Legislature(1997 - 1998)

03/23/1998 03:57 PM Senate RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
              SENATE RESOURCES COMMITTEE                                       
                    March 23, 1998                                             
                      3:37 P.M.                                                
MEMBERS PRESENT                                                                
Senator Rick Halford, Chairman                                                 
Senator Lyda Green, Vice Chairman                                              
Senator Bert Sharp                                                             
Senator Robin Taylor                                                           
Senator John Torgerson                                                         
Senator Georgianna Lincoln                                                     
MEMBERS ABSENT                                                                 
SENATOR LOREN LEMAN                                                            
COMMITTEE CALENDAR                                                             
SENATE BILL NO. 341                                                            
"An Act relating to agricultural land; and providing for an                    
effective date."                                                               
     - PASSED SB 341 FROM COMMITTEE                                            
SENATE BILL NO. 262                                                            
"An Act relating to regulation of hunting and trapping and to the              
definition of  sustained yield.'"                                              
     - PASSED CSSB 341(RES) FROM COMMITTEE                                     
CS FOR SENATE BILL NO. 281(CRA)                                                
"An Act relating to general grant land entitlements for the City               
and Borough of Yakutat; and providing for an effective date."                  
     - HEARD AND HELD                                                          
PREVIOUS SENATE COMMITTEE ACTION                                               
SB 341 - No previous action to record.                                         
SB 262 - No previous action to record.                                         
SB 281 - See Community & Regional Affairs minutes dated 2/23/98.               
         See Resource Committee minutes dated 3/20/98.                         
WITNESS REGISTER                                                               
Ms. Janey Wineinger, Staff                                                     
Senator Lyda Green                                                             
State Capitol Bldg.                                                            
Juneau, AK 99811-1182                                                          
POSITION STATEMENT: Commented on SB 341 for sponsor.                           
Ms. Mel Krogseng, Staff                                                        
Senator Robin Taylor                                                           
State Capitol Bldg.                                                            
Juneau, AK 99811-1182                                                          
POSITION STATEMENT: Commented on SB 262 for sponsor.                           
Mr. Geron Bruce, Special Assistant                                             
Department of Fish and Game                                                    
P.O. Box 25526                                                                 
Juneau, AK 99802-5526                                                          
POSITION STATEMENT: Opposed SB 262.                                            
Mr. Tom Armour, Manager                                                        
City and Borough of Yakutat                                                    
P.O. Box 160                                                                   
Yakutat, AK 99689                                                              
POSITION STATEMENT: Supported SB 281.                                          
Mr. Paul Fuhs                                                                  
City and Borough of Yakutat                                                    
10652 Porter Lane                                                              
Juneau, AK 99801                                                               
POSITION STATEMENT: Supported SB 281.                                          
Mr. Dick Mylius                                                                
Division of Land                                                               
Department of Natural Resources                                                
3601 C Street, Ste. 1122                                                       
Anchorage, AK 99503-5947                                                       
POSITION STATEMENT: Commented on SB 281.                                       
Mr. Steve Planchon, Executive Director                                         
Mental Health Trust Land Office                                                
Department of Natural Resources                                                
3601 C Street                                                                  
Anchorage, AK 99503-5935                                                       
POSITION STATEMENT: Supported SB 281.                                          
ACTION NARRATIVE                                                               
TAPE 98-21, SIDE A                                                             
Number 001                                                                     
               SB 341 - AGRICULTURAL LAND BILL FIX                             
CHAIRMAN HALFORD called the Senate Resources Committee meeting to              
order at 3:37 p.m. and announced SB 341 to be up for consideration.            
MS. JANEY WINEINGER, Aide to Senator Green, sponsor, said SB 341               
attempts to correct a small glitch that was created in SB 109,                 
Section 14(b) which listed tracts 1 -19 at Pt. Mackenzie and 21 -              
30.  This bill attempts to remove 30, ending it at 29.  Tract 30               
was assigned to the Borough through the Municipal Entitlement Act.             
