HOUSE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE February 14, 1997 8:01 a.m. MEMBERS PRESENT Representative Ivan Ivan, Chairman Representative Fred Dyson Representative Scott Ogan Representative Joe Ryan Representative Jerry Sanders Representative Al Kookesh Representative Reggie Joule MEMBERS ABSENT All members present COMMITTEE CALENDAR Presentation: Local Boundary Commission's Annual Report to the Legislature * HOUSE JOINT RESOLUTION NO. 17 Disapproving Local Boundary Commission recommendation number two regarding the annexation of the territory to the City and Borough of Yakutat. - FAILED TO MOVE HJR 17 OUT OF COMMITTEE (* First public hearing) PREVIOUS ACTION BILL: HJR 17 SHORT TITLE: DISAPPROVE YAKUTAT BOUNDARY CHANGES SPONSOR(S): REPRESENTATIVE(S) KUBINA JRN-DATE JRN-PG ACTION 01/29/97 163 (H) READ THE FIRST TIME - REFERRAL(S) 01/29/97 164 (H) CRA 02/14/97 (H) CRA AT 8:00 AM CAPITOL 124 WITNESS REGISTER DARROLL HARGRAVES, Chair Person Local Boundary Commission Department of Community and Regional Affairs 333 West Fourth Avenue, Suite 220 Anchorage, Alaska 99501-2341 Telephone: (907) 269-4560 POSITION STATEMENT: Presented Commission's Annual Report Testified on HJR 17. REPRESENTATIVE GENE KUBINA Alaska State Legislature Capital Building, Room 404 Juneau, Alaska 99801 Telephone: (907) 465-4859 POSITION STATEMENT: Sponsor of HJR 17. SENATOR JERRY MACKIE Alaska State Legislature Capitol Building, Room 427 Juneau, Alaska 99801 Telephone: (907) 465-4925 POSITION STATEMENT: Testified on HJR 17. JOHN CHRISTENSEN, Chairman Chugach Alaska Corporation 560 East 34th Avenue Anchorage, Alaska 99503 Telephone: (907) 563-8966 POSITION STATEMENT: Testified in support of HJR 17. SCOTT JANKE, City Manager City of Cordova Box 1210 Cordova, Alaska 99574 Telephone: (907) 563-8966 POSITION STATEMENT: Testified in support of HJR 17. JAMES BRENNAN, Borough Attorney City and Borough of Yakutat Hedland, Fleischer, Friedman, Brennan and Cooke, P.C. 1227 West Ninth Avenue, Suite 300 Anchorage, Alaska 99501 Telephone: (907) 279-5528 POSITION STATEMENT: Testified against HJR 17. DARYL JAMES, Mayor City and Borough of Yakutat P.O. Box 160 Yakutat, Alaska 99689 Telephone: (907) 784-3323 POSITION STATEMENT: Testified against HJR 17. ACTION NARRATIVE TAPE 97-8, SIDE A Number 014 CHAIRMAN IVAN IVAN called the House Community and Regional Affairs Standing Committee meeting to order at 8:01 a.m. Members present at the call to order were Representatives Dyson, Ogan, Sanders, Ryan and Kookesh. Representative Joule arrived at 8:05 a.m. Number 127 DARROLL HARGRAVES, Chair Person, Local Boundary Commission (LBC), Department of Community and Regional Affairs, came forward to present the commission's annual report to the committee and to comment on HJR 17. This annual report encompasses the commission's activities for the past year. The members of this commission represent various judicial districts across the state of Alaska. He then listed each of the board members which were present at the meeting. MR. HARGRAVES highlighted the activities enumerated in the report disseminated to the committee. The Local Boundary Commission filed its annual report with the legislature on January 22, 1997, and copies of it were provided to all members of the House and Senate. The roles and duties of the Local Boundary Commission were established to ensure that proposals to create and alter cities, boroughs, and unified municipalities would be considered objectively and from a broad perspective. Of the 130 or so state boards and commissions, it's only the Local Boundary Commission, along with four others, which have origins in Alaska's Constitution. The matters which have come before the Local Boundary Commission this past year in the domain of their responsibilities have included such things as incorporation, annexation, detachment, dissolution, mergers, consolidation and reclassification. MR. HARGRAVES stated that the commission itself consists of the five members introduced, one is appointed from each of Alaska's four judicial districts. The fifth, the chair person is appointed at large. The Local Boundary Commission members serve at the pleasure of the governor. They are appointed for overlapping five year terms. These commission members are volunteers serving and providing a public service. They are not compensated. The staff which supports the commission comes from the Department of Community and Regional Affairs. MR. HARGRAVES outlined the activities they undertook after 17 meetings to include the following: They approved a petition by the City and Borough of Yakutat for annexation of the Gulf of Alaska coastal region from the one hundred and forty-first meridian to Cape Suckling. They rejected a petition for detachment of 5,400 square miles from the Fairbanks North Star Borough. They rejected a Petition for Incorporation of a 10,000 square mile, home rule, North Pole Borough. They approved a petition by the Fairbanks North Star Borough for detachment of 13 acres from the City of Fairbanks and they approved the petition for the dissolution for the City of Akiak. Number 437 MR. HARGRAVES stated that two of their actions are subject to the review of this legislature. These two actions includes the detachment of territory from the city of Fairbanks and the Yakutat annexation. Article 10, Section 12 of Alaska's Constitution provides the legislature with 45 days to review these actions. The 45 day review period begun with the filing of the commission's report on January 22. The time period runs until March 8. Under the Constitution, legislative approval is automatic unless the House and Senate adopt a joint resolution rejecting the action. MR. HARGRAVES noted that the two items which the legislature would be responsible for considering would be the detachment of territory from the City of Fairbanks. In this particular case it was relatively straight forward. It involved the proposal from the Fairbanks North Star Borough for detachment of approximately 13 acres from the city. There were no respondents which gave any testimony or documentation against this transaction. The proposal was endorsed by the City of Fairbanks. The detachment was proposed to allow the Fairbanks North Star Borough to use bond funds for the construction of a solid waste transfer site. MR. HARGRAVES stated that in contrast to this situation, the Yakutat annexation proposal was complex and it involved a number of fundamental public policy matters. The City and Borough of Yakutat sought annexation of territory extending the western boundary of the city and borough further west to Cape Suckling. The annexation petition has its origins in the unsuccessful attempt to include the territory in question within the original 1990 boundaries of the City and Borough of Yakutat. In February of last year, the City and Borough of Yakutat petitioned the LBC for annexation of this territory. The City and Borough of Yakutat contended that approval of the annexation would enhance the ability of that city and borough to extend its jurisdiction over an area where they contended that Yakutat residents have demonstrated important personal interests affecting their lives. There is a history of significant land use of this area and of resource management conflicts in this area which requires greater government planning. There is a need for other local government services as well. These were the arguments they heard from the City and Borough of Yakutat. Number 618 MR. HARGRAVES said that throughout the proceedings there was an alternative position given by various Prince William Sound community bodies, organizations and individuals who vigorously opposed the annexation proposal. The Local Boundary Commission conducted public hearings on December 14 and 15, 1996, in Cordova and Yakutat with 12 teleconference sites to allow many others to participate. The commission received some 15 1/2 hours of testimony concerning the annexation proposal. Following two hours of deliberation on December 16, 1996, the commission amended the Yakutat annexation petition to include approximately 184 square miles lying within the model borough boundaries of the Copper River Region. The commission then unanimously approved the amended petition. MR. HARGRAVES continued that on December 19, the Local Boundary Commission adopted an 18 page decisional statement explaining the basis of its decision in this matter, to amend and approve the Yakutat Annexation Petition. A copy of the decisional statement was provided on the same day to the petitioner, respondents and to other concerned entities, thus rendering the LBC's action in the matter final. At this point it has also been included in their January 22 report to the legislature beginning at page 35. The parties had until January 8, 1997, to seek reconsideration of the decision. Number 790 MR. HARGRAVES stated that the Local Boundary Commission conducted a meeting by teleconference on January 14, 1997, at 10:00 a.m. to address four such requests for reconsideration. On January 14, the Local Boundary Commission unanimously rejected all four requests for reconsideration of its decision. On January 22, the Local Boundary Commission's decision was presented to the first session of the 20th Legislature for review. Legislative approval of the matter will be automatic unless both houses of the Legislature rejects the LBC's recommendation within 45 days of the date it is filed. Annexation would take effect after legislative approval and the receipt of documentation that Yakutat has complied with the federal Voting Rights Act. Number 843 CHAIRMAN IVAN noticed for the record that Representative