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CSSB 217(FIN) AM: "An Act relating to the University of Alaska and university land, authorizing the University of Alaska to select additional state public domain land, and defining net income from the University of Alaska's endowment trust fund as `university receipts' subject to prior legislative appropriation; and providing for an effective date."

00CS FOR SENATE BILL NO. 217(FIN) am 01 "An Act relating to the University of Alaska and university land, authorizing the 02 University of Alaska to select additional state public domain land, and defining 03 net income from the University of Alaska's endowment trust fund as `university 04 receipts' subject to prior legislative appropriation; and providing for an effective 05 date." 06 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 07 * Section 1. FINDINGS AND PURPOSE. The legislature finds that 08 (1) as the beneficiary under the provisions of the Acts of August 30, 1890, and 09 March 4, 1907, designating the Alaska Agricultural College and School of Mines as 10 beneficiary, and of March 4, 1915, 38 Stat. 1214, transferring certain land for its location and 11 support, the University of Alaska is a land grant university; 12 (2) under the Acts of March 4, 1915, 38 Stat. 1214, and January 21, 1929, 45 13 Stat. 1091, the Congress of the United States granted to the Territory of Alaska certain federal 14 land to be held in trust for the benefit of the predecessor of the University of Alaska;

01 (3) the Territory was unable to receive most of the land conveyed by the Act 02 of March 4, 1915, before repeal of that Act by Sec. 6(k) of the Alaska Statehood Act (P.L. 03 85-508, 72 Stat. 339); 04 (4) the Congress of the United States granted the State of Alaska the right to 05 select 102,500,000 acres of federal land under Sec. 6(b) of the Alaska Statehood Act; 06 (5) the land selection rights embodied in the Alaska Statehood Act reflect in 07 part congressional recognition that the state would need the land to support its government and 08 programs, and the Congress assumed that the State of Alaska would in turn devote some of 09 the land or the income from it for the use and benefit of the University of Alaska; 10 (6) most land grant colleges in the western United States have obtained a larger 11 land grant from the federal government than the University of Alaska has received; 12 (7) an academically strong and financially secure state university system is a 13 cornerstone to the long-term development of a stable population and to a healthy, diverse 14 economy in the state; and 15 (8) it is in the best interests of the state and the University of Alaska that the 16 university take ownership of a significant and substantial portfolio of income producing land 17 in order to provide income for the support of public higher education in the state. 18 * Sec. 2. AS 14.40.170(a) is amended to read: 19 (a) The Board of Regents shall 20 (1) appoint the president of the university by a majority vote of the 21 whole board, and the president may attend meetings of the board; 22 (2) fix the compensation of the president of the university, all heads of 23 departments, professors, teachers, instructors, and other officers; 24 (3) confer such appropriate degrees as it may determine and prescribe; 25 (4) have the care, control, and management of 26 (A) all the real and personal property of the university; and 27 (B) land 28 (i) conveyed to the Board of Regents by the 29 commissioner of natural resources in the settlement of the claim of the 30 University of Alaska to land granted to the state in accordance with the 31 Act of March 4, 1915 (38 Stat. 1214), as amended, and in accordance

01 with the Act of January 21, 1929 (45 Stat. 1091), as amended; and 02 (ii) selected by the University of Alaska and conveyed 03 to it by the commissioner of natural resources under AS 14.40.365, 04 except as provided in AS 14.40.368(2); 05 (5) keep a correct and easily understood record of the minutes of every 06 meeting and all acts done by it in pursuance of its duties; 07 (6) under procedures to be established by the commissioner of 08 administration, and in accordance with existing procedures for other state agencies, 09 have the care, control, and management of all money of the university and keep a 10 complete record of all money received and disbursed; 11 (7) adopt reasonable rules for the prudent trust management and the 12 long-term financial benefit to the university of the land of the university; 13 (8) provide public notice of sales, leases, exchanges, and transfers of 14 the land of the university or of interests in land of the university; 15 (9) report each year within the first 10 days of the convening of a 16 regular session of the legislature on the expenditures made during the preceding fiscal 17 year from the funds of the University of Alaska that are derived from sales, leases, 18 exchanges, or transfers of the land of the university or of interests in land of the 19 university 20 (A) that were conveyed to the University of Alaska in 21 settlement of the claim of the University of Alaska to land granted to the state 22 in accordance with the Act of March 4, 1915 (38 Stat. 1214), as amended, and 23 in accordance with the Act of January 21, 1929 (45 Stat. 1091), as amended; 24 and 25 (B) that were selected by and conveyed to the University of 26 Alaska under AS 14.40.365. 27 * Sec. 3. AS 14.40.291 is amended to read: 28 Sec. 14.40.291. LAND OF THE UNIVERSITY OF ALASKA NOT PUBLIC 29 DOMAIN LAND. Notwithstanding any other provision of law, university-grant land, 30 state replacement land that becomes university-grant land on conveyance to the 31 university, land selected by and conveyed to the University of Alaska under

