HB 479: "An Act establishing an education fund and a land endowment for public education; and providing for an effective date."
00 HOUSE BILL NO. 479 01 "An Act establishing an education fund and a land endowment for public education; 02 and providing for an effective date." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. AS 37.14 is amended by adding new sections to read: 05 Article 9. Education Fund. 06 Sec. 37.14.800. Education fund established. (a) Under art. IX, sec. 18, 07 Constitution of the State of Alaska, the education fund is established as a separate fund 08 of the state. 09 (b) The principal of the fund consists of 10 (1) legislative appropriations to the fund; 11 (2) transfers of land to the fund; and 12 (3) gifts, bequests, and contributions of cash or other assets from a 13 person. 14 (c) The net income of the fund shall be determined by the commissioner of
01 revenue in accordance with investment accounting principles and in a manner that 02 preserves the distinction between principal and income. 03 Sec. 37.14.810. Powers and duties of the commissioner of revenue. The 04 commissioner of revenue is the treasurer of the fund and has the power and duty to 05 (1) act as official custodian of the cash and investments belonging to 06 the fund by securing adequate and safe custodial facilities; 07 (2) receive all items of cash and investments belonging to the fund; 08 (3) collect the principal and income from investments owned or 09 acquired by the fund and deposit the amounts in separate principal and income 10 accounts for the fund; 11 (4) invest and reinvest the assets of the fund as provided in this section 12 and as provided for the investment of funds under AS 37.14.170; 13 (5) exercise the powers of an owner with respect to the assets of the 14 fund; 15 (6) maintain accounting records of the fund in accordance with 16 investment accounting principles and with distinction between the principal and 17 income accounts of the fund; 18 (7) engage an independent firm of certified public accountants to 19 annually audit the financial condition of the fund's investments and investment 20 transactions; 21 (8) enter into and enforce contracts or agreements considered 22 necessary for the investment purposes of the fund; 23 (9) report to the board the condition and investment performance of the 24 fund; 25 (10) do all acts, whether or not expressly authorized, that the 26 commissioner of revenue considers necessary or proper in administering the assets of 27 the fund. 28 Sec. 37.14.820. Administration of the fund; fund board established. (a) 29 The fund shall be administered by the Education Fund Board. 30 (b) The Education Fund Board is established in the Department of Education 31 and Early Development. The board is composed of
01 (1) the governor or a designee of the governor; 02 (2) the commissioner of natural resources or the commissioner's 03 designee; 04 (3) the commissioner of education and early development or the 05 commissioner's designee; and 06 (4) four public members appointed by the governor; in appointing the 07 public members, the governor shall give a preference to persons who have experience 08 and expertise in 09 (A) education; or 10 (B) private sector resource development. 11 Sec. 37.14.830. Powers and duties of the board. When acting as 12 administrator of the fund, the board shall 13 (1) hold regular and special meetings it considers necessary; the board 14 may hold meetings by teleconference; 15 (2) have the care, control, and management of land selected by and 16 conveyed to the fund by the commissioner of natural resources under AS 37.14.850; 17 (3) keep audio tape recordings of each meeting of the board to be made 18 available on request; and 19 (4) submit to the governor and make available to the legislature by 20 February 1 each year a report describing 21 (A) expenditures made during the preceding fiscal year from 22 the fund that are derived from sales, leases, exchanges, or transfers of the land 23 of the fund or of interests in land of the fund that were selected by and 24 conveyed to the fund under AS 37.14.850; and 25 (B) the annual level of contributions to, income of, and 26 expenses of the fund. 27 Sec. 37.14.840. Uses of fund principal and net income. (a) The principal of 28 the fund shall be retained perpetually in the fund for investment as specified in 29 AS 37.14.810. 30 (b) The net income of the fund may be annually appropriated by the 31 legislature for the support of public elementary and secondary education and for
