Alaska Legislature: Special Coverage - October 8, 2026 1:00pm

I call this joint meeting of the Resources Committees to order. Today is Thursday, October 8th, 2026, and the time is 1:02 PM. Please turn off your cell phones. Uh, I am going to invite Representative Dybert to introduce the House members that are present both in the room and online. Thank you.

Uh, representatives present today are Representative Klum, Representative Fields, Representative Mears, Representative Hall. Online we have Representative Prox, Co-Chair Representative Freer, and myself, Representative Dybert. Thank you, Representative Dybert. And on the Senate side, present in the room we have Senator Wilkowski and myself. I'm Senator Giesel.

Online I have Senator Dunbar and Senator Rauscher. I believe Senator Clayman will be joining us shortly. So welcome. To the committee meeting today. Keeping our recording— our minutes are Heather, and helping us out in Juneau and the Anchorage LIOs are Ian, Cassie, and Tristan.

The subject for today's meeting is the Department of Natural Resources land conveyances to the Alaska Industrial Development and Export Authority, otherwise known as AIDA, in Houston and Port McKenzie. Now, I will comment out of the gate that you probably saw the committee announcement, which included the Department of Natural Resources' presence and Alaska Housing Finance Corporation. Shortly after arranging this meeting, I received a message from Commissioner John Krother, Department of Natural Resources, that his presence today had been denied by the governor. He operates, of course, under the governor's leadership. Then yesterday, after the Legislative Budget and Audit Committee, I was informed that Director Brian Butcher was out of state at a conference and had accepted a dinner engagement at this time.

So he is declining to be present today also. However, we have Mr. Randy Raro, Executive Director of the Alaska Industrial Development and Export Authority, otherwise known as AIDA, present. So I appreciate his presence. I also want to make it known that I do have legal counsel online, Claire Radford and Emily Nauman, as well as Sonya Kawasaki. So the order of this meeting today, this is a very complicated subject.

So, what we're going to do, the order we're going to proceed in is I will do a brief overview of the situation. I know that some folks are not familiar with this topic at all, and so I'll do a brief overview. Then I'm going to call on Sonya Kawasaki. She is legal counsel for the Senate Majority, and she will review the letter, the first letter that the Senate Resources Committee submitted in public comment to the ADA, one of the ADA conveyances. Then I will have Claire Radford, who is representing Legislative Legal.

They wrote a legal memo on the subject. She will present that legal memo. Then Ms. Kawasaki will discuss a second follow-up letter that the Senate Resources sent, and then I will turn it over to Mr. Raurow to present the proposal they had made, how he responds to the letters of concern and the legal memo, and then we'll open it up to questions. Though when the— legislative legal is presenting, after she presents her legal memo, I want to open it up to questions from committee members, both online and present, because you probably will have some questions about the legal memo. So that's how we're planning to proceed.

I do intend to adjourn by 3:00 p.m. today. So, uh, to begin, uh, we're here today and our only subject due to the, um, limited appearance, but I am thankful that Mr. Rourou is here, will be the DNR land transfers to Ada in Houston as well as Point McKenzie. So basically the overview, uh, at Point McKenzie, the, uh, The conveyance of land is 20,000 acres of land. The interesting piece of this land conveyance by the Department of Natural Resources is that there is no reversionary authority. They have waived reversionary authority on this conveyance.

So that means that DNR has said, we are conveying the land and we have— we are waiving our ability to reclaim that 20,000 acres. Uh, the second proposal of land transfer is for 885 acres at Point McKenzie. Same idea, conveying the land, no cost, under the public and charitable use law. Uh, this is a rail support site. Uh, interestingly, the Department of Natural Resources retained reversionary authority on this conveyance.

So first of all, a bit more in depth on the, on the Houston land conveyance. It's referred to as ADL 234762. The application by Ada was submitted on December 9th, 2025. This would be the conveyance, as I said, of 20,000 acres, probably the largest lands land transfer, uh, ever attempted under the current law that allows these land transfers. Uh, the original law was meant for small community parcels.

Um, the 20,000 acres is, uh, area classified right now as forestry habitat and water resources, uh, and could be reclassified as settlement land, uh, as part of this proposed transfer. Um, so let's see, there is no specific project or developer identified. Uh, there are uses of the land identified for this 20,000 acres as rail logistics hub, manufacturing, gravel expand— extraction, utility corridors, and possible data centers. Um, the power needed for, uh, the project, of course, potentially is a significant amount of power. That is not identified.

The land is located in Willow, Meadow Lakes, and Houston areas. There are salmon streams, wetlands, moose calving, and winter grounding— winter grounding— wintering grounds present in this. The Houston City Council voted unanimously to oppose this land transfer. The borough assembly all voted in opposition as well. There has been robust public comment on that land transfer.

The second land transfer to AIDA that we're discussing today is the Port McKenzie land transfer. This is legal description ADL 234934. The AIDA application was submitted June 24th, 2026. This second— this second land transfer, again at no cost, of 885 acres is indicated for rail support and cargo logistics, again, under that same statute of public purpose or charitable use.

The— there is no site plan for this either at this time. The Matsue Borough has commented, or it was commented in a news article in the last couple days, that the borough was not aware that ADA was requesting this conveyance. And as I mentioned earlier, DNR is retaining reversionary interest on this land. This is stated in their preliminary decision. They are placing a 5-year limit on this piece of property, this 885 acres, that if nothing is done with it in that 5-year limit, DNR will, uh, reclaim that land.

I have also heard from the public that some of this land had been, um, had been indicated to be agriculture land, but the Matsu Borough had transferred that agriculture covenant back to the state, removing those agriculture covenants, and the state now is proposing this conveyance to Ada.

This again— this, by the way, is still open for public comment. The public comment on this land conveyance is open until October 21st. So people can still, can still comment on this one. So the legislative concerns that have been expressed is that we feel the legislature actually did— has not granted this authority. Both bodies had pieces of legislation this last year.

Senate Bill 224 and House Bill 276 were proposed by the governor during this last legislative session. They would allow significant conveyances of large sections of property. Neither of these bills passed the legislature. Uh, in fact, I can say for Senate Bill 224, it didn't leave Senate resources. Um, there have been no best interest findings on either of these, and they seem to be circumventing local community opposition.

So we'll be reviewing the legal opinion on that shortly.

When— the reason these came forward is as the chair of Senate Resources, I get the public notices of activity by the Department of Natural Resources. They convey land frequently to small communities, particularly under the charitable use, conveying land for a library, a hospital, a school. Small pieces to, to local communities. But I began to notice, starting in April, these large land conveyances under public and charitable use title. So we began to look into this, and then of course the large conveyance of 20,000 acres came forward with the media reports on it and the public hearings in the community of Houston.

So that prompted the Senate Resources Committee to start looking into this. I'm going to call on Sonya Kawasaki now, Legal Counsel to the Senate Majority. We sent letters, a letter of public comment to Department of Natural Resources on the 20,000-acre conveyance, and I'm going to ask Ms. Kawasaki to review the contents of that letter briefly. Ms. Kawasaki? Sure.

Hi. Thank you, Madam Chair. Good afternoon, members of the committee. This is Sonya Kawasaki, Senate Majority Legal Counsel. I want to thank the members for letting me speak today.

Yes, the Senate Resources Committee submitted comments to the Department of Natural Resources on August 19th of this year, which was the final day of the original public comment period for the Houston Land Conveyance to ADA under application of AS 3805810A, which is the Public and Charitable Use Land Conveyance Statute. Highlights of this letter included that the committee was concerned of potential infringements on legislative intent of the public and charitable use statute because this land will ultimately be conferring direct private industrial benefits as opposed to potentially more public benefits, um, and whether it's in the best interest of the state and the public. We noted that DNR's recent regulatory adoption of a new definition of public purpose, that phrase, was now being used for this conveyance and that that may have suffered from defective public process, the promulgation of the definition of public purpose, and that their use of it is— their use of that phrase is overly permissive at any rate and likely violates legislative intent by the phrase public purpose. And then we also noted that DNR's interpretation produces absurd results because it allows state land to be conveyed to a state entity and then curtails the entire Alaska Lands Act, which is under Title 8— Title 38 of Alaska Statutes And that's really important because that governs disposition of public land in the state, which is a public resource. And the public resources and public natural resources are under the purview of the legislature.

So the committee had concerns there. And then finally, the letter explained that the committee did not believe that even if the public and charitable use statute were applicable, that DNR performed enough due diligence to ensure that the public purpose requirement would be met. And in fact, that the potential for some of the installments that would be at the Houston facility could cause detrimental effects to the residents of that area. And so, Madam Chair, that was the crux of the committee's first letter. And I'd be happy to take questions if there are any.

