Legislature(1999 - 2000)

03/03/2000 01:50 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
SENATE BILL NO. 7                                                                                                               
An Act relating to the University of Alaska and                                                                                 
university land, and authorizing the University of                                                                              
Alaska to select additional state land.                                                                                         
JIM POUND, STAFF, SENATOR ROBIN TAYLOR, commented that the                                                                      
University of Alaska system was created under federal                                                                           
authority as a land grant institution to provide for the                                                                        
higher education requirements of Alaska's people into                                                                           
perpetuity.  Mr. Pound continued that most colleges                                                                             
established under the land grant program were endowed with                                                                      
sizable land bases from which to generate income to be used                                                                     
for operating purposes. Unlike most institutions in the                                                                         
lower 48 states, the University of Alaska does not have the                                                                     
larger population base and proximity to other support                                                                           
services that are so beneficial. The University of Alaska                                                                       
additionally, suffers from a smaller pool of alumni and                                                                         
other normal sources of endowment income which many                                                                             
institutions rely on to help support operations.                                                                                
Mr. Pound pointed out that in the past decade, several                                                                          
legislators have introduced legislation allowing the                                                                            
University of Alaska to select additional lands from the                                                                        
State. The purpose of all legislative attempts to provide                                                                       
more land for the University statewide system has been to                                                                       
provide more income producing assets. SB 7 would continue                                                                       
that effort to give the University of Alaska a larger and                                                                       
more productive land base. Mr. Pound stated that the bill                                                                       
also will provide clear expectations that the land conveyed                                                                     
would be used for the development of value added industries.                                                                    
Mr. Pound advised that the provisions of SB 7 would allow                                                                       
the University of Alaska to select 250,000 acres of State                                                                       
land. Lands selected for transfer would include interests in                                                                    
minerals, oil, and gas, and would be subject to certain                                                                         
limitations. Mr. Pound noted that certain lands would be                                                                        
exempt from the selection, such as:                                                                                             
? Lands subject to a coal lease or where a lease                                                                                
application is pending;                                                                                                         
? Land reserved by law from the public domain;                                                                                  
? Land included in a five-year proposed oil and gas                                                                             
leasing program; and                                                                                                            
? Leased land where the lease applications are pending.                                                                         
In an endeavor to encourage local support, up to twenty                                                                         
percent (20%) of the income derived from lands conveyed as a                                                                    
result of the legislation, would be given to the campus or                                                                      
campuses in the region from which the earnings are derived.                                                                     
That revenue is to be used for programs and services that                                                                       
support the development of natural resources within that                                                                        
region. The appropriation by the Board of Regents would only                                                                    
happen, if the local municipality where the campus or                                                                           
campuses were located, provided a match of the same amount.                                                                     
Mr. Pound concluded that SB 7 would enable the University of                                                                    
Alaska to begin making its way toward equal footing with                                                                        
other land grant universities around the country.                                                                               
Representative J. Davies referenced the language                                                                                
"municipality" indicated on Page 4.  He asked if that was                                                                       
land which the municipalities had already claimed.  Mr.                                                                         
Pound replied that it would be land that the municipalities                                                                     
or the boroughs "may" select.  Mr. Pound admitted that was a                                                                    
gray area and that the bill addresses a "negotiation                                                                            
process" between the University and the particular                                                                              
Representative J. Davies asked if the language indicated                                                                        
properties already selected by the municipalities.  Mr.                                                                         
Pound commented that was not the case.  Representative J.                                                                       
Davies referenced Page 4, Line 29, and asked what that would                                                                    
include.  Mr. Pound did not know.  Representative J. Davies                                                                     
requested that information be clarified.                                                                                        
Representative Grussendorf asked if the legislation would                                                                       
stand-alone or if it would be tied in with legislation                                                                          
currently happening in the U.S. Congress.  Mr. Pound replied                                                                    
that there are two bills in Congress that are stand-alone.                                                                      
They would provide 250,000 federal acres to the University.                                                                     
Co-Chair Therriault clarified that this legislation would be                                                                    
separate from that passed on the federal level and would                                                                        
double the amount of land available for the University.                                                                         
Vice Chair Bunde noted that some of his constituents were                                                                       
concerned with legislation "blocking up" lands.  Mr. Pound                                                                      