01 AS 14.40.365, and any other land owned by the University of Alaska is not and may 02 not be treated as state public domain land. Title to or interest in [TO] land described 03 in this section may not be acquired by adverse possession, prescription, or in any other 04 manner except by conveyance from the university. The land is subject to 05 condemnation for public purpose in accordance with law. 06 * Sec. 4. AS 14.40 is amended by adding a new section to read: 07 Sec. 14.40.365. UNIVERSITY LAND FROM STATEHOOD ACT LAND 08 SELECTION CONVEYANCES. (a) The University of Alaska may select and is 09 entitled to receive the conveyance of 500,000 acres of land conveyed to the state under 10 Sec. 6(b) of the Alaska Statehood Act (P.L. 85-508, 72 Stat. 339) that, on the date of 11 its selection by the university, 12 (1) has not been conveyed by the state; 13 (2) has not been reserved by law from the public domain; 14 (3) is not land 15 (A) included in a five-year proposed oil and gas leasing 16 program under AS 38.05.180(b); or 17 (B) leased under, or for which a lease application is pending 18 under, AS 38.05.180(d); 19 (4) is not subject to a possessory interest or encumbrance other than 20 (A) a lease that is not an oil or gas lease; 21 (B) a timber contract; 22 (C) a mining claim; 23 (D) a sale of materials under AS 38.05.110 - 38.05.120; 24 (E) a land use permit or right-of-way issued by the Department 25 of Natural Resources under AS 38.05; 26 (5) is not necessary to carry out the purpose of an interagency land 27 management agreement; or 28 (6) is not subject to conveyance under a land exchange or land 29 settlement agreement. 30 (b) Notwithstanding AS 38.05.125(a), the transfer of ownership and 31 management of land from the Department of Natural Resources to the Board of

01 Regents of the University of Alaska under this section includes 02 (1) the interest of the state in the coal, ores, minerals, fissionable 03 materials, geothermal resources, and fossils that may be in or on the land; and 04 (2) the interest of the state in the oil and gas that may be in or on the 05 land, but only as to land that is selected by the University of Alaska under this section 06 on and after the date that is the fifth anniversary of the effective date of this section. 07 (c) When the University of Alaska selects the land to which it is entitled under 08 this section, unless the commissioner of natural resources determines under (e) of this 09 section that title to the land should not be conveyed, the commissioner of natural 10 resources shall convey title to the land selected. 11 (d) When a selection has been made by the University of Alaska under (c) of 12 this section, the land selected is closed to entry until the land selected has been 13 conveyed or the selection has been rejected by the commissioner of natural resources. 14 (e) The commissioner of natural resources may not convey title to any land 15 selection made by the University of Alaska under this section if the commissioner 16 determines that the proposed selection 17 (1) includes land for which, at the time of its selection under this 18 section, 19 (A) a municipality has made a selection under AS 29.65, unless 20 the land selection is, at a later date, rejected by the commissioner of natural 21 resources or relinquished by the municipality; or 22 (B) the commissioner reasonably believes may be selected by 23 a municipality under AS 29.65.030, but the commissioner may not withhold 24 under this subparagraph the conveyance of title to land selected by the 25 University of Alaska for more than three years after the date of the 26 municipality's incorporation; 27 (2) is not in the best interests of the state; in making a determination 28 under this paragraph as to whether a selection by the University of Alaska is in the 29 best interests of the state, the commissioner shall consider 30 (A) the interest of the general public in retention of the land in 31 state ownership, including the interest in maintaining and protecting customary