Thank you, Ms. Kawasaki. For committee members, the letter is in your packet. It's also online for members of the public that wish to read it. In addition, informative would be the ability to actually see what the statute says under public and charitable use. That is also in your packet.

Public and Charitable Use statute is AS 38-05810. And as Ms. Kawasaki cited, it is small section A. This, I will point out, was revised. The definition was changed in November of 2025. And the regulatory change— or excuse me, the statute change was adopted in March of 2026.

By DNR. The regulation, that is, was adopted then. So this is a very recent change in the definition of public and charitable use. Any questions for Ms. Kawasaki on the letter? Seeing none, then I will go to Ms. Clare— let me go to— where are we?

There we go— to Ms. Clare Radford. She is legal counsel. Online with Legislative Legal, and with her is Emily Nauman. If there are additional questions, she is the Director of Legislative Legal Services. Ms. Radford, thank you for joining us.

If you would review, uh, the legal memo that we obtained from Legal Services.

Thank you. For the record, this is Claire Radford with Legislative Legal Services. Um, this is just a brief overview of the September 4th, 2026 memo that specifically relates to the preliminary decision ADL 234762, which is the transfer of approximately 20,000 acres. This memo answers— addresses the question: Does the Department of Natural Resources have the authority to convey certain state land to Ada without cost? And the short answer that the memo— that the memo states is that DNR has the authority to convey land to ADA if the conveyance is for a public purpose.

But whether a conveyance serves a public purpose is a question that is both fact and circumstance specific. And in determining whether a conveyance serves the public purpose, it likely requires an evaluation of the uses to which the land will be put.

In its preliminary decision here, DNR has limited the scope of its review for the conveyance to exclude an analysis of ADA's proposed uses for the land after the conveyance, and that exclusion may raise legal issues. The memo goes on to look at AS 3805810, which is the statute that allows DNR to dispose of state land to a political subdivision or a state agency for less than the appraised value. And it requires DNR to ensure that disposals under that subsection serve a public purpose and are in the public interest. The memo goes on to look at the regulation DNR recently adopted, 11 AAC 98.010, which defines public purpose for the context of Title 38. The memo does state, though, that despite the regulation, whether a conveyance serves a public purpose is a question that would likely be considered by a court without deference to the administrative regulation because that phrase public purpose is a question of statutory interpretation and constitutional requirements under Article IX, Section 6.

The memo then looks at the scope of DNR's preliminary decision. The preliminary decision includes what Ada anticipates the uses of the land may include and addresses those proposed uses of the land in a general way, but excludes a specific evaluation— a specific evaluation of Ada's post-patent uses of the land. The memo says that in making its determination, DNR is required to give due consideration to the nature of the public services or the function rendered by the applicant under 3805.810. So the court could interpret the exclusion of a specific evaluation for those uses as a significant omission.

The Alaska Supreme Court has previously stated that the test of whether a public purpose is being served doesn't depend on the nature of the entity that will operate the property, but upon the character of the use to which the property will be put. And that in each case, the analysis of the public purpose must be made within the specific context of fact. So here, the court may find that Ada's identity and intent alone are insufficient criteria for the department to determine whether the conveyance serves the public purpose. It is in the public interest.

The memo does make a note that DNR proposes to dispose of the land without retaining any reversionary interest. A reversionary interest would allow the department to ensure that the land continues to serve a public purpose in the future.

And the memo ends with the procedural posture and the next steps. Public comment ended on September 14th. The Alaska Land Act requires DNR to address public comments in its final decision. A person who meets the requirements of AS 3805.035 may appeal that final written finding, and an appeal would be first to the Commissioner of Natural Resources and then to the Superior Court. It's necessarily Sorry, it's necessary to have meaningfully participated in the process in order to appeal.

And then when considering an administrative appeal, the court would evaluate whether DNR complied with statutory and constitutional requirements. At this time, our office is looking further into the appeal process and the timeline for that. So unfortunately, I don't have any more specific answers about how that would work, what that looks like at this time, but I'm happy to get back to the committee if anybody has questions on that topic. Thank you very much, Ms. Radford, for that overview. Committee members, are there any questions of legal counsel?

Senator Wilkowski. Thank you. At what point in time is the definition of the public purpose met? In other words, if So DNR decides to transfer this land to ADA. Does the public purpose have to be defined at the time of transfer, or could it be later defined at whatever time ADA decides?

It's my understanding that in order to convey the land to ADA, the department would have to find that the disposal would serve a public purpose.

And is in the public interest at the time of disposal. Follow-up, Senator Wilkowski. What would happen if this transfer occurred and then ADA decided to do something like convey it to— for the benefits of some outside company that maybe wasn't in the public— wasn't a public purpose? What would happen at that point? Would there be legal challenges available?

Would there be an automatic reversion even though there's no reversionary interest? What, what would happen?

Uh, Senator Wilkowski, our office is looking into that question a little bit further. Um, right now it's unclear what would happen. Um, just based on my preliminary research, I think it's certainly possible that there could be legal challenges. But with a waiver of the reversionary interest, it may be harder to succeed with those. Follow-up.

What— in your experience in dealing with these transfers, is it typical for a— for DNR to transfer lands without a reversionary interest? It would seem that that would be something that would be almost required to protect the state's interests.

So under the statute 3805.810, there is a process for DNR to waive the reversionary requirement. I am not sure how often this occurs or what other context it may have occurred in. That is Certainly something that I could look into for you.

Further questions?

I don't— yes, Representative Fields. Through the Chair to Ms. Radford, it seems like ADA's interpretation of public purpose here is anything. Is that a fair summary of your memo?

Thank you, Representative Fields. I think that although there may be some applications for ADA's— sorry, although there may be some applications for ADA's regulation under 11 AAC 98010, here, if this is appealed to the court, I do not think the court would necessarily give that regulation deference since this would be a question of statutory interpretation and constitutional requirements. Follow-up. Follow-up. I mean, acknowledging here that this governor's administration is ending shortly and therefore new leadership of Ada may go in an entirely different direction, and I assume, number one, Ms. Radford, that Ada could simply return this land to the state and say, hey, if you're going to transfer it, go through a public process Please confirm that that is accurate.

But I would also assume that any private developer that was looking to use this land would do so at significant legal risk and should be aware that the underlying conveyance may not be legal and that that mere fact would, in fact, inhibit private development. Does that make sense, Mr. Radford? So if I was a private company looking at using some of this 20,000 acres, I might say, well, Gee whiz, it sure looks like DNR and Ada broke the law, so maybe I shouldn't invest, I don't know, tens or hundreds of millions of dollars in building something when the land conveyance was illegal.

Thank you, Representative Fields. I certainly understand that that may be a concern, but I don't have the experience to speak to that. Ms. Nowman, I know you're online also. Do you have any comments related to that question?

For the record, Emily Nelman, Legislative Legal Services. No, I don't have anything to add to Claire's comments. Thank you. Sure. Representative Fields, follow-up.

I was hoping that Ms. Radford or Ms. Nelman could also comment on whether in a new administration, Ada could simply return this land to DNR and reset and allow public process if this is a direction that the agencies want to go.

Thank you, Representative Fields. I am not sure what the process would look like for that.

It may certainly be possible, but I don't have a very good understanding of what that would look like from ADA's position. That may be a better question for Mr. Ruro. Well, Representative Fields, through the chair, I might ask Ledge Legal to work on that. Um, what, what would that process look like? Because there will be a new administration.

Thank you. Thank you. I see that Representative Prox has his hand up. Representative Prox.

It takes a minute to unmute. Thank you, we got it. There you go. He didn't have his hand up. And I, um, through the chair, I guess, for Ledge Legal, my question has to do with ADA being owned by the state.

There must have been some sort of determination that that served a public purpose at some point in history, it would seem to me. Does that factor into the equation that ADA at some point, probably somebody said it served a public purpose to— to authorize, to create ADA?

Ms. Redford.

Thank you, Representative Prox. For the question of whether a public purpose is served by a conveyance, the court has held that it depends on the facts and circumstances particular to each case. I, I don't think that the general nature of an entity that the conveyance is being proposed to go to would be the same as the evaluation of the uses to which the land would be put. I think that a court would take a look at more specifically the facts and circumstances of a particular conveyance and not the entity itself.

Follow-up, Representative Frocks? Yes, follow-up. So using what?

And well, I guess there's two that I can think of. Uh, Ambler Road— ADA is proposing to own or at least build the road, and somebody must have thought that was a public purpose. And then many years ago, ADA was involved with that fish processing facility in Anchorage that ultimately failed, to give an opposite example as I can. But at some point, somebody must have thought that served a public purpose, that the development that ADA does serves a public purpose, and I think that should be looked into, I suppose.