Gene Kubina and Senator Jerry Mackie had joined the proceedings. Number 890 REPRESENTATIVE AL KOOKESH stated that the importance of public hearings is that everyone has had an opportunity of adequate time before a body such as the Boundary Commission for questions and debate. He noted that, obviously, the House Community and Regional Affairs Committee doesn't have time for the kind of public testimony which the commission was able to take in relation to this issue. He said it appeared to him that there were about 50 hours of hearings and about 4,000 pages of testimony taken. He asked Mr. Hargraves if he thought this was adequate to support the decision which the commission made. MR. HARGRAVES answered, yes, that this has been a very extensive hearing process taking into account the original petition to create a city and borough in this area. He stated this testimony, written and otherwise, was adequate to support the decision which the commission has made, especially since the presenters on both sides of the issue directed their testimony toward specific standards. It was his personal opinion that in the case of the City and Borough of Yakutat that there was tremendous amounts of information presented by both sides. Number 1074 MR. HARGRAVES added that in this City and Borough of Yakutat petition the decision of the commission was unanimous. Number 1100 REPRESENTATIVE FRED DYSON noted that on page 42, second paragraph of the commission's report, it makes reference to the fact that the Local Boundary Commission approved the amended petition by a vote of four to one. Number 1136 MR. HARGRAVES pointed out that the date on this notation was 1992, and this would have been the original incorporation of the City and Borough of Yakutat. There was a four to one vote in this instance and he didn't know what the minority opinion was expressed in the corresponding decisional statement. He confirmed that the record of this person's position could be found by referring to the decisional statement of the original action. REPRESENTATIVE DYSON said he would enjoy seeing this documentation. Number 1196 REPRESENTATIVE SCOTT OGAN asked Mr. Hargraves to explain the action of the recent Lake Louise case. MR. HARGRAVES responded, that in this instance, they approved the decisional statement yesterday. He said he'd make this information available to the committee. The decision in that instance was a two/two vote which defeated the motion to allow the incorporation. In that instance, one member of the commission had declared a conflict of interest because of a prior contractor/employment relationship with the Mat-Su Borough. This two/two decision has been an interesting point to deal with. What this means and the implications of it is something the commission is having to deal with at this time. Again, they did approve the decisional statement and that gives the position of both sides in that vote. Number 1274 REPRESENTATIVE OGAN said he was interested as to why the commission disallowed the incorporation of the city when it was a recommendation incorporated earlier by the commission. He asked why the change of heart. MR. HARGRAVES stated that he could only speak as one vote in this instance and guessed that this was a lingering question that concerns him somewhat. "It perhaps will cause me to think more through on the point of giving the - any kind of approval of anything that carries with it certain stipulations that the Local Boundary Commission continues to hold the controls on at a later date. I'm going to have to rethink that. It was a two/two vote and both sides are pretty well presented in our decisional statement. I wouldn't want to try to speak for the opposing side on that." Number 1327 CHAIRMAN IVAN announced that there were teleconference sites set up for participation in Anchorage, Glennallen, Cordova, Petersburg, and Valdez. He mentioned specifically Mr. Dan Billman from Lake Louise and Ms. Mona Swanson from Yakutat. REPRESENTATIVE OGAN stated for the record, "I think it's unfortunate that these people, my perception, have been ragged around by the commission. They were told they wanted to secede from the borough - they asked to secede from the borough, they were told 'you can do it under two conditions, you can do it if you form a second class city or join another borough.' There was not another borough to organize. These people went through tremendous effort for several years and a lot of heartburn to jump through the hoops to form as a second class city and then you say, you can't be a second class city." He said that his sympathies go to his constituents in this area who have labored terribly over this situation. He thought it was a grave inconsistency of the commission to do this. HJR 17 - DISAPPROVE YAKUTAT BOUNDARY CHANGES Number 1551 REPRESENTATIVE GENE KUBINA, Sponsor of HJR 17, came forward to testify. He referred to a sponsor statement and map which was provided to the committee. He then read the sponsor statement into the record. "HJR 17 disapproves the Local Boundary Commissions recommendation to annex an additional 2,800 square miles of territory to the existing 4,898 square miles that is already in the City and Borough of Yakutat. The Local Boundary Commission presented this recommendation to the Legislature on January 22, 1997. Under Article X, Section 12, of the Constitution of the State of Alaska, a recommendation of the LBC presented to the Legislature becomes effective 45 days after presentation, unless disapproved by a resolution concurred in by the majority of the members of each house. The 45th day is March 8, 1997." REPRESENTATIVE KUBINA stated, for background purposes, that the petition before the committee comes on the heels of a 1992 Supreme Court decision to exclude this very same area from the City and Borough of Yakutat. The recent recommendation by the LBC is a 180 degree change in its prior position on the appropriateness of this area going to Yakutat. This recent decision was made in spite of no change in the facts or the criteria applied to the merits of the original annexation petition which was voted on in 1992. He urged the committee to take these points into consideration when making their decision. REPRESENTATIVE KUBINA noted that the Prince William Sound communities with 8,000 residents were looking into the possibility of forming their own borough. This isn't just discussion, each village and communities have put forward $10,000 apiece to conduct an appropriate study to determine whether forming a borough in their area is in their best interest. To successfully do this, they need the proposed area of annexation for their own municipal land entitlement. He referred to a map and its regions, virtually all of the other publicly owned land in the Prince William Sound area is owned by the U.S. Forest Services, therefore, if this annexation takes place the lack of these valuable municipal entitlement lands will severely impede the goals of the Prince William Sound communities to create new income for funding essential services such as education, emergency and medical services, transportation, land use planning, police protection and refuse and sanitation control. REPRESENTATIVE KUBINA continued that the area west of the one hundred forty-first meridian is historically and economically tied to the Prince William Sound region. He noted that the current boundary is on the one hundred forty-first meridian. It is appropriate for the election district boundary, for the Chugach REAA school district boundary, for the Alaska Superior Court second and third judicial district boundary, for the recording district boundary and for the boundary that the LBC and the Community and Regional Affairs staff use for the purpose of establishing model borough boundaries. Above the one hundred forty first meridian is the boundary that separates House District 35 and House District 5. The proposed area of annexation is in Representative Kubina's district. The shareholders of Chugach Alaska Corporation own the land in the proposed area of annexation. The Yakutat based corporation, Yak-tat-kwaan owns no land in the proposed area of annexation. Understandably, Chugach shareholders would like to be able to vote for the assembly that makes decisions about how they will develop their land, but if the annexation goes forward they will be without any representation on the City and Borough of the Yakutat Assembly. REPRESENTATIVE KUBINA noted that Chugach shareholders want the taxes they pay to a borough to go to the benefits of their shareholders. Under the proposed annexation, taxes paid by the Chugach Corporation in the region would go to benefit of non- shareholders in the Yakutat Borough. For some reason, the Local Boundary Commission's recommendation was significantly larger than what the Community and Regional Affairs staff recommended. He strongly encouraged the committee to disapprove this recommendation. The proposed annexation only marginally benefits Yakutat and it significantly undermines the ability of the five communities in Prince William Sound and its 8,000 people to organize their own borough. Number 1805 REPRESENTATIVE SCOTT OGAN stated that they hear a lot about the traditional use areas in ancient and recent history of this area. Looking at the map behind the committee it seemed to him that there was a significant geographical difference between Prince William Sound and the outer coastal area. From a geographic standpoint, it would seem that Yakutat and the area of proposed annexation would make more sense since it's the same type of coast line. It's not more inshore and protected like Prince