01 and traditional uses of the resources of the land; 02 (B) ensuring an appropriate diversity in the character of land 03 owned by the state and by the University of Alaska; 04 (C) the public benefits achieved by conveyance of the land to 05 the University of Alaska; 06 (D) the probable potential for the development of the land and 07 its resources and the probable income to the University of Alaska from the 08 conveyance of the land; 09 (E) benefits to the University of Alaska from the conveyance 10 of the land to it; and 11 (F) the efficiency of the management of the land resulting from 12 the conveyance of the land. 13 (f) If the Board of Regents of the University of Alaska disagrees with a 14 decision of the commissioner of natural resources not to convey to the University of 15 Alaska land selected by it under this section, the Board of Regents and the 16 commissioner of natural resources shall submit the matter to the governor, who shall 17 make the decision. The decision of the governor is final. 18 (g) When land is conveyed to the University of Alaska under this section, the 19 University of Alaska takes the land subject to any possessory interest held by another 20 person on the effective date of the conveyance. Except as provided in 21 AS 14.40.368(1), the University of Alaska is entitled to receive the consideration due 22 under that interest for the duration of the interest. 23 (h) In conveying land to the University of Alaska under this section, the 24 commissioner of natural resources shall give public notice under AS 38.05.945(b) and 25 (c) and provide for access under AS 38.05.127, but other provisions of AS 38.04 and 26 AS 38.05 do not apply. 27 (i) Land transferred or conveyed to the University of Alaska under this section 28 (1) is subject to 29 (A) section 6(i) of the Alaska Statehood Act (P.L. 85-508, 72 30 Stat. 339); 31 (B) art. IX of the state constitution;

01 (C) AS 19.10.010; and 02 (D) the rights of the state under former 43 U.S.C. 932 (sec. 8, 03 Act of July 26, 1866, 14 Stat. 253); 04 (2) excludes any interest transferred to the state by quit claim deed 05 dated June 30, 1959, under authority of the Alaska Omnibus Act, P.L. 86-70, 73 Stat. 06 141; 07 (3) based on a land selection filed by the University of Alaska on or 08 after the effective date of this section and until the day before the day that is the fifth 09 anniversary of the effective date of this section is subject to reservation by the state 10 in perpetuity of all oil and gas that may be in or on the land, together with the right 11 to explore the land for oil and gas and to remove from the land all oil and gas located 12 in and on it. 13 (j) The University of Alaska shall bear all costs of selection, platting, 14 surveying, and conveyance of the land that it selects under this section and, subject to 15 appropriation, shall reimburse the Department of Natural Resources for the reasonable 16 costs incurred by that department relating to that selection, platting, surveying, and 17 conveyance. As to land due the University of Alaska under (c) of this section because 18 it has not been disapproved under (e) of this section, 19 (1) if the land has been surveyed, the boundaries of the land conveyed 20 must conform to the public land subdivisions established by the approved survey; 21 (2) if the land is unsurveyed, the commissioner shall survey the exterior 22 boundaries of the land to be conveyed without interior subdivision, and shall issue 23 patent in terms of the exterior boundary survey. 24 (k) For land due the University of Alaska under (c) of this section that is 25 unsurveyed, pending the survey of exterior boundaries and issuance of patent, the 26 commissioner of natural resources shall prepare and provide to the University of 27 Alaska a document of interim conveyance for the land to be conveyed. 28 (l) Except as provided in AS 14.40.368(2), management of land conveyed to 29 the University of Alaska by patent or by a document of interim conveyance vests with 30 the University of Alaska from the date of execution of the patent or document of 31 interim conveyance.

01 (m) The University of Alaska may not make a land selection under this section 02 after December 31, 2009. 03 * Sec. 5. AS 14.40.365(e) is repealed and reenacted to read: 04 (e) The commissioner of natural resources may not convey title to any land 05 selection made by the University of Alaska under this section if the commissioner 06 determines that the proposed selection 07 (1) includes land for which, at the time of its selection under this 08 section, 09 (A) a municipality has made a selection under AS 29.65, unless 10 the land selection is, at a later date, rejected by the commissioner of natural 11 resources or relinquished by the municipality; or 12 (B) the commissioner reasonably believes the land may be 13 selected by a municipality under AS 29.65.030, but the commissioner may not 14 withhold under this subparagraph the conveyance of title to land selected by the 15 university longer than three years after the date of the municipality's 16 incorporation; 17 (2) includes land that, at the time of its selection under this section, 18 (A) is subject to an oil and gas exploration license; or 19 (B) the commissioner reasonably believes will be made part of, 20 an oil and gas exploration license issued under AS 38.05.131 - 38.05.134; the 21 commissioner may not refuse to convey title to land to the University of Alaska 22 under this subparagraph for more than three years after its first selection by the 23 University of Alaska; 24 (3) is not in the best interests of the state; in making a determination 25 under this paragraph as to whether a selection by the University of Alaska is in the 26 best interests of the state, the commissioner shall consider 27 (A) the interest of the general public in retention of the land in 28 state ownership; 29 (B) ensuring an appropriate diversity in the character of land 30 owned by the state and by the University of Alaska; 31 (C) the public benefits achieved by conveyance of the land to

