Legislature(2009 - 2010)BARNES 124
02/18/2010 08:00 AM House COMMUNITY & REGIONAL AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| HB295 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 295 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 295-UNIVERSITY LAND GRANT
8:11:28 AM
CO-CHAIR MUNOZ announced that the only order of business would
be HOUSE BILL NO. 295, "An Act relating to the grant of certain
state land to the University of Alaska; relating to the duties
of the Board of Regents; relating to deposits made to the Alaska
permanent fund received from certain lands conveyed to the
University of Alaska; ratifying and reauthorizing certain prior
conveyances of land to the University of Alaska; making
conforming amendments; and providing for an effective date."
[Before the committee is CSHB 295(EDC).]
8:13:09 AM
DICK MYLIUS, Director, Division of Mining, Land and Water,
Department of Natural Resources (DNR), explained that HB 295 was
introduced by the governor to address problems that occurred
with the passage of the 2005 legislation that gave the
University of Alaska 250,000 acres of state land. This
legislation only transfers about 200,000 acres, which are
exactly the same lands as in the 2005 legislation. This
legislation fixes a provision in the 2005 legislation that
caused the legislation to be found unconstitutional. The
provision required the money from the lands given to the
university be deposited into the University Land Endowment. A
subsequent lawsuit over the issue of dedicated funds ultimately
resulted in the Supreme Court overturning the entire land
conveyance because it found the provision to be
unconstitutional.
MR. MYLIUS informed the committee that the University of Alaska
is a land grant college. Every state has one land grant
college, which began with land provided to it by the federal
government. The notion was to provide land to the university in
order to allow the land to be used for revenue or educational
and research purposes. The University of Alaska's original
grant was given in two chunks in 1915 and 1929. Under those
grants the university received 110,000 acres, which was the
second smallest land grant ever given to a university. One
discussion during statehood was what sort of land grant should
be given to the state and whether some of that land should be
given to the University of Alaska. Although some of the earlier
versions of the statehood legislation included specific land
grants to the university, the final land grant to the state was
all given to the state not as trust lands or dedicated to any
specific group. Therefore, there was no provision in the
Statehood Act to give specific lands to the university.
However, the university felt it was owed land from the federal
government, land that was given to the state. The
aforementioned has led to the university advocating for many
years that it should receive a share of the state's land grant.
Beginning in 1959, there were various attempts to pass
university lands legislation. Every legislative session from
1993-2000 considered university land conveyance legislation, of
which three passed the legislature and three were vetoed by the
governor. In 2000 the governor's veto of the university land
conveyance legislation, Senate Bill 7, was overridden by the
legislature. The aforementioned resulted in a lawsuit regarding
whether overriding the governor's veto of Senate Bill 7 required
a two-thirds or three-quarters vote. The governor argued that
it was appropriations legislation while the legislature argued
that it wasn't. The case went to the Alaska Supreme Court,
which ruled in favor of the legislature and upheld the
legislature's override of the governor's veto of Senate Bill 7.
Therefore, the legislation passed in 2000 went into effect in
2004 and gave the university 250,000 acres of land without
specifying which lands would be given to the university. The
legislation established a fairly contentious process between the
university and DNR to determine which lands the university would
receive. Furthermore, the restrictions in the legislation
regarding what lands the university could not get significantly
limited the pool of lands available. Recognizing the
aforementioned, DNR and the university presented to the
legislature a list of lands totaling 250,000 acres, which the
legislature was asked to approve in 2005 in the form of House
Bill 130. House Bill 130 was passed by the legislature and
approved by the governor. At this point, more than half of the
parcels under House Bill 130 have been transferred to the
University of Alaska. However, the Southeast Alaska
Conservation Council (SEACC) brought a suit over the dedicated
funds clause. Finally, after several years, the Supreme Court
ruled in March 2009 that House Bill 130 violated the dedicated
funds clause. The court further stated that the trust
provisions couldn't be separated from the land provisions, and
therefore the court invalidated the entire legislation with one
exception and required the university to return the parcels that
DNR had already conveyed to it. The parcel the court allowed
the university to keep is referred to as the research forest,
which is land that the university, the federal forest service,
state forest service, and others use for research. This parcel
is in the Tanana Valley State Forest and was specifically set
aside as research/educational property and included a
restriction against the university selling the parcel for at
least 50 years. This parcel accounts for the difference in
acreage amounts between HB 295 and House Bill 130.
