Legislature(1995 - 1996)

05/07/1995 02:15 PM House FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
                                                                               
                                                                               
                     HOUSE FINANCE COMMITTEE                                   
                           MAY 7, 1995                                         
                            2:15 P.M.                                          
                                                                               
  TAPE HFC 95 - 117, Side 2, #000 - end.                                       
  TAPE HFC 95 - 118, Side 1, #000 - #184.                                      
                                                                               
  CALL TO ORDER                                                                
                                                                               
  Co-Chair  Mark Hanley  called  the  House Finance  Committee                 
  meeting to order at 2:15 P.M.                                                
                                                                               
  PRESENT                                                                      
                                                                               
  Co-Chair Hanley               Representative Kohring                         
  Co-Chair Foster               Representative Martin                          
  Representative Mulder         Representative Navarre                         
  Representative Brown          Representative Parnell                         
  Representative Grussendorf    Representative Therriault                      
  Representative Kelly                                                         
                                                                               
  ALSO PRESENT                                                                 
                                                                               
  Sara  Fisher, Staff,  Representative  Gene Therriault;  John                 
  Shively,  Commissioner,  Department  of  Natural  Resources;                 
  Wendy   Redman,   Vice-President,    University   Relations,                 
  University of Alaska; Senator  Steve Frank; Jack  Chenoweth,                 
  Attorney,  Legislative  Legal  Counsel, Legislative  Affairs                 
  Agency.                                                                      
                                                                               
  SUMMARY                                                                      
                                                                               
  SB 16     An Act relating  to the  University of Alaska  and                 
            university  land,  authorizing  the University  of                 
            Alaska to  select additional  state public  domain                 
            land, and defining net  income from the University                 
            of  Alaska's endowment  trust fund  as 'university                 
            receipts'    subject    to    prior    legislative                 
            appropriation.                                                     
                                                                               
            SB   16  was   HELD  in   Committee   for  further                 
            discussion.                                                        
                                                                               
  SB 115    An    Act    relating   to    the   establishment,                 
            modification,  and  enforcement of  support orders                 
            and the  determination of parentage  in situations                 
            involving  more  than one  state;  amending Alaska                 
            Rule of Administration 9; amending Alaska Rules of                 
            Civil Procedure 79  and 82;  and providing for  an                 
            effective date.                                                    
                                                                               
                                1                                              
                                                                               
                                                                               
            CS SB 115  (FIN)am was  reported out of  Committee                 
            with  "no recommendation",  with a  Senate Finance                 
            Letter of Intent,                                                  
            and  with  fiscal  notes   by  the  Department  of                 
            Community and  Regional Affairs dated  3/7/95, the                 
            Department  of  Law dated  3/7/95 and  zero fiscal                 
            notes  by the  Department  of  Health  and  Social                 
            Services  dated  3/7/95   and  the  Department  of                 
            Revenue dated 3/7/95.                                              
                                                                               
  HB 281    An Act  ratifying an agreement between  the Alaska                 
            Housing Finance Corporation  and the  commissioner                 
            of revenue and  making certain pledges to  obliges                 
            of  the  corporation  regarding   that  agreement;                 
            relating to the authorization for and the issuance                 
            of bonds by the Alaska Housing Finance Corporation                 
            to pay for the costs  of repair and rehabilitation                 
            of student housing facilities of the University of                 
            Alaska; and providing for an effective date.                       
                                                                               
            CS HB 281 (FIN) was reported out of Committee with                 
            a "do pass" recommendation and  with a fiscal note                 
            by the Department  of Revenue dated 3/24/95  and a                 
            zero fiscal  notes by the  Statewide Budget Office                 
            dated 3/24/95 and the  Department of Revenue dated                 
            3/24/95.                                                           
                                                                               
  HB 282    An Act relating  to the authorization for  and the                 
            issuance of  revenue  bonds by  the University  of                 
            Alaska  to  pay  for  the   costs  of  repair  and                 
            rehabilitation of buildings and  other structures,                 
            excluding student housing  and dormitories, of the                 
            University  of Alaska;  expanding the uses  of the                 
            Alaska debt retirement fund to  allow financing of                 
            the  repair and  rehabilitation  of University  of                 
            Alaska facilities; and providing  for an effective                 
            date.                                                              
                                                                               
            HB 282 was HELD for further consideration.                         
                                                                               
