Legislature(2015 - 2016)BARNES 124

03/18/2016 01:00 PM House RESOURCES

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* first hearing in first committee of referral
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Moved CSHB 216(RES) Out of Committee
         HB 274-STATE LAND; EXCHANGES; LEASE EXTENSIONS                                                                     
1:23:30 PM                                                                                                                    
CO-CHAIR TALERICO  announced that the  next order of  business is                                                               
HOUSE BILL  NO. 274,  "An Act relating  to extensions  of certain                                                               
state land  leases; relating to  the exchange of state  land; and                                                               
relating to the definition of 'state land.'"                                                                                    
1:23:47 PM                                                                                                                    
CRYSTAL  KOENEMAN,  Staff,  Representative  Cathy  Munoz,  Alaska                                                               
State Legislature, introduced HB  274 on behalf of Representative                                                               
Munoz, sponsor.   She  said the sponsor  introduced HB  274 after                                                               
being approached with  the issue by a Juneau  non-profit that had                                                               
worked with the  Department of Natural Resources  (DNR) on trying                                                               
to complete  a land  exchange.  She  said the  sponsor researched                                                               
statutes and  talked with DNR  about what was hindering  the land                                                               
exchange.    Through research,  the  sponsor  realized the  issue                                                               
stemmed well beyond  just this local non-profit in that  it is an                                                               
issue for non-profits across the  state, including land exchanges                                                               
involving  Native corporations,  the Alaska  Mental Health  Trust                                                               
Authority  (AMHTA),  and federal  land  exchanges.   The  sponsor                                                               
found  inefficiencies  within Title  38.50  in  the way  statutes                                                               
govern land  exchanges.  Title  38.50 land exchanges  are written                                                               
differently  than  the  municipal  land exchanges.    State  land                                                               
exchanges call for the value of  the land that is being appraised                                                               
to  be "exactly  equal to"  when talking  about the  surveying of                                                               
land.  Municipal land exchanges  call for it to be "approximately                                                               
equal to", which allows for  consideration of other factors, such                                                               
as public interest  and access to the land,  something that Title                                                               
38.50 does not allow for and is a major hurdle.                                                                                 
MS. KOENEMAN pointed out that  the other issue is that appraisals                                                               
under 38.50 are only good for  one year.  She explained that with                                                               
the public comment period, the  application, and the survey work,                                                               
most land exchanges  take at least a year and  are very difficult                                                               
to  complete within  one year.   Therefore,  HB 274  would remove                                                               
that  one-year   limitation  and  let  the   final  paperwork  be                                                               
completed  to conclude  those land  exchanges that  are close  to                                                               
being completed.                                                                                                                
1:27:32 PM                                                                                                                    
MS. KOENEMAN provided  a sectional analysis of HB 274.   She said                                                               
Section 1 deals  with the coordination with  other state agencies                                                               
and would remove  a reference that is being repealed.   Section 2                                                               
[would add two  new subsections that] deal with  the extension of                                                               
certain land leases  if it is in the best  interest of the state.                                                               
Section  3  would,  through new  paragraph  (7),  apply  existing                                                               
notice  standards  to state  land  exchanges.   Section  4  would                                                               
provide  clarifying language  regarding the  definition of  shore                                                               
land  and  tideland; it  is  technical  cleanup from  Legislative                                                               
Legal  and  Research Services.    Section  5  would add  two  new                                                               
provisions, one being that the land  exchange must be in the best                                                               
interest  of the  state and  the  other being  that AS  38.05.945                                                               
applies for  providing public  notice.   Section 6  would provide                                                               
that land  exchanges be  approximately equal  in value  and would                                                               
require  legislative  approval  of   exchanges  greater  than  $5                                                               
million;  this mirrors  the  municipal  lands exchange  statutes.                                                               
Section  7 would  remove  the "equal  value"  provision that  was                                                               
changed  to "approximately  equal to"  in Section  6.   Section 8                                                               
would  remove existing  limitations  and would  provide that  the                                                               
conveyances must be  authorized by the Constitution  of the State                                                               
of Alaska  and federal  laws.   Section 9  would provide  for the                                                               
continuation  of revenue  accrual  until state  land is  conveyed                                                               
unless jurisdiction from other state agencies is waived.                                                                        
1:30:00 PM                                                                                                                    
MS. KOENEMAN  continued the  sectional analysis,  explaining that                                                               
Section 10 would  change the hearing requirements  on land valued                                                               
at  more than  $5  million.   The  hearing  requirement would  be                                                               
changed from  three public hearings  to one public  meeting prior                                                               
to it being submitted to the legislature for review.                                                                            
REPRESENTATIVE HERRON expressed his concern  with Section 10.  He                                                               
asked why reduce the number  from three hearings to one [meeting]                                                               
for land that is valued over $5 million.                                                                                        