8:20:13 AM
MR. MYLIUS explained that HB 295 fixes the dedicated funds
provision by specifically stating that the revenue from the
lands given to the university are considered university receipts
and are deposited into the general fund for the legislature to
appropriate as it sees fit. The remainder of the legislation is
basically intact from the 2005 legislation. In fact, the
legislation includes language that refers to the list of lands
book, which is exactly same. He informed the committee that the
legislation before it proposes to convey the following: 29
parcels in Southeast Alaska, 5 parcels in South Central Alaska,
and 18 parcels in the Interior. The legislation specifically
excludes nine parcels in Southeast Alaska, which were withdrawn
by the legislation in 2005 due to public concerns. There are
also nine other parcels in Wrangell, Petersburg, and Pelican
that are on hold due to land selections by or formation of
boroughs. The aforementioned provision had to be changed a bit
because the provision in 2005 placed those parcels on hold
pending formation of a borough. In the case of Wrangell, a
borough has formed and thus has a municipal entitlement. The
legislation before the committee also includes specific language
that addresses the 2009 Supreme Court ruling by directing the
revenue to the general fund. He noted that two small parcels
near Fairbanks had been conveyed under different authorities,
one of which was a small parcel held by the Department of
Transportation & Public Facilities (DOT&PF).
8:22:39 AM
MR. MYLIUS highlighted that the intent of CSHB 295(EDC) was to
swap two parcels. Although in 2005 the legislature withdrew a
parcel around Pelican, recent testimony in the House Education
Standing Committee related that Pelican residents preferred that
the Mite Cove parcel be dropped and part of the parcel that had
previously been dropped was offered in exchange. However, the
amendment to effectuate the aforementioned change didn't
actually accomplish it, and thus this committee will need to
address that.
8:23:30 AM
MR. MYLIUS, in response to Co-Chair Munoz, explained that CSHB
295(EDC) substituted the Pelican parcel for the Mite Cove parcel
in the incorrect part of the legislation. In terms of the list
of lands proposed for conveyance, DNR and the university focused
on lands that were either identified for development or could be
transferred to municipalities, if they were in DNR ownership.
Those lands included public recreation lands because
municipalities can acquire recreation lands under the municipal
entitlement statutes.
8:24:57 AM
MR. MYLIUS explained that the landless parcels don't include
parcels proposed for future state park lands. Furthermore, no
parcels are in legislatively designated areas, except the
aforementioned Tanana Valley Forest parcel. In Southeast
Alaska, the timber parcels selected were minimized because there
was concern regarding how it would impact the state's timber
program.
8:25:31 AM
MR. MYLIUS, in response to Co-Chair Munoz, explained that on
pages 8-9 subsections (o), (p), and (q) refer to the possible
formations of boroughs in Petersburg, Wrangell, and the northern
Southeast area. Those provisions require that parcels not be
conveyed to the university until the municipal entitlements are
addressed.
CO-CHAIR MUNOZ asked if the Mite Cove parcel is included in CSHB
295(EDC).
MR. MYLIUS related that the intent of the House Education
Standing Committee was to withdraw the Mite Cove parcel.
However, that wasn't accomplished. In order to withdraw the
Mite Cove parcel, it should've been listed in subsection (n) on
page 9 with the other nine parcels being withdrawn from the
list. In further response to Co-Chair Munoz, Mr. Mylius
confirmed that the aforementioned needs to be included in a
future CS. To that end, he said he had provided committee staff
with an amendment to do so.
8:27:38 AM
MR. MYLIUS, referring to the landless book provided to the
committee, clarified that it contains the exact list of lands
that were presented in 2005. The book is divided into
geographic areas and the parcels are listed in geographic order.
Although the parcels the legislature withdrew from the list in
2005 are still included, those lands are identified as "deleted
by the legislature." The amendment made in the House Education
Standing Committee inserted part of another parcel. He related
that DNR doesn't encourage reviewing entirely new parcels of
land because [the list] has already been thoroughly vetted. In
the case of Pelican, it offered to insert part of a parcel that
was taken out in 2005, which the department felt was appropriate
since the parcel had been previously identified.
8:29:58 AM
REPRESENTATIVE HARRIS surmised that the intent of HB 295 is to
convey lands to the university so that it has a revenue source
to operate the university.
MR. MYLIUS replied yes, adding that there are parcels to
generate revenue as well as educational parcels. In further
response to Representative Harris, Mr. Mylius confirmed that the
intent is to provide the university with more land so that it
can expand its operations and/or earn revenue to avoid general
fund appropriations to the university.
8:31:07 AM
REPRESENTATIVE HARRIS, referring to Section 12 on page 14 of
CSHB 295(EDC), asked if any consideration had been given to the
university receiving the revenues from its lands that generate
oil and gas revenues rather than depositing it into the
permanent fund dividend (PFD).
MR. MYLIUS related his understanding that the aforementioned
would require a constitutional amendment because these lands
[with mineral lease rentals, royalties, royalty sale proceeds,
and net profits under AS 38.05.180(f) and (g)] are considered
state lands in that context. He noted that it only applies to
mineral revenues, and therefore any land leases or sales aren't
subject to that provision.
REPRESENTATIVE HARRIS surmised then that the situation is
difficult since the university needs revenue, but the
legislature can't take funds from the PFD to give to the
university.