  HB 309    An Act approving the University  of Alaska's plans                 
            to  enter  into  long-term  obligations to  borrow                 
            money from the Alaska Housing Finance  Corporation                 
            for the acquisition of student housing facilities;                 
            and providing for an effective date.                               
                                                                               
            CS HB 309 (FIN) was reported out of Committee with                 
            a "do pass" recommendation and  with a fiscal note                 
            by the Statewide Budget Office dated 4/21/95.                      
  SENATE BILL 115                                                              
                                                                               
                                2                                              
                                                                               
                                                                               
       "An Act  relating to  the establishment,  modification,                 
       and enforcement of support orders and the determination                 
       of  parentage in  situations  involving more  than  one                 
       state;  amending  Alaska  Rule  of  Administration   9;                 
       amending Alaska Rules of Civil Procedure 79 and 82; and                 
       providing for an effective date."                                       
                                                                               
  Representative Brown MOVED  to report CS SB 115  (FIN)am out                 
  of Committee  with individual  recommendations and  with the                 
  accompanying fiscal notes.  Co-Chair Hanley noted that there                 
  was  a previous MOTION  on the table.   Representative Brown                 
  WITHDREW  THE  MOTION  to  move  the  bill  from  Committee.                 
  Representative Therriault  WITHDREW the  amendment moved  at                 
  the previous meeting.                                                        
                                                                               
  Representative Brown reiterated the MOTION  to MOVE the bill                 
  from   Committee  with   the   accompanying  fiscal   notes.                 
  Representative Brown  noted that  it was  not her intent  to                 
  move the Letter  of Intent.   There being  NO OBJECTIONS  to                 
  moving the bill and  fiscal notes from Committee, it  was so                 
  ordered.                                                                     
                                                                               
  Representative Therriault MOVED the Senate Finance Letter of                 
  Intent.    Representative  Brown OBJECTED.    She  asked the                 
  purpose  of the  letter.   Representative Therriault  stated                 
  that he had  received complaints from constituents  who have                 
  been good child  support payers but received  correspondence                 
  from  that   agency   containing   very   strong   language.                 
  Representative Brown voiced favor that  all people should be                 
  treated with respect and recommended that the agency provide                 
  separate letters addressing specific situations.                             
                                                                               
  A roll call was  taken on the MOTION to adopt  the Letter of                 
  Intent.                                                                      
                                                                               
       IN FAVOR:      Therriault,   Kohring,   Kelly,  Martin,                 
                      Foster, Hanley                                           
       OPPOSED:       Parnell,  Brown,   Grussendorf,  Mulder,                 
  Navarre                                                                      
                                                                               
  The MOTION PASSED (6-5).                                                     
                                                                               
  CS SB  115 (FIN) am was  reported out of Committee  with "no                 
  recommendation", a Senate Finance Letter  of Intent and with                 
  fiscal notes by the Department of Health and Social Services                 
  dated 3/7/95,  the Department  of Revenue  dated 3/7/95  and                 
  zero  fiscal  notes  by  the  Department  of  Community  and                 
  Regional  Affairs  dated 3/7/95  and  the Department  of Law                 
  dated 3/7/95.                                                                
  HOUSE BILL 281                                                               
                                                                               
                                3                                              
                                                                               
                                                                               
       "An  Act  ratifying  an  agreement  between the  Alaska                 
       Housing  Finance Corporation  and  the commissioner  of                 
       revenue and making  certain pledges  to obliges of  the                 
       corporation regarding  that agreement; relating  to the                 
       authorization  for  and the  issuance  of bonds  by the                 
       Alaska Housing Finance Corporation to pay for the costs                 
       of  repair   and  rehabilitation  of   student  housing                 
       facilities  of the University  of Alaska; and providing                 
       for an effective date."                                                 
                                                                               
  HOUSE BILL 309                                                               
                                                                               
       "An Act approving  the University of Alaska's  plans to                 
       enter into long-term obligations  to borrow money  from                 
       the  Alaska   Housing  Finance   Corporation  for   the                 
       acquisition   of   student   housing  facilities;   and                 
       providing for an effective date."                                       
                                                                               
  SARA FISHER, STAFF, REPRESENTATIVE GENE THERRIAULT, provided                 
  an explanation of the changes  contained in the work  drafts                 
  LS1076\K, Chenoweth, 5/7/95 for CS HB 309.                                   
                                                                               
  Representative  Therriault,  Subcommittee  Chair, MOVED  the                 
  committee substitute  work draft for  HB 281 as  the version                 
  before  the Committee.   There  being  NO OBJECTION,  it was                 
  adopted.                                                                     
                                                                               