MS.  KOENEMAN replied  that  the way  the  Department of  Natural                                                               
Resources (DNR)  conducts its  public hearings  is a  much higher                                                               
bar than is its public meetings.   She qualified the sponsor does                                                               
not want to  limit public participation and wants  to ensure that                                                               
all the issues are vetted,  but said the sponsor also understands                                                               
the need  for the timeline  of getting land exchanges  taken care                                                               
of.     Additionally,  with  the  additional   oversight  of  the                                                               
legislature, the  sponsor feels comfortable that  the legislature                                                               
will  do its  due diligence  on these  land exchanges.   Multiple                                                               
public meetings and legislative  hearings could be held regarding                                                               
these land exchanges  and therefore the sponsor  feels the public                                                               
would be well served and there would be no diminishment.                                                                        
REPRESENTATIVE HERRON  observed in the  bill that the  status quo                                                               
language  is  for  "at  least  three  public  hearings"  and  the                                                               
proposed language is "at least  one public meeting".  He inquired                                                               
as to the difference between a hearing and a public meeting.                                                                    
MS.  KOENEMAN responded  that the  commissioner  must attend  the                                                               
public  hearings  and  recorders  must  be  there  and  [minutes]                                                               
transcribed.  Hearings are a much  higher bar than having, say, a                                                               
town  hall  [meeting],  where  there   is  more  of  a  free-form                                                               
REPRESENTATIVE HERRON  commented that  land exchanges  should not                                                               
be easy, and that is the reason for his concern.                                                                                
1:33:43 PM                                                                                                                    
REPRESENTATIVE JOSEPHSON  surmised that  if it  is not  a hearing                                                               
then the legislature  would not be privy to what  was said at the                                                               
hearing, given  that for a  public meeting the  legislature would                                                               
probably read a press account of it.                                                                                            
MS. KOENEMAN understood  the legislature would still  be privy to                                                               
much of the information that was presented at a [meeting].                                                                      
1:34:38 PM                                                                                                                    
REPRESENTATIVE SEATON  stated his  concern regarding  Section 10,                                                               
noting there is  a proposal for an area on  the Kasilof River for                                                               
which  there are  three public  hearings -  one each  in Wasilla,                                                               
Anchorage,  and Kasilof.    He posited  that  the public  opinion                                                               
coming out  of a  meeting in Kasilof  will absolutely  be totally                                                               
different than what  will come out from the  other two locations.                                                               
This is  because it relates  to dip  netting and people  from the                                                               
population centers  have a definitely different  attitude to that                                                               
than the property  owners who live around that area  and who have                                                               
the impact of that.  Therefore,  he is concerned about going from                                                               
three public hearings to one public  meeting.  He requested he be                                                               
provided  with the  definition of  public  hearing versus  public                                                               
meeting,  saying that  normally [legislators]  get the  notice of                                                               
public hearings but not necessarily public meetings.                                                                            
MS.  KOENEMAN  answered that  the  proposed  language states  DNR                                                               
shall hold "at least" one public  meeting, it would not limit DNR                                                               
to  only  one  [for  exchanges  having  value  of  more  than  $5                                                               
million].   It  would  allow for  if there  is  public outcry  or                                                               
interested parties  to request more  than one meeting.   She said                                                               
public   meetings  do   still  go   through  the   public  notice                                                               
requirement and so notice is  sent out to all interested parties,                                                               
ensuring  that every  affected  party does  have  the ability  to                                                               
comment.   This is  in addition to  the public  notice provisions                                                               
that are contained  in statute, so there would  already have been                                                               
the chance  to submit  comments through the  public notice.   The                                                               
department would  have a chance  and opportunity to  review those                                                               
public  comments and  determine where  the issues  are and  which                                                               
communities would be greatly affected.                                                                                          
1:37:20 PM                                                                                                                    
MS. KOENEMAN  resumed the sectional  analysis, noting  Section 11                                                               
would  provide  conforming  language  regarding  the  legislative                                                               
review for changes made in Section  6 and Section 13.  Section 12                                                               
would provide  additional clarifying language for  the definition                                                               
of  shore  land and  tideland  for  another section  of  statute.                                                               
Section 13 would repeal several statutes.                                                                                       
MS. KOENEMAN reviewed  the statutes that would  be repealed under                                                               
Section  13:    AS  38.50.020,  which deals  with  the  value  of                                                               
properties exchanged, would be repealed  because Section 6 of the                                                               
bill which would  change the language from "exactly  equal to" to                                                               
"approximately equal";  AS 38.50.040,  which deals with  the land                                                               
subject to  exchange, would  be repealed  because the  state does                                                               
not  have  the  legal  authority  to  violate  a  covenant  or  a                                                               