MR. MYLIUS indicated agreement, but deferred to the Department
of Law (DOL) representative.
8:33:17 AM
KEVIN SAXBY, Senior Assistant Attorney, Natural Resources
Section, Department of Law, noted his agreement with Mr. Mylius'
comments. He added that the Alaska Supreme Court said that
these are state lands, and therefore fall under the same
constitutional provisions under which other state lands fall.
8:33:37 AM
CO-CHAIR MUNOZ related her understanding that 50 percent of the
revenue generated from other state lands is deposited into the
PFD.
MR. MYLIUS said that the constitutional requirement is currently
25 percent, but he noted the legislature has changed it various
times.
8:34:10 AM
CO-CHAIR HERRON inquired as to the public hearing process with
the university land grant [list].
MR. MYLIUS explained that although there was no public process
during the development of the land use list, the land use
designations within the land use plans were utilized. The land
use plans, he said, go through a thorough public process. The
pool of lands [from which DNR selected] were either lands that
had been identified as settlement, general use, or public
recreation land. The public recreation lands, under the
Municipal Entitlement Act, were lands that could go to
municipalities and thus DNR felt it appropriate for those lands
to be considered for selection by the university. Mr. Mylius
said that DNR relied upon the legislative process in 2005 for
the public input. That legislative process resulted in nine
parcels being withdrawn [as specified in HB 295].
8:35:23 AM
CO-CHAIR HERRON asked if DNR and the university has identified
parcels to substitute for any withdrawn parcels, especially
given the fact that it probably makes sense for that the
university needs 200,000-250,000 acres in order to have an
appropriate revenue stream.
MR. MYLIUS replied no, adding that DNR didn't want to enter into
a situation in which it was adding and withdrawing parcels.
Therefore, it was determined that it would be an easier process
if it was a final list. The intent in 2005 was not to change
the list; however he acknowledged that it's the legislature's
prerogative to do so. Mr. Mylius pointed out that although the
state has a large amount of land, the best land to generate
revenue is small. He opined that it's not an easy process to
select 250,000 acres of land that's consistent with the
university's land use plans, isn't controversial, and will
generate revenue. Furthermore, DNR has to consider how selected
lands will impact the timber program in Southeast Alaska,
recreational concerns, and can't select oil and gas producing
properties. The aforementioned considerations results in a
fairly limited group of parcels that can be transferred to the
university and generate revenue for it.
8:37:40 AM
CO-CHAIR HERRON inquired as to why it's in the state's best
interest not to give the university some oil and gas revenue
stream.
MR. MYLIUS clarified that the rule was that the university
couldn't select producing oil and gas properties. He reminded
the committee that the 2005 legislation directed revenues to the
University Endowment Fund, which was out of the control of the
legislature. Furthermore, 80-90 percent of the state's revenue
in the general fund comes from oil and gas revenues. The
concern was from the governor, who [Governor Knowles and
Governor Murkowski] didn't support the university holding
producing oil and gas lands because they are fundamental to the
state's revenue generation. However, the university did select
the Nenana oil and gas property, which is a prospective natural
gas property, and it's still in the legislation. The Nenana oil
and gas property is the one of the highest potential oil and gas
areas of the state that isn't producing oil and gas now.
8:40:03 AM
REPRESENTATIVE HARRIS inquired as to how much land the federal
government owes the university.
MR. MYLIUS specified that the federal government owes the
university approximately 6 million acres. In the last 4 years,
the university has received 8.5 million acres from the federal
government. In further response to Representative Harris, Mr.
Mylius related that the federal government has a few hundred
acres to transfer under the Alaska Mental Health grant. The
remainder of the lands to be transferred to the university fall
under the statehood grants.
8:40:58 AM
REPRESENTATIVE HARRIS surmised then that if the state faces
revenue shortfalls, the university won't likely rate high on the
list for revenues from the state.
MR. MYLIUS explained that since the revenue from the
university's lands will be deposited into the GF, it will be
left to the legislature to determine whether revenue the
university generates will return to the university or not. With
the exception of the Nenana parcel, the lands the university has
selected are lands that would result in land sales or support
various forms of commercial or recreational activities and
possibly port development. He mentioned that there is one
prospective coal site at Jarvis Creek. Therefore, because the
university is selecting lands that aren't oil and gas producing
parcels, those lands could earn revenue regardless of what
happens with oil and gas parcels in the state.
REPRESENTATIVE HARRIS asked if it would be fair to say that the
psyche of governors is such that they want to determine how the
funds are spent in terms of all the services the state offers.
Therefore, if funds are basically dedicated to the university,
it would preclude those funds from being spent on other services
the state may offer.
MR. MYLIUS replied yes, but he reiterated that under the current
legislation it would be left to the legislature to decide
whether the funds earned from the land would return to the
university or be utilized elsewhere.
