Legislature(1995 - 1996)
05/03/1995 08:13 AM House RES
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SB 16 - INCREASE LAND GRANT TO UNIVERSITY OF ALASKA CO-CHAIRMAN WILLIAMS made a MOTION to ADOPT HCS CSSB 16(RES), version K. REPRESENTATIVE OGAN OBJECTED for discussion purposes. REPRESENTATIVE KOTT reviewed the changes contained in the committee substitute. He said the first change is on page 15, line 6, which protects the mental health lands until the mental health trust has been reconstituted. The next change is on page 4, line 1, which allows the university, rather than the Department of Revenue, to manage their trust fund and report on its performance to the legislature. He stated the next change begins on page 5, line 11, and protects prospecting sites and claims if they have been selected. The next change is on page 2, line 19 and is intent language encouraging the development of in-state value-added industries to the maximum extent feasible. REPRESENTATIVE KOTT stated the next change is on page 10, line 17, and clarifies the university has in place a development program to derive income from the land selection. Number 120 CO-CHAIRMAN GREEN said the point was made at the subcommittee meeting that the university might not have income received from their lands selected within the time frame but certainly could have a plan in place to do that. He stated quite often it takes a number of years to formulate an effective plan. REPRESENTATIVE KOTT said the next change is on page 5, line 30, and provides a minimum selection of 640 acres. Since the subcommittee met, there has been considerable feedback from the department and the university indicating they would like to discuss this change. The next change is on page 4, line 29, and reduces the amount of acreage that can be selected by the university from one million acres to 350,000 acres, which was the original amount of acreage conveyed to the university at the time of statehood, even though that amount of acreage was never conveyed. REPRESENTATIVE KOTT stated the next change is on page 10, line 20, and relates to the conveyance of land. He asked Co-Chairman Green to discuss this change. CO-CHAIRMAN GREEN said originally the university land was to come from the federal government and there were many people who felt that some of the state land conveyed should have been available to the university. However, that was never documented. He stated the concern was that the first step should be to go to the federal government for state land and if that does not work, the next concept is if there is going to be a conveyance of land that is now granted to the university and the university subsequently wants to divest itself of that land, it should be on an exchange basis rather than a sale. REPRESENTATIVE KOTT told committee members the next change is on page 2, line 17, and suggests that renewable resources should be managed on a sustained yield basis, taking into account the total land grant, therefore, avoiding looking at one isolated pocket. REPRESENTATIVE OGAN WITHDREW his OBJECTION to the motion. CO-CHAIRMAN GREEN asked if there were any objections to adopting the committee substitute. Hearing none, the MOTION PASSED. Number 250 REPRESENTATIVE KOTT said on page 5, line 30, the 640 acres might pose a problem in selecting parcels of land of that size. He stated both the department and the university have come forward with that concern. He said a conceptual amendment might be in order which would allow for the initial selection to be at a minimum of 640 acres and thereafter, any additional selections to be at a minimum of 40 acres. NICO BUS, LEGISLATIVE LIAISON, DEPARTMENT OF NATURAL RESOURCES (DNR), said in talking with Ron Swanson, Director, Division of Land, it was his experience in dealing with the mental health settlement and other issues, that 640 acres was too large, and specifically for residential and recreational sites, 40 acres is a better number. He stated Mr. Swanson suggested changing the language on page 5, line 30, from 640 acres to 40-60 acres in size. CO-CHAIRMAN GREEN asked if Mr. Swanson had a suggested number from that range. MR. BUS said the minimum is 40 acres. He stated the problem is if there is a selection of 640 acres, there is a conflict and the university is only interested in a 40 acre site, the department would be willing to give them the 40 acres but would not be willing to give them the full 640 acres because of conflicting land interests or public interest values. CO-CHAIRMAN GREEN said his concern is that smaller parcels will create an expanded duty on the conveyance because there will be four times as many conveyances. The other concern is that it would perhaps make for more checker boarding rather than contiguity. REPRESENTATIVE DAVIES stated a number of these parcels can be conveyed with a single conveyance action, so it does not necessarily have to increase the paperwork. He felt intent language is needed saying the legislature would like the university to select as large as parcel as possible. However, expressing that in the actual statute is somewhat difficult. REPRESENTATIVE DAVIES made a MOTION to AMEND HCS CSSB 16(RES) on page 5, line 30, delete the word "whole"; replace the word "sections" with the word "parcels"; change the number 640 to 40; after the word acres, insert the words ", or larger wherever practical"; and on line 31, delete the words "and may not be made in fractional parts of sections;". REPRESENTATIVE KOTT OBJECTED. He said that would suggest 40 acres or larger wherever possible and there could be five acres conveyed or one acre. REPRESENTATIVE DAVIES disagreed. He said 40 acres is the minimum. He mentioned it was important to let the bill drafter know the importance of the comma before the words "or larger wherever practical". REPRESENTATIVE KOTT withdrew his objection. CO-CHAIRMAN GREEN asked if there were any objections to the amendment. Hearing none, the MOTION PASSED. Number 378 REPRESENTATIVE WILLIAMS made a MOTION to AMEND HCS CSSB 16(RES) on page 4, line 29, delete the number 350,000 and insert the number 1,000,000. REPRESENTATIVE