Legislature(1999 - 2000)
02/17/1999 03:07 PM Senate RES
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* first hearing in first committee of referral
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SENATE RESOURCES COMMITTEE
February 17, 1999
3:07 P.M.
MEMBERS PRESENT
Senator Rick Halford, Chairman
Senator Pete Kelly
Senator Jerry Mackie
Senator Lyda Green
Senator Sean Parnell
Senator Georgianna Lincoln
MEMBERS ABSENT
Senator Robin Taylor, Vice-Chairman
COMMITTEE CALENDAR
Overview: Proposed Chenik Institute lease - McNeil River State Game
Refuge
WITNESS REGISTER
Mr. Dick Mylius, Acting Director
Division of Lands
Department of Natural Resources
3601 C Street, Ste 1130
Anchorage, AK 99707-3645
Ms. Marty Rutherford, Deputy Commissioner
Department of Natural Resources
3601 C Street, Ste. 1210
Anchorage, AK 99707-5921
Mr. Rick Thompson, Southcentral Manager
Division of Land
Department of Natural Resources
3601 C Street
Anchorage, AK 99707
Mr. Mike Sullivan
Southcentral Region
Department of Natural Resources
3601 C Street
Anchorage, AK 99707
Mr. Geron Bruce, Legislative Liaison
Alaska Department of Fish and Game
P.O. Box 25526
Juneau, AK 99802-5526
Mr. Lance Trasky, Southcentral Regional Supervisor
Division of Habitat and Restoration
Department of Fish and Game
333 Raspberry Rd.
Anchorage, AK 99518-1599
Mr. John Hilsinger
3601 Raspberry Rd. #1A
Anchorage, AK 99502
Mr. Thomas Walker, Special Projects Manager
Cook Inlet Aquaculture Association
40610 K Beach Rd.
Kenai AK 99611
Mr. Gary Fandrei
Cook Inlet Aquaculture Association
40610 K Beach Rd.
Kenai, AK 99611
ACTION NARRATIVE
TAPE 99-10, SIDE A
Number 001
CHAIRMAN HALFORD called the Senate Resources Committee meeting to
order at 3:07 p.m. and said the Committee would discuss the Chenik
Institute lease proposal that was written up in the Anchorage Daily
News on February 7, 1999. He asked Mr. Mylius, Division of Lands,
to give the committee a status report.
MR. DICK MYLIUS, Acting Director, Division of Lands, Department of
Natural Resources (DNR) said that the McNeil River Game Refuge is
not even State land at this point. It is State-selected land and
is managed by the federal Bureau of Land Management (BLM). DNR's
appropriate action is to comment on what BLM should do. State-
selected lands are governed under Section 906(k) of the Alaska
Lands Act, he explained. Before BLM does any long-term interest
action on State-selected land, they have to get State concurrence.
This particular chunk of land has been both State and ANCSA
selected since the 1970's. It was selected by the Seldovia Native
Association which BLM rejected about 15 years ago. The Seldovia
Native Association appealed, was rejected and went to court.
Recently both parties decided to settle the issue out of court and
the suit was dropped. This means BLM can proceed to convey the
land to the State. However, as a general rule, the State does not
like to take title to federal lands that have unauthorized uses on
them and the current structures at Chenik Institute are not
authorized by the BLM.
Several years ago, BLM proposed to issue a lease to Mr. Mike
McBride who actually built those facilities. At the time, the
State said we would not concur with the lease. Now that BLM is
about to transfer the land to us, the issue is coming to a head
again.
In a preliminary decision published in November of 1998, the
Department concurred with BLM entering into a lease with Chenik
Institute, a nonprofit organization. Public comments were
solicited on this proposal, ending in January, and 50 comments were
received - 14 or 15 against and 30 or so for the proposed lease.
He cautioned that the Department is not going to make a decision
based on the numbers of comments on one side or the other.
MR. MYLIUS said the comments ranged from relatively insignificant
concerns to some new issues. So the Department has now gone back
to the drawing board to figure out where to go. They are reviewing
the comments, but they haven't heard from ADF&G yet, a big piece of
the puzzle since the land is within the McNeil River State Game
Refuge.
Under the management plan for that land, DNR is the party that is
responsible for any decision on leasing, but ADF&G has to
essentially approve any proposal as consistent with their
management plan.
Some of the options, Mr. Mylius said, range from not even taking
title to the land, an option they don't feel favorable towards
because they feel the McNeil River is appropriate for State
ownership, to the Department saying "no" altogether to BLM
regarding authorization to lease to the Chenik Institute and asking
them to remove the structures. They could consider a short-term
BLM authorization and spend a couple of years trying to find a
longer term solution.