8:43:31 AM
REPRESENTATIVE GARDNER recalled when the original university
land grant legislation went through the legislature, the
governor made it clear that he wanted the legislation to proceed
as written. Therefore, she said she was surprised to hear that
the public process for the university land grant legislation was
the legislative process because for the public process to be
meaningful, one has to expect some changes. She then questioned
whether it has been a problem/surprise that there have been
changes following the legislative public process.
MR. MYLIUS said it wasn't a surprise because the department knew
that it couldn't develop a 250,000-acre land list that wasn't
controversial. The aforementioned is why DNR and the university
went forward with the specific land list. The 2000 legislation
basically said that DNR and the university would work out the
land selections, which would've been a long contentious process.
He noted that there was no public process specified in that 2000
legislation either.
8:45:41 AM
MARI MONTGOMERY, Director, Land Management Office, Finance &
Administration, University of Alaska, reminded the committee
that in 1915 and 1929 the federal government granted about
360,000 acres of surveyed lands to the university. At
statehood, only about 100,000 acres of that land had been
surveyed by the federal government and conveyed to the
university. The Statehood Act extinguished the university's
ability to receive the balance of the aforementioned federal
grant. Since that time there have been repeated efforts to
secure additional lands for the university. Only Hawaii and
Delaware have smaller university land grants. In many states,
the land grants were only for universities. Ms. Montgomery
pointed out that the passage of this legislation certainly isn't
going to fund the university. Therefore, she opined that these
lands aren't really a mechanism to fund the university but
rather is a mechanism to allow the university to have ownership
and control of several educational properties and other lands
that could be used to expand or modify existing campuses.
However, she did acknowledge that the lands would provide the
opportunity to generate additional receipts that could be used
for various uses and programs throughout the state, if the
legislature chose to do so. Ms. Montgomery related that the
university appreciates the committee's review of HB 295 and
hopes that it's forwarded with a favorable recommendation.
8:48:44 AM
CO-CHAIR HERRON asked if the 250,000 acres being requested is
appropriate for the size of the University of Alaska in relation
to other states.
MS. MONTGOMERY pointed out that the university's current grant
is just over one-tenth of 1 percent of the overall state land
grant, which is small comparatively speaking. However, the
university land grant varies throughout the nation. She opined
that one would expect the University of Alaska to have a much
larger land grant than it has. Furthermore, even the 250,000
acres is viewed by the university as a relatively small land
grant.
8:50:29 AM
CO-CHAIR HERRON inquired as to why the university would sell a
parcel for a one-time payment.
MS. MONTGOMERY informed the committee that to date the
university has sold about 18,000 acres, which is a small amount.
She explained that by law the money from the federal land grant
is deposited in a permanent fund; it helps to build up that
endowment, the proceeds from which fund the Alaska Scholars
program among other things. Furthermore, those proceeds can be
used to purchase properties adjacent to a campus, which has been
done in Anchorage.
8:52:18 AM
CO-CHAIR HERRON asked if, in the university's opinion, the
original selection process by DNR and the governor at the time
was arbitrary. He further asked if DNR and the governor at the
time understood the desire for a vibrant university.
MS. MONTGOMERY said she was sure that DNR didn't view it as
arbitrary as it surely had a lot to consider throughout the
process. Although the list could be better, it would, as Mr.
Mylius indicated, likely bring in a different set of
controversy. Ms. Montgomery said although it would be nice to
have a better list of lands, she didn't believe there was any
malicious intent to give the university a bad list of lands.
8:54:54 AM
TIM LYDON informed the committee that the Sumdum parcel is a 5-
acre parcel in Endicott Arm, located about 50 miles south of
Juneau. Geographically, the Sumdum parcel is almost in the
center of the Tracy Arm-Fords Terror Wilderness and Chuck River
Wilderness complex, which is about 730,000 acres of designated
wilderness. The Sumdum parcel is located in Sanford Cove, which
has a rich coastal history. In fact, there are many artifacts
in the area from both Native and mining activity. Furthermore,
the area has a couple of anadromous fish streams, a unique array
of birds, as well as other Alaskan animals. Currently,
throughout Tracy Arm-Fords Terror Wilderness there is no
development, which is unique. The Sumdum parcel is incredibly
unique per the aforementioned reasons as well as the fact that
it's a popular location for people to experience an undeveloped
landscape, which is a diminishing landscape in Southeast Alaska.
He reviewed those who use this parcel for various purposes,
including commercial kayaking operations and programs targeting
at-risk youth. Furthermore, when traveling in this area, there
are a limited number of places to camp. Sanford Cove is an
important anchorage in the area because once one enters the arm
there is almost no area in which to anchor. Therefore, this
area is vitally important to commercial and independent people
to anchor their boats out of the weather of Stephens Passage.
This cove and parcel serve as a portal to the entire landscape.