01 support of the University of Alaska. 02 Sec. 37.14.850. Fund land from Statehood Act land selection conveyances. 03 (a) The board may select and is entitled to receive the conveyance of 5,000,000 acres 04 of land conveyed to the state under sec. 6(b) of the Alaska Statehood Act (P.L. 85-508, 05 72 Stat. 339). The board shall annually submit a list of selections to the commissioner 06 of natural resources. If there is disagreement between the board and the commissioner 07 of natural resources about the land selected, the disagreement must be submitted to the 08 governor, who shall make the final decision. The board and the governor shall 09 annually and jointly submit to the legislature, within 30 days after the beginning of a 10 regular legislative session, a list of the selections of land proposed to be conveyed to 11 the fund under this section. Each list must contain not more than 25 percent of the 12 total acres of land to which the fund is entitled after subtracting previous conveyances 13 under this section, but not less than 25,000 acres or the remaining entitlement under 14 this section, whichever is less. The legislature may by law approve or disapprove the 15 list of selections submitted to it. A list of selections submitted shall be considered 16 approved for conveyance to the fund if the legislature does not disapprove the list 17 during the legislative session during which the list was submitted. If the amount of 18 land to be conveyed exceeds the balance due the fund under this section, the fund shall 19 set out the land to be conveyed in priority order. Land may not be selected if, on the 20 date of its selection by the board, it 21 (1) has been reserved by law from the public domain; 22 (2) is land 23 (A) included in a five-year proposed oil and gas leasing 24 program under AS 38.05.180(b); or 25 (B) leased under, or for which a lease application is pending 26 under, AS 38.05.180(d) or 38.05.150; 27 (3) is subject to 28 (A) an oil, gas, or coal lease, or coal prospecting permit; 29 (B) a mining claim, offshore prospecting permit, a prospecting 30 site, an upland mining lease, or a mining leasehold location; 31 (4) is necessary to carry out the purpose of an interagency land
01 management agreement; or 02 (5) is subject to conveyance under a land exchange or land settlement 03 agreement. 04 (b) Notwithstanding AS 38.05.125(a), the transfer of ownership and 05 management of land from the Department of Natural Resources to the fund under this 06 section includes the interest of the state in 07 (1) the coal, ores, minerals, fissionable materials, geothermal 08 resources, and fossils that may be in or on the land; and 09 (2) the oil and gas that may be in or on the land, but only as to land 10 that is selected by the board under this section on and after the date that is the fifth 11 anniversary of the effective date of this section. 12 (c) When the board selects the land to which it is entitled under this section, 13 selections must be made in parcels of 640 acres or larger unless the selection is an 14 isolated tract or the commissioner of natural resources finds it is in the best interest of 15 the state to convey less. When the fund becomes entitled to land under this section, 16 the commissioner of natural resources shall convey a document of interim conveyance 17 under (j) of this section or a patent to land. 18 (d) Notwithstanding any other provision of law, for land selected under (a) of 19 this section but not yet patented to the fund or for which a document of interim 20 conveyance has not been issued to the fund under this section, 21 (1) the commissioner of natural resources is authorized to enter into 22 contracts and grant leases, licenses, prospecting sites, claims, permits, rights-of-way, 23 or easements and any interim conveyance or patent shall be subject to the contract, 24 lease, license, prospecting site, claim, permit, right-of-way, or easement, except that 25 the authority granted the commissioner by this subsection 26 (A) is the authority that the commissioner otherwise would 27 have had under existing laws and regulations had the land not been selected by 28 the fund; and 29 (B) may be exercised only if the fund has concurred before the 30 action is taken by the commissioner; 31 (2) income from and management of the land is subject to
