Legislature(2009 - 2010)BARNES 124

02/18/2010 08:00 AM COMMUNITY & REGIONAL AFFAIRS


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08:11:17 AM Start
08:11:28 AM HB295
09:57:32 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ HB 295 UNIVERSITY LAND GRANT TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled 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