If the parcel is allowed to remain in the land selection and
opened to development, a lodge will likely be constructed as is
the case in any number of bays. Mr. Lydon urged the committee
to remove the Sumdum parcel from HB 295, as it impacts a very
broad area. He then told the committee that he would send the
committee a statement from 17 commercial tour operators who are
concerned about the Sumdum parcel.
9:02:09 AM
NORM CARSON, President, Pelican Chamber of Commerce, related his
background and that he managed his dream of returning to
Lisianski Inlet to retire and build a home. After 40 years in
the area, he opined that he knows the inlet very well. However,
when public hearings aren't held in communities like Pelican,
expertise such as what he has to offer is lost. Such situations
result in decisions like that of the university selecting the
Mite Cove parcel. Mr. Carson said that he was present to
support the removal of the Mite Cove parcel from HB 295 in
exchange for another parcel that's within two miles of Pelican.
9:03:19 AM
CO-CHAIR HERRON inquired as to why Mite Cove was chosen.
MR. CARSON responded that he didn't understand the selection of
Mite Cove because it is 13 miles from Pelican and sits on the
corner of Cross Sound. Furthermore, it sits on the wrong side
of the inlet for sun and doesn't have any good fresh water
provisions. Mr. Carson surmised that the parcel must have
looked good on the map.
CO-CHAIR HERRON questioned then why the property is attractive
to Mr. Carson and his neighbors in Pelican.
MR. CARSON explained that it's attractive because the parcel is
designated as a recreational undeveloped unit, which is
appropriate for that parcel. Furthermore, it would be more
attractive for Pelican to have development within two miles of
its city limits [as would be the case with the parcel Pelican
would like to exchange for Mite Cove].
9:04:56 AM
CO-CHAIR MUNOZ reminded the committee of Mr. Mylius' testimony
that the House Education Standing Committee attempted to craft
an amendment to accomplish the swap of the Mite Cove parcel for
a parcel nearer Pelican. However, as that wasn't done
appropriately, this committee will address it in a new committee
substitute (CS).
9:05:38 AM
ERIC LEE, Fisherman, expressed concern with the Read Island and
Whitney Island parcels as they are too important to the
community [of Petersburg] for public use. Both of the islands
are important in terms of subsistence use in the area since both
are close enough to be accessed by skiff and are accessed almost
year round. Furthermore, the charter fishing industry also
relies heavily on the areas surrounding Read Island and Whitney
Island as they provide an ideal surrounding for day charters.
There is excellent fishing, whale watching, and general
sightseeing opportunities. If these islands are privatized, the
aforementioned will radically change. Conveying these parcels
to the university will diminish the tourism draw and Alaskan
experience. Mr. Lee also noted that the commercial fishing
fleet uses the area heavily due to the good anchorages offered
in that part of Frederick Sound, which would be lost if the
parcels are privatized. In conclusion, Mr. Lee urged
elimination of these two parcels from the selections for the
university.
9:11:07 AM
ART BLOOM, Vice Mayor, Member, Tenakee Springs City Council,
City of Tenakee Springs, highlighted the lack of public input
during the [university land selection] process. The parcel, ST
1003, in Tenakee is about 350 acres, which is more private land
than exists in the corporate boundaries. The City of Tenakee
Springs is small and has limited financial resources. The
committee, he said, should have a resolution from the City of
Tenakee Springs requesting the removal of the [ST 1003 parcel].
Mr. Bloom informed the committee that residents of Tenakee
Springs are concerned about the potential impact of the fabric
of life in Tenakee if this parcel is given to the university.
The residents of Tenakee Springs want to be able to maintain the
opportunity for their current lifestyles. "No one asked the
community about the concept of privatizing over 300 acres within
our city boundaries. And when we found out about it, we have
consistently voiced strong opposition to the concept," he
related. He acknowledged that some changes are inevitable, as
is evidenced by the transformation of Tenakee over the years.
As Juneau and state government has grown, Tenakee has been
transformed into a city dominated by second homes. Now, this
legislation proposes to take almost 40 acres by the boat harbor
and lock up the land by the boat harbor. He questioned the
impact of the potential addition of 20-40 more homes on the
limited resource of the small natural hot spring with its flow
of 8 gallons per minute. This natural hot spring is essential
to the fabric of the community, he opined. Mr. Bloom stated
that [the City of Tenakee] has consistently opposed this
legislation because of the potential impacts to the community.
He then suggested that the state shouldn't privatize these
parcels, but rather should convey the land to the city for
public use. He informed the committee that prior to the
introduction of the [university land grant] legislation, the
city was working with DNR to obtain a lease or conveyance of
these harbor uplands. The city government of Tenakee owns
almost no land within the town core and there is precious little
flat land, save that at the harbor area. This land upland from
the harbor is needed for public uses, not for privatization for
second homes that would burden the local government, existing
public facilities, and existing natural resources in Tenakee
Inlet. The same can be said for the parcel along the Indian
River Road, he said.
