Legislature(1995 - 1996)
05/08/1995 03:30 PM House FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
MAY 8, 1995
3:30 P.M.
TAPE HFC 95 - 119, Side 2, #000 - end.
TAPE HFC 95 - 120, Side 1, #000 - #299.
CALL TO ORDER
Co-Chair Mark Hanley called the House Finance Committee
meeting to order at 3:30 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
Wendy Redman, Vice President, University Relations,
University of Alaska; Ron Swanson, Director, Division of
Land, Department of Natural Resources; Andy Warwick,
Fairbanks School Board, Fairbanks.
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.
HCS CS SB 16 (FIN) was reported out of Committee
with "no recommendation" and with fiscal notes by
the Statewide Budget Office, the Department of
Fish and Game dated 3/27/95, the Department of
Natural Resources dated 3/27/95, and a zero fiscal
note by the Department of Revenue dated 3/27/95.
SB 148 An Act relating to a defined contribution
retirement plan for state employees.
SB 148 was HELD in Committee for further
consideration.
1
HB 178 An Act making supplemental and special
appropriations for the expenses of state
government; making and amending capital and
operating appropriations; and providing for an
effective date.
HB 178 was HELD in Committee for further
consideration.
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."
Representative Kelly WITHDREW Amendment #4. [Attachment
Amendment #4a. [Attachment #2].
Representative Kelly MOVED to adopt Amendment #5.
[Attachment #3]. Representative Martin OBJECTED for
purposes of discussion. He recommended deleting "by" on
Page 1, Line 21, and inserting "to" the legislature.
WENDY REDMAN, VICE PRESIDENT, UNIVERSITY RELATIONS,
UNIVERSITY OF ALASKA, agreed with Representative Martin.
She noted that the intention was clear and that the issue
was a grammatical change. Representative Martin MOVED to
amend Amendment #5. There being NO OBJECTION, it was
amended to the language previously recommended.
Representative Brown spoke to Amendment #5 questioning how
it could work. Ms. Redman stated that the amendment would
clarify the Legislature's authority and that they may act
by:
1. Approving the list;
2. Disapproving the list;
3. Or no action in which case the list would
deem to be approved.
Representative Brown questioned the time limit the
Legislature would have. Ms. Redman replied that the list
would need to be approved by the end of the first session of
the following legislature after it was introduced.
Representative Brown questioned the reasoning in requiring
that each list to contain not less than 25,000 acres for the
2
remaining entitlement. Ms. Redman stated that the
University was trying to settle on a group of lands that
would be large enough for investment yet not overwhelming to
maintain. She explained that there could not be a final
conveyance until approved by the Legislature.
Representative Brown recommended clarifying the language
that specifies when the University must submit the list to
the Legislature. Representative Brown MOVED a change to
Page 1, Line 7, delete "at" and insert "within thirty days
of the". There being NO OBJECTION, it was adopted. There
being NO OBJECTIONS to adoption of the amended Amendment #5,
it was adopted.
Representative Kelly MOVED to adopt Amendment #4a.
[Attachment #2]. Representative Parnell OBJECTED.
Representative Kelly stated that the amendment would provide
a compromise to the size of the parcels selected. Ms.
Redman stated that the amendment had resulted in response to
an issue of the total state holding. Representative Brown
thought the legislation should address the property already
in possession for expansion. Representative Kelly and
Representative Therriault clarified the intention of the
amendment.
Representative Martin voiced concern in limiting the parcels
to 40 acres. He thought that the language of the amendment
was not specific and would result in court orders. He added
that the parcels should be large and be used for long range
investment purposes. Ms. Redman pointed out that the
original language specified 640 acres which the Department
of Natural Resources and the University determined was too
large. The University prefers land selections with as large
of tracts as possible, however, the University would like to
protect themselves so that if there is a State tract
available totaling thirty five acres, the University would
not be precluded from selecting that land. Current language
would preclude the University from selecting that parcel.
Representative Martin questioned the purpose for obtaining
the land. Ms. Redman explained that the purpose of land
selections would not be for campus expansion. The purpose
of land grant lands would be to generate revenue.
