Legislature(2017 - 2018)CAPITOL 106
02/20/2017 09:00 AM House EDUCATION
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| Audio | Topic |
|---|---|
| Start | |
| Presentation: University of Alaska, Public Land Deficit | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
ALASKA STATE LEGISLATURE
HOUSE EDUCATION STANDING COMMITTEE
February 20, 2017
9:06 a.m.
MEMBERS PRESENT
Representative Harriet Drummond, Chair
Representative Justin Parish, Vice Chair
Representative Zach Fansler
Representative Ivy Spohnholz
Representative Jennifer Johnston
Representative Chuck Kopp
Representative David Talerico
Representative Lora Reinbold (Alternate)
MEMBERS ABSENT
Representative Geran Tarr (Alternate)
COMMITTEE CALENDAR
PRESENTATION: UNIVERSITY OF ALASKA~ PUBLIC LAND DEFICIT
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
JAMES JOHNSON, President
University of Alaska (UA)
Fairbanks, Alaska
POSITION STATEMENT: Provided the presentation on the University
of Alaska (UA) public land deficit.
KIT DUKE, Administrator
University of Alaska (UA) System
Fairbanks, Alaska
POSITION STATEMENT: Responded to questions during the
presentation on the University of Alaska, Public Land Deficit.
ACTION NARRATIVE
9:06:08 AM
CHAIR HARRIET DRUMMOND called the House Education Standing
Committee meeting to order at 9:06 a.m. Representatives
Drummond, Kopp, Parish, Fansler, Johnston, Spohnholz, and
Talerico were present at the call to order. Representative
Reinbold (Alternate) arrived as the meeting was in progress.
^PRESENTATION: University of Alaska, Public Land Deficit
PRESENTATION: University of Alaska, Public Land Deficit
9:06:43 AM
CHAIR DRUMMOND announced that the only order of business would
be a presentation from the University of Alaska (UA) on the
public land deficit.
9:06:55 AM
JAMES JOHNSON, President, University of Alaska (UA), explained
that one reason the university depends heavily on the state for
funding is because it did not receive its full land grant. He
said, "We're the land grant university without the land." Only
Delaware received a smaller public land grant than did Alaska,
he pointed out, and added that Hawaii received cash in lieu of
any land, which the UA would also find acceptable. The
University of Alaska received approximately 110,000 acres of
land, prior to statehood. The estimated deficit, according to
what was to be awarded under the various grants, is 360,000.
9:09:51 AM
PRESIDENT JOHNSON presented the timeline of the land grant
history. The Morrill Act, 1862, was passed by Congress under
President Abraham Lincoln, and provided more than 11 million
acres of land to states and territories to create a system of
land grant colleges and universities. It further established
that every existing state, and every future state, would be
granted 30,000 acres per member of Congress, representing 90,000
acres for Alaska, to be dedicated to higher education. In 1915,
the Wickersham Land Grant statute was adopted by the territorial
legislature. Under Sec. 33, each township within a large Tanana
Valley rectangle, estimated at 336,000 acres, was to be conveyed
to the university; however, the territorial lands remained
largely un-surveyed, and less than five percent was actually
transferred. The Sutherland Land Grant statute, 1929, was
adopted by Congress to convey an additional 100,000 acres of
land, in the Territory of Alaska, for the exclusive use and
benefit of the Alaska Agricultural College and School of Mines.
In 1959, the First Alaska Legislature granted 1,000,000 acres to
the university but Governor William "Bill" Egan vetoed the
action. During the period of 1966-1980 Congress passed the
Alaska Native Claims Settlement Act (ANSCA) and the Alaska
National Interest Lands Conservation Act (ANILCA), but the
question of the UA land entitlement remained unresolved. From
1997-2005, Alaska's congressional delegation introduced several
federal bills in an attempt to rectify the UA land deficit. In
2000, the Alaska State Legislature passed SB 7 authorizing the
university to select up to 260,000 acres of state land.
However, Governor Tony Knowles vetoed the action and the
legislature tried but did not have enough votes to override the
veto. The Alaska Supreme Court ruled that conveyance of land is
not an appropriation and declined to address the potential
dedication clause issue. The 2005 State Legislature passed, HB
130, identifying a specific list of lands for the Department of
Natural Resources (DNR) to transfer to the university. The
Southeast Alaska Conservation Council (SEAC) filed a lawsuit, in
2007, arguing that HB 130 was in violation of the anti-
dedication clause and the university teamed with the state to
mount a defense. In 2009 the Alaska Supreme Court handed down
its decision striking down HB 130 and holding that the
legislature could not set up a permanent land endowment for the
university, citing the Constitution of the State of Alaska,
Article 9, Section 7, Dedicated Funds clause. Governor Sean
Parnell introduced HB 295, in 2010, which was partially modeled
after HB 130 but without the permanent endowment aspects. The
bill failed to pass the legislature. The same year, the
university complied with the court's deadline and transferred
the HB 130 lands back to DNR.
9:14:56 AM
PRESIDENT JOHNSON reviewed the options and possible solutions to
make up the university's 360,000 acre deficit. He said a
permanent land endowment would allow UA to generate revenue and
moderate the need for the state to provide general fund (GF)
allocations. The constitution has precluded all attempts by the
Alaska legislature to remedy the deficit situation. He said
that, from the federal point of view, the university land was
included in the Alaska Statehood Act grant and, thus, has
resisted endeavors to correct the deficit via use of additional
federal land grants. The Dedicated Funds clause has an explicit
exemption, he said, and read, "... when required by the federal
government for state participation in federal programs." A
federal program, that establishes a permanent UA land endowment,
consisting of a combination of state and federal lands, will
ensure compliance with this clause, he suggested. State
participation in a federal program will require the state to
convey lands, through the program for the purpose of endowing
the university's permanent land trust. He reported that
preliminary discussions are underway with DNR and Alaska's
congressional delegation regarding federal legislation to
establish such a program.