9:15:52 AM
REPRESENTATIVE CISSNA inquired as to the form of city government
of Tenakee Springs. She also inquired as to the powers the City
of Tenakee Springs holds.
MR. BLOOM related that the City of Tenakee has a city council of
seven members, which elects the mayor. The city has received
municipal grants. Within the corporate boundaries, the city
owns about 3,700 acres. The town core of Tenakee Springs is a
very small area and there are no roads in Tenakee and the city
can only be accessed by plane or ferry. Presently, the city
doesn't own any other property within the town core, other than
a small lot on a steep hillside. Therefore, the city doesn't
have an area on which to build a new community hall or fire
hall. The primary area for such construction would be at the
harbor uplands. In further response to Representative Cissna,
Mr. Bloom clarified that Tenakee Springs incorporated into a
second class city in the early 1970s. He noted that there is a
clear paper trail of the negotiations the city has had with DNR
regarding the city's interest in the harbor uplands area.
CO-CHAIR MUNOZ interjected that the committee packet includes
that information.
9:19:14 AM
CO-CHAIR HERRON asked if the City of Tenakee would've discussed
accommodating the university's interest in the harbor upland
parcel.
MR. BLOOM reiterated that the harbor uplands had been identified
as important to city, and thus the city wouldn't have wanted to
let it go to another entity. When the university land grant
legislation was passed previously, no public testimony was taken
and the City of Tenakee was told that the [harbor uplands]
wouldn't be included in the legislation. Therefore, the City of
Tenakee was surprised when those parcels were included. Once
the parcels were included, the city had conversations with the
university regarding a potential land swap for the harbor
uplands. In fact, the city was at the point of having an
appraiser come appraise the lands. However, the lawsuit was
instigated and the aforementioned process stopped. In further
response, Mr. Bloom said that the City of Tenakee would continue
the discussions if it was forced to do so. Still, the city
would prefer not to trade its lands for the reasons mentioned
earlier.
9:22:12 AM
MARY IRVINE began her testimony by informing the committee that
she is a strong supporter of the University of Alaska. She
noted that she has taken various classes at the university and
has served as a volunteer instructor. Ms. Irvine related her
desire for the University of Alaska to have more financial
stability and support. However, she requested that the
committee exempt the Sumdum parcel, a 5-acre parcel, from HB
295. Alternatively, she requested that DNR select another 5-
acre choice parcel to include in HB 295. Ms. Irvine then
directed the committee's attention to page 44 of the committee
packet, which is a chart provided DNR. She pointed out that
although the chart lists Sumdum as dispersed recreation, the
Central Southeast area plan designates Sumdum as recreation
undeveloped, which is the most restrictive category. Recreation
undeveloped lands can't be sold to an individual. Furthermore,
the Central Southeast plan, which outlines the state's
management intent for this parcel, was the result of an intense
public process with adequate notice and intense public comment.
The aforementioned plan was formally adopted by the state in
November 2000. The plan, she opined, should be the controlling
document regarding whether Sumdum is in the university's land
selection, not the aforementioned chart.
MS. IRVINE then informed the committee that the Sumdum parcel is
located about 40 miles south of Juneau and is abutted on either
side by the mouth of two very productive salmon streams as well
as a historic cultural site important to many Tlingit people and
Alaskan history scholars. The Sumdum parcel is on the site of
the old fish camp, just across the inlet to Endicott Arm. She
reviewed the historical significance of the Sumdum parcel in
terms of its Tlingit and American history, including its clan
houses and the old townsite that existed at the location. In
fact, the site boasts American Alaska's first brewery. She told
the committee that the Alaska State Historical Library has
several photographic collections from the town of Sumdum.
Furthermore, there are several historical accounts of botanists
collecting undiscovered plants. There are also accounts of
early governors stepping in to mediate civil disputes at Sumdum.
MS. IRVINE opined that the history of Sumdum is significant and
what tourists seek. She further opined that DNR is the
appropriate holder of this land as it manages land for the good
of all Alaskans. The requirement for the state to hold land in
common for the good of all Alaskans is specified in the Alaska
State Constitution. This parcel is a priceless treasure, she
opined. Ms. Irvine said, "Land doesn't always make money for us
in the way that we think it's going to or in the way that we try
to make it make money for us," she pointed out. She then
related that although the anthropology and history professors
she spoke with were universally dismayed that a historical site
would be taken out of the public domain, not one of the
professors was interested in performing research or had the
graduate student labor to administer research on the property.
Therefore, she questioned the reasoning behind transferring the
land to the university, if its staff isn't interested in it even
as a research site. She further questioned whether the Sumdum
parcel is such a burden to the land managers at DNR. Ms. Irvine
recalled that five years ago when the original university land
selection legislation was moving through the legislature, it was
difficult to bring to light the special historic nature of the
site. Therefore, it remained unreal and not an issue for the
legislature and the land's office. Ms. Irvine emphasized that
removing the Sumdum parcel from the legislation wouldn't be
burdensome to the state or the university, although it would be
significant to historians.
