Legislature(1999 - 2000)

02/07/2000 01:15 PM RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
SB  7 - INCREASE LAND GRANT TO UNIV. OF ALASKA                                                                                
Number 0117                                                                                                                     
CO-CHAIR MASEK  announced that the  first order of  business would                                                              
be CS  FOR SENATE  BILL NO.  7(FIN) am,  "An Act  relating to  the                                                              
University  of Alaska  and university  land,  and authorizing  the                                                              
University of Alaska to select additional state land."                                                                          
CO-CHAIR HUDSON made  a motion to adopt proposed  HCS CSSB 7(RES),                                                              
version  1-LS0072\S,  Luckhaupt, 2/5/00  (Version  S),  as a  work                                                              
draft.  There being no objection, it was so ordered.                                                                            
Number 0205                                                                                                                     
LORALI MEIER, Staff to Representative  Beverly Masek, Alaska State                                                              
Legislature,  serving as  committee aide  for the House  Resources                                                              
Standing  Committee, explained  the  changes in  Version  S.   She                                                              
referred to page 5, line 3, where new language had been added:                                                                  
     (2)  is  located  within a  municipality  that  has  not                                                                   
     received  at least  80 percent of  its land  entitlement                                                                   
     under  AS  29.65  and  is  not  vacant,  unappropriated,                                                                   
     unreserved   land;    in   this   paragraph,    "vacant,                                                                   
     unappropriated, unreserved  land" has the  meaning given                                                                   
     in AS 29.65.130;                                                                                                           
MS. MEIER informed  members that it puts the University  of Alaska                                                              
on the  same selection  level as the  municipalities.   In current                                                              
statute,    the   municipalities    can   only   select    vacant,                                                              
unappropriated,   unreserved   land   (VUU  land)   within   their                                                              
boundaries, but the University of  Alaska is allowed to select any                                                              
land within the boundaries.  She  indicated that the Department of                                                              
Natural Resources  (DNR) had said that only  seven municipalities,                                                              
mostly in Western Alaska, have not  selected the majority of their                                                              
land.   Therefore, the goal  was to make  the changes  specific to                                                              
those seven municipalities by setting  the requirement that unless                                                              
the  municipalities  have  at  least  80  percent  of  their  land                                                              
entitlement, the  University of Alaska  is only allowed  to select                                                              
VUU land within  their boundaries.  Ms. Meier pointed  out that in                                                              
the  case of  the Lake  & Peninsula  Borough,  the entitlement  is                                                              
greater than the VUU land available.                                                                                            
MS. MEIER  next referred  to page 6,  line 20, where  new language                                                              
had been added:                                                                                                                 
     (1)   includes   land   that    the   commissioner,   in                                                                   
     consultation  with the  commissioner of  fish and  game,                                                                   
     determines  has demonstrated  value to  the public as  a                                                                   
     habitat  area   that  is  especially  critical   to  the                                                                   
     perpetuation of fish or wildlife;                                                                                          
MS. MEIER explained  that this basically protects  public interest                                                              
in special lands.   The amendment was spurred by  the situation in                                                              
Cape Yakataga when the University  of Alaska logged the thin strip                                                              
of  forest between  the  mountains and  the  ocean, thus  damaging                                                              
possible habitat between the two.                                                                                               
MS. MEIER  referred to  page 7,  line 23,  where new language  had                                                              
been added:                                                                                                                     
     (E)  any   easement,  right-of-way,   or  other   access                                                                   
     claimed, reserved,  occupied, or possessed by  the state                                                                   
MS.  MEIER  explained that  this  protects  public access  to  the                                                              
University  of Alaska  conveyed lands,  as does  the new  language                                                              
added on page 8, line 31, through page 9, line 5:                                                                               
               (m) The commissioner may not convey land                                                                         
           under this section unless the commissioner                                                                           
           reserves easement, rights-of-way, and other                                                                          
          forms of access                                                                                                       
                    1) required under the Constitution                                                                          
          of the State of Alaska or other law; and                                                                              
                    (2) sufficient to ensure all                                                                                
           current access, and reasonably foreseeable                                                                           
          future access, to adjacent public or private                                                                          
          land or water.                                                                                                        
MS. MEIER referred to page 9, line  6, where new language had been                                                              
     Sec. 14.40.366.  Management  requirements for university                                                                 
     land.    (a) The  Board  of  Regents shall,  by  policy,                                                                 
     establish procedures  for mineral entry or  location and                                                                   
     mineral  leasing  on  university  land  selections  made                                                                   
     under  AS 14.40.365  that are  substantially similar  to                                                                   
     mineral  entry,  location, and  leasing  procedures  for                                                                   
     state land under AS 38.05.185 - 38.05.275.                                                                                 
MS. MEIER explained that this means  the University of Alaska will                                                              
have the same mineral management  requirements that exist on state                                                              
land.  The final  change Ms. Meier explained was  on page 13, line                                                              
22, through page 14, line 26 [Sections 8-11 were new]:                                                                          
     * Sec. 8. AS 41.17.115(b) is amended to read:                                                                            
          (b) The commissioner shall adopt regulations for the                                                                  
protection of riparian areas; the  regulations may include  higher                                                              
standards of  protection for fish  and other public   resources on                                                              
land managed  by the  department or  owned by  the  University  of                                                          
Alaska than on public land or private  land.  The  regulations may                                                          
vary by  region of  the state  and must  take into   consideration                                                              
reasonable  classification  of  water  bodies and    the  economic                                                              
feasibility of timber operations.                                                                                               
     * Sec. 9. AS 41.17.118(a) is amended to read:                                                                            
          (a) The riparian standards for state land,                                                                        
      including land owned by the University of Alaska, are                                                                 
     as follows:                                                                                                                
               (1) on state forest land managed by the department                                                               
or owned  by the  University of  Alaska that  is located  north of                                                            
the Alaska Range, harvest of timber  may not be undertaken  within                                                              
100 feet  immediately  adjacent to  an anadromous  or high   value                                                              
resident  fish water  body unless  the division  determines   that                                                              
adequate protection remains for the fish habitat;                                                                               
               (2) on state forest land managed by the department                                                               
or owned  by the  University of  Alaska that  is located  south of                                                          
the Alaska Range,                                                                                                               
                    (A) harvest of timber may not be undertaken                                                                 
within 100  feet immediately  adjacent to an  anadromous or   high                                                              
value resident fish water body;                                                                                                 
                    (B) between 100 and 300 feet from the water                                                                 
body, timber harvest  may occur but shall be consistent   with the                                                              
maintenance of important fish and wildlife  habitat.                                                                            
