Legislature(2005 - 2006)HOUSE FINANCE 519

04/09/2005 11:00 AM House FINANCE


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11:12:29 AM Start
11:13:49 AM HB130
03:08:00 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ HB 130 UNIVERSITY LAND GRANT/STATE FOREST TELECONFERENCED
Heard & Held
Bills Previously Heard/Scheduled
HOUSE BILL NO. 130                                                                                                            
                                                                                                                                
     An Act granting certain state land to the University of                                                                    
     Alaska and establishing the university research forest;                                                                    
     and providing for an effective date.                                                                                       
                                                                                                                                
11:13:49 AM                                                                                                                   
                                                                                                                                
Representative  Foster   MOVED  to  ADOPT  work   draft  #24-                                                                   
GH1034\L,  Bullock,  4/08/05,  as  the version  of  the  bill                                                                   
before  the Committee.    There being  NO  OBJECTION, it  was                                                                   
adopted.                                                                                                                        
                                                                                                                                
JOE BEEDLE,  (TESTIFIED VIA  TELECONFERENCE), VICE  PRESIDENT                                                                   
FOR FINANCE,  CHIEF FINANCIAL  OFFICER AND TREASURER  TRUSTEE                                                                   
FOR  THE LAND  GRANT ENDOWMENT  FUND,  UNIVERSITY OF  ALASKA,                                                                   
offered to answer questions of the Committee.                                                                                   
                                                                                                                                
PETE KELLY, DIRECTOR, STATE RELATIONS,  UNIVERSITY OF ALASKA,                                                                   
noted  the University  objects to  the committee  substitute.                                                                   
The legislation does  not meet the needs that  the University                                                                   
lands bill  intended.   The University of  Alaska is  a lands                                                                   
grant  institution, founded  with  the intent  that it  would                                                                   
supplement its  operating expenses with the  establishment of                                                                   
a  lands  grant  trust.    Currently,   the  University  uses                                                                   
earnings  from  the  trust  for   their  day-to-day  facility                                                                   
operations.                                                                                                                     
                                                                                                                                
At statehood,  it was anticipated  that the University  would                                                                   
receive  a much  larger  grant  than it  actually  did.   The                                                                   
University  received   approximately  140,000  acres.     The                                                                   
                                            th                                                                                  
University  of Alaska  land grant  ranked 48   out of the  50                                                                   
states.                                                                                                                         
                                                                                                                                
Mr. Kelly noted  that when SB 7 was passed and  vetoed by the                                                                   
Governor,  it ended  up in  Supreme Court.   The  Legislature                                                                   
prevailed in  that suit and it  became law.  HB 130  would be                                                                   
phase two of that and actually transfers the land.                                                                              
                                                                                                                                
The University of  Alaska has an active lands  department and                                                                   
is  the most  successful  public  entity of  the  State.   He                                                                   
pointed  out that  the  University  has sold  12,000  parcels                                                                   
since 1986.  The  lands department has to act  in a fiduciary                                                                   
position with  the lands based  trust.  It is  important that                                                                   
the University  is able to  balance those obligations  taking                                                                   
into consideration that they are a public institution.                                                                          
                                                                                                                                
Mr. Kelly noted  that the University engages in  a high level                                                                   
of public  process in order  to meet obligations.   Decisions                                                                   
have to pass  through the Board of Regents  to address issues                                                                   
such as  land decisions  and policies.   Public testimony  is                                                                   
taken to inform those decisions.                                                                                                
                                                                                                                                
He noted  the concern that SB  130 had not had  enough public                                                                   
process   and  reminded   the  Committee   that  the   Alaska                                                                   
Constitution  stipulates there  is no  higher public  process                                                                   
than  that   which  happens   during  deliberations   of  the                                                                   
Legislature.    The  other  complaints   deal  with  specific                                                                   
parcels.    The  University worked  with  the  Department  of                                                                   
Natural Resources to determine the list.                                                                                        
                                                                                                                                
Representative  Weyhrauch  pointed   out  concerns  that  the                                                                   
University  had transferred  lands to  organizations such  as                                                                   
the  nature  conservatory  not   placing  the  lands  into  a                                                                   
developing  mode.    Mr.  Kelly  advised  that  was  a  court                                                                   
decision  and not something  that the  University would  have                                                                   
normally   chosen  to   do.     Since   there  is   fiduciary                                                                   
responsibility  to  the trust,  it  has to  be  sold for  the                                                                   
highest and  best value. The  intention of the  University is                                                                   
to get land into development.                                                                                                   
                                                                                                                                
Representative Weyhrauch asked  if the transfer resulted from                                                                   
a court order.  Mr. Kelly said  yes.  Representative Weyrauch                                                                   
asked if  they offered the highest  value for the land.   Mr.                                                                   
Kelly deferred that question to Mr. Beedle.                                                                                     
                                                                                                                                
Representative Weyhrauch noted  that the committee substitute                                                                   
attempts to  provide intent that  the University  be required                                                                   
to transfer lands for development purposes.                                                                                     
                                                                                                                                
Representative  Weyhrauch understood  that  the 260  thousand                                                                   
acres proposed  in the original  bill was reduced  to 249,000                                                                   
acres and asked if it would make  or break the bill with that                                                                   
reduction.  Mr. Kelly said it would not be sufficient.                                                                          
                                                                                                                                
11:23:28 AM                                                                                                                   
                                                                                                                                
Representative Weyhrauch asked  if anything above the 250,000                                                                   
threshold would  be adequate.   Mr. Kelly responded  it would                                                                   
be doable  as long as the  value was similar to  the original                                                                   
request.                                                                                                                        
                                                                                                                                
