Legislature(2009 - 2010)BARNES 124

03/17/2010 06:00 PM RESOURCES

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06:15:19 PM Start
06:22:09 PM HB295
09:37:31 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
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Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
                  HB 295-UNIVERSITY LAND GRANT                                                                              
6:22:32 PM                                                                                                                    
CO-CHAIR  NEUMAN announced  that the  only order  of business  is                                                               
HOUSE BILL  NO. 295,  "An Act  relating to  the grant  of certain                                                               
state land  to the University  of Alaska; relating to  the duties                                                               
of the Board of Regents; relating  to deposits made to the Alaska                                                               
permanent  fund  received  from certain  lands  conveyed  to  the                                                               
University of  Alaska; ratifying and reauthorizing  certain prior                                                               
conveyances  of   land  to  the  University   of  Alaska;  making                                                               
conforming  amendments; and  providing  for  an effective  date."                                                               
[Before the committee was CSHB 295(CRA).]                                                                                       
CO-CHAIR JOHNSON  moved to adopt  CSHB 295(CRA) as a  work draft.                                                               
There  being   no  objection,  CSHB   295(CRA)  was   before  the                                                               
6:24:31 PM                                                                                                                    
WENDY  REDMAN, Executive  Vice  President, University  Relations,                                                               
University of Alaska,  stated that in 1915 and  1929, the federal                                                               
government  granted approximately  360,000 acres  of land  to the                                                               
University  of Alaska.   This  acreage was  intended to  generate                                                               
revenue to  support the university's  educational mission.   Only                                                               
about 112,000 acres had actually  been conveyed to the university                                                               
by the  time of statehood  because much of  the land had  not yet                                                               
been surveyed.   The 1959  Alaska Statehood Act  extinguished all                                                               
land grants to the state,  including the university's land grant,                                                               
so the  112,000 acres went  under state management.   Commitments                                                               
were made that  the state would make good on  the land because of                                                               
receiving  such   a  large  land  settlement   from  the  federal                                                               
government.   At  the time  it was  believed the  state would  be                                                               
better  served to  receive  its  land in  toto  rather than  with                                                               
reservations  for  the  university, schools,  or  mental  health.                                                               
Under  state management,  the university's  original land  grants                                                               
were  subsequently eroded  by  municipal  selections, land  grant                                                               
offerings, and legislative designations.   The university went to                                                               
court and received  the right to manage its own  land in the late                                                               
1980s.   Today, the university  has approximately  160,000 acres.                                                               
Since  1959  there have  been  six  different  land bills.    The                                                               
precursor  to HB  295 began  in 2000  with Senate  Bill 7,  which                                                               
appropriated up  to 260,000 acres of  land.  The bill  was passed                                                               
by the  legislature, but vetoed  by the  governor.  The  veto was                                                               
overridden by the  legislature and the override was  taken to the                                                               
Alaska Supreme Court  where the override was ruled  valid and the                                                               
bill went into effect.                                                                                                          
6:28:05 PM                                                                                                                    
MS. REDMAN said  that in 2005 the legislature decided  it was not                                                               
happy with  260,000 acres of  undesignated land and  passed House                                                               
Bill [130] which provided the  specific lands that the university                                                               
would receive.  Until about one  year ago, the university and the                                                               
Department of Natural Resources  (DNR) proceeded with the process                                                               
of  conveying those  lands.    In that  meantime,  a lawsuit  was                                                               
brought against  the university  and the  state by  the Southeast                                                               
Alaska Conservation Council and  the Tongass Conservation Society                                                               
claiming the bill  was an abridgement of the  dedication of funds                                                               
section of  the Alaska  State Constitution.   The  Alaska Supreme                                                               
Court ruled in favor of  the plaintiffs, saying that the proceeds                                                               
from the land  could not go into an endowment  as provided by the                                                               
bill,  but instead  had to  go back  through the  legislature for                                                               
appropriation to the university.                                                                                                
MS.  REDMAN explained  that HB  295  is essentially  the same  as                                                               
House  Bill 130,  with the  addition of  language that  gives the                                                               
legislature the  authority to appropriate  the proceeds  from the                                                               
land back  to the  university.  Of  course, the  legislature does                                                               
not have to appropriate the  proceeds back to the university, but                                                               
that is the  idea.  In response to Co-Chair  Neuman, said that if                                                               
the  committee wishes  to hear  about  this appropriations  issue                                                               
from Legislative Legal and Research  Services, she would ask that                                                               
the committee also  hear from the attorney  general because there                                                               
is a difference of opinion.                                                                                                     
MS. REDMAN related that the  University of Alaska's preference is                                                               
for HB 295  to remain intact.  The university  had wanted to come                                                               
back  and  deal with  the  same  bill  that the  legislature  had                                                               
already passed and  not re-address every acre of  land.  However,                                                               
land has already been taken out  of the bill by two subcommittees                                                               
and she is aware that there  will be amendments presented to this                                                               
committee for  even more land  to be taken out  of the bill.   If                                                               
the  will of  the  legislature  in 2010  is  that the  university                                                               
should simply  not have  any lands,  then that  is a  valid issue                                                               
that should  be discussed.   Taking land out  of HB 295  that has                                                               
already discussed  under House  Bill 130 does  not seem  the best                                                               
use of everyone's time at this point.                                                                                           
6:32:27 PM                                                                                                                    
CO-CHAIR NEUMAN  related that legislators have  been hearing from                                                               
the public  and many people  have said  they were unaware  of the                                                               
university  recently coming  to their  communities to  talk about                                                               
this land conveyance.   He asked whether the  university has made                                                               
an effort  to visit or  notify communities that these  lands were                                                               
going to be conveyed.                                                                                                           
MS. REDMAN  responded that  this has  been the  law for  the last                                                               
five years,  given that these lands  were conveyed in 2005.   The                                                               
university does not  actually have access to most  of these lands                                                               
at this point because it was  in the process of conveyance.  When                                                               
the  university conducts  land  activities it  is  always in  the                                                               
communities  talking  about  the   process  and  looking  at  the                                                               
communities' land management  plans.  She pointed  out that every                                                               
parcel of  land in  House Bill 130  and HB 295  is land  from DNR                                                               
that  was already  available for  conveyance.   She  said she  is                                                               
therefore confused about how anyone  in a community could have an                                                               
opinion that the lands were  somehow off limits for conveyance to                                                               
the university or anybody else.                                                                                                 
6:35:02 PM                                                                                                                    
REPRESENTATIVE KAWASAKI  observed that there has  been discussion                                                               
about  adding covenant  language  for  the land  in  some of  the                                                               
MS. REDMAN  replied the last  committee put covenants on  some of                                                               
the acreage  and this is  not usually  a good thing,  although it                                                               
depends  on what  the  covenants are.   By  the  law itself,  the                                                               
university is required  to provide the right of  first refusal to                                                               
any borough  for purchase  of the property  if the  university is                                                               
prepared to  sell that  property.   The purpose  of a  land grant                                                               
university is  to get  land into development  and the  purpose of                                                               
House  Bill  130 was  to  put  Alaska  lands  into the  hands  of                                                               
Alaskans.  The  university has done this very  well by developing                                                               
residential and  commercial properties.   She  noted that  DNR is                                                               
understaffed and cannot manage the  lands as efficiently as would                                                               
the university.   People have  been able  to use these  lands for                                                               
personal uses  and the  university would not  allow this,  so she                                                               
understands why people oppose the transfer.                                                                                     
6:37:47 PM                                                                                                                    
REPRESENTATIVE  KAWASAKI inquired  whether  the university  would                                                               
prefer that covenants  not be applied and those  lands instead be                                                               
stripped from the bill so the university could pick other lands.                                                                
MS. REDMAN answered yes.                                                                                                        
REPRESENTATIVE KAWASAKI  understood it  is difficult  to purchase                                                               
state  lands  in over-the-counter  sales  and  asked whether  Ms.                                                               
Redman believes the  university could do a better job  of this if                                                               
it is given the lands.                                                                                                          
MS. REDMAN  deferred to  DNR for  that answer,  but said  DNR has                                                               
many hundreds of  thousands more acres than  does the university.                                                               
The university has been very  efficient at managing its lands and                                                               
getting lands  out to development.   She said she does  not think                                                               
DNR has  the staff that  is needed to  manage the kinds  of lands                                                               
that  Alaska has.   The  university  does not  take general  fund                                                               
money to  manage its  lands; all management  costs for  lands are                                                               
paid  by the  proceeds from  the  lands.   The university's  land                                                               
grant trust fund  stands at $135 million and pays  for the entire                                                               
University  of  Alaska  Scholars  Program.   The  university  has                                                               
generated  about $10  million per  year in  income off  its lands                                                               
since taking over their management in 1988 or 1989.                                                                             
6:40:42 PM                                                                                                                    
REPRESENTATIVE  KAWASAKI  inquired how  the  lives  of people  in                                                               
these communities would  be changed if these  lands are conveyed.                                                               
He said  he has  heard from many  people expressing  concern that                                                               
their lifestyle will be changed because of this conveyance.                                                                     
MS.  REDMAN answered  it is  hard to  provide specifics  for each                                                               
parcel  because at  this point  in time  the university  does not                                                               
have land plans  for all of the acreage.   The bill includes many                                                               
educational properties as  well as gas lands  in Interior Alaska.                                                               
She has  heard a lot of  scare stories about what  the university                                                               
will do,  from clearcutting  to building  McDonald's restaurants.                                                               
While she understands people's concerns,  they are unrealistic in                                                               
many cases.                                                                                                                     
CO-CHAIR  NEUMAN  said legislators  feel  that  the concerns  are                                                               
realistic because they  know what is going on  in their districts                                                               
and have  heard from people in  the communities.  He  argued that                                                               
even if  some acreage is taken  out, there would still  be plenty                                                               
of land from which the university could make money.                                                                             
6:44:05 PM                                                                                                                    
REPRESENTATIVE GUTTENBERG asked how  these lands were selected to                                                               
begin with.                                                                                                                     
MS.  REDMAN explained  that after  passage of  Senate Bill  7, in                                                               
which all 260,000  acres were undesignated, it  became clear that                                                               
it  would  be a  very  difficult,  expensive, and  time-consuming                                                               
process.  It was decided to  go back to the Department of Natural                                                               
Resources and have  the department select lands  around the state                                                               
from its portfolio  of lands already designated  as available for                                                               
conveyance.  While the university  had some discussions with DNR,                                                               
the  department  basically had  a  list  of  lands it  felt  most                                                               
appropriate.  The university therefore  agreed on those lands and                                                               
came forward with those lands in House Bill 130.                                                                                
6:45:21 PM                                                                                                                    
REPRESENTATIVE GUTTENBERG  inquired whether the arguments  on the                                                               
parcels that have been withdrawn have been made before.                                                                         
MS.  REDMAN responded  yes, but  some things  have changed.   New                                                               
boroughs  have been  formed and  existing boroughs  have expanded                                                               
and can now  make other selections.  Some of  the changes made in                                                               
HB  295 to  date reflect  changes  that have  happened since  the                                                               
original bill was passed.  For  example, Haines is trying to form                                                               
a  larger borough  and the  only lands  available for  additional                                                               
selection would  have been the  lands in  HB 295, so  those lands                                                               
were dropped from the bill.                                                                                                     
6:47:14 PM                                                                                                                    
CO-CHAIR JOHNSON observed  that in the northern areas  on the map                                                               
he sees a lot of  pipeline rights-of-way that have been selected.                                                               
