Legislature(2001 - 2002)
03/20/2002 01:44 PM JUD
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SJR 25-CONST. AM: EDUCATION FUND SENATOR JERRY WARD, prime sponsor of SJR 25, encouraged members to adopt a proposed committee substitute (Version J) before the committee. He pointed out that members' packets also contain a proposed committee substitute to SB 188, companion legislation to SJR 25. He explained that the proposed committee substitute to SJR 25 is an attempt to address some of the long term needs of K- 12 education in the state of Alaska. The University of Alaska was removed from the proposed committee substitute at his request because he wanted the bill to emphasize K-12. Much of the bill is modeled after similar legislation introduced by Steve Cowper, former Governor. Governor Cowper's education endowment required a mandatory draw from the Permanent Fund; SJR 25 allows the legislature to make such a draw but does not mandate it to do so. Version J allows the legislature to put 5 million acres of state land into an education endowment, allows residents to contribute 100 percent of their permanent fund dividends, and leave the door open to allow other funds to be deposited into the endowment in the future. [SENATOR ELLIS arrived.] SENATOR WARD informed members that he and Senator Cowdery introduced similar legislation in 1983. They were told at that time it would take 20 years to produce income from a land endowment. He believes the legislature should have committed 8 million acres of land to the endowment at that time. Senator Ward said he is bringing this concept forward again because he has seen the education community do a good job, but believes the "boat is sinking." This year the legislature will have to spend more on education than any other component of government. He wants to align the educational community with the development community so that Alaska can move forward and begin to develop some of its more than 106 million acres of state land. He noted that a land trust relationship was set up in the Alaska Constitution for the University of Alaska and the mental health community and the legislature set up a land trust for the Alaska Railroad Corporation when it was purchased in 1983. He repeated that he wants to bring advocates for public education and the development community together so that, "we might be able to overrule some of the non-growth environmental extremists from outside that have been locking our country up for the last several decades and not to say in the least for the last seven years." He noted that he spoke with Governor Cowper when he first proposed this concept and urged him to use a land endowment instead of permanent fund monies but his constituency opposed that plan. He stated the purpose of this legislation is to create another revenue source for education. SENATOR COWDERY moved to adopt the proposed committee substitute to SJR 25 (Version J) for the purpose of discussion. VICE-CHAIR DONLEY noted that he would leave that motion on the table until Senator Therriault returned and the committee would take public testimony. MR. DARROLL HARGRAVES, Executive Director of the Alaska Council of School Administrators (ACSA), informed members that this legislation has not been on his "radar screen" so he has no official position from the ACSA. He said he was happy to see this issue surface again because he recalled, in 1982, the ACSA pushed to highlight the possibilities of such a fund. ACSA invited Dr. Norman Hall from Texas to visit: he proposed that Alaska do what Texas did with its oil revenue - restrict that revenue to construct and maintain school facilities. ACSA made such a proposal but Alaska had so much money at that time, he believes no one could foresee future problems. He favors limiting an endowment to K-12 education and he encouraged members to consider restricting its use to construction and major maintenance, as that is what worked best in Texas. He added that he believes the thth statehood charter puts the 16 and 36 section of every township into a public school land trust. He was not sure of the status but offered to check for members. He applauded Senator Ward for introducing the legislation and said he would like to see a land endowment for education come to fruition. SENATOR WARD acknowledged that Senator Taylor has worked with him on this bill and estimated that the sections of land in the statehood charter would add about 1.5 million acres to the endowment. He noted that the Texas university system is making enough from its land grants that it spends excess funds on K-12 programs. He has spoken to members of Alaska's congressional delegation about this issue and they believe the University of Alaska's land grant should stand on its own. The delegation suggested that if a land grant comes to pass, they would consider trying to donate an equal amount of federal land to it. If 5 million acres of both federal and state land were put into an endowment, it would be the largest land grant in the United States. SENATOR COWDERY asked how much land would be needed at the start and noted that land sales could encompass one lot or one million acres. SENATOR WARD replied that he "took it down to nothing less than 40 acres." He suggested staying with 640 acres but pointed out 40-acre parcels would not require surveys so there would be no transfer cost. SENATOR COWDERY noted that he sees no reference to that in the committee substitute. SENATOR WARD clarified the details are specified in SB 188. He referred to language on page 4 that reads: Each list must contain not more than 25 percent of the total acres of land to which the fund is entitled after subtracting previous conveyances under this section, but not less than 25,000 acres or the remaining entitlement under this section, whichever is less, and said that is a formula the department came up with. He maintained that the bill should not contain a minimum because size should not be a factor; the legislature should have the option to transfer lots if necessary. He said it is not helpful to the education of Alaska's children to leave over 100 million acres in state ownership. SENATOR WARD said he purposely did not restrict contributions to permanent fund dividends so that future legislators can identify other revenue streams, such as gas line revenue. He said he believes there is a serious misunderstanding about education funding. The legislature has been trying to put quite a bit of money into public education for the last few years but it never seems to be enough. He believes the legislature should fund transportation, public safety and education well, and it is not doing so. He does not believe the legislature can "tax its way out of this," and that if a land endowment is logical for the University, the railroad and the mental health community, it certainly is logical for K-12 education. He then asked Mr. Hargraves about the status of the land grant he referred to. MR. HARGRAVES replied, "I think that thing is a real ball of worms for you. This state someday may pay the price for that. I don't know what you know - I don't know what's happening, but aren't there some lawsuits out there that are either taking shape or...?" SENATOR WARD stated the lawsuits have dropped to the wayside because agreements were negotiated. MR. HARGRAVES said it is his impression, "...that if you got a decision similar to that mental health lands trust in connection with this one, I think it would practically destroy the state." SENATOR WARD commented that Senator Taylor believes giving the full 5 million acres to the land endowment would solve the problem. MR. HARGRAVES said the statehood charter issue is very complicated and would have tremendous and devastating implications for the state. SENATOR WARD clarified that he brought the proposed committee substitute for SB 188 to members' attention because he wanted to inform them of the board make-up. He said he would like to pit the development community and the education community against the extreme environmentalists. VICE-CHAIR DONLEY announced the committee would take up HB 362. He asked Ms. O'Regan to testify. Upon reconvening the meeting, SENATOR COWDERY moved CS SJR 25(JUD) from committee with individual recommendations. VICE-CHAIR DONLEY noted that without objection, the motion carried.