Legislature(1995 - 1996)

05/08/1995 08:45 AM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
                                                                               
                                                                               
                     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                 
                                                                               
                                1                                              
                                                                               
                                                                               
       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.                                                      
                                                                               
                                                                               
                                2                                              
                                                                               
                                                                               
  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                 
                                                                               
                                3                                              
                                                                               
                                                                               
  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                 
                                                                               
                                4                                              
                                                                               
                                                                               
  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.                    
                                                                               
                                                                               
                                5                                              
                                                                               
                                                                               
  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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