01 AS 37.14.880. 02 (e) Unless the governor provides otherwise under (a) of this section, the 03 governor may not include on a list of selections of land submitted to the legislature a 04 land selection made by the fund under this section if the commissioner of natural 05 resources determines that the proposed selection 06 (1) includes land for which, at the time of its selection under this 07 section, 08 (A) a municipality has made a selection under AS 29.65 unless 09 the land selection is, at a later date, rejected by the commissioner of natural 10 resources or relinquished by the municipality; or 11 (B) the commissioner reasonably believes the land may be 12 selected by a municipality under AS 29.65, but the commissioner may not 13 withhold under this subparagraph the conveyance of title to land selected by 14 the fund longer than three years after the date of the municipality's 15 incorporation; or 16 (2) includes land that, at the time of its selection under this section, 17 (A) is subject to an oil and gas exploration license; or 18 (B) the commissioner reasonably believes will be made part of 19 an oil and gas exploration license issued under AS 38.05.131 - 38.05.134; the 20 commissioner may not refuse to convey title to land to the fund under this 21 subparagraph for more than three years after its first selection by the fund. 22 (f) When land is conveyed to the fund under this section, the fund takes the 23 land subject to any possessory interest held by another person on the effective date of 24 the conveyance. 25 (g) In conveying land to the fund under this section, the commissioner of 26 natural resources shall give public notice that substantially complies with notice 27 requirements under AS 38.05.945(b) and (c) and provide for access under 28 AS 38.05.127, but other provisions of AS 38.04 and AS 38.05 do not apply. 29 (h) Land transferred to the fund under this section 30 (1) is subject to 31 (A) sec. 6(i) of the Alaska Statehood Act (P.L. 85-508, 72 Stat.
01 339); 02 (B) art. IX of the state constitution; 03 (C) AS 19.10.010; 04 (D) the payment requirements to the Alaska permanent fund 05 under AS 37.13.010(a) and (b); and 06 (E) the rights of the state under former 43 U.S.C. 932 (sec. 8, 07 Act of July 26, 1866, 14 Stat. 253); 08 (2) excludes any interest transferred to the state by quitclaim deed 09 dated June 30, 1959, under authority of the Alaska Omnibus Act, P.L. 86-70, 73 Stat. 10 141; 11 (3) based on a land selection filed by the fund on or after the effective 12 date of this section and until the day before the day that is the fifth anniversary of the 13 effective date of this section, is subject to reservation by the Department of Natural 14 Resources in perpetuity of all oil and gas that may be in or on the land, together with 15 the right to explore the land for oil and gas and to remove from the land all oil and gas 16 located in and on it. 17 (i) The fund shall bear all costs of selection, platting, surveying, and, except as 18 provided in (k) of this section, conveyance of the land that it selects under this section 19 and, subject to appropriation, shall reimburse the Department of Natural Resources for 20 the reasonable costs incurred by that department relating to that selection, platting, 21 surveying, and conveyance. As to land due the fund under (c) of this section, 22 (1) if the land has been surveyed, the boundaries of the land conveyed 23 must conform to the public land subdivisions established by the approved survey; 24 (2) if the land is unsurveyed, the commissioner shall survey the 25 exterior boundaries of the land to be conveyed without interior subdivision and shall 26 issue patent in terms of the exterior boundary survey within one year of the later of the 27 effective date of the approval by the legislature of the list containing the land or the 28 adjournment of the legislative session during which the list containing the land was 29 not disapproved by the legislature. 30 (j) For land due the fund under (c) of this section that is unsurveyed, pending 31 the survey of exterior boundaries and issuance of patent, the commissioner of natural
