03/17/2010 01:30 PM House FINANCE

HOUSE BILL NO. 273                                                                                                            
                                                                                                                                
     "An Act relating to general grant land entitlements                                                                        
     for the City and Borough of Wrangell; and providing                                                                        
     for an effective date."                                                                                                    
                                                                                                                                
3:14:48 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE PEGGY WILSON, SPONSOR,  explained that HB 273                                                                    
would increase the land entitlement  to the City and Borough                                                                    
of Wrangell,  correcting a deficit in  the borough formation                                                                    
process.  She noted  that  the state  grants  state land  to                                                                    
support the development of a new borough.                                                                                       
                                                                                                                                
Representative  Wilson  detailed  that  Wrangell's  original                                                                    
entitlement in 2008 was only  1,952 acres. Negotiations with                                                                    
the  Department of  Natural Resources  (DNR) resulted  in an                                                                    
agreement  regarding acreage;  however a  new amendment  was                                                                    
required to bring the total  entitlement to 9,006 acres. The                                                                    
additional  acreage  would allow  the  City  and Borough  of                                                                    
Wrangell to  select the Sunny  Bay section of  the Cleveland                                                                    
Peninsula.  She emphasized  that  the land  is important  to                                                                    
provide  for the  needs of  the borough  and to  address the                                                                    
economic,   cultural,  and   resource-based  goals   of  the                                                                    
residents. The  parcel was  not included  originally because                                                                    
boundaries had not been set.                                                                                                    
                                                                                                                                
Representative Austerman asked  whether the requested parcel                                                                    
was connected to the rest of the borough's land.                                                                                
                                                                                                                                
REID  HARRIS, STAFF,  REPRESENTATIVE  PEGGY WILSON,  replied                                                                    
that Wrangell is  on an island, but  the borough encompasses                                                                    
other pieces.                                                                                                                   
                                                                                                                                
Representative  Austerman  queried   the  proximity  of  the                                                                    
proposed land  to the existing  borough. Mr.  Harris replied                                                                    
that a boat was needed to access the parcel.                                                                                    
                                                                                                                                
3:19:15 PM                                                                                                                    
                                                                                                                                
STEVE PRYSUNKA, DIRECTOR,  ALASKA CROSSINGS, WRANGELL, spoke                                                                    
to  concerns  regarding  the legislation.  He  testified  as                                                                    
representative of a  large community-service organization in                                                                    
Wrangell that provides  medical, dental, pharmaceutical, and                                                                    
therapeutic  services  to   the  surrounding  areas.  Alaska                                                                    
Crossings also  runs the largest wilderness  therapy program                                                                    
in  Alaska.  About 250  Alaskan  young  people travel  to  a                                                                    
floating facility off Deer Island,  a renovated logging camp                                                                    
moored near the island.                                                                                                         
                                                                                                                                
Mr.  Prysunka  told  the  committee   that  the  area  under                                                                    
consideration on Cleveland Peninsula  is important to Alaska                                                                    
Crossing's operation.  The waters  are protected and  can be                                                                    
used by the  kids. He was concerned about  the potential for                                                                    
development in  the area. He stressed  that Alaska Crossings                                                                    
with 85 employees  is the largest employer  in the community                                                                    
and  has been  a  significant financial  contributor to  the                                                                    
local economy.  He noted  that there  are not  other mooring                                                                    
options in the borough for the floating facility.                                                                               
                                                                                                                                
MARK GALLA,  OWNER/OPERATOR, ALASKA  PEAK &  SEAS, WRANGELL,                                                                    
spoke in  opposition to the  legislation. He  explained that                                                                    
he runs  a guide/charter operation  out of Wrangell.  He was                                                                    
concerned about  development in the land  selection, such as                                                                    
logging  or construction,  which  would  severely limit  his                                                                    
operations, especially brown bear hunting.                                                                                      
                                                                                                                                
Mr.  Galla emphasized  that development  of  the area  would                                                                    
displace  him  from the  area;  the  parcel covers  over  30                                                                    
percent of the area he operates  in and would result in a 30                                                                    
percent  negative  impact to  his  business.  He stated  his                                                                    
support of  Wrangell acquiring the  piece of land  to better                                                                    
serve the community.                                                                                                            
                                                                                                                                
3:25:19 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Thomas   noted  that  the  borough   would  have                                                                    
jurisdiction  over   the  area   and  could   make  land-use                                                                    
decisions,  including  to  log. Mr.  Galla  understood,  but                                                                    
hoped  the borough  would consider  the  interests of  small                                                                    
businesses such as his.                                                                                                         
                                                                                                                                