restriction  on  a  title  that prevents  the  disposal  or  land                                                               
exchange,  therefore  Legislative  Legal  and  Research  Services                                                               
determined  this statute  does not  seem to  hold any  functional                                                               
value; AS 38.50.080(b), which deals  with the prohibition against                                                               
alienation  of selection  rights, would  be repealed  because the                                                               
state has already  selected its lands under  the Alaska Statehood                                                               
Act and has no further ability to select lands.                                                                                 
1:39:12 PM                                                                                                                    
REPRESENTATIVE CHENAULT  offered his  belief that Alaska  has not                                                               
yet selected all of its lands,  so there are still lands that are                                                               
CO-CHAIR NAGEAK agreed with Representative Chenault.                                                                            
MS. KOENEMAN  replied that that  was the information  provided to                                                               
her and she will follow up in this regard.                                                                                      
REPRESENTATIVE CHENAULT requested that  DNR provide the committee                                                               
with clarification.                                                                                                             
1:39:38 PM                                                                                                                    
MS. KOENEMAN continued  her review of the statutes  that would be                                                               
repealed  under  Section 13:    AS  38.50.090, which  deals  with                                                               
coordination with  other state agencies,  would be  replaced with                                                               
AS  38.05.035(e) which  requires that  a summary  be provided  of                                                               
agency and  public comments that  have been obtained as  a result                                                               
of contacts  with other agencies  and other efforts taken  by the                                                               
department  through public  comment;  AS  38.50.100, which  deals                                                               
with  the  finding  requirements  as to  alternatives,  would  be                                                               
replaced   with  AS   38.05.035(e)  which   requires  a   written                                                               
determination that  the exchanges  will serve the  best interests                                                               
of  the state;  AS 38.50.110,  which  is the  notice of  proposed                                                               
exchanges,  would  be  replaced   with  the  requirements  of  AS                                                               
38.05.945  which  is  the  standard  for  most  other  disposals,                                                               
including oil  and gas  leases, land  sales, material  sales, and                                                               
other  leases;   AS 38.50.120(b),  which is  the public  hearings                                                               
statute, would  be replaced  by Section  10 of  the bill;  and AS                                                               
38.50.130, which  is the report  on proposed exchanges,  would be                                                               
repealed because  it is duplicative of  existing requirements for                                                               
publications of  the best  interest finding  and would  add costs                                                               
and  complexities to  the exchange  process.   The best  interest                                                               
decision  would   still  lay  out  the   considerations  used  in                                                               
determining  the  value  of  the   property,  the  value  of  the                                                               
exchange, and what the benefits are of the exchange.                                                                            
1:41:36 PM                                                                                                                    
REPRESENTATIVE  JOSEPHSON noted  that under  AS 38.50.080(b)  the                                                               
state may not  alienate land selected under the  Statehood Act of                                                               
1958.   He said  he has not  seen a map  showing what  Alaska has                                                               
received as  of January 3,  1959.   He inquired whether  there is                                                               
some reason why lawmakers eons ago  said that that is sacred land                                                               
and is not  to be exchanged, whereas land the  state has accepted                                                               
since then has been exchanged, albeit very slowly.                                                                              
MS. KOENEMAN deferred to DNR for an answer.                                                                                     
CO-CHAIR  TALERICO requested  DNR to  address the  land selection                                                               
question and also the public hearing versus meeting question.                                                                   
1:42:39 PM                                                                                                                    
WYN  MENEFEE, Deputy  Director, Alaska  Mental Health  Trust Land                                                               
Office, Department  of Natural  Resources (DNR),  first addressed                                                               
the  state's  selection  rights,  explaining  that  at  statehood                                                               
Alaska  had 105  million  acres to  select,  with certain  coming                                                               
through grants  and certain  needing to be  selected.   The state                                                               
had a  time period in  which to  select lands and  the selections                                                               
have  already occurred.   Of  the remaining  selections that  the                                                               
state  has, the  state is  currently figuring  out which  ones to                                                               
relinquish and which  ones to close, but the state  does not have                                                               
the ability  to select more.   At the time [AS  38.50.080(b)) was                                                               
created  the state  likely had  the ability  to select  lands, so                                                               
that is  the reason why  currently it is  not needed.   The state                                                               
does  have  the  ability  to  change  what  is  its  priority  in                                                               
selection  and close  out of  selection, but  the state  does not                                                               
have the ability to select more land.                                                                                           
1:44:01 PM                                                                                                                    
MR. MENEFEE  then addressed the  difference between  meetings and                                                               
hearings.   He said  DNR's interpretation of  hearings is  that a                                                               
court transcriber must  be there to type out every  word said and                                                               
then  the department  pays  someone to  process  and publish  the                                                               