William Sound and the Cordova area. REPRESENTATIVE KUBINA noted that if they were discussing Prince William Sound in itself, this argument might be made, but the Cordova area, an integral part of Prince William Sound, encompasses the Copper River Delta region and this is where the Prince William Sound gillnetters fish these outside waters on the delta. This whole area is traditionally tied with Chugach Native Corporation and the Eyak people of the Cordova area. He felt as though they should not just think of what's in the Sound while it's called the Sound. Number 1892 REPRESENTATIVE DYSON asked Representative Kubina to summarize the reasons the court used in rejecting the annexation in 1992. REPRESENTATIVE KUBINA responded that he couldn't do this, but he stated that there was someone present who could. Number 1907 REPRESENTATIVE AL KOOKESH stated that he wanted to correct a statement made by Representative Kubina in regards to the Chugach Alaska Corporation owning the land in the proposed area, which is not exactly true. The corporation owns some land in the proposed area. He wanted to make sure they were in agreement with this. REPRESENTATIVE KUBINA stated that this was correct. They don't own all the land. Number 1930 REPRESENTATIVE KOOKESH understood from Representative Kubina's statement that a proposed study was underway to research forming a new boundary. He understood that this would be the fourth one conducted to consider a borough in this area. He wondered if the Local Boundary Commission could afford to wait for another study or another study after this one. He appreciates the fact that studies are made, but someplace, somebody has to get off the dime and file a petition. He also noted that no one has filed a petition at this juncture to form another borough. REPRESENTATIVE KUBINA stated that traditionally, people in Alaska like their freedom and don't necessarily want another layer of bureaucracy. He felt that with the mandatory borough legislation which passed the other body last year, there are now many communities that are looking at what's in their best interest. As far as he knows, none of the communities have gone to the effort that they have in the last year in trying to determine if forming a borough in the Prince William Sound is the best thing to do. Number 1998 REPRESENTATIVE KOOKESH referred to Representative Kubina's statement that Chugach shareholders wanted the taxes they pay to go to the benefit of Chugach shareholders. He said he was not real familiar with this area, but familiar enough to know that no Chugach shareholders live in this area. If the benefit of those taxes are being paid, what benefits were they referring to. REPRESENTATIVE KUBINA responded that for those people who do live in this area this proposal is just a "land grab," it's not a "people grab." If there were people living in this area they would probably have the ability (indisc.), the only living to be made in this area is logging. There is a small school in the Chugach school district, but only because there is a logging interest there. He stated that there are a few, if any, permanent people who live in this area. Number 2047 REPRESENTATIVE KOOKESH noted that they both agree with Representative Kubina's statement that they are doing this to make sure that people benefit from the taxes to be paid by the people out there. REPRESENTATIVE KUBINA responded that he didn't agree with this statement because the Chugach Corporation does own a lot of land in this area. These taxes, in the Prince William Sound Borough, would be paid to benefit their members in this borough. Number 2083 REPRESENTATIVE DYSON stated that it seemed to him there were at least two questions of contention, maybe three. One, which of the two areas really needs this piece of land most for their future economic development and to increase their tax base. The second, which cultural or ethnic group is most closely tied to a historic use of this land. He asked Representative Kubina to address the second question. REPRESENTATIVE KUBINA responded that maybe it's easiest to answer who has claimed the land. Who's land is it, in regards to the private holdings in that area? He answered the Chugach Native Corporation. He pointed out that this corporation is in Prince William Sound. If this was traditional Yakutat land he asked why it wasn't claimed by that corporation. It was not, and for this reason he thought it was clear whose traditional land this is. REPRESENTATIVE KUBINA continued, that one of his fears of having this land in a borough where the people don't have a stake in the land that is privately owned, is not that who can use it for development, but for who cannot develop it. This is probably one of the larger reasons why people are uncomfortable with the direction of the Local Boundary Commission's decision. Number 2170 REPRESENTATIVE JOE RYAN stated that traditionally throughout history when people want to acquire lands they do so by conquest, purchase or discovery. This is all for the purpose of obtaining wealth, since wealth comes from the land. He looked through this report extensively and he found one vague reference to some oil and the fact that the University has some trees which they were harvesting, but were sued successfully and this stopped. He noted that they wouldn't want to take this much land on unless there was some benefit. He asked what they would ultimately gain, mineral reserves, is there oil, what about the trees. He asked what the economic value of acquiring this land would be. REPRESENTATIVE KUBINA responded that the value of this land to many of his constituents is that quite a bit of this land they already own. They do look at this land as something to develop in the future. He added that the fear which some of the Chugach shareholders feel is that this property under Yakutat jurisdiction would not be developed. There are places where oil and coal deposits exist on this land and there have been both onshore and offshore lease sales in the vicinity. Number 2267 REPRESENTATIVE KOOKESH referred to the question posed earlier regarding who owned the land in the area and the fact that Chugach Corporation had filed and why didn't Yakutat file to get land in this area. One of the restrictions of the Alaska Native Claims Settlement Act is that they were bound to stay within a township. Yakutat was not allowed to go outside this township to select their land entitlements. Therefore, to be able to select in this area was beyond the control of Yakutat Corporation, however, the regional corporation, Chugach, does not have this restriction. They aren't bound by township restrictions. This is one of the main reason why Yakutat didn't select from this area. Number 2329 SENATOR JERRY MACKIE came forward to ask questions regarding HJR 17 and the attached sponsor statement. The statement was made by Representative Kubina that Chugach owns the land in this particular area, but qualified this by saying that there is some Chugach land in this area. He referred to Cape Suckling on a map and the entire area in question to note that the actual land owned by Chugach in the overall general area is quite small. The other thing he wanted to point out is that Chugach Alaska Corporation (item number three of the sponsor statement), own land in the proposed area and that Yak-tat-kwaan owns no land. Being a member of both the regional corporation and a village corporation, as well as his involvement for nine years as a board member and a chairman, he knows a little bit about these corporations. SENATOR MACKIE stated that a regional corporation is exactly that, they are huge. They encompass all the villages within the region in this area. A village corporation only encompasses a small amount of land compared to the size of a regional corporation. To say that Yak-tat-kwaan should have to own this land (referred to map) was simply not a possibility to begin with. He didn't know why this should be a requirement in terms of an annexation request considered by the Boundary Commission. They not only consider what land is owned by native corporations, but lands that make sense for a particular municipality within a region. Number 2422 SENATOR MACKIE referred to point five of the sponsor statement which states that Yakutat does not have the resources necessary to provide services to a large area. He took offense to this and asked Representative Kubina if he had spent much time in Yakutat to see what services are actually available. He also asked if he knew where the majority of the people involved with this annexation actually have their post offices boxes and where they receive their mail. He felt as though the Yakutat representatives would provide information to dispute this point five, but asked Representative Kubina what he based this statement on that Yakutat wouldn't have the resources and noted that they are currently a borough with education services, a police force, shipping, a major airport which dwarfs Cordova's airport. TAPE 97-8, SIDE B Number 036 JOHN CHRISTENSEN, Chairman, Chugach Alaska Chairman, came forward to testify in support of HJR 17. He stated that the issue before the committee was of great importance to Chugach since approximately one-third of their shareholders live within the communities which would be adversely affected if the LBC decision is allowed to stand. He stated that there were representatives with him from the villages of Prince William Sound, Tatitlek, Councilmen, Mr. Ken Viasoff and Mr. Roy Totemoff. Also, from Chenega, Village Council President, Mr. Don Kompkoff, as well as the city managers of Valdez, Bill Hubbard, and