He asked  what the  advantage is to  the university  in selecting                                                               
lands around  the Dalton Highway, the  Trans-Alaska Pipeline, and                                                               
the proposed gas pipeline.                                                                                                      
MS. REDMAN deferred to Mr. Dick Mylius and Ms. Mary Montgomery.                                                                 
DICK  MYLIUS,  Director,  Division  of Mining,  Land  and  Water,                                                               
Department of Natural Resources,  replied that the Dalton Highway                                                               
parcels are  specific nodes  that have  been envisioned  as areas                                                               
where there would  be future development along the  highway.  For                                                               
example, the parcel  at Coldfoot has always been  envisioned as a                                                               
possible  community development;  the parcel  where the  pipeline                                                               
and the  road cross the Yukon  River is an ideal  parcel for some                                                               
sort of development  related to the road, river,  or gas load-off                                                               
facility;  and the  northern-most parcel  has some  potential for                                                               
commercial  recreational   facilities.    Therefore,   these  are                                                               
parcels  that   have  good  potential  for   various  development                                                               
activities that may or may not be related to the gas pipeline.                                                                  
6:49:41 PM                                                                                                                    
CO-CHAIR  JOHNSON  surmised  the  current  right-of-way-easements                                                               
through these parcels would remain in effect under a new owner.                                                                 
MR. MYLIUS  answered correct.   These parcels are subject  to any                                                               
existing authorizations for  rights-of-way, including some right-                                                               
of-way applications  and rights-of-way issued for  gaslines.  For                                                               
any new  authorizations, the  applicant would  have to  work with                                                               
the  university.   However, since  the university  is looking  at                                                               
these parcels  as economic development opportunities,  he said he                                                               
is  sure  those  kinds  of   additional  rights-of-way  would  be                                                               
something the university would be willing to consider.                                                                          
6:50:42 PM                                                                                                                    
CO-CHAIR JOHNSON  asked whether the  State of Alaska  can condemn                                                               
by eminent domain property owned by the University of Alaska.                                                                   
ANNE  NELSON,  Assistant   Attorney  General,  Natural  Resources                                                               
Section,  Department of  Law, responded  that  under state  code,                                                               
which she believes is AS  14.40.291, university property can only                                                               
be  acquired by  the  state through  eminent domain  condemnation                                                               
proceedings.  In further response,  she said she misspoke and she                                                               
believes  the  wording in  the  statute  is  that the  state  may                                                               
acquire university property through eminent domain.                                                                             
6:51:48 PM                                                                                                                    
CO-CHAIR JOHNSON inquired  whether it would cost  the state money                                                               
to get its own land back should it need a new right-of-way.                                                                     
MR. MYLIUS replied  yes, that is a possibility  if new rights-of-                                                               
way are needed  that do not already  exist.  He added  that if it                                                               
is  a private  right-of-way  across  state land,  such  as a  gas                                                               
company, the private  entity would have to pay  the state, unless                                                               
the state itself is building the gasline.                                                                                       
6:53:40 PM                                                                                                                    
CO-CHAIR JOHNSON noted  that north of the Yukon River  there is a                                                               
five-mile  corridor along  the  Dalton  Highway where  snowmobile                                                               
access is denied.  He asked  what the university's position is on                                                               
making available turnouts  and other areas that could  be used to                                                               
have access outside of that five-mile corridor.                                                                                 
MS. REDMAN answered  she is not familiar with this,  but she will                                                               
get information on that specific area to the committee members.                                                                 
CO-CHAIR  JOHNSON  said  he  would  appreciate  the  university's                                                               
cooperation and if a five-acre parcel  needed to be carved out of                                                               
this for keeping with the state, he would be willing to do that.                                                                
CO-CHAIR JOHNSON reiterated his question to Mr. Mylius.                                                                         
MR.  MYLIUS  responded  it  would  be up  to  the  university  to                                                               
determine whether  it wanted pullouts,  but these would  be ideal                                                               
locations because  one is  right at  the Yukon  River, one  is at                                                               
Coldfoot, and  the other is  at an airstrip/old  development node                                                               
from pipeline  construction.  In  response to  further questions,                                                               
he reiterated  that these  would be  good locations  for pullouts                                                               
and  such. Because  the  easement through  that  area is  already                                                               
state-owned, any pullouts would be  subject to the existing state                                                               
highway  rights-of-way.    He  said  he would  get  back  to  the                                                               
committee regarding how wide that easement is.                                                                                  
6:56:50 PM                                                                                                                    
CO-CHAIR JOHNSON,  in response to  Representative Tuck,  said the                                                               
university chose the aforementioned  sites because they are ideal                                                               
for  development,  especially  on  the Yukon  River  and  in  the                                                               
Coldfoot area.   They  would provide  places for  communities and                                                               
offtakes, and are potential development  areas for natural gas up                                                               
and down the Yukon River.                                                                                                       
MR. MYLIUS agreed.                                                                                                              
6:57:48 PM                                                                                                                    
REPRESENTATIVE KAWASAKI inquired whether  Mr. Mylius thinks it is                                                               
a  good idea  to convey  the  Nenana oil  and gas  tracts to  the                                                               
University  of Alaska,  given the  university changes  presidents                                                               
from time  to time and could  decide it does not  want to develop                                                               
that area.                                                                                                                      
MR.  MYLIUS  replied the  transfer  is  subject to  the  existing                                                               
exploration license, so the university  would basically step into                                                               
DNR's shoes  and would have  to honor those  existing commitments                                                               
for that  license.   The whole  intent is  for the  university to                                                               
receive  lands that  generate revenue,  so he  cannot imagine  it                                                               
would  not pursue  development of  the oil  and gas  resources on                                                               
this property, if the resources are there.                                                                                      
6:59:28 PM                                                                                                                    
REPRESENTATIVE KAWASAKI  asked how covenants would  interact with                                                               
the university  in the  future and  would it  be better  to place                                                               
covenants or to strip that land out.                                                                                            
MR. MYLIUS  answered that the  question of whether a  covenant is                                                               
preferred over not getting the  land would be better addressed by                                                               
the university.   He said  CSHB 295(CRA)  puts a covenant  on the                                                               
Sumdum  parcel  to  protect   the  archeological  and  historical                                                               
resources.    That  is  the  only parcel  that  currently  has  a                                                               
covenant,  except that  all the  parcels are  subject to  Revised                                                               
Statute (RS) 2477 and any valid and existing rights.                                                                            
7:00:53 PM                                                                                                                    
REPRESENTATIVE P. WILSON moved to  adopt Amendment 1, labeled 26-                                                               
GH2829\C.2,  Bullock,  3/16/10,   written  as  follows  [original                                                               
punctuation provided]:                                                                                                          
     Page 9, line 20:                                                                                                           
          Delete "and"                                                                                                          
     Page 9, line 21, following "Place":                                                                                        
          Insert "; and                                                                                                         
               (4)  Parcel Number KT.1002, Cleveland                                                                            
     Peninsula, Sunny Bay parcel"                                                                                               
REPRESENTATIVE KAWASAKI objected.                                                                                               
REPRESENTATIVE P. WILSON  said she would like to  add this parcel                                                               
to  the area  of  land  that the  university  cannot  have.   She                                                               
explained that  when House Bill  130 was discussed in  2005, both                                                               
Wrangell  and Petersburg  were talking  about becoming  boroughs,                                                               
but  the  boundaries  had  not  been  determined  at  that  time.                                                               
Wrangell became a  borough in 2008.  The Sunny  Bay parcel on the                                                               
Cleveland  Peninsula provides  economic income  because it  is an                                                               
area used by  Alaska Island Community Services  (AKICS), a mental                                                               
health provider  that is the  biggest employer in Wrangell.   The                                                               
university has told  AKICS that it cannot guarantee  what it will                                                               
do with the land.  So,  unless the Wrangell borough controls this                                                               
land, AKICS  might have  to move its  operations from  that area.                                                               
She is therefore asking that the  Sunny Bay parcel be included in                                                               
this section of the bill so  it would be available [for selection                                                               
by] the Wrangell borough.                                                                                                       
7:03:27 PM                                                                                                                    
CO-CHAIR NEUMAN asked whether Representative  P. Wilson wants the                                                               
university to receive this land or  wants to remove the land from                                                               
the list of property that would go to the university.                                                                           
REPRESENTATIVE P. WILSON  explained that as the  bill is written,                                                               
[Amendment 1] would  give the City and Borough  of Wrangell first                                                               
priority to  pick the land before  the university.  The  State of                                                               
Alaska has  been encouraging borough  formation across  the state                                                               
and that  has now happened for  Wrangell.  However, there  is not                                                               
much  state land  to pick  from because  the borough  encompasses                                                               
much of  the Tongass National  Forest; therefore, this  Sunny Bay                                                               
parcel is  crucial.  She  read aloud the following  language from                                                               
the original 2005 bill, House Bill 130:                                                                                         
     Notwithstanding  (a) of  this section,  the state  land                                                                    
     identified  and described  may not  be conveyed  to the                                                                    
     University of Alaska under this  section if the land is                                                                    
     included in a borough formed before July 1, 2009.                                                                          
7:05:27 PM                                                                                                                    
REPRESENTATIVE  SEATON understood  that by  adding the  Sunny Bay                                                               
parcel to the bill it would  be available to the City and Borough                                                               
of Wrangell for  selection, and if the parcel is  not selected by                                                               
the borough it would then go the University of Alaska.                                                                          
REPRESENTATIVE  P.  WILSON  said   she  is  unsure  whether  this                                                               
particular parcel was in House Bill  130, but she wants to ensure                                                               
the parcel is  included in the list  of lands in HB  295 that the                                                               
City  and Borough  of Wrangell  can choose  from.   She said  her                                                               
constituents and  her city  want this provision,  so she  is sure                                                               
the land will be selected by the borough.                                                                                       
7:07:18 PM                                                                                                                    
REPRESENTATIVE  SEATON clarified  for the  listening public  that                                                               
the parcel is not  being removed from HB 295.   It is being moved                                                               
onto a list of lands from  which the City and Borough of Wrangell                                                               
may make  selections.   However, if the  borough does  not select                                                               
all or  some of that land,  then all or the  remaining portion of                                                               
the parcel would be transferred to the university.                                                                              
REPRESENTATIVE P. WILSON responded yes.                                                                                         
REPRESENTATIVE   P.  WILSON,   in   response  to   Representative                                                               
Guttenberg,  confirmed  that the  Borough  of  Wrangell is  newly                                                               
formed and  just began selecting  land this past month,  which is                                                               
why the Sunny Bay parcel was not yet selected by the borough.                                                                   
7:08:29 PM                                                                                                                    
CO-CHAIR NEUMAN noted  that a lot of these  local communities are                                                               
working on development plans, and  looking to the legislature for                                                               
assistance.  Whether communities choose  to select these lands at                                                               
a later  date has yet  to be decided, but  the concept is  that a                                                               
tremendous amount  of land will still  go to the university.   He                                                               
asked how much land is currently in HB 295.                                                                                     
MS.  REDMAN replied  [the bill  began  with] 260,000  acres.   In                                                               
further response, she said 197,600 acres now remain in the bill.                                                                
CO-CHAIR NEUMAN added it is good  policy to respect the public so                                                               
he supports the amendment.                                                                                                      
REPRESENTATIVE KAWASAKI  withdrew his objection.   There being no                                                               
further objection, Amendment 1 was passed.                                                                                      
7:11:18 PM                                                                                                                    
CO-CHAIR NEUMAN drew  attention to the March 16,  2010, letter in                                                               
the  committee  packet from  Mr.  Don  Pegues, Mayor  of  Tenakee                                                               
Springs  [requesting that  the  lands contained  in  the ST  1003                                                               
