SB 96-UNIVERSITY LAND GRANT/STATE FOREST  CHAIR THOMAS WAGONER announced SB 96 to be up for consideration. SENATOR SEEKINS moved to adopt CSSB 96(RES), version \G, as the working document. There were no objections and it was so ordered. 4:43:00 PM MARY JACKSON, Staff to Senator Wagoner, explained that the companion bill to SB 96, HB 130, now has completely different language and has had multiple hearings. A number of properties were deleted that were problematic; language has been added that was described in a separate document. Briefly she explained that on page 5 language - "In addition to access under" - was added on lines 27 and 28 and on page 6, lines 2 through 4. A new subsection (m) was added on page 7, lines 21 through 24. Language on pages 7 and 8 deletes the problematic parcels. A new subsection (o) with specific reference to two properties in Biorka and Lisianski was added on page 8, lines 4 through 6. Pages 8 and 9, section 6, subsection (b) through section 7 contains all new language. New language is on page 10, lines 20 through 22. Section 9 on page 10 is also new language. She said the fiscal notes still apply to the CS. 4:45:04 PM DICK MYLIUS, Deputy Director, Division of Mining, Land and Water, Department of Natural Resources (DNR), said that the Governor feels that the University of Alaska should receive more land as part of its land grant charter. When he was in Congress, he introduced legislation to give it more land as well. The Legislature has promised to give the university more land in SB 7, which was passed in 2000. It was vetoed, overridden by the Legislature and subjected to litigation relating to whether it was an appropriations bill or not. 4:48:20 PM The Supreme Court finally ruled in April 2004 that SB 7 is the law and since then the state has had an obligation to provide the University with 260,000 acres of land. SB 7 had several problems and SB 96 is essentially a substitute for it. The issue is the value of the land that had potential for generating revenue was taken off the table as part of various compromises. For example, no mineral, oil or gas properties could be acquired through the use of the bill and survey requirements created a $1.7 million fiscal note over a 10-year period for a total of $17 million. SB 96 has a fiscal note of less than $800,000 over a three-year period. The old bill would have required a 10-year process during which the University and DNR would have been haggling about which parcels might or might not go to them and that would have created uncertainty for development on some of them. 4:50:22 PM The decision was made by the Legislature that DNR has a three- year process to issue the deeds. This CS transfers 64 parcels, a total of about 253,000 acres, of land. The parcels were selected from lands DNR had identified for development. 4:52:10 PM MR. MYLIUS reviewed that there are three primary acreage components to the properties. The first is about 80,000 acres of educational properties that would fit in to the University as an educational institution and are not meant to generate revenue. The largest of those is a large portion of the Tanana Valley State Forest that is educational and experimental. The University's Sitka campus and Poker Flats rocket launch facilities are on DNR land and are also being transferred. A 90,000-acre tract in Nenana that has high potential for discovery of natural gas, that is currently under exploration license to Andex Petroleum Corporation, will be transferred subject to the exploration license. When the gasline is built, this gas could feed into the line at Fairbanks. Another 80,000 acres consists of investment properties, which the University is thinking of using for land sales and commercial type developments. About half of those parcels are scattered around Southcentral and Northern Alaska and about half [according to the CS and the House version] or 35,000 acres are in Southeast Alaska. He referenced the parcels on maps hanging in the committee room. 4:56:17 PM SENATOR ELTON said that there has been great concern in Southern Southeast that the state is giving away the land would diminish the ability of communities to incorporate - especially property on Prince of Wales Island. 4:57:23 PM MR. MYLIUS responded that is true to some extent. When new municipalities form boroughs or cities they receive 10 percent of the vacant and unappropriated and reserved state land. So, if the University is given 5,000 acres out of what becomes a municipality, their entitlement would go down. The CS actually takes care of that issue because it says that entitlements from new municipalities formed will not be reduced by this acreage. However, the University is looking at the best land to be used for development and that may be the same land the municipalities want. He has heard that concern from a number of communities and he doesn't have a solution for that. SENATOR ELTON asked why Lena Creek and Sumdum Island were removed from the list. He was wondering what potential use Lena Creek could have been put to, because the availability of land for housing is difficult in Juneau. MR. MYLIUS replied that he did not know why the Lena Creek property was selected. The City and Borough of Juneau originally nominated it for state ownership from the National Forest. It has clearly been viewed as a residential property. He did not know why Sumdum Island was removed from the list. Someone mentioned that it was viewed as recreation sites. SENATOR SEEKINS said concerns had been expressed to him that some of these lands would be sold to 501c3 nonprofits and become de facto conservation lands and he is considering a conceptual amendment to prevent that kind of land transfer. A letter of intent on page 3, lines 12 through 18, encourages the University to be mindful of developing in-state value-added industries to the extent economically feasible and practical. 