     * Sec. 10. AS 41.17.950(11) is amended to read:                                                                          
               (11) "other public land" means state land managed                                                                
by  state agencies other than the  department or the University of                                                          
Alaska and [,] land owned by a municipality  [, AND LAND OWNED  BY                                                          
THE UNIVERSITY OF ALASKA];                                                                                                      
     * Sec. 11. AS 41.17.950(13) is amended to read:                                                                          
               (13) "riparian area" means                                                                                       
                    (A) the areas specified in AS 41.17.116(a) on                                                               
private land in the coastal forest of spruce or hemlock;                                                                        
                    (B) the areas specified in regulations                                                                      
adopted   by  the commissioner  under AS  41.17.116(b) on  private                                                              
land  outside the coastal forest of spruce or hemlock;                                                                          
                    (C) the area 100 feet from the shore or bank                                                                
or   an  anadromous  or high  value resident  fish  water body  on                                                              
state land managed  by the department or owned by  the  University                                                          
of Alaska and on other public land;                                                                                         
MS. MEIER explained that this means  the University of Alaska will                                                              
be subject to  riparian management standards that  are required on                                                              
state lands under the Forest Practices Act.                                                                                     
Number 0465                                                                                                                     
REPRESENTATIVE COWDERY  noted that in the privatization  work done                                                              
over  the interim,  one  recommendation was  for  the governor  to                                                              
endow the University  of Alaska with 250,000 acres  of land and to                                                              
try to get a federal match.                                                                                                     
MS. MEIER  pointed out  that committee packets  contain a  copy of                                                              
the federal legislation that is currently in Congress.                                                                          
Number 0635                                                                                                                     
JIM  POUND, Legislative  Aide  for  Senator Robin  Taylor,  Alaska                                                              
State Legislature, speaking  on behalf of the prime  sponsor of SB
7, pointed out that the riparian  requirements are a bit redundant                                                              
since all  land in Alaska now  falls under the Alaska  Forest Act.                                                              
He explained  that the bill has  been around for  approximately 10                                                              
or 15 years and  initially goes back to 1915,  when the University                                                              
of Alaska  - then called the  College of Agriculture and  Mining -                                                              
was established as a land grant college.   The land granted to the                                                              
college  became  the  property  of  the  state  under  the  Alaska                                                              
Statehood Act,  and there was an  assumption by Congress  that the                                                              
land  would  be transferred  back  to  the University  of  Alaska;                                                              
however, that still has not been done.                                                                                          
MR. POUND emphasized  that the purpose of the bill  is to give the                                                              
University of Alaska  the land grants that it was  promised by the                                                              
federal government prior  to statehood.  The copies  of the Senate                                                              
and  House bill  from  the congressional  side  are identical,  he                                                              
said, and include  250,000 acres from the federal  government.  He                                                              
explained  that part  of that  is a  cleanup where  land that  was                                                              
conveyed to the  University of Alaska is now in  national parks or                                                              
national wildlife refuges.   It is a show of good  faith on behalf                                                              
of the state for 250,000 acres; that  means it is more salable for                                                              
the  Alaska   delegation  in  Washington,   D.C.,  and   also  the                                                              
University of Alaska  could ultimately end up  with 750,000 acres,                                                              
with 500,000 acres of that coming from the federal government.                                                                  
MR. POUND  indicated the money will  go into a trust  account that                                                              
will be drawn on primarily as an  "interest situation," similar to                                                              
the permanent fund,  but it will be specifically  designed for the                                                              
University  of Alaska.   Currently,  the budget  request from  the                                                              
governor  for the University  of  Alaska is $189,301,800.    It is                                                              
hoped that if the University of Alaska  has this land available to                                                              
it - given  a fairly conservative  estimate of $1,500 per  acre at                                                              
60 percent of the sale - it should  be able to produce $74 million                                                              
annually.   Mr.  Pound  noted that  there  are  advantages to  the                                                              
municipalities; for  example, if a municipality  were dealing with                                                              
land that it  doesn't have the ability  to develop or sell,  or if                                                              
the land were  moved out into development status,  it would create                                                              
a tax  base for  municipalities that  they currently  do not  have                                                              
from raw land.                                                                                                                  
Number 0991                                                                                                                     
REPRESENTATIVE HARRIS  wondered what  the policy and  practices of                                                              
the University of Alaska are currently  with the lands that it has                                                              
for development or revenue enhancement.                                                                                         
MR. POUND  responded that  at the current  time the land  that the                                                              
University  of Alaska  has available  is generating  approximately                                                              
$32 million annually to its revenue source.                                                                                     
REPRESENTATIVE HARRIS  asked whether the University  of Alaska has                                                              
a projected revenue  stream from the 250,000 acres  from the state                                                              
as well  as the possible  250,000 or  more acres from  the federal                                                              
MR. POUND indicated  he does not have any firm  numbers, because a                                                              
lot of it has to do with what the land is used for.                                                                             
REPRESENTATIVE HARRIS requested clarification  that the University                                                              
of Alaska does have the option to sell the land.                                                                                
MR. POUND responded,  "Yes.  As I  understand the way the  bill is                                                              
written, they  should have  the ability to  transfer that  land to                                                              
private ownership."                                                                                                             
Number 1150                                                                                                                     
REPRESENTATIVE BARNES wondered why  the federal bill is in any way                                                              
tied to an amount  of land being made available  to the University                                                              
of Alaska from the state.                                                                                                       
MR. POUND  explained that  as he  understands it from  Congressman                                                              
Young's office, this bill is a good-faith  effort on behalf of the                                                              
state;  there is  an  assumption  in Congress  that  the land  was                                                              
transferred to  the State of Alaska  upon statehood, and  that the                                                              
state should  be transferring  it to the  University of  Alaska to                                                              
complete the process.                                                                                                           
REPRESENTATIVE  BARNES   pointed  out  that  even   if  the  state                                                              
transfers  the  250,000 acres,  there  is  no guarantee  that  the                                                              
federal government will transfer any land.                                                                                      
MR. POUND  said, "Absolutely.   These  bills are  in Congress  and                                                              
could end up anywhere."                                                                                                         
Number 1252                                                                                                                     
DAVE  LACEY  testified  via teleconference  from  Fairbanks.    He                                                              
stated  that  he is  opposed  to  SB  7 for  the  following  three                                                              
reasons:    First,  land  disposals   in  rural  Alaska  hurt  the                                                              
residents,  because they  cause  more people  to  compete for  the                                                              
limited  subsistence resources,  which damages  the rural  economy                                                              
and [adds] more  people who will qualify under  the ANILCA (Alaska                                                              
National Interest Lands Conservation  Act) laws as rural residents                                                              