Is that a question, Representative Prox, for Ms. Radford? I don't know. I think— well, okay, the question is, had you thought about that? There we go. Ms.

Radford, uh, thank you, Representative Prox. While those two projects may certainly have been determined to be, you know, have served a public purpose. Whether or not this particular conveyance would serve a public purpose is a different analysis.

We have taken into consideration whether or not previous designations would help meet that standard. But based on, you know, the research that we've done over here and I've done over here, the court has held that public purpose really depends on each particular case and not the history of an entity as a whole.

And another follow-up, if I may? Yes, one more. So would we have to— would that evaluation have to happen for each little project that ADA might choose to sanction or authorize or sell, or could we somehow get the question settled before it goes too far to, uh, Reason I'm asking that is to Representative Fields' point that this conveyance would have some legal uncertainty, which would make it more difficult for somebody to develop. And we'd want to set the question settled. Is there some way to get that question settled with the court?

Thank you, Representative Prox. Under this particular statute that is being used for this conveyance, which is 3805.810, that determination would need to be made on a case-by-case basis.

If you are proposing a change to statute or what that might look like, that's certainly something that we could discuss further.

Thank you, Ms. Radford. Thank you, Representative Prox. Going now to Senator Rauscher, who has a question.

Yes, can you hear me? Yes, very well. Thank you very much. So my question is, the, the comment period, the comments that were given, do they hold any legal weight in the decision? So in other words, I guess I'm trying to evaluate if ADA goes one way and the DNR goes one way with them, and— but the people have gone in a different direction with the comments as a majority of these comments.

I'm trying to understand the best purpose of the people being served. Is that part of a legal argument? Or are they just— we just want to know what they say.

Thank you, Senator Rauscher. The DNR is required to issue a final written finding that includes a summary of agency and public comments received and the department's responses to those comments. Um, A person who submits comments would have standing to appeal a final written decision. And again, we are looking into what that appeal process looks like.

Follow-up, Senator Rauscher? So, yes, please, uh, through the chair. So did you say a person or, or collectively the people? I was just trying to understand Is each one of these comments now able to challenge the decision on their own separate merit, or is it must be a collective of some sort?

Thank you, Senator Rosser. That's something that I am happy to look into for you. I am afraid I don't have specific information related to that at this time.

Follow-up. And one last follow-up. Yes. Senator Rosier. Thank you.

Through the chair, through the chair. So, and one thing I'd like to know is, is whether, um, whether the ADA and the DNR— I don't even know if you could consider both of them— have a, have a legal responsibility to the comments if there's such a large amount. I've heard there's over 2,000 comments, and I've heard that a lot of them are, are kind of in the same ballpark. And I'm just wondering, could you find out whether they're actually legally supposed to follow the best interest of the people? And is the comments the best interest, or is it their own personal decision?

And can that be challenged in court, uh, as not following the people's best interest? I'm just trying to understand why the comment period is there and what its purpose can be and how they can use their comments in the future should any decisions come about.

Senator Rauscher, I'm happy to look into that further for you and more specifically. Thank you. Thank you, Senator Rauscher. Senator Wilkowski. Thank you.

My questions were somewhat similar to Senator Rauscher's in that I'm curious what— where is there a balancing test that's involved here? The regulation seems extraordinarily broad. It says basically anything determined by the commissioner would be in the interest of the state. And so let's say in this case there's talk of a data center, 20,000 square— 20,000 acres is enormous. I think 30 square miles, huge area, massive data center could go there.

And, and so on the one hand, you could have a commissioner saying, well, it's going to create 25 full-time jobs or 10 full-time jobs, and that's an interest to the state and we, we want to go forward on it. But on the other hand, you could have community concerns about increased electric costs, increased gas costs, and increased water use and pollution and impacts to hunting, fishing, recreational use. And so is there some sort of required balancing test that requires the, the department to analyze those things before making this conveyance or before approving this use?

Thank you, Senator Wolkowski. So there are some requirements in the context of 3805.810 in terms of what the department needs to find before the conveyance happens. Um, the courts have said that the phrase public purpose represents a concept which doesn't have a precise definition, but it has also found that the Alaska Supreme Court has stated that the test of whether a public purpose is being served depends on the character of the use to which the property will be put. That is a case-by-case basis.

But that analysis needs to be made within the context of specific facts. So it would make sense that that is something that is considered, whether the department does that in its written findings or whether that comes up on appeal, I think would just depend on, the nature of the process.

Further questions? Senator Wilkowski. And is it, is it fair to say that DNR, before making this conveyance, should have the answer to these questions, should know what use this property is being put to and whether or not it is in fact being used for a public purpose and weighing all these other things into consideration before making the conveyance? Isn't— doesn't that— I mean, just seems legally that should be the way it should proceed. And of course, public policy-wise, that should be the way it would proceed, I would think.

Thank you, Senator Wielechowski. I think that is essentially the main legal issue that the preliminary decision raises, is that the scope of The preliminary decision is limited and excludes an evaluation of ADA's use after the conveyance. I think without that analysis, there are certainly legal issues.

Thank you, Ms. Radford. Further questions? Yes, Representative Colon. Thank you, Chair. Through the Chair, Ms. Ratcliffe, I was I saw in the packet that there is a regulation.

My original question was trying to find out if economic activities, expansion of tax base, jobs, if that was serving a public purpose. And I see in 11 AAC 98.010 that is listed that public purpose supports private commerce or industry that contributes to economic development of the state. Including creation, retention, or expansion of employment opportunities. So my question is, is there a statute that supports this regulation? Is there any court decisions that supports the fact that economic activity and jobs and growth and infrastructures is defined as public use, public purpose?

Thank you, Representative. There are some statutes listed as the authority for the regulation. Those include 3805.020, 3805.555, and 3805.810. Those don't specifically speak to the economic development aspect of that. While economic development could be interpreted as a public purpose in certain instances, if this matter is litigated, a court will examine whether this specific conveyance serves a public purpose.

So even though economic development in the context of other projects may be a public purpose, a court would look at the totality of the factors here, and there may be other considerations that could result in a court finding that although it is, you know, economic development in nature, that the project doesn't serve a public purpose. Follow-up, Representative Kolumb? And so what kind of cases would decide that economic development is not in the best purposes? Are you talking about using power and water? That sort of thing?

So I think that would be something that the court would determine. I can't really speak to specifics on that. I don't know specifically what they might look at in making that decision. Okay, thank you. Thank you.

Further questions? I have One, Ms. Radford. Ms. Radford, the conveyance is very— the purpose of the conveyance is very vague. As I look at the application that ADA submitted, which I believe is in the packet of information, it talks about— it says written project description. So this is the development plan ADA submitted, and they identify these key elements: intermodal logistics and rail-served industrial park, energy and utility enablers, innovation and advanced manufacturing pads, data center development, on-site materials—gravel and rock—as a development asset, stewardship areas and setbacks along Deception Creek.

These are all very broad, and these key elements, it states, are included but not limited to. Later, in response to questions on July 30th, ADA responded that no project has been approved or selected for this particular conveyance. There are no committed data center tenants, industrial developer, site plan, power source, cooling system, water supply plan, or construction schedule. This feels like— and it refers to any future project would be subject to rigorous review. It feels like this land is being conveyed to ADA, and then ADA will make a determination as to how that land will be used.

And yet this is a public asset. This is an asset of the state of Alaska. And I believe DNR holds the authority to determine how that land would be used. How— what would you respond to that? How would you respond to that?

So the statutory requirement is that DNR does need to find that it serves a public purpose and it's in the public interest.

I think that if this conveyance were reviewed by a court, the lack of specificity in terms of what project will be— this land will be used for may have some legal issues since there is not an analysis that DNR can do in terms of satisfying whether that use serves a public purpose without more specificity. Thank you. Further questions? Yes, Representative Dibert, Co-Chair Dibert. Thank you, through the chair.

I'm not sure who this goes to, and just hearing in learning about this, so I'm going to take a stab at this with land issues. So early on in the discussion, there were like— there's always land getting swapped, you know, maybe 50 acres here, 100 acres there.

But this, to me, 20,000 acres is a lot. You know what Senator Wilkowski said, and 1,000 acres is a lot. So a red flag at some point needs to come up. And 20,000 acres is going to affect a community with state land taking over. So what— so red flag comes up.

Who else is notified of this land being, you know, swapped? Is it— I know it's the legislature. Is the borough mayor involved? That just kind of helps me with the entire picture. Sure.

Um, and the way that the public finds out is through the public notice system that the Department of Natural Resources has, which is required. It's required in statute. Um, but Ms. Radford, can you, uh, speak more specifically to public notice?