01 resources shall, within one year of the later of the effective date of the approval by the 02 legislature of the list containing the land or the adjournment of the legislative session 03 during which the list containing the land was not disapproved by the legislature, 04 prepare and provide to the fund a document of interim conveyance for the land to be 05 conveyed. 06 (k) Except as provided in AS 37.14.880(2), management of land conveyed to 07 the fund by patent or by a document of interim conveyance vests with the fund from 08 the date of recording of the patent or document of interim conveyance. The 09 Department of Natural Resources shall pay the cost of recording all patents and 10 documents of interim conveyance. 11 (l) The board may not make a land selection under this section after 12 December 31, 2008. 13 Sec. 37.14.860. Management and disposition of land. (a) The board shall, 14 by policy, establish procedures for mineral entry or location and mineral leasing on 15 land selections made under AS 37.14.850 that are substantially similar to mineral 16 entry, location, and leasing procedures for state land under AS 38.05.185 - 38.05.275. 17 (b) Notwithstanding other provisions of law, the board shall seek public 18 comment on proposals for development, exchange, or sale of land selections made 19 under AS 37.14.850. The board shall adopt policies that provide that the fund shall 20 prepare an annual plan for management and disposition of fund land under this section 21 and shall, not less than 60 days before scheduled approval by the board of the plan, 22 (1) make copies of the plan available at all legislative information 23 offices and at other locations as the board may designate; 24 (2) publish a notice in newspapers of general circulation in the state 25 that provides the public with information on the locations where the plan is available 26 for public inspection; 27 (3) give notice to all legislators and to local governments with 28 jurisdiction over the land affected by the proposal; and 29 (4) seek public comment on the annual plan before action by the board 30 approving the plan. 31 Sec. 37.14.870. Confidential records. Notwithstanding AS 40.25.110 -
01 40.25.125 and 40.25.220, on a determination that it is in the best interest of the fund or 02 on the request of the person who has provided the information, the board may keep the 03 following confidential: 04 (1) the name of a person applying for the sale, lease, or other disposal 05 of land or an interest in land conveyed to the fund under AS 37.14.850; 06 (2) before the announced time of opening of an offer to purchase, 07 lease, or obtain a disposal of land conveyed to the fund under AS 37.14.850, the 08 names of the participants and the terms of their offers; 09 (3) all geological, geophysical, engineering, architectural, sales, 10 appraisal, gross receipts, net receipts, or other financial information relating to land or 11 an interest in land conveyed to the fund under AS 37.14.850 and considered for or 12 offered for disposal or currently subject to a contract; 13 (4) cost data and financial information submitted by an applicant in 14 support of applications for bonds, leases, or other information in offerings and 15 ongoing operations relating to management of land conveyed to the fund under 16 AS 37.14.850; 17 (5) applications for rights-of-way or easements across land conveyed 18 to the fund under AS 37.14.850; and 19 (6) requests for information about or applications by public agencies 20 for land conveyed to the fund under AS 37.14.850 that is being considered for use for 21 a public purpose. 22 Sec. 37.14.880. Land subject to encumbrances and trespasses. Except as 23 provided in AS 37.14.850(b), for the land selected by the board under AS 37.14.850 24 that is subject to a lease, license, contract, prospecting site, claim, sale, permit, right- 25 of-way, or easement, or to trespass, 26 (1) if the lease, license, contract, prospecting site, claim, sale, permit, 27 right-of-way, easement, or trespass 28 (A) existed before the selection of the land by the board, the 29 general fund or permanent fund, as appropriate, the state is entitled to receive 30 the income obtained from the lease, license, contract, prospecting site, claim, 31 sale, permit, right-of-way, easement, or trespass for the duration of the term of
