Alaska Legislature: Senate Resources - October 26, 2026 10:00am

I call Senate Resources Committee meeting to order. Today is Monday, October 26th, 2026, and the time is 10:00 AM. Please turn off your cell phones. Committee members present: Senator Dunbar, and the rest are online. So Senator Myers is online on Teams, so is Senator Rauscher, Senator Claman, and Senator Kawasaki.

Vice Chair Senator Wielechowski is slightly delayed and will be along shortly. We have a quorum to conduct business. Thank you to the recording secretary, Heather, and helping us out in the Anchorage and Juneau LIOs, is Zack in Juneau, Ian, Cassie, and Tristan here in Anchorage. So the topic for today's meeting is the Department of Natural Resources public and charitable use land conveyances, with a specific focus on the Senate Resources Committee public records request for DNR communications related to the proposed ADA, Alaska Industrial Development and Export Authority, and AHFC, Alaska Housing Finance Corporation, land conveyances. Online, for folks who are at home watching on their computers, we have posted multiple documents.

In fact, the packet is single-sided, about this many.

You can go to the documents if you are online watching this meeting. They should have the documents attached there. The only piece that is missing is the documents that we had posted for the October 8th meeting, and that's because because we are having some IT challenges here in the Anchorage LIO today. So before we begin, and unfortunately we only have 2 hours, I will be expeditious here. I want to go over some information and some of the history.

The whole reason this subject is being heard today is because I began to see a lot of public notices for public and charitable use conveyances of land. I'd not seen these public and charitable use term used in the past, and one very large conveyance caught my eye, and that was for 20,000 acres going to ADA in the Mat-Su Valley. So questions began to be asked. Many of the conveyances are small to local governments. They seem to make sense, but it is not a local government.

It is a state public corporation, and it was created to, quote, foster the expansion of exports the export of goods, services, and raw materials of the state. AHFC, Alaska Housing Finance Corporation, is also not a local government. It's a public corporation and government instrumentality within the Department of Revenue. So these are portions of state government. DNR's conveying land to another state.

Entity, another state government entity, and that seemed questionable to many of us. So, uh, going back to a timeline which is of interest, Senate Bill 224 was introduced at the beginning of our legislative session this year on January 23rd. The title of this bill was State Land Contracts for Sale and Lease and Commercial Development parks. This bill would have authorized the conveyance of large sections of land. This bill did not pass out of the Senate or the House Resources Committees, though both of the committees reviewed the bill.

We did not, uh, feel it was appropriate, so it didn't pass out of certainly this committee. I can't speak in detail about the House committee. Prior to that legislation being introduced, On November 26th, 2025, a new amended regulation was introduced. That regulation related to— let me see if I can find it. Here we go.

11 AAC 51.1010 to 11 AAC 97-990. And this relates to public purpose, the— what public purpose means. So this regulation was being changed and, um, the definition broadened to include public purposes, to include private industry purposes. Um, this seemed very broad. Uh, unfortunately, we didn't notice this, this, uh, particular regulation.

They, uh, it went out for public notice Comments closed on January 2nd, 2026. So that was right before the legislative session began. And the regulation was adopted by DNR on March 14th, 2026. So about a month and a half after Senate Bill 224 was introduced in the legislature. So I point this out because this regulation Defining public purpose is new.

So when we began to notice these conveyances, these large land assets being conveyed, the Senate Resources Committee submitted a comment letter on August 19th. That is on the public record. It is on the website right now for folks that are listening at home. On September 1st, I submitted a public request to the Department of Natural Resources Commissioner. That public request— that request for information should also be on the website, though I'm not 100% sure it is.

In any case, asking for all communications, deliberations, et cetera, related to these land conveyances.

We requested a memo from our legislative legal services.

Asking for information concerning the legality, the constitutionality of making these large conveyances from the Department of Natural Resources, who has jurisdiction over Alaska's lands, to other state agencies, especially when the description for the use of that land is exceedingly vague. We have back a memo from our legislative legal indicating that they are probably— it was opined by the attorney writing the legal opinion that these likely were unconstitutional, but that would be up to a court and that type of proceeding. After getting that legal memo on September 9th, this committee submitted a second comment letter. So that's a little bit of the history behind what's have been happening. Last Friday afternoon at about 3:45 PM or closer to 4, I received a download of the documents that I had requested as a public records request.

I've spent the record— or the weekend going over all of these records. There's about close to 2,000 of them, and we'll be talking about that a little bit later today when the Department of Natural Resources is before us. When we met on October 8th, we talked with Alaska Industrial Development and Export Authority, ADA. Today, the Alaska Housing Finance Corporation is here. They were unable to attend that meeting, and so they've graciously agreed to come today.

And so I will invite the CEO, Mr. Brian Butcher, to come forward, and I believe Daniel Delfino— Delfino. Delfino, yes— is with you. So welcome. If you would introduce yourselves for the record. But before you do that, just to let you know, what I want to focus on today is there are 6 land conveyances that I have found in the public record for public and charitable use.

They are across the state. Rosie Creek is an area around Fairbanks. There's a second one in the Fairbanks-North Star Borough. That's 31 acres. Rosie Creek is 220 acres.

There is a conveyance in Homer, Anchor Point, 80 acres, Seward, 22 acres, and Mat-Su, Sherry Lake is 43 acres. So that's what we kind of want to— well, that is what we want to focus on with you. So if you'll introduce yourself for the record. I'm sure. Thank you, Madam Chair, members of the committee.

For the record, my name is Brian Butcher. CEO, Executive Director of the Alaska Housing Finance Corporation, and I have with me our Director of Planning and Program Development, Daniel Delfino, who's kind of been the point person on this. And if I could take a minute or two and talk a little bit about kind of how we got to the conversations with DNR. Absolutely. Before you do, pardon me, I'm so sorry, Director.

I wanted to recognize that Senator Wielechowski has joined us. Senator Claman is on the phone. I also want to recognize Senator Elvie Gray Jackson is present, as well as Representative Mears and Representative Coulombe. Please proceed. Thanks.

We have been looking at ways in talking to policymakers, mayors, legislators about trying to get more housing developed in Alaska. It's been a national issue, but it's really been a much more of an issue in Alaska. We're not seeing a lot of construction at any level. We're not seeing market rate housing. We're not seeing affordable housing.

And as a result of that, we've looked at ways to try to get that jump started. If you look at why we're not seeing a lot of housing construction, it's basically— there's 5 main challenges. One is land. There's not a lot of availability. 1%, As I'm sure you know, of the land in the state of Alaska is privately owned.

And the land that there is is either not in a place near people or is not in good condition to build. Labor is another challenge. There's a labor shortage and the cost has gone up. Materials, very high. There's been a shoot-up in the last 5 or 6 years of materials.

The transportation of those materials to Alaska makes it even worse than it is in the Lower 48. Permitting. This doesn't— this isn't an issue with— in every community, but it's very much an issue in Anchorage and Juneau. And challenging there. And then interest rates, which have been climbing, which make things— construction loans are now going to be more expensive for homebuilders.

So when you look at the three— labor, materials, and interest rates— we're very limited on what we can do. We can work with local communities on permitting, but we thought lands would be something that we'd really be able to do something about. So in the 1994 session, the Senate Finance Committee put an appropriation in the capital budget to AHFC of state funds, of AHFC dividend, for the Alaska Housing Development Program. And what we were tasked with was to meet with the agencies, the state agencies that had land, to see if we could work with them to acquire land for housing. And those focused on the Department of Natural Resources, the University of Alaska, the Alaska Mental Health Trust Authority, and the Alaska Railroad.

So we had meetings. We— $4 million isn't a lot of money, but it's a good start. And so we met with all 4 of those entities, numerous meetings with them. The university was the first one that was really in a situation because they already had land that they were trying to sell. So we were able to take the $4 million and also combine it with federal funds we had that were expiring for rent relief that could be used for purchase of land, and we bought almost 600 acres from the university.

Most of that land is in the Mat-Su Valley or Fairbanks. One parcel is in Anchorage that we're also helping working with the university in Cordova. And so we've begun a process of trying to determine how we could get that land developed. The first thing we did is we went to the mayors, we went to the local communities, we met with them and asked, what do you need? Because we've got some flexibility here.