Thank you, Senator Giesel. I'm afraid that I don't have any more specifics relating to public notice and how Any other notices may, may go out. Ms. Nowman, additional information on public notice systems?

For the record, Emily Nowman, Legislative Legal Services. No, I don't have any additional information off the top of my head on public notice, but I can have our office look into it if that would be helpful. Thank you. Representative Dybert, I have carried legislation related to land and water issues for the Department of Natural Resources in the past, and so I am somewhat familiar with public notice. Um, right now they have an electronic system where people can sign up to receive public notice, but it's also required that it be published in local newspapers, uh, and posted publicly in, in communities.

Uh, that has not changed, though department has requested a change so that the newspaper part of it can go away. How the public, how the community of Houston was notified, I cannot speak to specifically, but they were certainly notified. That's where the public meetings occurred, and as Senator Rauscher said, you know, 2,000 public comments were submitted. So the public did— were informed, at least to some degree.

Senator Rauscher, did you have further information on how the community of Houston received notice of this?

Uh, the exact way that they noticed it, I do not know, but I do know that our offices kept them abreast of timetables of what they were facing, and I know that they're very astute. They They keep tab— good tabs on timetables, so I'm sure that there was probably a period of waste.

Thank you, Representative Rauscher. It is difficult to hear you, by the way. You might speak directly into whatever your speaker is or use the handheld if you're using your phone versus the speaker piece of it. I see that Representative Prox has another question.

Yes, thank you.

Um, well, I don't know if this is through the chair or to the chair. When I read that notice, and it's been 2 or 3 weeks ago, I didn't notice that there was any discussion of other potential locations for what Ada is proposing. I guess what, what ran through my mind is this would put relative to the interior— I'm being parochial now— this would put development projects a step or two ahead of somebody trying to start a project in the interior from land that belonged to DNR.

And it would seem that the public interest would come into play if we, if we had more, if there were more potential parcels available. If there was something, I don't know where, doesn't matter, if it was on the other side of the Susitna River for the sake of discussion, or in the interior, and Ada was contemplating 2 or 3 parcels and wanting to know which we think is the better choice. Are there other parcels available? Do we know? Have we heard of any of that?

Representative Prox, there are additional conveyances being proposed. We're talking about the one right now of 20,000 acres, so I won't deviate from that at the moment because that's complex enough. Unfortunately, the commissioner from the Department of Revenue— Department of Natural Resources, who would have this information, was denied access to this meeting by the governor. So I can't answer that question right now. We will, of course, pursue his attendance at another time.

Senator Wilkowski. Thank you. A question for legal. Is there a, is there a difference in the way the court would analyze this? And I'll give you two different scenarios.

One is the scenario that we're seeing right now, which is a conveyance to ADA for purposes which I don't think anybody clearly understands, or conveyance to a private— let's say they wanted to convey it directly to a data center. I mean, does the court allow a conveyance to a public entity like ADA in like almost like a laundering fashion where they can just sort of evade the public purpose requirements? Would a court allow that, or would they give it the same analysis as they would to a private entity.

Thank you, Senator Wilkowski. So under 3805-810, DNR can dispose of state land to a political subdivision or state agency for less than the appraised value. And so I think a court would look at a conveyance to a private entity differently since it doesn't under this statute which could allow for the conveyance to ADA. Follow-up. Let me just—.

Okay, and that's an important point. And I guess what I'm asking is would the court allow an effective laundering of state land through ADA for less than fair market value?

Do you think a court would allow that? In other words, they wouldn't— they clearly wouldn't allow this to a data center. They wouldn't just say, hey, you're a charitable purpose, we're just gonna give you this land. I— do you think a court would say, well, we'll allow you to launder it through a public agency and then allow them to give it at a very low price, for example, to some data center? Do you think a court would allow that?

Thank you, Senator Wolkowski. I think that that question would require more research and would be very fact and circumstance dependent.

I didn't have a question. Thank you. Yes, question, Representative Colon. Thank you, Chair. Yes, so I had a question.

So let's say ADA does— this moves forward, ADA finds a developer, they have a project. Is that project still subject to any permitting, legal regulations, local regulations, noise, requirements, all those things that any development would have to do. Is ADA's involvement removing all those requirements if they develop the land?

Thank you, Representative Colon. My understanding is that although ADA may be involved, those requirements would still have to be met. That may, however, be a better question for ADA to answer. Okay. Thank you.

And we will have Mr. Raro before us shortly. All right. Seeing no further questions for legal counsel, we— the Senate Resources Committee did follow up with a subsequent letter, number 2, that you see in your packet. Ms. Kawasaki, brief review of the contents of that?

Yes. Thank you, Madam Chair. Again, Sonya Kawasaki, Senate Majority Counsel. Um, the committee's second letter was submitted before the extended deadline for comments for the Houston land conveyance to ADA, which was an extension to September 14th. The letter provided the legal memo from our nonpartisan attorney group, and, um, it took into consideration our attorney's observations.

Um, and then the committee noted that there had been multiple, been recent public statements made by ADA officials to the effect of not truly knowing how the land would be utilized and that data centers may or may not be installed there, for example. So the committee explained in the letter that if the uses cannot be determined and there will be no reversionary interest maintained, then DNR cannot meet its requirements of due diligence under the public and charitable use statute at any rate. And then, Madam Chair, we noted also that DNR appeared to overly rely on— over-rely on ADA status as a state entity rather than confirming the uses to which the land would be put. And that would just— that it would just definitively serve a public purpose. So, um, Madam Chair, those were the highlights of your second, of your second committee letter to DNR.

And I note that during that, in that letter, we also asked for DNR to respond to that letter, the committee's previous letter, and also the legal memo provided by our nonpartisan attorneys. And, um, we have received no response yet. Thank you, Ms. Kawasaki. Uh, to complete that timeline, on September 1st, that second letter, by the way, was sent later in September, but on September 1st, the committee did submit to the Department of Natural Resources a public records request. In it, we requested all of the data that led to the conveyance of this 20,000 acres, but in addition, we had noted 4 other land conveyances, substantial land conveyances, that were being made to Alaska Housing Finance Corporation.

These were made on July 28th, 29th, and July 30th. These are 4 conveyances. Alaska Housing Finance Committee— Corporation, pardon me— again became unavailable for today's meeting, but we did ask for that information as a public records request from DNR. I received within the statute— the requirement, 10 days later, a response from the Commissioner's Office stating that these records would be gathered as expeditiously as possible without impairing DNR's ability to fulfill its other responsibilities. That letter came to me on September 10th.

We have no information yet in response from the Department of Natural Resources. Representative Fields, you had your hand hand up? Just another legal question, if I might. To Ms. Radford? Yes.

Ms. Radford, one more question from Representative Fields. Thanks to the Chair. I was just curious if ADA was to lease— let's say that this somehow was not challenged in court and ADA leased land to a private company, but ADA remained the landowner, would that land be exempt from local property taxes? Or do we know?

Thank you, Representative Fields. I unfortunately don't have an answer to that. I am happy to look into that for you.

Thank you. Thank you, Representative Dibert. Thank you, Chair Giesel. I just want to, for the record, let everyone know that Rep. Sadler has joined us online. Very good.

Thank you. All right. Uh, with that, that is the timeline of the particular— these particular conveyances. There are additional conveyances that have occurred. If you go on your public notices from DNR, either the, the big central site, or probably they came in your email somewhere, uh, there have been significant land conveyances both to ADA to Alaska Housing Finance Corporation, and the University of Alaska Land Office has also made a very large land conveyance that at another time we'll discuss.

But at this time, I want to call forward Mr. Randy Raro, who is the Executive Director of ADA, and allow him an opportunity to respond to the concerns that have been expressed and perhaps answer some of the public comment questions that Representative Rauscher particularly has offered. Mr. Ruaro, welcome. Thank you, Madam Chair. For the record, my name is Randy Ruaro, R-U-A-R-O. I'm the executive director for ADA.

Thank you for giving me a few minutes today. I appreciate it. This is an incredibly important issue, and I'd like to start, if I could, Madam Chair, by talking a little bit about the application, then about the legal issues, and lastly, and I think most importantly, is the why ADA would seek to acquire land and advance development or economic advancement jobs using that land. So to the application first on the Houston parcel. Reading that application over several times, it was not artfully drafted, I would say, to almost appear that there was a data center developer ready to go and things were going to advance.

There is no project for a data center currently. It is a possible use. It is an implausible use. Use because there is no energy— excess energy or resource that I'm aware of. No one that I've ever— I've never spoken to anyone who had an interest in building a large data center there.