parcel not  be transferred to  the university.]  He  said members                                                               
have talked to numerous folks in Tenakee Springs in this regard.                                                                
CO-CHAIR  NEUMAN   moved  to  adopt  Amendment   2,  labeled  26-                                                               
GH2829\C.3, Bullock, 3/17/10, which read as follows:                                                                            
     Page 8, lines 26 - 27:                                                                                                     
          Delete "the portions of United States Survey 2459                                                                     
     and United States Survey 6855 that are within"                                                                             
7:12:17 PM                                                                                                                    
REPRESENTATIVE  SEATON  objected  for discussion  purposes.    He                                                               
related  that  when  HB  295  came  before  the  House  Education                                                               
Standing Committee there  were two parcels.  One  of the parcels,                                                               
the 17-acres surrounding  the dock area, was  removed in response                                                               
to a  fair amount  of testimony.   He  said he  has not  seen the                                                               
second  parcel,  but he  is  concerned  about stifling  community                                                               
development  because a  number of  communities want  to grow  and                                                               
have  worries about  school  closings  and economic  development.                                                               
While testimony in the other  committee indicated a lot of people                                                               
use  that area  for hiking  and other  uses, he  wants to  ensure                                                               
there is strong, broad testimony about this second parcel.                                                                      
CO-CHAIR NEUMAN opened public testimony.                                                                                        
7:14:12 PM                                                                                                                    
LARRY HURA, Member, Tenakee Springs  City Council, drew attention                                                               
to  City of  Tenakee Springs  Resolution 2010-16,  dated February                                                               
11, 2010,  that supports the  exclusion of Tenakee  Springs lands                                                               
from  HB 295.   He  said  removal of  the parcels  near the  boat                                                               
harbor from  transfer to the  university is  greatly appreciated.                                                               
The  other parcel,  which is  designated C34,  is near  a logging                                                               
road that  is no longer  used.  He  explained that both  of these                                                               
properties were subject to litigation  in the early 1980s and the                                                               
court judgment requires that these  lands be kept for public use.                                                               
Transfer  of these  lands to  the university  would not  coincide                                                               
with  that judgment.   If  the university  opened these  lands to                                                               
development  all at  once, the  size of  private land  in Tenakee                                                               
Springs would double and would overwhelm the city.                                                                              
7:16:44 PM                                                                                                                    
STEVE LEWIS,  Member, Tenakee Springs  City Council,  thanked the                                                               
previous  committee for  removing  the parcels  near  town.   The                                                               
other parcel,  261 acres, is a  couple of miles east  of the town                                                               
core and is heavily used by  the residents of Tenakee Springs for                                                               
subsistence, hunting,  recreation, and  commercial trapping.   He                                                               
said Tenakee Springs already has quite  a bit of land of its own,                                                               
so  it is  not  incumbent upon  the state  or  the university  to                                                               
provide  lands for  the  city  to develop.    The  city has  been                                                               
developing its lands rationally and  slowly and is not opposed to                                                               
development, but  it does  not want  development thrust  down its                                                               
throat.  Development would double  the private land and providing                                                               
and  supervising services  to those  lands  would overwhelm  this                                                               
little community.  Removing this  land from conveyance would have                                                               
a small  impact upon the  university, but transferring it  to the                                                               
university  would dramatically  impact the  community of  Tenakee                                                               
Springs.  He urged members to support Amendment 2.                                                                              
MR.  LEWIS, in  response to  Representative Seaton,  said Tenakee                                                               
Springs has a school with about 14 students.                                                                                    
REPRESENTATIVE  SEATON  related  that school  personnel  in  many                                                               
areas where  the schools are  close to  the minimum number  of 10                                                               
students required  for staying open have  expressed concern about                                                               
the need  for development.   Thus,  it has  been a  balancing act                                                               
when   people  testify   that  they   do   not  want   additional                                                               
development,  which in  one  way would  probably  lead to  having                                                               
enough people  to keep the  school open,  and then there  is also                                                               
testimony   requesting  waivers   to   keep   the  school   open.                                                               
Therefore, he  wants to be  sure the city council  considered the                                                               
population of the school without  development of the lands around                                                               
the Tenakee Springs area.                                                                                                       
MR.  LEWIS   answered  that  council   members  took   that  into                                                               
consideration in  their hearts while  looking at this issue.   He                                                               
does not believe  the lands in question would have  any impact on                                                               
the school,  especially in  the timeframe  necessary to  keep the                                                               
school open because  if the school were to close  it would happen                                                               
soon.   The city  needs people  moving into  the town  core where                                                               
there is plenty of property, rather than far out.                                                                               
7:21:32 PM                                                                                                                    
CO-CHAIR  NEUMAN said  Amendment  2 addresses  the  land that  is                                                               
talked about  on page  2, paragraph 1,  of Mayor  Pegues' letter,                                                               
which reads [original punctuation provided]:                                                                                    
          Two of those lands specifically excepted from the                                                                     
     transfer to  the City were  lands designated  as tracts                                                                    
     C30  and  C34  in  the  Northern  Southeast  Area  Plan                                                                    
     [NSEAP], adopted October  15, 2002.  In  2005, DNR took                                                                    
     the position  [House Bill] 130  that tract C30  was not                                                                  
     among  the parcels  in  the  2005 list.    The City  is                                                                    
     relying on  DNR's position that C30  is, similarly, not                                                                    
     included now  in HB 295.   However, if for  some reason                                                                    
     C30  is considered  included in  the 2010  legislation,                                                                    
     the City objects.                                                                                                          
CO-CHAIR  NEUMAN  surmised   the  plan  is  to   have  this  land                                                               
transferred to the City of Tenakee Springs.                                                                                     
MR. LEWIS replied he could not hear the question.                                                                               
CO-CHAIR  NEUMAN  understood  that   the  letter  talks  about  a                                                               
memorandum from the state to transfer those lands to the city.                                                                  
7:23:09 PM                                                                                                                    
REPRESENTATIVE  GUTTENBERG said  he is  trying to  determine what                                                               
the land  in question  looks like.   He read from  page 1  of the                                                               
City of Tenakee Springs  Resolution 2010-16 [original punctuation                                                               
     WHEREAS,  Parcel  Number  ST  1003  also  includes  the                                                                    
     parcel  identified in  the NSEAP  further  as C24,  261                                                                    
     acres more  or less,  and the NSEAP  and March  9, 1981                                                                    
     Court  Order declares  that "Lands  within this  parcel                                                                    
     are to be retained by the state"; and                                                                                      
     WHEREAS,  the Stipulation  for Settlement,  (para 1.4),                                                                    
     Tenakee  Springs  vs.  State  of  Alaska,  IJU-80-1666,                                                                    
     March  9, 1981  stipulates these  retained lands  to be                                                                    
     managed for "Commercial, industrial,  right of way, and                                                                    
     borrow pits" uses; and                                                                                                     
MR. LEWIS responded the land has  a road coming up from a landing                                                               
facility that was  used by the old logging process,  and there is                                                               
an old borrow pit  along the road.  The bulk of  the rest of that                                                               
land is forested,  except for the area that was  pushed around at                                                               
the shoreline when the logging was going on.                                                                                    
7:24:44 PM                                                                                                                    
REPRESENTATIVE GUTTENBERG  surmised that  if the City  of Tenakee                                                               
Springs retained this land for its  own use, it seems it would be                                                               
inappropriate  to use  it  as  a buffer  zone.    For example,  a                                                               
hatchery, cannery, or something industrial could not be stopped.                                                                
MR. LEWIS responded  he believes that would be  correct under the                                                               
existing stipulation.  In further  response, he said that at this                                                               
point he  does not think  the city has  any thought of  using the                                                               
land for the near-term future.                                                                                                  
REPRESENTATIVE   GUTTENBERG  inquired   whether   this  land   is                                                               
designated  for  anything  besides commercial,  industrial,  road                                                               
right-of-way, and  borrow pits under the  Northern Southeast Area                                                               
Plan (NSEAP).                                                                                                                   
MR. LEWIS answered he does not know.                                                                                            
7:26:04 PM                                                                                                                    
REPRESENTATIVE  TUCK  said  he  does  not  have  a  copy  of  the                                                               
memorandum of understanding  between the city and the  state.  He                                                               
read the following from Mayor  Pegues' letter, beginning with the                                                               
last paragraph on page 1 [original punctuation provided]:                                                                       
          The Stipulation for Settlement provides that the                                                                      
     State "convey to  the City ... fee simple  title to all                                                                    
     selected  lands within  the City's  boundaries conveyed                                                                    
     to the state  by the Bureau of  Land Management, except                                                                    
     for the sites and acreages set out below."                                                                                 
          Two of those lands specifically excepted from the                                                                     
     transfer to  the City were  lands designated  as tracts                                                                    
     C30  and  C34  in  the Northern  Southeast  Area  Plan,                                                                    
     adopted  October  15, 2002.    In  2005, DNR  took  the                                                                    
     position [House Bill] 130 that  tract C30 was not among                                                                  
     the parcels in  the 2005 list.  The City  is relying on                                                                    
     DNR's  position that  C30 is,  similarly, not  included                                                                    
     now in  HB 295.   However,  if for  some reason  C30 is                                                                    
     considered included  in the 2010 legislation,  the City                                                                    
MR. LEWIS noted that C30 is  no longer included for conveyance to                                                               
the university  because it was  taken out by the  House Community                                                               
and Regional  Affairs Standing Committee.   In  further response,                                                               
he explained that C30 is comprised  of two parcels and parcel C34                                                               
is comprised of 261 acres located to the far east of town.                                                                      
CO-CHAIR  NEUMAN directed  attention to  the topographic  maps in                                                               
the committee packet for the location of C34.                                                                                   
7:28:43 PM                                                                                                                    
REPRESENTATIVE TUCK  understood Mr.  Lewis to be  testifying that                                                               
the concern is this area will  be developed too fast for the city                                                               
to provide services and asked whether  this is the reason for the                                                               
second  and  fourth whereas  clauses  on  page  2 of  the  city's                                                               
resolution,  which   state  respectively   [original  punctuation                                                               
     fiscal   Note  3   of   [HB]   295  indicates,   "after                                                                    
     substantial additions to the  LGTF endowment UA can see                                                                    
     modest  operating  revenue  i.e., in  approximately  20                                                                    
     years UA anticipates annual  investment earnings on new                                                                    
     land sales  to reach  1 percent  of state  general fund                                                                    
     support or $2.6M."; and ...                                                                                                
     parcel  number ST  1003 is  approximately 301  acres in                                                                    
     size,  which  equates to  .0013  percent  of the  total                                                                    
     acreage of land to be conveyed to the University;                                                                          
MR.  LEWIS  replied  the  council  was  trying  to  clarify  that                                                               
excluding  .0013 percent  of the  land included  in HB  295 would                                                               
have a  trivial effect on  the university, but  transferring this                                                               
land would have a major effect on Tenakee Springs.                                                                              
REPRESENTATIVE TUCK  asked what would create  fast development in                                                               
this  parcel if  it is  supposed  to be  managed for  commercial,                                                               
industrial, road right-of-way, and borrow pits.                                                                                 
MR. LEWIS answered  that should the university  take the position                                                               
that the stipulations are invalid  and therefore choose to put in                                                               
subdivisions or other development that  would impact the city, it                                                               
would  take a  legal effort  to  fight that  development and  the                                                               
community is not rich.                                                                                                          
REPRESENTATIVE TUCK  inquired where the  city is at in  regard to                                                               
the [Stipulation for] Settlement from its previous lawsuit.                                                                     
MR. LEWIS  responded that the  litigation was resolved  nearly 30                                                               
years ago in 1981  and prior to his time in  Tenakee Springs.  In                                                               
response  to Co-Chair  Neuman, he  said he  cannot hear  over the                                                               
telephone much of what the committee members are saying.                                                                        