  Representative  Therriault MOVED to  report out of Committee                 
  CS HB 281 (FIN) with individual recommendations and with the                 
  accompanying fiscal notes.   There  being NO OBJECTIONS,  it                 
  was so ordered.                                                              
                                                                               
  CS HB  281 (FIN) was  reported out of  Committee with  a "do                 
  pass"  recommendation  and   with  a  fiscal  note   by  the                 
  Department of Revenue  dated 3/24/95 and a zero fiscal notes                 
  by  the  Statewide  Budget  Office  dated  3/24/95  and  the                 
  Department of Revenue dated 3/24/95.                                         
                                                                               
  Representative  Therriault  MOVED  the committee  substitute                 
  work draft for HB  309 as the version before  the Committee.                 
  There being NO OBJECTIONS, it was adopted.                                   
                                                                               
  Representative Therriault MOVED  to report  CS HB 309  (FIN)                 
  out of  Committee with individual  recommendations and  with                 
  the accompanying fiscal note.  There being NO OBJECTIONS, it                 
  was so ordered.                                                              
                                                                               
  CS HB  309 (FIN) was  reported out  of Committee with  a "do                 
  pass" recommendation and with a fiscal note by the Statewide                 
  Budget Office dated 4/21/95.                                                 
                                                                               
                                4                                              
                                                                               
                                                                               
  SENATE BILL 16                                                               
                                                                               
       "An  Act  relating  to  the  University of  Alaska  and                 
       university land,  authorizing the University  of Alaska                 
       to  select  additional state  public  domain land,  and                 
       defining  net  income from  the University  of Alaska's                 
       endowment trust  fund as 'university  receipts' subject                 
       to prior legislative appropriation."                                    
                                                                               
  JOHN SHIVELY, COMMISSIONER, DEPARTMENT OF NATURAL RESOURCES,                 
  spoke against the proposed legislation.   He noted that  the                 
  Department of Administration  also has consistently  opposed                 
  the  bill.   The legislation  would allow the  University of                 
  Alaska  to  select  certain  lands  from  the  State's  land                 
  entitlement.  He  thought that the  benefit received by  the                 
  State would be minimal and that the legislation would not be                 
  a good use of  the State's limited resources.   He suggested                 
  an  alternative approach  would  be  to investigate  federal                 
  lands  being  used for  the  University's land  base through                 
  direct appropriations.                                                       
                                                                               
  SENATOR STEVE FRANK testified in support of SB 16.  He noted                 
  that  the  University of  Alaska  is  called a  "Land  Grant                 
  University"  in   the  tradition  of   American  land  grant                 
  universities,  providing  teaching,   research  and   public                 
  service to the people  of Alaska.  While the  University has                 
  attempted to mold  itself in the  land grant tradition,  one                 
  piece of that tradition is lacking--a sufficient land grant.                 
                                                                               
                                                                               
  Senator Frank continued that Alaskans look to the University                 
  of Alaska  to provide  for some  of its  financial needs  by                 
  earning income from the federal land  grant, yet Alaskans do                 
  not  realize  the  need  of  lands  to  be  managed  by  the                 
  university.    He added,  passage  of the  legislation would                 
  allow expansion of  the University of Alaska land grant, and                 
  would allow the University to generate additional revenue in                 
  support  of  its  programs.    The  land would  need  to  be                 
  responsibly  managed  in  order  to  generate income.    The                 
  University is currently involved in a wide range of projects                 
  including  commercial  leasing,   development  and  sale  of                 
  residential  and remote  subdivisions,  oil  and  gas  lease                 
  sales, timber and gravel sales and mining leases.                            
                                                                               
  Representative Mulder asked how many acres of land the State                 
  owns.    Senator  Frank   replied  currently,  there  exists                 
  approximately   104  million   acres   of  state   property.                 
  Representative Mulder asked if it would be possible for  the                 
  University to  select land that has oil and gas developments                 
  on it.   Senator  Frank stated  that it  was, although,  the                 
  Commissioner had been  given a  very broad power.   No  land                 
                                                                               
                                5                                              
                                                                               
                                                                               
  could be selected that was on the  State's five year oil and                 
  gas leasing program, and the University could not select any                 
  other lands that the Commissioner thought were vital for the                 
  State's best interest.                                                       
                                                                               