Cordova, Mr. Scott Janke. MR. CHRISTENSEN said that if the LBC ruling stands, irreparable harm will be done to the efforts to organize a viable Prince William Sound Borough. At the same time, no such irreparable harm will be done to Yakutat's annexation efforts in so much as they will be allowed to re-petition in two years. If Prince William Sound fails to organize by this time, he was certain that this petition would fly probably without any opposition. MR. CHRISTENSEN continued that the issues of traditional and cultural use by the citizens and shareholders of Yak-tat-kwaan in particular, is an issue addressed in ANSCA. It is not an issue which needs to be addressed in an effort to form a borough. ANSCA guarantees Yak-tat-kwaan shareholders traditional and cultural use of the area surrounding Icy Bay. This was an issue brought up in the Chugach Land Settlement and is addressed specifically in federal law. They are guaranteed this use and access as if they were shareholders of Chugach. He then introduced Scott Janke to help him in a brief review of the events demonstrating the commitment made by the communities of Prince William Sound toward organizing a Prince William Sound borough. Number 150 SCOTT JANKE, City Manager, Cordova came forward to testify in support of HJR 17. He stated that he was also the President of the Prince William Sound Economic Development Council that has tied the communities of the sound together to work towards this borough formation. He outlined that in late 1988, a prior feasibility study was completed for Prince William Sound for becoming a borough. As everyone was aware, shortly after this, there was the Exxon Valdez oil spill which he believed put the whole issue of borough formation on a very distant burner for the next five years while they spent most of their efforts working towards environmental and economic recovery. Since this time, beginning in mid-summer of 1994, the City of Cordova's planning and zoning commission began to investigate regional issues such as borough formation and coastal resource service areas, as an effort toward identifying what was best for them to do regarding regional issues. MR. JANKE stated that at about this same time, the Economic Development Council for Prince William Sound, including membership from each community and village, began to discuss these issues at the executive committee level. A little progress was made until this past summer of 1996, the leadership of the Sound didn't feel pressured that they had to do something quickly. They relied on the 1990 LBC decision and the subsequent Supreme Court ruling upholding this decision, that this land was being reserved for a Prince William Sound Borough. He noted that they didn't believe they had to move quickly without all the facts to make a decision and then submit a petition. There was no good reason to do this. Number 264 MR. JANKE stated that they were shocked with the decision the LBC came back with this last time, quite surprised that they went 180 degrees on their own prior decision, as well as against the Supreme Court upholding this decision. He offered that the three cities in the Prince William Sound, Whittier, Valdez and Cordova, as well as two villages, Tatitlek and Chenega with approximately 8,000 people in all, is difficult to bring these many people with such diverse interest together to make a decision to move forward with incorporating a borough government. He stated they've made good progress in the last few years to do this. All of these entities, including the native corporations and the regional corporation have all donated money to have this economic feasibility study done. MR. JANKE stated that he didn't think the progress they have made should be overlooked and it certainly shouldn't be punished by having this annexation upheld. The damage to a future Prince William Sound Borough will be permanent. He said this area's people just need enough time to complete the studies which they're funding, to educate the population in the sound to the issues so they can make an informed decision. If the committee allows this LBC decision to stand, they can never get these lands back, however, if the committee gave them the time to do things right and if they in the Sound don't form a borough, well then, "shame on us." He stated Yakutat should be commended for their ability to make a decision and move forward with it, however, it's a lot easier for a group of people who essentially live in one community to focus on a direction and move. Number 406 MR. JANKE added that they've raised the money, they've submitted an a Request for Proposal (RFP) to hire an economics firm to do this study. The proposal from the RFP are due next Friday. On the 26th of this month, the Executive Committee from the Prince William Sound Economic Development Council will interview the candidates and make a selection. It's anticipated, based on the scope of services, that the study should take about 90 days. This would mean they would finish some time in May. During this same period of time, they'll begin to put together an educational process to educate the voters of Prince William Sound. If things go properly they could see a petition submitted and an election held in October. Currently, they are working on a petition and a draft charter with possibly a home rule borough with powers limited to education, taxation, and regional planning. This draft charter will be submitted and circulated throughout the communities of the sound for comments. MR. JANKE noted that the main purpose of the Prince William Sound group moving towards borough formation is to ensure the future of education in the sound. The state and local governments have had a difficult time every year funding education. In the Sound, they have had this same problem. As a city manager, education is one of the most difficult budget items to fund every year. They believe that by forming a Prince William Sound Borough they can ensure long into the future the financial resources necessary to educate their children. MR. JANKE continued that the region in question needs to be part of this Prince William Sound Borough for a number of important fiscal reasons: Number one, under municipal entitlements when a borough is incorporated they are entitled to select lands that are designated VUU (Vacant Unappropriated Unreserved). They would look at the Prince William Sound Model Borough boundary region and those lands identified as VUU are essentially mountain tops and glaciers, except for this region west of the one hundred forty-first meridian. There are valuable resources in this area that he hopes would prove out in the economic study to supply a base for revenue to fund education into the future. They are trying to do what the state wants local governments to do and that is to take a more active role in funding education. They need these resources to do this. For two and one half years they have been working towards this direction. He said it was unfair that the LBC made a decision based on a first come, first serve basis. This is not the best decision to make. PWS, if given the time, will do the right thing. Number 509 REPRESENTATIVE RYAN asked if he was correct in his understanding that municipal entitlement is based on a population driven formula. MR. JANKE answered that he didn't know that this was correct. He didn't believe so. He noted that the LBC staff might be able to answer this better. He thought it was based on ten percent of available VUU lands designated. Number 538 REPRESENTATIVE RYAN asked if they were able to incorporate, of this contested land, how much would they receive under their municipal entitlement. MR. JANKE stated he thought most of the VUU lands (those entitled to be selected under the entitlement program) in the model Prince William Sound Borough were mostly mountain tops and glaciers. He said his estimate would be if they were entitled to select ten percent of VUU lands, those combined acreages would be selected from lands generally in this area west of the one hundred forty- first meridian. Number 568 REPRESENTATIVE OGAN referred to Mr. Janke's remarks about not forming a borough on a first come, first serve basis and asked that if the Yakutat formation was disallowed, "if both of you applied at the same time and then - the boundary line was divided up at that point, who's going to be - do you think, do you think, do you think that would more of an equitable... MR. JANKE responded that had a petition been filed simultaneously by Yakutat and Prince William Sound there is not doubt in his mind that the LBC would have granted this area to Prince William Sound. As a matter of fact, at the end of their recent round of testimony and prior to deliberations, one of the LBC members stated that logically the land belongs with the Prince William Borough, but Yakutat had submitted a petition and the people of Prince William Sound had not. Number 614 REPRESENTATIVE OGAN said that this conflicted with the findings within the report and quoted, "However, the ties between native regional corporation boundaries and borough government boundaries in Alaska is limited, few existing model borough boundaries correlate directly between the boundaries of native regional corporations. A number of existing model boroughs include portions of more than one native corporation." Sealaska has land holdings in five organized boroughs, as well as in an unorganized borough. MR. JANKE stated that he didn't see any consistency. The model borough boundaries were established and utilized before by LBC decisions which have been upheld by the Alaska Supreme Court. He