MS. MARTY RUTHERFORD, Deputy Commissioner, DNR, noted that it's
important for the committee to know whenever the Department
solicits public comment, they found it more successful to give an
indicator of what they thought would be an appropriate management
strategy. In this case, they said some type of lease to a
nonprofit might be appropriate. The Department is not bound by
that and there could be another preliminary best interest finding
as the situation evolves. One suggestion of the Department is a
one-year permit with, maybe, a competitive lease in the future.
There are many alternatives.
Number 130
CHAIRMAN HALFORD asked if there was a general policy the State has
held with regard to trespass entries.
MR. MYLIUS answered in this case the issue is that we are just
taking title to the land. It's not the State's land yet. The
Department's policy is to not take title to lands that have
trespass on them. BLM has been asked to resolve it, and the
options range from removing the structures altogether to figuring
out some way to authorize them.
As part of the decision making process, he explained, the
Department looks at the management plan for the area. In this
area, ADF&G has identified the need for some sort of public
facilities. Since a facility already exists, it's possible those
buildings could serve some of the purposes that ADF&G intended.
The second question is, if they are appropriate there, how does the
Department come up with a fair process to decide who should get to
run them.
CHAIRMAN HALFORD asked how long the facility had been there.
MR. MYLIUS responded that it had evolved over the years.
MR. RICK THOMPSON, Southcentral Manager, added that it had been in
existence for around 20 years.
CHAIRMAN HALFORD asked how much it had paid in rent, fees, or
license for that 20 years.
MS. RUTHERFORD replied that to the best of their knowledge no money
has been paid to the BLM.
CHAIRMAN HALFORD asked for an explanation of when the BLM asked the
State, who replied they expected the BLM to proceed with whatever
their trespass actions were to clear the title and clear the land.
MR. MIKE SULLIVAN, Regional Office, answered that in 1994 they
initially responded to the letter of concurrence unfavorably as a
result of comments the Division received from ADF&G. BLM seems to
want to avoid doing trespass action and the applicant, at the time,
indicated to them he was going to continue to work on the
objections at the State government level. So the BLM kind of "held
off." There were then some discussions in his office with ADF&G
about what conditions would have to exist for approval and if more
conditions were needed to make it more palatable to the agencies.
That's where they are now.
MS. RUTHERFORD inserted that some of the conditions include an
unwillingness to let this land go to any entity that is not a
nonprofit.
CHAIRMAN HALFORD asked if the State's position was that a lease was
contrary to the State's best interest as of 1994 or 95.
MR. MYLIUS answered that's right, as it was proposed by BLM at the
time.
CHAIRMAN HALFORD asked if the nonprofit had been formed in an
effort to come up with a vehicle to transfer this trespassed land.
MS. RUTHERFORD responded that the nonprofit was always in
existence, but it was Mr. McBride who applied for the lease to BLM.
She said her comments to him have been always her unwillingness to
convey to an individual. At that time, he suggested establishing
the Chenik Institute as a State-recognized nonprofit as an
alternative. She had responded that might be worthy of
consideration and, perhaps, if the Chenik Institute were to reach
out to other nonprofits, they would have more status in the State.
At this point, she knows they reached out to the Nature Conservancy
and Audubon Society to see what their levels of interest might be.
She had never seen anything in writing, but had gotten calls from
both entities asking her questions about it.
Number 220
CHAIRMAN HALFORD noted, according to correspondence on Chenik
Institute paper, they were incorporated in August 1996. It's Board
of Directors are Mr. McBride as President and his wife as
secretary.
MS. RUTHERFORD said Mr. Sullivan told her that is absolutely
accurate.
MR. SULLIVAN clarified that it wasn't formed just to run the camp.
It was in existence for other reasons.
SENATOR MACKIE asked if it was correct that the State does not have
title to the land right now and doesn't manage it.
MR. MYLIUS replied that is correct.
SENATOR MACKIE asked if DNR or its representatives ever indicated
to the McBrides that if they did become a nonprofit, that would
probably be acceptable and the State would probably be willing to
take the land and give them the lease.
MS. RUTHERFORD answered that no one ever indicated to the McBrides
that they would get a lease under any conditions. The Department
said they were interested in seeing a plan of operations and
finding whether the McBrides would be willing to amend their
application to BLM to reflect a nonprofit, making it slightly more
palatable because of the Department's concerns about [indisc] being
saved. It was more of an interim discussion about alternatives
that might be considered by DNR rather than any commitment that
they would find it acceptable.