RON SWANSON, DIRECTOR, DIVISION OF LAND, DEPARTMENT OF
NATURAL RESOURCES (DNR), noted the Department's concern that
there exists many subdivision tracts which are contiguous
and could total 25-30 acres. The University would like to
own the entire parcel of that subdivisoned land. He
suggested additional language be added to Amendment #4a,
which would give that discretion to the Commissioner of DNR.
Representative Kelly WITHDREW Amendment #4a. He offered to
3
provide language as suggested by Mr. Swanson as Amendment
Representative Kelly MOVED to adopt Amendment #6.
[Attachment #4]. There being NO OBJECTION, it was adopted.
Representative Brown MOVED to adopt Amendment #7.
[Attachment #5]. Representative Therriault OBJECTED.
Representative Brown stated that Amendment #7 would isolate
the University's selections to the surface estate. Ms.
Redman commented that currently the University does a lot of
gravel work and that it has become a lucrative business.
Representative Grussendorf discussed that the municipalities
are not given subsurface rights. He asked why the state
would grant the University subsurface rights and not the
municipalities. Representative Therriault noted that the
University was a part of the State government, whereas, the
municipalities are considered to be subsets of State
government. He stressed that the two are classified in
different categories.
A roll call was taken on the MOTION to adopt Amendment #7.
IN FAVOR: Brown, Grussendorf
OPPOSED: Kelly, Kohring, Martin, Mulder, Navarre,
Parnell, Therriault, Hanley, Foster
The MOTION FAILED (2-9).
Representative Brown MOVED to adopt Amendment #8.
[Attachment #6]. Representative Therriault OBJECTED.
Representative Brown explained that the amendment would
balance the land interest in favor of State interest rather
than the University.
A roll call was taken on the MOTION.
IN FAVOR: Grussendorf, Kelly, Martin, Navarre,
Brown, Hanley
OPPOSED: Kohring, Mulder, Parnell, Therriault,
Foster
The MOTION FAILED (6-5).
Representative Brown WITHDREW Amendment #9. [Attachment
Representative Kelly MOVED to adopt Amendment #4aa.
[Attachment #8]. He explained that the amendment would give
the Commissioner of DNR the authority to determine what
would be in the best interest of the State in disposal of
4
those lands under 40 acres.
Representative Brown noted that the wording did not make
sense. Representative Mulder MOVED the "friendly" change
recommended by Mr. Swanson to Amendment #4aa, deleting
"unsurveyed" and inserting "larger" and deleting "shall be
40 acres". There being NO OBJECTION, to adopting the
amended Amendment 4aa, it was adopted.
Representative Mulder MOVED to report HCS CS SB 16 (FIN) out
of Committee with individual recommendations and with the
accompanying fiscal notes. Representative Brown stated that
her questions from a previous meeting had not yet been
answered. Representative Mulder WITHDREW to MOTION to move
the bill from Committee.
Representative Brown asked about the leases to the permanent
fund. Ms. Redman replied that those leases were addressed
on Page 8, Lines 26-27, and would subject the University
lands to all of the same provisions that are contained in
effect for other state lands. She concluded that the
proceeds to the permanent fund would be 50%.
Representative Brown referenced Page 5, Line 9, and asked if
the leases would include a shore fisheries lease. Mr.
Swanson noted that it would not, and that it would not be in
the best interest of the State to include those.
Representative Brown asked the language which indicates that
the lease would not be covered in the legislation. Mr.
Swanson replied that it is not specifically stated and that
decision would be required to go through the "best interest"
findings process.
Representative Brown asked why there should be a different
policy between the University and the municipalities. Ms.
Redman commented that the intent of the legislation would
leave that decision to the Commissioner of DNR and with the
Legislature. She pointed out that the bill has many
controls and that a shore lease would not be in the best
interest of the State. Representative Brown disagreed and
felt that the language should be spelled out.
(Tape Change, HFC 95-120, Side 1).
Representative Mulder MOVED to report HCS CS SB 16 (FIN) out
of Committee with individual recommendations and with the
accompanying fiscal notes. Representative Navarre OBJECTED.
Representative Brown referenced the Memorandum provided by
Legislative Counsel, Jack Chenoweth dated 5/8/95.
[Attachment 9]. The memo references AS 14.40.400 indicating
5
that changing that status could be unconstitutional. Ms.