9:34:31 AM
CO-CHAIR HERRON announced that the committee will delete the
Sumdum parcel in a forthcoming committee substitute (CS), an
action which DNR supports. He then asked the committee if there
was any objection to allowing the co-chairs to work on a CS.
9:35:03 AM
REPRESENTATIVE GARDNER questioned whether there is something
more the committee could do, such as placing a covenant on this
property to avoid a similar battle in the future. She proposed
implementing a more permanent protection for the Sumdum parcel.
CO-CHAIR MUNOZ confirmed that the co-chairs are working on
language to accomplish the aforementioned.
CO-CHAIR HERRON interjected that the co-chairs will work with
DNR on areas [of the legislation needing improvement].
9:35:52 AM
CO-CHAIR HERRON remarked that perhaps Ms. Irvine's efforts could
go toward convincing the administration that perhaps there
should be a resource extraction site that could provide revenue
for the university.
9:36:38 AM
REPRESENTATIVE GARDNER informed the committee that when the
original university land grant legislation proceeded through the
legislature, former Representative Croft proposed removing all
the identified lands from the legislation and replacing them
with Point Thomson.
9:37:16 AM
AL RUEBEN, Member, Tenakee Springs City Council, related his
support for Tenakee Springs resolution 2010-16. He said he
would focus his comments on the C30 parcel, which includes the
C31 and C32 parcels. The aforementioned parcel is commonly
referred to as the harbor uplands in Tenakee. This parcel is
located directly above the Tenakee Springs harbor and can be
described as a mess. In fact, squatters have erected crude
shelters on the property as well as prefabricated structures.
This is state property on which the city has no jurisdiction.
Furthermore, a commercial saw mill has setup shop on the
property and is selling lumber commercially. This property also
holds a fair amount of junk and garbage. At one count, the
harbor uplands had 45 boats stored on it, some were residents'
boats, some were nonresidents' boats, and others were derelict.
Therefore, to convey this parcel to the university would hand
them a huge problem with legal fees and cleanup expenses.
Moreover, conveying the upland harbor parcel to the university
would leave the Tenakee harbor virtually water locked. He
informed the committee that the state is in the process of
conveying the harbor to the city and city ownership of C30 is
imperative to complete the transaction. Currently, one-third of
the harbor has been conveyed to the city. Mr. Rueben related
that the City of Tenakee has a plan and has been trying to work
with DNR to cleanup this parcel. However, the city has been
continually told that the department doesn't have the resources
to do so. He informed the committee that the City of Tenakee
has sought an 810 conveyance previously and has applied twice
for a lease.
MR. RUEBEN related support for the university, but requested
that these lands aren't conveyed to the university. He
expressed the need for the city to obtain [all of the uplands
harbor property]. The city believes that the best way to
proceed at this time is for the city to request eliminating the
uplands harbor property from the conveyance while the city
continues to work with DNR on obtaining an 810 conveyance. He
stated that DNR has a plan for the public use of this property.
A land swap, or any conveyance of land from the city, would
require a vote from the city residents. In fact, prior to the
lawsuit, the city was in the process of a land swap, he noted.
9:42:42 AM
REPRESENTATIVE CISSNA asked if the co-chairs plan to address the
concerns of Tenakee Springs' residents in a CS.
CO-CHAIR HERRON confirmed that the co-chairs intend to work on
this parcel within the CS, adding that it would be nice to be
able to accomplish the conveyance in this legislation.
MR. RUEBEN commented that the City of Tenakee would really
appreciate that.
9:43:51 AM
DONALD BULLOCK, Attorney, Legislative Legal Counsel, Legislative
Legal and Research Services, Legislative Affairs Agency (LAA),
reminded the committee that the reason the lands list is the
same as in prior university land grant legislation is because of
the Southeast Alaska Conservation Council v. State case. That
case was based on the issue that the funds generated from the
land would be dedicated funds under the prior legislation, which
the courts ruled was in violation of Article IX Section 7 of the
Alaska State Constitution that prohibits dedicated funds. He
acknowledged that the constitution does allow for dedicated
funds into the permanent fund, which is also a sub issue in this
land transfer. In order to reach the decision that these funds
are subject to the dedicated funds provision, the court first
had to conclude that the funds were state money subject to the
provision. The court did so by recognizing an earlier case that
found university land to be state land. Under the Statehood
Act, the state may not convey mineral interests away from the
state. Therefore, so long as the university is the state, it
can hold mineral interests. Another section of the constitution
said that the university could hold title to land, which is
different than the proceeds [from that land]. Therefore, any
land that is conveyed to the university is state land,
regardless of title. The legislation before the committee
proposes to address the dedicated fund issue by making proceeds
generated from the land to be university receipts, subject to
appropriation. However, the legislation fails to address the
court ruling that the administration and disposal of the
conveyed land has to be done by law. He read the following
excerpt from the case:
Our opinion emphasized article VII, section 2's
command that "property shall be administered and
disposed of according to law," and noted that
"'according to law' refer[s] to the legislature's
power to make laws." Thus, even when the University
has title to land, "only the legislature can make laws
effecting the disposal of land, not the Board of
Regents."