7:32:44 PM                                                                                                                    
REPRESENTATIVE   TUCK  requested   further  explanation   of  the                                                               
potential legal problem should this  parcel be transferred to the                                                               
CO-CHAIR  NEUMAN  requested  former city  council  member,  Molly                                                               
Kemp, to  answer the  question since she  was in  Tenakee Springs                                                               
during that time and he talked to her by telephone last night.                                                                  
MOLLY  KEMP replied  she was  present in  Tenakee Springs  at the                                                               
time of  that lawsuit, although she  was not on the  city council                                                               
at  that  time.    She  explained  that  there  was  a  long-term                                                               
controversy over  U.S. Forest Service  logging operations  up the                                                               
Indian  River   Valley  because  the  City   of  Tenakee  Springs                                                               
controlled the tidelands in that  area.  Negotiations occurred in                                                               
1977  between  Tenakee Springs,  the  State  of Alaska,  and  the                                                               
Alaska Pulp Corporation,  which were resolved by  a memorandum of                                                               
understanding that  conveyed land to  the city through  the state                                                               
selection  process.    When  that process  did  not  occur  after                                                               
several years, the  city litigated against the state.   That suit                                                               
was resolved in  1981 with the Stipulation  for Settlement, which                                                               
she  said she  believes  is  still in  effect.   The  stipulation                                                               
states  that  this  specific  area will  be  retained  as  public                                                               
property and  assigned the uses  of commercial,  industrial, road                                                               
right-of-way, and borrow pits.   Those uses were assigned at that                                                               
time  because there  was an  ongoing logging  operation that  was                                                               
utilizing  the road  and  this was  to  accommodate that  process                                                               
until it was over.                                                                                                              
7:35:28 PM                                                                                                                    
REPRESENTATIVE  SEATON said  his concern  with this  amendment is                                                               
that the school has low  population; therefore, he wanted to hear                                                               
full discussion about development of  this property so that if in                                                               
the future  the school falls  below 10 students and  closes local                                                               
residents do not then say it is the legislature's fault.                                                                        
REPRESENTATIVE SEATON,  given the community support  for removing                                                               
this parcel from conveyance, withdrew  his objection to Amendment                                                               
2.  There being no further objection, Amendment 2 was passed.                                                                   
CO-CHAIR  NEUMAN commented  that he  just heard  a great  sigh of                                                               
relief from Tenakee Springs.                                                                                                    
7:37:45 PM                                                                                                                    
REPRESENTATIVE  GUTTENBERG  asked   whether  the  university  has                                                               
backup land  for adding to the  bill to replace those  lands that                                                               
are being taken out.                                                                                                            
MS. REDMAN answered no.                                                                                                         
7:38:45 PM                                                                                                                    
CO-CHAIR  NEUMAN  presumed  it  would take  awhile  to  sell  the                                                               
conveyed  parcels,  but that  the  sale  of those  parcels  would                                                               
provide a substantial amount of money to fund the university.                                                                   
MS. REDMAN  responded the bulk  of the  properties in HB  295 are                                                               
already  educational  properties  on  which  the  university  has                                                               
campuses,  and an  additional  95,000 acres  are  the Nenana  gas                                                               
lands.   The  other  pieces  are much  smaller  and  not all  are                                                               
saleable.   In  further  response, she  confirmed the  university                                                               
might  lease some  lands for  gas and  other lands  would provide                                                               
substantial funds to the university.                                                                                            
REPRESENTATIVE KAWASAKI  commented that Ms. Redman  is not before                                                               
the committee  to pitch  for university funding,  she is  here to                                                               
pass  this  bill.    He  said  conveying  these  lands  does  not                                                               
necessarily translate  into a budget  item down the road,  and he                                                               
is hoping the actions taken on HB  295 will not have an impact on                                                               
how the  legislature addresses the  University of  Alaska budget.                                                               
To  say that  the university  will become  suddenly solvent  with                                                               
passage of HB 295 would not be accurate, he argued.                                                                             
7:41:15 PM                                                                                                                    
REPRESENTATIVE  P. WILSON,  to give  Petersburg extended  time to                                                               
become  a  borough, moved  to  adopt  Conceptual Amendment  3  as                                                               
     Page 9, line 1:                                                                                                            
          Delete "2012"                                                                                                         
          Insert "2017"                                                                                                         
REPRESENTATIVE P.  WILSON added that  while she doubts  this will                                                               
happen, she would  like to give Petersburg extra time  in case it                                                               
does happen.                                                                                                                    
7:42:40 PM                                                                                                                    
REPRESENTATIVE  GUTTENBERG objected,  saying that  while he  does                                                               
not mind allowing Petersburg more time  to decide whether to be a                                                               
borough, he  is wondering what  the impact of an  extension would                                                               
be for other entities that might be in a similar situation.                                                                     
CO-CHAIR  NEUMAN  said   this  provision  specifically  addresses                                                               
Petersburg and whether a borough  is formed in that specific area                                                               
of the state.                                                                                                                   
REPRESENTATIVE P. WILSON agreed.                                                                                                
7:43:49 PM                                                                                                                    
REPRESENTATIVE  GUTTENBERG  inquired  about  the  background  and                                                               
reason for including this provision.                                                                                            
REPRESENTATIVE  P.  WILSON said  this  language  was included  in                                                               
[House Bill  130] because  at that  time Petersburg  and Wrangell                                                               
were talking about becoming boroughs.   Wrangell has since become                                                               
a borough, but Petersburg is still  working on it and she thought                                                               
it would be  nice to give the  city some extra time.   In further                                                               
response, she  clarified that  the provision  was in  [House Bill                                                               
130] in 2005,  and the language from that bill  is now before the                                                               
legislature  again.   The  amendment does  not  make any  changes                                                               
other than extending Petersburg more  time and right now it looks                                                               
like it will take longer than 2012.                                                                                             
7:45:42 PM                                                                                                                    
REPRESENTATIVE SEATON moved a friendly  amendment, Amendment 1 to                                                               
Conceptual  Amendment 3,  to change  "2017" to  "2014".   He said                                                               
that since  the desire is to  stimulate action, 2017 is  too long                                                               
and a shorter  time extension might be better.   Thus, Conceptual                                                               
Amendment 3, as amended, would read:                                                                                            
     Page 9, line 1:                                                                                                            
          Delete "2012"                                                                                                         
          Insert "2014"                                                                                                         
REPRESENTATIVE P. WILSON accepted the friendly amendment.                                                                       
CO-CHAIR NEUMAN  stated that  forming a  borough is  a tremendous                                                               
amount of work given the legal  issues involved and the amount of                                                               
time required  for public notice  of meetings  and so forth.   He                                                               
said he  therefore thinks a  five-year extension of  the deadline                                                               
to 2017 is appropriate.                                                                                                         
REPRESENTATIVE KAWASAKI  said he  thinks hastening  the formation                                                               
of a  borough is where the  sponsor of the friendly  amendment to                                                               
the  amendment  is  going.    He  asked  whether  the  lengthened                                                               
timeline could  hinder the university's ability  to acquire other                                                               
lands and  whether the  Department of  Natural Resources  and the                                                               
university could figure out other lands in the meantime.                                                                        
7:48:47 PM                                                                                                                    
CO-CHAIR  NEUMAN directed  Representative Kawasaki's  question to                                                               
Ms. Redman.   He further understood that House  Bill 130 included                                                               
a federal land match of 250 million  acres as a result of work by                                                               
U.S. Senator [Lisa] Murkowski.                                                                                                  
MS. REDMAN answered the original  land grant bill in 2000 [Senate                                                               
Bill 7]  was prior  to that  match.  The  federal idea  picked up                                                               
steam by  the time  of House Bill  130 and it  was at  that point                                                               
that they  came together.   She deferred to Mr.  Mylius regarding                                                               
any contingency  plans.   She said  she did  not expect  quite so                                                               
much  controversy on  HB  295  because she  thought  much of  the                                                               
controversy  had been  worked  through.   During  the five  years                                                               
since  passage of  House  Bill 130,  the  university worked  with                                                               
several communities  and was  therefore anticipating  land trades                                                               
and development activities in these communities.                                                                                
7:51:15 PM                                                                                                                    
MS. REDMAN, in  response to Co-Chair Neuman, said  she thinks the                                                               
University of Alaska currently owns  160,000 acres.  In regard to                                                               
a  further   question  from  Co-Chair   Neuman  about   how  much                                                               
university land  is available for  sale that is not  under lease,                                                               
she deferred to Ms. Mari Montgomery.                                                                                            
MARI  MONTGOMERY,   Director,  Land  Management,   University  of                                                               
Alaska, estimated  that approximately 10,000 to  15,000 acres are                                                               
currently for  sale.   She explained that  about 500  parcels are                                                               
usually for sale  or in an offering  at any given time.   It is a                                                               
balance of not flooding the market  and easing the lots out.  The                                                               
university watches how  it moves parcels out because  it does not                                                               
want to put 50 or 100 lots for sale in any one community.                                                                       
CO-CHAIR  NEUMAN said  the university  could use  the money  from                                                               
lands  it sells  to  buy other  lands for  resale  that are  more                                                               
valuable or  could undertake other  upgrades.  He said  his point                                                               
was  the amount  of property  the university  actually sells  per                                                               
year and how much land the university already actually owns.                                                                    
7:53:11 PM                                                                                                                    
CO-CHAIR  NEUMAN  asked  what  ability  DNR  has  to  assist  the                                                               
university in selecting other lands  to replace the lands removed                                                               
from conveyance under HB 295.                                                                                                   
MR.  MYLIUS  responded there  are  no  contingency plans  because                                                               
legislation would be  required to allow the  university to select                                                               
other lands.   The idea with HB  295 was that this is  a set list                                                               
of lands with no backup lands if  land was taken out.  He pointed                                                               
out  that  if  the  date  on  page 9,  line  1,  is  changed  the                                                               
subsequent dates  in that section  would also need to  be changed                                                               
CO-CHAIR  NEUMAN inquired  whether  it is  difficult  for DNR  to                                                               
assist the university in selecting other state lands.                                                                           
MR. MYLIUS  reiterated that DNR  would need  specific legislative                                                               
authority to  transfer additional lands.   He said  the challenge                                                               
in  this   process  is  finding   lands  that   have  development                                                               
potential.   Even  though  the  state owns  a  lot  of land,  the                                                               
acreage fitting  that criteria is  fairly limited.   For example,                                                               
the department did  not want producing oil and  gas properties to                                                               
be  on the  list and  has  tried to  minimize the  impact on  the                                                               
state's timber program as well as  minimize the impact on some of                                                               
the prime  recreational parcels.   So, any parcels that  meet the                                                               
criteria for  giving to the  university are probably going  to be                                                               
equally or  perhaps even more controversial  than those currently                                                               
in HB  295.  It is  not an easy  process to come up  with 200,000                                                               
acres of  land that  have development potential  that are  not in                                                               
someone's back yard.                                                                                                            
7:55:44 PM                                                                                                                    
REPRESENTATIVE SEATON maintained his  motion to adopt Amendment 1                                                               
to Conceptual Amendment 3.                                                                                                      
REPRESENTATIVE P. WILSON objected.                                                                                              
A roll call vote was  taken.  Representatives Seaton, Guttenberg,                                                               
Kawasaki, and  Tuck voted in  favor of Amendment 1  to Conceptual                                                               
Amendment  3.   Representatives  P. Wilson,  Neuman, and  Johnson                                                               
voted  against   it.    Therefore,  Amendment   1  to  Conceptual                                                               
Amendment 3 passed by a vote of 4-3.                                                                                            
REPRESENTATIVE  GUTTENBERG withdrew  his objection  to Conceptual                                                               
Amendment  3  as originally  offered.    There being  no  further                                                               