replied that the legislation was essentially dealing with                                                                       
various accesses and processes already in place.  He                                                                            
believed that the legislation would not have any effect on                                                                      
access of lands.                                                                                                                
Representative J. Davies inquired about the timing between                                                                      
SB 7 and the federal bills.  Mr. Pound replied that he did                                                                      
not know when the federal match would occur, but that SB 7                                                                      
is based on a 20-year selection process.                                                                                        
Co-Chair Therriault asked if Senator Taylor had taken a                                                                         
position on the bill having access to any of the                                                                                
legislatively designated areas.  Mr. Pound did not know.  He                                                                    
noted that the access concern was brought up during the                                                                         
House Resources Committee hearing.  He advised that there                                                                       
was no intention by Senator Taylor to deny access under what                                                                    
is considered "normal process".                                                                                                 
Representative G. Davis pointed out that there was not a                                                                        
fiscal note submitted by the Department of Law.  He advised                                                                     
that Department would definitely have an added cost                                                                             
associated with the proposed legislation.                                                                                       
ANN RINGSTAD, DIRECTOR, GOVERNMENT RELATIONS, STATEWIDE                                                                         
OFFICE OF UNIVERSITY RELATIONS, UNIVERSITY OF ALASKA,                                                                           
FAIRBANKS, (TESTIFIED VIA TELECONFERENCE), read testimony                                                                       
prepared by Wendy Redman, Vice President, University of                                                                         
Ms. Ringstad advised that the House Resources version of SB
7, which is before the Committee, is not satisfactory to the                                                                    
University for a variety of reasons, including provisions                                                                       
that would give the commissioners of the Department of                                                                          
Natural Resources and the Department of Fish & Game, policy                                                                     
and regulation making authority regarding the management of                                                                     
University lands.                                                                                                               
Ms. Ringstad added that other amendments made during the                                                                        
Resources Committee would weaken the University's ability to                                                                    
generate revenue from lands that would be made available,                                                                       
and curtail which lands would be available.  She noted that                                                                     
it was the University's intent to continue to work with Co-                                                                     
Chair Therriault, Senator Taylor, other interested                                                                              
legislators, representatives Department of Natural Resources                                                                    
and Department of Fish and Game and interested constituent                                                                      
groups, in order to develop a Finance Committee substitute,                                                                     
that would be a more satisfactory bill.                                                                                         
Ms. Ringstad reminded Committee members that of the original                                                                    
350,000 acres that the University was provided between 1915                                                                     
and 1929 by virtue of its land grant status, only 112,000                                                                       
acres were actually transferred to the University.  In 1959,                                                                    
the Alaska Statehood Act cancelled the University's right to                                                                    
receive all unsurveyed lands which amounted to 238,000                                                                          
Ms. Ringstad acknowledged that it is true that there is no                                                                      
legal obligation for the State to provide lands to the                                                                          
University.  However, there was an assumption at the time of                                                                    
statehood that the State would use land from its federal                                                                        
land grant to "make good" on the original commitment to                                                                         
establish a land endowment for the University.  She pointed                                                                     
out that in direct response to that assumption, the first                                                                       
Alaska Legislature passed a bill giving the University of                                                                       
Alaska, one million acres of land to develop for the purpose                                                                    
of providing support for the post-secondary needs of our new                                                                    
She pointed out that Governor Egan vetoed that legislation                                                                      
citing that Alaska lands should be best developed by the                                                                        
Department of Natural Resources.   Governor Knowles cited                                                                       
the same rationale when he vetoed similar legislation in                                                                        
1994 and 1996.  Ms. Ringstad noted that the Department of                                                                       
Natural Resources has never had, nor does it now have,                                                                          
adequate resources to meet the mandate.  Ms. Ringstad                                                                           
advised that the Department of Natural Resources has done an                                                                    
outstanding job of managing Alaska's oil and gas lands,                                                                         
however, they do not have the staff to actively manage all                                                                      
of the states additional lands.                                                                                                 
Ms. Ringstad advised that support for the legislation comes                                                                     
down to a philosophical decision about the development of                                                                       
State lands.                                                                                                                    
Ms. Ringstad stated that there is not a large quantity of                                                                       
good, income producing State land available. Additionally,                                                                      
it is true that the income generated from additional lands                                                                      
to the University would not be significant in the short                                                                         
term. The University is not looking to the legislation as a                                                                     
panacea.  The University would much rather have $250 million                                                                    
dollars than 250 million acres of land.  The University has                                                                     