believed that these decisions gave the Prince William Sound residents a sense of false security that the lands were reserved for our eventual borough and asked why would they have to rush forward unprepared. He pointed out that at the end of any movement to petition for a borough, an election must take place. The population must be educated in order that they can vote with an informed attitude and, hopefully, vote the right way. A rushed movement would surely result in a failed vote. Number 669 REPRESENTATIVE KOOKESH referred to Mr. Janke's statement that it would be very difficult to get this land back if this annexation is allowed to stand. He stated that as long as he can remember, everything south of Cape Suckling was always considered southeast Alaska and everything north was considered part of the northern region of the state. Since he grew up in southeast Alaska, traditionally, the people of Yakutat have fished Icy Bay and all the way to Cape Suckling. He didn't remember any Yakutat fishermen ever catching a sockeye in that area and having it be called a Copper River red. He stated that the Cordova fisherman never fish in Dry Bay and those areas. Traditionally, the Yakutat area was used by the Yakutat fisherman. According to the Chugach Chairman it was recognized in the Alaska Native Claim Settlement Act. He stated that he was a little uncomfortable with Mr. Janke's statement that if this annexation goes forward that they'll never get the land back, because in his mind, they never had it in the first place. MR. JANKE responded that if the borough of Yakutat is allowed to maintain the LBC's decision and take these lands via the annexation, a future Prince William Sound borough can never incorporate those lands as part of its borough. Taking personal use of the land is something completely different. He noted that Cordova residents do fish down in this area. Number 795 REPRESENTATIVE KUBINA came forward to clarify comments made earlier in response to some of Senator Mackie's concerns. He noted that Senator Mackie talked about Chugach Alaska selected lands within the proposed annexation and that the Yakutat Village Corporation hadn't done so. Representative Kubina stated that it was unfair for him to say that "because they couldn't go out of theirs." He said he didn't think it was unfair that Sealaska, a regional corporation, did not choose any areas out of this annexation where Chugach Alaska did. Again, he stated that if they were looking at traditional use it seemed that the regional corporations made this decision a number of years ago, also they took it. SENATOR MACKIE said he was concerned with Representative Kubina's statements regarding Yakutat's resources as being inadequate to provide services to this area. He reiterated that Yakutat is an organized borough currently providing these services and he wanted to know what the justification was for this. He stated that he was quite impressed with the infrastructure of Yakutat. Number 876 REPRESENTATIVE KUBINA responded that he didn't mean in any way to belittle what Yakutat is capable of doing. He stated that the people of Yakutat have come to him to talk about this issue. These people were complete ladies and gentlemen. He appreciates what they are doing to try to better themselves also. He stated this was what everyone was trying to do. In discussions with the communities he represents, these individuals believed the Prince William Sound area was better able to serve a wider borough in these ways. Number 914 JAMES BRENNAN, Borough Attorney, City and Borough of Yakutat came forward to testify against HJR 17. He stated that he was intimately involved with this process and he introduced the mayor of Yakutat, Daryl James. The Yakutat Borough was formed in 1992 and has since then shown its capability to deliver municipal services to a borough area on a fiscally responsible basis. Yakutat now wishes to extend this borough into an area which Yakutat residents have, traditionally and today, used extensively, economically, for subsistence and prior to this, they had villages in this area. The reason Yakutat seeks to annex this area is not out of some tax grab, nor is it a land grab, which appears to be the case with the Prince William Sound proposal. Yakutat has always had a strong connection with this area. Yakutat has depended on this area. It's their backyard and the residents use it very extensively. Yakutat's economic connection with this land is much stronger than that of Prince William Sound. MR. BRENNAN continued about the process of annexation. The Local Boundary Commission is constitutionally established. It was established to hold hearings, review written comment and then make decisions on annexations, reasoned, analytical decisions after extensive review of the evidence. The legislature should not overturn a Local Boundary Commission annexation decision unless there is an apparent monumental error or something that flies directly into the state's own interests. He stated that he was aware of dozens of annexation decisions that have come before the legislature and the only one that he remembers which was ever rejected involved an annexation built around a blatant tax grab of pipeline property. This would have reduced the state's ability to tax this same property, this was a direct state issue which was affronted and the legislature overturned it. MR. BRENNAN noted that in this instance of the Yakutat annexation, there are over 4,000 pages in the record, 16 hours of hearings this time around and many more previously. These hearings did not take place just in the Yakutat area, but also in Cordova. The Local Boundary Commission went out of their way to hold an extensive hearing there. The issues heard at these hearings have been hashed out before and in much more detail than possible at this hearing today. The Local Boundary Commission heard all the evidence, asked hard questions of both sides. These are intelligent people and they made a unanimous decision that Yakutat had a far stronger connection with this area. The commission rendered an eighteen page analysis. MR. BRENNAN stated that if the committee truly wanted to review this decision he asked that this issue be given substantially more hearing time before the legislature than what would be allowed today. They can only boil this issue down to a short presentation today, but given time, he thought they would reach the same conclusion as the Boundary Commission did which is that Yakutat shows a much stronger connection to the area than Prince William Sound. The issue regarding whether this annexation was disruptive to the model borough boundary system was briefly raised and he noted that model borough boundaries are presumptive guidelines established by the Local Boundary Commission and they have the power to determine that the evidence was so strong as to overcome its own pre-set model borough boundaries. This is the way the system should be, it should be flexible, something which makes it stronger. MR. BRENNAN noted that the suggestion that the Supreme Court independently decided on the one hundred and forty-first meridian boundary is completely wrong. This case involved a procedural challenge to the way the Local Boundary Commission made the initial incorporation decision. There were challenges by both sides as to the way this occurred. The court held that the Local Boundary Commission had followed the correct procedure and the court simply deferred to the Boundary Commissioner's ability to determine the correct boundary line. The court said that the commission had the expertise to make this decision and they bowed out. The court did not independently evaluate this question, but left it to the Boundary Commission. He said now the Boundary Commission has decided unanimously that the best boundary is at Cape Suckling. MR. BRENNAN continued that the question which has been discussed rather extensively is whether this annexation would affect the viability of a "would be" future Prince William Sound, should there actually be an effort to form a Prince William Sound Borough. He pointed out that there has not been a petition to form such a borough. The state paid for the last feasibility study in the 80's in the hopes that the Sound residents would form a borough, but they did not. This area is completely outside of Prince William Sound on the open gulf, a coastal region which is similar to the Yakutat region. Also, this area is not necessary to the viability of the Prince William Sound Borough. MR. BRENNAN referred to a hand out, an excerpt of an analysis which the Department of Community and Regional Affairs put together. This demonstrates that should Prince William Sound form a borough in Prince William Sound traveling eastward to include Controller Bay and the Copper River Basin (an area outside of the annexed area), areas traditionally used by Cordova fisherman, they were left out of this annexation. Should they incorporate a borough as far east as Cape Suckling, they would be the second richest borough per capita in Alaska, trailing only the North Slope Borough. They would have a tax base that be the envy of all the rest of the boroughs including Yakutat and other municipalities, such as Anchorage with a tax base of $197,000 per capita as compared to say, $50,000 per capita for Anchorage, $40,000 for Yakutat, etc. They do not need this annexation for a tax base for a viable educational system. MR. BRENNAN pointed out that what they were asking to do is go outside of their natural region to reach into the resources of a neighbor region in order to get a land base. They would get 30,000 to 