SENATOR MACKIE asked if the list of conditions the Department gave
the McBrides was a result of policies currently existing on state
lands. He asked if they manage State lands now, if someone wanted
to become a nonprofit, were they entitled to lease any land they
want from the State.
MS. RUTHERFORD responded that is not a policy; but because this
land is within a refuge makes it a unique situation. This
particular site was built without site control and doesn't have it
now. It is an existing problem.
SENATOR MACKIE asked if anyone else found a unique site that they
wanted to lease and became a nonprofit, were there policies that
would allow that to happen.
MS. RUTHERFORD answered that they make those decisions on a
specific site basis and try to resolve them in the best interests
of the State. She noted that a decision had not been made in this
instance. They had talked to Mr. McBride about forming a
nonprofit, working with other existing nonprofits, or opening it up
for competitive lease.
SENATOR MAKCIE said his understanding is that the Seldovia Native
Association has been after that location for a long time because of
ties they have to a village site there - and they have been turned
down. He asked if the Chenik Institute was a special instance and
didn't have anything to do with DNR's current policies.
MR. SULLIVAN answered that Seldovia's interest was that they had a
selection under ANCSA. Their selection was rejected and went to
court, but there has since been an agreement to drop the lawsuit.
For quite a few years both Seldovia and Mr. McBride thought the
land would eventually go to Seldovia, so they had a lot of
discussions with Mr. McBride trying to work out a lease for his
facility with them.
SENATOR MACKIE said it seemed ironic if Seldovia had a claim
through ANCSA to an old village site and were rejected that someone
could get it by "squatting." He wondered if that was the right
direction for State policy to go and if DNR was facilitating that
to happen.
Number 302
CHAIRMAN HALFORD asked if this were DNR land and going to be in
State title, the chain of title is that BLM normally clears the
trespass before they give it to the State, but if it were accepted
by the State and in State ownership, what would the process be for
issuing a lease or providing some kind of public facility in that
area.
MR. MYLIUS answered that normally the process is driven by someone
submitting an application and the Department responding to the
individual application. As a general rule, they do not use leases
to authorize something that's already there in trespass. If there
was no development there, they would wait until someone came in the
door and asked for an application. The Department would do a best
interest finding and if there was going to more than a 10-year
lease, it would be opened to competitive bidding.
CHAIRMAN HALFORD asked if that would apply on the State game
refuge.
MR. MYLIUS answered, if it was in the land use plan by ADF&G or if
they said it was approved, yes, they could start the process for
leasing in a game refuge. The application would have to be
determined to be consistent with refuge purposes. ADF&G would have
to make some positive determination that it's appropriate to have
that kind of proposed facility. They also have the ability, which
they have used in the Hatcher Pass ski area, to solicit proposals
for a facility for leasing land - a proactive stance. This is one
of the options considered for this site.
SENATOR LINCOLN said the Chenik Institute's mission is to encourage
and actively participate in the protection and preservation of
Alaska's coastal wilderness, especially brown bear habitat, working
with all national and international efforts to accomplish their
mission. She asked if DNR is successful in securing the lands
around the area and if the Institute is allowed to continue with
their facility, is DNR obligated to fulfill their mission. What if
it conflicts with the State's participation in the area, she asked.
MR. MYLIUS answered that DNR would not be obligated to carry out
Chenik Institute's mission, even though it is fairly similar to the
purpose of the game refuge. This is an issue for ADF&G to address.
MS. RUTHERFORD added whoever runs the facility, ADF&G would require
a plan of operations consistent with the management plan for the
refuge.
CHAIRMAN HALFORD asked if this place has been operating for 20
years, how much do they charge and how many people have they had
come through.
MR. SULLIVAN answered that information they have seen indicates
they charge a couple of thousand dollars a week and can accommodate
up to 16 people, although generally there are a few less than that.
The premium bear viewing time is about six weeks in summer.
CHAIRMAN HALFORD commented that this is an exclusive trespass
activity in the middle of a sanctuary, charging a couple of
thousand dollars per week for 16 people at a time, paying the State
or BLM $0 for 20 years use of the land and asked if that was right.
MR. SULLIVAN answered that essentially that was correct. It
started out as a tent camp in 1978. The lodge was built in the mid
to late 80's.
CHAIRMAN HALFORD commented that he was glad BLM hadn't decided what
to do, yet.
MR. GERON BRUCE, ADF&G, explained that they do have to make a
positive finding that an activity such as this within the refuge
would be consistent with the refuge purposes. They have had some
discussions about that, as this issue has been around a long time.