who  are available  for  hunting privileges  in  case of  resource                                                              
shortages.   Second,  it will  promote rapid  exploitation of  the                                                              
state's  resources   instead  of   a  more  value-added   type  of                                                              
development  that will support  the local  economies.   And third,                                                              
the land  selection process that  the University of Alaska  has to                                                              
go  through will  be  cumbersome,  expensive and  drawn  out.   He                                                              
indicated  it would  be  much more  efficient  to appropriate  the                                                              
money from the general fund.                                                                                                    
REPRESENTATIVE COWDERY pointed out  that the state has quite a bit                                                              
of land, some acquired through foreclosures.   He wondered how Mr.                                                              
Lacey felt about that land being made available.                                                                                
MR. LACEY  replied that  he would  have to take  a closer  look at                                                              
that.  He reiterated  that his main concern is  sticking people in                                                              
rural  areas who  will compete  for  the resources  and will  want                                                              
electricity and roads that the state cannot afford.                                                                             
REPRESENTATIVE COWDERY  explained that the same thing  was said in                                                              
the  homesteading  days,  and  if  there  had  not  been  services                                                              
eventually to those areas, there  would not be as many communities                                                              
today, especially in the Railbelt region.                                                                                       
Number 1522                                                                                                                     
BOB  LOEFFLER,  Director,  Division  of Mining,  Land  and  Water,                                                              
Department  of  Natural Resources,  testified  via  teleconference                                                              
from Anchorage.   Speaking in opposition to SB 7,  he testified as                                                              
     This bill, which appropriates  state land and subsurface                                                                   
     resources and  the revenue from  them to the  University                                                                   
     of  Alaska,  is very  similar  to  bills passed  by  the                                                                   
     legislature  in 1995-96 and  actually 1959.   Each time,                                                                   
     those  bills  have  been  vetoed,   including  the  1959                                                                   
     version,  which  was  vetoed   by  Governor  Bill  Egan.                                                                   
     Therefore, it will come as little  surprise to you today                                                                   
     that  I am in  fact testifying  in opposition  to SB  7.                                                                   
     I've got a  couple points and would like to  take just a                                                                   
     few minutes of your time.                                                                                                  
     The first  and most  important point  is that this  bill                                                                   
     would  set the university  in competition  with the  new                                                                   
     municipalities that  we all hope will be  forming in the                                                                   
     unorganized  portion of  Alaska.   It also  has them  in                                                                   
     competition with  existing municipalities.  I'd  like to                                                                   
     expand on that for a second.   While all of us are aware                                                                   
     that  the  state has  tremendous  acreage,  only a  very                                                                   
     small  amount of that land produces revenue.                                                                               
     As a  result of the  Mental Health Trust litigation  and                                                                   
     settlement process,  and the effort to  convey municipal                                                                   
     entitlement   to   existing    communities   for   their                                                                   
     commercial,  residential and  industrial uses, we  found                                                                   
     that there  is minimally viable development  land:  that                                                                   
     is,  a  small   portion  of  our  land  is   useful  for                                                                   
     development.    And since  the  purpose of  SB  7 is  to                                                                   
     convey  those  lands  to  the  university  for  revenue-                                                                   
     generation   purposes,   it   only  follows   that   the                                                                   
     university will select the most productive lands.                                                                          
     ... As many  of you know, half of Alaska  remains in the                                                                   
     unorganized  borough.   A  university  entitlement  will                                                                   
     make it  very difficult for  future boroughs  to receive                                                                   
     any  development entitlement  land.   This is a  serious                                                                   
     issue  for the  state, [because]  a lack  of good  lands                                                                   
     will  remove one  of the  few  remaining incentives  for                                                                   
     municipal  incorporation, should  they ever be  required                                                                   
     to incorporate.  This bill may  ensure that they have no                                                                   
     good  tax  base  with  which  to  generate  revenues  to                                                                   
     support  themselves.   In  short,  with respect  to  the                                                                   
     unorganized borough,  this is an appropriation  not from                                                                   
     the  general   fund  or  not  from  the   state  to  the                                                                   
     university but, in fact, from  new boroughs that may, in                                                                   
     fact, incorporate to the university.                                                                                       
     The  second half of  this is  competition with  existing                                                                   
     municipalities.   While  the  amendment on  page 5  goes                                                                   
     quite   far   to   eliminate   some   competition   with                                                                   
     municipalities, in fact, the  university would still get                                                                   
     a lot  of land that would  otherwise go to  the existing                                                                   
     municipalities.    And this  is  true for  two  reasons:                                                                   
     First, entitlements  have a tendency to be  an iterative                                                                   
     process.   They select, things  change, we reject,  they                                                                   
     select new ones.  And at the  point the university jumps                                                                   
     in, they  then become ahead  in line.  Second,  we would                                                                   
     expect  the university  to get theirs  first since  they                                                                   
     are funded  to get theirs,  and municipalities,  for the                                                                   
     most part, are not.  So, I believe  that the competition                                                                   
     with  new municipalities  and,  secondly, with  existing                                                                   
     ones, is a serious disadvantage to this bill.                                                                              
     The second point  is that I believe that  this bill will                                                                   
     have a significant and adverse  impact on development of                                                                   
     the state.  Let me give you  a few examples, and I guess                                                                   
     the reasons are  twofold.  First, the first  example I'd                                                                   
     like to use is - as we're all  proud of - there has been                                                                   
     a mining  claim boom  in this state,  and a boom  in the                                                                   
     mining  industry more  or less since  the settlement  of                                                                   
     the  Mental  Health  Trust.     That,  as  a  fixed  and                                                                   
     understandable   land   ownership,   is   critical   for                                                                   
     development, and I believe that  this would introduce an                                                                   
     element of  confusion into that.  Second,  especially in                                                                   
     the   unorganized  boroughs,   this   would  allow   the                                                                   
     university to  select lands basically to make  money off                                                                   
     of  development projects,  and  let me  give  you a  few                                                                   
     examples.  As many of you know,  the Pogo Mine is in the                                                                   
     process of  permitting; while  we don't know  whether or                                                                   
     when it  would be permitted,  the university  would have                                                                   
     no  impediment to  selecting the  only available  access                                                                   
     routes.    Thus,  in fact,  Teck  Corporation  would  be                                                                   
     negotiating  not  only  with  the  state  but  with  the                                                                   
     university  on royalties.  [A]  second example  would be                                                                   
     Donlin Creek, should that ever  go, and that's on Native                                                                   
     land.  The only access is from  state land, which is, in                                                                   
     fact, selectable  under this process, so that  you could                                                                   
     expect,  then  ...  that the  mining  company  would  be                                                                   