50,000 acres of land in municipal entitlement even if they were confined to the Prince William Sound area. On top of this land entitlement they are asking to go further and receive an additional 8,700 acres from the Yakutat Region. Even though the Prince William Sound representatives say that this annexation is absolutely necessary for the viability for the borough. The Yakutat Borough, when it was formed, received a grand total of 138 acres of municipal entitlement land. Yakutat has been able to function. It's not necessary - we would like to have the land in this area and they would not get it by virtue of this annexation because of the idiosyncracy of the law, but at some point they may go back and ask for some compensatory award of entitlement land there because they also have an interest in getting this entitlement land so that they can further industry in this area. MR. BRENNAN added that the Prince William Sound Borough would get along just fine financially without reaching into the Yakutat area to grab municipal entitlement land. Number 1439 DARYL JAMES, Mayor, City and Borough of Yakutat, came forward to testify against HJR 17. He stated that the Yakutat people have had a long and continued use of this annexed area including timber harvesting, fisheries, oil & gas exploration and transportation. All of the mentioned resources uses have had and still have their primary support out of the port of Yakutat. About 150 percent of the stevedore operations come out of Yakutat for both West Icy Bay and East Icy Bay, for the university land timber harvesting, as well as the same with the mental health trust lands, and Chugach. Supplies to these camps go through the port of Yakutat by the Alaska Marine Lines off-loading their cargo and Alaska Airlines. The employees of the timber operations in the area come through Yakutat and the workers have post office boxes there. MAYOR JAMES continued that mail is picked up and expedited by air taxi service that flies out of Yakutat to these camps. Local businesses of Yakutat supply the timber companies, including fuel by air transport. He noted that there were 1,316 flights in 1995 from Yakutat to these camps; 2,539 passengers from Yakutat; 233 tons of freight through the port of Yakutat to Icy Bay. In the set net fishery within this area, primarily the fisherman are from Yakutat, 30 to 35 permits originate from Yakutat. In the last five to ten years, there have probably been only two to three from the Copper River area. MAYOR JAMES stated that the fish primarily, since the 1930's, have come to Yakutat for processing with some going to Anchorage and Cordova. This fishery takes place in the Tsiu and Kaliakh Rivers, the Duktoth and Yahtse Rivers in Icy Bay and the Cape Suckling region. These have been fished commercially since the 1930's. There are 20 or so commercial fish cabins in the area owned by Yakutat fisherman. To his knowledge there is only one Prince William Sound region fisherman cabin there. The Yakutat Fisheries Management area goes from Cape Suckling to Cape Fairweather. The Cape Fairweather area is within the current boundary of the Yakutat City and Borough. In the 1970's, oil exploration was supplied and imported out of Yakutat or Seward. Recently, with the cancelled sale of 158, the draft proposal considered Yakutat as a support base and port for this operation. In the 1950's, exploration for oil and gas in this region was supplied out of Yakutat. MAYOR JAMES continued that residents of Yakutat under native allotments have in excess of 500 acres in this area and noted that native allotments need to go through very strenuous federal requirements to gain possession of these lands. This annexation area that Yakutat has petitioned for has the same ecosystem as the rest of the gulf coast area that are currently in the Yakutat Borough. Yakutat would like to meet and has met with the University of Alaska to work out any difference that might exist in the resource uses of the area. It is important to the City and Borough of Yakutat for economic diversification to work out any differences in plans. He urges the committee to uphold this unanimous decision by the Local Boundary Commission. Number 1761 REPRESENTATIVE KOOKESH noted a reference made by a previous presenter that this was a land and tax grab. He asked them to comment on this. MR. BRENNAN responded that he wished this was so. The reason this isn't so is that most of this land is tax exempt. The biggest parcels are held by the university of Alaska which is exempt from municipal taxation; mental health trust has some big holdings, also exempt; the great majority of Chugach Alaska Corporation lands are exempt under the Alaska Native Claims Settlement Act. The only lands of Chugach's that are subject to taxation are ones that are actively in a state of development, mainly those used for timber harvest. The total taxation they anticipate from the whole area, including lodges in the area, is about $24,000 per year. In municipal taxation terms this is a small chunk of change. MR. BRENNAN continued by asking what does Chugach get in return for this. Chugach is a logging camp and the other logging camp in the area will get a borough funded education service. Right now, their education service is 100 percent dependent on the state. The amount they would pay for taxes would only partially offset the local contribution that Yakutat would make. They would also be getting police services from Yakutat. Right now there is no realistic availability of police in this area. State Troopers are the closest in Valdez or southeast Alaska on an "as available" basis. Within 45 minutes, Yakutat would be able to get a policeman over to the Icy Bay camps. It's a short flight. MR. BRENNAN also mentioned that it should be remembered that the Prince William Sound Borough envisioned by the Local Boundary Commission is a Valdez based borough. Valdez is totally disconnected from this area. This is Yakutat's back yard. Valdez can be quite inconvenient. Number 1978 REPRESENTATIVE OGAN referred to the Local Boundary Commission's decision statement, more specifically that, logging, commercial fishing, and subsistence activities are clearly linked more to Yakutat and on the other hand, guided sport fishing and hunting activities appear to be connected more to Cordova. They also mentioned geographical considerations that the territory stretching from the one hundred forty-first meridian to Cape Suckling is a cohesive geographical area and it would be poor public policy to place a cohesive area into more than one organized borough. State law requires that boroughs conform generally with natural geography. He assumed that they would agree with these assertions, but he stated in all fairness this might be a question to be posed to both sides. MR. BRENNAN stated that everything Representative Ogan referenced favors the annexation decision made. The only discordant note was on the sport fishing camps which is a fairly new industry into the area, although it should be compared to the long standing commercial fishery in the area. Mr. Brennan noted the geographic area in question and added that this does impact the type of fishery which takes place there. It is entirely different in this area as compared to the state. This is a shore based fishery where people camp on shore and fish the mouths of the rivers with much smaller gillnets than in Prince William Sound. As a result there are almost no Prince William Sound fisherman who fish this area. Number 2204 SENATOR MACKIE stated that his understanding was that the University of Alaska was quite concerned about the proposed annexation because they have a number of land holdings there to be developed. The City and Borough of Yakutat passed a resolution regarding this concern. He asked this situation be explained and what the university's reaction was. MR. BRENNAN responded that as background some years back there was litigation between Yakutat and the university over the very initial timber settlement the state made with them. It was done with almost no public hearing in Yakutat and there was a lot of discord over the area selected. Yakutat became involved and this case settled a long time ago on terms mutually beneficial to both Yakutat and the university. The university's timber harvest was put in an area to the east, closer to Yakutat and in an area more viable to extract the timber at a commercially reasonable price. Yakutat consequently supplied employment and transhipment capabilities, etc. to the university. They now have a cooperative arrangement. The university wanted to get some reassurance from Yakutat that if they sought this annexation they would not seek to restrict development in this area by way of taxing or planning. Yakutat passed a resolution which the university was very pleased with. The university supports this annexation. Number 2384 SENATOR MACKIE said he also understood that Chugach has indicated that they were concerned about their potential development of their lands and asked what efforts Yakutat has made to discuss these issues with them. MAYOR JAMES responded that Yakutat has met with Chugach Alaska and it was very beneficial. He stated that they would continue to work with them and for that matter with any resource development companies which might come into the area. TAPE 97-9, SIDE A Number 033 MR. BRENNAN stated that one of Chugach's concerns is with their timber operation and that Yakutat will enact some stiffer standards. They understand that the state's position on this is that municipalities cannot have stricter standards than what are under the state. It's natural that