03/31/1999 03:12 PM Senate RES

                                                                                                                                
            HJR 13-UNIVERSITY ENDOWMENT FOR RESEARCH                                                                            
                                                                                                                                
CHAIRMAN HALFORD announced HJR 13 to be up for consideration.                                                                   
                                                                                                                                
MS. WILDA RODMAN, Staff to Representative Therriault, said HJR 13                                                               
supports the recent action of the Exxon Valdez Oil Spill                                                                        
Trustees(EVOS) to create a long term research and monitoring                                                                    
endowment using $115 million of the expected reserve.  The                                                                      
resolution also encourages the Trustee Council to endow  chairs in                                                              
the Sciences at the University of Alaska and supports trustee                                                                   
efforts to work with the congressional delegation to obtain                                                                     
authority to increase the earnings on remaining settlement funds.                                                               
Over the years, EVOS' funds have been used largely used to purchase                                                             
lands for habitat preservation, but has been lacking in the area of                                                             
research.  This has left a critical gap in our understanding of                                                                 
this spill and how to respond in the future.    An endowment would                                                              
fulfill the intent of the Exxon Valdez oil settlement, a mission of                                                             
the Trustee Council.                                                                                                            
                                                                                                                                
MS. MOLLY MCCAMMON, Executive Director, EVOS, supported HJR 13 as                                                               
it ties in very well with the long term plans of the Trustee                                                                    
Council to use the majority of the remaining funds for a long term                                                              
research foundation.                                                                                                            
                                                                                                                                
Number 562                                                                                                                      
                                                                                                                                
CHAIRMAN HALFORD asked what the status was on negotiations on the                                                               
Karluk and Sturgeon Rivers.                                                                                                     
                                                                                                                                
MS. MCCAMMON answered that negotiations are ongoing and we don't                                                                
have a deal with Koniag Corporation, yet.  She hoped to reach a                                                                 
conclusion by some time this summer.                                                                                            
                                                                                                                                
CHAIRMAN HALFORD asked what value range she was talking about.                                                                  
                                                                                                                                
MS. MCCAMMON said that it would not take a substantial portion of                                                               
these funds to get a deal with Koniag.  They have a disagreement on                                                             
the value of long term protection of the Karluk and Sturgeon                                                                    
Rivers.  The last offer of $24 million was rejected by Koniag.                                                                  
                                                                                                                                
CHAIRMAN HALFORD asked if that were not successful and there was                                                                
$170 million remaining, would there still be only $115 million                                                                  
transferred to the foundation.                                                                                                  
                                                                                                                                
MS. MCCAMMON answered that the Council committed that by 2002 an                                                                
additional $55 million would be committed to habitat protection.                                                                
That would include Koniag and any additional small parcels.  The                                                                
remainder of the funds would go into a long term fund for research                                                              
and monitoring.  They anticipate that amount being $115 million.                                                                
                                                                                                                                
MS. WENDY REDMAN, Vice President, University of Alaska Statewide                                                                
System, supported HJR 13.  The Board of Regents along with the                                                                  
Public Advisory Committee have long been advocates of setting aside                                                             
a research endowment from the very beginning.  She encouraged the                                                               
Trustees to use a portion of the research reserves to set up some                                                               
additional endowments for some chairs at the University.  A lot of                                                              
work needs to be done with the results that have been generated                                                                 
through the money that has been expended so far - a lot of                                                                      
information on spill technology, restoration methods, ecosystem                                                                 
prevention.  This provides them with an opportunity to endow a                                                                  
chair in perpetuity which takes about $2 million.                                                                               
                                                                                                                                
SENATOR GREEN asked what was the impact on the University when a                                                                
chair is endowed.                                                                                                               
                                                                                                                                
MS. REDMAN explained that endowments are held by the University of                                                              
Alaska which is a separate private corporation.  They do all the                                                                
investment and provide the University with the earnings of the fund                                                             
for use.  It shows up in the University budget as University                                                                    
receipts.                                                                                                                       
                                                                                                                                
SENATOR KELLY moved to pass SJR 13 from committee with accompanying                                                             
fiscal notes with individual recommendations.  There were no                                                                    
objections and it was so ordered.