  Representative Brown voiced  concern about the  treatment of                 
  the oil and gas licensing.   She referenced language on Page                 
  7,  indicating  that  the  oil  and  gas  license  would  be                 
  different  than the lease.  Senator Frank explained that the                 
  intent was more clearly defined on Page 5, Line 4.                           
                                                                               
  Representative Brown  commented that information on  Page 7,                 
  Subsection (3)  would not  be in  the best  interest of  the                 
  State.  Senator Frank noted that the Commissioner would have                 
  the ultimate authority to consider what would be in the best                 
  interest of the State.                                                       
                                                                               
  Representative Brown asked  if the  lands, when under  State                 
  ownership, would  be exempt  from taxation.   Senator  Frank                 
  understood that they would be, although any lease-hold would                 
  be subject to  taxation.  Representative Brown  thought that                 
  the  current  language was  confusing  and that  it  did not                 
  clarify if the University land would be subject to taxation.                 
  Senator  Frank  recommended  that   a  lawyer  provide  that                 
  information, although  he thought  that land  conveyed to  a                 
  private entity would carry a tax immunity.                                   
                                                                               
  Representative  Brown  asked why  the  University  should be                 
  managing  their  own  resources  and  surface  real  estate.                 
  Senator Frank replied  that the  University currently has  a                 
  specified Lands  Management Department  to manage  their own                 
  acreage.  He continued, the  Department of Natural Resources                 
  currently manages 1.4 million acres  and that the University                 
  currently  has  a  land   grant.    He  believed   that  the                 
  legislation would allow  the University  greater economy  of                 
  scale in land management, pointing  out that the legislation                 
  would provide a net long term economic benefit to the State.                 
                                                                               
                                                                               
  Representative Brown asked if  revenues which the University                 
  received from the lands would continue to be appropriated by                 
  the Legislature.   Senator Frank  stated that they  would be                 
  appropriated    through    the    Executive   Budget    Act.                 
  Representative  Brown  questioned   the  potential   revenue                 
  stream.   Senator Frank  replied that  information would  be                 
  speculative at this time, although he hoped it would be high                 
  so that the University would be  able to continue their high                 
  standards with less dependence on the general fund.                          
                                                                               
  Discussion  continued  between   Representative  Brown   and                 
  Senator  Frank regarding the  statutory adjustment which the                 
  legislature made for leases made in law after 1980.                          
                                                                               
                                6                                              
                                                                               
                                                                               
  Representative Brown asked what expertise the University had                 
  to manage oil and gas resources.  Senator Frank did not know                 
  the extent of  their expertise.  Representative  Brown asked                 
  for an explanation of Section (D), Subsection (2).                           
                                                                               
  WENDY   REDMAN,   VICE   PRESIDENT,  UNIVERSITY   RELATIONS,                 
  UNIVERSITY OF ALASKA,  responded that  Section D deals  with                 
  "time and space"  after the  University has selected  lands,                 
  but prior  to conveyance.   She  noted that  there had  been                 
  substantial  concern, because  that  process may  take  some                 
  time.   She added  that there  should not  be a  prohibition                 
  against  entry into  the lands during  that period  of time.                 
  Subsection (2)  deals with what  will occur to  the proceeds                 
  during the entry prior to conveyance.                                        
                                                                               
  Ms. Redman advised that the University could be given leased                 
  land, however,  the State  will retain the  income for  that                 
  land  for  the  life  of   the  lease/contract  through  the                 
  extension period.  She pointed out that language was similar                 
  to the language used  in the last land settlement  ruling in                 
  1986.                                                                        
                                                                               
  (Tape Change, HFC 95-118, Side 1).                                           
                                                                               
  Representative   Brown  asked   if   the  transferred   land                 
  properties selected  by the  University of  Alaska would  be                 
  subject to taxation by the municipalities.                                   
                                                                               
  JACK   CHENOWETH,   ATTORNEY,  LEGISLATIVE   LEGAL  COUNSEL,                 
  LEGISLATIVE AFFAIRS AGENCY,  stated that  they would not  be                 
  subject to taxation under  current law nor would they  be by                 
  the amendment made in Section  12 of the Resources' version.                 
  Representative Brown asked if the land would be subject once                 
  transferred to a private owner.  Mr. Chenoweth  advised that                 
  beyond ownership  by the  University, the  lands would  then                 
  become taxable.                                                              
                                                                               
  SB 16 was HELD in Committee for further consideration.                       
  ADJOURNMENT                                                                  
                                                                               
  The meeting adjourned at 3:00 P.M.                                           
                                                                               
