Legislature(1995 - 1996)
05/08/1995 08:45 AM House FIN
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* first hearing in first committee of referral
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HOUSE FINANCE COMMITTEE
May 8, 1995
8:30 A.M.
TAPE HFC 95-118, Side 2, #000 - end.
TAPE HFC 95-119, Side 1, #000 - #95.
CALL TO ORDER
Co-Chair Mark Hanley called the House Finance Committee
meeting to order at 8:45 a.m.
PRESENT
Co-Chair Hanley Representative Martin
Co-Chair Foster Representative Mulder
Representative Brown Representative Navarre
Representative Grussendorf Representative Parnell
Representative Kelly Representative Therriault
Representative Kohring
ALSO PRESENT
Ron Swanson, Director, Division of Land, Department of
Natural Resources; Wendy Redman, Vice President, University
of Alaska; Sarah Hannan, Executive Director, Alaska
Environmental Lobby.
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 148 An Act relating to a defined contribution
retirement plan for state employees.
SB 148 was rescheduled.
SENATE BILL NO. 16
"An Act relating to the University of Alaska and
university land, authorizing the University of Alaska
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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."
SARAH HANNAN, EXECUTIVE DIRECTOR, ALASKA ENVIRONMENTAL LOBBY
testified in opposition to SB 16. She stressed that the
University of Alaska's land grant has been fulfilled. She
maintained that the University has been lobbying for an
increase in its land grant since statehood. She
acknowledged that a land grant would increase the
University's revenue stream, but questioned whether the
state of Alaska should give limited land resources to the
University. She emphasized that the size of grant is not
the issue. She stressed that the transfer would limit the
State's resources. She stated that SB 16 does not address
best use issues regarding the selected land. She argued
that it is not in the State's best interest to give the
State's limited resources to the University. She observed
that the State spends a lot of money managing its resources.
She asserted that unless there is a comprehensive plan and a
vision as to why the University of Alaska should have
certain lands the grant should not be made. She stressed
that it is bad policy to give away a large amount of land
out of the State's very limited resource base.
Representative Kelly MOVED to adopt Amendment 1 (Attachment
1). Amendment 1 would delete "350,000" thousand dollars and
insert "750,000" thousand dollars on page 4, line 29.
Representative Navarre spoke against Amendment 1. He
maintained that the University of Alaska has been able to
compete favorably for resources within the budget process.
He asserted that the grant would not allow the University to
wean itself from general fund dollars. He suggested that
resources should be kept at the state level.
Representative Kelly observed that the intent is to give the
University a resource that can produce income.
Representative Parnell questioned if the University of
Alaska would realize any savings from the land transfer.
Representative Kelly acknowledged that savings would not be
immediate.
WENDY REDMAN, VICE PRESIDENT, UNIVERSITY OF ALASKA explained
that a major land endowment would allow the University of
Alaska to realize savings. She observed that the University
currently has an endowment of $28 million dollars which has
been generated over the past nine years from revenues on
100,000 thousand acres.
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Representative Grussendorf stated that he would support
grants of land that are adjacent or in the general vicinity
as University holdings. He cautioned against land grants
that result in a "checker board" of Alaska real estate.
Representative Martin pointed out that the State's
contribution per student to the University of Alaska is
high. He suggested that the University will put the land to
use.
Representative Navarre maintained that land disposals are
the best way to put state land into public hands. He
emphasized that SB 16 will allow the University to choose
the most valuable development potential acres in the State.
He reiterated that the State has provided adequate resources
to the University of Alaska. He predicted that the
University will at some point go off budget with the portion
of money that is earned from the revenues derived from the
land grant. He expressed concern that hunting and fishing
continue on lands granted to the University.
Representative Kelly stated that the selection will be made
by the Commissioner of Department of Natural Resources. Ms.
Redman maintained that the Commissioner of the Department of
Natural Resources will be in total control of every acre
that is made available for conveyance. Representative
Navarre disagreed with Ms. Redman's statement. He stressed
that the best interest findings on page 7, are prejudiced on
behalf of the University.
Representative Brown asked how surface and subsurface estate
would be counted. Ms. Redman noted that the University
would be able to select parcels with subsurface or surface
or both. She clarified that parcels containing subsurface
and surface estate would only be counted once. A split
estate would be counted the same.
Representative Brown referred to page 4, line 28. She
interpreted section 6 to state that the University would
make the land selections and the Commissioner would have an
entitlement that the Department is obligated to satisfy in
some manner. She questioned the time limit by which
selections must be made. Ms. Redman noted that the
selection and conveyance must be made by the year 2009. She
referred to page 9, line 31. The University would loose any
lands that were not conveyed by the year 2009.
Ms. Redman clarified that no selections can be made by the
University on oil and gas lands in the current five year
plan. There is also an additional five year period to allow
the State to place properties into the five year plan. She
explained that the University could select lands with other
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contracts or leases. The University would not earn income
off of those lands until any leases or contracts had
expired.