Redman stated that Page 13, Line 6, essential changing the
land grant lands, currently existing lands are a dedicated
fund pre-statehood. She implied that Mr. Chenoweth had
acknowledged that information in his memo. Currently, the
original land grant lands and all of the new lands have
placed them into the regular appropriation process as
University receipts. In effect, the dedication of funds
would be given up.
Representative Navarre WITHDREW THE OBJECTION to moving the
bill from Committee. There being NO FURTHER OBJECTIONS, it
was so ordered.
HCS CS SB 16 (FIN) was reported out of Committee with "no
recommendations" and with fiscal notes by the Department of
Fish and Game dated 3/27/95, the Statewide Budget Office and
two by the Department of Natural Resources dated 3/27/95 and
a zero fiscal note by the Department of Revenue dated
3/27/95.
HOUSE BILL 178
"An Act making supplemental and special appropriations
for the expenses of state government; making and
amending capital and operating appropriations; and
providing for an effective date."
Co-Chair Hanley distributed to Committee members a work
draft of the legislation #9-GH0035\G, Cramer, 5/7/95, for HB
178. He requested members to review that language.
Representative Therriault asked if the Election District
(E.D.) run had been included. Co-Chair Hanley recommended
that all amendments to the legislation be provided to Co-
Chair Foster's Office.
HB 178 was HELD in Committee for further consideration.
SENATE BILL 148
"An Act relating to a defined contribution retirement
plan for state employees."
ANDY WARWICK, FAIRBANKS SCHOOL BOARD, FAIRBANKS, spoke in
support of full funding of education, although he agreed
that the current Teachers Retirement System (TERS) is too
costly. He requested that the State not make a move that
would change benefits to teachers from first to last. He
suggested passing a more moderate funding solution as in
comparison to other states in the Union.
6
Mr. Warwick affirmed that teaching for 20 years and then
being out and funded is "too" liberal and also that paying
dependant health benefits after retirement is "too" liberal.
He supported cost containment in those two areas, although,
cautioned legislators in "going too far" toward the low
extreme.
SB 148 was HELD in Committee for further discussion.
ADJOURNMENT
The meeting adjourned at 4:25 P.M.
HOUSE FINANCE COMMITTEE
MAY 8, 1995
3:30 P.M.
TAPE HFC 95 - 119, Side 2, #000 - end.
TAPE HFC 95 - 120, Side 1, #000 - #299.
CALL TO ORDER
Co-Chair Mark Hanley called the House Finance Committee
meeting to order at 3:30 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
Wendy Redman, Vice President, University Relations,
University of Alaska; Ron Swanson, Director, Division of
Land, Department of Natural Resources; Andy Warwick,
Fairbanks School Board, Fairbanks.
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.
7
HCS CS SB 16 (FIN) was reported out of Committee
with "no recommendation" and with fiscal notes by
the Statewide Budget Office, the Department of
Fish and Game dated 3/27/95, the Department of
Natural Resources dated 3/27/95, and a zero fiscal
note by the Department of Revenue dated 3/27/95.
SB 148 An Act relating to a defined contribution
retirement plan for state employees.
SB 148 was HELD in Committee for further
consideration.
HB 178 An Act making supplemental and special
appropriations for the expenses of state
government; making and amending capital and
operating appropriations; and providing for an
effective date.
HB 178 was HELD in Committee for further
consideration.
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."
Representative Kelly WITHDREW Amendment #4. [Attachment
Amendment #4a. [Attachment #2].
Representative Kelly MOVED to adopt Amendment #5.
[Attachment #3]. Representative Martin OBJECTED for
purposes of discussion. He recommended deleting "by" on
Page 1, Line 21, and inserting "to" the legislature.
WENDY REDMAN, VICE PRESIDENT, UNIVERSITY RELATIONS,
UNIVERSITY OF ALASKA, agreed with Representative Martin.
She noted that the intention was clear and that the issue
was a grammatical change. Representative Martin MOVED to
amend Amendment #5. There being NO OBJECTION, it was
amended to the language previously recommended.
Representative Brown spoke to Amendment #5 questioning how
it could work. Ms. Redman stated that the amendment would
clarify the Legislature's authority and that they may act
by:
8
1. Approving the list;
2. Disapproving the list;
3. Or no action in which case the list would
deem to be approved.