                     HOUSE FINANCE COMMITTEE                                   
                           MAY 7, 1995                                         
                            2:15 P.M.                                          
                                                                               
  TAPE HFC 95 - 117, Side 2, #000 - end.                                       
  TAPE HFC 95 - 118, Side 1, #000 - #184.                                      
                                                                               
  CALL TO ORDER                                                                
                                                                               
                                7                                              
                                                                               
                                                                               
  Co-Chair Mark  Hanley  called the  House  Finance  Committee                 
  meeting to order at 2:15 P.M.                                                
                                                                               
  PRESENT                                                                      
                                                                               
  Co-Chair Hanley               Representative Kohring                         
  Co-Chair Foster               Representative Martin                          
  Representative Mulder         Representative Navarre                         
  Representative Brown          Representative Parnell                         
  Representative Grussendorf    Representative Therriault                      
  Representative Kelly                                                         
                                                                               
  ALSO PRESENT                                                                 
                                                                               
  Sara  Fisher,  Staff, Representative  Gene  Therriault; John                 
  Shively,  Commissioner,  Department  of  Natural  Resources;                 
  Wendy   Redman,   Vice-President,    University   Relations,                 
  University of  Alaska; Senator Steve Frank;  Jack Chenoweth,                 
  Attorney,  Legislative  Legal  Counsel, Legislative  Affairs                 
  Agency.                                                                      
                                                                               
  SUMMARY                                                                      
                                                                               
  SB 16     An Act relating  to the  University of Alaska  and                 
            university  land,  authorizing  the University  of                 
            Alaska  to select  additional state  public domain                 
            land, and defining net income  from the University                 
            of Alaska's  endowment trust  fund as  'university                 
            receipts'    subject    to    prior    legislative                 
            appropriation.                                                     
                                                                               
            SB   16  was   HELD  in   Committee  for   further                 
            discussion.                                                        
                                                                               
  SB 115    An    Act    relating   to    the   establishment,                 
            modification,  and  enforcement of  support orders                 
            and the  determination of parentage  in situations                 
            involving  more than  one  state; amending  Alaska                 
            Rule of Administration 9; amending Alaska Rules of                 
            Civil Procedure 79  and 82;  and providing for  an                 
            effective date.                                                    
                                                                               
            CS SB 115  (FIN)am was  reported out of  Committee                 
            with  "no recommendation",  with a  Senate Finance                 
            Letter of Intent,                                                  
            and  with  fiscal  notes   by  the  Department  of                 
            Community and  Regional Affairs dated  3/7/95, the                 
            Department  of  Law dated  3/7/95 and  zero fiscal                 
            notes  by the  Department  of  Health  and  Social                 
            Services  dated  3/7/95   and  the  Department  of                 
            Revenue dated 3/7/95.                                              
                                                                               
                                8                                              
                                                                               
                                                                               
  HB 281    An  Act ratifying an  agreement between the Alaska                 
            Housing Finance Corporation  and the  commissioner                 
            of revenue  and making certain  pledges to obliges                 
            of  the  corporation  regarding   that  agreement;                 
            relating to the authorization for and the issuance                 
            of bonds by the Alaska Housing Finance Corporation                 
            to pay for the costs  of repair and rehabilitation                 
            of student housing facilities of the University of                 
            Alaska; and providing for an effective date.                       
                                                                               
            CS HB 281 (FIN) was reported out of Committee with                 
            a "do pass" recommendation and  with a fiscal note                 
            by the Department  of Revenue dated 3/24/95  and a                 
            zero fiscal notes by  the Statewide Budget  Office                 
            dated 3/24/95 and the Department of  Revenue dated                 
            3/24/95.                                                           
                                                                               
  HB 282    An Act relating  to the authorization for  and the                 
            issuance of  revenue bonds  by  the University  of                 
            Alaska  to  pay  for  the   costs  of  repair  and                 
            rehabilitation of buildings and  other structures,                 
            excluding student housing and dormitories, of  the                 
            University of  Alaska; expanding  the uses  of the                 
            Alaska debt retirement fund to allow financing  of                 
            the  repair and  rehabilitation  of University  of                 
            Alaska facilities; and  providing for an effective                 
            date.                                                              
                                                                               
            HB 282 was HELD for further consideration.                         
                                                                               
  HB 309    An Act approving the University of Alaska's  plans                 
            to  enter  into  long-term obligations  to  borrow                 
            money from the Alaska  Housing Finance Corporation                 
            for the acquisition of student housing facilities;                 
            and providing for an effective date.                               
                                                                               