At this time, the Borough retains the development rights and the               
State retains the agriculture rights.  The key is what's fee                   
simple.  The Revolving Loan fund later acquired the agriculture                
rights in Tract 30 by foreclosure of its lien when the farmer had              
secured the agriculture rights.  Tract 30 is the only parcel                   
designated that has a split title.  The Mat-Su Borough requested               
this with concurrence from the State.  She said no one opposes this            
SENATOR TAYLOR moved to pass SB 341 from Committee with individual             
recommendations with the accompanying fiscal note.  There were no              
objections and it was so ordered.                                              
                  SB 262 - MANAGEMENT OF HUNTING                               
CHAIRMAN HALFORD announced SB 262 to be up for consideration.                  
SENATOR TAYLOR said this is a reaction to the closure by the Board             
of 236 square miles to Alaskan hunters.  It basically restricts the            
Department from curtailing traditional access for hunting and                  
trapping unless the specific needs of access is causing biological             
harm to a game population in the area where the restriction is to              
MS. MEL KROGSENG, Staff to Senator Taylor, said the amendment was              
drafted to allow the Board of Game to maintain those controlled use            
areas in existence now that they feel are necessary.  Some of them             
have indicated that these areas may be only for a short period of              
time and may not be necessary to be maintained over time.  This                
would allow the Board to grandfather them if they need to be                   
continued and eliminate them if they don't need to be continued.               
There were references in the original bill to fish and the bill                
doesn't really deal with fish, just game; so fish were deleted. It             
was also intended that generalized motor vehicles be included, so              
that is in the amendment.  The term "conservation" was changed to              
"management."  The bill still states that if the Department wishes             
to create new controlled use areas, it must be for biological                  
SENATOR TAYLOR moved to adopt the amendment to SB 262.  There were             
no objections and it was so ordered.                                           
SENATOR TAYLOR moved to pass CSSB 262(RES) from Committee with                 
individual recommendations.                                                    
SENATOR LINCOLN objected saying she would first like to hear from              
the Department.                                                                
MR. GERON BRUCE, Department of Fish and Game, said the amendments              
would not essentially affect the main testimony of the Department              
on the original bill which is that controlled use areas are                    
designed not for biological purposes, but for allocative purposes              
under the Board's authority to provide preferences among beneficial            
uses.  That is what this tool is being used for.  With the                     
exception of a few areas, they have been well received by the                  
SENATOR SHARP asked if current areas would be grandfathered in.                
SENATOR TAYLOR answered, "Yes."                                                
SENATOR TORGERSON asked if they are taking out all reference to                
fish except in the sustained yield definition and asked if that's              
the intent.                                                                    
MS. KROGSENG said they intentionally left the reference to fish for            
sustained yield, because this definition is under general                      
definitions, not referring to just this section of the bill.                   
There were no further objections and the bill moved from Committee             
with individual recommendations.                                               
           SB 28 - UNINCORP. COMMUNITY MATCHING GRANTS                         
CHAIRMAN HALFORD announced SB 281 to be up for consideration.                  
SENATOR MACKIE said he represents the City of Yakutat and SB 281               
was introduced to complete the formation of the Yakutat Borough and            
the land entitlements that the State grants to support local                   
government.  Initially, the land entitlement for the new borough by            
the formula of 10 percent of "vacant, unappropriated, and                      
unreserved" (VUU) State lands was a mere 138 acres.                            
The City and Borough of Yakutat subsequently petitioned the Local              
Boundary Commission to reclaim much of the area on its Northern                
border.  In a reversal of its earlier decision, the Local Boundary             
Commission approved the annexation which contains a substantial                
amount of State "VUU" lands.  It is estimated that if the annexed              
areas had been included for the original borough formation, the                
municipal land entitlement would amount to 33,000 acres.                       
It has been a long established policy for the State to assist the              
formation and operation of the local governments with generous                 
grants of State land.  SB 281 corrects the defects in the borough              
formation process that resulted in such a small land entitlement               
for the City and Borough of Yakutat by increasing its entitlement              
to 21,500 acres. At this point, the Community and Regional Affairs             
Committee, which he chairs, reduced the amount from 30,000 acres.              