OGAN OBJECTED. CO-CHAIRMAN WILLIAMS felt the figure will be debated on the floor as it was last year. He stated getting land as close to the private sector as possible is better for the state. He noted the university has a track record of managing their land correctly in an environmentally safe manner. REPRESENTATIVE KOTT said the subcommittee felt if the figure was 1 million acres, it would connote that the committee supported 1 million acres. Therefore, the subcommittee felt compelled to reduce the figure down to another number. The most legitimate number, based on the information available, was 350,000 since that was the original number used to convey land to the university at statehood. CO-CHAIRMAN GREEN stated in discussions the subcommittee had, there was concern that even 1 million acres is far below, percentage- wise, that which other land grant schools get. On the other hand, the state has a lot of land that could potentially make the figure go up to 10 million acres. He noted the 1 million acres was an arbitrary number. He said the 350,000 figure at least had a tie, as that was the original grant. CO-CHAIRMAN GREEN said, "If in the wisdom of the legislature they want to bring that back up to 500,000 as it was at one time, 250,000 was suggested...there were lots of numbers discussed, but for the committee to come in with 1 million acres could send a message saying, we do not care, we want you to have a great number of acreage. I think your point that they have done well in managing their land...they have...there is still land they have not done much with...so the discussion last night got to the point that if we were to grant 350,000 and they can come back and show they have done a good job managing the land...look what we have done as compared to what the same number of years under state ownership did...they could certainly increase that with another bill. They could go back up showing they have this great track record on an even expanded number of acres because this acreage is not going to be pristine, prime, wonderful acreage because it has already been selected." REPRESENTATIVE DAVIES noted the 350,000 acres was not a unanimous decision in the subcommittee. He agreed there is no history behind the 1 million acres figure but felt there is a rationale for that number. He did not feel there is any particular stronger tie or rationale for the original 350,000 acres. He said it is a consideration people make who are making the decision...they look at all the factors involved and come to an agreement on what is ultimately an arbitrary number. He stated it is not totally without rationale. REPRESENTATIVE DAVIES felt the committee should discuss what the level of the land grant should be in the context of what is intended to be accomplished. He said the bill is trying to accomplish two things: Provide a stable, financial underpinning for the university; and provide an additional diversified stimulation to the state's economy. He stated both of those goals are furthered by having a larger endowment to the university. He thought the discussion needs to center on that, rather than trying to find some magic tie out there. REPRESENTATIVE DAVIES felt the committee should not be fixating on something that was magic from pre-statehood days as the situation was quite different then. Perhaps there was a rationale for that number at that time. He noted much has happened since then and that figure should be revisited in light of what is known today and what the intent of the bill is. CO-CHAIRMAN GREEN said, "My tie concept has to do with the fact that this did happen some time ago and that if we are going to go back because someone thinks there was some indication that this land should come out of the land granted to the state as part of that which normally land grant schools get from the federal government but since we got ours from the federal government then we should give part of that to the school if we are tying to that then that is why I say we should tie with that understanding at that time was 350,000 which to me makes a stronger case than to say well because back there we need to get it from the state but we are not going to take what was the suggested amount back there--we are going to take some other number. To me that begins to mix apples and oranges." Number 491 CO-CHAIRMAN WILLIAMS stated with the time constraints involved in managing lands, to manage lands correctly there is a need to get the amount to be worked with immediately so planning for the future can begin. He recalled it was mentioned earlier that it is going to take at least ten years in order to get the conveyances from the state. During that time, the university could be planning for the one million acres and do a better job at managing the lands correctly and perhaps even selecting lands. He noted it is not known what the university's top priority is. He wondered if the sponsor agreed with changing the one million acres to 350,000 acres. CO-CHAIRMAN GREEN said he talked to the sponsor several days ago and told him there would probably be amendments made to SB 16. The sponsor stated he did not object to amendments as long as they made the bill better and more easily accepted. Co-Chairman Green thought keeping the acreage low would be more acceptable. He noted he can do a good job managing his back yard. If he has to manage all the yards in the neighborhood, his ability is going to go down. He pointed out 350,000 acres is twice the amount of land the university currently has and is a significant increase. He stressed if the university can still manage that land and wants more land, they should come back and get more but to give them five times the amount they have now may not be helpful. CO-CHAIRMAN GREEN asked for a roll call vote on the amendment. Voting in favor of the motion were Representatives Austerman, Davies, and Williams. Voting against the motion were Representatives Kott, Ogan, and Green. The MOTION FAILED 3-3. Number 547 REPRESENTATIVE DAVIES made a MOTION to AMEND HCS CSSB 16 on page 4, line 29, delete 350,000 and insert 500,000. REPRESENTATIVE KOTT