Legislature(2019 - 2020)BUTROVICH 205
04/12/2019 03:30 PM RESOURCES
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SJR 10-COMPLETION OF UNIVERSITY LAND GRANT 3:32:16 PM CHAIR BIRCH announced the consideration of Senate Joint Resolution 10 (SJR 10). 3:32:39 PM TIM LAMKIN, Staff, Senator Gary Stevens, Alaska State Legislature, Juneau, Alaska, explained that SJR 10 addresses the underwhelming history of the University of Alaska as a land- grant university. This is an issue with the federal government that has been ongoing for a century. He noted that Senator Stevens, sponsor of SJR 10, is a student of history and stands by as a shepherd to make whatever changes necessary to address the University of Alaska land-grant deficit. The current budget climate is such that Senator Stevens wishes to provide the university with an opportunity to find other financial means to support itself in the form of its land holdings. The ultimate goal is to rely less on general funds. SJR 10 calls upon U.S. Senator Murkowski to help Alaska and call upon Congress to fix the university's land-grant deficit. 3:33:39 PM SENATOR BISHOP joined the committee meeting. 3:34:52 PM CHAIR BIRCH opened invited testimony for SJR 10. 3:35:27 PM MILES BAKER, Associate Vice President of Government Relations, University of Alaska, Anchorage, Alaska, explained that the University of Alaska is a land-grant university. He noted that of the 49 states that received college land grants, only Delaware received less acreage than Alaska. He detailed that the State of Hawaii was given cash in lieu of a land grant. MR. BAKER explained that a land-grant university is an institution of higher education that is granted federal land to raise funds to endow the university. The concept originated with the Morrill Land-Grant Act in the late 1800s. The land-grant mission was intended to focus on teaching of practical agriculture, science, military science, and engineering as a way of developing the west in response to the industrial revolution. He said today there are approximately 70 land-grant institutions around the U.S., but under explicit terms included in the Alaska Statehood Act, Alaska is the only state that has not been extended the Morrill Land-Grant Act benefit. He noted that the Alaska Legislature has attempted several times to grant land to the university, but their efforts have not been successful. 3:36:09 PM He addressed the slide titled, "University Land Grant" as follows: • Only Delaware and Hawaii rank below Alaska in higher education land grants. • The University of Alaska only received approximately 110,000 acres of its federal land grant entitlement. • The University of Alaska's estimated land grant gap is 360,000 acres. • A robust permanent land endowment would allow the University of Alaska to generate more revenue, and over time help moderate state general fund support. • The state has repeatedly attempted to remedy the gap but is constitutionally precluded from doing so. • The federal government's position is that the University of Alaska's land was included in Alaska's Statehood Act grant and has resisted remedies that rely solely on additional federal lands. He detailed that the University of Alaska currently owns 150,000 acres, most of which was from the Sutherland Act in 1929. He added that the University of Alaska has also received land from private donations and local governments, but the university estimates that it is still left without 360,000 acres that the original federal land grant would have allowed. He said the federal government's position has been that the land for the university was included as part of the Alaska Statehood Act. CHAIR BIRCH asked what the difference is between the University of Alaska land and the Mental Health Trust land. 3:39:55 PM ANDY HARRINGTON, Associate General Counsel, University of Alaska-Fairbanks, Fairbanks, Alaska, explained that the university's land grant situation is parallel to the Mental Health Trust lands. Legislation was passed in 1978 that tried to treat all the granted land associated the Mental Health Trust and the University of Alaska as part of the general grant, but the university Board of Regents did not approve. He noted that the Mental Health Lands Trust brought a lawsuit that resulted in a ruling that the legislation violated the trust and the trust had to be reconstituted. The university is anxious to litigate the land-grant issue and that is why a collaborative legislative solution is being pursued. MR. BAKER continued to address the University of Alaska lands as follows: • 12,000 acres are educational lands used for campuses and research sites. • The university's 139,000 acres allows for revenue: o $10 million in gross receipts was generated in FY2018. o The 20-year annual receipts average is $8.5 million. o $221 million has been generated since 1987 through real estate, timber, mineral and mining, and oil and gas. • The monetized activities benefit the university's educational programs, campuses, the university's foundation, and the Alaska's Scholar's Program which funds the top ten percent of high school graduates. 3:43:24 PM He discussed the slide titled "Framework for a Solution" as follows: • The University of Alaska's unfulfilled land grant is a Statehood Act issue. • Congress assumed that the Alaska Legislature would be able to fulfill the entitlement. • The Alaska delegation, the governor, the Alaska Department of Natural Resources, and the U.S. Department of Interior are discussing other issues related to Alaska's remaining 5-million-acre Statehood Act land selections. • The anti-dedication clause has an explicit exemption that says, "when required by the federal government for state participation in federal programs." • A solution may entail a structured federal program permissible under the constitution. MR. BAKER noted that the most recent attempt to resolve the dispute ended with the 2009 Alaska Supreme Court decision that determined the endowment transfer of land to the university would be a violation of the dedication clause in the Alaska constitution. The fourth bullet point in the previous slide points out an exemption the university may use when the state participates in a federal program, a concept that the university has been working on over the last several years. The state has several outstanding issues as well with the federal government regarding its land selection of five million acres from the Alaska Statehood Act; the university believes it should be part of those negotiations. 3:45:03 PM He turned to the slide titled, "Receipts by Resource Category" and noted that receipts from the land the university is sporadic. The university, just like with the state, would like to develop its endowment in a way that generates a predictable long-term revenue stream for educational benefit. He referenced the slide titled, "UA Land Trust Balance" and detailed that the trust balance is approximately $160 million. SENATOR GIESSEL noted that the committee had a similar hearing on the university's land trust during a previous legislature. She asked if any progress had been made. MR. BAKER answered yes. The university has had discussions with the Alaska delegation on possible federal legislation. He opined that the window is narrow over the next two years with the Department of Interior in trying to make the land grant happen. 3:48:23 PM SENATOR KIEHL commented that the conversation so far has been fascinating and oblique. He admitted that he was lost on what result would occur. MR. BAKER answered that the university has been in a quandary since 2009. He said there are many reasons why the land did not get transferred in previous years, but the federal government feels that the state has the land that should be transferred to the university and is not inclined to give more federal land. He reiterated that the Alaska Supreme Court decision prohibits the state from transferring the land to the university. The university is trying to come up with a way to transfer land that complies with the state constitution. SENATOR KIEHL asked how much land should be transferred. MR. BAKER answered 360,000 acres. He admitted that the challenge will be for the university to receive the most valuable land to generate money. SENATOR KIEHL asked who would ultimately choose the land. 3:52:37 PM MR. HARRINGTON answered that the university and the DNR would jointly agree on the land coming out of the federal program. SENATOR BISHOP asked if the land the university is trying to get is part of the five million acres that has already been appropriated by the federal government. MR. HARRINGTON answered that the lands would come out of both the state's remaining five-million-acre entitlement and the land put through the federal program. 3:56:43 PM MARTY PARSONS, Director, Division of Mining, Land, and Water, Alaska Department of Natural Resources, Anchorage, Alaska, said the department fully supports the university's effort to diversify its funding sources and the division is prepared to assist the university where appropriate. He suggested that portions of the resolution should be clarified to strengthen the resolution. CHAIR BIRCH asked if the university may consider land around Prudhoe Bay. MR. PARSONS admitted that most lands around Prudhoe Bay have already been selected and conveyed to the state. He pointed out that in 1993, all the state lands that could be selected where selected. 3:59:15 PM CHAIR BIRCH held SJR 10 in committee.