objection,  Conceptual  Amendment 3,  as  amended,  and with  any                                                               
conforming language necessary, was passed.                                                                                      
7:58:36 PM                                                                                                                    
CO-CHAIR NEUMAN moved  to adopt Conceptual Amendment  4 to remove                                                               
Frying Pan Lake  from the list of parcels that  would be conveyed                                                               
to the  University of Alaska.   He explained that this  parcel is                                                               
located in  Southcentral Alaska near Nancy  Lake State Recreation                                                               
Area, an area  that is unavailable for development.   He said the                                                               
amendment is  in response to the  needs and desires of  people in                                                               
the community of Willow, one of  the fastest growing areas in the                                                               
state.  Willow is currently  working on its development plans and                                                               
several  hundred people  usually  come to  the community  council                                                               
8:00:54 PM                                                                                                                    
REPRESENTATIVE  KAWASAKI objected,  saying  the  Frying Pan  Lake                                                               
parcel  was  identified by  DNR  as  being  land from  which  the                                                               
university could  benefit.  Given the  university's testimony, he                                                               
surmised  that it  would use  these parcels  for development  and                                                               
would put  the parcels on  the market and into  private ownership                                                               
faster than would be the case under  DNR.  He said he is hesitant                                                               
to pull  a lot of these  parcels out if the  committee is serious                                                               
about ensuring that this bill passes.                                                                                           
CO-CHAIR  NEUMAN pointed  out it  is  not like  the community  is                                                               
unwilling to give  up some lands within its boundaries.   It is a                                                               
give-and-take situation of  one parcel being taken  and one being                                                               
left.  The other parcel, Deception Creek, is prime land.                                                                        
8:03:06 PM                                                                                                                    
CO-CHAIR JOHNSON inquired  what DNR would do with  the Frying Pan                                                               
Lake land if it remained in the department's possession.                                                                        
MR. MYLIUS responded  he believes this is an  area the department                                                               
would look at  for possible land sales.  A  number of dog mushing                                                               
trails go through  this area and DNR worked  extensively with the                                                               
community  to identify  and reserve  these trails  when preparing                                                               
the deeds  for the university on  this parcel.  Any  sort of land                                                               
sale  would  have to  protect  the  recreational trails  that  go                                                               
through this  area.  He  added that  the deeds have  already been                                                               
prepared for many of the other  parcels included in the bill.  In                                                               
further  response, he  said that  protection of  the recreational                                                               
trails  would  be  required with  conveyance  to  the  university                                                               
because the draft deeds include  reservations for the trails.  If                                                               
the  land remained  with DNR,  the department  would also  likely                                                               
reserve  those trails  in a  land sale,  given they  have already                                                               
been identified as important trails.                                                                                            
CO-CHAIR NEUMAN interjected that due  to the rapid growth in this                                                               
area,  conflicts have  been arising  between  motorized and  non-                                                               
motorized uses.   It is  important to  keep trails where  the dog                                                               
mushers  can have  their  piece and  motorized  trails where  the                                                               
motorized people can have their piece.   He said Willow is a huge                                                               
mushing  community, especially  with  the start  of the  Iditarod                                                               
trail being  located there, and  it is  out of respect  for these                                                               
people that he is proposing the amendment.                                                                                      
8:05:17 PM                                                                                                                    
REPRESENTATIVE SEATON related that HB  295 was heard in the House                                                               
Special Committee on Education and  not one person from that area                                                               
testified in  opposition to  including these  areas in  the bill.                                                               
He  offered his  belief  that the  House  Community and  Regional                                                               
Affairs Standing Committee also did  not hear any objections from                                                               
the  Willow  community.    Since  work has  been  done  with  the                                                               
community  on  this, it  does  not  seem  like the  community  is                                                               
unaware of  the proposed conveyance  to the university.   He said                                                               
he is reluctant  at this point to remove this  parcel given there                                                               
has been no correspondence.                                                                                                     
CO-CHAIR  NEUMAN said  there  was lots  of  correspondence a  few                                                               
years  ago  that  included  dog  mushers  from  the  area.    The                                                               
amendment is out  of respect for their goals and  what they would                                                               
like to  see in their  community.  He  reiterated he wants  to be                                                               
responsive  to the  people in  the  area because  they have  been                                                               
working on development plans.  He  said he has another issue with                                                               
the university:   when the new Trunk Road  extension went through                                                               
from  the  Palmer  experimental farm,  the  university  made  the                                                               
Department  of Transportation  & Public  Facilities (DOT&PF)  pay                                                               
tens of millions  of dollars for that property.   He allowed that                                                               
while the money  goes from one pocket or  another, the university                                                               
sold that  land to the  state but did not  put any of  that money                                                               
back into the experimental farm or other nearby areas.                                                                          
8:08:38 PM                                                                                                                    
REPRESENTATIVE  TUCK inquired  whether Co-Chair  Neuman wants  to                                                               
see this parcel developed or not.                                                                                               
CO-CHAIR NEUMAN  replied he would like  to see this land  used as                                                               
the  community sees  fit because  he likes  local control  rather                                                               
than the state telling the community what it must do.                                                                           
REPRESENTATIVE  TUCK  asked  whether keeping  this  parcel  under                                                               
state ownership  would provide more  local control than  would be                                                               
the case under university ownership.                                                                                            
CO-CHAIR  NEUMAN answered  the  community would  love to  receive                                                               
this  conveyance  so  it  could  sell the  land  to  support  the                                                               
community.   The community would like  to grow but does  not have                                                               
the ability to  do so because it  does not have land  to sell and                                                               
does  not  receive  state  revenue  sharing  since  the  area  is                                                               
unincorporated.  He said communities  cannot be weaned from state                                                               
coffers unless they are allowed these opportunities.                                                                            
CO-CHAIR  NEUMAN, in  response to  Representative Tuck  about the                                                               
boundaries  of Willow,  said Nancy  Lake at  White's Crossing  is                                                               
about  four  miles south  of  Willow  town  center.   In  further                                                               
response,  he  agreed  this  location is  close  to  the  borough                                                               
8:11:43 PM                                                                                                                    
CO-CHAIR  NEUMAN,  in   response  to  Representative  Guttenberg,                                                               
clarified that the  Frying Pan Lake parcel is  within Willow city                                                               
limits.  In further response he  said he did not know whether the                                                               
parcel  was  available  for selection  [through  the  state  land                                                               
selection process].                                                                                                             
REPRESENTATIVE GUTTENBERG proffered that  when looking to build a                                                               
tax  base,  the  university  is generally  considered  to  be  an                                                               
aggressive developer, which would  provide property tax if Willow                                                               
has  property  taxes.    He  said  the  university's  development                                                               
process is generally much less  cumbersome that the state's.  Not                                                               
wanting to convey  the land because the desire  is no development                                                               
is one thing, but if the  desire is for development then it would                                                               
seem that  conveyance to the  university would be doing  people a                                                               
favor because the mushing trails would be retained.                                                                             
8:13:10 PM                                                                                                                    
CO-CHAIR NEUMAN allowed that is  a good point, except that Willow                                                               
is  not yet  an organized  community.   A goal  in the  community                                                               
development  plan is  to become  an  organized area.   If  Willow                                                               
received conveyance of  this land the community  could sell those                                                               
properties for  development and set the  boundaries and covenants                                                               
as the community  sees fit.  The dog mushing  trails would create                                                               
conflicts and controversy when trying to sell the properties.                                                                   
CO-CHAIR NEUMAN, in response  to Representative Seaton, confirmed                                                               
that  Willow is  not  a  municipality and  added  that  it is  an                                                               
unincorporated area of  the state.  In further  response, he said                                                               
Willow has city limits but is not a Class B city.                                                                               
8:14:55 PM                                                                                                                    
REPRESENTATIVE  TUCK   asked  whether  Willow  is   organized  or                                                               
CO-CHAIR  NEUMAN  replied  his  best  guess  is  that  Willow  is                                                               
unorganized because there  is only one organized  city within his                                                               
district and that is Houston, which is a Class B city.                                                                          
REPRESENTATIVE TUCK suggested implementing  language for a future                                                               
date  similar to  that included  in the  bill on  page 9  for the                                                               
cities  of Wrangell  and Petersburg.    He said  this would  give                                                               
Willow  the time  to organize  and  have the  ability to  acquire                                                               
lands, including the Frying Pan Lake parcel.                                                                                    
CO-CHAIR NEUMAN appreciated the suggestion,  but said he does not                                                               
know  the timeframe  that this  would take  and he  is trying  to                                                               
respond to the community.                                                                                                       
REPRESENTATIVE TUCK  said he is  hesitant without any  written or                                                               
oral  testimony in  this regard.   A  good way  to promote  local                                                               
control is  to provide  the opportunity  to become  organized and                                                               
independent  and able  to  acquire the  land,  so his  suggestion                                                               
would be  a potential solution to  meet the needs and  desires of                                                               
the Willow community.                                                                                                           
8:17:29 PM                                                                                                                    
CO-CHAIR  NEUMAN agreed  that this  could be  done on  page 9  by                                                               
adding a paragraph (6) after line  11.  However, he would like to                                                               
allow Willow a longer time period,  at least until 2016, which is                                                               
why he thinks it would be easier to remove the parcel.                                                                          
REPRESENTATIVE TUCK said he wants  to see this area protected for                                                               
the interests of Co-Chair Neuman's  district, but it is difficult                                                               
without any  testimony and  no further information.   He  said he                                                               
supports giving more  time and wants boroughs to  be developed so                                                               
they  can sustain  themselves and  develop their  own areas.   He                                                               
said he would like to  propose a friendly conceptual amendment to                                                               
Conceptual Amendment 4 that would  be a compromise and would give                                                               
the community a  chance to weigh in, and would  likely be located                                                               
on page 9 after line 11.                                                                                                        
CO-CHAIR  NEUMAN   suggested  that  a  conceptual   amendment  to                                                               
Conceptual Amendment 4 allow the  community of Willow 10 years to                                                               
request conveyance  of the  Frying Pan Lake  parcel, and  if this                                                               
does  not occur  within  that  time period  the  parcel would  be                                                               
conveyed to the university.                                                                                                     
REPRESENTATIVE  TUCK agreed  that  10 years  is reasonable  given                                                               
that the  timeline for Petersburg  was extended to 2014  and that                                                               
community is further along in the process.                                                                                      
8:20:32 PM                                                                                                                    
REPRESENTATIVE  TUCK moved  to adopt  Conceptual  Amendment 1  to                                                               
Conceptual  Amendment 4  [to  allow the  community  of Willow  10                                                               
years to request conveyance of the  Frying Pan Lake parcel and if                                                               
this does not  occur within that time period the  parcel would be                                                               
conveyed to the university].                                                                                                    
REPRESENTATIVE KAWASAKI objected, pointing  out that there are no                                                               
contingency  plans for  adding more  lands to  the bill  and this                                                               
amendment would  potentially lock  out the university  from being                                                               
able to use this  land.  He said he would  prefer the land either                                                               
be given to university or not, rather than having to wait.                                                                      
8:21:49 PM                                                                                                                    
REPRESENTATIVE SEATON observed that  the time period for Wrangell                                                               
under House Bill 130 was from  2005 until 2012, so he agrees that                                                               
10 years  is a long  time.  With a  hold on this  parcel, neither                                                               
DNR nor  the university could do  anything with the land.   Given                                                               
that DNR  has worked  with the community  and the  university and                                                               
drawn up deeds  for the trails identified by  the community, this                                                               
parcel is probably  in a readily developable stage,  so a 10-year                                                               
limbo would be  a long time.   This would tie up  the parcel even                                                               