We need some affordable housing to be on the land, but it can also be market-rate homes, it can be starter homes, it can be for sale, it can be multifamily, it could be senior housing. And so we got a pretty good idea of what a community was looking for because We're going to work with the community. We have no interest in trying to tell a community what housing we think they need, uh, should, should be there. And so we had a good idea of what we were looking for. We went out for requests for proposal, RFPs, for all of those, um, parcels of land, and we got really good, uh, return by very accomplished, uh, developers and home builders, a real mixture of single-family homes, of multi-family homes.

We— there has to be an aspect of affordable housing on it. So we're going to see affordable housing built when generally the only way you can get affordable housing built, if you're trying— if we can't build market housing in Alaska, we certainly can't build affordable housing for people at, say, 60% of the median income. It's virtually impossible. It takes low-income housing tax credits. It takes grant programs.

And this is an opportunity to be able to get that while also expanding the number of units that are in communities. For the 2-acre parcel that we had in Anchorage, we've worked with the muni of Anchorage and we have signed over documents where the Alaska Community Development Authority, ACDA, is working on that. And we'll be happy to work with— they're looking at building multifamily housing on on that piece of property. So that's been kind of the blueprint that we've been working as we got into this. We were contacted earlier this year by the Department of Natural Resources.

They had said that they had gone through and found a number of pieces of property throughout the state that they thought would work well for housing. So we worked with them on that. We submitted 26 applications all total. Areas around communities where we felt like potentially we could develop housing. 6 Of them, as you have mentioned, Madam Chair, have moved forward through DNR's public process.

There's an additional 6 that are being evaluated. And the way we see looking at it is a number of things as we dig into it more deeply, they may not be properties that are buildable. Because this process started in the winter, we were limited on how much due diligence we could do on it, but it's a very simple process to simply let DNR know that we're not interested in the conveyance. Should we be interested and should we get the land, we would go through the similar process that we've gone through with the university lands, hoping that we would get housing on it. Should we not get housing on it, then that's land that could go back to DNR or some other purpose.

We're focused very specifically on getting housing built in the communities that are seeing their economies being really held down by businesses that can't expand because there's no place to live, businesses that are looking to come into a community that can't come into a community because there's no place to build. So I've been a little long-winded on this, so I will wrap it up, but we're very ready to answer any questions the committee has. Thank you, Director Butcher. Yes, Senator Dunbar. Thank you, Madam Chair.

Thank you, Director Butcher. I have a couple of questions here. I'll start by saying, you know, I think many of us on this panel are very supportive of the work you do in building more housing. Obviously, for myself here in Anchorage, something we've been working on. But we also know there's a critical need in other parts of the state.

So You describe this sort of longstanding process with other entities like the university. Have you previously gotten lands from DNR directly free of cost? And, um, the— there was this regulatory change early in the year. Could these conveyances have happened under the old regulatory framework, or was that new revised regulation needed for this to go forward? Through the chair, Senator Dunbar, we, in our conversations with DNR, it became clear as we were trying to prioritize what agencies we could work with, that the university had been thinking about this kind of thing.

The Mental Health Trust Authority, not quite as up as the university was in terms of being close to working with us, but a little bit behind. And then both the Alaska Railroad, we didn't see a lot of pieces of land that made sense for both of us. And then DNR was kind of really at— they hadn't put a lot of thought into it. Obviously, they're managing a lot more land. So as we knew that it was going to be a process that was probably going to be down the road a ways.

So that's how we view DNR. You would have to ask the department about the specifics of it. We weren't even aware of the regulation or any of that. We've just been kind of working off of that appropriation that we got in 2024. And I should have added, if I could, Madam Chair, that we received an additional appropriation in the current FY27 budget for the same program of $8 million of HFC dividend.

And they also broadened— legislature broadened the title so we could do infrastructure. Because what we found out, even places like Fairbanks, and it kind of spurred a conversation we had with Mayor Hopkins where he said, We need to expand infrastructure. We're struggling to do it. Could we work together? And we thought if maybe both agencies work together, that that's something we could do.

So we did get kind of a second amount of money that we're now beginning to look at some of the agencies again on. But we're excited that it's been broadened and we'll have more flexibility. Follow-up, Senator Dunbar? Thank you, Madam Chair. Senator Wielechowski?

Yeah, thank you. What is the— do you have specific plans for the property that has been received, the land that's been received? Through the chair, Senator Wielechowski, we do not. It's been very much like the university land. If we see that we think there's— a good example with the university land is there's a piece right across the street from an elementary school.

There's a piece right next to a 200 condo complex of 200 units. We take a look at it and we haven't It's too early in the process from AHFC's perspective to be able to have gotten the information to have a specific idea of what might— we want to move forward on. Follow-up, Senator Wielechowski. Do you expect that the land will— that's been received will remain under the ownership of AHFC or will it be transferred to private entities or individuals? Through the chair, Senator Wielechowski.

We are flexible. There are situations where it might be a 50-year lease, but we would also talk about potentially assuming we get affordable housing out of it, something that would be under the hands of— would be under control of the private developer. Follow-up, Senator Wielechowski.

Were these lands transferred to AHFC, I assume, under the public purpose provision of the regulations? Is that your understanding? Through the chair, Senator Wielechowski, that's again a question for the Department of Natural Resources.

Follow-up? What's— if you don't know what you're going to do with the lands, I guess, what's the public purpose?

Through the chair, Senator Wielechowski, from our perspective, and again, we're not attorneys, is that the public purpose is we're seeing after talking to mayors and policymakers the really damage being done to the economy in so many of these communities because there's no housing, because there's no new housing being developed because of the costs and the numerous factors that I talked about. And if we're able to do with this housing what we're able to do with the university housing and see hundreds of units in communities that need it, particularly some of the communities that we've looked at with Fairbanks and Southcentral Alaska as well as Southeast and Western Alaska, we believe just from a non-attorney's view that that would be the public purpose. Follow-up, Senator Wielechowski. Understanding and agree completely. And I guess what I'm getting at is, so it will be developed for housing or affordable housing?

Through the chair, Senator Wielechowski, that's been our model. And going forward, I assume that would continue to be the model where all of the housing wouldn't be affordable housing, but there would be a segment, there would be some amount of affordable housing on those properties because that's really— we want to spur housing of all levels because we're not seeing it really anywhere. But affordable housing, we feel like, has to be a component.

Thank you. So Director, one of the things I notice— first of all, for the folks online, you will see each of the 6 conveyances. They're identified by number. I'm most interested in the Rosie Creek conveyance, uh, 799, which is, uh, 220 acres. But Director, I notice in the documents that The Department of Natural Resources has waived reversionary interest on this land, which means that they aren't going to require the land come back.

But you have said we may or may not find this useful, so we may give it back. Can you talk a little bit more about that? I'll ask my coworker here to— if he has any insight into it in a second. But I wasn't aware of the details of which did and which didn't. As we move forward, I will say that we have no issue with it, with a reversion clause being back into it.

If it doesn't appear to be something where we can achieve our mission, which is housing, then there's no necessarily a desire for us to hold the property. Thank you. Sure. So, Madam Chair, the—. Identify yourself quickly.

Daniel Delfino with Alaska Housing Planning Director. The reversion, the elimination of the reversion language, that was brought up specifically for financing. When we get the housing developed, it would presumably go into the hands of a developer who's going to make it available for rent or for ownership. And then someone would have to take out a loan, presumably, against the property. So we were just trying to make sure that there weren't clouds against title.

But any commitments that a person makes to us to get the property, those would still be commitments that would go on there. So the elimination of the reversionary clause was just to make sure that we had marketable title that would allow development. Thank you. That makes sense. I think everyone sitting at this table as well as online legislators agree that housing is certainly a challenge.

But you mentioned something about leasing the land. I mean, when you add these 6 up, it's more than 400 acres. Now, if we used the leasing rate that the University Land Office charges, that's worth $285,000 yearly. You know, that's to the State Treasury for a very valuable asset. I think every Alaskan agrees our land is very valuable.

I did notice that the mineral rights retained— were retained by the state. I will be asking DNR if that includes gravel. But you mentioned leasing. Could you talk more about that? Yes, Madam Chair.

It's just one of the options that we've had on the table as we've moved through the process. We haven't gone through a detailed a situation where we've worked down that road. And I would like to mention that with most of this land, it's very similar to the 600 acres of university land that we got, that, you know, you can look at 600 acres and think, wow, that's a lot of land. You can put on, you know, a quarter acre of house, you can put on this many units. But in most of these parcels, a lot of it can't be developed.

