txt

CSHB 333(FIN): "An Act relating to an endowment for public education and the University of Alaska; relating to university land; and providing for an effective date."

00 CS FOR HOUSE BILL NO. 333(FIN) 01 "An Act relating to an endowment for public education and the University of Alaska; 02 relating to university land; and providing for an effective date." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. AS 14.40.170(a) is amended to read: 05 (a) The Board of Regents shall 06 (1) appoint the president of the university by a majority vote of the 07 whole board, and the president may attend meetings of the board; 08 (2) fix the compensation of the president of the university, all heads of 09 departments, professors, teachers, instructors, and other officers; 10 (3) confer such appropriate degrees as it may determine and prescribe; 11 (4) except as provided under AS 14.40.505, have the care, control, 12 and management of 13 (A) all the real and personal property of the university; and 14 (B) land

01 (i) conveyed to the Board of Regents by the 02 commissioner of natural resources in the settlement of the claim of the 03 University of Alaska to land granted to the state in accordance with the 04 Act of March 4, 1915 (38 Stat. 1214), as amended, and in accordance 05 with the Act of January 21, 1929 (45 Stat. 1091), as amended; and 06 (ii) selected by the University of Alaska and conveyed 07 to it by the commissioner of natural resources under AS 14.40.365; 08 (5) keep a correct and easily understood record of the minutes of every 09 meeting and all acts done by it in pursuance of its duties; 10 (6) under procedures to be established by the commissioner of 11 administration, and in accordance with existing procedures for other state agencies, 12 have the care, control, and management of all money of the university and keep a 13 complete record of all money received and disbursed; 14 (7) adopt reasonable rules for the prudent trust management and the 15 long-term financial benefit to the university of the land of the university; 16 (8) provide public notice of sales, leases, exchanges, and transfers of 17 the land of the university or of interests in land of the university; 18 (9) administer, manage, market, and promote a postsecondary 19 education savings program, including the Alaska Higher Education Savings Trust 20 under AS 14.40.802 and the Alaska advance college tuition savings fund under 21 AS 14.40.803 - 14.40.817. 22 * Sec. 2. AS 14.40.291(a) is amended to read: 23 (a) Notwithstanding any other provision of law, university-grant land, state 24 replacement land that becomes university-grant land on conveyance to the university, 25 land selected by and conveyed to the University of Alaska under AS 14.40.365, and 26 any other land owned by the University of Alaska, except for land transferred under 27 AS 14.40.505, is not and may not be treated as state public domain land. Land 28 conveyed to the University of Alaska under AS 14.40.365 shall be managed under 29 AS 14.40.365 - 14.40.368 and policies of the Board of Regents of the University of 30 Alaska. 31 * Sec. 3. AS 14.40.400(a) is amended to read:

01 (a) The Board of Regents shall establish a separate endowment trust fund in 02 which shall be held in trust in perpetuity all 03 (1) net income derived from the sale or lease of the land granted under 04 the Act of Congress approved January 21, 1929, as amended; 05 (2) net income derived from the sale, lease, or management of the land 06 selected by and conveyed to the University of Alaska under AS 14.40.365; [AND] 07 (3) monetary gifts, bequests, or endowments made to the University of 08 Alaska for the purpose of the fund; and 09 (4) receipts transferred to the fund under AS 14.40.500. 10 * Sec. 4. AS 14.40 is amended by adding new sections to read: 11 Sec. 14.40.495. Use of public school trust fund; percentage of market 12 value. Up to five percent of the market value of that portion of the public school trust 13 fund, as established under AS 37.14.110, that represents the contributions to that fund 14 under AS 14.40.500 may be annually appropriated by the legislature for the support of 15 public elementary and secondary education and the cost of managing that portion of 16 the public school trust fund. The amounts appropriated for public elementary and 17 secondary education shall be divided equally between elementary education and 18 secondary education. 19 Sec. 14.40.500. Funding from public school trust fund and university 20 lands. By November 15 of each year, the commissioner of revenue shall transfer to 21 the University of Alaska endowment trust fund (AS 14.40.400) and to the public 22 school trust fund (AS 37.14.110) the receipts derived from the management of each 23 interest in land conveyed under AS 14.40.505, including amounts paid to the state as 24 proceeds of sale or annual rent of surface rights, mineral lease rentals, royalties, or 25 royalty sale proceeds from the previous fiscal year. 26 Sec. 14.40.505. Land endowment. The legislature conveys to the University 27 of Alaska as tenant in common with the state, and subject to the limitations of this 28 section, an undivided two percent interest in land that is managed by the Department 29 of Natural Resources under AS 38, and to the public school trust fund as tenant in 30 common with the state, and subject to the limitations of this section, an undivided 31 three percent interest in state land that is managed by the Department of Natural