The bill also gives additional authority to the Director of the                
Division of Lands in the Department of Natural Resources to                    
condition and restrict any of the municipality's selections made               
under this increased grant.                                                    
The City and Borough of Yakutat has been extremely accommodating in            
terms of working with all the agencies, the State, the University              
of Alaska, DNR, DCRA, and the Mental Health Trust to try to come up            
with a bill that would be non-controversial.                                   
Number 227                                                                     
SENATOR TAYLOR said the backup material indicates this legislation             
addresses another matter, because it says, "much of the State land             
in the area has been reclassified under the Yakutaga Area Plan, it             
will be necessary for DNR to relocate and reclassify acreage                   
available for conveyance to the Borough."  He asked why they didn't            
convey to Yakutat a contiguous portion of land, in essence,                    
surrounding their community.                                                   
SENATOR MACKIE said he would like another person who is more                   
familiar with the issue to answer that.  He knew there were a                  
number of concerns from the University in terms of their ability to            
have development on University lands.                                          
SENATOR TAYLOR asked if these lands didn't include University                  
SENATOR MACKIE responded that Mr. Armour would answer that a little            
CHAIRMAN HALFORD asked what the population of the Yakutat Borough              
SENATOR MACKIE replied 850 people.                                             
SENATOR TAYLOR asked if they had any plans to convey this land to              
private owners or would it be held by the community.                           
MR. TOM ARMOUR, Manager, City and Borough of Yakutat, said the                 
people of Yakutat have been fighting to form a borough for six                 
years.  This bill granting their municipal entitlement is a final              
step in the legislative process and he asked for their support of              
it.  They have worked closely with all the affected parties for the            
past five months including Chugach Corporation, University, DNR,               
ADF&G, and the Mental Health Trust.  As part of their negotiations,            
they reduced their entitlement from 30,000 to 21,500 acres and have            
agreed to work out habitat conditions with ADF&G so they can obtain            
title to lands with critical habitat issues.  As a result, all of              
the parties are in support of this bill with the exception of the              
Mental Health Trust who wants veto power over a 40-acre parcel                 
currently used as a log sort yard, which they couldn't accept.                 
They offered the Mental Health Trust the same deal as the                      
University, which doesn't charge for using the property during the             
term of their current State land lease, and an offer to delay                  
nominating that parcel until they are finished with their round of             
logging (approximately eight years).  DNR will have the final                  
decision and they may well keep that property for itself.                      
SENATOR TAYLOR said he was concerned with what some of the land                
classifications were and asked to see them on a map.                           
MR. ARMOUR said he didn't have it with him, but it would be readily            
MR. PAUL FUHS, City of Yakutat, said this land is highly classified            
and managed.  There were a lot of lawsuits that were filed against             
the University for their logging.  Mental Health was involved.  It             
is part of an out-of-court settlement.  If you change around the               
classifications, then all the bets are off and the lawsuits are                
back on.  These were very delicate negotiations and they weren't               
able to identify 30,000 acres in the municipality that wouldn't                
have triggered so many changes in land classification that would               
have upset the whole apple cart.  That's why they agreed to 21,500             
acres.  A lot of the land is directly contiguous to Yakutat; the               
other land is around the industrial area where the University and              
Mental Health are doing their logging which is a potential future              
port site.                                                                     
He explained that some lands are classified in a way that a                    
municipality would never get them, like wildlife refuges.  The ones            
that are classified as habitat, forestry, or industrial use areas              
are those areas that are available for selection.  Most                        
municipalities do not know which parcels they would go after; they             
would just go after a straight 10 percent.  This area is so highly             
classified and managed, that they know exactly which parcels they              
can and can't go after.  That's how they zeroed in on the 21,500               
without upsetting all the other land classifications in the area.              