Representative Brown questioned the time limit the
Legislature would have. Ms. Redman replied that the list
would need to be approved by the end of the first session of
the following legislature after it was introduced.
Representative Brown questioned the reasoning in requiring
that each list to contain not less than 25,000 acres for the
remaining entitlement. Ms. Redman stated that the
University was trying to settle on a group of lands that
would be large enough for investment yet not overwhelming to
maintain. She explained that there could not be a final
conveyance until approved by the Legislature.
Representative Brown recommended clarifying the language
that specifies when the University must submit the list to
the Legislature. Representative Brown MOVED a change to
Page 1, Line 7, delete "at" and insert "within thirty days
of the". There being NO OBJECTION, it was adopted. There
being NO OBJECTIONS to adoption of the amended Amendment #5,
it was adopted.
Representative Kelly MOVED to adopt Amendment #4a.
[Attachment #2]. Representative Parnell OBJECTED.
Representative Kelly stated that the amendment would provide
a compromise to the size of the parcels selected. Ms.
Redman stated that the amendment had resulted in response to
an issue of the total state holding. Representative Brown
thought the legislation should address the property already
in possession for expansion. Representative Kelly and
Representative Therriault clarified the intention of the
amendment.
Representative Martin voiced concern in limiting the parcels
to 40 acres. He thought that the language of the amendment
was not specific and would result in court orders. He added
that the parcels should be large and be used for long range
investment purposes. Ms. Redman pointed out that the
original language specified 640 acres which the Department
of Natural Resources and the University determined was too
large. The University prefers land selections with as large
of tracts as possible, however, the University would like to
protect themselves so that if there is a State tract
available totaling thirty five acres, the University would
not be precluded from selecting that land. Current language
would preclude the University from selecting that parcel.
9
Representative Martin questioned the purpose for obtaining
the land. Ms. Redman explained that the purpose of land
selections would not be for campus expansion. The purpose
of land grant lands would be to generate revenue.
RON SWANSON, DIRECTOR, DIVISION OF LAND, DEPARTMENT OF
NATURAL RESOURCES (DNR), noted the Department's concern that
there exists many subdivision tracts which are contiguous
and could total 25-30 acres. The University would like to
own the entire parcel of that subdivisoned land. He
suggested additional language be added to Amendment #4a,
which would give that discretion to the Commissioner of DNR.
Representative Kelly WITHDREW Amendment #4a. He offered to
provide language as suggested by Mr. Swanson as Amendment
Representative Kelly MOVED to adopt Amendment #6.
[Attachment #4]. There being NO OBJECTION, it was adopted.
Representative Brown MOVED to adopt Amendment #7.
[Attachment #5]. Representative Therriault OBJECTED.
Representative Brown stated that Amendment #7 would isolate
the University's selections to the surface estate. Ms.
Redman commented that currently the University does a lot of
gravel work and that it has become a lucrative business.
Representative Grussendorf discussed that the municipalities
are not given subsurface rights. He asked why the state
would grant the University subsurface rights and not the
municipalities. Representative Therriault noted that the
University was a part of the State government, whereas, the
municipalities are considered to be subsets of State
government. He stressed that the two are classified in
different categories.
A roll call was taken on the MOTION to adopt Amendment #7.
IN FAVOR: Brown, Grussendorf
OPPOSED: Kelly, Kohring, Martin, Mulder, Navarre,
Parnell, Therriault, Hanley, Foster
The MOTION FAILED (2-9).
Representative Brown MOVED to adopt Amendment #8.
[Attachment #6]. Representative Therriault OBJECTED.
Representative Brown explained that the amendment would
balance the land interest in favor of State interest rather
than the University.
A roll call was taken on the MOTION.
IN FAVOR: Grussendorf, Kelly, Martin, Navarre,
10
Brown, Hanley
OPPOSED: Kohring, Mulder, Parnell, Therriault,
Foster
The MOTION FAILED (6-5).
Representative Brown WITHDREW Amendment #9. [Attachment
Representative Kelly MOVED to adopt Amendment #4aa.
[Attachment #8]. He explained that the amendment would give
the Commissioner of DNR the authority to determine what
would be in the best interest of the State in disposal of
those lands under 40 acres.