     negotiating  with the  university.   And I believe  that                                                                   
     this could occur throughout the state.                                                                                     
     The third is  the impact on what I'd call  sort of rural                                                                   
     issues.  ... The bill  allows selection  of any land  in                                                                   
     the  rural areas except  for, in  this amendment,  those                                                                   
     especially  critical  to  the maintenance  of  fish  and                                                                   
     wildlife  species,   and  I  don't  have   that  wording                                                                   
     exactly.    But in  rural  areas throughout  the  state,                                                                   
     there  is no  impediment to  the university's  selecting                                                                   
     areas  for traditional  use,  subsistence -  all of  the                                                                   
     things  used   by  the  local  public  that,   in  fact,                                                                   
     municipalities  were  forbidden to  select.    And so  I                                                                   
     believe    this   would   exacerbate    the   sort    of                                                                   
     rural/Railbelt  tensions  that  unfortunately  exist  in                                                                   
     this state.                                                                                                                
     The  fourth problem  is its  impact  on state  programs.                                                                   
     Assuming that  the university would select  timber lands                                                                   
     and lands  for land  sales, one  would assume that  they                                                                   
     would select  the lands either - with respect  to timber                                                                   
     - closest to  existing access or - with respect  to land                                                                   
     sales  - that are  closest to  being sold.   That  would                                                                   
     probably  have   a  significant  effect  to   reduce  or                                                                   
     eliminate  the near-term timber  and land sale  program,                                                                   
     although certainly  in the long term - these  programs -                                                                   
     there are other lands to sell.                                                                                             
     ... I  note in subsection  (h) on  page 7 that  there is                                                                   
     what appears to be a constitutional  confusion, and that                                                                   
     is -  while I haven't talked  to the Department  of Law,                                                                   
     because this was just pointed  out - it appears that the                                                                   
     land in  this bill  is state land  in the sense  that it                                                                   
     includes  subsurface resources;  but  subsection (h)  on                                                                   
     page 7  appears to exempt  university land from  many of                                                                   
     the requirements of the constitution.                                                                                      
     As you  know, if the  land is state  land, in  fact, the                                                                   
     law cannot  exempt state land; that is,  the legislature                                                                   
     cannot   exempt    state   land   from    constitutional                                                                   
     requirements.   And two  requirements in particular  I'd                                                                   
     like  to  point out.    The  first is  sustained  yield.                                                                   
     While I believe there is some  controversy as to whether                                                                   
     trust  land  gained  from  the   federal  government  is                                                                   
     required  to be  managed  according to  sustained  yield                                                                   
     timber harvest, there is no doubt that state land is.                                                                      
     The second  is land from the federal  government doesn't                                                                   
     have  the  same  public  notice  and  meaningful  public                                                                   
     involvement requirements  that the constitution  imposes                                                                   
     on us, but  there is no doubt in my mind  that this land                                                                   
     would  have  those  requirements;  thus  the  university                                                                   
     would not - if I'm correct,  and I do believe we need to                                                                   
     check with the  Department of Law - that  the university                                                                   
     would  not be allowed  to dispose  of this land  without                                                                   
     complying with the public notice  and public involvement                                                                   
     requirements the court has found in the constitution.                                                                      
     And  the last point  is, in  fact, that  I believe  this                                                                   
     bill is relatively expensive  and an unwise use of state                                                                   
     money; that  is, our conservative estimate  that it will                                                                   
     cost more than  a million dollars per year  for at least                                                                   
     ten  years, while  the bill  provides  that these  costs                                                                   
     will  be borne by  the university,  they're still  state                                                                   
     moneys that  could best  spent operating the  university                                                                   
     rather than transferring lands  from one state agency to                                                                   
     Furthermore, there [are] some  timing implications.  The                                                                   
     money to transfer the land comes  up-front.  The revenue                                                                   
     comes later,  especially in today's budget  environment.                                                                   
     Paying costs today where the  revenues don't come in for                                                                   
     many  years,  a  decade  or so,  could  certainly  be  a                                                                   
     problem.   So, this  bill spends  money and reduces  the                                                                   
     appropriation  flexibility   for  the  legislature.    I                                                                   
     believe  that money  would be better  spent funding  the                                                                   
     university  directly.   Madam  Chairman,  thank you  for                                                                   
     this  opportunity.    I'm  available  if  you  have  any                                                                   
Number 2068                                                                                                                     
REPRESENTATIVE COWDERY  indicated that the state  provides lots of                                                              
services to rural Alaska at the present  time.  He stated that Mr.                                                              
Loeffler is making  a lot of other assumptions that  are not based                                                              
on  facts.   He  pointed  out  that some  accommodations  for  the                                                              
university would  allow it to  benefit from something  rather than                                                              
state dollars.  The state has a lot  of other high priorities.  He                                                              
asked what  Mr. Loeffler would recommend  that the state  cut from                                                              
its budget in order to get the money for the university.                                                                        
MR.  LOEFFLER answered  that he  believes the  bill would  require                                                              
money   to be spent  now.  It  is a cost,  not a revenue,  for the                                                              
near  term, because  it  costs money  to  transfer  land, and  any                                                              
revenue would come in the long term.                                                                                            
Number 2198                                                                                                                     
REPRESENTATIVE WHITAKER stated, "I'm  trying to couch this without                                                              
being overly  aggressive. ... Were  you instructed to  convolute a                                                              
rationalization for a predisposed position?"                                                                                    
MR. LOEFFLER responded, "No, sir."                                                                                              
REPRESENTATIVE WHITAKER  asked, "You've come to  these conclusions                                                              
logically, based upon the facts, is that correct?"                                                                              
MR. LOEFFLER replied,  "I believe so, sir."  He  indicated that if                                                              
his logic was not clear, he was willing to elaborate on it.                                                                     
REPRESENTATIVE  WHITAKER  said,  "Your first  item  of  opposition                                                              
related to  the competition for  land with unorganized  areas. ...                                                              
How many areas are in the process of currently organizing, that                                                                 
you're aware of?"                                                                                                               
MR. LOEFFLER replied, "I don't know  of any areas before the Local                                                              
Boundary  Commission, although  I  guess I  wouldn't  know, but  I                                                              
suspect there  are very few.  Our  concern is really for  the long                                                              
term - we hope that many of them organize."                                                                                     
REPRESENTATIVE WHITAKER asked, "And are you manifesting those                                                                   
hopes in any way?"                                                                                                              
MR. LOEFFLER stated, "No, sir."                                                                                                 
REPRESENTATIVE WHITAKER continued:                                                                                              