            CS HB 309 (FIN) was reported out of Committee with                 
            a "do pass" recommendation and  with a fiscal note                 
            by the Statewide Budget Office dated 4/21/95.                      
                                                                               
  SENATE BILL 115                                                              
                                                                               
       "An Act  relating to  the establishment,  modification,                 
       and enforcement of support orders and the determination                 
       of  parentage in  situations  involving more  than  one                 
       state;  amending  Alaska  Rule  of  Administration   9;                 
       amending Alaska Rules of Civil Procedure 79 and 82; and                 
       providing for an effective date."                                       
                                                                               
  Representative Brown MOVED  to report CS SB  115 (FIN)am out                 
  of Committee  with individual  recommendations and  with the                 
                                                                               
                                9                                              
                                                                               
                                                                               
  accompanying fiscal notes.  Co-Chair Hanley noted that there                 
  was a  previous MOTION on  the table.   Representative Brown                 
  WITHDREW  THE  MOTION  to  move  the  bill  from  Committee.                 
  Representative Therriault  WITHDREW the  amendment moved  at                 
  the previous meeting.                                                        
                                                                               
  Representative Brown reiterated the MOTION  to MOVE the bill                 
  from   Committee  with   the   accompanying  fiscal   notes.                 
  Representative Brown  noted that  it was not  her intent  to                 
  move the Letter  of Intent.   There being  NO OBJECTIONS  to                 
  moving the bill and  fiscal notes from Committee, it  was so                 
  ordered.                                                                     
                                                                               
  Representative Therriault MOVED the Senate Finance Letter of                 
  Intent.    Representative  Brown OBJECTED.    She  asked the                 
  purpose of  the  letter.   Representative Therriault  stated                 
  that he had  received complaints from constituents  who have                 
  been good  child support payers  but received correspondence                 
  from   that   agency   containing   very  strong   language.                 
  Representative Brown voiced favor that  all people should be                 
  treated with respect and recommended that the agency provide                 
  separate letters addressing specific situations.                             
                                                                               
  A roll  call was taken on the MOTION  to adopt the Letter of                 
  Intent.                                                                      
                                                                               
       IN FAVOR:      Therriault,   Kohring,  Kelly,   Martin,                 
                      Foster, Hanley                                           
       OPPOSED:       Parnell,  Brown,   Grussendorf,  Mulder,                 
  Navarre                                                                      
                                                                               
  The MOTION PASSED (6-5).                                                     
                                                                               
  CS SB 115  (FIN) am was reported  out of Committee with  "no                 
  recommendation", a Senate Finance Letter  of Intent and with                 
  fiscal notes by the Department of Health and Social Services                 
  dated 3/7/95,  the Department  of Revenue  dated 3/7/95  and                 
  zero  fiscal  notes  by  the  Department  of  Community  and                 
  Regional  Affairs  dated 3/7/95  and  the Department  of Law                 
  dated 3/7/95.                                                                
                                                                               
  HOUSE BILL 281                                                               
                                                                               
       "An  Act  ratifying  an  agreement  between the  Alaska                 
       Housing  Finance Corporation  and  the commissioner  of                 
       revenue and making  certain pledges  to obliges of  the                 
       corporation regarding  that agreement; relating  to the                 
       authorization  for  and the  issuance  of bonds  by the                 
       Alaska Housing Finance Corporation to pay for the costs                 
       of  repair   and  rehabilitation  of   student  housing                 
       facilities  of the University  of Alaska; and providing                 
       for an effective date."                                                 
                                                                               
                               10                                              
                                                                               
                                                                               
  HOUSE BILL 309                                                               
                                                                               
       "An Act approving  the University of Alaska's  plans to                 
       enter into  long-term obligations to borrow  money from                 
       the   Alaska  Housing   Finance  Corporation   for  the                 
       acquisition   of   student   housing  facilities;   and                 
       providing for an effective date."                                       
                                                                               
  SARA FISHER, STAFF, REPRESENTATIVE GENE THERRIAULT, provided                 
  an explanation of  the changes contained in  the work drafts                 
  LS1076\K, Chenoweth, 5/7/95 for CS HB 309.                                   
                                                                               
  Representative  Therriault,  Subcommittee  Chair, MOVED  the                 
  committee substitute work  draft for HB  281 as the  version                 
  before  the Committee.    There being  NO OBJECTION,  it was                 
  adopted.                                                                     
                                                                               