more than  would its removal  from the  list of conveyances.   He                                                               
said  he  also has  a  problem  with  this amendment  because  no                                                               
objections to the  conveyance have been heard  from any community                                                               
members during  any other committee  hearings.  He  recalled that                                                               
objections expressed during consideration  of House Bill 130 were                                                               
from  people fearing  that the  dog mushing  access would  be cut                                                               
off, but this issue has now been handled in the title transfer.                                                                 
8:23:43 PM                                                                                                                    
CO-CHAIR NEUMAN  said he also  recalls those discussions,  but he                                                               
does not think 10 years is  too long because the university would                                                               
receive about  190,000 acres under  HB 295 and already  has other                                                               
lands.   He reiterated  it is  a give and  take as  the Deception                                                               
Creek parcel  would remain in  the bill  and the Frying  Pan Lake                                                               
parcel  would be  taken out.   He  estimated the  Deception Creek                                                               
parcel to  be about one  section [640  acres] in size  and argued                                                               
that this 10-year delay would not  cause a problem given that the                                                               
university does  not want to dispose  of land too quickly  at one                                                               
time in an area.  He asked Ms. Redman whether he is correct.                                                                    
MS. REDMAN responded she is the wrong person to ask.                                                                            
8:25:16 PM                                                                                                                    
CO-CHAIR  JOHNSON inquired  who  the  owner is  of  land that  is                                                               
conveyed with a timeframe on it.                                                                                                
MARTY  PARSONS, Deputy  Director,  Division of  Mining, Land  and                                                               
Water,   Department   of   Natural   Resources,   replied   that,                                                               
technically, until title  passes from the state,  the state still                                                               
owns that land.                                                                                                                 
CO-CHAIR JOHNSON  asked whether this  would be like a  lien where                                                               
nothing could be done with the property until it is transferred.                                                                
MR.  PARSONS answered  that if  the land  is set  aside where  no                                                               
action or  development can  be taken for  a 10-year  period while                                                               
the community  of Willow determines whether  to incorporate, then                                                               
no development or  land sales could occur in  that parcel through                                                               
either the university or the state.                                                                                             
CO-CHAIR  JOHNSON inquired  whether the  state would  be able  to                                                               
maintain or monitor the dog mushing trails.                                                                                     
MR. PARSONS  responded the state  would still have  ownership and                                                               
would be  required to manage the  land just like any  other state                                                               
parcel.   From the committee  conversation that he has  heard, he                                                               
said there would  be no conveyance available to  any other entity                                                               
or individuals until the 10-year period had run.                                                                                
CO-CHAIR  JOHNSON   asked  whether  the  state   would  make  any                                                               
improvements on the parcel during that 10-year period.                                                                          
MR.  PARSONs replied  that if  this land  is set  aside and  in a                                                               
state of limbo,  the department would maintain the  status quo as                                                               
he cannot imagine  there would be any  development or expenditure                                                               
of state funds on lands for which future ownership is unsure.                                                                   
8:28:05 PM                                                                                                                    
CO-CHAIR NEUMAN inquired whether  Willow could request conveyance                                                               
of the land to itself if it forms a city.                                                                                       
MR. PARSONS  answered the  land surrounding  the parcel  has been                                                               
transferred to  the borough, so nothing  could be done as  far as                                                               
conveying  the  parcel  to  a   new  municipality  until  it  had                                                               
incorporated and any land entitlement  determined and which lands                                                               
would be  available.   He said  it is quite  a process  that must                                                               
take place after a community  is incorporated and he believes the                                                               
state has about 2.5 years to complete that process.                                                                             
8:29:06 PM                                                                                                                    
REPRESENTATIVE SEATON  understood Mr.  Parsons to have  said that                                                               
the  lands around  this parcel  were selected  by the  Matanuska-                                                               
Susitna Borough,  but that  this parcel was  not selected  by the                                                               
Matanuska-Susitna Borough for borough entitlement.                                                                              
MR. PARSONS responded correct,  the Matanuska-Susitna Borough has                                                               
received its entire entitlement of  355,000 acres.  This land was                                                               
retained by the state and that  is one reason why it was selected                                                               
for inclusion in the university bill.                                                                                           
8:29:56 PM                                                                                                                    
REPRESENTATIVE TUCK asked  whether Willow is part  of the 355,000                                                               
acres that were given to the Matanuska-Susitna Borough.                                                                         
MR.  PARSONS  replied Willow  is  within  the boundaries  of  the                                                               
Matanuska-Susitna Borough,  so much of the  lands surrounding the                                                               
community of  Willow would have  been conveyed to the  borough as                                                               
part of its selection.                                                                                                          
CO-CHAIR  NEUMAN said  the [Willow]  city  boundaries within  the                                                               
Matanuska-Susitna  Borough are  not incorporated  and he  is sure                                                               
the community would take this land if it could.                                                                                 
8:30:53 PM                                                                                                                    
CO-CHAIR NEUMAN  reiterated the effect of  Conceptual Amendment 1                                                               
to Conceptual Amendment 4.                                                                                                      
REPRESENTATIVE KAWASAKI maintained his objection.                                                                               
CO-CHAIR NEUMAN stated  a roll call vote would be  taken and that                                                               
a yes vote would support  the adoption of Conceptual Amendment 4,                                                               
as  amended,  and  a  no   vote  would  reject  the  adoption  of                                                               
Conceptual Amendment 4, as amended.                                                                                             
A roll  call vote was  taken.  Representatives Tuck,  Neuman, and                                                               
Johnson voted  in favor  of Conceptual  Amendment 4,  as amended.                                                               
Representatives  Guttenberg,   Kawasaki,  and  P.   Wilson  voted                                                               
against  it.   Therefore,  Conceptual  Amendment  4, as  amended,                                                               
failed by a vote of 3-3.                                                                                                        
CO-CHAIR  NEUMAN realized  he was  mistaken and  the vote  should                                                               
have  been  on  whether  to   adopt  Conceptual  Amendment  1  to                                                               
Conceptual Amendment 4.                                                                                                         
The committee took an at-ease from 8:33 p.m. to 8:33 p.m.                                                                       
8:33:42 PM                                                                                                                    
CO-CHAIR  JOHNSON  moved  to  rescind   the  action  on  adopting                                                               
Conceptual Amendment  1 to Conceptual  Amendment 4.   There being                                                               
no objection,  Conceptual Amendment  1 to Conceptual  Amendment 4                                                               
was before the committee.                                                                                                       
8:35:31 PM                                                                                                                    
REPRESENTATIVE KAWASAKI objected.                                                                                               
CO-CHAIR NEUMAN clarified  that a yes vote  supports the adoption                                                               
of Conceptual Amendment 1 to Conceptual Amendment 4.                                                                            
A  roll  call vote  was  taken.   Representatives  Tuck,  Neuman,                                                               
Johnson voted  in favor of  Conceptual Amendment 1  to Conceptual                                                               
Amendment 4.   Representatives Kawasaki,  P. Wilson,  Seaton, and                                                               
Guttenberg voted  against it.  Therefore,  Conceptual Amendment 1                                                               
to Conceptual Amendment 4 failed by a vote of 3-4.                                                                              
CO-CHAIR  NEUMAN   announced  that   before  the   committee  was                                                               
Conceptual  Amendment 4,  as originally  proposed  to remove  the                                                               
Frying Pan Lake parcel from HB 295.                                                                                             
REPRESENTATIVE KAWASAKI objected.                                                                                               
A roll call  vote was taken.  Representatives  P. Wilson, Neuman,                                                               
and   Johnson  voted   in  favor   of  Conceptual   Amendment  4.                                                               
Representatives  Tuck,  Seaton,  Guttenberg, and  Kawasaki  voted                                                               
against it.   Therefore, Conceptual Amendment 4 failed  by a vote                                                               
of 3-4.                                                                                                                         
8:38:49 PM                                                                                                                    
KEVIN  HOOD requested  that the  five-acre Sumdum  parcel located                                                               
about 50  miles south of Juneau  in Endicott Arm be  removed from                                                               
HB 295.   Recalling the Department of  Natural Resources' earlier                                                               
testimony that  it tries  to avoid  disposal of  prime recreation                                                               
areas, he said  the Sumdum parcel would qualify as  such an area.                                                               
The parcel is  a state in-holding that is  entirely surrounded by                                                               
[federally]  designated wilderness,  he  explained.   He and  his                                                               
fiance make regular  trips to this special area  to view wildlife                                                               
and pick  berries.   It is  further unique  in that  the Endicott                                                               
Arm-Tracy  Arm-Holkham  Bay area  is  the  first place  south  of                                                               
Juneau  with no  development.   This area  is the  only federally                                                               
designated  wilderness between  Skagway  and the  Stikine-LeConte                                                               
Wilderness.   The Sumdum parcel is  used by big game  hunters and                                                               
provides a  protected anchorage,  which is hard  to find  in this                                                               
area because Endicott  Arm is a fjord with sheer  walls and a lot                                                               
of fetch.                                                                                                                       
MR. HOOD suggested  that the Sumdum parcel be traded  to the U.S.                                                               
Forest Service for lands closer  to Juneau that would have higher                                                               
value  and  be  more  appropriate for  development,  rather  than                                                               
extending  development  into every  bay  south  of Juneau.    The                                                               
wilderness  designations  of  the lands  surrounding  the  Sumdum                                                               
parcel  indicate  this area  has  much  value to  many  different                                                               
people.  He  said he supports withdrawing the  Sumdum parcel from                                                               
conveyance  to the  university, but  if  it is  not withdrawn  he                                                               
would  then request  that a  restrictive covenant  be added  that                                                               
disallows any  development.  In  response to Co-Chair  Neuman, he                                                               
said  his  state  representatives are  Representative  Munoz  and                                                               
Senator Egan.                                                                                                                   
8:43:51 PM                                                                                                                    
CO-CHAIR NEUMAN suggested  that Mr. Hood make  his opinions known                                                               
to Representative Munoz and Senator Egan.                                                                                       
MR. HOOD said he would do that.                                                                                                 
MR. HOOD,  in response to Representative  Kawasaki, confirmed the                                                               
Sumdum parcel  has already had  covenants added to it  that would                                                               
restrict  mining  and timber.    However,  he  said that  in  his                                                               
opinion  those covenants  do not  go far  enough because  that is                                                               
neither the value nor the threat to this parcel.                                                                                
8:44:23 PM                                                                                                                    
MARY  IRVINE  stated  she  is  a very  strong  supporter  of  the                                                               
University of  Alaska and has  served the university  for several                                                               
years as  a volunteer instructor.   She said she  is respectfully                                                               
asking for the  committee's help in regard to  the Sumdum parcel.                                                               
Abutted  on either  side  by  the mouth  of  two very  productive                                                               
salmon streams,  the parcel was  an important seasonal  fish camp                                                               
to the  Sumdum Clan of  the Tlingit people.   The late  Andy Hope                                                               
documented clan houses  about four miles distant  from the parcel                                                               
and the  people there drew  fish from  all these streams.   While                                                               
there was  no Tlingit village  on the  Sumdum parcel, it  was the                                                               
town  site of  Sumdum  from  1879-1903.   She  said  that in  her                                                               
research she  came across  Interior Board  of Land  appeals cases                                                               
revealing  the special  nature of  this area,  as well  as a  PhD                                                               
thesis documenting some of the  cultural exchange that makes this                                                               
area  so interesting  historically and  culturally.   The Tlingit                                                               
name translates as the people of the sparkling green water.                                                                     
MS. IRVINE  said that although  the Sumdum  site was used  by the                                                               
Tlingit  people as  a fish  camp, it  was one  of the  very first                                                               
towns in American  Alaska during the gold mining days.   The site                                                               
was not  frequented by the  Russian America Company.   From 1879-                                                               
1903, the  town of  Sumdum consisted  of several  hundred people:                                                               
some local  Tlingits, some out-of-the-area Tlingits  who came for                                                               
work in  the new economy, and  some new gold miner  immigrants to                                                               
Alaska.   These  people used  the very  beach at  Sumdum that  is                                                               
being talked about to pull up  their boats and barges and later a                                                               
large  dock  and  staging  area  were  erected.    Cabins  and  a                                                               
bunkhouse went  up, as did  a laundry, a cookhouse,  and American                                                               
Alaska's first  brewery.  A  corduroy road  and a horse  ore cart                                                               