MR. BULLOCK pointed out that much of the public testimony has to
do with how the land to be transferred will be administered and
disposed. The aforementioned begs the question regarding what
law will be applicable. The court further said, "Statutory
language treating University lands differently from other state
land does not overcome this constitutionally based conclusion."
To focus on one part of the management issue, one could consider
the transfer of the Nenana oil and gas tract to the university.
If gas is there and subject to lease, the question becomes what
law would apply. He directed attention to AS 38.05.180, which
describes the procedure for oil and gas leasing of state land.
In AS 38.05.030, there's an exception that specifies: "Land
owned by the Board of Regents of the University of Alaska is not
subject to this chapter." Chapter 38.05 is the Alaska Land Act
that includes the oil and gas leasing provision. The question
is then what law is applicable. The concern, he said, is that
state land is state land, and therefore one would expect that if
the university owns the land, it would manage it as other state
land is managed. One option is that the university would manage
land under the provisions of the Alaska Land Act, and the
university would do so in place of DNR. However, that's a
duplication of effort. Therefore, the legislation provides
title to the university and doesn't dedicate any funds from the
land, and the management is subject to the laws of the
legislature.
9:49:25 AM
MR. BULLOCK, in response to Representative Cissna, clarified
that there are two different issues. One issue is in regard to
the land itself and the expectation that at some point it will
generate revenue, which has to do with the administration
disposal of the land. The administration disposal of the land
is required by law. Once revenue is generated from that land,
the question is how the revenue is returned to the university.
The revenue can't return to the university unless there is an
appropriation. An alternative method would be to designate the
same land and specify that DNR would continue to manage it under
state law, which would avoid the possible conflict between
university policy and state law with regard to management. The
funds could be deposited into a special fund within the general
fund, from which the legislature can appropriate money to the
university. The aforementioned has been done before. The
legislation before the committee fairly well accomplishes the
aforementioned, he said.
9:51:42 AM
CO-CHAIR HERRON highlighted that this committee is charged with
being responsive to the citizens of the regions in the state.
He then remarked that the focus of the committee's work will be
on cleanup and will continue to work with DNR.
CO-CHAIR MUNOZ noted her agreement, specifying that the
forthcoming CS will address the Mite Cove parcel, the Sumdum
parcel, and the Tenakee harbor uplands parcel.
9:52:50 AM
MR. BULLOCK pointed out that the university land selections are
designated by general descriptions, and therefore it would be
helpful to include the legal descriptions for the land
particularly for those cases in which the land has only been
designated as a parcel. Such legal descriptions would make
these lands consistent with other land provisions in statute
rather than referring to a document that is five years old.
9:54:01 AM
MR. MYLIUS related that although as a general rule the governor
prefers not to delete parcels, DNR is willing to work with the
committee to do so properly. He acknowledged that it's the
legislature's prerogative to modify the legislation and delete
parcels. With regard to the issues raised by Mr. Bullock, Mr.
Mylius related that the Department of Law fundamentally
disagrees with Mr. Bullock's comments regarding what laws apply.
With regard to the lack of legal description in the legislation,
the 2005 legislation didn't include the legal description
because it would have taken months to generate those. The
descriptions in the selection book follow section lines or the
boundaries of specific parcels of DNR lands. Therefore, it's
fairly easy to match the shape of the parcel. He opined that it
has always been clear to the public. He noted that there are
legal descriptions in the deeds, but if those were placed in the
legislation it would be quite lengthy. Therefore, DNR doesn't
feel it's necessary to include the legal descriptions in the
legislation.
9:57:00 AM
CO-CHAIR MUNOZ requested a written response to Mr. Bullock's
testimony from DOL, to which DOL staff agreed to provide.
[HB 295 was held over.]
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 295 Request for Hearing (H)CRA 2.8.10.pdf |
HCRA 2/18/2010 8:00:00 AM |
HB 295 |
| HB 295 SB225 Transmittal Letters.pdf |
HCRA 2/18/2010 8:00:00 AM |
HB 295 SB 225 |
| HB 295 Sectional Analysis 2 8 10.docx |
HCRA 2/18/2010 8:00:00 AM |
HB 295 |
| HB 295 UA Lands Briefing Doc 1.21.2010.doc |
HCRA 2/18/2010 8:00:00 AM |
HB 295 |
| HB 295 UA Letter of Support.pdf |
HCRA 2/18/2010 8:00:00 AM |
HB 295 |
| HB 295 Ltr (Hook Arm).PDF |
HCRA 2/18/2010 8:00:00 AM |
HB 295 |