hearing minutes.  This is a  very lengthy procedure for DNR to do                                                               
because it does  not normally do that.   Normally, the department                                                               
disposes of oil  and gas leases, mineral rights,  land sales, all                                                               
under  AS 38.05.035(e)  decisions.   The  department uses  public                                                               
meetings  to reach  out and  gather input  from the  public, then                                                               
documents the  type of  input received at  the meetings  but does                                                               
not use  a system  of transcribing  someone on  the record.   The                                                               
department has found meetings to  be much more beneficial because                                                               
meetings allows  for a  dialogue.  People  can give  their ideas,                                                               
ask  questions,  and  discuss solutions  with  department  staff,                                                               
rather than  a person being  constrained to two or  three minutes                                                               
and  that's it.    That is  why the  department  prefers to  have                                                               
meetings instead of hearings.                                                                                                   
1:46:53 PM                                                                                                                    
MR. MENEFEE  clarified that AS  38.05.945 is DNR's  public notice                                                               
requirements and AS 38.05.035(e) is  DNR's decision process.  The                                                               
combination  of those  two statutes,  he explained,  requires the                                                               
department to reach out to  potentially affected parties the best                                                               
way the  department sees  fit to  reach the  potentially affected                                                               
parties.  It  could be that the department  determines six public                                                               
meetings are needed to  do that or only one is needed.   If it is                                                               
under  the  $5   million  value  threshold  it   would  give  the                                                               
department the  decision making authority  to determine  how much                                                               
notice is  needed or how many  meetings to do and  even whether a                                                               
meeting is even  needed.  For example, something very  small in a                                                               
subdivision may not  really need a public meeting.   It will have                                                               
a  public  notice because  the  department  always has  a  public                                                               
notice and  will always post it  on the internet and  probably in                                                               
the  local  newspaper.   But  the  need  to go  through  multiple                                                               
meetings is not  always essential.  However, he  continued, if an                                                               
exchange is over  the $5 million value  threshold, the department                                                               
would need to bring that  to the legislature, and the legislature                                                               
could hold as  many hearings as it likes in  order to approve the                                                               
land exchange.   The department cannot  do over $5 million  or an                                                               
unequal land  exchange without  getting legislative  approval and                                                               
therefore  even more  hearings occur.   The  requirement for  the                                                               
three  hearings in  current law  is  only for  if it  is over  $5                                                               
million, so  it seems even  repetitive.  The department  would do                                                               
public meetings and such as necessary  up to that point, but once                                                               
the department  finally determined it  to be a good  exchange and                                                               
ready for  the legislative approval,  the legislature  could hold                                                               
as many hearings on that as it likes.                                                                                           
1:47:40 PM                                                                                                                    
REPRESENTATIVE  SEATON presumed  that written  public comment  to                                                               
public hearings  is on the record.   He asked how  written public                                                               
comment  to  public  meetings  is  acquired  and  whether  it  is                                                               
verbatim as  written by  the person or  is summarized  as someone                                                               
commenting in the positive or negative.                                                                                         
MR.  MENEFEE  answered that  when  DNR  does an  AS  38.05.035(e)                                                               
decision  it  oftentimes  does a  summary  of  comments  received                                                               
because  sometimes  there can  be  one  comment and  sometimes  a                                                               
thousand, but  the public  record is  still there  that documents                                                               
it.   The department tells people  that in order to  be heard DNR                                                               
wants comment  to be  put in writing  to preclude  the department                                                               
from mistakenly putting words in  someone's mouth.  At any public                                                               
meeting, DNR has  forms for writing down comments on  the spot or                                                               
for mailing in,  and DNR is willing to help  the person write it.                                                               
That is  in the  public record  and available  for anyone  to see                                                               
when doing decisions.  However,  in the actual decision document,                                                               
DNR oftentimes summarizes.                                                                                                      
1:49:27 PM                                                                                                                    
REPRESENTATIVE  SEATON,  regarding  three [hearings]  versus  one                                                               
[meeting] for  land exchanges  valued over  $5 million,  said his                                                               
concern with an  exchange coming before the  legislature that has                                                               
had  only one  public  meeting is  that 50  people  will call  in                                                               
asking legislators to  make a decision on something  that was not                                                               
as amply vetted  in the local area as it  should have been, given                                                               
that  legislative  hearings  are  not  in the  local  area.    He                                                               
requested Mr.  Menefee to address  his concern and  asked whether                                                               
DNR would have three meetings if the value is over $5 million.                                                                  
MR. MENEFEE  replied that if the  value is over $5  million it is                                                               
likely either  a broader land  base or a very  valuable location,                                                               
