SB 28-MUNICIPAL LAND SELECTIONS: PETERSBURG  3:50:34 PM CHAIR BISHOP announced SB 28 to be up for consideration. MELISSA KOOKESH, staff to Senator Bert Stedman, Alaska State Legislature, sponsor of SB 28, testified that this measure would give the Petersburg Borough an opportunity to grow, generate revenue, and increase economic development from nearby lands. For several months Senator Stedman's office and representatives from the Petersburg Borough have reviewed the bill with the Alaska Department of Natural Resources (DNR), and discussed where the borough selections would occur, and they have no objection to the bill. She reviewed the bill: Section 1 adds subparagraph (16) to AS 29.65.010(a) that sets the general land grant entitlement for the Petersburg Borough at 14,666 acres. This is an increase of 12,770 acres from its current level of entitlement. Section 2 of the bill is a conforming amendment to allow the borough time to make its new additional selections. Section 3 is also a conforming amendment to allow the land selection process at DNR to apply to the new Petersburg land selection. 3:52:43 PM Section 4 is an immediate effective date. 3:53:12 PM SENATOR GARDNER asked how the original allocation is calculated and where the 14,666 acre figure comes from. 3:53:32 PM DAVID SCOTT, staff to Senator Bert Stedman, sponsor of SB 28, Alaska State Legislature, answered that DNR and the Borough of Petersburg came up with the number. SENATOR GARDNER added that she was thinking if Petersburg gets to increase their allocation, will the other 15 beneficiaries say they weren't treated fairly and need to increase theirs, too. 3:54:36 PM MARK JENSEN, Mayor, Borough of Petersburg, Petersburg, Alaska, supported SB 28. He explained the way they arrived at this number is that it is an equal percentage of land that the other 15 boroughs that have already formed ahead of them have received. So Petersburg is just trying to get up to par with the other boroughs that have received additional land. He explained that when the borough was formed in 2013, they were allowed to select 10 percent of their area, which was 18-plus thousand acres. Since they already had 400 and some acres in the city limits they were allowed to select 1440 more acres. They are now asking for the other 14,666 acres just to get up to par with the volume as the other boroughs did. SENATOR MACKINNON asked DNR why she didn't see a fiscal note, because she assumed the land is coming from the State of Alaska selections. Where was the value determination of what would be moving as far as gravel rights, use of public facilities or whatever the borough would like to use the land for? 3:57:07 PM MARTY PARSONS, Deputy Director, Division of Mining, Land and Water, Department of Natural Resources (DNR), Anchorage, Alaska, said the department submitted a zero fiscal note. SENATOR MACKINNON asked if he was telling her that land is valued at zero. MR. PARSONS answered no; the land is not valued at zero. He was saying the fiscal note is what it would cost the division to process the additional land. SENATOR MACKINNON said the fiscal note has a spot for listing the capital value of the property. She understands there is a zero fiscal note for operations for the state, but considering the $3 billion deficit, there should be a value associated with the acreage in that transfer. MR. PARSONS said that is correct, but the state does not necessarily inventory its land on an acre by acre basis. The value is indeterminate, although there is gravel and timber on it. 3:59:34 PM SENATOR MACKINNON said she knows that Petersburg needs resources and assets at their disposal to help their community, but saying the value of the land is indeterminate is not a satisfactory answer. A value needs to be established on the property. If they haven't done it before, it needs to be done now. 4:00:26 PM MR. PARSONS said he could pull those numbers together. 4:00:52 PM CHAIR BISHOP asked if the DNR maintains an overriding royalty on top of what the borough can charge a contractor for using sand and gravel. MR. PARSONS answered no. Once those lands are conveyed, the municipality is given management authority and it's theirs to sell the material and land and reap the benefits. 4:01:46 PM At ease 4:02:04 PM CHAIR BISHOP said that request was in to DNR and he opened public testimony. 4:02:40 PM MR. JENSEN added that they worked with the DNR after borough formation on the original 1,400 acres and they have been working with them on the additional parcels and he has not heard any opposition. 4:03:43 PM CHAIR BISHOP closed public testimony on SB 28 and held the bill in committee.