A lot of it's wetlands. There's a lake. And so when you look at an amount, the actual number is often you know, less than half of what the total is. But the parcel just includes all of it. And so we understand going in that there's not an expectation that we're going to be able to put homes on every single aspect of the parcel, because in most of Alaska there's challenging conditions that wouldn't allow that.

Thank you. But getting back to the contractor who would be constructing the buildings, are they going to be paying you for the land at any rate? Are they going to leasing it, or is it going to be free? Madam Chair, it would be— we see the affordable housing piece of it being what they would pay for the land, because right now when we develop affordable housing, it takes 9 layers of financing. It takes IRS low-income housing tax credits, it takes senior housing grants, and the expectation would be whoever was developing it would be providing this affordable housing not through any subsidy from us, but through their own, there's going to be a challenge that they're going to have to do that's not going to make them money as a result of that.

So that's how we see that exchange going. Well, again, I understand, but I'm not sure I heard the answer. You have possession of the land. Here's a contractor that wants to build on it. So you're going to charge them something for the land or not?

Madam Chair, we're not at a point yet in the process to have nailed down the specifics of it, but I really do see weighing if we're going to get 8 units of affordable housing of being a very, of a very high cost to a developer because they're going to get, they're going to fill those 8 units with 60% AMI. They're going to lose considerable amount of money per unit on that. Thank you. You also said that, you pointed out that the legislature had expanded your authority to add infrastructure. So that's pretty broad— data farms, parking lots.

What's the thought there? Yeah, Madam Chair, it would be strictly in what would be needed to develop housing. And as I mentioned with the discussion with Mayor Hopkins, there needs to be an extension of a road to get— and we have other programs, our supplemental housing program that's been around for 40+ years. We work with the Alaska Native Regional Housing Authorities for the same purpose. NAHASDA federal funds doesn't allow any dollars to be used for infrastructure, but in so many of the villages, if you don't have a road or something to get to property, you can't build anything new, and it all just ends up being renovated old units.

And so we have that program. So we're in the business a little bit of understanding that in so much of Alaska, if you don't deal with the infrastructure challenges, that you're probably not going to get new housing. Thank you. Do you know if DNR completed a best interest finding? Madam Chair, I do not.

Okay, I'll hold that for them. Has a final decision been made on these conveyances? There's the preliminary decisions. Do you know if final has been made yet? Madam Chair, I will ask Mr. Delfino to give us the details on that, not that— but not that I'm aware of.

Um, so, Madam Chair, I'm Daniel Delfino again. There has not been a final determination on any of that. Uh, the decision that's been issued, we have not even done all the site visits yet to confirm feasibility. So if there's a prohibitive site condition or if there are trails that are public use trails that we don't want to go in and try and develop, we still have the ability to pull out. So there isn't anything irrevocable that's been done at this stage.

Thank you. So none of this is, uh, urgently being considered to be approved as far as you know? Uh, Madam Chair, that's absolutely correct. And, and I can't emphasize strongly enough that we will work with the communities on this. We have met with, um, the, the mayor of Houston, Mayor Cole.

We've met with the Houston City Council, and we've made it very clear that this is a program where we work with you. And if a community doesn't want something, then we respect that. Very good, thank you. I see online that Senator Kaufman has a question, but I want to quickly also recognize that Representative Holland has also joined us. Senator Claman, you had a question.

Thank you, Madam Chair. To the witness, we're talking about future developments, but historically, how has the How has your department gone forward, or not your department, AHFC, with development in terms of transferring title to the property or leasing it? What have been the practices historically?

Um, through the chair, Senator Claman, um, we've had a variety of different programs. Like, we have another program called the Last Frontier Housing, uh, program that we work with communities off the road systems, and we've just developed quite a number of affordable housing units in Bethel, Nome, Kotzebue, Sitka, and, and Ketchikan. And in that, in that circumstance, they came up with, uh, land and we worked with them on it. So we've been— most of our developments in these areas that we really don't see any new housing, it takes a lot of partners working on. It's not something just we can do, just, uh, just like it's not something that just the community does.

And I know I didn't 100% answer your question, but maybe I can ask Mr. Delfino to elaborate. Sure, Senators. Again, this is Daniel Delfino. So through the chair, the lease versus the deed, it usually depends on what is being developed and by who. Like with the municipality of Anchorage, we lease them the property that they're going to basically own.

So until they get a developer on board that's made firm commitments, they have a lease. And then once construction starts and there's a deed restriction, then they get the deed to the property. Sometimes people don't want a deed because of tax implications. It's one of the values that we bring to the table with this is that we can keep those holding costs at bay until they're ready to start turning dirt for rental housing, especially if it participates in the Low Income Housing Tax Credit program that Brian mentioned. A lot of sponsors like Cook Inlet here in Anchorage and others prefer leases for tax purposes.

So a lot of it depends on the structure and making sure that we're leveraging the value that we can bring to the table. By making the land flexible. Thank you. Senator Kaufman, do you have a follow-up? I think one follow-up.

Thank you, Madam Chair. Is your— is your— does the AHFC have any intention to approach it differently than past practices with regard to these additional parcels? Or, I mean, not that that's a direct answer, but not that there's a simple answer to that, but are you Is the intent to follow the same pattern you've done in the past? Through the Chair, Senator Claman, it is.

Thank you. Thank you. Senator Dunbar. Thank you, Madam Chair, and to follow up on sort of a line of questioning that Senator Wielechowski started to go down. So you've described the ability to have some flexibility in terms of housing, single-family, multi-family, affordable.

Do you do multi-use developments where a portion of the land is commercial? That's become more common with our, you know, in the private sector housing development. And then second, you described this, in some cases you lease, but in others there is a, you know, a deed, you give the— you sell the land. Give them permanent rights to it. In that case, are there any restrictions placed in that deed or any covenants or anything like that to ensure it actually is, over the long term, housing and remains housing?

You know, maybe a developer promises you that they're going to build housing, but then you give them the land in fee simple and they're like, well, no, we're gonna build something else here that is a mall or something. So could you just answer those two questions? Yeah, through the chair, Senator Dunbar, we can do mixed use. About 15 years ago, we got a statute passed that allows us to do that. So we do have flexibility to work on that.

We haven't seen a lot of success. Oftentimes people feel like the one benefits the other, and oftentimes that's not the way it works out. But we continue to work on them. And we will— we're not giving you a lot of really hard, fast answers because we're so early in the process. We haven't gotten to a point of being able to talk about— okay, I'm speaking with the university lands now, not the DNR.

We will get there, but, you know, it is our intention to make sure that does not happen. We have no interest in getting into an agreement on a specific number of, let's say, starter homes built and affordable housing units built and then not have that come to fruition. But that's a process that we're just at the very beginning of. We just in the latter half of the summer went through an RFP process and a scoring process of trying to determine who we'll be working with at each parcel. And so we haven't even really begun to go down that road.

Follow-up, Senator Dunbar. Thank you, Madam Chair. Well, I guess I want to get a little bit more specificity. In prior cases where you have transferred the land to developers in fee simple, do— is there some kind of restriction placed or covenant placed? And is that your intention in the future, kind of regardless, you know, so that, so that it is actually housing after it has been conveyed?

And it— are you legally required to do that, or is there a world in which you could just sell the land to someone and, you know, they, they own it, they can do with it what they want? Through the chair, Senator Dunbar, I see what you're asking now. There is a process in which we put covenants on the land for affordable housing. In fact, if you look at the Low-Income Housing Tax Credit program, there is a covenant of 15 years that the development has to be affordable housing, or the tax credits that the purchaser of it isn't eligible for the tax credits. We put an additional 15 years on it.

So when we go through that program, it's a It's a 30-year covenant on it. It's something we put on all of our affordable housing. Director Butcher, please identify yourselves as you speak. Our secretary is actually keeping a legal document, right? She has to note who is speaking, and she's having trouble distinguishing voices.

Absolutely. Did you have a follow-up, Senator Dunbar? Not this time, Madam Chair. Thank you. Any further questions from committee members?

I am not— let me just check online. I'm not seeing any. Thank you for being here. I don't see any other questions. I will comment on our website for today's meeting.