CAROL  RUSHMORE,  ECONOMIC   DEVELOPMENT  DIRECTOR,  CITY  &                                                                    
BOROUGH  OF  WRANGELL  (via  teleconference),  testified  in                                                                    
support  of  the  legislation.  She  strongly  stressed  the                                                                    
importance  of   the  entitlement  for   long-term  economic                                                                    
sustainability  in the  borough.  She pointed  out that  the                                                                    
borough  has   been  negotiating  with  DNR   regarding  the                                                                    
additional entitlement;  agreement had been  secured related                                                                    
to the 6,506  acreage amount. However, the  Sunny Bay parcel                                                                    
on   the   Cleveland   Peninsula  never   came   up   during                                                                    
negotiations  because  of  inadequate information  from  DNR                                                                    
regarding the possibility of selecting the area.                                                                                
                                                                                                                                
Ms. Rushmore informed  the committee that in  2005, when the                                                                    
University of  Alaska land bill  had come  forward, Wrangell                                                                    
had lobbied  successfully to have  three other  areas within                                                                    
the  proposed  borough  set aside  for  possible  selection.                                                                    
However,  after  the 2005  land  bill  passed, Meyers  Chuck                                                                    
approached  Wrangell  about  becoming part  of  the  forming                                                                    
borough instead  of the Ketchikan  borough (which  was going                                                                    
through  an  annexation  process   at  the  same  time).  In                                                                    
response, the borough boundary line  was modified to include                                                                    
part  of   the  Cleveland  Peninsula.  She   emphasized  the                                                                    
importance of Meyers Chuck to  the borough and requested the                                                                    
additional acreage.                                                                                                             
                                                                                                                                
Vice-Chair Thomas  noted that Amendment 1  would address the                                                                    
issue.                                                                                                                          
                                                                                                                                
3:28:13 PM                                                                                                                    
                                                                                                                                
TIMOTHY  ROONEY, MANAGER,  CITY &  BOROUGH OF  WRANGELL (via                                                                    
teleconference), stated  that the  borough is  interested in                                                                    
the  area  for  its  economic  potential  and  benefits.  He                                                                    
reported  that the  borough is  working closely  with Alaska                                                                    
Crossings  and  local  businesses   on  current  and  future                                                                    
potential  use of  the  area, and  noted  that Meyers  Chuck                                                                    
residents use it for recreation and subsistence.                                                                                
                                                                                                                                
Representative Wilson  read a paragraph from  the third page                                                                    
of  a handout,  "Section 14.40.365.  University land  grant"                                                                    
(copy on file):                                                                                                                 
                                                                                                                                
     (o)  Notwithstanding (a)  of  this  section, the  state                                                                    
     land  identified in  this subsection  and described  in                                                                    
     the document entitled "University  of Alaska Land Grant                                                                    
     List  2005,"  dated  January  12,   2005,  may  not  be                                                                    
     conveyed  by  the  University   of  Alaska  under  this                                                                    
     section if  the land  is included  in a  borough formed                                                                    
     before  July   1,  2009,  that  includes   Wrangell  or                                                                    
     Petersburg. If a  borough is not formed  before July 1,                                                                    
     2009,  land  described  in  this  subsection  shall  be                                                                    
     conveyed to the  University of Alaska on  July 1, 2009.                                                                    
     If a  borough is  formed before July  1, 2009,  and the                                                                    
     borough  does   not  select  land  described   in  this                                                                    
     subsection  before  January  1,   2013,  the  land  not                                                                    
     selected  by  the  borough shall  be  conveyed  to  the                                                                    
     University of Alaska on June 30, 2013.                                                                                     
                                                                                                                                
Representative Wilson  reminded the committee  that Wrangell                                                                    
became a  borough in 2008  and that the proposed  portion of                                                                    
Cleveland Peninsula  was not  on the  list only  because the                                                                    
boundaries were  unknown at  the time.  She noted  that when                                                                    
the university  land grant became  law, it was  decided that                                                                    
Wrangell would get first pick of the land.                                                                                      
                                                                                                                                
Vice-Chair  Thomas  noted  that   the  amendments  would  be                                                                    
further discussed at a future hearing.                                                                                          
                                                                                                                                
Representative  Fairclough   asked  whether  DNR   would  be                                                                    
present to speak to the amendments.                                                                                             
                                                                                                                                
3:32:33 PM                                                                                                                    
                                                                                                                                
Vice-Chair Thomas CLOSED public testimony.                                                                                      
                                                                                                                                
HB  273  was  HEARD  and   HELD  in  Committee  for  further                                                                    
consideration.