Representative Therriault observed that in section 7, page
11, line 29, customary and traditional uses of the land
selected are to be continued to the maximum extent
practical. Ms. Redman noted that section 8 provides tort
immunity which would allow the University to expand uses on
other lands.
Representative Therriault spoke in support of the land
grant.
In response to a question by Representative Martin, Ms.
Redman noted that page 8, line 20, provides that land
transferred to the University would be subject to all
royalties and bonuses that go into the Permanent Fund on any
oil and gas development.
Representative Martin noted that there is no fiscal note by
the University. Ms. Redman observed that costs of the
selection will be incurred by the Department of Natural
Resources but paid for with program receipts from the
University's land management accounts.
Representative Brown asked the management cost to the
University. Ms. Redman noted that costs cannot be
determined until the lands are conveyed. She stressed that
land management costs are paid out of the Natural Resources
Fund. She pointed out that there is no general fund
support. She added that the University has staff available
with the expertise needed for the selection. She noted that
additional staff may be necessary. She stated that the
University submitted a $100.0 thousand dollar fiscal note.
The fiscal note was adopted by the Senate Finance Committee
but not transmitted to the House.
A roll call vote was taken on the MOTION to adopt Amendment
1.
IN FAVOR: Therriault, Kelly, Kohring, Mulder
OPPOSED: Brown, Grussendorf, Martin, Navarre, Parnell,
Hanley, Foster
The MOTION FAILED (4-7).
Representative Kelly MOVED to adopt Amendment 2 (Attachment
2). Representative Brown OBJECTED for purpose of
discussion. Representative Kelly explained that the
amendment would clarify language in the legislation. Ms.
Redman added that the amendment was offered at the
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suggestion of the drafter. She stated that confusion
occurred from the fact that University land is defined as
"not public land." She observed that "public land" has no
definition in statute. She stated that the intent of the
language is that all of the University land would fall under
the provision for public process.
Representative Brown WITHDREW her objection. There being NO
OBJECTION, Amendment 2 was adopted.
Representative Kelly MOVED to adopt Amendment 3 (Attachment
3). Representative Navarre OBJECTED for purpose of
discussion. Amendment 3 would delete "rules or regulations"
and insert "policies". Representative Kelly explained that
the Board of Regents set policies. Ms. Redman stated that
the amendment clarifies that the Board of Regents do not
create rules and regulations.
In response to a question by Representative Navarre, Ms.
Redman noted that policy is developed through a public
review process.
In response to a question by Representative Brown, Ms.
Redman noted that the University does not have rules or
regulations. She reiterated that the Board of Regents
create policies. She observed that campuses may have
regulations that operate under the broad policies set by the
Regents. She noted that the University is under the
Administrative Procedures Act for the state procurement
code.
Representative Brown asked what kind of policies would be
adopted. Ms. Redman noted that the bill directs the
University to create policies relative to mineral entry and
leasing, and activity on University land which is similar to
that of the State.
There being NO FURTHER OBJECTION, Amendment 3 was adopted.
Representative Kelly MOVED to adopt Amendment 4 (Attachment
4). Representative Navarre OBJECTED. Amendment 4 would
delete: "(1) selections must be made in parcels of 40
acres, or larger whenever practical, whether surveyed or
unsurveyed." Representative Kelly noted that small parcels
adjacent to University land would be precluded by the
legislation.
Representative Navarre suggested that the amendment be
amended to state that the Commissioner may allow parcels
less than 40 acres if the land is next to existing
University land. He spoke against the current amendment.
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Ms. Redman argued that the Commissioner already has the
power to allow selections. Representative Navarre referred
to (b), page 7, line 26; "ensuring an appropriate diversity
in the character of land owned by the State and by the
University of Alaska." He asserted that the University
could choose a 5 acre parcel in downtown Anchorage.
In response to a question by Representative Martin, Ms.
Redman asserted that it would be difficult for the
University to acquire parcels of less than 40 acres.
Representative Grussendorf spoke in support of retaining
requirements that large blocks of land be selected. He
cautioned against allowing the striping of shore lands. He
maintained that good lands go with bad lands.
Representative Kelly maintained that the legislation
provides the Commissioner of Department of Natural Resources
with a lot of control. Representative Therriault added that
page 7, line 24, states that "the Commissioner shall
consider the interest of the general public in retention of
the land in state ownership."
Representative Brown suggested that page 5, line 30, be
amended to delete "whenever practical" and "unless adjacent
to a University facility" be added.
Representative Navarre asserted that some "high-grading"
occurred during the last University land settlement.
(Tape Change, HFC 95-119, Side 1)
RON SWANSON, DIRECTOR, DIVISION OF LANDS, DEPARTMENT OF
NATURAL RESOURCES stated that state disposals on selected
lands could occur
with the University's concurrence under provisions on page
6, lines 8 - 28.
Representative Brown observed that disposals would be
complicated by the selection. Mr. Swanson indicated that
the selections would not inhibit disposals.
Amendment 4 was held.
SB 16 was HELD in Committee for further discussion.
ADJOURNMENT
The meeting adjourned at 9:40 a.m.
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