01 the University of Alaska; 02 (D) the probable potential for the development of the land and 03 its resources and the probable income to the University of Alaska from the 04 conveyance of the land; 05 (E) benefits to the University of Alaska from the conveyance 06 of the land to it; and 07 (F) the efficiency of the management of the land resulting from 08 the conveyance of the land. 09 * Sec. 6. AS 14.40 is amended by adding new sections to read: 10 Sec. 14.40.366. MANAGEMENT AND DISPOSITION OF UNIVERSITY 11 LAND. Notwithstanding other provisions of law, the University of Alaska shall seek 12 public comment on proposals for development or sale of university selections made 13 under AS 14.40.365. The Board of Regents shall adopt policies which provide that 14 the university shall prepare an annual plan for management and disposition of 15 university land under this section and shall, not less that 30 days prior to scheduled 16 approval by the Board of Regents of the plan 17 (1) make copies of the plan available at all legislative information 18 offices and at such other locations as the university may designate; 19 (2) publish a notice in newspapers of general circulation in the state 20 which provides the public with information on the locations where the plan is available 21 for public inspection; 22 (3) give notice to all legislators and to local governments with 23 jurisdiction over the land affected by the proposal; and 24 (4) seek public comment on the annual plan prior to action by the 25 Board of Regents approving the plan. 26 Sec. 14.40.368. MANAGEMENT AND DISPOSITION OF INCOME FROM 27 EXISTING ENCUMBRANCES. For the land selected by and conveyed to the 28 University of Alaska under AS 14.40.365 that is subject to a lease, contract, claim, 29 sale, permit, or right-of-way identified in AS 14.40.365(a)(4) 30 (1) the state is entitled to receive the income obtained from the lease, 31 contract, claim, sale, permit, or right-of-way for the duration of the term of the lease,

01 contract, claim, sale, permit, or right-of-way, and during any renewal of it that is 02 authorized by the lease, contract, claim, sale, permit, or right-of-way, or by law; 03 (2) the responsibility for the management of the land vests with the 04 University of Alaska only upon conclusion of the term of the lease, contract, claim, 05 sale, permit, or right-of-way, and any renewal authorized by the lease, contract, claim, 06 sale, permit, or right-of-way, by law. 07 Sec. 14.40.369. CUSTOMARY AND TRADITIONAL USES TO BE 08 CONTINUED. When land selected by the University of Alaska under AS 14.40.365 09 has been conveyed to it, the University of Alaska shall manage the land in a manner 10 that permits customary and traditional uses of the resources of that land to the 11 maximum extent possible. 12 * Sec. 7. AS 14.40.400(a) is amended to read: 13 (a) The Department of Revenue shall establish a separate endowment trust 14 fund in which all net income derived from the sale or lease of the land granted under 15 the Act of Congress approved January 21, 1929, and the land selected by and 16 conveyed to the University of Alaska under AS 14.40.365, and in which all 17 monetary gifts, bequests, or endowments made to the University of Alaska for the 18 purpose of the fund, shall be held in trust. 19 * Sec. 8. AS 14.40.400(e) is amended to read: 20 (e) Subject to legislative appropriation, the [THE] Department of 21 Administration shall disburse the net income from the trust fund upon vouchers 22 approved by the president and treasurer of the University of Alaska specifying the 23 purpose for which the money is to be used and showing it is to be used in conformity 24 with this section. 25 * Sec. 9. AS 14.40.491 is amended to read: 26 Sec. 14.40.491. DEFINITION OF UNIVERSITY RECEIPTS. In 27 AS 14.40.120 - 14.40.491, "university receipts" includes 28 (1) student fees, including tuition; 29 (2) receipts from university auxiliary services; 30 (3) recovery of indirect costs of university activities; 31 (4) the net income of the trust fund established in AS 14.40.400 and