  Representative Therriault MOVED  to report out  of Committee                 
  CS HB 281 (FIN) with individual recommendations and with the                 
  accompanying fiscal notes.   There  being NO OBJECTIONS,  it                 
  was so ordered.                                                              
                                                                               
  CS  HB 281 (FIN)  was reported out  of Committee with  a "do                 
  pass"  recommendation  and   with  a  fiscal  note   by  the                 
  Department  of Revenue dated 3/24/95 and a zero fiscal notes                 
  by  the  Statewide  Budget  Office  dated  3/24/95  and  the                 
  Department of Revenue dated 3/24/95.                                         
                                                                               
  Representative  Therriault  MOVED  the committee  substitute                 
  work draft for HB  309 as the version before  the Committee.                 
  There being NO OBJECTIONS, it was adopted.                                   
                                                                               
  Representative Therriault MOVED  to report  CS HB 309  (FIN)                 
  out of  Committee with  individual recommendations and  with                 
  the accompanying fiscal note.  There being NO OBJECTIONS, it                 
  was so ordered.                                                              
                                                                               
  CS  HB 309 (FIN)  was reported out  of Committee  with a "do                 
  pass" recommendation and with a fiscal note by the Statewide                 
  Budget Office dated 4/21/95.                                                 
                                                                               
  SENATE BILL 16                                                               
                                                                               
       "An  Act  relating  to  the  University of  Alaska  and                 
       university land,  authorizing the University  of Alaska                 
       to  select  additional state  public  domain land,  and                 
       defining  net  income from  the University  of Alaska's                 
       endowment trust  fund as 'university  receipts' subject                 
       to prior legislative appropriation."                                    
                                                                               
                                                                               
                               11                                              
                                                                               
                                                                               
  JOHN SHIVELY, COMMISSIONER, DEPARTMENT OF NATURAL RESOURCES,                 
  spoke against the  proposed legislation.  He  noted that the                 
  Department of  Administration also has  consistently opposed                 
  the  bill.   The legislation would  allow the  University of                 
  Alaska  to  select  certain  lands  from  the  State's  land                 
  entitlement.   He thought that  the benefit received  by the                 
  State would be minimal and that the legislation would not be                 
  a good use of  the State's limited resources.   He suggested                 
  an alternative  approach  would be  to  investigate  federal                 
  lands  being  used for  the  University's land  base through                 
  direct appropriations.                                                       
                                                                               
  SENATOR STEVE FRANK testified in support of SB 16.  He noted                 
  that  the  University  of Alaska  is  called  a  "Land Grant                 
  University"  in  the  tradition   of  American  land   grant                 
  universities,  providing  teaching,   research  and   public                 
  service to the people  of Alaska.  While the  University has                 
  attempted  to mold itself  in the land  grant tradition, one                 
  piece of that tradition is lacking--a sufficient land grant.                 
                                                                               
                                                                               
  Senator Frank continued that Alaskans look to the University                 
  of Alaska  to provide  for some  of its  financial needs  by                 
  earning income from the federal  land grant, yet Alaskans do                 
  not  realize  the  need  of  lands  to  be  managed  by  the                 
  university.    He added,  passage  of the  legislation would                 
  allow  expansion of the University of Alaska land grant, and                 
  would allow the University to generate additional revenue in                 
  support  of  its  programs.    The  land would  need  to  be                 
  responsibly  managed  in  order  to  generate income.    The                 
  University is currently involved in a wide range of projects                 
  including  commercial  leasing,  development  and  sale   of                 
  residential  and  remote  subdivisions, oil  and  gas  lease                 
  sales, timber and gravel sales and mining leases.                            
                                                                               
  Representative Mulder asked how many acres of land the State                 
  owns.    Senator  Frank  replied  currently,   there  exists                 
  approximately   104  million   acres   of  state   property.                 
  Representative Mulder asked if it would be  possible for the                 
  University to select land that has oil and gas  developments                 
  on it.   Senator  Frank stated  that it  was, although,  the                 
  Commissioner had been  given a  very broad power.   No  land                 
  could be selected  that was on the State's five year oil and                 
  gas leasing program, and the University could not select any                 
  other lands that the Commissioner thought were vital for the                 
  State's best interest.                                                       
                                                                               
  Representative Brown voiced  concern about the  treatment of                 
  the oil and gas licensing.   She referenced language on Page                 
  7,  indicating  that  the  oil  and  gas  license  would  be                 
  different than the lease.   Senator Frank explained that the                 
  intent was more clearly defined on Page 5, Line 4.                           
                                                                               