And the ADA model, we do— sorry— we do work with communities on data centers, but they're extremely small, usually less than a megawatt, probably the size of, you know, maybe a Conex container. And what our model for data centers and communities in those cases like Cordova, others usually on the coast, is we're looking for excess hydropower available in the community that's just being spilled over, not being used but could be used. To generate, revenue and bring down the cost of power, for ratepayers. And so that's a model we're working on now with Cordova. Uh, it's a model we're looking at with other Southeast communities, some of which spill over many megawatts of power every year because they simply have too much rain.

Um, and so, uh, to that extent, uh, the application is— if it's read to say that this is ready to go and we have a developer, that's not accurate. It is a— as I mentioned, a possible use, but it's a very implausible use with nothing available for excess energy now. So it doesn't fit really the model that Ada is using to look at data centers. Which are very small data centers, usually a megawatt or less, for these communities that have excess hydro. Not that we couldn't look at a larger project, but right now, that's where our focus is.

To the legal issues, it's a very interesting legal discussion. ADA would point to several statutes that that we believe may have been overlooked by legislative legal that answer the question of when does ADA act for a public purpose or in the public interest. If I could, Madam Chair, just— I'll just read parts of them into the record if that's okay with the Chair. Yes, certainly. Okay.

So starting, Madam Chair, with AS4488-16. 10.01, There exist areas in the state in which seasonal and non-seasonal unemployment exists. This unemployment is a serious menace to the health, safety, and general welfare, not only to the people in those areas but also to the people of the entire state. It is in the public interest by definition to promote the prosperity and general welfare of all citizens of the state by stimulating commercial and industrial growth and expansion and by encouraging an increase of private investment. It is also in the public interest in creating ADA with the powers necessary to accomplish the objectives in this paragraph.

And it is in the state's interest to import private capital to create new economic activity. And then sub B, Madam Chair, it is declared to be the policy of the state in the interest of promoting the health, security, and general welfare of all the people of the state and a public purpose to increase job opportunities and otherwise to encourage the economic growth of the state, including the development of its natural resources. And then sub C, Madam Chair, of that same statute, 4488.010, it is further declared to be the policy of the state in the interest of promoting the health, security, and general welfare of all the people of the state and a public purpose to accomplish the objectives set out in subsection B. Um, there is also an Alaska Supreme Court case called Dearman versus ADA, what the precursor to ADA was. And the court in that case, 1962, very early case, found that ADA did act for a public purpose and that even though there's private investment or development involved, that the overall public purpose of job creation and economic development is in the public purpose of the State of Alaska. And so I guess we'd respectfully request, uh, alleged legal, um, and the attorneys to take a look at those cases.

I have the briefs that were filed. I have other trial documents and the arguments that may be helpful. I'm happy to provide those if that would be helpful. But those statutory definitions, Madam Chair, in our view, mean that when ADA acts and it acts within those boundaries of creating jobs and economic development, that by definition it is acting for a public purpose. And that in this case, because Ada is acquiring the land and it will be using it within those boundaries, by definition in statute, it's, it's acting for a public purpose and in the public interest.

And so the DNR would be justified to find— make that conclusion based on those those statutes and that essentially we're a bit of a unique entity, I guess, when it comes to applying for land, although the other corporations, I think, often have similar statutory language that they are acting for a public purpose and in the public interest as well. But our view would be that by statutory definition, if we stay within those boundaries of economic development and job creation, we are in the public purpose and acting in the public interest. And those actions benefit the state. The part of the Constitution, Article VII, provides that, you know, the state is supposed to care for the people, provide funding for education, health. Our activities generate revenue to the state.

So we're helping, frankly, the legislature obtain those funds it needs, you know, to meet those requirements. And then Article 8 of the Constitution, I'm sure you're very familiar with, has got a commitment to develop the lands of the state of Alaska and its resources for the benefit of all Alaskans. And so we're— we feel like when we're acting we are helping the legislature fulfill those purposes and acting in the public interest. And there's a good discussion of that in the Daarman case, those issues, and really good discussion in the briefs, which are pretty long. But like I say, I'm happy to provide those to the attorneys if they'd like to see them.

And I'll pause there. I think there's probably some questions. Yes, I appreciate that. I'm sure our attorneys can look up those briefs, but thank you for the offer. So questions?

I saw Dr.— or excuse me, Senator Wilkowski. Thank you. Thank you for being here, Randy. What— how— I'm just curious, how did the 20— this conveyance, this 20,000-acre conveyance come about? Was this something that ADR requested?

Was this something that DNR just volunteered? Were you approached by industry to say, hey, we have an idea for this land? I can speak to that a little, Madam Chair. So through the chair, Senator Wielechowski, I attended an event in Washington, D.C. with a number of governors, both parties, speaking on economic development and jobs. And Governor Pritzker was there.

There was a governor from New Mexico whose name I cannot recall right now, but they both spoke about how successful economic development was going in their states. And they both said that the key to that success was to acquire or have land— I don't know if it's zoned is the right word, but have land obtained and ready to go or prepared or, you know, for certain uses. And they were talking about a number of different uses. Illinois created a number of quantum computing locations. And so hearing them speak after that event, I started thinking of, well, what could Ada do to advance economic development and jobs if we had land in hand and could have it if it was suitable for whatever that activity was, hydroelectric, a hydroelectric dam or a harbor or something, you know, if we had it and could prep it and, and kind of advance it, uh, and then market it, you know, would we be more successful than we are now under the system where people looking to invest in the state or inside the state looking to invest have to find the land themselves, they then have to apply for it, uh, It may have no pre-work done on any permitting or Section 106 work or other things, examination or identification of wetlands.

And so that spurred me to think of that. And then the other issue that caught my attention is there's statutes in Title 38 for a commercial land bank that DNR is to identify lands and put into the bank. And then developers, I think ideally developers would then be able to look to that commercial land bank for access to property. But when I dug into it a little, it seemed like that land bank maybe had never really gotten off the ground and there was no acreage inside that bank. And so it didn't seem to be a functioning way to get— accomplish that goal of having some areas identified and ready for marketing and development.

And so based on those things, I decided to look for land opportunities, particularly close to roads or close to rail. Things like that where there would be an advantage. You wouldn't have to have— build a new road maybe for access other than maybe a minor access road off the side, not a long road. It's a lot of permitting and cost in those types of projects. And so I started looking at the map, identified, you know, several parcels, were involved in working with the railroad on on Port Mac Rail.

Hopefully that project will advance. And so that's roughly how the idea and the concept started of trying to identify these parcels and get title. Follow-up, Senator Wilkowski. Thank you. And I don't know what those other states have as far as constitutional obligations for public purpose or not.

I seriously doubt they're similar to ours. That aside, what is the purpose of this? What will— what does AIDA plan to use this 20,000 acres for? The very—. Thank you, Senator Wielechowski, through the chair.

The very first thing that AIDA has done and will continue to do is reach out to the local entities. We can finance and co-develop projects with local communities and cities. I've reached out to the mayor of Houston. I've reached out to the manager of the Matsuburo and let them know, you know, they are the very first entities, you know, we will talk with and look to in terms of identifying projects on certain locations of the land. What would they like to do?

Do they need financing? I think there's some interest in housing on part of the parcel. That's where we'll start is with the local entities and then we'll go, you know, from there to other things.

Follow-up. And just based on discussions that we've had today and previous discussions that I and others have had with our attorneys, it seems like you're putting the cart before the horse. It seems like the requirement is in order to do the constitutional analysis of whether this is a public purpose And the things you're talking about, I think, are good things. Unemployment reduction is obviously a good thing. Health and welfare, obviously a good thing.

But it sounds like you don't have a defined purpose yet. You're just saying, give it to us and trust us, and we'll do the right thing. And I'm not sure that's the way the law works or the Constitution works. In fact, I'm pretty sure that's the opposite of how it works. Yeah.

Through the chair, Senator Murkowski, I think I would have to respectfully disagree that that wouldn't apply or solve— meet constitutional standards. In our view at AIDA, the case and the statutes establish that as long as AIDA is acting within boundaries of creating jobs or creating economic development for the state, that we're meeting that public purpose test by definition in statute. It is a— Interesting question, but we think the Daarman case and the statutes answered that question. Yes, follow-up, Senator Wielechowski, then we will go to Representative Mears. Just one last follow-up, though.

By your logic, what would prevent a future ADA director or future governor from saying I want to give 1 million acres, I want to give 2 million acres of state land to ADA and you just You decide what you're going to do with it. Maybe one future governor is going to say, we're going to develop all that, put housing and data centers and all kinds of other things. Maybe another governor is going to say, nah, we want to use it for enjoyment of natural resources. We want to turn it into a giant park. Is that really the sort of discretion we want to give to our state lands and ADA?