ADF&G is working on its comments now and will be submitting them to
DNR in the near future.
SENATOR KELLY asked if they had been paying rent to the BLM for
this time, would any of that money have come to the State.
MR. BRUCE said he would defer to DNR on that.
CHAIRMAN HALFORD asked what happened to revenue from State selected
land before conveyance would be the general question.
MR. MYLIUS answered that the State would get 90 percent of the
revenues from the time our selection was considered valid. Since
the selection was in litigation all those years, the BLM may have
decided to wait until the litigation was settled.
CHAIRMAN HALFORD stated that the most recent correspondence is
dated January 1999 from Mr. Trasky to Janet Kowalski.
SENATOR MACKIE interjected a question asking Mr. Bruce if ADF&G had
a position on this issue yet.
MR. BRUCE explained that they had not submitted a finding to DNR
yet.
CHAIRMAN HALFORD asked if they had a position in the past.
MR. BRUCE said they have and that they have had more than one
position in the past.
CHAIRMAN HALFORD said there was a memo from Marilyn Heiman to the
Commissioner requesting ADF&G to reexamine this matter and advise
the Governor on a resolution. A previous paragraph in the memo
speaks of the ADF&G long-standing opposition.
SENATOR MACKIE noted that memo was actually dated 1996 and there
was a response back from Commissioner Rue to Marilyn Heiman saying
it continues to be the Department's position that, "the State
should not agree to any transfer or disposal of lands because that
would be in violation of the constitution and/or state law. Over
the last several years, Mr. McBride has met with BLM officials and
state officials from DNR, ADF&G, Division of Government
Coordination on this matter, and the paper trail is extensive. He
has now gone to the Governor to secure what has eluded him through
proper channels and due process....If the Governor wishes to pursue
the issue, we would recommend that he request an Attorney General's
opinion regarding the question of equal access under Article 8,
Section 17 of the Constitution as it pertains to this issue." He
then asked if they ever got an Attorney General's opinion on that.
MR. BRUCE responded that he didn't know.
SENATOR MACKIE said he would like to see it, if it's available.
CHAIRMAN HALFORD requested the 1996 memo and then asked Mr. Trasky
to summarize his memo dated January 19, 1999, since his was the
most recent statement.
MR. TRASKY replied that his memo was in response to a copy of a
letter they received in January 1996 referring to the Department's
decision recommending against issuing a lease for the structures.
Number 437
CHAIRMAN HALFORD said he thought he had an idea of the time-line.
In January 1996, the third floor staff asked the Commissioner to
reexamine. In the end of January 1996, the Commissioner basically
said no and doing so would probably be in violation of the
Constitution and he would like an Attorney General's opinion. By
November 22, 1996, the Commissioner of ADF&G did exactly what he
has said would be in violation of the Constitution in a memo dated
January, 30 1996 to Marilyn Heiman from Frank Rue.
MR. TRASKY stated that they didn't have the January memorandum and
couldn't respond. They had seen the November 22, 1996 decision.
CHAIRMAN HALFORD said they would send him a copy. By November, the
Commissioner had done what he considered unwise in January and he
asked if his current review is requesting him to reevaluate that
determination.
MR. TRASKY replied that was correct.
CHAIRMAN HALFORD asked if the rest of his letter came out of Mr.
McBride's chronology which may be at BLM or somewhere else.
MR. TRASKY said that was correct. It was explaining why they felt
he should reverse his reversal of the 1994 position.
CHAIRMAN HALFORD said he wanted to take the Chenik Institute issue
up again in two weeks and hoped there wasn't going to be any action
on it by ADF&G or DNR in the next few weeks.
MR. BRUCE said he spoke to the Commissioner and there wouldn't be
any action by ADF&G before the committee discussed it again.
SENATOR MACKIE asked if there were any other reasons for the
Commissioner reversing his earlier decision.
CHAIRMAN HALFORD said they would ask the Commissioner that question
when he becomes available.
SENATOR MACKIE said he was interested because Seldovia Native
Corporation tried to get the land and was refused. He asked if
this land came to the State, would there be some consideration
given to any other potential users; if there was interest in
competing for a lease.
MS. RUTHERFORD reiterated that no decision about any action by DNR
has been made. One of their options is to put this out to
competitive lease.
MR. TRASKY said he had a couple of conversations with Seldovia
Native Association and they hope to work with Mr. McBride. In
fact, one of his letters of support comes from the Seldovia Native
Association.
CHAIRMAN HALFORD asked what was the status of the November 10, 1998
finding and decision, ADL225906.