OBJECTED. CO-CHAIRMAN GREEN asked for a roll call vote. Voting in favor of the motion were Representatives Davies, Austerman, and Williams. Voting against the motion were Representatives Kott, Ogan, and Green. The MOTION FAILED 3-3. REPRESENTATIVE DAVIES discussed page 10, line 20. He said the committee heard convincing testimony on the rationale as to why this kind of restriction is not wanted. There are exceptional circumstances where a very small conveyance is clearly in the fiduciary interest of the university. An example is where a small amount of acreage is sold enabling the federal government to build a park headquarters and as a result of building that headquarters, all the surrounding land the university has then becomes far more valuable...campsites could be installed and revenue could be derived from the land as a result of that federal investment. He stated the federal laws prevent the federal government from building a building like that on anything but federal land. REPRESENTATIVE DAVIES stated there are rare exceptions where it is clearly in the university's interest to do that. He noted the Board of Regents already have a policy which says the university is not in the business of getting rid of their land but rather, their land is to be managed for the very long term. The Regents do not contemplate giving the land to anyone, including the federal government, as a matter of policy. He felt any concerns are already protected. He stressed it is not in the university's financial interest to dispose of lands when they are trying to establish an endowment for the long term. REPRESENTATIVE DAVIES said there are exceptional circumstances and to try to force the university to achieve an acre for acre exchange is complicated. He felt the language unnecessarily hamstrings the university. REPRESENTATIVE DAVIES made a MOTION to AMEND HCS CSSB 16(RES) by undoing the amendment offered in the subcommittee in regard to page 10, lines 19 through 25. CO-CHAIRMAN GREEN stated the subcommittee discussed that this would be a rare case and if it is that rare, the language should not unduly restrict the university on the rare occasion such as the park situation. He suggested on those rare occasions, a land swap could be worked out because there would be a lot of lead time. He said the reason the language is contained in the bill is to preclude future chancellory from going in the other direction, especially in times where revenues might be even tighter than they are now. REPRESENTATIVE KOTT OBJECTED to the motion. CO-CHAIRMAN GREEN asked for a roll call vote. Voting in favor of the amendment was Representative Davies. Voting against the motion were Representatives Austerman, Kott, Ogan, Williams, and Green. The MOTION FAILED 5-1. CO-CHAIRMAN WILLIAMS questioned page 2, line 17. He thought somewhere else in the bill it mentioned the requirement to manage land under the Department of Natural Resources regulations. He wondered if this language was redundant. REPRESENTATIVE KOTT noted the language was in the findings section. Number 653 REPRESENTATIVE KOTT told committee members the subcommittee agreed to forward a letter to the Board of Regents urging them to approach Congress again to try and urge them to transfer federal lands to the university. TAPE 95-63, SIDE A Number 000 REPRESENTATIVE KOTT said if SB 16 passes, there would be a recognition that there is an honest effort on the legislature's part to provide the university some additional acreage and perhaps the federal government could do the same. REPRESENTATIVE OGAN stated he looked into having an amendment drafted but it was determined the amendment would be unconstitutional (a dedicated fund) to have the funds derived from any proceeds from developing this land put into deferred maintenance. He wondered if it would be acceptable to address that issue in the legislative intent section. REPRESENTATIVE DAVIES felt the Board of Regents has been grappling with that issue over the last few years. The Regents now have put into place a policy that requires on the first draw of the budget to take care of maintenance. He said there is a process each campus has to go through to identify what the ongoing, absolutely essential maintenance needs are and those things get funded. He thought the issue was being taken care of. REPRESENTATIVE OGAN asked if the money derived from the land grant is used directly by the university or does it go into the general fund. Number 068 WENDY REDMAN, VICE PRESIDENT, UNIVERSITY RELATIONS, UNIVERSITY OF ALASKA, stated approximately ten years ago, the legislature set up in statute a natural resource endowment which follows the intent of the federal land grant statutes and defines what the money is used for, which is essentially natural resource issues. The money goes into the endowment trust fund and all of the earnings, minus inflation proofing, are available to the university as program receipts which are appropriated by the legislature, as program receipts, to the university each year. REPRESENTATIVE OGAN stated if legislative intent language was included, he would be more willing to consider larger acreage for the university. MS. REDMAN responded use of any receipts from the natural resource endowment for deferred maintenance, unless it was maintenance on agricultural experiment station or the fisheries industrial technology center, would not be in the scope of the statute already on the books for the use of the fund. REPRESENTATIVE DAVIES noted whatever amount of money coming in to the university from the earnings of that fund offsets the need for those funds and makes more funds available to deferred maintenance and everything else the university does. REPRESENTATIVE KOTT thanked the members of the subcommittee and members of the House Resources Committee who made contributions to the committee substitute. REPRESENTATIVE AUSTERMAN made a MOTION to MOVE HCS CSSB 16(RES), as amended, out of committee with individual recommendations. CO-CHAIRMAN GREEN asked if there were any objections. Hearing none, the MOTION PASSED.
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