SENATOR TAYLOR said it seems to him that there is an appropriation             
of State lands that's taking place through the classification                  
purpose, especially when that classification is used in a court                
settlement.  It seems like a couple of parties got together, not               
elected by anyone, and decided to settle a case. They are being                
precluded in the Legislature from conveying it to the Borough and              
they are precluded from doing any other management technique on                
that property other than that which has been decided by the                    
litigation.  It seems like they are going at this backwards.  The              
Legislature appropriates the resources and wealth of this State,               
not the Cleary case.                                                           
Number 310                                                                     
SENATOR MACKIE explained that all the City of Yakutat has is 138               
acres.  Everyone involved with this bill wanted to come up with a              
bill that wasn't controversial and tried to identify lands that                
would be noncontroversial and made sense for them to nominate.  All            
this bill does is allow up to that amount to happen.  It would                 
allow the City and Borough of Yakutat to nominate certain parcels              
of land within that entitlement and DNR would have to approve the              
nomination and once that happened the City and Borough would have              
to pay for the survey and the conveyance.  There would be no fiscal            
impact to the State.                                                           
CHAIRMAN HALFORD asked what the basis was for the original 138                 
MR. FUHS explained that it was 10 percent of the vacant                        
unappropriated land and the reason there wasn't much land is                   
because it was almost all federal and native corporation land                  
around the municipality.  There was very little State land around              
the original borough boundaries.  In the annexed area, there's a               
lot of State land which now allows Yakutat to seek its entitlement.            
SENATOR MACKIE said the annexation has occurred since that original            
CHAIRMAN HALFORD asked how many people lived in the annexed area.              
MR. ARMOUR explained that the small amount of permanent non-logging            
residents at the logging camps fluctuates with the market.  One of             
the camps has 35 people.  He knows of only six permanent people.               
SENATOR MACKIE said the reason the 33,000 acres was the original               
amount is because if the area that has recently been annexed was               
included in the original formation, they would have been entitled              
to 33,000 acres under the formula all the other municipalities were            
allowed land under.  Because of all the different land                         
classifications and habitat area, it was reduced by one third to               
CHAIRMAN HALFORD countered that those allocations were based on                
that particular snap-shot in time.  If they ended up with 21,000               
acres for a population of 850 people, they would have far more                 
acreage in a governmental entity that's pretty far away.  The Mat-             
Su Borough has become so big and so diverse,  that it has paralyzed            
itself by its own diversity.  Its extremities do not want what its             
core does want and it won't pay for what its core wants.  They                 
continuously argue back and forth.                                             
SENATOR MACKIE asked what would be the purpose of having a borough             
without land entitlement that actually made sense.  There are so               
many things within the Yakutat boundaries that are not going to be             
allowed for land development as it is...                                       
MR. FUHS responded they went through this with Chugach Corporation             
that also has logging in the area; and they have a differential                
mill rate.  Yakutat does not want to extend services to people who             
don't want them.  There is a satellite school for the logging camp             
area with a minimal mill rate.                                                 
SENATOR SHARP asked how recent annexing makes more land available              
closer to Yakutat.                                                             
MR. FUHS replied that 1,300 acres of the land is right around                  
Yakutat.  Ten percent of 1,380 acres is 138 acres - the original               
entitlement.  With this legislation, they can go back and get the              
1,300 acres that's right around Yakutat.  Under the original                   
entitlement they couldn't even get that.                                       
SENATOR SHARP asked where the Denali Borough was, referring to some            
materials in his packet.                                                       
MR. FUHS responded it was on a list of boroughs that required                  
legislative approval for property, that had done an annexation or              
some change.  Otherwise it would automatically be under the                    
CHAIRMAN HALFORD asked if other boroughs have a land entitlement.              
MR. FUHS answered yes, but they got it under the automatic borough             
formation that did not require legislative approval.                           
SENATOR TAYLOR said he is concerned that the people of Yakutat can             
afford to pay for the surveying and other things.  He thought they             
should have the 33,000 acres closest to Yakutat.                               
SENATOR GREEN asked for an explanation of the log sort yard.                   
MR. ARMOUR explained that there are two operations going on in the             
annexed area right now.  Some of it is on Mental Health Trust land;            
some is on University land.  The log sort yard is on the west side             
of the Icy Bay area where the various contractors bring their logs             
for shipping.  The sort yard is under a State lease or use permit              
of some sort.                                                                  
SENATOR GREEN asked if it was specifically for logs.                           
MR. ARMOUR answered that he didn't think the permit or lease was               
specifically for a sort yard; he thought it was to the contractor.             