There are maps of all of this property, and one of the things that struck me about each one of these is that they are very remote locations. I do see a lot of water on them, as you referred to, Director Butcher, and I'm, I'm marveling that this will be affordable for low-income medium-income homes being so remote and with so much challenge in terms of construction. But I appreciate that you're still evaluating this and the conveyances are not yet finalized, and you may determine after actually doing site visits that these lands are not— these 6 are not appropriate. So thank you. Any closing comments?

Yes, Madam Chair, to your last comment, We are still looking very broadly at what— I mean, it's so early in the process, we don't even know if these are conveyances that we can move forward on housing. But we are going to be very broad where affordable housing, I just wanted to make clear, would be a piece of it, but not possibly the majority of it. Because if you look historically, not just with HFC, but we've seen it with communities that get too prescriptive in what they want, they end up getting nothing. So we tried to be very broad and then work with the community on what they may need. So there may be a piece of property that has 20 starter homes that aren't affordable housing and a fourplex or an eightplex that is affordable housing.

So I just wanted to make it clear to the committee that it's ideally, in all probability, if we can develop it for housing, it's going to be a mix of things. It's not going to be just one thing. Thank you. Senator Wielechowski. Just— I don't— maybe you talked about this or not, but did AHFC approach the governor's office or DNR about acquiring this land, or did they approach you?

How did this conveyance come— how did this discussion even begin to occur? Through the chair, Senator Wielechowski, when we received the funds from the Senate Finance Committee in 2024, we reached out to them We had numerous conversations about potential pieces of property that may be developed for housing. They have such a broad portfolio that we really didn't get down the road as well as we did with the other state entities that had land. But it's a conversation that has been ongoing. And then I believe it was in March, we had a conversation with DNR, reached out to us and said they'd kind of done due diligence and this is what they looked at.

So it wasn't a situation where we were kind of dictating to them exactly what we wanted and exactly how we saw the program working. It was we initiated it and then they came back to us. Follow-up, Senator Wielechowski. And DNR in March said, "We have this land. We think this would be good for affordable housing." Is that how the conversation went?

Through the chair, Senator Wielechowski, they came back to us and said they had identified a very large amount of land potentially. I don't know the numbers off the top of my head. And then we at that point would look at and get back to them. We got back to them and said we think we see some possibilities with this. And that I think is when— what— and so we put applications in for those pieces, and that's what started the public process.

Senator Dunbar. Thank you, Madam Chair. Not a question, just a statement off the last thing you said before, Senator Wielechowski's statement, Director Boucher, about affordable housing being a portion of a mix. I want to say that I strongly agree with that approach, and I appreciate that you're taking it. There has been an unfortunate sort of push in some communities to demand affordable housing, whether, you know, out of genuine desire or out of sort of a rhetorical tactic that makes it unaffordable, that leads to no housing being constructed.

And so while we all want to see what we think of as affordable housing, the truth is that new-built housing is often unaffordable for sort of as most people think about it. But when you restrict housing construction in general, then you have all kinds of housing become unaffordable. So here in Anchorage, for example, we had just a few years ago, the average home was $350,000. Now it's approaching $500,000, and that is because we have had very little housing construction in general. And it's not just single-family housing, it's housing units, right?

That's what we're looking to build is housing units of a mix. Sometimes it looks like a quite expensive single-family home. Sometimes it's a more affordable duplex. Sometimes it's, you know, apartment building. But I just want to say that I appreciate the agency's approach where you try to build affordable housing as most people understand it, when you can.

But the real goal is to increase the number of housing units of all types at all income levels. So you have attainable housing for whether it's a, you know, a young family or a solidly middle-class established family or even a senior looking to downsize. You know, we need a wide mix. So I want to commend you on that approach, and I hope that we don't allow perfect to be the enemy of the good and allow housing construction to be restricted in the pursuit of affordable housing that really does not pencil. Thank you.

Thank you, Madam Chair.

All right. I think I see no further comments. Thank you very much for joining us today. Thank you, Madam Chair. All right.

Next up, we have the honor of having Commissioner John Krother from the Department of Natural Revenue— Resources, pardon me, Resources— with us today. I will invite him forward and any colleagues he needs. It looks like Director Collis is with him.

So welcome, Commissioner, and Director Collis.

I am not going to review the history here. The public who are listening are aware of it, and there are a lot of people with huge concerns over these conveyances. So I will let you— well, I'll lay some groundwork. The two conveyances that we most have in question here— you heard us ask questions about AHFC, Alaska Housing Finance Corporation, but we are particularly concerned about the ADA, Alaska Industrial Development and Export Authority's conveyance. They are another government agency.

They are not the public. It was done under the public and charitable use new regulation. It is a lot of land. It's over 20,885 acres. The purpose of what— it was vague or is vague.

You've read the legal memo from our Legislative Legal Services. So we're interested in digging into that.

So if you would like to give an overview of how this occurred, the timing and so forth, that would be welcome. Well, thank you very much, Senator Giessel and members of the committee. For the record, my name is John Krother. I serve as the Commissioner of the Department of Natural Resources.

And, you know, appreciate being— the opportunity to be here today just to share information about the process, to assist you with your oversight, share information with the public about the status of these conveyances. As was discussed previously related to the HFC matters, but the same applies to the ADA matters, those are preliminary decisions that have received public comment. We have— Department has not issued a final decision, so we are still in a deliberative process about developing a potential final decision. So there are some limitations as to what I can speak to as to, you know, we don't have a final decision, so we don't have a determination on some of these issues that have obviously been a matter of public concern and naturally are a source of questions from the committee. But so Director Collis and I are here to speak about the process that has occurred to date, the timeline, some of the considerations that have been touched on, and also to talk about qualitatively and typically how some of these processes as those processes evolve.

You know, one of the things we heard previously, HFC themselves as the applicant for those transfers is looking at the suitability, the details, development plans as they work through their process. We anticipate applicants are doing that when they are using our conveyances, and we are also doing that when we receive public comments on those conveyances, responding to matters of public concern, adjusting and adapting proposed decisions before they go final. And so, again, may not be able to speak exactly to a given comment or issue, but can speak generally to that today. And just here to assist the committee with your oversight. Thank you, Commissioner.

So perhaps what would be helpful at the beginning is just the reason— the reasoning behind the regulation change, public and charitable use. That was something we sought in the request for information. I will— the public has access to some of that information. It is on the website. There you will find some samples of communications that occurred.

They are largely redacted, lots of black spaces. There are I think it was 15 documents were completely withheld, and they were deliberatory— deliberatory— deliberatory documents.

Deliberative process, general right to privacy. One of them was raw public comments that we were not able to have. We were not able to see. That's 211 pages. One of the things Well, let's just start with the first question, which is why the change in the regulation?

It seems it was made right before a bill was offered that would have given you that authority. That bill was not accepted by the legislature. What are your comments related to that? Yeah, thank you, Senator Giessel, and members of the committee. Again, for the record, John Krother, Commissioner.

So speaking generally as to the kind of history and the motivation behind the reg change and some of these issues more generally, you know, as has been discussed at the hearing so far this morning and as you alluded to, you know, there's been multiple legislative initiatives associated with how do we use and leverage our state lands to promote expanded development. You know, we've talked about it in the context of renewable energy. We've talked about that in the context of carbon capture and sequestration and carbon offsets, you know, in different legislative proposals. Certainly housing, as AHFC discussed, there was legislative appropriations in this vein of how do you have a state agency resource to acquire land, mitigate the housing cost developments that are challenging their mission. And so that effort at the state level has, I think it's fair to say, in a general sense, been ongoing for several years in several different avenues.

And that regulation change was part of that at the administrative level, making additions and clarifications to regulation about how we could adapt our 810 statute and other statutes pertaining. We talked about gravel in that regulation as well to lean into some of these opportunities from a natural resource and land management perspective. And the— The history there, as you referenced, some of those legislative proposals have not been successful, but that theme runs throughout of we need to use our lands and our resources in ways to address these, you know, in some ways very consistent but in some ways very different cost access challenges that are stymieing public interest across the spectrum. And I believe Executive Director Ruraro mentioned it in the prior hearing that the department was not at. But there's, there's been an observation that other states are trying to tackle these same challenges and are doing so through adaptive land offerings and land management approaches.

And so, so that was a motivation both for that regulation change and some of these other initiatives. Thank you. Senator Dunbar. Thank you, Madam Chair. Um, going related to the chair's question about timing.