That seems to me to be just completely opposite of what the Constitution suggests we do. Senator Wilkowski, Through the chair, Senator Giesel, it is an interesting question. And I think that based on the authority of the executive, he does have some discretion. The statutes allow discretion to the agencies and ADA to obtain land and enter into contracts. I don't know that there's an acreage limit on it.

That's certainly a massive amount of land. But in the past, there's been a number of transactions. Frankly, the discretion of the agency, DNR, to grant land has been unfettered, not even using Section 810 in the past. Quitclaim deeds for Terror Lake Hydro, quitclaim deeds for Mount Edgecomb High School. So I think there's actually hundreds of those of record where the agency was not even required to go through an 810 process to get land into the hands of a corporation or an agency under the theory that it's all part of the state and therefore, you know, there's no procedure needed.

It's in the executive branch's discretion to sign these quitclaims and to get land over to corporations and other agencies. I don't know the exact number of quitclaim deeds that exist, but there are, I believe, hundreds.

Before we go to Representative Mears, I want to make comment about the items you've just cited. You cited some quitclaim deeds that were very specific, going to some very specific entities versus Ada, who will do maybe this or that. I, again, am saddened that DNR was denied the ability to attend this meeting because, of course, the commissioner could have responded to what they can permit. I know I carried a bill that would allow the permitting of up to 3 million acres of land for a specific purpose, a wind farm, so to speak, that would ultimately generate power for hydrogen production for export. This was a company's idea, but it— I had to write completely new statute for a permit for land use of that size, even though it would have been economic development, jobs for people in the area, and it would have happened in Southwest Alaska.

Uh, it would be important to know what the limit is on permits that private companies can ask for. Um, but Mr. Raro, this feels like we're designating ADA as an entity that will determine what private companies get land, and apparently for no cost. There's nothing mentioned here about what these private entities that you're proposing this land be used by are going to pay for this. These are state assets. The land is a state asset.

We've all heard the saying, "Young man, buy land, they make it more." And we all know how the cost of land has gone up here, even in Anchorage. So I'm struggling with how you justify a very small board— it has a very small board— and they're appointed by the governor, how that entity has the authority to decide who gets land and at what price here in Alaska. Through the chair, understand the concerns. I would say that under ADA statutes, we are required to use commercial reasonableness in our dealings with private entities, and that's reflected in projects such as Red Dog or the FedEx Hangar or, you know, really many projects that we do are small business loans. So I can't envision a scenario where we would be giving away land for free that has value.

That wouldn't fit, I don't believe, in our statutes.

There is a lot of discretion, I suppose, granted to Ada.

It has, you know, been used, I think, not always entirely successfully, but pretty successfully in places like Red Dog and FedEx Hangar, Ketchikan Shipyard. We're getting back up and running. That's been an exciting project in the last year. And so I think it's never going to be 100% success, but I think we We have a pretty good record of bringing jobs and economic development to the state. And we're working on more.

Thank you. Representative Mears. Thank you, through the Chair. If I may, two questions. The first on timeline for this.

So through the Chair to Director Rouraro, as we're looking at having significant changes in the next couple of months.

What's the timeline? Where are we looking at anything happening in the next 2 months or before we get back into session in January? And what are longer timeline items?

Thank you, Rep. Mears. Through the Chair, I can say that what will happen for sure in that timeframe is continued outreach to the borough and the City of Houston on their ideas for uses or projects on that property. We will try to identify the— their priority uses and then try to identify whether they need financing or are interested in any financing. We are allowed to lend or bond for communities.

Thank you. Through the Chair, I might need to I could drill down with some more follow-up. So through the chair, is getting at more specific, like when public timelines for comment are back, when any potential land transfer would happen, if any of that is anticipated before we get back into session in January. Oh, through the chair, Representative Mears, I'm not sure of the timeline. That would be a DNR question and process question.

I simply can't say that. I don't know that they have a statutory limit on making a decision. I don't believe they do. So it could be short. It could be drawn out.

Follow-up, Representative Schubert? Um, Chair Giesel, I'll get into my other one there because I'm not sure I'm going to get the details on timeline at this point. But I did want to drill down and pull a couple of other things together. So from work I've been doing on the Energy Committee and on a large load electrical bill, this— I'm seeing pieces come together. So on the Port McKenzie site, Senator Gissel, you mentioned briefly the University of Alaska land transfer.

There's also the Matsu borough is looking at a land transfer, and that very specifically for the Terra Energy project. The project developers have said, and I think I think it's been out in the public quite a bit that— and, you know, we know practically in order to do a large energy development, especially something larger than what our current demand is on the rail belt, you need to develop demand for that. And data centers is one of the big things that they're identifying. Sure, we've talked about greenhouses and byproduct of carbon dioxide for things, but really something on the scale of data center would be something that would be able to generate that type of demand to make a project like that feasible. And there's been a lot of talk about that project being completely behind the meter and not providing any benefit to the rail belt.

So that's a potential project with that potential land transfer there. From my discussion on the large load bill, which certainly includes data centers, we also understand that demand is important for other energy projects. It's something that's been brought up for gas line development as well as other projects as well. So, um, in those discussions, I had folks from the executive branch say that around data center development, identification of a pre-permitted parcel is something that the administration was looking at, and that I did not recommend that as a way to put the cart before the horse, as Senator Wielechowski said. But also, that very much is in line with what you were saying earlier about identifying parcels for sort of paving the way for development things.

I think those of us that have been involved in environmental permitting know that you can't just blanket pre-permit things. You can't pre-permit what water use is going to be, or water quality reports, or any of those sorts of things, but this seems to be getting towards that aim. And I think it's disingenuous to say that, oh, a data center was just sort of clumsily set in there, because I think that specifically is what this parcel was meant to do. When this proposal came out, I was like, oh, that's the parcel they had in mind. So as we're getting into this, I think that being clear about putting together some of the administration's desires to grow demand for this energy development is important because we're— a process like this, we're seeing clearly it's circumventing not just the legislative process, but also community process.

And it's vital. And we're seeing pushback from the Matsu Borough and from local government. And if we're going to be be successful with things, we need to be out and open as we're doing these processes because having pushback is detrimental to projects and we can't operate that way. It's disingenuous and it actually causes more harm in the long run. I'm very concerned that we've got a short timeframe with this administration and things are going to get shoved through and that's unacceptable.

Through the chair, Representative Mears, Um, I can say there's nothing misleading or inaccurate in what I've said in the sense that there is no project proponent for a large data center. There's no energy available for a large data center. I cannot envision in any way a large project affecting wetlands needing water permits, fish permits going through in the next 60 days. I think the average NEPA is 4.7 years. So I don't think that's much of a risk that that will happen in the next 60 days.

It just— it's literally impossible, I think, legally and permitting-wise.

Follow-up, Representative Mears? I think Senator Wielechowski looks like he's ready to But I'm asking you if you have any follow-up. Yes or no? I need to process that a little bit, Chair Giesel. I think there was more to what I had to say than just that.

If I could just take a minute and think about that. Of course. Thank you. Senator Wilkowski. Are ADA's requirements for land use, for sale, for lease, disposition of property that you are in your possession, are they the same as the Department of Natural Resources?

Through the chair, Senator Murkowski, I think our requirements for use of land or, or sale or lease of land are much more commercially focused in the sense that whatever we're leasing or selling would have to result in a fair market return to ADA and then the state. So I think our criteria, I guess, and process are probably different than, than DNR's. We would go through the process as we are now of DNR's before we ever got to being an owner. After that, our process would be guided by the commercial and job value of the property We would be required under my reading of the due diligence and fiduciary duty rules to, you know, obtain a fair market return. Follow-up, Senator Wilkowski.

And I know someone's calculated that over the life of ADA, your return on investment has been around 2%, that the state would have greatly, greatly done better had we just put that money in the permanent fund. Not here to dispute that with you. What I am curious to know is what is— how do— what is the public process for AIDA disposition of land and how does that compare to DNR? In other words, do you have to accept public comment? Do you have to address public comment?

Do you have to have public notice? Do you have to have a best interest finding? Is it similar to what DNR's is? Through the chair, Senator Werlekowski, Ada's process does have a public input component. The board acts in public meetings through adopting of resolutions.

A project of any size would have to be approved by the board. There might be multiple meetings. Public notice is given. So there are some similarities to DNR's process, but it is different. We don't have the same statutes.

Ours is an economic mission and a jobs mission versus as an administrator of state land. Follow-up? I see, excuse me, Senator Rauscher has a question. Senator Rauscher. Can you hear me now?

Yes. Good. I'm wondering, I'm just trying to follow up on the the discussion about the future of a data center. So the question that I have is, are you taking it off the list of possibilities since you've spoken so much against the, uh, the, the fact that it, it probably could never be built? And is it getting— is it getting scrubbed?

