HB 447 - ESTABLISH AFOGNAK ISLAND STATE PARK CHAIRMAN BILL WILLIAMS announced there is a quorum present and the committee will hear HB 447, a Governor's bill, establishing the Afognak Island State Park. He said the Exxon Oil Spill Settlement Trustees purchased Afognak Island land and timber in 1993, and have offered to transfer ownership to the state for use as a park. He noted the land is currently being held in trust by the Nature Conservancy. He stressed if the land is not legislatively designated as a state park this session, the land will be transferred instead to the federal government. CHAIRMAN WILLIAMS said it is his understanding that the land will be a park regardless of any legislature action. The only question is whether it will be a state-owned and managed park, or whether it will be a federal park. In order for it to be a state park, HB 447 must pass this session. He told committee members they have a proposed committee substitute in their folders which was drafted to clarify several points. First, this draft clarifies that ongoing negotiations between the Exxon Trustees and the owner of the subsurface estate can proceed. Language has also been added to emphasize that use of private lands adjoining the park will not be impaired, and that park status will not alter the rights and obligations created by the Road Use Agreement which has been in place since 1991. (CHAIRMAN WILLIAMS noted for the record that REPRESENTATIVE HUDSON joined the committee at 8:25 a.m.) Number 037 CRAIG TILLERY, ASSISTANT ATTORNEY GENERAL, DEPARTMENT OF LAW, stated HB 447 will create the Afognak Island State Park and allow the state to receive land now being held in trust by the Nature Conservancy. The bill is supported by the borough of Kodiak, the city of Kodiak, the Kodiak Chamber of Commerce, all major fishing organizations in the Kodiak area, tour operators, visitors association, citizens and Konkor Timber Products, the entity cutting timber on land adjacent to the park. He said the land originally was owned by Seal Bay Timber Company who was cutting timber there. The Exxon Trustee Council looked at the land through its imminent threat process for possible acquisition to protect habitat of species and resources injured as a result of the Exxon Valdez oil spill. MR. TILLERY remarked that in looking at the land, the Trustee Council did a ranking which broke down into two highly ranked parcels and then everything else. The highly ranked parcels were Kachemak Bay inholdings, which were acquired and are now a part of Kachemak Bay State Park, and the Seal Bay parcel. After negotiations with the owners, the Trustee Council acquired the Seal Bay land. He noted that the impetus to acquire the land was primarily that of the federal government. The Department of the Interior wished to acquire the land and add it to their wildlife refuge. The Trustee Council resisted that notion, stating the land, if acquired, had more of a direct relationship with Shuyak State Park to the north, and the Council ultimately prevailed. MR. TILLERY said the Trustee Council agreed to give the state first shot at the land; that is when the land was acquired, if the state was able to create a state park to hold the land, and accomplished that in one year, the state would get it. If not, the land, which is now being held by the Nature Conservancy, will be given to the federal government. In that case, the land would initially go to the Forest Service as part of Chugach National Forest and what the Forest Service does with it would depend on whether or not Congress enacts a bill to transfer the land to the Department of the Interior. Number 069 MR. TILLERY, referring to a map contained in a binder, (may be found in the Resources Committee Room, Capitol #124, and after the adjournment of the second session of the 18th Alaska State Legislature, in the Legislative Reference Library.) which committee members have, stated the land in yellow is the land which was acquired from Seal Bay Timber Company and will become the state park. In addition, the strip of blue which was previously state-owned land will be included in the boundaries of the state park. Marmot Island is not included in the boundaries of the state park. Referring to a more detailed map contained in the binder, he pointed out existing roads, proposed cutting units, and cutting units which have been clear cut. He said the existing roads are subject to a road use agreement and the state, under HB 447, will be subject to the road use agreement. He stated there is no intention or is there the ability to stop anyone from using the roads except for in conforming with the terms of the road use agreement. MR. TILLERY stated when the Trustee Council considered the land acquisition, there were certain criteria which resulted in the agreement to purchase. There are to be no commercial timber harvests on the land because some of the resources which were being protected by the acquisition of the land need the forested area for their habitat. What the trustees insisted upon, and what was also a part of the purchase agreement is that these lands be specifically permitted for sport, subsistence, personal use, hunting, fishing and trapping. He said limited commercial use was guaranteed under the ownership agreement which means there will be no interference with the small guiding operations currently ongoing. He explained those uses which the land is currently being used for, with the exception of the commercial timber operation, will