such as downtown.   If it is  that type of value  it likely would                                                               
be more than one [meeting].   If it is an accumulation of several                                                               
different  land parcels  located  in  different communities,  DNR                                                               
would likely have  public meetings in each  of those communities.                                                               
It  would be  unlikely,  although he  cannot  guarantee it,  that                                                               
something would get  to the legislature under  the requirement of                                                               
unequal value  or of over $5  million with only one  meeting.  In                                                               
either  of those  cases there  would  probably be  more than  one                                                               
public meeting  because DNR does  not want to bring  something to                                                               
the  legislature that  is not  vetted.   The department  wants to                                                               
know what  the problems  and concerns  are.  That  is not  to say                                                               
that  people  will  not  ask for  additional  hearings  with  the                                                               
legislature, but DNR would like to  have that vetted, so if it is                                                               
going to take more meetings DNR would hold more meetings.                                                                       
1:51:59 PM                                                                                                                    
REPRESENTATIVE JOSEPHSON  remarked that  severing of  the surface                                                               
from the mineral estate as proposed  under Section 8 seems like a                                                               
major shift.  He inquired what the  goal is here and how it would                                                               
be  known that  the state  had not  exchanged something  that had                                                               
valuable minerals or oil and gas under it.                                                                                      
MR. MENEFEE responded that current  law talks about trying to not                                                               
do mineral  estates separately.   By law, the  federal government                                                               
is  the only  group to  which state  land mineral  rights can  be                                                               
disposed.   The proposal says  it can  only be done  according to                                                               
state constitution and law, therefore  it could not be segregated                                                               
and given to "Joe" because it is  not permissible by law.  But it                                                               
would allow the separation.   So, for instance, when dealing with                                                               
the federal government there may  be reasons the state would only                                                               
want to  do a  mineral estate  in certain cases.   Even  under an                                                               
exchange, he  explained, the  state keeps the  rights to  the oil                                                               
and gas and such because of the  statutes.  The state is going to                                                               
evaluate that  because it does not  want to give away  a valuable                                                               
resource.    Normally, exchanges  are  going  to occur  with  fee                                                               
simple, which is both the mineral  estate and the land estate all                                                               
together.   Typically in  an exchange, both  the surface  and the                                                               
subsurface come  into the  state and only  the surface  estate is                                                               
given back out.                                                                                                                 
1:54:24 PM                                                                                                                    
REPRESENTATIVE SEATON  drew attention  to page  4, Section  9, of                                                               
the  bill  and requested  an  explanation  of the  language  "and                                                               
revenue" on lines 24-25.                                                                                                        
MR. MENEFEE answered  by posing a scenario in which  the state is                                                               
selling gravel  off of a site,  is going through a  land exchange                                                               
process, and  is in a  preliminary exchange agreement  but gravel                                                               
is still being extracted there.   The other entity that the state                                                               
is exchanging  with does not get  any of the revenues  off of the                                                               
gravel  extraction that  continues until  the actual  exchange is                                                               
complete.   This is  because the  state does  not want  the other                                                               
entity to  say, "Well this  exchange took  10 years and  I demand                                                               
all the revenue  that came off during that time."   The state has                                                               
not given  that land to  the other  entity until the  exchange is                                                               
done  and therefore  the idea  is to  be expeditious  about going                                                               
through  an exchange  but  not  wanting the  other  entity to  be                                                               
accruing any sort  of right on the  other side.  It  is wanted to                                                               
keep that  to the  state so  the state keeps  the benefit  of any                                                               
revenues coming off that land until the exchange is done.                                                                       
REPRESENTATIVE SEATON asked whether  there are any repealers that                                                               
the department is uncomfortable with  or that expand further than                                                               
is needed.                                                                                                                      
MR.  MENEFEE replied  that DNR  is comfortable  with the  way the                                                               
bill is  written.  In regard  to the repealers, he  said some are                                                               
pieces of  language being  moved from one  part to  another, some                                                               
are recommendations  by Legislative  Legal and  Research Services                                                               
for  what it  should  be,  and some  are  just for  efficiencies.                                                               
Therefore, DNR is very comfortable with where it stands.                                                                        
1:56:38 PM                                                                                                                    
REPRESENTATIVE JOSEPHSON  noted that  "best interest" is  used in                                                               
the bill.  He asked whether  this could result in more litigation                                                               
that would hold  up the exchange, given there is  a whole body of                                                               
law on what that means and that it is a term of art.                                                                            
MR.  MENEFEE  responded  that,  except  for  this,  almost  every                                                               