A data center ideology, is that getting scrubbed from the definition of what the land could be used for by either the DNR or yourselves? And if not, I was just wondering, uh, how you correlate the two. Uh, through the chair, Senator Rauscher, it's not being removed, so, so to speak, from the list of possible uses. It's just simply implausible at this point, uh, for the reason that there is no power to run a data center. So it, it's not being removed.

It's simply extremely, extremely low probability, virtually zero, because it needs energy. A data center needs energy, and there isn't any excess that it would occur.

Follow-up, Senator Rosier? Follow-up? Yes. Yeah, so, so just out of curiosity, I'm just going to throw this out there, and I know a lot of people that think that is—. Could you speak up, Senator Rauscher?

We can't quite hear you. All right, I have to turn this thing to the right thing. Um, so I, I understand what you're saying, but I'm just going to throw this out there. Some people don't believe it will happen. I, I have heard that there is a possibility of a coal-fired power plant coming online in 2 or 3 years.

Would that change your idea about a data center?

Uh, through the chair, Senator Rauscher, um, I believe the project you're talking about is, is a Terra Energy project. Um, that would be up to, I guess, the owners of that project. Ada is not involved in that project on how they want to use any power that's generated. They could use it to sell into the grid. I guess they could set up a behind-the-meter data center.

They could try to supply energy to different mines. I'm not 100% sure what all the options are, but that wouldn't be up to ADA. We're not in that project. Follow-up. Yes, Senator Rauscher.

So yeah, I'm not asking whether they're going to sell to a data center. I'm saying they probably are an IPP and would sell to MEA, but there's a possibility that there would be a lot of energy out there at that point. Does that change your perspective on the possibilities? Through the chair, Senator Rauscher, I'm hesitant to try to guess what a private party will do with their resources, but in addition to energy, you also need a supply of fiber. I'm not sure what fiber exists to that area right now.

It's somewhat off the road system. I'd have to look into that, but you do need both, correct?

Just one last follow-up. Yes, Senator Rosier. Okay, does it really matter, I guess, whether it's a coal-fired power plant or another energy source if it was there and fiber optic was there? I just wondered, would that change your perspective? Uh, through the chair, Senator Rauscher, data center companies— and I'm not an expert on them— but they are looking for those things plus redundancy.

So they like to have multiple sources of energy in case one falls away or is offline, and they look for multiple sources of fiber. So I think having one source of each may not be enough.

I thank you.

Thank you. Representative Colón, you are next. Thank you, Chair. I have a couple questions, if you don't mind. I'd like to ask you through the Chair what I had asked legal.

If ADA has a development and coordinates that, does that development still have to follow the rules of the borough and the state, the permitting, noise reduction, nuisance rules and regs? Are they still— Do those all still apply if that happens under your coordination? Through the Chair, Rep. Colombe, yes. ADA is not exempted from any federal or state or local permits. Okay.

And if I may— Yes, follow up. Do you— are you aware if the borough has a land use plan for this area that exists right now? Through the chair, Rep. Colombe, I believe they have a plan for at least part of the area, and they may have some ideas that aren't adopted in a formal plan. We'll be meeting with them and the City of Houston to find out exactly what their highest priorities are for use of the land. Right.

My limited experience in Anchorage is we do a lot of work on land use plans, and then we just kind of blow them out of the water. So I think that land use plan is important connection, I guess, with the local government and making sure that, you know, you guys are aligned. And I assume you are going to have community involvement around these plans if this actually happens.

My last question was about the so-called laundering of the land. So you guys would get the land for free, but in one of these documents, I thought ADA does— you guys are offering some kind of prep for land, whether it was platting or surveying or— can you speak to what ADA would do to help get the land developed? Sure. Through the chair, Rep. Calombe, first step would be to work with the boroughs and the city to identify what they would like to to see built. If that's multifamily housing or other things, then the next step would be to identify where would that best fit and have access to water and sewer, things like that.

And then ADA can finance or fund the utilities and the access road in, and that may be enough to incentivize a private developer, you know, to then go forward and build the units. And so everything would start really with the local communities. We would find the right spots in the parcel, you know, the best locations, try to identify what would make the project work commercially, and then go forward hopefully with a private partner. And one more. Yes, follow-up, Senator Klobuchar, Representative Klobuchar.

I don't know if you have this answer, but to what was asked prior, are those projects that would go on the land, is your understanding they would be paying property taxes? Through the chair, Rep. Colom, ADA is exempt from property tax, but entities that lease from ADA or are simply financing through ADA are not exempt, and so they would be paying property tax. Okay, great. Thank you. Thank you.

Before we go to Senator Wielechowski, I want to follow up on what you've said several times recently, Mr. Rouraro, and that is working with the local groups— Matsu, Houston. And yet when I look at the Port McKenzie Rail Support conveyance, that's 800— more than 800 acres. For the record, that's ADL 234762. Two, there was a newspaper article, I think it was in the Alaska Beacon yesterday, where the borough assembly was quite surprised to hear that you had applied for this conveyance because they had plans for this area as well. This was an assembly person saying that they had not heard from you about this.

Seems to fly in the face of what you're saying about working with local communities. Through the Chair, ADA has—. I have had some discussions with staff at the Bureau. I haven't spoken to every Assembly member, but certainly there's been some back and forth of what if, you know, this was acquired. So there's been some discussion.

I haven't met with every Assembly member.

Thank you. Thank you. Senator Wilkowski. Thank you. What organizations or companies or other groups has ADA met with, communicated with about using, potentially being recipients of this 20,000 acres?

Through the chair, Senator Wilkowski, I personally have not had many discussions outside of a few with some members of the communities. With developers. I think we had some look at material sites. There are existing oil and gas leases on the property. I think Mr. Donkle holds those.

And so there are, you know, I think some interactions have occurred below my level with entities that have an interest in the property already. But I personally haven't talked with, like, a large developer. Developer looking at that lot, parcel. Follow-up, Senator Wilkowski. How close do you think you are to making a decision or to having one of these user groups enter into an agreement with Ada about how to use this land?

Through the Chair, Senator Wilkowski, I would say we're a ways away.

It would be a process. We have to First, identify, you know, the exact location, identify the financing terms, things like that, permitting. So there's a ways to go still before anything would be built. Follow-up. So since it's a ways away, would you commit to not entering into any contracts for the use of this land until we have the next administration in place, Governor's administration?

Through the chair, Senator Wielechowski, my plan is to work as hard as I can every day that I'm in this position to promote economic development and create jobs until I'm no longer in the position. So I will be working as many hours as possible to accomplish those goals until I'm no longer in the position. Follow-up. Will you commit to not enter into any contracts, binding contracts, until we have the next governor's administration in place on this piece of property, this 20,000 acres? Yes or no?

Through the chair, no, I will not. Okay. Follow-up. Could you get me a detailed list of the companies, the groups, the organizations that you've had discussions with about using this land? Through the Chair, I can not only provide, I guess, a list of my contacts, which are very minimal, but I can check with staff and provide a list of companies.

I don't think it's a long list.

That would be great, Mr. Rourau. If you would submit it to my office, I will make sure that all the committee members have received those. If I could follow up. Yes, follow up. And in that list, You're saying you've had no discussions with data centers, any data center groups about coming in on this property?

Through the chair, Senator Wilkowski, that's correct. I have not. And the data center companies that I have met with are pretty sophisticated parties. They've probably already taken a look at an area and looked at the fiber map and looked at the energy supply. And decided, you know, whether or not that's a potential target or not for them to acquire and build.

If you were looking at this map, it's probably not the, you know, number one location you would look to.

Further questions? Representative Hall. Thank you, Madam Chair. I'm thinking 22,000 acres is a lot, and that's been discussed already. That's approximately 34 square miles.

Why not go a more phased approach with a land conveyance that's much smaller?

Through the Chair, Representative Hall, to be clear, it's unlikely that ADA will ultimately use, of course, every acre of that property, and there's nothing prohibiting ADA from quitclaiming back to DNR unused lands or lands that simply aren't good selections or areas for economic development. So, you know, what I would anticipate is a review process, and then areas that are, you know, clearly good places to build, we would retain. But there's nothing prohibiting Ada from simply quitclaiming the remainder back to to DNR. Follow-up, Representative? Thank you.

Thank you, Madam Chair. I'm curious, and why not— this seems like a blunt approach. Why not be more of a scalpel? That seems like it would be more efficient, a more efficient use of maybe ADA's resources. Through the Chair, it is a broad approach for sure, but I think the review process can occur fairly quickly.