remain. Number 109 REPRESENTATIVE CON BUNDE stated the proposed cutting units had been pointed out and asked if they are outside the park boundaries. MR. TILLERY said the dark crosses within the yellow (on the map) are in the park. REPRESENTATIVE BUNDE asked if they are proposed to cut. MR. TILLERY stated they will not be cut. One of them, however, has already been cut. (CHAIRMAN WILLIAMS noted for the record that REPRESENTATIVES FINKELSTEIN and DAVIDSON had joined the committee.) REPRESENTATIVE JEANNETTE JAMES clarified that Mr. Tillery had mentioned the blue section (on the map) is included in the park. MR. TILLERY replied that was correct and stated when that section was reviewed, there was an attempt to determine why the land was selected by the state. Based on the Department of Natural Resources' (DNR) records, it was determined that the land was selected for recreational purposes. He stated DNR agrees that section should be included in the park. Number 130 REPRESENTATIVE PAT CARNEY asked what percentage of the land mass had been logged. MR. TILLERY said the light cross checked (on the map) on the yellow has been logged. He noted in terms of timber values, there were significant timber values in certain areas and appraisals showed very little timber values in other areas (he pointed them out on the map). He stated the two appraisals are in members' binders under tabs 12 and 13. REPRESENTATIVE BILL HUDSON asked who maintains the roads and inquired if there will be any additional road maintenance responsibilities by the state as a result of the land acquisition. MR. TILLERY replied no and said the state will be putting to bed those roads not required for other owners to cut them, to the extent that other lands that are cutting do require the use of the roads, it will be their responsibility to maintain them. He said actually the seller will be putting the roads to bed. Number 146 REPRESENTATIVE JAMES wondered about the Native land and Tonki Cape and asked if there are any rights other than hunting and fishing, and if there are access points which need to be preserved. MR. TILLERY responded that section is owned by Afognak Joint Venture, which is another timber company. He felt the section of land pointed out does not contain useful timber, but does have the best access. He stressed it is not a hunting and fishing area. He pointed out that when the trustees spoke with Native landowners about acquiring the lands, they were told the lands are not traditional lands, they are not used for hunting and fishing and they rarely visit them. The lands were selected as a business venture and that is why they were willing to sell them. REPRESENTATIVE CARNEY asked why roads are being put to bed. MR. TILLERY replied the roads are being put to bed because the roads are no longer needed for cutting and pointed out that putting the roads to bed prevents erosion. Otherwise, creeks, etc., are created which go down the middle of the roads. He explained to create the roads, they take out the overburden, chew up the rocks, and mash them down. He said without putting in water bars, etc., there is erosion and a big mess. REPRESENTATIVE CARNEY asked how long the roads have been there. MR. TILLERY replied he is not sure, but he knows of one which was put in last year. REPRESENTATIVE CARNEY asked if they are putting the roads to bed to prevent access. MR. TILLERY said no. He stated there is no access for vehicles. The roads tend to grow up thick in alders. (CHAIRMAN WILLIAMS noted for the record that REPRESENTATIVE DAVIES joined the committee at 8:37 a.m.) Number 186 REPRESENTATIVE HUDSON said in reviewing the acquisition methodology he is trying to determine who the Seal Bay Timber Company is and the connection of the Nature Conservancy to the land. MR. TILLERY responded the Seal Bay Timber Company along with Akhiok-Kaguyak, and Old Harbor Joint Venture were originally all part of the Afognak Joint Venture. They split up after deciding they could manage their lands better themselves and divided their lands. The lands being discussed are lands the Seal Bay Timber Company received. The Nature Conservancy was brought into the process because the trustees did not have an existing state park. The trustees wanted to make sure that there was no claim which could attach to these lands under the Mental Health Trust Lands dispute. The trustees were advised the best way to assure that was for the state not to take title until it had a state park or other legislatively designated area to receive the lands. REPRESENTATIVE HUDSON asked who is the Nature Conservancy. MR. TILLERY replied it is an organization which works with businesses to acquire critical habitats for biological diversity. Susan Ruddy is the Chair, Governor Hickel is on the board, and BP plays an active role. Number 209 MR. TILLERY pointed out there are several amendments which are reflected in the committee substitute. On page 1, lines 5, 6, and 7 there is an addition which reads "subject to valid existing rights including those rights created by the Afognak Island Road Use Agreement executed on July 24, 1991, and as amended from time to time..." He said the amendment is to clarify and give some comfort to Konkor Forest Products and other timber companies in the area that there is no attempt being made to change the Road Use Agreement. He stated on page 2, beginning on line 7, there is a new subsection (c). MR. TILLERY said there were corrections made to the legal description and after