SENATOR TORGERSON asked when they approve a selection that would               
otherwise be disapproved, are they referring to land that would be             
disapproved because it doesn't meet the qualification of vacant,               
unappropriated, or unreserved.                                                 
MR. FUHS replied that they are areas that, unless there were some              
conditions placed on it in terms of protecting the habitat, the                
ADF&G would object completely to the property being turned over to             
the municipality.  There are some areas that the municipality is               
very interested in that they are willing to accept those conditions            
on, because they are, in fact, critical spawning habitat areas and             
Yakutat is a fishing dependent community.  They don't have a                   
problem with those provisions.                                                 
SENATOR TORGERSON asked if the Department couldn't turn down a land            
selection based upon whether it meets the criteria of not being                
vacant, unappropriated, or unreserved, what is their basis for                 
turning it down.                                                               
MR. FUHS replied that their basis is that they would say unless                
they can have those provisions in there, the municipality might                
decide to do something else with it and put it to a use the                    
Department would consider to be in conflict with the habitat                   
SENATOR TORGERSON said, "That's B.S." that there are buffer zones.             
MR. FUHS said one of the things they agreed to was the Forest                  
Practices Act.                                                                 
SENATOR TORGERSON said he didn't think ADF&G had any authority to              
say they couldn't select certain lands.                                        
MR. FUHS said, while they identify strongly with his statements and            
Senator Taylor's, the fact is that this area is the political                  
equivalent to West Beirut.  They are trying to navigate through it             
so the municipality can get its lands without taking the whole                 
thing apart.                                                                   
SENATOR TORGERSON said he wanted to insert that ADF&G may not                  
withhold approval, since they don't really have approval of it                 
Number 544                                                                     
MR. DICK MYLIUS, Division of Land, said there is only about 8,000              
acres in the City and Borough of Yakutat that are classified into              
vacant, unappropriated, and unreserved.  Most of that is mountain              
tops with the exception of 2,000 acres around the town that is                 
settlement land.  Most of the land is not classified so that they              
could get it.                                                                  
CHAIRMAN HALFORD asked if that meant that under existing law, now              
that they have a larger pool of vacant, unappropriated, unreserved             
land, they could go back and get 10 percent of that 8,000 acres.               
MR. MYLIUS answered that the law doesn't allow for any increase in             
entitlement through annexation.  On an existing formula, they get              
no additional entitlement.  If they were to add this land to the               
Borough today, their entitlement would be reduced to 10 percent of             
the 8,700 acres.  The 30,000 acres came from language before the               
Yakataga area plan, which set aside most of the land as a forestry             
or wildlife designation, both of which are not normally conveyable.            
CHAIRMAN HALFORD said the existing system does not allow any                   
adjustment based on annexation.  So if you annex an area that's                
twice as large to serve, you don't increase your entitlement at                
MR. MYLIUS answered that was correct; AS29.65 deals with municipal             
entitlements grants to new municipalities.                                     
SENATOR MAKCIE said that is why they need that amount of                       
entitlement in order to get through the formula.  He said the other            
boroughs on the list are in the same kind of situation needing                 
legislative approval.  Otherwise it would automatic.                           
CHAIRMAN HALFORD said he thought Senator Mackie's number was high,             
but their current number is very low.  Ten percent of 8,000 acres              
and the 1,300 currently in the Yakutat area don't bother him.                  
However, getting a huge annexation that was definitely a political             
issue and then adding a large entitlement to a very small                      
population base is different.  There are other areas that might                
feel like they in proportion didn't do as well.                                