01 the lease, license, contract, prospecting site, claim, sale, permit, right-of-way, 02 or easement, or of the trespass, and during any renewal of it that is authorized 03 by the lease, license, contract, prospecting site, claim, sale permit, right-of- 04 way, or easement, or by law; 05 (B) did not exist before the selection of the land by the board, 06 (i) the general fund or permanent fund, as appropriate, 07 is entitled to receive the income obtained from the lease, license, 08 contract, prospecting site, claim, sale, permit, right-of-way, or 09 easement, or from trespass before the recording of the conveyance to 10 the fund by the issuance of a document of interim conveyance or a 11 patent; 12 (ii) the fund is entitled to receive the income obtained 13 from the lease, license, contract, prospecting site, claim, sale, permit, 14 right-of-way, or easement, or from trespass on the date of and after the 15 recording of the conveyance to the fund by the issuance of a document 16 of interim conveyance or a patent; 17 (2) the responsibility for the management of the land vests with the 18 fund only upon conclusion of the term of the lease, license, contract, prospecting site, 19 claim, sale, permit, right-of-way, or easement, and any renewal authorized by the 20 lease, license, contract, prospecting site, claim, sale, permit, right-of-way, or easement, 21 or by law, if the lease, license, contract, prospecting site, claim, sale, permit, right-of- 22 way, or easement existed before the land's being selected by the board; if the lease, 23 license, contract, prospecting site, claim, sale, permit, right-of-way, or easement was 24 entered into after selection, then the responsibility for management vests with the fund 25 on the date of recording of the conveyance of the land to the fund by a document of 26 interim conveyance or patent. 27 Sec. 37.14.890. Customary and traditional uses to be continued. When 28 land selected by the fund under AS 37.14.850 has been conveyed to it, before 29 conveying or disposing of an interest in land to a third party, the fund shall manage the 30 land in a manner that permits customary and traditional uses of the resources of that 31 land to the maximum extent practicable.
01 Sec. 37.14.899. Definitions. In AS 37.14.800 - 37.14.899, 02 (1) "board" means the Education Fund Board; 03 (2) "fund" means the education fund established in art. IX, sec. 18, 04 Constitution of the State of Alaska. 05 * Sec. 2. AS 29.45.030(a) is amended to read: 06 (a) The following property is exempt from general taxation: 07 (1) municipal property, including property held by a public corporation 08 of a municipality, state property, property of the University of Alaska, property of the 09 education fund, or land that is in the trust established by the Alaska Mental Health 10 Enabling Act of 1956, P.L. 84-830, 70 Stat. 709, except that 11 (A) a private leasehold, contract, or other interest in the 12 property is taxable to the extent of the interest; however, an interest created by 13 a nonexclusive use agreement between the Alaska Industrial Development and 14 Export Authority and a user of an integrated transportation and port facility 15 owned by the authority and initially placed in service before January 1, 1999, 16 is taxable only to the extent of, and for the value associated with, those specific 17 improvements used for lodging purposes; 18 (B) notwithstanding any other provision of law, property 19 acquired by an agency, corporation, or other entity of the state through 20 foreclosure or deed in lieu of foreclosure and retained as an investment of a 21 state entity is taxable; this subparagraph does not apply to federal land granted 22 to the University of Alaska under AS 14.40.380 or 14.40.390, to other land 23 granted to the university by the state to replace land that had been granted 24 under AS 14.40.380 or 14.40.390, [OR] to land conveyed by the state to the 25 university under AS 14.40.365, or to land conveyed by the state to the 26 education fund under AS 37.14.850; 27 (C) an ownership interest of a municipality in real property 28 located outside the municipality acquired after December 31, 1990, is taxable 29 by another municipality; however, a borough may not tax an interest in real 30 property located in the borough and owned by a city in that borough; 31 (2) household furniture and personal effects of members of a