Representative Weyhrauch mentioned  on fish habitat concerns.                                                                   
Mr. Kelly  replied that he  was was not referencing  specific                                                                   
spots.                                                                                                                          
                                                                                                                                
11:24:24 AM                                                                                                                   
                                                                                                                                
Co-Chair  Meyer  asked why  the  University objected  to  the                                                                   
committee substitute.                                                                                                           
                                                                                                                                
Representative  Weyhrauch explained  that  the new  committee                                                                   
substitute  accomplished   two  things.     It  removed   two                                                                   
sections,  which had  a number  of  findings and  legislative                                                                   
intent.   That language  was placed  into a  draft letter  of                                                                   
intent.   It  does state  that the  University maintains  its                                                                   
role as a land grant institution.                                                                                               
                                                                                                                                
11:25:33 AM                                                                                                                   
                                                                                                                                
Representative  Weyhrauch addressed  the language taken  from                                                                   
Sections 1 & 2  of the bill.  Also, the  committee substitute                                                                   
clarifies that  if the University  gets the lands,  that they                                                                   
contribute to both the economic  diversification of the State                                                                   
and  if they  do not  go into  non-economical purposes,  they                                                                   
strike a  balance between  conservation and development.  The                                                                   
committee substitute bill adds  back the Lena Creek property.                                                                   
                                                                                                                                
Additionally,  it  affirms that  the  University  is a  lands                                                                   
grant  institution  and  outlines   a  cooperative  extension                                                                   
program.  The most  significant change occurs on  Pages 6 & 7                                                                   
and listed the other property changes made to that version.                                                                     
                                                                                                                                
11:28:11 AM                                                                                                                   
                                                                                                                                
Representative Weyhrauch  said that the draft  totals 195,000                                                                   
acres  and retains  parcels  having  Native allotments.    He                                                                   
pointed out  that the  last provision adds  a new  Section P.                                                                   
There  were  a   number  of  concerns  around   Wrangell  and                                                                   
Petersburg.   Concerns have  to be balanced  with a  sense of                                                                   
policy.  The  provision requires that the  properties contain                                                                   
a date-certain for  formation of a borough so  that the lands                                                                   
are  not  hanging  out  there   into  the  future.    Page  7                                                                   
stipulates an offer  to the municipalities, so  that they can                                                                   
develop the  land or organize  a borough and they  would have                                                                   
to pay fair market value.                                                                                                       
                                                                                                                                
11:31:13 AM                                                                                                                   
                                                                                                                                
Representative  Weyrauch continued, it  would be  required to                                                                   
go  to a  non-profit  organization  that was  established  to                                                                   
manage,  develop  or sell  the  land for  historic  purposes,                                                                   
which would accomplish two things:                                                                                              
                                                                                                                                
   ·    It would allow the University to determine the best                                                                     
        use; and                                                                                                                
   ·    It would allow organizations that understand the                                                                        
        property to use and develop it for historic                                                                             
        purposes.                                                                                                               
                                                                                                                                
Representative   Weyhrauch   stated   that   the   types   of                                                                   
compromises that committee substitute intended are to:                                                                          
                                                                                                                                
   ·    Insure that the University could get the lands                                                                          
        needed to meet its educational purposes;                                                                                
   ·    Recognize the important of the lands for local                                                                          
        organizations and peoples; and                                                                                          
   ·    Offer the lands to the municipalities to form                                                                           
        municipalities at the highest and best use of those                                                                     
        lands.                                                                                                                  
                                                                                                                                
11:33:03 AM                                                                                                                   
                                                                                                                                
Mr. Kelly  agreed with the  spirit, however, emphasized  that                                                                   
it  is  below  the  250,000-acre  threshold  requested.    He                                                                   
reiterated that  this legislation is the Governor's  bill and                                                                   
that the  University is the  beneficiary of the  legislation.                                                                   
The University will  continue to work with the  Department of                                                                   
Natural Resources.                                                                                                              
                                                                                                                                
11:34:31 AM                                                                                                                   
                                                                                                                                
DICK MYLIUS,  DEPUTY DIRECTOR,  DIVISION  OF MINING LAND  AND                                                                   
WATER, DEPARTMENT OF NATURAL RESOURCES,  noted the handout in                                                                   
Committee  member's file.   (Copy  on File).   He provided  a                                                                   
brief background  of the  bill, pointing out  that it  is the                                                                   
Governor's sentiment that the  University receives more land.                                                                   
                                                                                                                                
The 250,000  acres comes  from SB  7 and  is envisioned  as a                                                                   
match for  a federal  bill.  That  legislation initially  did                                                                   
not pass but has been reintroduced  by Senator Lisa Murkowski                                                                   
and would  grant the  University of  Alaska 250,000  acres of                                                                   
federal land.   The 250,000 acres  is a magic number  for two                                                                   
reasons as it was  the commitment made in SB 7  and it is the                                                                   
match if the federal legislation passes.                                                                                        
                                                                                                                                
11:36:14 AM                                                                                                                   
                                                                                                                                
Mr.  Mylius  noted  that  SB  7  established  a  process  for                                                                   
transferring  lands to  the University  and  was a  ten-year,                                                                   
expensive process.   That legislation carried  a $1.7 million                                                                   
dollar fiscal  note per year  for ten years.   HB 130  has an                                                                   
$800,000 dollar  fiscal note  for three  years.  He  believed                                                                   
that HB 130 would provide a more efficient process.                                                                             
                                                                                                                                
Mr. Mylius  stated that  the committee  substitute carves  62                                                                   
parcels,  amounting  to  approximately  250,000 acres.    The                                                                   
parcels fall into three categories of lands.                                                                                    
                                                                                                                                
