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