disposal  by  DNR  is  done through  the  AS  38.05.035  decision                                                               
process, which  says the department  has to  decide it is  in the                                                               
best interest of  the state.  Absolutely that  can be challenged,                                                               
he said.   Every decision  DNR does  can be appealed  by somebody                                                               
and  eventually taken  to  court.   If  DNR did  not  do its  due                                                               
diligence, evaluate  correctly, or  do everything  required under                                                               
AS  38.05.035, it  could be  challenged.   The department  can be                                                               
challenged whether  it has  done a good  job or a  bad job.   The                                                               
department gets taken to court all the  time.  He allowed it is a                                                               
term of  art, but pointed out  that that is what  the legislature                                                               
set up for DNR to do for  all of the disposals.  The department's                                                               
large  oil and  gas leases  and land  sale program  are all  done                                                               
through that same decision process  - the same appealable process                                                               
is there, same best interest determination.                                                                                     
1:58:32 PM                                                                                                                    
CO-CHAIR  TALERICO understood  that under  the Statehood  Act any                                                               
mineral  rights surrendered  by the  state would  go back  to the                                                               
federal government.                                                                                                             
MR. MENEFEE answered yes.                                                                                                       
CO-CHAIR TALERICO  presumed it would  be the feeling  of everyone                                                               
listening  that that  would never  happen, that  the state  would                                                               
never give those up.                                                                                                            
MR. MENEFEE replied  correct, except if it was going  back to the                                                               
federal government.   An allowance is there and  exchanges to the                                                               
federal government are possible in  the future.  For example, the                                                               
Alaska Mental  Health Trust  Land Office  is working  an exchange                                                               
with  the federal  government, however  mineral  rights were  not                                                               
really the issue there.  In  the future it could be a possibility                                                               
that the state could exchange  mineral rights back to the federal                                                               
government and that is the only place that that works.                                                                          
CO-CHAIR TALERICO surmised that some  of the land selected by the                                                               
state has  not yet been adjudicated.   He assumed the  state must                                                               
work with  the U.S.  Bureau of  Land Management  (BLM) to  do the                                                               
adjudication for the state to acquire the rest of its acreage.                                                                  
MR. MENEFEE  responded that the selections  have already occurred                                                               
and  the state  has over-selected.   In  that over-selection  the                                                               
state must work with BLM to  fine-tune what the state is going to                                                               
get  in the  end.   It is  somewhat like  a chess  game -  Native                                                               
corporations get first  dibs on selections and  from what remains                                                               
the state will  adjust its priorities and will  get the remaining                                                               
selections.   So, it is still  under adjudication and is  still a                                                               
process ongoing.                                                                                                                
2:00:27 PM                                                                                                                    
REPRESENTATIVE JOSEPHSON asked how  many of the exchanges involve                                                               
the  federal government.   He  further requested  Mr. Menefee  to                                                               
elaborate on the federal exchange that is currently going on.                                                                   
MR. MENEFEE  answered he can only  think of two that  have in any                                                               
way been  going on right now.   One is Izembek  National Wildlife                                                               
Refuge, which  has been going  on for  quite some time  with many                                                               
perils  with the  exchange.    Under AS  38.50  there  is not  an                                                               
exchange going  on presently.   There are many different  ways to                                                               
do exchanges.   An  exchange with the  federal government  can be                                                               
done administratively or as  a congressionally mandated exchange.                                                               
An administrative exchange  is more like what is  being done with                                                               
the Alaska Mental  Health Trust Land Office, where  the office is                                                               
working with  the U.S. Forest  Service in Southeast Alaska  to do                                                               
an  exchange for  approximately 18,000  acres of  trust land  for                                                               
about 20,000 acres  of U.S. Forest Service land.   There are many                                                               
parcels and it is a fairly  large and lengthy process.  Right now                                                               
an agreement has  been entered into to initiate  with the federal                                                               
government.   There  is a  National Environmental  Policy Act  of                                                               
1969 (NEPA) process that needs  to occur, an environmental impact                                                               
statement (EIS), and this must be  done before doing the AS 38.50                                                               
land exchange  on the state  side.  So, it  is just in  the first                                                               
stages of a  real robust process on the federal  side and then it                                                               
must  be  married  up.     The  way  AS  38.50  currently  stands                                                               
especially  wreaks  havoc with  this  appraisal  problem of  only                                                               
being good for  one year.  For example, the  Falls Creek exchange                                                               
took at least 12 years to  get through because of trying to match                                                               
up the state and federal processes.                                                                                             
2:03:36 PM                                                                                                                    