   ·    Educational properties, which will serve the                                                                            
        University's educational intent and amount to                                                                           
        approximately 80,000 acres of the package;                                                                              
   ·    One track of 90,000 acres near the Nenana River,                                                                        
        which has good possibility of discovery of natural                                                                      
        gas; and                                                                                                                
   ·    Investment properties in the amount of 80,000 acres.                                                                    
        Those are the properties the University would sell.                                                                     
       About ½ of those properties are in SE Alaska.                                                                            
                                                                                                                                
11:39:53 AM                                                                                                                   
                                                                                                                                
Mr. Mylius  referenced the maps  on display in  the Committee                                                                   
room indicating how  they relate to the lands  discussed.  He                                                                   
mentioned access restrictions  and University management.  He                                                                   
noted,  the  properties  in  SE Alaska  have  been  the  most                                                                   
controversial.                                                                                                                  
                                                                                                                                
Mr. Mylius  explained  how the parcels  had been  identified.                                                                   
Most were  parcels that the  Department of Natural  Resources                                                                   
would  eventually  sell  and/or develop.    The  Department's                                                                   
restrictions  go away  when  the land  is  transferred.   The                                                                   
Department did  not let the  University select  lands managed                                                                   
for  forestry.     Lands  were  withdrawn  intended   by  the                                                                   
Department for  land sales  in the next  five years  and ones                                                                   
those municipalities  had natural selection upon.   There has                                                                   
been concern  brought up by  municipalities that  plan future                                                                   
expansion of their boroughs.                                                                                                    
                                                                                                                                
Representative  Kelly referenced  the Coldfoot area  concerns                                                                   
and asked if there  had been discussion with that  area.  Mr.                                                                   
Mylius said  his office  had not been  contacted, but  he was                                                                   
aware of  concerns.  He noted  that the University  of Alaska                                                                   
offers a public testimony process  and it would be better for                                                                   
them to address those situations.                                                                                               
                                                                                                                                
11:47:02 AM                                                                                                                   
                                                                                                                                
Representative  Kelly commended  Representative Weyrauch  for                                                                   
the work  done on  the committee  substitute, noting  that he                                                                   
still did have concerns, which  he hoped the University could                                                                   
address.                                                                                                                        
                                                                                                                                
Representative  Hawker  referenced  Page  3, Section  3,  the                                                                   
three  categories of  land and  asked for a  breakout of  the                                                                   
property  by  those  categories.   Mr.  Mylius  replied  that                                                                   
Section © properties do not show  up because when the federal                                                                   
government  transfers  land  to   the  State,  if  there  are                                                                   
existing  claims on  that land,  they will  not transfer  it.                                                                   
That land  would be  excluded in the  transfer to  the State.                                                                   
If  the  claim  ever  went away,  then  the  lands  could  be                                                                   
transferred.    Those lands  are  kept  in the  State's  "top                                                                   
filing",  waiting  for  selection.     The  reason  that  the                                                                   
provision is included  is that the law states  that the lands                                                                   
should  be transferred  by 2005 with  the understanding  that                                                                   
there is no outstanding obligation.                                                                                             
                                                                                                                                
11:51:02 AM                                                                                                                   
                                                                                                                                
In  response to  Representative  Hawker, Mr.  Mylius did  not                                                                   
think that there were many of  that land type.  The transfers                                                                   
to the University  are subject to any valid  existing rights.                                                                   
The primary  "in-holdings" would  be federal reservations  or                                                                   
State land already transferred to other parties.                                                                                
                                                                                                                                
11:52:02 AM                                                                                                                   
                                                                                                                                
Representative Weyhrauch  thanked Mr. Mylius for  the work he                                                                   
had done.                                                                                                                       
                                                                                                                                
11:52:55 AM                                                                                                                   
                                                                                                                                
AL PAGH,  (TESTIFIED VIA  TELECONFERENCE), FOUR STAR  LUMBER,                                                                   
FAIRBANKS,  commented  that he  was  involved  in the  timber                                                                   
industry,  one  of  the  few  industries  that  uses  renewal                                                                   
resources.    HB  130  would  reduce  the  amount  of  timber                                                                   
available  throughout   the  State.    It  is   difficult  to                                                                   
manufacture  anything in  Alaska that  cannot be consumed  in                                                                   
the State  because of  transportation  costs and that  lumber                                                                   
was the  one thing that  can be used  here.  Mr.  Pagh voiced                                                                   
strong opposition to the proposed bill.                                                                                         
                                                                                                                                
11:56:36 AM                                                                                                                   
                                                                                                                                
LARRY EDWARDS,  (TESTIFIED VIA TELECONFERENCE),  SITKA, noted                                                                   
that he  did not like the  legislation and recommended  it be                                                                   
"killed".    He  indicated that  Sitka  opposes  all  parcels                                                                   
included  in  the  bill  except   the  one  adjacent  to  the                                                                   
University of Alaska-Sitka campus.   He reiterated the strong                                                                   
opposition to the bill throughout the State.                                                                                    
                                                                                                                                
Mr. Edwards  mentioned the matching legislation  currently in                                                                   
the  U.S. Congress  and thought  that  legislation too  would                                                                   
create many problems statewide.   Clear cutting should not be                                                                   
funding  the   price  for  higher  education   and  that  the                                                                   
University system should be funded up front.                                                                                    
                                                                                                                                
11:58:55 AM                                                                                                                   
                                                                                                                                
TED   SMITH,  (TESTIFIED   VIA   TELECONFERENCE),  MAYOR   OF                                                                   
PETERSBURG, PETERSBURG,  highlighted a drafting  error in the                                                                   
committee  substitute,  Page  4,  Section 3,  with  the  date                                                                   
listed as "2055".                                                                                                               
                                                                                                                                