                               12                                              
                                                                               
                                                                               
  Representative  Brown commented that  information on Page 7,                 
  Subsection (3)  would not  be in  the best  interest of  the                 
  State.  Senator Frank noted that the Commissioner would have                 
  the ultimate authority to consider what would be in the best                 
  interest of the State.                                                       
                                                                               
  Representative Brown asked  if the  lands, when under  State                 
  ownership, would  be exempt  from taxation.   Senator  Frank                 
  understood that they would be, although any lease-hold would                 
  be subject to  taxation.  Representative Brown  thought that                 
  the current  language  was confusing  and  that it  did  not                 
  clarify if the University land would be subject to taxation.                 
  Senator  Frank  recommended  that  a   lawyer  provide  that                 
  information, although  he thought  that land  conveyed to  a                 
  private entity would carry a tax immunity.                                   
                                                                               
  Representative  Brown asked  why  the University  should  be                 
  managing  their  own  resources  and  surface  real  estate.                 
  Senator Frank replied  that the  University currently has  a                 
  specified Lands Management  Department to  manage their  own                 
  acreage.  He continued, the  Department of Natural Resources                 
  currently manages 1.4 million acres  and that the University                 
  currently  has  a   land  grant.    He   believed  that  the                 
  legislation would  allow the University  greater economy  of                 
  scale in land management, pointing  out that the legislation                 
  would provide a net long term economic benefit to the State.                 
                                                                               
                                                                               
  Representative Brown asked if revenues which  the University                 
  received from the lands would continue to be appropriated by                 
  the Legislature.   Senator Frank  stated that they  would be                 
  appropriated    through    the    Executive   Budget    Act.                 
  Representative  Brown  questioned   the  potential   revenue                 
  stream.   Senator Frank  replied that  information would  be                 
  speculative at this time, although he hoped it would be high                 
  so that the University would be  able to continue their high                 
  standards with less dependence on the general fund.                          
                                                                               
  Discussion  continued  between   Representative  Brown   and                 
  Senator Frank regarding  the statutory adjustment  which the                 
  legislature made for leases made in law after 1980.                          
                                                                               
  Representative Brown asked what expertise the University had                 
  to manage oil and gas resources.  Senator Frank did not know                 
  the extent of  their expertise.  Representative  Brown asked                 
  for an explanation of Section (D), Subsection (2).                           
                                                                               
  WENDY   REDMAN,   VICE   PRESIDENT,  UNIVERSITY   RELATIONS,                 
  UNIVERSITY OF ALASKA,  responded that  Section D deals  with                 
  "time and space"  after the  University has selected  lands,                 
  but prior  to conveyance.   She  noted that  there had  been                 
                                                                               
                               13                                              
                                                                               
                                                                               
  substantial  concern,  because  that process  may  take some                 
  time.   She added  that there  should not  be a  prohibition                 
  against  entry into the  lands during  that period  of time.                 
  Subsection (2) deals  with what will  occur to the  proceeds                 
  during the entry prior to conveyance.                                        
                                                                               
  Ms. Redman advised that the University could be given leased                 
  land, however,  the State will  retain the  income for  that                 
  land  for  the  life  of   the  lease/contract  through  the                 
  extension period.  She pointed out that language was similar                 
  to the language used  in the last land settlement  ruling in                 
  1986.                                                                        
                                                                               
  (Tape Change, HFC 95-118, Side 1).                                           
                                                                               
  Representative   Brown   asked  if   the   transferred  land                 
  properties selected  by the  University of  Alaska would  be                 
  subject to taxation by the municipalities.                                   
                                                                               
  JACK   CHENOWETH,   ATTORNEY,  LEGISLATIVE   LEGAL  COUNSEL,                 
  LEGISLATIVE AFFAIRS AGENCY,  stated that  they would not  be                 
  subject to taxation under  current law nor would they  be by                 
  the amendment  made in Section 12 of the Resources' version.                 
  Representative Brown asked if the land would be subject once                 
  transferred to a private owner.   Mr. Chenoweth advised that                 
  beyond ownership  by the  University, the  lands would  then                 
  become taxable.                                                              
                                                                               
  SB 16 was HELD in Committee for further consideration.                       
                                                                               
  ADJOURNMENT                                                                  
                                                                               
  The meeting adjourned at 3:00 P.M.                                           
                                                                               
                                                                               
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