     That being the case, then one  would come to the logical                                                                   
     conclusion  that  if  none are  organizing  and  if  the                                                                   
     administration  is not facilitating organization,  that,                                                                   
     then, if  that is  the reason for  opposing land  to the                                                                   
     university  under  its  land  grant  status,  that  that                                                                   
     would,  then, be  postponed  indefinitely.   That  would                                                                   
     seem some what illogical, would you not agree?                                                                             
MR. LOEFFLER replied:                                                                                                           
     There  have been  a number  of  mandatory borough  bills                                                                   
     that have been introduced, and  it is certainly feasible                                                                   
     that such will  be introduced and passed  in the future,                                                                   
     but  I agree ...  that the  ability to  do some of  this                                                                   
     management is  in trust for future municipalities.   But                                                                   
     it is certainly the legislature's  choice if they should                                                                   
     decide to give it to the university instead.                                                                               
REPRESENTATIVE WHITAKER continued:                                                                                              
     Your  second  logical  conclusion was  that  an  adverse                                                                   
     impact  on development  to the  state  would result  and                                                                   
     there would be confusion in  development.  I find that a                                                                   
     tremendous leap  of logic in that the university  has as                                                                   
     its mandate to  develop these lands. ... Now,  how is it                                                                   
     that an  organization that  is mandated with  developing                                                                   
     lands for their own benefit,  and for the benefit of the                                                                   
     state,   would  somehow  have   an  adverse  impact   on                                                                   
Number 2381                                                                                                                     
MR. LOEFFLER answered:                                                                                                          
     My conclusion stems  in two ways.  First,  it stems from                                                                   
     experience with  the Mental Health Land Trust.   I think                                                                   
     there is no doubt that the Mental  Health Land Trust has                                                                   
     a  fiduciary  responsibility  to  develop  those  lands.                                                                   
     That  they are,  but  yet there  is  no doubt  that  the                                                                   
     Mental  Health Land  Trust  had an  impact  that we  all                                                                   
     regret on the  development of the state.   The second is                                                                   
     through  development  projects   that  I  am  personally                                                                   
     involved  with, an  example being ...  the Donlin  Creek                                                                   
     Mine; that  is, if there  are two land owners  involved,                                                                   
     or  three in this  case -  the state,  the state  public                                                                   
     domain  and the university  - the  more landowners,  the                                                                   
     more difficult  it is.  And  those are the source  of my                                                                   
REPRESENTATIVE WHITAKER responded:                                                                                              
     On  that  particular point,  then,  would  it not  be  a                                                                   
     logical assertion  that given one of the  two landowners                                                                   
     being absolutely motivated to  develop those lands, that                                                                   
     that might enhance the development,  that might serve as                                                                   
     a catalyst rather than an [inhibitor].                                                                                     
MR. LOEFFLER explained:                                                                                                         
     Typically,  the second landowner  acts as  a tax.   That                                                                   
     is, ...  while we're certainly  working with  the Mental                                                                   
     Health  Trust,  ...  the source  of  the  Mental  Health                                                                   
     Trust,  it's  financial.   It  costs  money,  and  their                                                                   
     motivation  may be money,  where in  some cases ours  is                                                                   
     jobs.  And so that's a slight change, sir.                                                                                 
REPRESENTATIVE WHITAKER declared:                                                                                               
     And  certainly I  would not  argue  with specifics,  but                                                                   
     generally  speaking, I  think that  there is  a lack  of                                                                   
     logic  in the  assertion that  given  the advantages  of                                                                   
     development to  the university, ... it would  be adverse                                                                   
     to development.  If I might  then continue, Madam Chair,                                                                   
     with regard to the assertion  that ... an investment, if                                                                   
     you will, by  the university - in itself,  by itself, in                                                                   
     itself, that  would ...  be a result  of this bill  - is                                                                   
     some how  adverse to the budget.   I find  that amazing,                                                                   
     when, in fact, at the urging  of the administration, the                                                                   
     legislature has passed innumerable  bills that relate to                                                                   
     a future  investment.   And now  you're telling us  that                                                                   
     that is not a wise course to  follow.  Again, that's not                                                                   
     a question, because I've reached  the point that I'm not                                                                   
     asking  questions anymore.   I continue  to assert  that                                                                   
     this  is a  convoluted  rationalization  to  shore up  a                                                                   
     predisposed, politically motivated position.                                                                               
Number 2541                                                                                                                     
REPRESENTATIVE BARNES referred to  Article VIII, Section 1, of the                                                              
Constitution of  the State of Alaska,  where it reads, "It  is the                                                              
policy of  the state to encourage  the settlement of its  land and                                                              
the  development of  its resources  by making  them available  for                                                              
maximum use consistent with the public  interest."  She asked what                                                              
the state is doing at the present time to fulfill that.                                                                         
MR. LOEFFLER replied that almost  all of the state programs at DNR                                                              
are intended specifically toward that end.                                                                                      
REPRESENTATIVE BARNES asked Mr. Loeffler  to elaborate on what the                                                              
programs are.                                                                                                                   
Number 2592                                                                                                                     
MR.  LOEFFLER  provided  a  list  of  programs:    land  disposal,                                                              
permitting, mariculture,  setnet leases, trapping cabins,  oil and                                                              
gas,  minerals,  timber  harvest,   transportation  and  municipal                                                              
entitlements.  He added that he may have left some out.                                                                         
REPRESENTATIVE  BARNES asked  Mr. Loeffler  to list specific  land                                                              
disposal programs.   She also wondered  what is being done  by DNR                                                              
to resolve the problems with mariculture.                                                                                       
MR. LOEFFLER stated that, with respect  to land disposal programs,                                                              
in fiscal  year 2001 they expect  to have three  new subdivisions,                                                              
about 100 remote  parcels.  He explained that they  have a lottery                                                              
program, a  subdivision program and  a remote recreation  program.                                                              
He  indicated,  with respect  to  mariculture,  that they  have  a                                                              
series of best-interest findings  to provide leases for the people                                                              
who qualify  under the  mariculture program.   He added  that they                                                              
have been  working with the Alaska  Department of Fish &  Game and                                                              
the  applicants  over  the  past   year  to  try  to  resolve  the                                                              
mariculture problem.                                                                                                            
REPRESENTATIVE BARNES asked how much  land has been disposed of by                                                              
the state for utilization by its  people over the last five years.                                                              
MR. LOEFFLER  indicated that  he cannot give  that answer  off the                                                              
top of his head, but that it hasn't  been that much.  He explained                                                              
that since  statehood it  has been  about 400,000  acres.   In the                                                              
last 20 years, since the advent of  modern land disposal programs,                                                              