So we heard from AHFC that DNR essentially approached them and said, "Well, you found these parcels we think you might be interested in." In the case of the ADA parcels, did DNR approach ADA or did ADA approach DNR? And then the second question— well, I'll let you answer that one first. Yeah. Thank you, Senator Dunbar, through the Chair. As— again, as I believe Director Rovarro mentioned, I think the— there was some discussion, and I can't speak to ADA's internal processes, but I think ADA had identified these concepts of having parcels of land that are staged for potential diversity of development is a way to get into that space.

And so I think they— it's fair to say that they were ruminating on that idea. They approached us conceptually about it, and we began working on understanding what that would look like on our side. And then, of course, they filed their specific application after some pre-application discussions with us that resulted in the proposed decision that's under consideration at this time. Follow-up, Senator Dunbar. Thank you, Madam Chair.

So that's interesting. So it does sound quite distinct from the HFC process. It sounds like DNR really approached AHFC. AHFC has to decide if they sort of want these parcels or not, or if they're developable. In the ADA case, while there was obviously ongoing discussion, it does sound like it was much more ADA-initiated, and then they had a much more specific application.

My question— my next question is, for the ADA conveyance, would it have been legal, assuming that it is legal now, if that's the DNR's interpretation. Would it have been legal under the prior version of the regulation before the change early this year? Uh, Senator Dunbar, through the chair, I, I often probably venture right to the line or over it as far as my articulation, extrapolation of a legal interpretation. You know, we at the department, um, in the course of developing a decision in this application sought extensive consultation with the Department of Law. While the details of that are not reflected in the records, Senator Giessel, that were disclosed to the committee, that it's clear that there was extensive back and forth with the Department of Law.

And we— I think at a general level, it's fair to say we viewed that regulatory change as providing clarity and disambiguation. Of an authority we thought under 810, as it was drafted statutorily, was available. So the regulation is an articulation of that, we believe consistent with the statute.

Commissioner, one of the things that was discernible from the records disclosure was that the conveyances were being discussed with the executive branch before they were public noticed. I see email going back to 2025, December, with the Senior Policy Advisor in the Office of the Governor.

Were these— was the change in the regulation and these— and the moving forward of these conveyances at the behest of the governor?

Senator Giessel, Chair Giessel, I think it is very fair to say that, you know, this— using our land for development has been a governor's priority, and consequently the department's been working on that in several different respects. You know, we had the regulation change that we've referenced that has again provided less ambiguity about the scope of these authorities. But these AHFC efforts, the ADA effort, we're working with AEA on similar efforts, they're all part of, I think it's fair to say, the Governor's initiative, not that I'm here to speak for him, to maximize use and development of state lands. And to look at how we can partner with these state agencies that have public purposes and public missions to make land that is in theory eligible for private use and development but hasn't seen that, how we can leverage the— in in some cases lending and financing, in some cases federal grants and partnerships that these other state agencies have access to, to move forward these initiatives. So I think it is fair to say that the governor's office was working very closely with the department.

We were working to carry out that vision to leverage and expand these development opportunities. Thank you. And the AHFC certainly are very specific housing. We heard the director repeatedly refer to housing, but the ADA application is wildly broad.

Have you ever used the conveyance procedure to transfer land before from the Department of Natural Resources to ADA, for example? Chair Giesel, John Krother again for the record. I will speak generally and then I will let my much more capable and detail-knowledgeable Director Collis speak to that with a little bit more specificity. The short answer is that there have historically been some conveyances under this 810 statute to other state agencies, but including ADA. I do think it is a fair characterization that the ADA parcel is larger, the one under consideration right now is larger, frankly, than than other 810 conveyances historically, and its purpose is not as explicitly defined as some have been historically.

And we don't think that there's a— we think that that's a fairly observable distinguishing element, but it's consistent with the overall history of working with these state agencies to fulfill their mission whether it's a very project-specific or site-specific or whether it's more generally aspirational. And so I'll let Director Collis speak to some of the history of 810 usage with these agencies. Good afternoon. For the record, this is Christie Collis. I'm the Director for the Division of Mining, Land and Water.

Specifically for ADA, there was a conveyance in 1998 under an 810 for the Snettisham Hydroelectric Plant, which is still currently owned by ADA, the land is. I know that there is an operator on that land. And then otherwise, we have a lot of 810 conveyances that we do to local governments, to any kind of political subdivision. One thing that we were looking at really closely is that ADA is a political subdivision. That was something that was being considered as we were looking at these applications.

We were talking to ADA or AHFC is whether or not they were considered a state agency. And after a lot of discussions, it was determined that, yes, they are a state agency, a political subdivision of the state. Therefore, they could qualify under 810. And then just to address the comment about the larger parcel, one thing that we do when we go out We always want to go larger when we go out for public notice if somebody is looking at an area because we can always scale down in the final finding. But we can't scale up without having to go back out for another preliminary decision.

So we are getting a lot of great information. We got over 2,300 comments. We are going through those comments. Have a lot of information to consider. We even talked to the applicants, and that is very normal in our process of, hey, these are some of the issues we are hearing.

How can we mitigate those issues? So there's a lot of work that happens after that preliminary decision goes out, even though I know the public feels like it's the final step. It's very much not. It's the step that we need information to be able to make a decision. Thank you, Director Coles.

Senator Dunbar. Thank you, Madam Chair. A few questions. You know, I think members of this committee are aware of the Snetishen dam sale, um, and I would assert that it can be distinguished pretty easily from the large conveyance of the 20,000 acres. And so just correct me if I'm wrong on any of these facts.

I think it was a sale, not a conveyance, without much— I think it was $100 million or something along those lines. Um, it was for an existing property, it wasn't speculative. It was power being sold primarily to the city of Juneau and to a regulated utility. So all of those things to me indicate a much— especially the latter two— much clearer public purpose than the very broad conveyance for private development that appears to be the application for ADA. Would you agree with those statements?

Senator Dunbar, through the chair, this is John Krother again for the record. The short answer is I think that is a fair characterization. The Snezhcham project, it was in operation as you referenced. It was engaged in the sales of power. The role of ADEA in that, I'm not intimately familiar with the details, but obviously it was to enable the continued use and development of that particular power generating station for the public interest there.

And, you know, here on this land, it's a much larger parcel and the goal is to potentiate and make available potential projects in the future consistent with ADA's mission and processes. So it's certainly fair to say it's distinguishable on that grounds. Follow-up, Senator Dunbar. So ADA, when they were here, you know, the belief from many is that this is for a very large data farm— data center project. But they were— they asserted that that wasn't necessarily the case.

That was one of many potential uses. And so I guess I'm asking you, the DNR, as you're making a decision about the public interest, if you were giving it to an agency that is saying explicitly, we're going to do private development, and it might be a data center, might be something else, is there any kind of private development that would not meet the public interest? So, for example, if they were going to convey it to a tribal entity and build a casino, or if they were to do probably indoor tobacco growth, would you consider that in the public interest for the purposes of your analysis? Senator Dunbar, through the chair, I very much appreciate the question. And, you know, I think the— has been referenced— the committee's legal memo has spoken to the prior court articulations that it's the purpose of the use, not the nature of the user, that drives that drives kind of the public interest analysis.

And I'm not here to analyze, unpack, dispute, or affirm, you know, those prior court rulings or their applicability here. I just say that that— it's fair that that line of inquiry is relevant to our decision in front of us in the DNR, and which is why we have that— the process where we have a proposed you know, application, Proposed Development Plan, but receive public comments and potentially modify a decision throughout the course of the process. I do think something that we're engaged with very substantively and in response to the regulatory language, which again, I would say provides kind of disambiguation, is that ADA's responsibility is to pursue projects that are consistent with its statutory authorities. Generate, you know, promote economic growth, employment, investment, and then to generate dividends and revenue for the state. And so as long as their application were identifying a suite of activities consistent with that mission and not identifying that they plan to abrogate that mission, I think we would interpret that as being cognizably appropriate under the conveyance.

You know, this conveyance will go to the specifics of that application and go to the specifics of any adjustments or additional requirements we put in a final decision if one does issue in this. But generally speaking, I think that what we would interpret ADA being able to do with conveyed parcel is quite broad. Follow-up, Senator Dunbar. Thank you, Madam Chair. So I'm going to try to parse that a little bit and maybe restate it in a way And you can correct me if I'm misinterpreting what you said.

