CS FOR SENATE BILL NO. 111(RES) "An Act creating the Kodiak Narrow Cape Public Use Area." This was the first hearing for this bill in the Senate Finance Committee. Co-Chair Stedman, who previously heard this bill in the Senate Resources Committee, announced that, absent any unexpected issues, the intent today would be to report the bill from Committee. 10:00:45 AM DOUG LETCH, Staff to Senator Gary Stevens, the bill's sponsor, displayed a map [copy on file] depicting the location of the 46,000 acre Narrow Cape Public Use Area this legislation would establish on Kodiak Island. This is a popular recreational area in the vicinity of the Alaska Aerospace Development Corporation's Kodiak Island Rocket Launch Facility and a buffalo range that offers beachcombing, surfing, and numerous other activities. Mr. Letch stated that the reason for designating this site as a public use area is to preserve it in its current form. This designation would also ensure that the Legislature would be involved in any future decision regarding State land in the area. He reminded the Committee that a few years prior, a University of Alaska lands bill considered State land in the Narrow Cape area. That legislation raised Kodiak Island residents' concern about Legislative decisions about the area and was, in essence, "the impetus" for this bill. Mr. Letch clarified that the creation of the Narrow Cape Public Use Area would not curtail activities currently being conducted in the vicinity; specifically those associated with the Kodiak Launch Site. Mr. Letch informed that the bill's sponsor "worked extensively" with the Department of Natural Resources and the Kodiak Island Borough to develop the bill. It is supported by the City of Kodiak, the Kodiak Island Borough, the Alaska Aerospace Development Corporation, and the Department of Natural Resources. Mr. Letch stated that the bill is accompanied by a zero fiscal note from Department of Natural Resources. Mr. Letch also noted that Senator Dyson was familiar with the area since he had attended the first rocket launch at the nearby rocket launch site. Mr. Letch considered this a good bill. The members of the Senate Resources Committee, which included Senator Huggins and Co-Chair Stedman, recognized the intent of the bill. 10:04:29 AM SENATOR GARY STEVENS, the bill's sponsor, spoke in favor of the bill. It is supported by the residents of Kodiak Island. Senator Stevens qualified that even though Kodiak Island is the largest island in the United States, it had limited public use areas. Furthermore, two-thirds of the island has been designated a bear refuge. Senator Stevens noted that the site being considered in this legislation is a popular recreational area located approximately 50 miles from the City of Kodiak. In addition to the Kodiak Island Rocket Launch site, other nearby special use designations include a buffalo ranch and grazing leases. 10:06:04 AM Senator Thomas asked the intent of language in Section 1 subsection Sec. 41.23.260(f) page 3 lines 15 -21 regarding "incompatible" use with the area. While understanding there being no intent to curtail current users' activities in the area, some activities must have been deemed incompatible with the area in order for this language to be included. 10:06:46 AM Mr. Letch deferred to Dick Mylius with the Department of Natural Resources. 10:07:03 AM DICK MYLIUS, Director, Division of Mining, Land and Water, Department of Natural Resources, testified via teleconference from an offnet location and informed the Committee that at this time, no incompatibility activities have been identified. This language was simply included in the bill in anticipation of future issues or conflicts that might arise. Mr. Mylius also noted that the bill contained language that provided the Department the option to develop a management plan for the area if deemed necessary. An earlier version of the bill specified that as a mandatory rather than optional provision. The Department does not anticipate any immediate need to develop a land management plan for the area since they had recently completed a Kodiak Area Plan which provided direction on how the island's State land would be managed. This legislation is consistent with the findings in that plan. 10:08:41 AM Senator Olson asked who would be responsible for maintaining the area were this legislation approved. Senator Stevens again deferred to Mr. Mylius. 10:08:52 AM Mr. Mylius responded that this legislation would not affect how the land would be managed; it would continue to be maintained by the Division of Mining, Land and Water. The bill would simply assure that the land would remain "in public ownership" and that it could "not be disposed of" without Legislative approval. 10:09:27 AM Co-Chair Stedman noted the bill was accompanied by a zero fiscal note from Department of Natural Resources. 10:09:36 AM Senator Olson asked whether this land designation would affect any private property owners in the area. Senator Stevens understood there were no private property holdings in the area. Mr. Letch thought that the land in the area belonged to either the State or the federal government. The nearby buffalo ranch operated on land leased from those entities. Mr. Mylius could confirm the status of the land holdings. 10:10:18 AM Mr. Mylius corrected the information. Mr. Burton, the operator of the buffalo ranch, owned a 160 acre parcel of land within the boundaries of the proposed public use area. His land had been purchased from the federal government and was located near the airstrip north of the rocket launch facility, depicted on the map. This land would be unaffected by this legislation since it was considered "an in-holding" and as such would not be included in "the definition of what's included in the public use area". Only State-owned land is subject to this legislation. 10:10:54 AM Co-Chair Hoffman inquired how language in Section 1, subsection Sec. 41.23.240(4) page 1 lines 14 and 15, which gave the responsibility of managing surface and subsurface land activities to the commissioner of the Department of Natural Resources, would affect the public use area; specifically in regards to exploration and mining activities. Mr. Mylius expressed that mining claims could be staked, explored, and developed in the area and oil and gas leases could be granted. However, the Department did not believe this area held "much potential for minerals" and no oil and gas fields have been identified in the area. 10:11:54 AM JEROME SELBY, Mayor, Kodiak Island Borough, testified via teleconference from Kodiak and identified this as being "an important bill for Kodiak, primarily because most of the land adjacent to the Kodiak road system is privately owned. This is the only significant portion of land that's publicly owned that is available for recreation. The area is easily accessible and is heavily used for a variety of recreation activities including berry picking, fishing, surfing, and hiking. Mr. Selby urged the Committee to recognize the value of this land as a recreational area and support the bill. The community desired to protect this land and not be surprised to learn about potential development plans for it, as was the case a few years prior, when the community read about a proposed State land transfer to the University in the newspaper. This land designation would ensure that any future discussion about land use changes in this area would undergo a public debate within the Legislature. Co-Chair Hoffman moved to report the bill from Committee with individual recommendations and accompanying fiscal notes. Without objection, CS SB 111(RES) was REPORTED from Committee with previous zero fiscal note #1 from the Department of Natural Resources.