it has  been around  180,000 to  190,000 acres,  not counting  the                                                              
homestead programs and large agricultural disposals.                                                                            
REPRESENTATIVE BARNES  wondered if Mr. Loeffler  could discuss the                                                              
land other than that made available for agriculture.                                                                            
DICK  MYLIUS,  Resource  Assessment  &  Development,  Division  of                                                              
Mining,  Land   and  Water,   Department  of  Natural   Resources,                                                              
testified via  teleconference from  Anchorage.  He  explained that                                                              
they have had three land sales in  the last four years, which were                                                              
parcels that were re-offered, having  been surveyed and subdivided                                                              
previously.    In  total, probably  500  or  600  non-agricultural                                                              
parcels were  sold.   He pointed  out that  the reason they  don't                                                              
have a big land  disposal program is simply a  function of budget:                                                              
they have  not been funded  significantly for land  disposal since                                                              
the late 1980s.                                                                                                                 
REPRESENTATIVE  BARNES  asserted  that  the  land  that  has  been                                                              
previously surveyed  and identified does  not need a  huge budget,                                                              
since it is  land that has already  been surveyed.  She  asked how                                                              
much  of that  land  is currently  available  to  the Division  of                                                              
Mining, Land and Water that can be made available to the public.                                                                
MR. LOEFFLER explained  that he believes they  have 5,000 parcels,                                                              
which  encompass approximately  50,000  acres.   The three  things                                                              
that need to  be done to make  that land available are:   do title                                                              
searches within  DNR; reappraise the  land, because much of  it is                                                              
rural homestead  land that has never  been appraised and  the rest                                                              
that have been  appraised are out of  date; and work out  a way to                                                              
do a  limited appraisal.   This means the  land can be put  up for                                                              
somewhere between $12 and $40 per acre.                                                                                         
REPRESENTATIVE  COWDERY  requested  that  Mr.  Loeffler  send  the                                                              
committee a written  report on what has happened  with disposal in                                                              
the past  five years  and what the  program is  for the  next five                                                              
MR. LOEFFLER  said he would be  delighted to that.   He emphasized                                                              
that  the land  disposal program,  to  some extent,  is driven  by                                                              
budget:  even though it makes more  than it costs, the Division of                                                              
Mining, Land and  Water or DNR cannot keep that money.   The money                                                              
goes into the general fund.                                                                                                     
REPRESENTATIVE COWDERY  said he doesn't see how DNR  can get money                                                              
except through the appropriation process.                                                                                       
MR. LOEFFLER clarified that he wouldn't recommend any, and he                                                                   
apologized if the implication was there.                                                                                        
TAPE 00-7, SIDE B                                                                                                               
Number 2957                                                                                                                     
SUE SCHRADER, Conservation Advocate, Alaska Conservation Voice                                                                  
(ACV), came forward to testify as follows:                                                                                      
     Alaska    Conservation    Voters,     formerly    Alaska                                                                   
     Conservation  Voice,  is a  not-for-profit  organization                                                                   
     dedicated  to protecting  Alaska's  environment  through                                                                   
     public   education  and   advocacy.     Our  40   member                                                                   
     organizations represent  over 21,000 registered  Alaskan                                                                   
     voters.    ACV believes  investment  in  our  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  that is  fueling our  country's  progress.   We                                                                   
     support funding that will guarantee  a strong university                                                                   
     system now and in the future.                                                                                              
     ACV  is pleased  to  see that  the  new draft  committee                                                                   
     substitute  of SB  7 addresses several  of our  concerns                                                                   
     with environmental impacts on  this legislation, namely,                                                                   
     providing  for  consultation  with ADF&G  and  requiring                                                                   
     increased protection  of riparian areas.   Nevertheless,                                                                   
     we  continue to  believe that  SB 7  does not  guarantee                                                                   
     adequate  or   reliable  funding  for   the  university.                                                                   
     Simply put,  the university's  full attention should  be                                                                   
     directed towards education,  where it has expertise, and                                                                   
     not   be  diverted   towards  the   complex  and   often                                                                   
     contentious arena  of land management.   We urge  you to                                                                   
     oppose   this   legislation   and  instead   seek   more                                                                   
     effective,  viable   ways  that  address   the  imminent                                                                   
     financial needs of the university.                                                                                         
     We  continue  to  have  serious   concerns  with  SB  7,                                                                   
     It  robs Alaskans  of  more effective  opportunities  to                                                                   
     capitalize  on our  natural assets,  rather than  simply                                                                   
     liquidating them to finance a specific state function.                                                                     
     It  is deleterious  to  local  economies.   Because  the                                                                   
     university  must  seek  to   maximize  revenue,  it  has                                                                   
     rapidly liquidated  its existing timber assets  and then                                                                   
     exported  these  valuable  Alaskan   resources,  in  the                                                                   
     round, at  significant cost to local economies.   During                                                                   
     past  timber  sales  such  as  those  at  Yakataga,  the                                                                   
     university has  ignored local processing  and local-hire                                                                   
     Because  of  the  university's   aggressive  development                                                                   
     polices,   the   bill  threatens   fish   and   wildlife                                                                   
     resources,  as well  as the  subsistence,  recreational,                                                                   
     and commercial  uses that depend on them.   It threatens                                                                   
     community  water sources  and local  use, expansion  and                                                                   
     planning.   At  both the  local  and regional  [levels],                                                                   
     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  new  draft  committee                                                                   
     substitute  to ensure  access,  SB 7  may 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  commercial  activities                                                                   
     that Alaskans depend upon.                                                                                                 
     Alaskans deserve  a strong university for  our children,                                                                   
     but  we  urge  you to  support  the  university  through                                                                   
     appropriations, not through land giveaways like SB 7.                                                                      
Number 2776                                                                                                                     
REPRESENTATIVE BARNES  asked whether Ms. Schrader is  aware of the                                                              
state budget deficit.                                                                                                           
MS. SCHRADER replied, "Yes."                                                                                                    
REPRESENTATIVE BARNES asked where  Ms. Schrader would propose that                                                              
the state get the money to fund the university.                                                                                 
MS.  SCHRADER replied  that she  has  followed all  of the  budget                                                              
discussions for  many years,  but she does  not have  the answers.                                                              
She pointed  out that one  possible consideration, with  a careful                                                              
approach, would  be to  use some of  the permanent fund  earnings.                                                              
She indicated that she believes helping  to support the university                                                              
is a valid use of those funds.                                                                                                  
REPRESENTATIVE BARNES wondered if  the ACV will change its mind on                                                              
RS 2477 rights-of-way, which it has traditionally opposed.                                                                      
MS. SCHRADER  replied that ACV probably  will not.   She explained                                                              