SENATOR MACKIE said the legislature had an opportunity to deny the             
annexation, which they didn't do.  Some at this table have                     
encouraged areas to incorporate into boroughs and that has been                
done, but if the legislature doesn't give them the land to be able             
to manage and utilize as a municipality, what purpose is it to                 
throw a line around it and say they only have 138 acres to deal                
with everything?  He questioned why that would be too much to ask              
and the financial reality that they would ever nominate most of                
that land, let alone survey and pay for it, is fairly slim to begin            
with.  The reason for the large number is to take advantage of the             
formula the way it's structured to get to the core area that is                
adjacent to Yakutat that they would have immediate use for.  It has            
to have that entitlement to get to that particular area.  They                 
estimated it would cost $20 million to survey that land which would            
never happen in our lifetimes.                                                 
SENATOR MACKIE said he did not want to invite criticism over land              
that in reality wasn't going to be able to be used for anything                
other than what it's classified as.  He didn't know of anyone who              
was opposed to this because of all the work that was done to                   
address everyone's concerns.  He thought this was a good example of            
how to get consensus on something and he was concerned with                    
arbitrarily reducing the amount without having some thought and                
SENATOR TORGERSON asked when DNR adopts area use plans, is all the             
land considered to be vacant, unappropriated, or unreserved or is              
it identified in the plan.                                                     
MR. MYLIUS answered the plan determines whether it's vacant,                   
unappropriated, or unreserved or not. If it's classified into                  
settlement, public recreation, or agriculture, it's considered                 
vacant, unappropriated, or unreserved and, therefore, available                
both to calculate the entitlement or to be conveyable to the                   
borough.  If it's classified forestry, wildlife habitat, minerals,             
oil and gas, or a few other lesser classifications, it's not                   
Number 578                                                                     
SENATOR TORGERSON asked if the language saying the director                    
determines what stipulations, conditions, or covenants would be                
what is already existing on that land.                                         
MR. MYLIUS answered it would likely be stipulations that were in               
the area plan like specific set-backs or buffers, like the timber              
ADF&G wanted along the shoreline for moose and bears.  If that                 
stipulation wasn't in there, they would oppose conveying that                  
particular tract to the borough.                                               
SENATOR TORGERSON asked if their intent was that the stipulations,             
conditions, and covenants would be the same that are in the area               
plan and they wouldn't be more stringent.                                      
MR. MYLIUS answered that they would definitely not be more                     
SENATOR TORGERSON asked if there would be new ones.                            
MR. MYLIUS answered not unless the City and Borough would want                 
them.  Division of Land would not propose any.                                 
SENATOR TORGERSON said that helped a little.  He asked how many                
acres they are trying for.                                                     
MR. FUHS said it would take a few years, like any municipality, to             
pay for the surveying, but this says Yakutat would get up to 21,500            
acres.  His guess is that the maximum they could get is 20,000                 
acres.  Mr. Mylius thought the same.                                           
SENATOR TORGERSON noted that the land has to be nominated before               
October 1, 1999, but the conveyance isn't done until the surveying             
is done and asked if that was correct.                                         
MR. FUHS said that is correct and part of what they are looking at             
is that the Municipality wants to make some revenue from these                 
properties to help pay for schools. Yakutat is up against the 35               
percent cap right now.  It's well managed and doing its part to                
pull its own weight and he hoped they would consider that.                     
SENATOR TAYLOR said it seems the VUU lands would not include                   
timbered lands under this classification.  He asked if the lands               
they are getting are timbered.                                                 
MR. FUHS replied that it would be a reclassification of lands                  
primarily identified as habitat now, with some conditions on it.               
Yakutat's potential uses for that would be recreational or                     
commercial lodges.  Part of the negotiations with the University               
was a hut-to-hut  trail system, hiking, and some recreation cabins,            
and tourist development.                                                       
SENATOR TAYLOR asked if they were not getting any of the timber                
lands in that area.                                                            
MR. FUHS said that was correct, all of those were taken by the                 
University, Mental Health, and Kedgwick Corp.  There are no                    
timbered lands involved here.                                                  
TAPE 98-21, SIDE B                                                             
MR. STEVE PLANCHON, Executive Director, Alaska Mental Health Trust             
Office, said the Trust Authority supports this bill.  However, they            
have one concern with the stated intention of the borough to select            
a specific tract on the West Icy Cape that is critical, and will               
continue to be critical, to the on-going operations of trust lands             
immediately adjacent to the tract.  The tract is general State land            
and the Trust Authority had selected it, but was told in no                    
uncertain terms that that land would stay in general state                     
ownership because of the statewide interest that the tracts served.            