He  noted  that   the  bill  undermines   existing  statewide                                                                   
management  direction.   Through a very  public process,  the                                                                   
State   has  worked   in   consort  with   citizens,   public                                                                   
organizations   and  federal   agencies   to  development   a                                                                   
management plan  for the  State.  That  effort was  done with                                                                   
good will,  which would be  eliminated through passage  of SB
130.  He concluded that the legislation was insulting.                                                                          
                                                                                                                                
12:02:18 PM                                                                                                                   
                                                                                                                                
Representative  Weyhrauch noted  that the  225 days  had been                                                                   
listed in  the original bill.   He inquired the  last borough                                                                   
formation vote in  Petersburg.  Mayor Smith  replied that the                                                                   
vote has  not yet been established;  however there  have been                                                                   
discussions  with Wrangell.   Representative Weyhrauch  asked                                                                   
the last time that Wrangell had  a vote on borough formation.                                                                   
Mayor  Smith  understood  that  the process  for  filing  the                                                                   
petition  had  occurred and  declined  by the  Department  of                                                                   
Commerce, Community & Economic Development.                                                                                     
                                                                                                                                
12:03:39 PM                                                                                                                   
                                                                                                                                
JULIE  HURSEY, (TESTIFIED  VIA  TELECONFERENCE),  PETERSBURG,                                                                   
echoed  concerns  voiced  by  Mayor Smith.    She  noted  her                                                                   
opposition to  HB 130 mentioning  the about work done  on the                                                                   
South  East (SE)  Lands Management  plan,  produced with  the                                                                   
Department of  Natural Resources.  Once the  University takes                                                                   
the lands  listed in HB 130,  the land designations  would no                                                                   
longer  be  binding.     The  University  would   take  lands                                                                   
designated in the plan and sell  it off to private owners who                                                                   
would  develop   it  as  they  want  and   private  ownership                                                                   
precludes  public use.   Ms.  Hursey stressed  that years  of                                                                   
research and expense  went into developing those  plans.  She                                                                   
urged that the RU designated lands  be removed from the bill.                                                                   
She asserted  that there  are other ways  to raise  money for                                                                   
the  University, recommending  raising  the taxes  on oil  or                                                                   
implementing  an income  tax.   The  lands  grant system  was                                                                   
developed  in the 1880's.   She  urged that  the bill  not be                                                                   
passed out of Committee  or that it be altered  to remove the                                                                   
lands of concern.                                                                                                               
                                                                                                                                
12:06:28 PM                                                                                                                   
                                                                                                                                
MICHELLE  NILAND, (TESTIFIED  VIA TELECONFERENCE),  MCCARTHY,                                                                   
testified against the legislation.   She did not believe that                                                                   
the lands proposed for the University  could benefit them and                                                                   
that  the loss  of  those  lands would  completely  devastate                                                                   
McCarthy.  The amount of revenue  expected to be generated by                                                                   
the bill is  relatively small.  The proposed  lands are being                                                                   
used  for subsistence  lifestyles and  act as  a buffer  zone                                                                   
between  McCarthy  and  the  local   park  service.    It  is                                                                   
imperative that the lands stay  available.  She believed that                                                                   
the bill  would increase  the local  population and  decrease                                                                   
resources and  through the  transfer, the McCarthy  lifestyle                                                                   
would be eliminated.  She emphasized  that McCarthy should be                                                                   
removed from  the land  transfer.   Ms. Niland recommended  a                                                                   
possible solution would be amending the federal bill.                                                                           
                                                                                                                                
12:11:07 PM                                                                                                                   
                                                                                                                                
JASON  ESLER,   (TESTIFIED  VIA  TELECONFERENCE),   CULTURNAL                                                                   
ANTHROPOLOLGIST,   MCCARTHY,    voiced   concern   with   the                                                                   
legislation  and the effect  that the law  would have  on the                                                                   
resources,   the  community  and   the  existing   "terrible"                                                                   
relationship that  already exists  with the park  service and                                                                   
the  people of  McCarthy.   The  community  does  not have  a                                                                   
formal government.   Within the community, there  are limited                                                                   
places that the residents can  go to collect wood and/or hunt                                                                   
that  not on  federal  lands.   The  zones  indicated are  an                                                                   
important buffer zone.   The proposed 12,000 acres  is a huge                                                                   
amount of land  for the size of McCarthy.  He  urged that the                                                                   
McCarthy  land  be removed  from  the  land transfer  to  the                                                                   
University.                                                                                                                     
                                                                                                                                
12:13:35 PM                                                                                                                   
                                                                                                                                
GARVIN  BUCARIA,  (TESTIFIED  VIA  TELECONFERENCE),  WASILLA,                                                                   
spoke against HB 130.  He urged  that other programs be added                                                                   
to  provide the  support  requested by  the  University.   He                                                                   
emphasized that  public lands  should not be transferred  out                                                                   
of  public ownership.   The  full public  oversight would  be                                                                   
reduced to  the University's Board  of Regents.  They  do not                                                                   
have the same attitude in managing  the lands.  He encouraged                                                                   
that  the  Legislature  fund  University  programs  directly.                                                                   
Research and education  projects could be conducted  on State                                                                   
and federal lands without an ownership change.                                                                                  
                                                                                                                                
12:18:43 PM                                                                                                                   
                                                                                                                                
DEB  SPENCER,   (TESTIFIED   VIA  TELECONFERENCE),   PELICAN,                                                                   
represented other residents in  Pelican and testified against                                                                   
portions of the  legislation.  She pointed out  that previous                                                                   
University  actions indicate  that  they  are not  consistent                                                                   
when   working   with   local  communities.      Pelican   is                                                                   
economically  depressed and suffering  and that the  proposed                                                                   
legislation would only make it worse.                                                                                           
                                                                                                                                