So the regulation is written very broadly, and you are conveying it to ADA, which is a public entity. You used another term that I'm forgetting now, but a governance unit or something along those lines. And so essentially, your regulatory analysis and your kind of responsibility to the project ends with your conveyance to ADA. That is to say, your analysis is, is ADA a public entity? Yes.

All right. Then it's in the public interest. We'll give it to ADA. ADA can do basically anything they want with it. And you have fulfilled your legal obligations under the regulation.

Now, the one exception to that might be if ADA is explicitly saying we are going to violate our authorizing statute, which I think is— would be an unusual thing for them to say, but that appears to be the only sort of stricture, the only requirement that you have to meet in order to meet the requirements of the regulation. Is that fair?

Senator Dunbar, through the Chair, I will concede that's probably a fair framing of what I said. I don't think that our role is so limited, so I think it probably bears correction. You know, we always have to analyze these things on a case-by-case and application-by-application basis. And in this case, we have a very large parcel, 20,000 acres, it's been applied for, preliminary decision proposed to grant that. The nature of the use that was identified in that plan is a broad range of things.

Everything from gravel sales, infrastructure development, partnership with housing, partnership with local governments, and, you know, preparations for an industrial park. We viewed those kinds of activities as a constructive, developable use of the land. We viewed those as being potentially consistent with AIDA's mission, not to the point of raising an acute concern of violating the public interest. And so, you know, that's, I think, fair to say, in the preliminary decision level— we have not yet issued a final decision— kind of where our where our analysis stopped for this case is that it's possible— it's very possible that ADA could develop one or more projects using this parcel of land consistent with its mission and consistent with the intent of the statute to promote development consistent with our mission and to, you know, comply with their statutes. And so we move forward.

I don't want to speculate about what kind of application would be facially unapprovable, but I think it is fair to say that's out there. There's somewhere where that line is.

Thank you. Thank you, Madam Chair. Senator Wielechowski. Thank you. And I just want to follow up on some of Senator Dunbar's questions, because when ADA was here, they testified that they weren't really sure what they would use the land for.

And I'm I guess the thing that I'm struggling with is if it's your— the Department's obligation to only transfer if there is a public purpose, how can you transfer without knowing what the purpose is?

Senator Wielechowski, through the Chair, I— not to speak for ADA, I mean, I think they've identified a couple of things both in their application and in their discussion about the parcel.

They intend to consider a variety of uses and developments. Another is that they do anticipate that they may not make use and development of the full parcel. And another is that they view the developments that they've conceptually identified as consistent with their statutes and mission. And so I think that— I don't want to be too cute with the language. You know, I think they've identified that they may use the parcel in a variety of ways and there may be parts of the parcel that they don't use at all.

But I don't think they've identified that they have no idea what they would do with any of the parcel because they want to do things like build infrastructure that, you know, receives a you know, annuity-like return. They want to build infrastructure that enables the development or investment. They want to partner with an industrial developer to build a site of some kind. They want to partner with the local government to build housing. You know, they've identified those kinds of things as potential projects.

Follow-up, Senator Wielechowski. And the statute dealing with aid is quite broad.

If a future DNR department wanted to give Ada a million acres, is there anything that would stop them under your analysis? Is there a land limitation?

Yes, Senator Wielechowski, through the chair, I think it's a very fair question given, you know, the line of inquiry here in front of us.

I think my answer to that would be twofold, is that one, you know, the department alone, not to speak on exactly where that line lies, but I think it's fair to say it lies somewhere. Two is that, you know, for this process specifically, but for any of these processes, there's obviously a public decision that's been made, and at a preliminary level, there will be a final decision. That final decision will have opportunities for administrative challenge and judicial challenge. Uh, any one of these decisions will occur over the course of a period of time that involves the legislature in regular session for things like appropriation considerations, statutory modifications. And so, you know, were there to be a proposal in the future that's much more dramatic than this one in terms of scale or scope, I, I think there would be variety of administrative, judicial, and legislative opportunities to set that line to the degree that there wasn't a clear consensus of where it was by the public, by the courts, and by the executive branch.

Follow-up, Senator Wielechowski. We heard— my understanding is there is no reversionary interest that was kept by the state, the department. And I think we also heard that that's a common thing to protect the state's interest and protect the public's interest to make sure that this land is being used for a public use. Why did DNR not include a reversionary interest, or did you? Yes, Senator Wielechowski, through the chair, appreciate the question, and I'll share kind of a general framing, and I think it was mentioned by the AHFC team And I'm not sure it was fully kind of brought out in the dialogue.

The historical practice of the department and the statutory framework, the default is to include a reversionary interest there. And that's because the statute is enabling the use of land for a particular purpose. And if it doesn't occur, it should go back to the general state land for that kind of use in the future. And one of the things that's identified even In projects, you know, the specifics will elude me, but even in projects that I think it's fair to say, you know, we've seen a long history of in the state and that are unquestionably consistent with the statute, such as a very specific nonprofit or local government developing a health facility or expansion of a health facility, when there's been a reversionary interest included, it creates a challenge for financing that development even when there's functionally no question whether that reversion would be exercised because the day you break ground on that project, the public interest is achieved. And so, we've been generally thinking about how to reflect— reflect and implement that statutory obligation in a way that enables these public interest projects that the statute is meant to enable to go forward.

And that is even more apparent in the case of housing when there's potential subsequent, you know, transfer to a developer. If there's a reversionary interest that can be triggered, you know, in theory 20 years down the road, or, you know, a future party who is not aware of it, you know, purchases it unaware of it and then it's asserted to be triggered, that just raises a big challenge for those projects getting off the ground. That's been the general discussion about that— the application of that particular statutory authority and how to implement that. In the case of the ADA parcel, our proposed decision, I think it's fair to say, does not have that in there, in part because we wanted to provide flexibility for ADA as they develop options and plans. But it's obviously been identified as a significant matter of legal concern and public concern, so we're We're looking closely at it.

Further questions? Senator Wielechowski. On the records request that was submitted by Senator Giessel and the committee, I think there were about 1,600 pages and the vast majority of them look like this. They're just blacked out. Here's one completely blacked out.

And some of the privileges that were invoked were— included Article 1, Section 2 constitutional right to privacy. And I'm just curious how the constitutional right to privacy can be invoked to shield the documents that are public documents from disclosure. Thank you, Senator Wielechowski. Through the chair, as I believe I referenced before, you know, we work closely with the Department of Law to appropriately assert state privileges in that— in the responsive production there. And so, I can't speak to the particular ones or the rationale.

I think the Department of Law would advise me not to. I will say, as a general matter, I believe redactions subject to that particular constitutional assertion are related to personal information of commenters. I believe that. If I'm wrong, I'll correct myself for the committee, but I think that's the nature of that assertion. We do obviously have executive communications attorney-client privileges and others that are applicable to many of the internal executive branch communications.

And if Director Collis has a correction live, I'll let her— let her— but if I'm incorrect about that, I'll I'll correct myself for the committee, but I think that's that constitutional invocation there. In that commenters provided their name, address, email, and we didn't want to produce that.

Director Collins, did you have more to add? No, Madam Chair, I do not. Thank you. Well, I'll follow up on that. It seems to me if there were personal comments being made, that could be redacted.

Wow. Other information could have been disclosed. I did see discussion about weather and so forth in some of the disclosed pieces. Senator Wielechowski, did you have further question? I think there may be other questions.

There are.

One of the— I want to follow up on one of the questions, however, Senator Wielechowski asked, and that is, are there any limits, you know, as far as how much can be? So a couple of years ago, there was an Australian company that came here wanting to put up a massive wind farm in Southwest Alaska, 3 million acres, and it was not possible to do it. You did not have the authority to convey that large of a piece. So you're saying now that would still be the case with the change in regulation? Um, Senator Giessel, through the chair— Chair Giessel.

And Director Calvas may want to speak to this as well.

My recollection of that matter is not— so they were not seeking a public and charitable conveyance, first of all. So they were seeking a, you know, private easement land right, which we have the authority to grant to private parties if they go through the potential competitive or negotiated process depending on the nature of other folks who file an application or indicate an interest for that land. But I believe one of the challenges we were trying to navigate for that project was they were interested in going through the public process for disposal, but they wanted to segment or phase it as they develop their project. So they, they receive a very large conveyance of a contingent right and then don't move to a final right until they have identified the specific locations for their project. So we could have provided them that very large conveyance up front.