tram system were  put in place.  Dozens of  miles of tunnels were                                                               
blasted into  the surrounding  hills for the  hard rock  gold and                                                               
those tunnels still remain today.                                                                                               
8:49:51 PM                                                                                                                    
MS. IRVINE said that in  October 1879, three Tlingit Indians from                                                               
Wrangell paddled a  dugout canoe through a storm to  bring over a                                                               
Presbyterian missionary and  John Muir.  Ship  logs indicate that                                                               
many ships  stopped at the  site.   The Alaska State  Library has                                                               
several  photographic collections  showing  the  town of  Sumdum.                                                               
She herself  possesses a  letter with  a stamp  cancellation from                                                               
the U.S.  post office  in Sumdum  for a  package that  was mailed                                                               
from Sutter  Creek, California.   The  Alaska State  Museum holds                                                               
several  items collected  at Sumdum,  one  of which  is a  unique                                                               
rifle that was used experimentally by  the U.S. Navy in the early                                                               
1800s.    There  are  historical   accounts  of  early  botanists                                                               
collecting un-to-for  undiscovered plants  at Sumdum, as  well as                                                               
writings  about labor  disputes  that occurred  during the  early                                                               
corporate mining era  at the town of Sumdum.   An early governor,                                                               
Governor  Shakely,  stepped  in   to  mediate  civil  unrest  and                                                               
disputes at  Sumdum in  a historical  act of  cross-cultural fact                                                               
finding and discerning  the rights of land users at  Sumdum.  She                                                               
said the  question is  how this public  history and  diversity of                                                               
people  are  valued  because  they  are  part  of  the  formative                                                               
beginnings for today's great and diverse state.                                                                                 
MS. IRVINE urged  that the amendment regarding  the Sumdum parcel                                                               
made last  week by  Representative Munoz  in the  House Community                                                               
and  Regional  Affairs  Standing  Committee  be  strengthened  by                                                               
adding  the words  "development including"  on page  10, line  6,                                                               
after the  word "to"  and before "commercial".   Thus,  lines 6-7                                                               
would  read:   "(1)  may  not be  open  to development  including                                                               
commercial  timber harvest  or mineral  development;".   She said                                                               
she believes  that if  the House  Community and  Regional Affairs                                                               
Standing  Committee  had  been  able to  work  on  the  amendment                                                               
further, this is what it would have done.                                                                                       
8:54:23 PM                                                                                                                    
MS.  IRVINE added  that this  change to  the covenant  would also                                                               
technically  and legally  fulfill the  letter and  spirit of  the                                                               
[Central/Southern]  Southeast   Area  Plan  which   outlines  the                                                               
state's long-standing  management intent for the  parcel known as                                                               
Sumdum.   She  said the  plan was  the result  of intense  public                                                               
process  with  adequate notice  and  comment  and intense  public                                                               
input.   The plan was formally  adopted by the state  in November                                                               
2000 and should be considered  the controlling document that this                                                               
committee and the  legislature looks to, not the  lands list that                                                               
has  been provided  from House  Bill 130  because there  are many                                                               
errors  in  that  list.    In  the  plan,  Sumdum  is  designated                                                               
recreation  undeveloped  (RU)  and  RU is  the  most  restrictive                                                               
category  for  lands  as  these   lands  cannot  be  sold  to  an                                                               
individual.    She  maintained   that  under  this  language  the                                                               
university lands office would either  constitute an individual or                                                               
the  university would  intend to  sell the  land to  individuals.                                                               
She said the  history of Sumdum does not belong  to one person or                                                               
one corporation;  it is a history  that can be offered  to future                                                               
generations and visitors.                                                                                                       
8:56:44 PM                                                                                                                    
REPRESENTATIVE TUCK  asked whether the university's  intention is                                                               
to use  the Sumdum parcel  for research and whether  Ms. Irvine's                                                               
intent is to not see any development of any kind.                                                                               
MS.  IRVINE responded  her interest  is  to see  the Sumdum  land                                                               
preserved and remain public.   The 4.9-acre parcel is outside the                                                               
city  limits of  Juneau  and is  surrounded  by the  730,000-acre                                                               
Tracy Arm-Fords Terror Wilderness.   She said she cannot envision                                                               
more than a lodge  or a dock on that area,  and has had heartburn                                                               
with the  meetings the university  has had with  potential buyers                                                               
since  2005 because  she does  not believe  that is  in the  best                                                               
interest of the public.                                                                                                         
8:58:39 PM                                                                                                                    
CO-CHAIR JOHNSON  referred to  page 10,  lines 8-10,  which state                                                               
the site must be preserved  for historical, cultural, scientific,                                                               
and  educational  purposes  and  must remain  accessible  to  the                                                               
public.  He  surmised this provision would do what  Ms. Irvine is                                                               
MS. IRVINE said  this language is very general and  while it fits                                                               
what she  is talking  about, it is  so non-specific  that someone                                                               
could put in a tramway, a zipline,  or a dock with full access to                                                               
the  public.    Therefore,  she   is  interested  in  the  parcel                                                               
receiving a more restrictive covenant to protect the land.                                                                      
9:01:11 PM                                                                                                                    
DONALD   BULLOCK  JR.,   Attorney,  Legislative   Legal  Counsel,                                                               
Legislative  Legal  and  Research Services,  Legislative  Affairs                                                               
Agency,  said  he thinks  it  would  be  helpful to  outline  the                                                               
structure of  the bill for  the people still waiting  to testify.                                                               
Section  5  would  convey  the  land  to  the  university  in  AS                                                               
14.40.365(a):  subsection (n) would  take parcels out of the list                                                               
that is referred to under (a)  and would keep them in the custody                                                               
of the  Department of Natural  Resources; [subsection  (o)] would                                                               
provide  conditional delays  in  which land  is  conveyed to  the                                                               
university to allow  newly formed municipalities to  lay claim to                                                               
those lands;  and [subsection (r)],  the Sumdum  provision, would                                                               
allow the  land to go to  the university but the  parcel would be                                                               
subject to certain limitations and  covenants.  He suggested that                                                               
when witnesses  testify they specify  whether they want  the land                                                               
to be  taken out  of the  list and not  transferred, or  have the                                                               
conveyance  delayed,  or want  the  land  to be  transferred  but                                                               
subject to certain conditions.                                                                                                  
9:03:39 PM                                                                                                                    
CO-CHAIR  NEUMAN noted  he is  providing members  with a  list of                                                               
concerns received from Mr. Bullock via electronic mail.                                                                         
MR. BULLOCK,  in response  to Co-Chair Johnson  and in  regard to                                                               
[Conceptual Amendment  3] which  extended the  date from  2012 to                                                               
2014, inquired whether  the committee's intent is  to also extend                                                               
the date  on page 9,  line 29, from  2016 to  2018.  He  said his                                                               
reason for raising the question is  that 2016 is still past 2014,                                                               
so it  is conceivable that  within that two-year period  the land                                                               
selection could be made, but whether  or not it was the intent of                                                               
the committee to extend that date to 2018 should be clarified.                                                                  
9:05:17 PM                                                                                                                    
CO-CHAIR NEUMAN,  in consultation with Co-Chair  Johnson, said he                                                               
would prefer not to take on  a clarifying amendment at this time.                                                               
He added  that discussions with  Speaker Chenault  indicate there                                                               
may be  some constitutional issues  with the  bill so it  will be                                                               
receiving assignment to the House Judiciary Standing Committee.                                                                 
9:06:13 PM                                                                                                                    
MR. BULLOCK addressed the issues he  raised with the bill [in his                                                               
paper entitled, "Issues  with CSHB 295(EDC)].  He  said one legal                                                               
issue is with  Section 13 [pages 14-15] which  would provide that                                                               
a certain  amount of money  that is generated from  mineral lease                                                               
rentals, royalties, royalty sale  proceeds, and net profit shares                                                               
go into the  permanent fund.  Article IX, Section  15, requires a                                                               
minimum of  25 percent  of these  type of monies  to go  into the                                                               
permanent fund.   The  beginning of Paragraph  (1) in  Section 13                                                               
would provide  for the  minimum amount to  go into  the permanent                                                               
fund, but the paragraph is limited  in time because the last part                                                               
of the paragraph  includes the dates of on or  before December 1,                                                               
1979, and  on or before February  15, 1980.  Paragraph  (2) would                                                               
provide for 50  percent of those monies to go  into the permanent                                                               
fund, which is  the 25 percent required by  the constitution plus                                                               
an additional 25 percent the legislature chose to appropriate.                                                                  
CO-CHAIR NEUMAN said the committee  would have Mr. Bullock return                                                               
to address these issue further.                                                                                                 
9:08:25 PM                                                                                                                    
MR.  BULLOCK, in  response  to  Representative Seaton,  explained                                                               
that when the state received  land from the federal government it                                                               
was  subject to  the condition  that  the state  could lease  the                                                               
mineral interest but  could not dispose or  transfer ownership of                                                               
the mineral  interest.  It  is possible  to transfer land  to the                                                               
university which can hold title to  land, and as an entity of the                                                               
state the university  can have the mineral rights  with the land.                                                               
Section  13 talks  about mineral  income.   For  example, if  the                                                               
Nenana  gas  fields prove  to  be  productive, then  the  mineral                                                               
income  from  that  would  be  subject  to  being  added  to  the                                                               
permanent fund.  Since university  land is state land this raises                                                               
the issue  of whether some state  land can be only  subject to 25                                                               
percent and other state land subject  to 50 percent.  He said his                                                               
recommendation is  rather than applying  it to these  old leases,                                                               
it be  added to paragraph (2)  or else to say  nothing because it                                                               
is mineral income from state land.                                                                                              
CO-CHAIR NEUMAN returned to public testimony.                                                                                   
9:11:34 PM                                                                                                                    
TIM LYDON  said he  and his  wife Barbara  Lydon are  speaking on                                                               
behalf  of 18  commercial  tour operators  ranging  in size  from                                                               
local  operators  in  Southeast   Alaska  to  large  out-of-state                                                               
operators  that  run  multiple   vessels  in  northern  Southeast                                                               
Alaska.  He said when he last  testified on the bill, he spoke on                                                               
behalf of 17  operators, so the number of  people concerned about                                                               
the Sumdum  parcel is  growing.  The  group has  testified before                                                               
the  other committees,  but frustration  is  growing because  the                                                               
group's interests have not been met.   He said it is important to                                                               
note that this  4.9-acre parcel sitting in the  middle of 730,000                                                               
acres of federally designated wilderness  is the only undeveloped                                                               
mainland bay  between Juneau  and Frederick Sound.   It  has this                                                               
federal designation  because it is  a very  unique place.   It is                                                               
valuable to him,  his wife, and other Juneau residents  who go to                                                               
there to sightsee,  fish, hunt, kayak, and camp because  it is an                                                               
undeveloped bay.   It is also valuable to the  18 companies he is                                                               
representing because  they use this location  for guided hunting,                                                               
fishing,  walks  ashore,   sightseeing,  kayaking,  and  camping.                                                               
Sanford  Cove  where the  Sumdum  parcel  is  located is  a  safe                                                               
anchorage for  the boats of these  18 companies; this is  of very                                                               
high value because  Endicott Arm and Tracy Arm  have virtually no                                                               
anchorages.  The  reasons for caring about the  Sumdum parcel are                                                               
its  important  cultural  and aesthetic  values.    Additionally,                                                               
there is  the compatibility issue with  the surrounding federally                                                               
designated  wilderness, which  is indicated  by DNR's  management                                                               
designation for this parcel.                                                                                                    
9:16:05 PM                                                                                                                    
MR. LYDON  addressed the issue  of economics, noting that  the 18                                                               
companies  he  is  represents include  small  and  mid-size  tour                                                               
companies, hunting  operations, kayaking operations,  and others.                                                               
He said  research by  the University  of Alaska  has demonstrated                                                               
that this sector of Alaska's  nature-based tourism industry pumps                                                               
tens of  millions of  dollars into  the Southeast  Alaska economy                                                               
every year.   The  clients served by  these companies  must spend                                                               