01 Resources under AS 38. The conveyance shall be recorded under AS 40.17.020. 02 Notwithstanding another provision of law, 03 (1) the interest in land conveyed to the University of Alaska and the 04 public school trust fund is strictly limited to the right to receive income earned and 05 received by the state as proceeds from royalties, rent, sale, lease, and other disposal of 06 land that is managed by the Department of Natural Resources under AS 38, after 07 deducting contributions to the Alaska permanent fund required by law, contributions 08 to the public school trust fund under AS 37.14.150, and administrative service fees, 09 application fees, filing fees, processing fees, or other similar fees; 10 (2) the interest in land conveyed to the University of Alaska and the 11 public school trust fund does not include a right or interest in possession of land, in the 12 management or disposal of the land, or in a decision-making process relating to the 13 use of the land; except where otherwise provided in law and regulation, the 14 Department of Natural Resources shall be the sole agency to manage or dispose of 15 land subject to this section; 16 (3) the Department of Natural Resources does not owe the University 17 of Alaska or the public school trust fund a fiduciary duty with respect to its 18 management or disposition of the land subject to this section. 19 * Sec. 5. AS 29.45.030(a) is amended to read: 20 (a) The following property is exempt from general taxation: 21 (1) municipal property, including property held by a public corporation 22 of a municipality, state property, property of the University of Alaska, or land that is 23 in the trust established by the Alaska Mental Health Enabling Act of 1956, P.L. 84- 24 830, 70 Stat. 709, except that 25 (A) a private leasehold, contract, or other interest in the 26 property is taxable to the extent of the interest; however, an interest created by 27 a nonexclusive use agreement between the Alaska Industrial Development and 28 Export Authority and a user of an integrated transportation and port facility 29 owned by the authority and initially placed in service before January 1, 1999, 30 is taxable only to the extent of, and for the value associated with, those specific 31 improvements used for lodging purposes;

01 (B) notwithstanding any other provision of law, property 02 acquired by an agency, corporation, or other entity of the state through 03 foreclosure or deed in lieu of foreclosure and retained as an investment of a 04 state entity is taxable; this subparagraph does not apply to federal land granted 05 to the University of Alaska under AS 14.40.380 or 14.40.390, to other land 06 granted to the university by the state to replace land that had been granted 07 under AS 14.40.380 or 14.40.390, [OR] to land conveyed by the state to the 08 university under AS 14.40.365, or to an interest in land conveyed by the 09 state to the university or the public school trust fund (AS 37.14.110) under 10 AS 14.40.505; 11 (C) an ownership interest of a municipality in real property 12 located outside the municipality acquired after December 31, 1990, is taxable 13 by another municipality; however, a borough may not tax an interest in real 14 property located in the borough and owned by a city in that borough; 15 (2) household furniture and personal effects of members of a 16 household; 17 (3) property used exclusively for nonprofit religious, charitable, 18 cemetery, hospital, or educational purposes; 19 (4) property of a nonbusiness organization composed entirely of 20 persons with 90 days or more of active service in the armed forces of the United States 21 whose conditions of service and separation were other than dishonorable, or the 22 property of an auxiliary of that organization; 23 (5) money on deposit; 24 (6) the real property of certain residents of the state to the extent and 25 subject to the conditions provided in (e) of this section; 26 (7) real property or an interest in real property that is exempt from 27 taxation under 43 U.S.C. 1620(d), as amended; 28 (8) property of a political subdivision, agency, corporation, or other 29 entity of the United States to the extent required by federal law; except that a private 30 leasehold, contract, or other interest in the property is taxable to the extent of that 31 interest;

01 (9) natural resources in place including coal, ore bodies, mineral 02 deposits, and other proven and unproven deposits of valuable materials laid down by 03 natural processes, unharvested aquatic plants and animals, and timber. 04 * Sec. 6. AS 37.14.140 is amended to read: 05 Sec. 37.14.140. Utilization of income. The net income of the fund may not 06 be appropriated for a purpose other than the support of the state public school 07 program. The commissioner of revenue shall invest realized net income that has not 08 been appropriated or that has been appropriated but not expended until the income is 09 appropriated and expended. In this section, "net income" does not include 10 contributions to the fund under AS 14.40.500 or income from those contributions, 11 but the commissioner of revenue shall invest those contributions and income in 12 accordance with this section. 13 * Sec. 7. AS 37.14.160 is amended to read: 14 Sec. 37.14.160. Duties of the commissioner of revenue. The commissioner 15 of revenue is the treasurer of the trust fund created in AS 37.14.110 and shall 16 (1) in carrying out investment duties under this section, exercise the 17 same powers and duties established for the Alaska State Pension Investment Board in 18 AS 14.25.180(c); 19 (2) deposit the principal and income from investments in separate 20 principal and income accounts for the fund; 21 (3) invest and maintain accounting records that distinguish between the 22 principal and income of the fund; 23 (4) separately account for contributions to the trust fund under 24 AS 14.40.500 and the principal of the fund attributable to those contributions for 25 the purpose of determining the amount that may be appropriated by the 26 legislature under AS 14.40.495; and 27 (5) provide reports to the board established under AS 37.14.120 on the 28 condition and investment performance of the fund. 29 * Sec. 8. The uncodified law of the State of Alaska is amended by adding a new section to 30 read: 31 APPLICABILITY. The rights under AS 14.40.505, as enacted in sec. 4 of this Act, of

01 the University of Alaska and the public school trust fund (AS 37.14.110) to receive income 02 earned and received by the state applies to income received by the state under the following 03 entered into on or after the effective date of this Act: 04 (1) oil and gas leases under AS 38.05.180, shallow natural gas leases under 05 AS 38.05.177, and oil and gas exploration licenses under AS 38.05.132 and otherwise; and 06 (2) contracts for royalties, rents, sales, leases, and other disposals of state land. 07 * Sec. 9. This Act takes effect July 1, 2004.