Chugach would have concerns and referred to differences in the past which must be resolved, but he wanted to stress that Yakutat has never lifted a finger to stop Chugach's development thus far in the area. He said it was ironic, previous mentions about Chugach owned lands, but it's actually Yakutat people who are employed there and providing services, much more than Prince William Sound communities. Number 159 SENATOR MACKIE referred to a supplemental, provisional report to the Local Boundary Commission that discusses the education issue. He asked if the City and Borough of Yakutat was prepared to take on the responsibility of the Icy Bay School as part of their school district and he asked for a comment about the assertion made by the Department of Education that if Yakutat took on this school district it would save the state approximately $180,000 a year. MAYOR JAMES responded that the City and Borough of Yakutat is capable to take on this responsibility. Currently, they fund the local school district at the current cap for the past three years. Yakutat has a surplus in their funding for this project which is growing. Number 266 REPRESENTATIVE KUBINA stated that he was curious about the discussion regarding the university. He characterized this situation that the university opposed the annexation originally. The borough obtained an injunction to prevent the logging of the university, but then the borough made a deal with the university that they would withdraw this litigation in turn for their support of the petition to annex. He said this sounded like blackmail to him. MR. BRENNAN responded that this chronology as outlined was out of whack. The litigation actually started in 1989 between the prior City of Yakutat and the university. This was in the process of resolving itself about the time Yakutat first considered incorporation. Initially, the university in the midst of litigation, was not excited about the incorporation of this borough. As this process furthered and the litigation was resolved, the university withdrew their opposition to the incorporation. The incorporation went through and they have never opposed this annexation. Yakutat has a good working relationship with the university and they'd like this same thing with Chugach as well. Number 368 REPRESENTATIVE KUBINA reiterated that he didn't believe that the university had always approved of this annexation. MR. BRENNAN stated that the university even supported the earlier efforts of annexation and referred to the record as documentation. Number 437 REPRESENTATIVE KUBINA asked that, if there is no real financial gain for Yakutat to annex or no land entitlement, what is it, other than restricting development, that Yakutat stands to gain by these efforts. MR. BRENNAN stated that their motives were not for land or money interests, but they were motivated by heritage interests. He noted that this is Yakutat's backyard, they've used this area for subsistence uses and commercial fishing. This area was formally populated by the Tlingit - Eyak people, the residents of which settled in Yakutat eventually. The ancestors of the Yakutat community are buried in this region. They have a very strong identity to this land. It's a community land relationship. Number 550 MAYOR JAMES noted also that Yakutat has been characterized anti- development, that they would shut down resource development in this area. Yakutat has no intention to do this. There is tremendous amounts of economic benefit that comes to Yakutat as a result of development in this area. He didn't know where this perception was coming from that Yakutat was anti-development REPRESENTATIVE RYAN referred to the suit with the university regarding timber and discussed whether this took place during the spotted owl controversy in the state of Washington. Number 646 MR. BRENNAN summarized what the specific timber issue with the university was about. Actually there was an injunction issued but because of the pendency of the litigation, the university did not proceed. For engineering reasons, the lands the university received were clear out at Cape Suckling and they had a hard time retrieving the timber. The delay from the litigation and subsequent settlement benefited them in two ways: First, they received a substitute tract which is substantially eastward of Cape Suckling making the timber easier to harvest. Secondly, the timber prices went way up from the time they initially wanted to harvest the trees. REPRESENTATIVE RYAN stated that the university needs to generate alternative incomes to take the load off the legislature for appropriations. The legislature promotes alternative generated incomes at every chance they can. Number 839 MR. JANKE came forward to redress a few issues. He noted that a future Prince William Sound Borough would also include for educational purposes the school in Icy Bay. Currently in Prince William Sound there are three school districts, the City of Cordova, Valdez and the Chugach Rural Regional Attendance Area (REAA), which the REAA is completely supported by the state. Cordova and Valdez expends significant funds for local schools. The significance of this proposed annexation region for the future of education is to support a Prince William Sound school district which will reduce the need of the state to solely support the REAA. MR. JANKE referred to the comments made by one of the members from the Yakutat delegation who identified the value of lands property in the proposed Prince William Sound borough as being second in riches only to the North Slope Borough, however, it's important to note that the majority of that value is at the Valdez Oil Terminal. The terminal is being devalued by approximately 8 to 12 percent per year through depreciation. He continued that this proposed annexation is one of their solutions to make up for shortfalls on the horizon. MR. JANKE noted that there is about 80,000 acres of Chugach land in this region, 58,000 have been selected and 22,000 are under consideration. Chugach Corporation stages most of their operation out of Cordova and has a close relationship with Cordova and with the Prince William Sound. Currently they have plans to build a road to Carbon mountain for a logging operation and its scheduled to be open in 1998. This will create the beginning of a ground transportation system connected to the area in question. Cordova does supply a lot of services to this region already, medical, dental, mail service, etc. Number 1060 REPRESENTATIVE OGAN noted that state law requires that the boundaries of a borough conform generally to natural geography and referenced again the Local Boundary Commissions findings regarding this issue on page 17. They also discussed current use regarding logging, commercial fishing and subsistence were clearly linked more to Yakutat. Further, this area of annexation is a more cohesive geographic area and referred to the map. He said he couldn't disagree with this finding. Number 1163 MR. CHRISTENSEN stated that the area between Icy Bay and Cape Suckling is not only geographically different from either side, it is geologically different than anything east of the one hundred and forty-first meridian or anything west of Cape Suckling as well. A senior geologist from ARCO informed him that this area is geologically a formation that begins in Kodiak, extends across the ocean floor and comes up to the mainland between Malaspina Glacier and Cape Suckling. It is different than the area of Prince William Sound, but it is considerably different than the present Yakutat Borough. MR. CHRISTENSEN stated that this area has a history of being shared by Yakutat and Cordova. Many of the Yak-tat-kwaan shareholders have relatives and elders who are shareholders of Chugach Alaska Corporation. There are families that have shareholders in both or either. A decision could be made today that would cause harm that cannot be repaired, whereas, if the resolution passed out of committee there will be no harm done to the Yakutat position, since they can bring this petition at a later date. If this resolution is not passed out, there will be no opportunity in the future for a Prince William Sound borough. Number 1339 MR. JANKE pointed out that the original decision to form the Yakutat borough did not meet with any of the requirements for borough formation in the state of Alaska by population size, the number of communities, and he thought a special exception was granted in this case. The Local Boundary Commission has made decisions on other occasions that the one hundred and forty-first meridian is the appropriate dividing line. They keep changing their minds and hanging the Prince William Sound communities in the balance. REPRESENTATIVE OGAN noted that Mr. Janke was correct. State law provides that absent a specific or persuasive showing to the contrary the Local Boundary Commission may not approve a borough annexation beyond the model, this text he read from page 13. The commission obviously felt that there was a specific and persuasive showing to the contrary, after a much more public process, than they will be able to accommodate today. Number 1405 MR. JANKE stated that he thought this regulation had been changed since Yakutat was first formed. CHAIRMAN IVAN noted for the record that they had been joined by Senator Georgianna Lincoln at approximately 9:45 a.m. He then asked the Yakutat delegation to summarize their statements regarding the resolution before the committee. Number 1436 MAYOR JAMES referred to the comments by Mr. Janke that development will occur in the Carbon Mountain area and pointed out that this was under a joint venture