their nights before and after  their tours in hotels in Southeast                                                               
Alaska, which  makes them unique  from the cruise  ship industry.                                                               
These  18  companies  represent  approximately  22  vessels  that                                                               
provision  in Southeast  Alaska  throughout  the summer,  meaning                                                               
each  week's load  of  fuel,  food, and  supplies  is shopped  in                                                               
Southeast  Alaska.   He pointed  out  that the  backbone of  this                                                               
industry is nature-based tourism where  people are brought to the                                                               
undeveloped places in Alaska that  they see on television and the                                                               
MR. LYDON said  the 18 companies he is  representing would prefer                                                               
that  the  Sumdum  parcel  be  removed  from  conveyance  to  the                                                               
university.  Given  that the group realizes there  is pressure to                                                               
keep the parcel in the bill,  it would be amenable to a covenant.                                                               
However, the covenant as currently  written is inadequate because                                                               
the area is  not threatened by mining or logging.   The threat is                                                               
someone building a small lodge  on the parcel with flight seeing,                                                               
catamaran tours, and so forth, and  all of that can be done under                                                               
the  current  language that  describes  preserving  the area  for                                                               
education,  cultural,  and  historical  values.    Therefore,  an                                                               
amendment providing for  no development is important  to these 18                                                               
companies, himself, and other Juneau residents.                                                                                 
9:19:27 PM                                                                                                                    
ROBERTA  CHARLES  expressed  her   concern  about  Biorka  Island                                                               
because  it is  a customary  place for  her family,  which has  a                                                               
reinstatement application  for the 115 acres  that Rudolph Walton                                                               
had  applied for  as a  Native allotment  but did  not get.   The                                                               
basis of the reinstatement is that  Mr. Walton was not provided a                                                               
hearing  to  present  evidence  of  use  and  occupancy  for  the                                                               
additional acreage that was originally  denied.  The family would                                                               
like  Biorka  Island  to  be  excluded  from  conveyance  to  the                                                               
university.  In  response to Co-Chair Neuman, she said  she is 73                                                               
years  old and  this is  a family  matter that  goes back  to her                                                               
grandfather's time.                                                                                                             
REPRESENTATIVE P.  WILSON asked  whether there  is a  question of                                                               
whose land it is and that this is not state land.                                                                               
MS. CHARLES responded that the  U.S. Bureau of Land Management is                                                               
handling this.   Her mother attended  a hearing held a  few years                                                               
ago by the Sitka Tribe of  Alaska to request the land be returned                                                               
to the  family.   Congressmen were also  present at  the hearing.                                                               
The family's  request is still  in process.   In response  to Co-                                                               
Chair Neuman,  she agreed to  provide Representative  Wilson with                                                               
further information in this regard.                                                                                             
9:22:20 PM                                                                                                                    
STEVE HENRIKSON  related that Rudolph  Walton was born  on Biorka                                                               
Island  in 1867  and was  one of  Sheldon Jackson  School's first                                                               
Tlingit students  at the  Sitka Industrial  Training School.   At                                                               
the time  of his graduation,  Alaska Natives were not  allowed to                                                               
hold legal title  to any property except  through the homesteader                                                               
Native allotment  process.  Rudolf  Walton applied for  about 140                                                               
acres, but  only received  40 of  those acres.   Due  to military                                                               
emergency during  World War  II, those 40  acres were  taken from                                                               
him by  the U.S. government  with the stipulation that  after the                                                               
war the  land would be  returned.   Instead, the land  was turned                                                               
over to several  federal agencies.  The family  has been fighting                                                               
for this land for decades  and several family members have passed                                                               
away during this  time.  In 2005, during  consideration of [House                                                               
Bill 130], both the family and  the Sitka Tribe of Alaska pointed                                                               
out this matter  and explained it was not yet  resolved, yet this                                                               
property remained  in the bill.   The family  understands through                                                               
the  Sitka Tribe  of Alaska  that  this issue  is being  actively                                                               
dealt with by  the U.S. Bureau of Land Management  and the family                                                               
would like  Biorka Island  to be removed  from conveyance  to the                                                               
university under this bill.                                                                                                     
9:24:52 PM                                                                                                                    
CO-CHAIR NEUMAN observed  that eight or nine  other Walton family                                                               
members are still waiting to  testify.  He requested that further                                                               
information be provided to Representative Wilson's office.                                                                      
REPRESENTATIVE  P. WILSON  said the  bill would  be remaining  in                                                               
committee  and asked  the Walton  family members  to contact  her                                                               
office.   She surmised  the university  would not  want something                                                               
that has been in litigation, but she would like to know exactly                                                                 
what is being dealt with.                                                                                                       
9:26:37 PM                                                                                                                    
MARY ANNE NAVITSKY, DDS, testified on behalf of herself and the                                                                 
following Rudolf Walton family members:  Irene Vaden; Josephine                                                                 
Patterson; Charles Daniels Jr.; Elizabeth Goldsbury, great-                                                                     
granddaughter of Mr. Walton; Cheryle Enloe; William Craig; and                                                                  
Jeremiah Craig.  Dr. Navitsky said she is a granddaughter of                                                                    
Rudolph Walton.  She spoke as follows:                                                                                          
     Rudolph  Walton was  a Tlingit  Indian  born on  Biorka                                                                    
     Island in 1867.  Biorka  Island was his summer home and                                                                    
     fish  camp through  his  whole life.    Mr. Walton  had                                                                    
     applied  and  received Biorka  Island  as  part of  his                                                                    
     Native allotment.   The federal  government established                                                                    
     the Native  Allotments Act  of 1906  to return  land to                                                                    
     Alaska Natives.  The  federal government issued Rudolph                                                                    
     Walton  a  certificate  of  ownership  for  the  Native                                                                    
     allotment on  Biorka Island.   During World War  II the                                                                    
     United  States government  requested  Biorka Island  to                                                                    
     help  protect   this  country,  and   Rudolph  Walton's                                                                    
     property was then  used in the war effort.   It was not                                                                    
     returned to  him or his  heirs as was expected  when it                                                                    
     was no longer needed to protect  the country.  He was a                                                                    
     responsible citizen and a  patriot and always supported                                                                    
     this country  and believed his rights  would be honored                                                                    
     and protected.   The  heirs of  Rudolph Walton  and the                                                                    
     Sitka Tribe  of Alaska  have worked  very hard  to have                                                                    
     this  property   returned  to  his  family.     Federal                                                                    
     agencies, including  the Department of  Defense, United                                                                    
     States Coast Guard, United  States Forest Service, have                                                                    
     all supported  this effort.   The  heirs and  the Sitka                                                                    
     Tribe of Alaska are continuing  to work to correct this                                                                    
     injustice and  to have  Biorka Island  Native Allotment                                                                    
     returned  to  Rudolph  Walton  heirs  and  respectfully                                                                    
     request  that  Biorka Island  not  be  included in  the                                                                    
     University  of Alaska  Land Grant  List 2005,  which is                                                                    
     currently part of  HB 295.  Please amend  this bill and                                                                    
     remove Biorka Island.                                                                                                      
9:29:19 PM                                                                                                                    
CHERYLE ENLOE, in response to Representative Wilson, said Biorka                                                                
Island is further out in the ocean than is Fort Russo.                                                                          
CO-CHAIR NEUMAN said it would be  good to remove Biorka Island so                                                               
it can be  re-submitted to the family.  He  offered his assurance                                                               
that Representative  Wilson would  work with  the family  on this                                                               
REPRESENTATIVE P. WILSON agreed.                                                                                                
9:30:13 PM                                                                                                                    
LEO LUCZAK,  Community Development Director, City  of Petersburg,                                                               
related  that the  Petersburg city  council  passed a  resolution                                                               
requesting an  extension of  the moratorium  on the  selection of                                                               
university land within the boundaries  of the proposed Petersburg                                                               
borough.   He  thanked members  for the  two-year extension,  but                                                               
said  he is  afraid it  may  be unrealistic  because the  borough                                                               
petition  must  be re-done,  attorneys  hired,  and an  extensive                                                               
outreach program  conducted to the  10 percent of  the population                                                               
that resides  in the unorganized borough.   He said there  is not                                                               
much to offer  those residents in this regard, but  one carrot is                                                               
that the borough would be  able to select some unencumbered lands                                                               
outside the  borough.  He estimated  that 95 percent of  the land                                                               
outside the borough is owned  by the federal government, so would                                                               
not be available for selection.   The land that was available was                                                               
selected by  many state agencies,  including prior  selections by                                                               
the University of Alaska.   Nearly all of the remaining available                                                               
land  was then  taken  by the  Mental Health  Trust  when it  was                                                               
reconstituted.   The five parcels  requested by Petersburg  in HB
295 are the  only available state lands left  within the proposed                                                               
borough.   He  requested  that Petersburg  be  given a  five-year                                                               
extension because  he does not  believe an organized  borough can                                                               
be formed in  two years and if the opportunity  is lost to select                                                               
these parcels,  there will be  nothing else to select  that would                                                               
benefit the proposed borough.                                                                                                   
9:32:33 PM                                                                                                                    
REPRESENTATIVE  P. WILSON  pointed out  that the  committee added                                                               
four more years by amending the deadline from 2012 to 2014.                                                                     
MR.   LUCZAK  responded   that  Petersburg   has  a   very  open,                                                               
Scandinavian-like government  process that  takes time  and while                                                               
Petersburg really  desires to  form a borough,  he is  afraid the                                                               
2014 deadline will be hit.   He said his personal opinion is that                                                               
if the opportunity is lost  to select these remaining state lands                                                               
Petersburg will then never form a borough.                                                                                      
9:33:38 PM                                                                                                                    
DAVID KENSINGER said  he is one of the residents  of the proposed                                                               
Petersburg borough and is in  the unique position of volunteering                                                               
himself  to  be  taxed  because   he  feels  very  strongly  that                                                               
Petersburg must  form this borough.   He related that  during the                                                               
past process, it  became obvious that Petersburg was  going to be                                                               
unable to complete  the process in time to  receive the community                                                               
selection lands.   Hence, it was hard to  motivate people outside                                                               
the  boundary  of the  City  of  Petersburg  to  sign on  to  the                                                               
process.   Forming a borough is  a very cumbersome process.   For                                                               
example, it  can take  a year  or longer  for the  local boundary                                                               
commission to  even look at the  proposal and reply.   He said he                                                               
is therefore  asking for  more time because  he thinks  forming a                                                               
borough is important and will happen.                                                                                           
9:34:51 PM                                                                                                                    
DENNIS ROGERS,  regarding the Sumdum  selection in  Sanford Cove,                                                               
stated that  he is one of  the small business owners  referred to                                                               
by Mr. Lydon.   He said his business conducts  extensive trips in                                                               
the Sumdum  area and  Sanford Cove  and, in  addition to  being a                                                               
scenic location, it  is one of very few anchorages  in that area.                                                               
He speculated  that these attributes are  why it has had  all the                                                               
historic attention  referred to  by Ms.  Irvine.   It would  be a                                                               
shame  to  see  the  Sumdum  parcel go  into  private  hands  for                                                               
development by a  single corporation and preclude  that area from                                                               
use  by Alaskans.   He  urged that  this parcel  be removed  from                                                               
conveyance to  the university and,  if not removed,  then special                                                               
attention be given to the covenants suggested by Ms. Irvine.                                                                    
9:36:37 PM                                                                                                                    
CO-CHAIR NEUMAN left public testimony open and held over HB 295.                                                                

Document Name Date/Time Subjects
HB 295 Letter 3.16.10.pdf HRES 3/17/2010 6:00:00 PM
HB 295
HB 295 amend C.2.pdf HRES 3/17/2010 6:00:00 PM
HB 295
HB 295 amend C.3.pdf HRES 3/17/2010 6:00:00 PM
HB 295
HB 295-1-1-011910-REV-N.pdf HRES 3/17/2010 6:00:00 PM
HB 295
HB 295-2-2-011910-DNR-Y.pdf HRES 3/17/2010 6:00:00 PM
HB 295
HB 295-3-1-011910-UA-Y.pdf HRES 3/17/2010 6:00:00 PM
HB 295
HB 295 DNR MLW Ltr 3.24.10.pdf HRES 3/17/2010 6:00:00 PM
HB 295
HB 295 LAW Ltr 2.25.10.pdf HRES 3/17/2010 6:00:00 PM
HB 295
HB 295 LAW ltr 3.30.10.pdf HRES 3/17/2010 6:00:00 PM
HB 295
HB 295(CRA).pdf HRES 3/17/2010 6:00:00 PM
HB 295
HB 295 UA Gen Couns Ltr 3.24.10.pdf HRES 3/17/2010 6:00:00 PM
HB 295
HB 295 Leg Legal Memo 3.22.10.pdf HRES 3/17/2010 6:00:00 PM
HB 295