an excellent record of land management.                                                                                         
Over the years, the legislation has generated controversy                                                                       
from a wide variety of constituencies, all of whom have                                                                         
their own self-interests to protect when it comes to                                                                            
Alaska's lands.  The bill is full of amendments and                                                                             
compromises to meet the interests of miners, hunters,                                                                           
fishers, berry-pickers, recreationalists, and oil and gas                                                                       
interests. She requested additional time to work with the                                                                       
Committee to adequately address the legislation.                                                                                
ANDREW DEVALPINE, DIRECTOR, BRISTOL BAY COASTAL RESOURCE                                                                        
SERVICE AREA (BBCRSA), DILLINGHAM, (TESTIFIED VIA                                                                               
TELECONFERENCE), noted that the legislation proposes a                                                                          
"threat" for the resource areas.  He noted that the bill                                                                        
appears to exempt the University from AS 38.04, which speaks                                                                    
to State land use plans.  Mr. DeValpine stated that there is                                                                    
no guarantee that the University would honor the priorities                                                                     
established by the municipalities.  The bill represents an                                                                      
invasion of a rural area.  Those residents rely on the                                                                          
natural abundance of fish and game provided for their                                                                           
ROBERT LOEFFLER, DIRECTOR, DIVISION OF MINING, LAND AND                                                                         
WATER, DEPARTMENT OF NATURAL RESOURCES, ANCHORAGE,                                                                              
(TESTIFIED VIA TELECONFERENCE), noted that the Department                                                                       
would be willing to enter into negotiated agreements with                                                                       
the University.  He listed the fundamental concerns of the                                                                      
? The Department believes that the bill puts the                                                                                
University in competition with the municipalities in a                                                                          
way in which the University would win.                                                                                          
? The Department believes that the bill would have a                                                                            
significant effect on State land and timber sale                                                                                
programs.  The Department has been working with the                                                                             
Senate to come up with a stable land disposable program                                                                         
favored by Alaskans.  SB 7 would put that bill in                                                                               
jeopardy.  He thought that the University would chose                                                                           
all saleable State land.                                                                                                        
? He noted that the bill could have a "chilling" effect                                                                         
on development of Alaska land in many ways.  The bill                                                                           
carries an uncertainty in land tenure.  That is one of                                                                          
the reasons that the Alaska Mental Health Land Trust                                                                            
(AMHLT) stopped development throughout Alaska during                                                                            
the years before selections were final. Also, the bill                                                                          
allows selection of the fiberoptics.                                                                                            
? He addressed the bill's effect on promises made to the                                                                        
public.  The Department of Natural Resources identifies                                                                         
public use areas, areas used for subsistence, and areas                                                                         
used for public access.  There is no similar process in                                                                         
the bill.                                                                                                                       
Mr. Loeffler advised that there are two additional technical                                                                    
problems with the bill.  He noted that they were addressed                                                                      
in the letter from Commissioner Shively to the members.                                                                         
(TAPE CHANGE HFC 00 - 47, Side 2)                                                                                               
Mr. Loeffler stated that there are general grant lands                                                                          
subject to and which the Legislature can not exempt from                                                                        
constitutional requirements otherwise applicable to State                                                                       
Mr. Loeffler noted the second technical defect is the                                                                           
University selection of the designated areas and their                                                                          
definition of public domain.  He believed that the bill                                                                         
intended that the University not select areas that are                                                                          
critical habitat areas, however, the language accomplishes                                                                      
the opposite that intent.                                                                                                       
Co-Chair Therriault asked if these concerns had been                                                                            
expressed to the House Resources Committee.  Mr. Loeffler                                                                       
stated that they were, however, the technical defects were                                                                      
submitted in a letter afterward.                                                                                                
SUSAN SCHRADER, CONSERVATION ADVOCATE VOTERS (CAV), ALASKA                                                                      
CONSERVATION VOTERS, JUNEAU, stated that the Alaska                                                                             
Conservation Voters, formerly Alaska Conservation Voice, is                                                                     
a not-for-profit organization dedicated to protecting                                                                           
Alaska's environment through public education and advocacy.                                                                     
The membership represents over 22,000 registered Alaskan                                                                        
voters.  She stated that ACV believes that investment in the                                                                    
University system is critical for the State's continued                                                                         
economic prosperity and for enabling the State's                                                                                
participation in the developing intellectual and knowledge-                                                                     
based economy fueling our country's progress.                                                                                   
Ms. Schrader noted that ACV is pleased to see that the House                                                                    
Resource Committee substitute for the bill addresses several                                                                    