MR. TRASKY explained that the preliminary decision is what the
public comments were taken on and is most likely to change based on
other information that has been gathered. There would be further
public review before a final decision.
CHAIRMAN HALFORD asked how they could make that finding without a
response from ADF&G.
MR. MYLIUS answered that this proposal is something for ADF&G to
respond to.
MS. RUTHERFORD added for all of the Department's best interest
findings, a preliminary decision is used as a methodology to
solicit input from the public and the agencies.
SENATOR LINCOLN asked if there was a response to Mr. Trasky's memo
of January 19 about selection of an appropriate site for such a
facility.
MR. TRASKY replied no.
SENATOR LINCOLN asked if they had followed up with a telephone
call.
MR. TRASKY said they had discussed this in the Department, but one
of the complications is that regulations for the refuge's
commercial facility and structures plan say the structure has to
protect fish and wildlife habitat, conserve fish and wildlife
populations, and maintain public use opportunities and high quality
environment. Permanent commercial facilities will not be allowed
in either the refuge or the sanctuary, except that the Commissioner
will, in the Commissioner's discretion, allow a permanent
commercial facility in the refuge specifically for the purpose of
facilitating the brown bear viewing program under appropriate terms
and conditions in a manner compatible with the purpose for which
the area is established only after a finding of fact indicates the
refuge and sanctuary management goals are better served with a
commercial facility than without. This has not been done yet, he
concluded.
SENATOR MACKIE noted that where the memo says the Department should
continue to oppose any long-term lease, regardless of who the
applicant might be, conflicts with what the Commissioner said in
November.
MR. TRASKY said he thought there had been some change of thought
within the Department. Their purpose was to provide the
Commissioner with additional facts he needed to consider in making
that decision, to be consistent with his own statutes and
regulations.
MR. BRUCE added that the Commissioner met with staff in Anchorage
and discussed the issue recently, after the memo from Mr. Trasky.
There has not been a formal written response, yet, but discussions
have been going on within the Department.
CHAIRMAN HALFORD asked who has the lead within the Department.
MR. BRUCE replied that at this point he knew the Commissioner took
the initiative to meet with staff, but he wasn't sure who was
taking the lead on the technical stuff.
TAPE 99-10, SIDE B
Number 570
MR. JOHN HILSINGER testified via teleconference that his main
concern was covered by Mr. Trasky regarding the process laid out in
the management plan and the fact that to his knowledge, the
Division of Wildlife Conservation has not decided that they want a
commercial facility in the refuge in order to facilitate the bear
viewing program. Doing the finding of fact would be the second
step. None of this has occurred, yet.
MR. TOM WALKER, Cook Inlet Aquaculture Association, said they have
a pen and fish ladder just south of the Chenik Lodge for which they
do have a lease which they got by going through DNR, along with a
number of other permits that were necessary. They support the
Department's earlier decision that it was not necessarily a good
idea to permit Chenik. He urged the Committee to stay with that
decision.
Number 550
CHAIRMAN HALFORD asked if the lands his permit is subject to are
also in BLM hands now.
MR. WALKER replied that the land they have a lease on is state
land. This is not the issue; the issue of bears is relevant to
both situations and, in their case, one of their requirements to
have that property was that the staff and materials area has to be
surrounded by a 10 ft. barbed wire electrified fence - among other
things. They don't see those kinds of restrictions even being
suggested for this facility.
MR. FANDREI, Cook Inlet Aquaculture Association, supported Mr.
Walker's comments.
MR. ROY HOYT, JR. said his opinion is that someone who has been in
trespass for 20 years and has constructed illegal structures should
be denied a lease. In fact, they should be denied a lease on any
state or federal land from now on.
MS. LOIS IRVIN, Homer, asked for maps of the area to help clarify
her understanding of the issue.
SENATOR MACKIE asked if the Commissioner was going to make the
final decision on this.
MR. BRUCE replied that was correct, as the law requires, and he was
in the process of considering it.
SENATOR MACKIE said he wanted a comment on the Commissioner's memo
saying it was unconstitutional and needed an Attorney General's
opinion.
CHAIRMAN HALFORD noted that constitutional protection of everyone
else's rights collectively to what is public property is difficult
to handle.
SENATOR MACKIE said that was his biggest concern. He knows because
of issues in his district that it's a complicated issue.
SENATOR KELLY noted that in his district there is a similar
situation across the Tanana River from Fairbanks where people have
made little hunting camps and they are being burned out.
CHAIRMAN HALFORD said the committee would take this issue up again
soon and adjourned the meeting at 4:06 p.m.
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