REPRESENTATIVE  HERRON commented  that in  regard to  the Izembek                                                               
trade  there is  a  lot of  bitter resentment  with  the way  the                                                               
federal government has treated that  trade.  The EIS process took                                                               
four years to do with  many Alaskans and other parties interested                                                               
in a  successful conclusion to  that trade.   In his  opinion, he                                                               
continued, the  EIS was  corrupted at the  highest levels  of the                                                               
U.S. Department  of the Interior  at the  last minute.   He asked                                                               
when the Izembek trade agreement is going to expire.                                                                            
MR.  MENEFEE responded  that DNR  will have  to get  back to  the                                                               
committee with an answer.                                                                                                       
2:04:42 PM                                                                                                                    
REPRESENTATIVE TARR related  that a criticism she  has heard with                                                               
the whole land exchange process is  the great length of time that                                                               
it can  take and that costs  may be exceeded through  the process                                                               
relative to the value of the  property.  She inquired whether the                                                               
cleanup proposed  in HB  274 will help  expedite the  process, if                                                               
that is an accurate criticism.                                                                                                  
MR. MENEFEE replied  that the criticism is accurate  in the sense                                                               
that DNR  has had  numerous failed  exchanges and  exchanges that                                                               
never got  off the ground  because of  process.  Under  AS 38.50,                                                               
the way  the timing  works it  is extremely  difficult to  get an                                                               
exchange  through  - many  years  in  the making,  many  repeated                                                               
steps, lots of  cost for both the state and  the entity proposing                                                               
to exchange  with the state.   It is not good  for anyone because                                                               
much money and  staff time is wasted that way.   The intention of                                                               
HB 274  is to make  it more consistent  with how DNR  does normal                                                               
disposals and what is really trying  to be done is get efficiency                                                               
so  exchanges  can  actually  get  done.    Numerous  people  and                                                               
entities, such as  Native corporations, have come  to DNR wanting                                                               
to do  an exchange and explaining  why it is in  the state's best                                                               
interest.   But oftentimes DNR  has said that it  probably cannot                                                               
be done  because of the  law as  it stands.   That is not  a good                                                               
answer  because it  might actually  be in  the state's  interest.                                                               
When  it is  in the  state's interest,  DNR wants  to be  able to                                                               
actually complete an exchange.                                                                                                  
MS. KOENEMAN  added that  the land exchange  example she  used at                                                               
the start  of her testimony  was in  regard to the  Point Bridget                                                               
trailhead and the Echo Ranch  Bible Camp, a land exchange process                                                               
that started  in the early  2000s.  She  said the bible  camp has                                                               
dumped tens  of thousands  of dollars over  and over,  year after                                                               
year, trying  to get this  exchange.   It has been  a frustrating                                                               
ordeal  for the  camp because  it is  a nonprofit  and should  be                                                               
using those funds  for other purposes instead of  exchanges.  The                                                               
hope is that  there will be additional public  entities that will                                                               
not have  to expend  those same  funds and that  it will  be more                                                               
cost advantageous for them.                                                                                                     
2:07:35 PM                                                                                                                    
CO-CHAIR TALERICO opened public testimony on HB 274.                                                                            
2:08:35 PM                                                                                                                    
The committee took a brief  at-ease due to technical difficulties                                                               
at the Fairbanks Legislative Information Office.                                                                                
2:09:05 PM                                                                                                                    
DOUG  ISAACSON, General  Manager, Minto  Development Corporation,                                                               
stated  his corporation's  support for  HB  274.   He noted  that                                                               
Minto Development  Corporation is  a subsidiary  of Seth-De-Ya-Ah                                                               
Corporation  and Minto  is a  federally recognized  village under                                                               
the Alaska Native Claims Settlement  Act (ANCSA).  He offered his                                                               
appreciation for  the earlier testimony  and explanations  by Mr.                                                               
Menefee,  noting that  a Native  corporation looking  at economic                                                               
development  for  its village,  work  for  shareholders, and  the                                                               
ability to create  value for the greater community  at large, the                                                               
corporation is  discouraged from pursuing any  land exchanges due                                                               
to the process.   He related his experience with  a land exchange                                                               
while he  was mayor  of North  Pole.  North  Pole was  looking at                                                               
expanding  its  wastewater  treatment  center  and  the  exchange                                                               
process became too cumbersome to pursue.                                                                                        
MR. ISAACSON noted  that HB 274 was immediately  received well by                                                               
his board.   He  drew the committee's  attention to  two letters,                                                               
one  from the  Minto  Development Corporation  and  one from  the                                                               
Seth-De-Ya-Ah Corporation.   If the bill is passed,  he said, the                                                               
corporation is looking at pursuing  some ventures that would open                                                               
up some economic  opportunities.  It is reasonable  to reduce the                                                               