Both the University and Mental Health Trust depend upon this tract             
and its current status to enable them to get supplies onto shore               
and to get timber off of the shore.  It is the only place you can              
do that.  They generate over 50 percent of Trust natural resource              
revenues off of this land - from a five year timber contract they              
have in place and another timber contract after that.  They have an            
excellent working relationship with the DNR and so does the                    
University.  Their concern is that Borough ownership might                     
unnecessarily complicate the ongoing operations there because of               
the relatively small area available for connecting operations and              
having new parties coming in who might have different objectives               
for long term management that might not be compatible with timber              
resource management.                                                           
However, that's not the case of their current relationship with the            
Borough with whom they have an excellent working relationship.  The            
Trust was also ready to select lands, under terms of the                       
settlement, in and around the City of Yakutat, but when they found             
that the City and Borough of Yakutat was intending to find lands               
for the good purposes of local government, they took those lands               
out of their selection pool, believing strongly in having a good               
relationship with local government.                                            
He recommended an agreement between the Mental Health Trust, the               
University of Alaska, and the Borough that would essentially allow             
for the selection of this tract to be made and then be put in a                
pending status, because there may be a good reason for local                   
government to own those lands.  They just don't know what that                 
reason is today and don't know what the outcome of that would be.              
Unfortunately, the Borough considered that to be veto power on the             
part of the University or the Trust.  At this time, they seek the              
legislature's advice.                                                          
SENATOR TORGERSON asked if that tract was pending now.                         
MR. PLANCHON explained that the selection is still pending, but                
basically DNR has said it's not in the best interests of the State             
to allow the Trust to take title to that parcel at this time.                  
SENATOR TORGERSON said he couldn't see why they were afraid of the             
City and Borough getting this parcel other than a fee they might               
charge for logs.                                                               
MR. PLANCHON said that was a concern.  Because the Trust and                   
University purposes are statewide interests, DNR does not charge               
fees to cross the land or use it.  If a local government takes                 
property ownership of the parcel, they could charge fees (which                
they have been told would be reasonable) or they could dispose of              
the land to a private party.  They are concerned about those                   
uncertainties.  He is trying to look out for the Trust's interest.             
SENATOR TORGERSON asked if this is one of the pieces that would                
have a covenant stipulation on it if it was transferred to the                 
MR. FUHS said it is industrial; there are no fish and game concerns            
on this property.                                                              
Number 470                                                                     
CHAIRMAN HALFORD asked if this was the only place to get ashore.               
SENATOR TORGERSON asked if Mr. Planchon understood that the State              
would convey the land to the City and Borough of Yakutat.                      
MR. PLANCHON replied that he thought they would decide it would                
stay in State ownership.                                                       
SENATOR MACKIE said this tract was good commercial land that is the            
kind of land a municipality ought to be able to nominate.                      
MR. JIM BRENAN, Attorney, City and Borough of Yakutat, responded               
that Yakutat has assured the Mental Health Trust and University                
that their existing right-of-way permit, which runs for 25 years,              
would not be disrupted by operation of law under the Municipal                 
Entitlements Act.  All Yakutat is seeking is the opportunity to                
nominate this land for conveyance at which point it would be up to             
the State to decide.                                                           
In response to Senator Torgerson's question about what authority               
DNR has here, they have the authority to make a best interest                  
determination whether or not to award a conveyance.  Their                     
authority to withhold a conveyance has been upheld by the Alaska               
Supreme Court.  Yakutat is not seeking conveyance of the land                  
underlying the current University of Alaska harvest.                           
The question has been raised about the per capita award and he said            
the Lincoln Peninsula Borough was awarded 125,000 acres through a              
statute just like this in the 1994 legislative session which works             
out to more per capita.  The Denali Borough was awarded 49,700                 
acres under the standard 10 percent VUU entitlement.  He thought               
what could occur with the sort yard a decade or two down the line              
can be resolved by DNR at that time when it rules on Yakutat's                 
conveyance requests.  The University harvest will be done in 18                
years; the Mental Health Trust current harvest will be done in 10.             
What the situation is 10 years from now can best be evaluated by               
the agency at that time.  All they want now is legislative                     
authorization to pursue conveyance of lands.                                   
CHAIRMAN HALFORD thanked everyone for the testimony and adjourned              
the meeting at 4:45 p.m.                                                       

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