concerns with environmental impacts, namely providing for                                                                       
consultation with Department of Fish and Game and requiring                                                                     
protection of riparian areas.  Nevertheless, ACV believes                                                                       
that the bill does not guarantee adequate or reliable                                                                           
funding for the University.  The University's attention                                                                         
should be directed towards education and not be diverted                                                                        
towards the complex and often contentious arena of land                                                                         
Ms. Schrader noted that ACV has serious concerns with SB 7                                                                      
which include:                                                                                                                  
? Alaskans may lose the use of 250,000 acres of public                                                                          
lands, including the potential loss of acreage within                                                                           
our State game refuges, State game sanctuaries, State                                                                           
recreation areas, recreational mining areas, State                                                                              
critical habitat areas, etc., including one of our                                                                              
State parks, all of which are located in the public                                                                             
? Because of the University's aggressive development                                                                            
polices, the bill threatens fish and wildlife re-                                                                               
sources, as well as the subsistence, recreational, and                                                                          
commercial uses that depend on them. The bill would                                                                             
threaten community water sources and local use,                                                                                 
expansion and planning options, at both the local and                                                                           
regional level.  The University land selections would                                                                           
further complicate confusing land ownership patterns                                                                            
and make sorting out the conflicts a costly and time-                                                                           
consuming process.                                                                                                              
? Even with the language in the committee substitute to                                                                         
ensure access, SB 7 might impact highly valued access                                                                           
rights on selected lands that the University chooses to                                                                         
sell to a third party or develop in such a way as to                                                                            
preclude access. Potentially at risk are the hunting,                                                                           
fishing, skiing, mushing, and innumerable other                                                                                 
recreational and commercial activities that Alaskans                                                                            
depend upon.                                                                                                                    
? SB 7 very likely violates the Dedicated Fund Clause,                                                                          
Article IX, Section 7, of the Alaska Constitution. The                                                                          
Dedicated Fund Clause explicitly allows continuation of                                                                         
dedicated funds that predated ratification of the                                                                               
constitution and it also allows dedicated funds                                                                                 
required participating in federal programs. While the                                                                           
existing University land trust does not violate the                                                                             
clause because it meets the two circumstances. However,                                                                         
any new grant of land created by SB 7 would not meet                                                                            
either circumstance.                                                                                                            
Ms. Schrader concluded that if SB 7 becomes law, the                                                                            
University would select 250,000 acres with the highest                                                                          
potential for future revenue generation. At a time of                                                                           
significant budget shortfalls, the last thing that the                                                                          
legislature should remove is the State's 250,000 most                                                                           
promising acres for future revenue.                                                                                             
Representative Austerman mentioned the fish and game                                                                            
resources and asked if there could be a "crisis" because of                                                                     
the legislation.  Ms. Schrader replied that there would most                                                                    
likely be an impasse, as 250,000 acres of State land would                                                                      
be transferred to the University.  Representative Austerman                                                                     
could not guess the impact that the legislation could have,                                                                     
not knowing the lands selected.  Ms. Schrader replied that                                                                      
the very existence of setback requirements found in the                                                                         
Forest Practices Act, are examples that government                                                                              
appreciates those private lands needed to protect our                                                                           
resources.  Putting 250,000 acres into private ownership                                                                        
places our resources at risk.                                                                                                   
Representative J. Davies pointed out that the University                                                                        
would have to adhere to the stipulations established in the                                                                     
Forest Practices Act.  He advised that State law protects                                                                       
many of the concerns voiced by ACV.  Ms. Schrader agreed                                                                        
that the State law would protect fish on private land,                                                                          
however, the reality of the situation given the current                                                                         
funding allocated to Department of Environmental                                                                                
Conservation and the Department of Fish and Game, it would                                                                      
be difficult for those agencies to do the type of monitoring                                                                    
that would need to be done on private lands.                                                                                    
KEN TAYLOR, DIRECTOR, DIVISION OF HABITAT AND RESTORATION,                                                                      
DEPARTMENT OF FISH AND GAME, responded to a query voiced by                                                                     
Representative J. Davies regarding the public domain issue                                                                      
in relationship to designated areas.  None of the 10                                                                            