We just would have had to do it according to the statutory rate setting and the public process, which would have resulted in an extremely exorbitant fee for them, even at the kind of project concept selection stage. So what we were working to advance or consider was some sort of authority where the Department could help give people kind of contingent or initial rights as they move through their process, and we as they step up in project certainty, we step up in land rights certainty and fee certainty. And so that's still a question about how we navigate that, given the deliberations about those statutory changes are still, you know, didn't lead to enacted legislation.

Shifting to the matter at issue here, I think it's— You know, the entities like ADO or AHFC or AEA are the only entities subject under, you know, under this interpretation application of 810. There's obviously other entities like municipalities that could be as well, but for a project of large scale like that to be eligible for an 810 conveyance, it would have to be done in partnership or through one of these public entities consistent with their public. Mission. So let's say the wind farm was going to provide power to Bethel and surrounding areas. That's certainly desperately needed, lower cost, less CO2, etc.

And so they were partnering with, say, the community of Bethel. It seems that with this very broad regulation now that actually could get approved? Is that— I realize this is theoretic. Perhaps you can't answer. Yeah, and I'll— Chair Giesel, John Krother for the record.

I think it is fair to say that the department— the department is open to exploring those kinds of opportunities with local communities if there's public or private sector partners that can look at that. That's what I was describing earlier in the discussion. Our intent across the board with our state agencies but also with local government partners is to try and pursue novel projects like this to make things happen. Director Collis may have additional information. Yes.

Kristi Collis for the record. Chair Giesel, we work a lot with our local communities. Mat-Su Borough is one that we have recently done some decisions for under 810. If Bethel was interested in partnering and they were the applicant, then I do think they would qualify under an 810. There is a statute that does talk about some limitations for closing to multiple use, 3805-300, but our understanding that that's more of a leasing and not a conveyance because we do conveyances obviously for land sales, for municipal entitlements.

Purposes to convey out-of-state ownership for those uses. And so, you know, I think there was, as, as the Commissioner said, some issues with those large wind farms for the way they wanted it structured. And two, we wouldn't have conveyed those lands. It would have been more of a leasing or an easement that would have occurred to those entities. Thank you.

The value of our land, of course, and I mentioned earlier that this land does have incredible value. I'm hearing a lot from the agriculture communities, particularly on the conveyance in the Port McKenzie, uh, 234-934 conveyance. This is, uh, land that had agricultural covenants on it. There's a complicated history there, uh, but this land is still productive. Could be productive for farming, and yet you're conveying it to Ada for apparently industrial uses.

Now, you did retain reversionary interest on that land with a 5-year limitation. Mm-hmm. But this is the agriculture community. This department came to the legislature, our Resources Committee, urgently requesting a Department of Agriculture because we need to become self-sufficient. And yet here you are conveying agriculture land at no cost to Ada.

Yeah, Chair Cathy Giessel, John Krother for the record.

Just very generally speaking on this conveyance, you know, as is always the case, there's a relatively complex factual and on-the-ground history. But I think in short answer, the, you know, the agricultural value both to these parcels historically but also more generally in the areas is very important. And, you know, we're trying to navigate that historical need and use for these parcels and in the broader area with some other important industrial development obligations and expressions of intent and interest from the local government who is the holder of this parcel. As it was pursuant to a Borough Assembly ordinance transferred to the State with a reversionary interest vis-à-vis the local government for us to go through the process of transferring it to a developer or it would revert to the predecessor local government owner. And so consequently, we are going through a process pursuant to an application from ADA for transfer for potential development by themselves.

With a reversionary interest that if they don't proceed to development, it returns to us so that we can honor our reversionary interest to the local government. And I may have legally jumbled that a little bit, but that's essentially that there's a kind of chain of obligation associated with the original initiation of this process at the local prior owner level. And the interest in that development is to facilitate the build-out expansion and hopefully success of the Port McKenzie rail extension and potentially shipping out of that side of the inlet. So the goal is significant industrial and economic expansion there that does have to be weighed against the agricultural use, which is important. And Director Collis here.

Director Collis, just to follow up. Cathy Giessel. Everything the Commissioner said is correct. And the Borough has supported this project. We have a support letter from them for conveyance to ADA.

So they are in support of it. We know that there are some farmers that are concerned, and we are trying to, of course, work through those comments. The comment period closed. We had, I think it was about 110 comments that came in. So similar to the Houston parcel, we will be looking at those comments, working with ADA to see what we can do to to address some of those concerns, see what we could do for mitigation.

But yes, the, the parcel coming to us was very much predicated on the fact that we'd be using it or only conveying it for industrial use for some sort of economic development. And so that's why we received it from the Mat-Su Borough. Thank you. I'm hoping that the farmers continue to pursue their objections. They did submit alternate use plan.

So hopefully that will be followed up on. I know that Senator Claman has a question. Senator Claman. Thank you, Madam Chair. To either of the witnesses testifying, you've talked about a preliminary decision for the 20,000 acres.

What is the timeline, the current timeline for making a final decision?

Senator Claman, through the Chair, John Krother for the record. We, as I believe was referenced early in our testimony, we received over 2,000 public comments on this decision. Public comments are a very important part of reviewing and addressing issues. So we are in the process of developing analysis and response, and in some cases potentially mitigation in response to those public comments, including the letter from the committee. That speaks to some of the specific on-the-ground and fact-based issues that come up in the preliminary decision.

So we're working very earnestly through that process, and our intention is to move it to completion as soon as that analysis is done. Follow-up, Senator Claman. Thank you, Madam Chair. Mr. Crowther, I'll be somewhat— I'll be more specific. As we know that we will have a new governor, I think, at noon on December 7th.

Is there any possibility that the department will approve and provide a final decision before December 7th? Senator Claman, through the chair, I think that is certainly possible.

Follow-up, Senator Claman? Just one last follow-up. In terms of the potential, and I, I've heard some talk of possible claims that could be filed depending on the decision that's made. Does the Department have a perspective on whether private parties would have a right to bring claims before a final decision, or would it have to only be made after the Department makes a final decision?

Uh, Senator Claman, through the Chair, again, the Department of Law would tell me not to answer this at all. I will bumble through. My impression— the short answer is I believe a suit was filed at the end of last week. Of course, we'll review that in due course. I think one of the claims that we would assert is that any administrative decision needs to go to finality before it's subject to challenge.

But having not reviewed that suit, they may have addressed that argument, in which case I imagine ourselves and the Department of Law would— would work to respond accordingly. So I, I think some litigation has already been filed by a third-party public interest litigant. Follow-up, Senator Claman.

No, I have questions about that lawsuit, but I'm not going to ask— I won't ask Mr. Crowley about that. Thank you. Thank you. Senator Dunbar. Thank you, Madam Chair.

I have two lines of questioning, if that's all right. The first is immediately following Senator Kaufman. So if a final decision is issued before December 7th, how long does it take to— for the actual conveyance to occur? Is it immediate after that final decision, or does it take some number of weeks for the legal process to play out between DNR and Ada?

Yes, Senator Dunbar, through the Chair, John Krother here. I can speak a little bit on the administrative process side, and Director Kallas, who, you know, works through these kinds of decisions, you know, the Department issues a variety of decisions that have a variety of administrative and judicial review. The short answer is that a final Department decision is subject to request for administrative appeal reconsideration. That process has a regulatory period within which it must be filed, and then it's up to the department leadership to review as appropriate based on what comes in in that request, in the case— in the event one is filed. So, whenever the department issues a final decision, there would be an opportunity for people who meet the regulatory criteria to pursue that administrative review, and assuming that period closes without a challenge, then the decision administratively would be final.

If an administrative challenge is filed, the Department would undertake a review consistent with those regulations, and then if the Department issues a final administrative decision, it's, of course, subject to judicial review, which the— you know, the terms are set by the courts. And the jurisdiction that they have. So we anticipate moving through our process as expeditiously as possible, and some of those processes we don't have control over the timeline. Follow-up, Senator Dunbar. Thank you, Madam Chair.

In a case like the 20,000-acre Houston parcel, what parties have standing to bring this administrative appeal or review that you mentioned? Well, Senator Dunbar, through the Chair, and I think Director Collis probably has some helpful process information on the prior question as well.

I believe any member of the public or interested party that submits a comment is eligible to pursue administrative review of the decision. And so in this case, we have quite a few eligible parties.