5:02:07 PM MR. KELLY said he was not sure how such a restrictive amendment would be made. He explained that the piece of land the University recently sold was in response to a court-mandated settlement. SENATOR SEEKINS asked if it would be feasible, from a DNR standpoint, to place such a restriction in the deed. MR. MYLIUS replied that it would be more effective to place it in statute. SENATOR SEEKINS said that one of the premises of the bill is that the land would be placed where it is most profitable and he is concerned that allotting the land to conservation use is not the most effective way to do that. 5:04:21 PM SENATOR STEDMAN said he was surprised at the formidable opposition that has arisen from this issue and he is reluctant to support this bill without modifications to improve the public process. Both Wrangell and Petersburg have an interest in just tabling the bill entirely. He hoped some kind of a compromise could be reached. One suggestion is to add language requiring DNR to have a more stringent process to develop and transfer land, in which case all of the parcels should be included. Another option would be for DNR and the University to hold public hearings with the affected communities to determine what parcels should and should not be removed. The only other option would be to just table the bill, but he said he would leave that ball in the committee's court. 5:13:12 PM MR. KELLY responded that the University has a history of good land stewardship and the Board of Regents has a constitutionally mandated process that incorporates public input. He said that only 1 percent of the land is in public hands and this bill will only increase it by .4 percent. He remarked that it is in the best interests of the University to maintain good stewardship of the land since that would presuppose good will among prospective local students. "We want people to support the University of Alaska. We bend over backwards so it never appears as if we're going in and running roughshod over a community." SENATOR STEDMAN asked if he supported holding public hearings in some of the communities. He added: There isn't enough private property in Southeast Alaska; there is too much national forest and the people should be able to have access to property. Most of this property that has been selected is premium property; most of it is geared for remote cabin sites or maybe small little clusters of groups of cabins or small homes that want to live together. It's clearly not an industrial policy that is being pursued here.... MR. KELLY restated that the University has a history of meeting with communities before and during development. He reminded them that some of the land wouldn't go into development for years. "I would just like to reassure you that we do that anyway...." SENATOR ELTON remarked that it would be helpful for him and Senator Stedman to have information on the land use determinations made by the University. 5:21:24 PM SENATOR STEDMAN said he didn't know of any tide or submerged lands that were involved in the conveyance, so the 50 ft. easement wouldn't be a problem. But, in the future, if any tidelands are conveyed, easement size would be an issue. If the intent here is to allow and insure public access along the water front - and the public should have access along the water front regardless if there's any constitutional protection to the issue - it's just the way Southeast has always been - why is it set at 50 ft.? Because in my entire life I have yet to see anybody walk down the beach at high tide. You'd break your neck - because of the density of the forest and the terrain.... 5:25:26 PM MR. MYLIUS responded that the bill does concern uplands and a 50 ft. easement would start at the high tide line and go inland. The reason for having any public access is because the constitution requires it and state law, AS 305.127, requires reserving public access easements when transferring land, but doesn't define how wide it would be. His research indicates that the law was passed in 1976 or 1977 and DNR adopted regulations at that time establishing 50 ft. easements. That language is included on all of the department's conveyances with the exception of requests for specific parcels with a physical reason. He hasn't received any specific complaints about 50 ft. and there is a process for vacating that that has been used. He said there is no magic number for easement width. Fifty feet is not an issue in municipalities that have 100 ft. setbacks. 5:27:27 PM SENATOR STEDMAN disclosed that he has less than a mile of water front broken up into four different parcels, some of which have the 50 ft. access easement. He wanted to know the number of times the easement has been reduced for the University. I think it's a little egregious for the people especially in Southeast Alaska who reside on islands that are fairly rugged, most of them. If you happen to have a parcel, which I don't, of land that has a rock face in front of it or a raised bluff, [and] would have either had to have a 50 ft. setback into the trees when it's physically almost impossible for the public to walk up and through there. He said he didn't want to see California policies be implemented in Alaska because they just don't fit. He understands that an owner must go through the local planning commission to get a reduction in an easement. Then the commissioner of DNR has to sign off on it, which is a bit of a hindrance. People often ignore it and put their structures wherever they want them and enforcement isn't there unless a parcel is sold and the lender requires a plat. He thought there should be a better mechanism to deal with the public policy part of this issue. 5:29:24 PM MR. MYLIUS said there aren't a lot of requests for these. He had one last year in Excursion Inlet. He did not have a tracking mechanism that could easily document how many easements had been changed. It comes to his attention when a structure is obstructing a public trail and the users complain about it. SENATOR WAGONER thanked everyone for their testimony and said there would be more opportunities to for them and adjourned the meeting at 5:32:41 PM.