12:23:09 PM                                                                                                                   
                                                                                                                                
JON   BILLING,   (TESTIFIED   VIA   TELECONFERENCE),   CRAIG,                                                                   
testified  in   opposition  to   portions  of  the   proposed                                                                   
legislation.  He  maintained that there are  areas within the                                                                   
bill,  which  should  be  removed  and  maintained  as  State                                                                   
ownership.   The Thorne  Bay area  will affect  opportunities                                                                   
for logging and employment for  Alaskans.  He referred to the                                                                   
Alaska   Mental   Health   Trust   Authority   (AMHTA)   land                                                                   
settlements as a model.                                                                                                         
                                                                                                                                
12:26:08 PM                                                                                                                   
                                                                                                                                
JACK  REAKOFF,  (TESTIFIED  VIA   TELECONFERENCE),  expressed                                                                   
concern that there  are no provisions for  pipeline crossings                                                                   
and no considerations of year around service at Coldfoot.                                                                       
                                                                                                                                
THOR STACEY, (TESTIFIED VIA TELECONFERENCE),  WISEMAN, echoed                                                                   
concerns voiced by Mr. Reakoff.   He added comments regarding                                                                   
year around  service in Coldfoot  and asked if it  that would                                                                   
be withdrawn.                                                                                                                   
                                                                                                                                
Representative  Kelly  questioned  if by  not  removing  that                                                                   
parcel,  could  a  plan  be  arranged  to  accommodate  those                                                                   
concerns.  Mr.  Stacey expressed concern that  the University                                                                   
of Alaska's  management policy tends  to be uncertain.   They                                                                   
want the  most money  possible for the  lands and  that could                                                                   
preclude any public input.                                                                                                      
                                                                                                                                
12:32:10 PM                                                                                                                   
                                                                                                                                
NEIL  DARISH,   (TESTIFIED  VIA  TELECONFERENCE),   MCCARTHY,                                                                   
expressed concern  over the  Department of Natural  Resources                                                                   
control   over  partials   in  McCarthy.   He  stressed   the                                                                   
importance of harvesting firewood  and use of the gravel pit.                                                                   
He mentioned  the difficulty of  accessing federal  lands and                                                                   
voiced concern  that the  University would  sell land  to the                                                                   
National Park Service.  He reiterated  that the National Park                                                                   
Service is  not willing to work  with the community  and that                                                                   
the Department was.                                                                                                             
                                                                                                                                
12:34:32 PM                                                                                                                   
                                                                                                                                
KELLY BAY,  (TESTIFIED VIA TELECONFERENCE),  MCCARTHY, echoed                                                                   
the remarks  by Mr.  Darish and  stressed the importance  and                                                                   
need of harvesting  wood.  He stressed that much  of the land                                                                   
in  question is  not appropriate  for  development and  rests                                                                   
over swampy grounds.                                                                                                            
                                                                                                                                
ED  LACHAPPEL,  (TESTIFIED  VIA   TELECONFERENCE),  MCCARTHY,                                                                   
spoke in opposition  to the legislation.  He  pointed out how                                                                   
little  opportunity there  had  been for  public  input.   He                                                                   
urged  that the  McCarthy  parcel be  removed  from the  land                                                                   
transfer proposal.                                                                                                              
                                                                                                                                
DAN  ELLSBERG,  (TESTIFIED  VIA   TELECONFERENCE),  MCCARTHY,                                                                   
testified  in opposition  to the  inclusion  of the  McCarthy                                                                   
parcel in  the legislation.   He  stressed his dependence  on                                                                   
local  lands  and  the  difficulty  of  obtaining  access  to                                                                   
federal lands.   He  thought that  the transfer would  create                                                                   
conflicts within the community.                                                                                                 
                                                                                                                                
12:44:29 PM                                                                                                                   
                                                                                                                                
ANDY SNIDER, (TESTIFIED VIA TELECONFERENCE),  MCCARTHY, urged                                                                   
that the  McCarthy land area  be deleted  from the bill.   He                                                                   
stated  that  developing  another  12,500 acres  of  land  in                                                                   
McCarthy  would  be  "frightening"  as  there  is  already  a                                                                   
stressful  demand  on  local  resources.    He  warned  about                                                                   
significant   issues  that  would   result  and   recommended                                                                   
creating a University endowment in other ways.                                                                                  
                                                                                                                                
12:48:24 PM                                                                                                                   
                                                                                                                                
PAUL ANDERSON,  (TESTIFIED VIA  TELECONFERENCE), VICE  MAYOR,                                                                   
PETERSBURG  CITY COUNCIL,  PETERSBURG,  testified against  HB
130.   He claimed  that the municipalities  were being  "held                                                                   
hostage" by the  Legislature.  He added his  support creating                                                                   
an endowment  from the Permanent  Fund for the  University of                                                                   
Alaska.                                                                                                                         
                                                                                                                                
12:51:23 PM                                                                                                                   
                                                                                                                                
MELINDA   HOFSTAND,   BARANOFF    WARM   SPRINGS   HOMEOWNERS                                                                   
ASSOCIATION,     PETERSBURG,    voiced    appreciation     to                                                                   
Representative Weyhrauch for excluding  Baranoff Warm Springs                                                                   
from the  legislation.   The watershed  in  that area is  the                                                                   
only water source for the community  and they would no longer                                                                   
have a water supply source if it remained in the bill.                                                                          
                                                                                                                                