01 receipts from sales and rentals of university property; 02 (5) federal receipts; 03 (6) gifts, grants, and contracts; and 04 (7) receipts from sales, rentals, and the provision of services of 05 educational activities. 06 * Sec. 10. AS 29.45.030(a) is amended to read: 07 (a) The following property is exempt from general taxation: 08 (1) municipal property, including property held by a public corporation 09 of a municipality, or state property, except that 10 (A) a private leasehold, contract, or other interest in the 11 property is taxable to the extent of the interest; 12 (B) notwithstanding any other provision of law, property 13 acquired by an agency, corporation, or other entity of the state through 14 foreclosure or deed in lieu of foreclosure and retained as an investment of a 15 state entity is taxable; this subparagraph does not apply to federal land granted 16 to the University of Alaska under AS 14.40.380 or 14.40.390, or to other land 17 granted to the university by the state to replace land that had been granted 18 under AS 14.40.380 or 14.40.390, or to land conveyed by the state to the 19 University of Alaska under AS 14.40.365; 20 (C) an ownership interest of a municipality in real property 21 located outside the municipality acquired after December 31, 1990, is taxable 22 by another municipality; however, a borough may not tax an interest in real 23 property located in the borough and owned by a city in that borough; 24 (2) household furniture and personal effects of members of a 25 household; 26 (3) property used exclusively for nonprofit religious, charitable, 27 cemetery, hospital, or educational purposes; 28 (4) property of a nonbusiness organization composed entirely of persons 29 with 90 days or more of active service in the armed forces of the United States whose 30 conditions of service and separation were other than dishonorable, or the property of 31 an auxiliary of that organization;

01 (5) money on deposit; 02 (6) the real property of certain residents of the state to the extent and 03 subject to the conditions provided in (e) of this section; 04 (7) real property or an interest in real property that is exempt from 05 taxation under 43 U.S.C. 1620(d), as amended; 06 (8) property of a political subdivision, agency, corporation, or other 07 entity of the United States to the extent required by federal law; except that a private 08 leasehold, contract, or other interest in the property is taxable to the extent of that 09 interest; 10 (9) natural resources in place including coal, ore bodies, mineral 11 deposits, and other proven and unproven deposits of valuable materials laid down by 12 natural processes, unharvested aquatic plants and animals, and timber. 13 * Sec. 11. APPLICABILITY OF UNIVERSITY SELECTION RIGHTS UNDER 14 AS 14.40.365 TO LAND. In addition to the land that, under AS 14.40.365(e), the 15 commissioner of natural resources may not convey to the University of Alaska, the 16 commissioner of natural resources may not convey land that, at the time of its selection by 17 the university, 18 (1) is subject to designation for conveyance or conveyance to the Alaska 19 Mental Health Trust Authority under sec. 54, ch. 66, SLA 1991; 20 (2) is land that the commissioner of natural resources reasonably believes 21 should be designated for conveyance or conveyed to the Alaska Mental Health Trust Authority 22 under sec. 55, ch. 66, SLA 1991, as compensation to that trust for original mental health trust 23 land not available for return to the corpus of the trust; or 24 (3) is land described in sec. 56, ch. 66, SLA 1991, as listed in "Lands 25 Hypothecated to the Mental Health Trust, May 1991" located in the office of the director of 26 the division of lands, Department of Natural Resources, in Anchorage, Alaska, that has been 27 hypothecated to secure reconstitution of the mental health trust; however, as the reconstitution 28 of the mental health trust is accomplished and the hypothecated land is released on a pro rata 29 basis, the University of Alaska may select the land and the commissioner may convey it. 30 * Sec. 12. LEGISLATIVE INTENT. It is the intent of the legislature that, if sec. 11 of 31 this Act has not taken effect on or before the effective date of secs. 1 - 4 and 6 - 10 of this

01 Act, the commissioner of natural resources reject, as inconsistent with the best interests of the 02 state, selections of land by the University of Alaska under AS 14.40.365, added by sec. 4 of 03 this Act, of land described in sec. 11 of this Act. 04 * Sec. 13. Section 5 of this Act takes effect on the effective date of a version of House Bill 05 199 or Senate Bill 150 of the Eighteenth Alaska State Legislature authorizing oil and gas 06 exploration licensing on state land that is passed by the Eighteenth Alaska State Legislature. 07 * Sec. 14. Section 11 of this Act takes effect on the effective date of ch. 66, SLA 1991.