Clearly, some areas are used for recreation and are far off the road system. So it's a similar process in a way to what DOT uses for rights-of-way when they, they build a road and then they survey it after and then relocate or reconvey the unused property within that overall right-of-way back to DNR. So it's, it's somewhat similar to that process. Follow-up, Representative Hall? Thank you.

Representative Dybert. Yeah, just to kind of follow up from Representative Hall on the same question. I think in the process of the whole going— coming from D.C., coming back to Alaska, we want these lands. How can we prevent like upset communities? Where did we go wrong there?

Where we had the thousands of comments and what do you suggest? Thank you. Sure. Thank you for being here too. Thank you.

Through the chair, Representative Dibert, I think as I mentioned in my opening statements, that review of the application, it certainly could have been drafted better to convey that that this wasn't a pending huge project that was ready to rush in and be built on the land. That probably should have been written more clearly. And I think that failure to do that, I think, led to some concerns about what's going on, what's going to be built here. And so obviously, Always more outreach at the upfront is better. Certainly something we believe in.

We should have done, I think, could have done more here upfront on the early side. And that's unfortunate. But we'll try to pick it up and where it's at and give the communities all the time they need and before things go forward. Follow-up, Senator—. Or Representative Diber.

Follow-up. Thank you, Chair Giesel. Is public notice— is that a DNR step or—. And both ADA? That's correct.

Through the chair, Representative Diber, it would be a two-step process. Public notice now through DNR and then public notice and action at the ADA level to implement any actual building decisions.

Very good. Further questions? Senator Wielechowski. Has there been an appraisal of the 20,000 acres? Through the Chair, Senator Wielechowski, I'm not aware of an appraisal.

I can check with staff and have to get back to you. I'm not aware of one. Follow-up? What is your estimated value of this 20,000 acres? Through the chair, I really couldn't even guess right now at the value because there's a number of underlying claims already on the property, including the oil and gas leases that Ada is not acquiring, the subsurface minerals, things like that.

So you have to remove out— I guess if you were doing an appraisal, you'd have to pull all those things out. And then look at what's left, you know, that ADA would actually be receiving. Follow-up. Has there been any best interest finding that this is in the best interest of the state to make this transfer? Through the Chair, Senator Murkowski, I hope I don't sound too repetitive, but in our view, as long as ADA is acting within its statutes as defined by the legislature, legislature and now in state law to create jobs and create economic development, that is, in a sense, the best interest finding for ADA.

Follow-up. Not to sort of belabor this, but you— ADA hasn't identified what your use is. You have not said what you're going to use this for, so how can it— how can there be a determination that this this is in the best interest of the state and the people of Alaska and the people of Matsu when you have no idea what you're even going to use it for. Through the chair, Senator Wilkowski, there are some uses that we know exist. Probably gravel sites, things like that are pretty certain to exist.

So, and as long as we're within our statutory boundaries, we feel we're within the scope of what would equivalent of a best interest finding that the legislature has already made a long time ago, that state needs economic development and it needs jobs. As long as we are within those sideboards, we feel like we are within our abilities to go forward and identify purposes as we move forward. Follow-up. So you are going to use this site for gravel? That's one possible Used— sorry, through the Chair, Senator Wilkowski, that is a likely use for gravel.

How many acres is for gravel? Through the Chair, Senator Wilkowski, we're going to have to test the gravel, make sure it meets code. I mean, there's a number of steps still to proceed.

Yes, Phil? What's the value of the gravel? Through the Chair, Senator Wilkowski, I believe commercial value of Gravel is roughly $10 to $12 a yard. There are probably many, many hundreds of thousands of yards. So you're going to use it for gravel?

Yes, possibly. I believe that's a very likely use, yes, sir. What else will you use it for? Other uses we've talked about a little bit with some of the Houston officials is multifamily housing or housing. There are some— with access roads already on the property with additional areas behind those roads that would be available for more houses.

That's another use. And we'll look at other commercial possible uses, but those are two of probably of the key highly likely uses. I don't know Houston very well, but is there a booming market for multifamily use in Houston? Through the chair, Senator Wielechowski, what I've heard just from a few conversations is there is a demand for housing. How big it is, what kind it is exactly, I'm not sure, but there is some need for housing.

Follow-up? It just seems to me that— and these are all things that you might do— it just seems to me that the better process would be for DNR, because as was mentioned, to do this a little more surgical and say, okay, there's a gravel use, and to go through the DNR process, we want to provide— have this land go maybe through you or to some organization that will have paid fair appraisal value for it, full value for it. The state gets used, maybe there's some jobs created. And so there's a designation of that portion. And then the multifamily use, I can't imagine that's a huge amount of land.

And then you have a put that out and have a discussion on that. It just seems like that's a better, more surgical approach than to just say, we're going to give 20,000 acres to ADA, unelected bureaucrats, you guys decide what to do with it, with very little public oversight. Through the chair, Senator Murkowski, that is a approach. Our approach is different. We feel it's legal and within the boundaries.

Thank you. Representative Hall. Thank you, Madam Chair. Building off of Senator Wielechowski's comments, because that was actually the question that I wanted to ask, I feel like your answer just was not sufficient. Why not go the more surgical approach if there are already identified uses for the land?

Through the chair, Representative Hall, we don't know at this point in time every use that would be good for the property. And so our approach is to receive the entire parcel, review it at that point for a number of uses, maybe some that are unknown at this time. Um, and as we work with the community, work with the public, work with the investors, um, we'll be able to identify at that point the exact areas that are needed, and we can always quitclaim back whatever is not needed. So it's just a different view, I guess, of how to proceed and identify all the uses.

Follow-up, more of a comment, if I may, Madam Chair. Yes. It would appear to me that you might— ADA might be biting off more than it can chew, and This process to me seems extremely flawed. Thank you, Madam Chair. Thank you, Representative Hall.

We are arriving at closing time. This has been a very— I'm going to say the word rushed process. As I look at the conveyances that have been public noticed through the public and charitable use premise, there's certainly been a huge huge number of them. Referring to the value of the land, you know, one of the pieces that is being conveyed we haven't even talked about today, and this is by the University of Alaska Land Bank. They are conveying 800— 829 acres for an industrial park over in the Port McKenzie area, but they stand to bring in about $14 million excuse me, somewhere around $14 million annually at some point.

Certainly, the amount of land that ADA is considering could bring in significantly more if it were actually leased for marketable— the market issue, the market price. The overall overarching issue that we have been talking about today actually is that use of the public and charitable use regulation, and we were wondering about the appropriate application of it. We have made public comment through Senate Resources. We are going to continue to do that. I will point out that there is still open comment, open public comment on the conveyance 234762, and that is the ADA conveyance at Port McKenzie.

That's 885 acres. So for the public who are interested, I also have been informed that there was agricultural, agricultural land that was designated in that area. Those designations have been withdrawn and the land given back to the state, which is now making it available for these conveyances. So we're losing some ag land in the Mat-Su area for these land conveyances through DNR. So just something to think about.

We haven't had time today, nor has AHFC, Alaska Housing Finance Corporation, been present, but there are the 4 conveyances made to AHFC allegedly for low and medium level housing for folks. Again, very vague. Uh, you do have in your packet of information and online a specific conveyance for one, uh, around Rosie Creek in the Esther area in Fairbanks. Folks that live around that area have contacted me and said this is inappropriate land for housing. Why is this being conveyed?

Uh, so that particular conveyance That information is in your packet today. Again, I lament over and over the fact that the DNR commissioner has not been available. So while we've reached the end of our meeting today, I did want to offer Co-chair Dybert opportunity if you have any closing remarks as the House co-chair. Thank you, Chair Giesel, and thank you, Mr. Rahr, for being here today. Thank you for including the House Resources Committee in discussing this very complex issue.

I learned a lot today about some of the flaws here and just hearing the story of land conveyances. And, you know, Alaska land is very important to Alaskans. It's our backyard. It's where we hunt, we fish, we hike, enjoy this beautiful state. And I think we're A flaw that we definitely learned about today is, you know, talking to these folks that enjoy their backyards.

You know, these are our neighbors.

And instead, you know, I'd like to support our communities by bringing them to the front chapter of any kind of land exchange. And I think that is definitely an area that I would like to learn more about. Focus on so that we don't have upset communities in Alaska when it comes to land conveyances. But thank you for inviting the House and for bringing this forward. Thank you, Co-chair Daibert.

So this concludes our meeting. Our next meeting, I'm announcing right now, is for the Senate Resources Committee. So a few members are still here. That's going to be on October 14th at 10 AM here in this room, as well as on Teams. The subject of that meeting will be the DNR public and charitable use conveyances and the options relating to the appearance of executive branch officials.

At this time, we will conclude the meeting. Let the record reflect the time is 3 PM.