12:53:47 PM                                                                                                                   
                                                                                                                                
PAUL  JOHNSON, (TESTIFIED  VIA  TELECONFERENCE), ELFIN  COVE,                                                                   
testified against the legislation,  noting how "dramatically"                                                                   
that land  sale would  impact  Elfin Cove.   It would  affect                                                                   
Elfin Cove's economic  future.  Mr. Johnson  pointed out that                                                                   
the proposed bill was the largest  piece of legislation since                                                                   
statehood or Alaska National Interest  Lands Conservation Act                                                                   
(ANLICA).                                                                                                                       
                                                                                                                                
Representative  Kelly asked about  the situation  existing in                                                                   
Elfin  Cove  and  hoped  that  Representative  Weyhrauch  had                                                                   
addressed it.                                                                                                                   
                                                                                                                                
12:56:56 PM                                                                                                                   
                                                                                                                                
RJ  KOPCHAK,  (TESTIFIED  VIA  TELECONFERENCE),  ELFIN  COVE,                                                                   
indicated that he would fax testimony  for Mr. Beedle and Mr.                                                                   
Kenyon  from Elfin Cove  with comments  against the  proposed                                                                   
legislation and land transfer.                                                                                                  
                                                                                                                                
12:58:06 PM                                                                                                                   
                                                                                                                                
LOVEY BROCK,  (TESTIFIED VIA  TELECONFERENCE), ALASKA  NATIVE                                                                   
SISTERHOOD  (ANS),   WRANGELL,  spoke  against   any  use  of                                                                   
traditional lands.   These lands  are still being used  for a                                                                   
traditional  way of  life for  Alaska Natives  in that  area.                                                                   
She  stated that  there has  to be  another way  to help  the                                                                   
University than taking traditional lands.                                                                                       
                                                                                                                                
12:59:01 PM                                                                                                                   
                                                                                                                                
RICK KENYON, (TESTIFIED VIA TELECONFERENCE),  MCCARTHY, spoke                                                                   
against inclusion of the parcel  referenced in SB 130 for the                                                                   
McCarthy  area  as  it  is  an  important  resource  to  that                                                                   
community.  He  strongly urged that the  Committee reconsider                                                                   
the legislation.                                                                                                                
                                                                                                                                
1:00:49 PM                                                                                                                    
                                                                                                                                
MICHELLE  CASEY, (TESTIFIED  VIA  TELECONFERENCE),  MCCARTHY,                                                                   
spoke  against  the  land  listed  around  the  community  of                                                                   
McCarthy.   If the land is  transferred and the  Park Service                                                                   
has access, they  will impose fees for usage.   The community                                                                   
of McCarthy is an asset to the  State of Alaska.  She pointed                                                                   
out that they had gather 60 signatures  in one and half days,                                                                   
which is a huge  number for the size of McCarthy.   She urged                                                                   
reconsideration of the legislation.                                                                                             
                                                                                                                                
                                                                                                                                
RECESS:        1:05:36 PM                                                                                                     
RECONVENE:     1:54:36 PM                                                                                                     
                                                                                                                                
                                                                                                                                
1:54:55 PM                                                                                                                    
                                                                                                                                
MARGARET CLABBY, (TESTIFIED VIA TELECONFERENCE), KETCHIKAN,                                                                     
addressed four  concerns of funding  for the University  with                                                                   
parcels from  Southeast Alaska,  testifying in opposition  to                                                                   
the bill.                                                                                                                       
                                                                                                                                
   ·    The parcels contradict the State's land use plan;                                                                       
   ·    There are financial issues in using the lands for                                                                       
        the University;                                                                                                         
   ·    Leaving the parcels alone would help to stabilize                                                                       
        the economy in SE Alaska; and                                                                                           
   ·    There are Public access concerns.                                                                                       
                                                                                                                                
2:00:18 PM                                                                                                                    
                                                                                                                                
Ms.  Clabby concluded  that placing  the  lands into  private                                                                   
ownership, then  no one from the  coast would be able  to cut                                                                   
through  to national forest  lands.   The federal  government                                                                   
does  not put  access easements  unless  they are  absolutely                                                                   
required.                                                                                                                       
                                                                                                                                
2:02:06 PM                                                                                                                    
                                                                                                                                
Representative  Hawker asked for  a formal response  from the                                                                   
University  regarding if  the legislation  would be  fiscally                                                                   
irresponsible in certain timberlands.                                                                                           
                                                                                                                                
MARY MONTGOMERY,  (TESTIFIED VIA TELECONFERENCE),  UNIVERSITY                                                                   
OF ANCHORAGE,  ANCHORAGE, clarified  that the University  had                                                                   
actually received an appraisal  from a local appraiser and it                                                                   
was determined that  the property was sold above  fair market                                                                   
value.   She  reminded members  that the  University is  tax-                                                                   
exempt.                                                                                                                         
                                                                                                                                
2:04:28 PM                                                                                                                    
                                                                                                                                
GAYLE  GROSS,   (TESTIFIED  VIA  TELECONFERENCE),   WRANGELL,                                                                   
echoed  concerns regarding  the  land transfer,  particularly                                                                   
the parcel  at Olive  Cove on Ellen  Island.  She  emphasized                                                                   
the importance of the lands in  question to Wrangell and that                                                                   
the intent of  the bill provides for logging.   Logging would                                                                   
remove  stream  habitats  and   the  fish  habitat  would  be                                                                   
compromised.  Ms. Gross pointed  out that the State's fishery                                                                   
management  system  is  based  on sustainable  yield;  it  is                                                                   
important to protect the fish-spawning habitat.                                                                                 
                                                                                                                                