Through the chair, Senator Dunbar, just to follow up as well. If we don't receive a challenge or if it goes through the challenges and we are affirmed in our decision, we still have to have a survey completed before we can actually issue a patent. So if we were to move forward, the 20,000 acres would need to be surveyed. That can take a couple of years. And then once we have confirmation that the survey is solid, we have good legal description, then we would actually issue a patent or deed to Ada at that time.

Okay. Follow-up, Senator Dunbar. Thank you, Madam Chair. Um, before I— I want to pursue something that you had said too, Madam Chair, but just for members of the public, it sounds like while the final decision may occur before the new administration is sworn in, uh, that these administrative and legal processes are likely to take quite a long time time, perhaps months, perhaps even years before ADA has legal possession of the land and then could enter into contracts that might create liability at the state level. Is that fair to say?

And it would almost certainly push beyond the timeframe in which the new administration is sworn in. Is that correct? Senator Dunbar, through the Chair, I think it's— you know, I don't I don't want to speak to court timeframes and such. It is just not directly within the Department's expertise. You know, I think our intent is to undertake a very thorough review of the public comments, move forward with a robust decision in the most timely way that we can, and have the analysis in that decision address the public comment that we received and issue the most appropriate decision that we can.

That is kind of what is within the Department Congress's control, and then if there's administrative or judicial challenges that continue, those— the timelines for those would be set by the entities that control those, the court system and such. Okay. Follow-up, Senator Dunbar. Thank you, Madam Chair. I'll just say briefly, I think that it's not just that.

It's also what the Director mentioned about the surveying and the— I don't know if it's platting, but the sort of the requirements before you hand over the, the actual legal control of the property to ADA sound pretty extensive. But I want to go back just briefly to the discussion you had with the chair about the wind farm outside of Bethel. So you described that it was, it was a different regulatory process, it was a leasing potential. And when the chair mentioned, you know, conveyance to Bethel, you said, well, there's a different set of regulations for that as well. But it seems like you are setting up a precedent now with this conveyance to Ada that would allow such a large conveyance to occur.

That is, rather than go through the process you just described for a private entity or even a municipal entity, DNR could have just given those— and you have legal authority now to just give those 3 million acres to Ada, and then Ada could do exactly the project as proposed. But perhaps with very vastly different economic terms. I mean, is that your sort of interpretation? What distinguishes that conveyance to Ada, if you were to do a conveyance to Ada for those 3 million acres, how is that distinguishable from the 20,000 acres you're giving to Ada now?

Yes, Senator Dunbar, through the Chair, you know, in Definitely, the Committee will certainly happy to speak generally to that. You know, not having a particular application, I don't want to say it would or would not have this consideration or key factor. I do think, as I alluded to, one of the intent behind this portfolio of efforts is to enable a broad suite of projects to happen that we all have an interest in that we have not seen move forward for a variety of reasons. Remote areas of Alaska have extremely high cost, have very limited infrastructure. You know, the question is what can the department be doing to partner with entities to move these things forward?

And so I think a scenario where either a state corporation or a local instrumentality has capacity and/or private partners to pursue these kind of projects We do intend for this to be an avenue that could lead to additional conveyances for, you know, this kind of work, be it at a local government level or at a statewide level. And so I don't— you know, I think a scenario where there is a project like that, it's an opportunity to explore. You would need to develop an application, development the plan would need to go through a public process. But we intend for that kind of thing to be considered. Final.

Follow-up. Senator Dunbar. Thank you, Madam Chair. So I think some of the frustration or concern that you might be hearing from the Committee and from the public is the scale of these conveyances that seems to be, because of the broad interpretation of the regulation, entirely at the discretion of the commissioner. And then ADA, because it also has a broad mission, they have tremendous discretion as well.

And so, you know, for example, at the Misspawttee Band region, I think at other local governments, if the local administration tried to make a very large land conveyance, it comes back to the assembly for some kind of vote. And in this case, because of these very broad powers and the way the statute is written, the legislature doesn't get to vote on whether or not we give 3 million acres out in western Alaska to ADA to then go to a private entity. Is that a fair interpretation of the law as it stands now? And would you suggest that perhaps we need to revise our statute so that very large land conveyances come back to the legislature for, you know, basically the public to weigh in again and make this decision rather than leave it at the discretion of the commissioner and ADA?

Senator Dunbar, through the chair, I think it is a fair characterization to say that the statute as in place today does not have a size or scope trigger. And so consequently, you know, we have not read one into it. I don't have a recommendation, you know, any deliberation or consideration the legislature wants to undertake about the scope of the statute is the legislature's. You know, we are not coming forward with any proposal or recommendation at this time there.

And I— yeah, I think that— You know, that— it's— I'm trying to think how to articulate this. You know, DNR is an instrumentality of the state and an executive branch agency. ADA is an executive branch instrumentality of the state created by the legislature. You know, we view these assets as continuing to be subject to legislative direction, either through statutory changes or legislative appropriations. And so, I think that, you know, whether that's done reactively or prospectively, if it's in the statute, the Department will execute on it.

Thank you. Thank you, Madam Chair. I don't see any further questions online.

I do have another one. You've talked about the— I think it was nearly 2,000 public comments on the Houston conveyance, which is ENDS number 762. How many public comments did you get on 934, the Port Mac public comments? Chair Giesel, we got 110 comments.

Thank you.

You know, one of the One of the big concerns I'm hearing from the public is the massive amount of land and activity that ADA is directing. An agency that no one has really any oversight authority, regulated by a board that— or controlled by a board that no one even knows who is on that board.

So that has raised a lot of concern, and I think that may be some of the motivation for the public comments that you are getting. That is certainly a concern that I have when I look at this 20,000 acres, just because it is the largest one, and as I have commented before, if I take the lease that the University of Alaska Lands Office places on their land, which is $708 per acre, approximately. This is a $14 million annual income to the state treasury if this land were leased. Instead, it's going free to Ada. We don't know what Ada is going to gain financially from this land.

It feels like an appropriation. An appropriation of very valuable asset, and that is Alaska land. Alaska public land.

So that authority rests with the legislature. And that raises questions. Any other questions from committee members? Let me check online to see if there's anyone. I don't see any other questions from committee members.

I'll just check in. Uh, Senator Kawasaki, Senator Rauscher, any questions coming from you? Senator Myers?

No, I'm good. Thank you, Madam Chair. Thank you, Senator Rauscher. All right, Senator Wielechowski. Is, is the public process for Okay.

So let's say the land is transferred to ADA under this public use exception. Is the public process for ADA to decide how to use that land similar to what the public process is for DNR, or is it less, or is it basically nonexistent? Senator Wielechowski, through the Chair, I don't want to speak to the exact confines of ADA's public process. I think they might have generally spoken to it at the prior hearing. I do believe they typically have to have board endorsement or approval of specific projects, and that is done through their public board meetings, is my understanding.

But again, that may not be the authoritative scope of their process.

Follow-up, Senator Wielechowski? It just seems, and following up on Senator Giessel, Senator Dunbar's comments and questions, it just seems like it It's a huge loophole that is being created here. It seems like we've got a constitutional obligation to manage our resources, including our lands. And if you're giving the lands away for nothing with no reversionary interest, very little protection for the public, to a board that's not confirmed by the legislature, has no— basically zero public oversight.

It seems like it creates this giant loophole for which Ada then has the ability to just go out and do whatever they want with the land in a way that DNR would not have the ability. And that seems like— it seems like a huge— that's what's causing, I think, a lot of consternation, a lot of concern among the public and legislators.

Senator Wielechowski, through the chair, appreciate the point. Am I wrong? Senator Wielechowski, it is not appropriate for me to comment on the kind of scope of what goes into the board processes for ADA or the legislative process for setting their mission. You know, they have enacted statutes about their obligations, enacted statutes about their board, and just don't have Department comment about it further than that.

All right. With no further comments, Commissioner, I appreciate you and Director Kolas being here today. I know this has drawn a lot of attention. I know there's a lot of people watching this. You also have— or it has been alluded to— a public complaint that has been filed with the court.

Related to this. So it can get kind of serious here, and you've heard our concerns. So thank you for being here today. With that, that concludes our meeting today. The next meeting for Senate Resources has not been scheduled yet, but likely will occur again.

So at this time, I will gavel out. Let the record reflect that the time is 11:41 AM. A.m.