not
go well last year's Deer Mountain episode being an example.
The communities do not want the Trust cutting timber. However,
he continued, the resources of the Trust are supposed to be
managed solely for the interests of the Trust, which means the
public can be ignored in that sense. Even if the public says it
doesn't like it, if it is in the best interests of the Trust,
the Trust is supposed to still do it. But, he said, the Trust
is trying to work it out by doing this exchange, so timber can
be cut where there is no opposition.
MR. MENEFEE stated that the Trust sees the land exchange and the
selling of the timber as a sustainable thing because trees grow
back, and another harvest will provide revenue in the future.
The land exchange will protect the timber and tourism industries
because it protects the viewsheds while giving the timber
industry the capability of having timber to market, which is
critical right now, because the timber industry is failing due
to lack of timber. He said the timber industry has multiple
layers of great economic impact because it includes stevedores,
equipment rental, maintenance, purchases, transportation, timber
fellers, and cruisers. Timber harvest on the exchanged lands
would be done in an environmentally responsible manner, he
maintained, because the Trust must follow the Alaska Forest
Resources and Practices Act.
MR. MENEFEE addressed slide 9. He explained that the Trust has
been working on this exchange for 10 years. The Trust tried to
do it administratively and entered into an agreement to initiate
with USFS to exchange these very lands. The problem, he said,
is that USFS's estimate of how much it would cost to get it done
and how long it would take goes well past when the timber
industry would fail in Alaska. "We're the only ones with timber
that potentially could be brought to market right now in any
amount that will keep the timber industry alive," he stated. He
reiterated that he is concerned about the timber industry
because if the timber industry is not viable, the Trust has
nobody to sell its timber to, and that is the devaluing of its
asset.
MR. MENEFEE stated that the Tongass Futures Roundtable [a group
of stakeholders convened by USFS, Alaska Region] had about 35
entities, everything from governments to boroughs to
conservation groups, and they all came out with the same idea
that the exchange is a good idea for the communities, the timber
industry, and the Trust. In working through this exchange, the
Trust has worked with conservation groups and other interested
parties. The Trust has modified boundaries and addressed
concerns to try to make the exchange successful. The only group
that has expressed concern in recent time, he said, is the
Southeast Alaska Conservation Council (SEACC). Primarily SEACC
has expressed concern about a litigation it has on No Name Bay.
He assured the committee that the Trust has clear title in No
Name Bay, can go forward with the exchange, and that there is
nothing in the litigation that would stop the Trust going
forward. He related that in its testimony on SB 88, [the
companion bill] in the other body, SEACC said it wanted No Name
Bay to go to USFS. He further related that SEACC has stated it
would like to have the Trust's lands purchased. However, he
continued, $40 million-$60 million doesn't seem to be available,
and the Trust does not have other options that compare with the
proposed exchange.
3:05:34 PM
MR. MENEFEE continued to slide 10, and noted USFS owns the
majority of land [in Southeast Alaska]. He said the areas on
the map colored in brown or tan cannot be cut, and the areas
colored in green could be cut, which is a small portion of the
forest. The U.S. Forest Service used to be the primary seller
of timber in Southeast Alaska; however, when USFS cut back on
the amount of timber sold each year, the timber industry started
failing and the number of jobs declined. The Trust is
attempting to bridge the interim while USFS transitions to a
sustainable young-growth harvest. It is critical right now to
get timber to market during that two-year period, he added, and
that is why the state and federal legislation needs to get
through.
MR. MENEFEE moved to slide 11, and explained that both the
federal and state legislation need to pass and are compatible.
The federal legislation directs USFS to complete the exchange,
he said, and the state legislation allows the Trust to go
forward with the exchange. Passage of both the federal and
state legislation would enable consummation of this exchange,
get the lands appraised and surveyed, and get timber to market
within the two-year timeframe.
MR. MENEFEE turned to slides 12 and 13, and concluded by
pointing out that there are many supporters of the exchange. He
reiterated that the bill is a positive revenue-generating
exchange that would help improve the lives of beneficiaries and
would help communities by preserving jobs, economies, viewsheds
and watersheds. He urged for the passage of HB 155.
REPRESENTATIVE BIRCH asked whether an appropriate assessment of
minerals has been done on the lands currently owned by the Trust
to assure that there is not another gold mine within.
MR. MENEFEE acknowledged assessing mineral potential is
difficult. However, to the best of the Trust's knowledge from
surveys that have been done, there is not a mineral potential
that would be lost.
3:09:01 PM
[HB 155 was held over.]