Representative Brown noted that the wording did not make
sense. Representative Mulder MOVED the "friendly" change
recommended by Mr. Swanson to Amendment #4aa, deleting
"unsurveyed" and inserting "larger" and deleting "shall be
40 acres". There being NO OBJECTION, to adopting the
amended Amendment 4aa, it was adopted.
Representative Mulder MOVED to report HCS CS SB 16 (FIN) out
of Committee with individual recommendations and with the
accompanying fiscal notes. Representative Brown stated that
her questions from a previous meeting had not yet been
answered. Representative Mulder WITHDREW to MOTION to move
the bill from Committee.
Representative Brown asked about the leases to the permanent
fund. Ms. Redman replied that those leases were addressed
on Page 8, Lines 26-27, and would subject the University
lands to all of the same provisions that are contained in
effect for other state lands. She concluded that the
proceeds to the permanent fund would be 50%.
Representative Brown referenced Page 5, Line 9, and asked if
the leases would include a shore fisheries lease. Mr.
Swanson noted that it would not, and that it would not be in
the best interest of the State to include those.
Representative Brown asked the language which indicates that
the lease would not be covered in the legislation. Mr.
Swanson replied that it is not specifically stated and that
decision would be required to go through the "best interest"
findings process.
Representative Brown asked why there should be a different
policy between the University and the municipalities. Ms.
Redman commented that the intent of the legislation would
leave that decision to the Commissioner of DNR and with the
Legislature. She pointed out that the bill has many
controls and that a shore lease would not be in the best
11
interest of the State. Representative Brown disagreed and
felt that the language should be spelled out.
(Tape Change, HFC 95-120, Side 1).
Representative Mulder MOVED to report HCS CS SB 16 (FIN) out
of Committee with individual recommendations and with the
accompanying fiscal notes. Representative Navarre OBJECTED.
Representative Brown referenced the Memorandum provided by
Legislative Counsel, Jack Chenoweth dated 5/8/95.
[Attachment 9]. The memo references AS 14.40.400 indicating
that changing that status could be unconstitutional. Ms.
Redman stated that Page 13, Line 6, essential changing the
land grant lands, currently existing lands are a dedicated
fund pre-statehood. She implied that Mr. Chenoweth had
acknowledged that information in his memo. Currently, the
original land grant lands and all of the new lands have
placed them into the regular appropriation process as
University receipts. In effect, the dedication of funds
would be given up.
Representative Navarre WITHDREW THE OBJECTION to moving the
bill from Committee. There being NO FURTHER OBJECTIONS, it
was so ordered.
HCS CS SB 16 (FIN) was reported out of Committee with "no
recommendations" and with fiscal notes by the Department of
Fish and Game dated 3/27/95, the Statewide Budget Office and
two by the Department of Natural Resources dated 3/27/95 and
a zero fiscal note by the Department of Revenue dated
3/27/95.
HOUSE BILL 178
"An Act making supplemental and special appropriations
for the expenses of state government; making and
amending capital and operating appropriations; and
providing for an effective date."
Co-Chair Hanley distributed to Committee members a work
draft of the legislation #9-GH0035\G, Cramer, 5/7/95, for HB
178. He requested members to review that language.
Representative Therriault asked if the Election District
(E.D.) run had been included. Co-Chair Hanley recommended
that all amendments to the legislation be provided to Co-
Chair Foster's Office.
HB 178 was HELD in Committee for further consideration.
12
SENATE BILL 148
"An Act relating to a defined contribution retirement
plan for state employees."
ANDY WARWICK, FAIRBANKS SCHOOL BOARD, FAIRBANKS, spoke in
support of full funding of education, although he agreed
that the current Teachers Retirement System (TERS) is too
costly. He requested that the State not make a move that
would change benefits to teachers from first to last. He
suggested passing a more moderate funding solution as in
comparison to other states in the Union.
Mr. Warwick affirmed that teaching for 20 years and then
being out and funded is "too" liberal and also that paying
dependant health benefits after retirement is "too" liberal.
He supported cost containment in those two areas, although,
cautioned legislators in "going too far" toward the low
extreme.
SB 148 was HELD in Committee for further discussion.
ADJOURNMENT
The meeting adjourned at 4:25 P.M.
13
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