checking with DNR, none of the changes cause any problems with them. On page 2, line 13, it reads "including both the surface and subsurface estate,". He stated mentioning the subsurface estate was added to clarify that if the subsurface estate is acquired, it will become part of the park. The subsurface estate is owned by Kodiak and at the time the sale was being negotiated, because of the eminent threat, it was important to address the surface estate issue. He added there is no threat in the subsurface estate because state and federal agencies have looked at it have said there are no mineral values in the subsurface estate. Kodiak is negotiating with the trustees to sell the subsurface estate and it is very likely the trustees will acquire it. He stressed this language clarifies the subsurface estate will be included in the park. MR. TILLERY explained on page 6, there is a change in the language in the final section and that change is to remove an ambiguity as to whether the subsurface estate becomes a part of the park. Number 258 REPRESENTATIVE CARNEY said in regard to the last section on page 6, Additions To Park, he does not understand the last sentence. He asked if the sentence means the state cannot buy land within the park. MR. TILLERY responded the language means the state can acquire the land and water within the boundaries of the park but cannot use eminent domain to acquire any land within the park. He said the trustees do not believe there is any land inside the boundaries that the state will not own except for the subsurface estate. REPRESENTATIVE CARNEY said he did not read it that way. He read it as saying the state could acquire it only by eminent domain. MR. TILLERY pointed out that if there is a desire to add anything else to the park, the trustees must come back to the legislature. REPRESENTATIVE JAMES clarified the only land or water which might be wanted is the Native parcel. MR. TILLERY said the only land the trustees are actively seeking is the subsurface estate. The Native land is not within the boundaries of the park. He said Afognak Joint Venture may be interested at some point in selling that land to the Trustee Council and if they do, it will make an obvious addition to the park. He pointed out since the land is outside the boundaries of the park, the legislature would have to act on acquiring the land. REPRESENTATIVE JAMES felt the sentence on page 6, lines 26 and 27 is misleading and serves little purpose. MR. TILLERY said the final section of HB 447, lines 24, 25, 26, and 27, attempts to clarify how the park will be composed. The first sentence says "land and water outside of the boundaries." He stressed the boundaries are carefully delineated by section, excluding certain things, and including certain things. He pointed out the sentence says the state can only go beyond the boundaries to add something to the state park by an act of the legislature. He stated the second sentence is intended to say that the commissioner may acquire land and water within the boundaries and added the commissioner will acquire the lands by deed through the Nature Conservancy. In addition, the commissioner may acquire the subsurface estate at a future time if the Trustee Council were to buy it and give it to the state. He reiterated that the second sentence says the commissioner may acquire the land and water within the boundaries, which the state does not own presently, except by eminent domain. REPRESENTATIVE JAMES expressed concern that the title to the final section is Additions To Park and the last sentence seems to only relate to getting the park in the first place. She felt it is not necessarily an addition to the park and did not feel the sentence fits with the rest of the paragraph. REPRESENTATIVE DAVIES said it is the subsurface estate. REPRESENTATIVE JAMES stated the section does not say that, it says land and water. She thought the sentence is confusing and separate to the title, Additions To Park. If there is a desire to say that the commissioner cannot acquire land by eminent domain, she felt it should be a sentence of its own. MR. TILLERY said if the legislature passes HB 447 and the Governor signs it into law, the park is going to consist of the blue strip (on map). Within a month, title to the yellow (on map) will be received from the Nature Conservancy and the commissioner will have acquired the land by deed. Then within some period of time, the Trustee Council will purchase the subsurface estate which will be deeded by Kodiak to the state of Alaska and the commissioner will acquire the subsurface estate under the terms of the last sentence. Then the park will be whole. REPRESENTATIVE JAMES said she understood, but felt there is a need to have "except by eminent domain" be a sentence which says "may not" be acquired by eminent domain. She stated she liked the language as it was in the original HB 447. Number 385 REPRESENTATIVE BUNDE made a MOTION to ADOPT CSHB 447(RES). CHAIRMAN WILLIAMS asked if there were any objections. Hearing none, the MOTION PASSED. REPRESENTATIVE DAVID FINKELSTEIN asked if there was any consideration of including the joint venture land at the head of Tonki Bay in the boundaries of the park. He said often the approach with parks is to draw a line around possible future additions, even though it is private land, in case they decide to do an exchange or sell it at some later point. MR. TILLERY stated Afognak Joint Venture owns the land and the timber on the land is not commercially