2:06:49 PM                                                                                                                    
                                                                                                                                
VALERY  MCCANDLESS,  (TESTIFIED VIA  TELECONFERENCE),  MAYOR,                                                                   
CITY  OF WRANGELL,  reiterated  the importance  of the  Olive                                                                   
Cove parcel  and gave  a brief  history of the  archeological                                                                   
importance of  that area.   She maintained that  the proposal                                                                   
contradicts the State's Land Use Plan.                                                                                          
                                                                                                                                
2:10:07 PM                                                                                                                    
                                                                                                                                
WILMA STOKES, (TESTIFIED VIA TELECONFERENCE),  WCA PRESIDENT,                                                                   
WRANGELL,  testified   in  opposition  to   the  legislation,                                                                   
expressing  concern  with  a   number  of  selections.    She                                                                   
requested that Thoms Place & Olive Cove be removed.                                                                             
                                                                                                                                
Ms. McCandless  addressed the committee substitute,  pointing                                                                   
out that  two of the parcels  of concern had been  pulled and                                                                   
indicated her appreciation for that.                                                                                            
                                                                                                                                
2:12:45 PM                                                                                                                    
                                                                                                                                
RACHEL  COLVARD,  (TESTIFIED  VIA  TELECONFERENCE),  STUDENT,                                                                   
ANCHORAGE, testified  in opposition to the legislation.   She                                                                   
maintained  that the legislation  is in  opposition to  State                                                                   
policy.   She  recommended creating  a research  board.   She                                                                   
referred  to  Section AS  14.40.400(a)  on  Page 9,  Line  4,                                                                   
noting the impact on the State.                                                                                                 
                                                                                                                                
2:16:07 PM                                                                                                                    
                                                                                                                                
RON  SCHONENBACH, JUNEAU,  noted that  he had  worked for  25                                                                   
years for  the Department of  Natural Resources,  Division of                                                                   
Mining, Land,  and Water.   He stated  that the bill  was ill                                                                   
conceived and  should have begun  with a public process.   He                                                                   
referenced the  land management plans and how  the guidelines                                                                   
went  through   an  extensive   2-year  process.     What  is                                                                   
disturbing  about the  land list  is  inclusion of  a lot  of                                                                   
settlement and  wildlife habitats.   The land list  takes all                                                                   
of the  settlement lands out  of the Department's  land base.                                                                   
The Department of Natural Resources  would not have any lands                                                                   
left  to  sell  in  SE  Alaska.     He  stressed  that  is  a                                                                   
shortsighted approach for land managers.                                                                                        
                                                                                                                                
During  the  planning  process,  the  Department  of  Natural                                                                   
Resources  and the  public  agreed on  which  lands would  be                                                                   
wildlife habitat  and which would  be for public  recreation.                                                                   
Once  the lands  are  conveyed to  the  University, all  that                                                                   
would  vanish.   The Department  of  Natural Resources  would                                                                   
lose credibility  and the University  of Alaska will  have to                                                                   
withstand a fight.                                                                                                              
                                                                                                                                
Mr. Schonenbach referenced the  655 acres on Middle Island in                                                                   
Sitka.   He noted that  there are only  a few pieces  of very                                                                   
exposed  and  marginal  land  left  on  Middle  Island.    He                                                                   
questioned inclusion of that land.                                                                                              
                                                                                                                                
Mr. Schonenbach  concluded that there are many  "faults" with                                                                   
the legislation,  but should  it proceed,  it would  fail the                                                                   
intent of SB 7 (passed in 2000).   He pointed out that 70% of                                                                   
the investment properties  are in SE Alaska.   He recommended                                                                   
that  there   is  time  remaining   to  recommend   that  the                                                                   
Department of  Natural Resources  take another look  at their                                                                   
inventory.                                                                                                                      
                                                                                                                                
2:21:23 PM                                                                                                                    
                                                                                                                                
JENNIFER  PRICE,  WARM  SPRINGS   BAY,  SITKA,  testified  in                                                                   
opposition to  the legislation.   She expressed  concern with                                                                   
RU designated parcels.   She spoke in support  of the removal                                                                   
of parcels that will dramatically affect lifestyles.                                                                            
                                                                                                                                
2:24:35 PM                                                                                                                    
                                                                                                                                
BRETT CARLSON, COLDFOOT CAMP,  testified in opposition to the                                                                   
inclusion of  the Coldfoot land  selection.  He gave  a brief                                                                   
history of the Coldfoot parcel.   He believed that the intent                                                                   
was to support  the oil industry.  Their lease  requires them                                                                   
to be open year round to provide  services to the public.  He                                                                   
provided members with written  remarks regarding the Coldfoot                                                                   
Land Transfer.  (Copy on File).                                                                                                 
                                                                                                                                
Mr.  Carlson proposed  that  the State  go  through a  public                                                                   
planning process,  which he maintained had not  occurred.  He                                                                   
asked for a fair and rational public process.                                                                                   
                                                                                                                                
2:30:24 PM                                                                                                                    
                                                                                                                                
JOAN  BRODIE,   KODIAK,  testified   in  opposition   to  the                                                                   
legislation.   She  spoke in  support  of maintaining  public                                                                   
access to the narrow  cape area.  She pointed  out that there                                                                   
is only 70 miles  of roads on the Kodiak Island  & encouraged                                                                   
that the  area remain off  the map for  the University.   She                                                                   
urged reconsideration of the bill.                                                                                              
                                                                                                                                