that there  are many aspects  to the access  issue and RS  2477 is                                                              
just one of those.   She clarified that it does  not mean that the                                                              
ACV  members have  any less  interest  in maintaining  appropriate                                                              
access by appropriate means to public land.                                                                                     
Number 2666                                                                                                                     
REPRESENTATIVE  BARNES  wondered if  Ms. Schrader  could  identify                                                              
what she means by appropriate access.                                                                                           
MS. SCHRADER indicated that it would  obviously vary, depending on                                                              
who is being addressed;  it has to be taken on  a case-by-case and                                                              
area-by-area basis.   There are  certainly public lands  that lend                                                              
themselves well to  all types of access, including  motorized, and                                                              
there are  other lands where,  for a  variety of reasons  - mainly                                                              
habitat protection and conflicting  uses - it is better to look at                                                              
a more controlled form of access.                                                                                               
REPRESENTATIVE  BARNES wondered  if  ACV would  be  in support  of                                                              
logging in the state.                                                                                                           
Number 2611                                                                                                                     
MS. SCHRADER pointed  out that one of the 40  organizations of the                                                              
ACV  is  the Southeast  Alaska  Conservation  Council,  which  has                                                              
always  supported  a  sustained  value-added  timber  industry  in                                                              
Southeast Alaska.   She added that  the ACV would certainly  be in                                                              
support of   a sustained  value-added timber industry  in portions                                                              
of Alaska,  although it  is difficult when  trying to  compare the                                                              
boreal  forest around  Fairbanks  to the  temperate rainforest  in                                                              
Southeast.   She emphasized that  ACV's support would  depend upon                                                              
where the activity was taking place.                                                                                            
REPRESENTATIVE BARNES  noted that she has never  heard from anyone                                                              
from  a conservation  organization in  support of  logging in  the                                                              
REPRESENTATIVE  COWDERY  wondered  if  Ms.  Schrader  thought  the                                                              
private sector could do the disposal  program without any costs to                                                              
the state.                                                                                                                      
MS. SCHRADER responded that she doesn't have that information.                                                                  
REPRESENTATIVE  COWDERY   explained  that  the   Federal  Activity                                                              
Inventory Reform Act  (FAIRA) gives a definition  of an inherently                                                              
governmental function, and that function  is so intimately related                                                              
to public  interest as  to require  its performance by  government                                                              
employees.   He pointed  out that  the disposal  of land  probably                                                              
would not fit that category.                                                                                                    
MS. SCHRADER  replied that  it is something  one may want  to look                                                              
REPRESENTATIVE COWDERY  pointed out that one area  the legislature                                                              
might look  at, to find some  money, is activities that  the state                                                              
does but which the private sector could do at a cost savings.                                                                   
Number 2388                                                                                                                     
KEN TAYLOR, Director, Division of  Habitat and Restoration, Alaska                                                              
Department of Fish and Game (ADF&G),  indicated he wanted to voice                                                              
some concern that  the department had with the  proposed committee                                                              
substitute (CS)  that came  to the committee.   He noted  that the                                                              
committee seems to  have put a lot of effort  into addressing some                                                              
of the points that he was going to make.                                                                                        
MR. TAYLOR told  members that the department's  main concerns have                                                              
to do with  the disposal of  land that is in  either legislatively                                                              
designated  areas -  such as  critical habitat  areas, refuges  or                                                              
sanctuaries  -  or other  areas  that  the department  has  worked                                                              
through some  process to identify  - areas that are  important for                                                              
fish and wildlife  values or that are important  as access points,                                                              
for people to access those resources.                                                                                           
Number 2274                                                                                                                     
CLIFF EAMES,  Alaska Center for  the Environment  (ACE), testified                                                              
via teleconference from Anchorage.   He indicated that the ACE has                                                              
consistently opposed proposals to  provide additional land for the                                                              
University of  Alaska, in  spite of their  strong support  for the                                                              
university.  They  believe that such a transfer  would create more                                                              
conflicts than solutions  to problems.  He informed  the committee                                                              
that the ACE  was heavily involved in the attempts  to resolve the                                                              
Mental  Health  Land Trust  situation,  as  well as  several  land                                                              
exchange attempts  that would have transferred public  domain land                                                              
into private  or quasi-private  ownership; there  has been  a huge                                                              
amount of conflict and litigation.                                                                                              
MR. EAMES pointed  out that some of the ACE's concerns  have to do                                                              
with whether  a proposal might  be an unconstitutional  dedication                                                              
of funds;  even if it is a  legal disposal, they  question whether                                                              
it will nevertheless  violate the policy behind  dedicating funds.                                                              
They  believe that  it is  wise to  devote a  substantial part  of                                                              
Alaska's  resource  base  to  a   single  entity  and  remove  the                                                              
opportunity  through  the  yearly appropriation  process  to  make                                                              
decisions about what is most important.                                                                                         
MR. EAMES  also expressed concern  about the effect of  the public                                                              
land-use  planning process.   They  believe that  in spite  of the                                                              
attempt  to  ensure  access  to  the  land,  it  would,  in  fact,                                                              
eliminate  or reduce  a variety  of  existing public  uses or  the                                                              
quality of those public uses.  It  could adversely affect fish and                                                              
wildlife,  although  they  [ACE]   are  pleased  to  see  the  new                                                              
provision that should  reduce some of the impacts.   He added that                                                              
the disposals  and subsequent  development would create  conflicts                                                              
for rural residents  and would reduce public participation  in the                                                              
management of  the land.   He noted that  they [ACE]  would rather                                                              
see the university  funded through general funds,  and there might                                                              
be something  that the state  could do  to build a  strong private                                                              
endowment for the  university.  He pointed out that  many - if not                                                              
all - conservationists  do believe it would be wise  to look at an                                                              
income tax for the state in order  to raise sufficient revenues to                                                              
fund important programs.                                                                                                        
Number 2073                                                                                                                     
REPRESENTATIVE BARNES  referred to the  issue raised by  Mr. Eames                                                              
about  the  constitutionality  of  the  legislature's  ability  to                                                              
transfer  lands.   She  directed his  attention  to Article  VIII,                                                              
Section 9,  in the Constitution of  the State of Alaska,  where it                                                              
     Subject   to  the  provisions   of  this  section,   the                                                                   
     legislature may  provide for the sale or  grant of state                                                                   
     lands,  or   interests  therein,  and   establish  sales                                                                   
     procedures.   All  sales or  grants  shall contain  such                                                                   
     reservations  to the State  of all  resources as may  be                                                                   
     required by Congress or the  State and shall provide for                                                                   
     access to these resources.   Reservation of access shall                                                                   
     not unnecessarily  impair the  owners' use, prevent  the                                                                   