viable. He said his guess is that the Venture would like to sell the land to the Trustee Council and if so, it makes sense for the Council to give the land to the state. However, the Council's view was that the legislature would be more comfortable with having control over any additions to the park. If the legislature wishes to draw the boundary to the outside of the land it is not a problem. REPRESENTATIVE FINKELSTEIN pointed out that if current state parks are reviewed, there is usually private lands within the boundaries. The laws and usually the specific authorizing legislation recognizes that there is no affect on the private land within the park, but rather it is recognition that the private land is an integral part of the park unit and that if the land is ever acquired, it will become part of the park. He thought it makes sense that private land be contained in the park. REPRESENTATIVE JAMES believed it is a matter of philosophy and one that she does not adhere to. She felt it was infringing upon private property as to what they may or may not want to do with their property in the future. Number 438 REPRESENTATIVE BUNDE stated in other parks where the state has inholdings, the inholdings are an ongoing source of concern, trouble, financial challenge, etc. He said he would not be anxious to expand inholdings in state parks. He agreed that if the land being discussed ever became available, it should be added to the park. REPRESENTATIVE HUDSON asked if there were any mental health lands attachments to any of the parcel. MR. TILLERY said there are no mental health lands claims in the land. The Council's concern was that in looking at the settlement, the parcel could perhaps have been claimed having not had a legislatively designated area and they did not want to have to buy the land twice. He added a title search has been conducted and there are no mental health claims. REPRESENTATIVE HUDSON stated he would like to have a current update on the monies received through the trust and how the money has been used. Number 490 NEIL JOHANNSEN, DIRECTOR, DIVISION OF PARKS AND OUTDOOR RECREATION, DNR, testified via teleconference and expressed support of HB 447 and the amendments. He stated the area has some high recreational values and hunting, fishing, trapping, and subsistence, is protected. (Indiscernible) recreational development out there including the provision of public use cabins. He said the state does have Exxon Criminal Settlement Funds which the department is currently working on a plan on how to use the funds. He felt there should be a few public use cabins and trail development so kayakers, hunters, fishermen, etc., can enjoy the park. He urged the committee to pass HB 447 out of committee. REPRESENTATIVE BUNDE asked someone to speak to the fiscal note and the fact that a free park is going to cost $33,000. MR. JOHANNSEN stated the department has revised the fiscal note down to $17,000 which is the minimum funding for a 40,000 acre state park to enable the establishment of public use cabins and provide transportation funds, enabling department personnel to occasionally visit the park. He urged committee members to support the fiscal note. REPRESENTATIVE BUNDE thought he had heard Mr. Johannsen say that the Exxon criminal money would be used for public use cabins and asked if money contained in the fiscal note will be used only for transportation. MR. JOHANNSEN replied the money will be used for transportation and temporary staff in the summer months. Number 578 REPRESENTATIVE JAMES asked if there were any plans to implement fees. MR. JOHANNSEN stated yes there will be fees but he felt the fees should be tied to public use cabins. REPRESENTATIVE JAMES asked if the revenues could be reflected in the fiscal note. MR. JOHANNSEN replied revenue could be reflected in the fiscal note, but added it will be about two years before the revenue will be generated. Number 625 REPRESENTATIVE HUDSON asked if DNR has ever gone to the Trustee Council to seek funding for management of newly acquired lands. He thought that is a legitimate fund which could be established and managed by the administrators of the trustee fund on a yearly basis and preclude putting general fund money into the fund. MR. JOHANNSEN responded they have. In the past, he had discussions with the past Attorney General, Charlie Cole and Mr. Cole was clear that funds were not to be used for operational purposes. REPRESENTATIVE HUDSON felt the legislature ought to go on record supporting the use of funds for management of newly acquired lands. He felt the trustees ought to reconsider and on an annual basis, be open to consideration of a budget request from various agencies in the state to conduct the best use of the lands now set aside. He stressed using the $900 million only to acquire property, place the property in special use parks, and then expect the balance of the general fund to be responsible for their management is not the best use of the money. TAPE 94-30, SIDE B Number 000 REPRESENTATIVE HUDSON made a motion to MOVE CSHB 447(RES) with revised fiscal notes out of committee with INDIVIDUAL RECOMMENDATIONS. CHAIRMAN WILLIAMS asked if there were any objections. Hearing none, the MOTION PASSED. ANNOUNCEMENTS CHAIRMAN WILLIAMS announced the committee will meet Monday, March 14, at 8:15 a.m. to hear HJR 59 and HB 496. ADJOURNMENT There being no further business to come before the House Resources Committee, Chairman Williams adjourned the meeting at 9:07 a.m.