9:16:46 AM
PRESIDENT JOHNSON said the existing UA land holdings are
approximately 150,700 acres, mostly acquired under, or as
replacement for, the lands received under the Sutherland grant,
but are also lands acquired from private parties, as well as
local, state, or federal governments. The UA Land Management
Office is responsible for managing, developing, acquiring, and
disposing of all the university's real property. Since 1987, he
reported, the land and resource sale have generated over $204
million. The income has been deposited in the university's Land
Grant Endowment Trust Fund; a permanent endowment. The trust
fund is managed by the UA Foundation Board of Trustees. The
earnings are used to fund an array of natural resource related
education and research projects, which include programs on
fisheries, ocean sciences, biology, and agriculture.
Additionally, the trust earnings fund the Alaska Scholars
Program (ASP). The program awards $12,000 to students who plan
to attend the UA, and who graduate with a ranking in the top 10
percent of their class.
9:18:38 AM
PRESIDENT JOHNSON said that of the 150,700 total acres held by
the university, 12,183 are used for educational purposes and
sites for the UA system campuses. The remaining 138,517 acres
are investment properties, which he detailed as follows: 17,000
potential timber development, 10,018 national parks inholdings;
8,604 residential subdivisions under construction, 3,995
potential material sales, 2,087 potential oil and gas
development, and 96,813 remaining acres.
9:19:39 AM
PRESIDENT JOHNSON referred to the committee handout, titled,
"University of Alaska Public Land Deficit, House Finance
Education Subcommittee February 20, 2017," page 12, and the
investment property chart, which provides specific locations of
the acreage involved and the land use in each area. Directing
attention to page 13, titled, "UA Land Trust Balance," he
explained that the bar graph illustrates the steady, monetary
return provided by the trust from FY 89 to FY 16. The trust is
an endowment, he reminded, thus, only the earnings are part of
the university's budget. The goal is to maximize the investment
of the lands to drive the earnings up. He stressed that,
ultimately, the increased earnings will allow the university to
work towards becoming financially independent and less dependent
on state allocations. Finally, he said, despite failed efforts
in the past, a viable plan has been created to address the
deficit and meet the goals.
9:22:03 AM
REPRESENTATIVE JOHNSTON asked how many acres were returned to
the state following the latest court decision.
PRESIDENT JOHNSON answered that about 250,000 acres were
received and subsequently returned.
REPRESENTATIVE JOHNSTON surmised that if the federal and state
plan being proposed works in favor of the university, the same
250,000 acres would be reallocated once more, as a beginning
point of reconciliation.
PRESIDENT JOHNSON acknowledged that it may serve as the starting
point, and opined that it would be wise to also consider other
locales, such as lands that could host renewable energy
projects.
REPRESENTATIVE JOHNSTON asked where the university falls on the
federal list of organizations awaiting land allocations.
PRESIDENT JOHNSON agreed that there are a number of entities
awaiting federal land grants, and deferred further comment to
Kit Duke.
9:25:32 AM
REPRESENTATIVE TALERICO said investment property would be any
land that could be included for any of the purposes mentioned:
sale, lease, material sale, or other income opportunities.
PRESIDENT JOHNSON responded yes.
REPRESENTATIVE TALERICO asked whether the university holds lands
on the west side of Nenana and the Nenana River.
PRESIDENT JOHNSON deferred comment to Kit Duke.
KIT DUKE, Administrator, University of Alaska (UA) System, said
the university holds two parcels in the Nenana area. Doyon
Limited has been given access to one of these parcels for
exploration purposes.
9:27:01 AM
REPRESENTATIVE FANSLER asked if there is a timeline that the
university is hoping for in accomplishing action at the federal
level action, and whether the university has targeted any
specific lands.
PRESIDENT JOHNSON stated hope for positive movement in the next
two years at the federal level, which will open doors for action
at the state level.
9:29:16 AM
REPRESENTATIVE PARISH referred to the national parks inholdings
(NPS) and asked what revenue these holdings generate.
MS. DUKE responded that access issues have prevented issuance of
leases, thus, no revenues are being earned at this time. One NPS
parcel was traded for a useable property in the Seward area, she
reported.
9:30:41 AM
REPRESENTATIVE FANSLER asked about the use of the reported
96,813 acres remaining; shown on the handout, page 11.
MS. DUKE explained that the remaining acreage is land which has
yet to have its optimum potential determined.
9:33:45 AM
REPRESENTATIVE KOPP asked whether the university has analyzed
the value for converting its property to cash.
PRESIDENT JOHNSON said no, and deferred further comment.
MS. DUKE responded that some analyses has been performed,
especially on properties that have natural resource development
possibilities. Whenever allocation hearings occur, lands will
be considered for development potential, during the selection
process.
9:36:52 AM
CHAIR DRUMMOND asked what would prevent the introduction of a
new bill to grant the lands, is it at the will of the
legislature.
PRESIDENT JOHNSON responded that the 2009 court decision
currently holds sway. However, should a federal plan come forth
and override the decision, the legislature would be able to act.
9:38:05 AM
CHAIR DRUMMOND thanked everyone and announced the next meeting.
ADJOURNMENT
There being no further business before the committee, the House
Education Standing Committee meeting was adjourned at 9:38 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| List of Unviversity Land Grants by State.pdf |
HEDC 2/20/2017 9:00:00 AM |
University of Alaska Land Grants |
| 2017 02 20 UA Lands HEduc FINAL.pdf |
HEDC 2/20/2017 9:00:00 AM |
University of Alaska Land Grants |