02/19/1997 09:03 AM Senate HES

                                                                               
          SB  84 ASSETS OF THE UNIVERSITY OF ALASKA                          
                                                                               
 Number 001                                                                    
                                                                               
  CHAIRMAN WILKEN  called the Senate Health, Education & Social                
 Services Committee (HES) to order at 9:03 a.m. and introduced  SB 84          
 as the first order of business before the committee.  He noted that           
 testimony previously requested by Senator Ward on SB 36 was in the            
 packet.  Chairman Wilken passed out a synopsis from the Governor's            
 office who has requested the committee sponsor some legislation.              
 Any comments from the committee would be appreciated.  Chairman               
 Wilken passed the gavel to Vice Chairman Leman in order to present            
 the sponsor statement to the committee.                                       
                                                                               
  SENATOR WILKEN  informed the committee that this legislation was             
 introduced by request of the University of Alaska system.  He                 
 specified that SB 84 was not the lands bill with which many are               
 familiar.  SB 84 is a component of the lands bill.  Chairman Wilken           
 read the following Sponsor Statement:                                         
                                                                               
  Congressional acts of 1915 and 1929 granted the Territory of                 
  Alaska approximately 113,000 acres of land.  The grants were                 
  for the exclusive use and benefit of the Alaska Agricultural                 
  College and School of Mines, and its successor, the University               
  of Alaska.  All earnings from the sale, lease, or use of these               
  lands have been deposited into a trust fund established under                
  AS 14.40.400.  As of June 30, 1996, the fund has grown to                    
  approximately $32.6 million.                                                 
                                                                               
  Senate Bill 84 transfers management of these funds from the                  
  Department of Revenue to the Board of Regents.  The University               
  will be able to coordinate management of the investments of                  
  these funds with management of its other endowments.  This                   
  will substantially lower the cost of administration.  The                    
  transfer will also maximize the fund's earnings potential and                
  permit greater investment diversification.                                   
                                                                               
  SB 84 provides a technically sound transfer of control of an                 
  endowment fund from the Department of Revenue to the                         
  University of Alaska.  The University has demonstrated a sound               
  investment history in relation to the University of Alaska                   
  Foundation endowment funds.  This same expertise will be                     
  extended to the Natural Resource Endowment.                                  
                                                                               
  VICE CHAIRMAN LEMAN  asked if there were questions or comments.              
 Hearing none, he passed the gavel back to Senator Wilken.                     
                                                                               
  CHAIRMAN WILKEN  noted that Jim Lynch, the Associate Vice President          
 of Finance, was on line, and Wendy Redman and Anne Ringstaad were             
 present representing the University of Alaska system.                         
                                                                               
  SENATOR GREEN  inquired as to the specifics of the projects listed           
 on page 42 in the committee packet.                                           
                                                                               
  WENDY REDMAN , Vice President of the Statewide University System,            
 explained that the specific information is provided each year in              
 the report to the Legislature which would be done in about a week.            
                                                                               
  CHAIRMAN WILKEN  inquired as to the will of the committee.                   
                                                                               
  SENATOR LEMAN  moved to report SB 84 out of committee with                   
 individual recommendations and accompanying fiscal notes.  Without            
 objection, it was so ordered.