with Concor Construction, Incorporated, which Yak-tat-kwaan is a member of. This will benefit both Yakutat and Chugach, but this Carbon Mountain area is outside the area of the proposed annexation. This area has a long history with Yakutat. Mayor James said his grandmother was born on Kyak island and raised in Katalla. She moved to Yakutat from there and he noted the numerous other descendants to be considered. Three of the Yak-tat-kwaan clans come from this area as well. Number 1460 MR. BRENNAN referred to the issue of the Chugach REAA raised, it should be pointed out that this REAA is based out of Anchorage. It is an Anchorage based school district. They are talking about a state funded Anchorage based school district that currently operates Icy Bay school. They are asking it to be put into a borough that's a very short distance away. He believed that they could provide a closer, better educational services on this basis. MR. BRENNAN responded to the question regarding previous litigation with the university and wanted to point out that the Cordova District Fisherman's Union were a part of this matter. They also had concern over the university's timber harvest. There was an alliance between Yakutat and the Cordova District Fisherman Union on this issue. This matter was resolved to the satisfaction of all three parties. MR. BRENNAN mentioned the appropriate boundary issue raised and the regional native corporation boundaries that have been discussed. Looking at a borough map of Alaska, along with the native corporation boundaries, these overlap all over the place. ANCSA boundaries are not used as the standard for borough boundaries and he used the example of Cook Inlet Regional that's in four different municipalities. It is a part of doing business in Alaska, that if you're a land holder, your land might fall into a borough. There is nothing sacrilegious about this. As far as election district boundaries used as a basis for setting a boundary, he ventured that they would end up with ridiculous looking boroughs. He then summarized how the land surrounding this proposed annexation was parcelled out according to native corporation boundaries, fish and game management areas, etc. He again noted that this proposed annexation was geographically more similar to Yakutat. MR. BRENNAN stated that this would be the only committee in the legislature to hear this issue. He appreciated the time given to both sides of this issue, but it doesn't compare with the amount of time that was put in by the Boundary Commission. This is their specialty and they don't have other things they need to concern themselves with during deliberations. He stated that if the legislature was going to overturn the Local Boundary Commission without a clear, glaring error or due to an affront to the state's interest, the question should be asked, why do we have a Local Boundary Commission? Why do we pay their expenses to investigate and hold hearings? He asked why should the Local Boundary Commissioners work their tail off to evaluate these situations if the decision will be overturned on the basis of political matters. The constitutional process for this should be respected for this case as a precedent. Number 1785 REPRESENTATIVE OGAN stated that he'd done a lot of soul searching on this issue and he had been heavily lobbied. To be a good statesman, he stated that he couldn't in good conscious vote to move this resolution out of committee. He said he couldn't disagree with the commission's findings. Number 1825 REPRESENTATIVE JERRY SANDERS stated that after hearing all the testimony he would vote to move this resolution out of committee, and he expressed his agreement with Mr. Christensen. If he ever sees this proposal again, it will fly with very little opposition. Number 1849 REPRESENTATIVE DYSON stated that as a freshman in this process he said he would enjoy some discussion from the experienced hands present on the merits of passing this resolution out of committee for a larger debate on the floor, as opposed to not passing it out, and/or how their actions interact with the actions of the other body in the House. Number 1887 REPRESENTATIVE KOOKESH stated that as a committee they are looking at a process set up by the legislature, a process to allow local governments to form. He believed they needed to commend Yakutat for the point that they've formed a borough without a mandatory borough bill or without any money from the state of Alaska. He said before they overturn this process, they have to look at the process the legislature established. The commission is made up of Alaskans who sit through extensive hearings. The legislature doesn't have the luxury of these hearings. If they move this out of committee and send it to the floor, the rest of the representatives will have even less time for hearings on this issue. Debate will not cover all of the issues. He asked the committee members to stand behind the Local Boundary Commission's unanimous decision. Number 1950 REPRESENTATIVE RYAN said he had read the Local Boundary Commission report. He didn't see why this annexation could not take place within a larger borough if necessary and one of things that troubled him, was, in the past, he had seen where land, was taxed without providing services to those entities who owned the land. He didn't want to see this happen in this case. He stated that he would vote to move this resolution out of committee. Number 2022 REPRESENTATIVE REGGIE JOULE said he had spent a lot of time listening and digesting the issues. He said this was not a situation unfamiliar to him, but it was under different circumstances. He said it's ironic that this issue was before the committee and that later today they would hear issues surrounding tribalism. Listening to the debate about ties to the land he was considering the weight of what will be before the house later on. He noted the commission had heard so many hours of debate that they will not be afforded the time to do the same. He said he would vote not to move this resolution out of committee. Number 2100 SENATOR GEORGIANNA LINCOLN noted that Icy Bay was in her district. She felt compelled to say a few words about this issue. She spoke to the validity of bringing this issue before the entire house for a more full disclosure to benefit both sides. She said that precedent had already been set before, through other situations, which have come before the Local Boundary Commission and mentioned briefly these situations. She noted the validity of both sides to this issue and mentioned the fact that constitutionally, it was the responsibility of the legislature to make the final decision. She believed it would be wrong to have this resolution stuck in committee when many lives were at stake. Number 2218 SENATOR MACKIE offered that he chairs the Community and Regional Affairs Committee on the Senate side and he had scheduled a hearing at 1:30 p.m. later today to discuss the report. He believed the hearing today had been fair. He responded to a statement made that the Prince william Sound wished to become a borough. He didn't think this was the case, that there is nothing to say that they will ever become a borough, but they are discussing this issue as a result of the annexation granted to Yakutat. As to the communities contributing money towards a feasibility study, this has happened after Yakutat was granted annexation, so he didn't see a lot of action before this. He appreciated that they were looking at what's in the best interest for their communities. SENATOR MACKIE also referred to the fact that both Representative Kubina and Senator Lincoln had stated that this area is within their districts, but this is not a criteria for any of this. These election district boundaries have changed three times in the last six years. He used an example from seven years ago when Juneau proposed to capture Greens Creek Mine for taxation purposes, an area within his district at the time. This issue was buried in that committee for the sole reason that they did not want to usurp the Boundary Commission's decision. He again reiterated all the work that went into this annexation review by the commission. He stated they should protect the process and that the commission made the correct decision. TAPE 97-9, SIDE B Number 000 REPRESENTATIVE IVAN stated he appreciated all the work which the commission has conducted thus far and addressed Representative Dyson's concerns. He stated that a bill if passed through committee it would be heard by both sides of the house, regardless of the subject matter. His intent was for the committee to hear both pros and cons regarding this annexation issue. He said they were here to serve their districts, but when they serve on committees they represent the whole state of Alaska. He asked what the committee's wish was. Number 050 REPRESENTATIVE DYSON stated that in light of the new information he was able to gain today, he said he would enjoy some time until the next committee meeting to process this information. Number 064 REPRESENTATIVE SANDERS moved and asked unanimous consent to move HJR 17 out of committee with individual recommendations and accompanying zero fiscal note. Number 076 REPRESENTATIVE KOOKESH objected. A roll call vote was taken. Representatives Sanders, Ryan and Ivan voted in favor of moving HJR 17 out of committee. Representatives Dyson, Ogan, Kookesh and Joule voted against moving HJR 17 out of committee. HJR 17 failed to move from the House Community and Regional Affairs Committee. ADJOURNMENT Number 097 CHAIRMAN IVAN adjourned the Community and Regional Affairs Committee meeting at 10:20 a.m.