Legislature(2019 - 2020)BUTROVICH 205

04/12/2019 03:30 PM RESOURCES

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Audio Topic
03:30:56 PM Start
03:32:16 PM SJR10
03:59:31 PM Confirmation Hearings:
04:46:12 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Consideration of Governor's Appointees: TELECONFERENCED
Board of Game:
- Allen "Al" Barrette - Fairbanks
- Orville Huntington - Fairbanks
-- Public Testimony on All Appointees --
*+ SJR 10 COMPLETION OF UNIVERSITY LAND GRANT TELECONFERENCED
Heard & Held
-- Testimony <Invitation Only> --
-- Public Testimony Removed from Agenda --
+ Bills Previously Heard/Scheduled TELECONFERENCED
           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.                                                                                           

Document Name Date/Time Subjects
BoG Barrette Resume.pdf SRES 4/12/2019 3:30:00 PM
BoG FFGAC Letter 4.11.19.pdf SRES 4/12/2019 3:30:00 PM
BoG Dennis Zadra Email 4.10.19.pdf SRES 4/12/2019 3:30:00 PM
BoG Gary & Kathy King Email 4.10.19.pdf SRES 4/12/2019 3:30:00 PM
BoG Huntington - APHA Letter 4.10.19.pdf SRES 4/12/2019 3:30:00 PM
BoG Mike Munsey Email 4.11.19.pdf SRES 4/12/2019 3:30:00 PM
BoG MVFGAC Letter 4.10.19.pdf SRES 4/12/2019 3:30:00 PM
BoG RHAK Letter 4.10.19.pdf SRES 4/12/2019 3:30:00 PM
BoG Treasure Hunter Lodge Email 4.10.19.pdf SRES 4/12/2019 3:30:00 PM
BoG Barrette Letters & Emails #1.pdf SRES 4/12/2019 3:30:00 PM
SJR10 Sponsor Statement.pdf SRES 4/12/2019 3:30:00 PM
SJR 10
SJR10 Version A.pdf SRES 4/12/2019 3:30:00 PM
SJR 10
SJR10 Fiscal Note.pdf SRES 4/12/2019 3:30:00 PM
SJR 10
SJR10 UA Land Grant White Paper.pdf SRES 4/12/2019 3:30:00 PM
SJR 10
SJR10 UA Land Grant History.pdf SRES 4/12/2019 3:30:00 PM
SJR 10
SJR10 UA Letter 4.11.19.pdf SRES 4/12/2019 3:30:00 PM
SJR 10
SJR10 UA Presentation 4.12.19.pdf SRES 4/12/2019 3:30:00 PM
SJR 10
BoG Barrette Letters & Emails #2.pdf SRES 4/12/2019 3:30:00 PM
BoG Huntington Resume.pdf SRES 4/12/2019 3:30:00 PM
BoG Combined Emails & Letters 4.16.19.pdf SRES 4/12/2019 3:30:00 PM