number of  public meetings.   It does not  say there will  not be                                                               
public meetings,  but in  the municipal  process for  land issues                                                               
there  is  outreach to  those  who  are immediately  affected  by                                                               
exchanges.  Having  three mandated public hearings  does not make                                                               
sense when something  is being done in an area  that is not going                                                               
to have a lot of affect.   The proposal is a much more reasonable                                                               
way of  pursuing it and  would allow the corporation  to appraise                                                               
the property,  go through the  best interest findings, and  get a                                                               
determination in a much more timely way.                                                                                        
2:13:04 PM                                                                                                                    
BART GARBER, President, CEO,  Toghotthole Corporation, stated his                                                               
corporation is a  village corporation in Nenana.   He offered the                                                               
corporation's  support for  HB  274.   He  said  he echoes  Minto                                                               
Development  Corporation's   testimony  and  added   that  Nenana                                                               
potentially has  a more  extreme case.   By the  time Toghotthole                                                               
got around to selecting lands, the  vast majority of lands in its                                                               
area had  already been  selected by  the state  and by  the city.                                                               
So, Toghotthole's lands  are primarily distant, many  of them are                                                               
split up  along the  road system  or farther out  on some  of the                                                               
river systems.   There have  already been times  when Toghotthole                                                               
needed or had opportunity to exchange  and it was easier when the                                                               
city and  the village had to  make a land exchange.   The parties                                                               
were more  similar, the parcels  were smaller, and  the interests                                                               
were  more  in  line.    There  are  now  increasing  amounts  of                                                               
development in the area, but  the corporation's parcels are still                                                               
all spread out, and it is  getting into more and more areas where                                                               
the state  has lands.   It  is not large  parcels that  are being                                                               
talked about, but potentially small  parcels that are loggerheads                                                               
for access  issues and other things.   He related that  this last                                                               
year he  had to make arrangements  for the lease of  a very small                                                               
state  parcel  between  Toghotthole's property  and  some  mental                                                               
health property that Toghotthole had to  get to.  That worked out                                                               
okay, but it might  have been easier and in the  long term it may                                                               
be  easier, to  get  an  exchange.   However,  given the  current                                                               
process, there  is a  very good  chance of  not going  through it                                                               
simply  because of  the  time  deadlines and  the  length of  the                                                               
transaction.   Toghotthole Corporation supports HB  274 and would                                                               
like to see  the number of hearings potentially  diminished or at                                                               
least sped  up.  In  most situations where the  principle parties                                                               
are  in agreement,  it would  be in  the best  interests of  both                                                               
parties if the process does not get in way.                                                                                     
2:15:56 PM                                                                                                                    
CO-CHAIR  TALERICO  closed  public  testimony  on  HB  274  after                                                               
ascertaining no one else wished to testify.                                                                                     
2:16:06 PM                                                                                                                    
REPRESENTATIVE SEATON stated his  concern that budget constraints                                                               
and  future administrative  contraction  might  result in  saving                                                               
expenses by having a single  hearing for exchanges valued at over                                                               
$5 million  and then  shoving that  off to  the legislature.   He                                                               
said  he would  like, at  the appropriate  time, to  go from  one                                                               
public  meeting to  three public  meetings  because meetings  are                                                               
simpler and easier than hearings  and three meetings would ensure                                                               
that budgetary problems  do not shift from  the administration to                                                               
the legislature.   He recounted  that he has been  through timber                                                               
sales or  exchanges that were  very contentious by the  time they                                                               
came before the  legislature and some of that  was because things                                                               
had  not been  worked  out  in public  meetings.    He urged  the                                                               
committee  to stay  at  three meetings  and not  go  down to  one                                                               
meeting for exchanges valued at $5 million.                                                                                     
2:17:34 PM                                                                                                                    
CO-CHAIR TALERICO  held over HB  274 and requested  that proposed                                                               
amendments be submitted to the co-chairs' offices.                                                                              

Document Name Date/Time Subjects
HB0274 Ver. E.PDF HRES 3/18/2016 1:00:00 PM
HB 274
HB274 Sponsor Statement Ver. E.pdf HRES 3/18/2016 1:00:00 PM
HB 274
HB274 Sectional Analysis Ver. E.pdf HRES 3/18/2016 1:00:00 PM
HB 274
HB 274 Fiscal Note.pdf HRES 3/18/2016 1:00:00 PM
HB 274
HB 274 Supporting Documents - Repealers.pdf HRES 3/18/2016 1:00:00 PM
HB 274
HB274 Supporting Documents-Letters of Support.pdf HRES 3/18/2016 1:00:00 PM
HB 274
HB274 Supporting Documents-Parks Div Briefing on Point Bridget.pdf HRES 3/18/2016 1:00:00 PM
HB 274
HB274 Supporting Documents-State Land Exchanges Fact Sheet.pdf HRES 3/18/2016 1:00:00 PM
HB 274
HB274 Supporting Documents-Trust Land Exchange.pdf HRES 3/18/2016 1:00:00 PM
HB 274
CSHB 216( 1 ) - Sponsor Statement.pdf HRES 3/18/2016 1:00:00 PM
HB 216
CSHB 216( 2 ) - Sectional Analysis.pdf HRES 3/18/2016 1:00:00 PM
HB 216
CSHB 216( 4) - Legislation Ver. E.pdf HRES 3/18/2016 1:00:00 PM
HB 216
CSHB 216( 3 ) - Summary of Changes (Ver. W to E).pdf HRES 3/18/2016 1:00:00 PM
HB 216
Adopted Amendment for CS HB 216 Request new CS.pdf HRES 3/18/2016 1:00:00 PM
HB 216
HB 216 Talerico Memo on questions in committee.pdf HRES 3/18/2016 1:00:00 PM
HB 216