designated State game refuges, 17 critical habitat areas, or                                                                    
the 3 State game refuges have been removed from the public                                                                      
domain.  The proposed legislation would free the University                                                                     
to select many of those areas.                                                                                                  
Mr. Taylor added that the legislation could include many                                                                        
very important areas as indicated on Page 6, Line 16-22,                                                                        
Section (365b-1).  He commented that to deal with the broad                                                                     
language terms would be difficult for the Department.                                                                           
Mr. Taylor pointed out that these areas were designated by                                                                      
the Legislation to be statutorily protected.  SB 7 would                                                                        
minimize that protection.  It would reduce it from statutory                                                                    
protection to the discretion of future governors and                                                                            
Mr. Taylor added that the Department is concerned with the                                                                      
lack of protections for lands designated as important fish                                                                      
and wildlife habitat in the Department of Natural Resources                                                                     
areas management plans.  These plans were developed with                                                                        
strong public participation. The legislation would not                                                                          
afford the same protection to these lands. A lot of these                                                                       
lands have a high economic value.                                                                                               
Mr. Taylor added that the Department of Natural Resources                                                                       
had submitted a fiscal note with the bill.                                                                                      
Vice Chair Bunde commented that if the University wanted to                                                                     
select a specific land, they would have to meet legislative                                                                     
approval and they would be responsible to see that the State                                                                    
game refugee continues. The uses would be limited by                                                                            
overlying covenants.  Mr. Taylor replied that the statute                                                                       
would remove the University lands from the public domain and                                                                    
that if they were removed from the domain they would not                                                                        
remain part of the refugee.                                                                                                     
Vice Chair Bunde reiterated that the legislative approval                                                                       
would still remain.  Mr. Taylor agreed.  He suggested that                                                                      
if the bill passes, most likely there would be annual                                                                           
selections.  The parcels will be as small as 650 acres.  Mr.                                                                    
Taylor emphasized that is a lot of pieces and for the                                                                           
Legislature to enter into detail on each parcel will be a                                                                       
lot of additional work.                                                                                                         
RICHARD BISHOP, VICE PRESIDENT, ALASKA OUTDOORS COUNCIL,                                                                        
JUNEAU, noted that the Council has followed the bill for                                                                        
several years.  He stated that AOC's principle interest is                                                                      
in the lands.  The Council recognizes that the amount                                                                           
suggested is a relatively small portion of State private                                                                        
lands, however, because there are differences in the                                                                            
importance of habitats and access, it would be prudent to                                                                       
look at the terms of the bill in relationship of principle                                                                      
interest of sound conservation and the opportunity to using                                                                     
public resources.                                                                                                               
Mr. Bishop recommended adding an amendment to Page 5, Line                                                                      
2, which would delete the entire text and replace it with                                                                       
the following language:                                                                                                         
"Is a legislatively designated area, including but not                                                                          
limited to state critical habitat areas, wildlife                                                                               
refuges, wildlife sanctuaries, forests, parks,                                                                                  
recreation areas, range areas, public use areas, and                                                                            
recreational mining areas, of is a state                                                                                        
administratively designated site dedicated to public                                                                            
access or other uses."                                                                                                          
PAMELA LABOLLE, PRESIDENT, ALASKA STATE CHAMPBER OF                                                                             
COMMERCE, JUNEAU, voiced support for the legislation.  She                                                                      
noted that the State Chamber recognizes the valuable                                                                            
contribution that an academically strong and financially                                                                        
secure State University system can make to Alaska's future.                                                                     
Management of lands provides the University system with a                                                                       
source of recurring revenues.                                                                                                   
Ms. LaBolle pointed out that in managing its current land                                                                       
portfolio, the University has demonstrated that it can meet                                                                     
and exceed the requirements of responsible land development.                                                                    
Conveyance of State and federal lands to the University for                                                                     
appropriate development will enhance economic opportunities                                                                     
on many fronts.                                                                                                                 
Representative Foster remarked about the total fiscal amount                                                                    
which had been submitted.  Co-Chair Therriault advised that                                                                     
the fiscal notes would be reevaluated during the further                                                                        
consideration of the legislation.                                                                                               
Co-Chair Therriault asked if all State lands would be                                                                           
available for selection.  Ms. Ringstad understood that they                                                                     
SB 7 was HELD in Committee for further discussion.                                                                              

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