     control  of  trespass,  or   preclude  compensating  for                                                                   
REPRESENTATIVE  BARNES  said  the legislature  therefore  has  the                                                              
authority to do so.                                                                                                             
REPRESENTATIVE  COWDERY   referred  to  the  budget   deficit  and                                                              
wondered what  Mr. Eames thinks the  state should not  fund, since                                                              
the state  obviously  cannot fund  everything.   He noted that  if                                                              
there were a state income tax, as  Mr. Eames recommended, it would                                                              
only produce about  $260 million per year, yet there  is a $600 to                                                              
$700 million state deficit.                                                                                                     
MR.  EAMES replied  that he  does not  know where  the income  tax                                                              
figure came from and would need to  explore that further, but they                                                              
would  at least  have some  additional  revenues.   He added  that                                                              
there  might also  be the  possibility  of using  portions of  the                                                              
permanent fund, as Ms. Schrader had pointed out.                                                                                
Number 1896                                                                                                                     
REPRESENTATIVE  COWDERY said it  still goes back  to the  issue of                                                              
the general  fund; the money will  still have to  be appropriated,                                                              
and there still is a large deficit.   He added that the public had                                                              
voted on  whether to use any  of the permanent fund  earnings, and                                                              
they were clear about not wanting to do that.                                                                                   
DICK  BISHOP,  Vice  President,   Alaska  Outdoor  Council  (AOC),                                                              
indicated that the AOC has followed  this legislation for a number                                                              
of  years.   He explained  that the  AOC supports  the concept  of                                                              
enhancing the self-sufficiency  of the University  of Alaska; they                                                              
hope  that the  potential of  a significant  university land  base                                                              
will  contribute  to that  goal.    Their interests  and  concerns                                                              
relate  to  ensuring that  the  public  purposes of  state  lands,                                                              
waters and resources  are not seriously compromised,  and that the                                                              
following  are  recognized  and  accommodated:    prime  fish  and                                                              
wildlife habitat; public access to  lands and waters; and fishing,                                                              
hunting and trapping.   It appears that Version  S addresses those                                                              
concerns, and the AOC supports passage of the bill.                                                                             
Number 1590                                                                                                                     
WENDY  REDMAN,  Vice President,  Statewide  University  Relations,                                                              
University of  Alaska, pointed  out the four  top priorities:   to                                                              
identify  and  dispose  of non-appreciating  assets;  to  actively                                                              
develop  university  land  consistent   with  market  demands;  to                                                              
increase the pool  of developable land; and to  acquire additional                                                              
urban  commercial  property  and  land  resources  with  near-term                                                              
development  potential.   She noted  that a question  had come  up                                                              
regarding the annual receipts and  what they are generating on the                                                              
property  that they  have right  now, which  about 150,000  acres.                                                              
She  indicated  that  they  currently   have  a  land  grant;  the                                                              
endowment is  $102 million and last  year they generated  about $8                                                              
million in earnings on those lands.                                                                                             
MS. REDMAN referred to Ms. Schrader's  comment that the university                                                              
had liquidated its  timber land in Yakataga; Ms.  Redman clarified                                                              
that  they have  only cut 12  percent  of the timber  on the  Gulf                                                              
Coast.   Next she  referred to Mr.  Loeffler's comments  regarding                                                              
competition  with  municipalities;  she indicated  that  they  had                                                              
tried to  address that in  the bill.   She stressed the  fact that                                                              
the governor  and the  commissioner have  total control  over what                                                              
lands are  even available to the  university to select,  and there                                                              
is  no  opportunity  for  appeal  by the  university.    She  also                                                              
referred  to Mr.  Loeffler's  comments  on subsurface  rights  and                                                              
explained  that  it  has  been researched  by  many  lawyers;  the                                                              
university  is   a  pre-statehood   agency,  which  means     that                                                              
university  land   grant  lands  are  not  subject   to  the  same                                                              
provision.   They do,  in fact,  have subsurface  rights on  their                                                              
lands, she noted.                                                                                                               
MS. REDMAN  pointed out  that there are  no general funds  used to                                                              
manage  university  lands;  all management  costs  come  from  the                                                              
proceeds  of  the land  itself.    She referred  to  Mr.  Taylor's                                                              
comments on  legislatively designated  areas and pointed  out that                                                              
those are excluded in the bill and  have been since the very first                                                              
bill.  She indicated that a couple  of issues continue to come up.                                                              
For  instance, the  constitutionality  question  is another  issue                                                              
that has  been researched, and it  has never been shown  that this                                                              
would be  unconstitutional.  Rather, it  is an effort on  the part                                                              
of  the university  to try  to find  some  small way  to be  self-                                                              
sustainable.  She  agreed with almost everyone  that had testified                                                              
on the bill  that land is not  a panacea for the  university; they                                                              
would much prefer  to have money.  She pointed out  that land is a                                                              
very long-term  investment and it  will not solve the  problems of                                                              
the university.   However, it could provide a  small annual stream                                                              
of revenue.                                                                                                                     
Number 1188                                                                                                                     
CO-CHAIR MASEK closed public testimony.   She offered Amendment 1,                                                              
which read:                                                                                                                     
     Page 4, lines 26-28:                                                                                                       
     Insert "not" after "shall"                                                                                                 
     Replace "unless" for "if"                                                                                                  
     Replace "acts to approve" for "does not disapprove"                                                                        
     New sentence to read:                                                                                                      
          A list of selections submitted shall not be                                                                         
     considered approved for conveyance  to the University of                                                                   
     Alaska [if]  unless the  legislature [does not  approve]                                                                 
     acts to approve the list during  the legislative session                                                                 
     during  which  the  list  was   submitted.    [New  text                                                                   
     underlined and deleted text bracketed]                                                                                     
CO-CHAIR MASEK  asked whether  there were  any objections.   There                                                              
being none, Amendment 1 was adopted.                                                                                            
REPRESENTATIVE  COWDERY asked  whether it  was the  intent of  the                                                              
chair to move the bill.                                                                                                         
CO-CHAIR MASEK indicated that she  would like to hold it until the                                                              
next meeting.                                                                                                                   
Number 1036                                                                                                                     
REPRESENTATIVE KAPSNER  stated that she is not in  favor of seeing                                                              
the bill  leave the committee  at this  time.  She  explained, for                                                              
example,  that the  Northslope Borough  and  the Northwest  Arctic                                                              
Slope  Borough haven't  even  selected  all of  their  land.   She                                                              
emphasized  that she  is  not opposed  to  funding the  university                                                              
system, but she is not sure this is the best way.                                                                               
[SB 7 was held over.]                                                                                                           

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