01 household; 02 (3) property used exclusively for nonprofit religious, charitable, 03 cemetery, hospital, or educational purposes; 04 (4) property of a nonbusiness organization composed entirely of 05 persons with 90 days or more of active service in the armed forces of the United States 06 whose conditions of service and separation were other than dishonorable, or the 07 property of an auxiliary of that organization; 08 (5) money on deposit; 09 (6) the real property of certain residents of the state to the extent and 10 subject to the conditions provided in (e) of this section; 11 (7) real property or an interest in real property that is exempt from 12 taxation under 43 U.S.C. 1620(d), as amended; 13 (8) property of a political subdivision, agency, corporation, or other 14 entity of the United States to the extent required by federal law; except that a private 15 leasehold, contract, or other interest in the property is taxable to the extent of that 16 interest; 17 (9) natural resources in place including coal, ore bodies, mineral 18 deposits, and other proven and unproven deposits of valuable materials laid down by 19 natural processes, unharvested aquatic plants and animals, and timber. 20 * Sec. 3. Section 3, ch. 117, SLA 2000, is repealed and reenacted to read: 21 Sec. 3. AS 29.45.030(a) is amended to read: 22 (a) The following property is exempt from general taxation: 23 (1) municipal property, including property held by a public corporation 24 of a municipality, state property, property of the University of Alaska, property of the 25 education fund, or land that is in the trust established by the Alaska Mental Health 26 Enabling Act of 1956, P.L. 84-830, 70 Stat. 709, except that 27 (A) a private leasehold, contract, or other interest in the 28 property is taxable to the extent of the interest; [HOWEVER, AN INTEREST 29 CREATED BY A NONEXCLUSIVE USE AGREEMENT BETWEEN THE 30 ALASKA INDUSTRIAL DEVELOPMENT AND EXPORT AUTHORITY 31 AND A USER OF AN INTEGRATED TRANSPORTATION AND PORT
01 FACILITY OWNED BY THE AUTHORITY AND INITIALLY PLACED IN 02 SERVICE BEFORE JANUARY 1, 1999, IS TAXABLE ONLY TO THE 03 EXTENT OF, AND FOR THE VALUE ASSOCIATED WITH, THOSE 04 SPECIFIC IMPROVEMENTS USED FOR LODGING PURPOSES;] 05 (B) notwithstanding any other provision of law, property 06 acquired by an agency, corporation, or other entity of the state through 07 foreclosure or deed in lieu of foreclosure and retained as an investment of a 08 state entity is taxable; this subparagraph does not apply to federal land granted 09 to the University of Alaska under AS 14.40.380 or 14.40.390, to other land 10 granted to the university by the state to replace land that had been granted 11 under AS 14.40.380 or 14.40.390, to land conveyed by the state to the 12 university under AS 14.40.365, or to land conveyed by the state to the 13 education fund under AS 37.14.850; 14 (C) an ownership interest of a municipality in real property 15 located outside the municipality acquired after December 31, 1990, is taxable 16 by another municipality; however, a borough may not tax an interest in real 17 property located in the borough and owned by a city in that borough; 18 (2) household furniture and personal effects of members of a 19 household; 20 (3) property used exclusively for nonprofit religious, charitable, 21 cemetery, hospital, or educational purposes; 22 (4) property of a nonbusiness organization composed entirely of 23 persons with 90 days or more of active service in the armed forces of the United States 24 whose conditions of service and separation were other than dishonorable, or the 25 property of an auxiliary of that organization; 26 (5) money on deposit; 27 (6) the real property of certain residents of the state to the extent and 28 subject to the conditions provided in (e) of this section; 29 (7) real property or an interest in real property that is exempt from 30 taxation under 43 U.S.C. 1620(d), as amended; 31 (8) property of a political subdivision, agency, corporation, or other
01 entity of the United States to the extent required by federal law; except that a private 02 leasehold, contract, or other interest in the property is taxable to the extent of that 03 interest; 04 (9) natural resources in place including coal, ore bodies, mineral 05 deposits, and other proven and unproven deposits of valuable materials laid down by 06 natural processes, unharvested aquatic plants and animals, and timber. 07 * Sec. 4. The uncodified law of the State of Alaska is amended by adding a new section to 08 read: 09 CONDITIONAL EFFECT. This Act takes effect only if the voters at the 2004 general 10 election approve an amendment to the Constitution of the State of Alaska proposed by the 11 Twenty-Third Alaska State Legislature that creates an education fund for public education. 12 * Sec. 5. If this Act takes effect, it takes effect on the effective date of an amendment to the 13 Constitution of the State of Alaska proposed by the Twenty-Third Alaska State Legislature 14 that creates an education fund for public education.