2:32:20 PM                                                                                                                    
                                                                                                                                
KRISTEN   DUNLAP,  ENVIRONMENTAL   PLANNER,  DOUGLAS   INDIAN                                                                   
ASSOCIATION,  JUNEAU,  spoke  on  behalf  of  the  Taku  Quan                                                                   
people.   She stated  that they are  strongly opposed  to the                                                                   
public land conveyance contained  in HB 130.  She referred to                                                                   
the Sum  Dum Plot,  a five-acre  plot in  Sanford Cove.   She                                                                   
pointed out the  historical and cultural importance  to these                                                                   
people.   Ms. Dunlap  voiced concern  over the University  of                                                                   
Alaska's  poor  history  of  land   management.    There  are                                                                   
concerns over  public access and  development.   She believed                                                                   
that  the land  acquisition would  result in  a reduction  of                                                                   
State support for the University.                                                                                               
                                                                                                                                
2:35:11 PM                                                                                                                    
                                                                                                                                
Representative Kelly  asked for examples of  the University's                                                                   
failures.    Ms.  Dunlap  provided   examples  of  poor  land                                                                   
management.   She  pointed out  unsafe  logging practices  in                                                                   
University  lands  near Ketchikan,  declared  a  contaminated                                                                   
site by  the Department  of Environmental  Conservation.   In                                                                   
the past, the  University has not followed State  and federal                                                                   
land standards in developing their lands.                                                                                       
                                                                                                                                
2:37:27 PM                                                                                                                    
                                                                                                                                
ARTHUR  BLOOM, CITY  OF TENAKEE  SPRINGS,  TENAKEE, spoke  in                                                                   
opposition to the  legislation.  He commented  that there are                                                                   
two major  problems with the  lands selected around  Tenakee.                                                                   
There was  a court  order stipulation  resulting between  the                                                                   
State  and  the City  of  Tenakee  in  1981, which  would  be                                                                   
breeched.   He spoke to  the zoning regulations  currently in                                                                   
place in  Tenakee and  that the zoning  would not  permit the                                                                   
types of uses proposed by the University.                                                                                       
                                                                                                                                
2:40:22 PM                                                                                                                    
                                                                                                                                
MARY   IRVINE,  JUNEAU   testified  in   opposition  to   the                                                                   
legislation  and provided  members with  written remarks  and                                                                   
maps.  (Copy  on File.)  She  spoke to the importance  of the                                                                   
archeological  sites on  State  lands.   She maintained  that                                                                   
these  sites should  be  red  flagged for  their  protection.                                                                   
Forest  service land  is adjacent  to the  majority of  these                                                                   
parcels.  She  observed that the parcel in  reference is only                                                                   
5 acres.   Tourism is  a thriving business  in the  Tracy Arm                                                                   
area.   She noted  that major  archeological finds  have been                                                                   
made in that area.                                                                                                              
                                                                                                                                
Ms.  Irvine referenced  Page  5, Line  12,  of the  committee                                                                   
substitute.     She  maintained  that  language   would  only                                                                   
postponed the problems.                                                                                                         
                                                                                                                                
Ms. Irvine  addressed the fiscal  notes, which she  felt were                                                                   
unrealistic  given  the  testimony   over  the  last  several                                                                   
months.   This is  the biggest  lands bill  since the  Alaska                                                                   
Natives  Settlement  Act.    She  urged  that  the  notes  be                                                                   
revisited.                                                                                                                      
                                                                                                                                
REPRESENTATIVE JAY RAMRAS pointed  out that these lands could                                                                   
attract research dollars as archeological  sites.  Ms. Irvine                                                                   
responded that  the University currently has  access to these                                                                   
lands and that  scholars are working with the parcels.    She                                                                   
maintained  that if  the parcel  is part of  the lands  bill,                                                                   
there is a greater risk that it would be alienated.                                                                             
                                                                                                                                
2:54:13 PM                                                                                                                    
                                                                                                                                
DANIEL TRAIL,  THOMS PLACE, WRANGELL, spoke in  opposition to                                                                   
the legislation.   He read a Resolution against  the transfer                                                                   
of the Thoms  Place parcel.   (Copy on File.)   He maintained                                                                   
that  the University  could be  funded  by the  State if  the                                                                   
State desired.   The only  reason for  giving the land  is to                                                                   
remove  the public  process.   He referred  to the  committee                                                                   
substitute and asked  for the removal of Thoms  Place parcel.                                                                   
The parcel  being proposed  for transfer  is three  times the                                                                   
size of the  community.  It encompasses areas  used by locals                                                                   
and areas that have historic importance.   Mr. Trail referred                                                                   
to  Page 7,  Line 15.    He concluded  that  the Thoms  Place                                                                   
Association would be included in the provision.                                                                                 
                                                                                                                                
3:02:30 PM                                                                                                                    
                                                                                                                                
MATT  DAVIDSON,  LEGISLATIVE  DIRECTOR,  ALASKA  CONSERVATION                                                                   
VOTERS  (ACV),   JUNEAU,  testified  in  opposition   to  the                                                                   
legislation.  He clarified that  there is no trigger that the                                                                   
State must meet  in terms of the land transfer.   The federal                                                                   
provision would match lands transferred  to the University on                                                                   
an  acre-by-acre   basis.    He  commented   that  non-public                                                                   
purposes are not  appropriate and expressed concern  that the                                                                   
lands would  be sold  for private ownership.   He  noted that                                                                   
many of  the lands  were selected  for their public  purpose.                                                                   
He  referred  to the  fiscal  aspect  of  the transfer.    He                                                                   
maintained  that  the  purpose  is  not  to  fully  fund  the                                                                   
University.   He spoke  strongly against  the liquidation  of                                                                   
State lands as contained in HB 130.                                                                                             
                                                                                                                                
HB 130 was HELD in Committee for further consideration.                                                                         

Document Name Date/Time Subjects