Legislature(2005 - 2006)SENATE FINANCE 532

05/08/2005 01:00 PM Senate FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Call of the Chair --
HB 26 SHORT-TERM COM FISHING CREWMEMBER LICENSE
Moved CSHB 26(FIN) Out of Committee
+ HB 94 ELECTIONS/VOTERS/POLTICAL PARTIES TELECONFERENCED
Moved SCS CSHB 94(STA) Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= HB 53 CHILDREN IN NEED OF AID/ADOPTION/GUARDIAN TELECONFERENCED
Moved SCS CSSSHB 53(FIN) Out of Committee
+= HB 98 NONUNION PUBLIC EMPLOYEE SALARY & BENEFIT TELECONFERENCED
Moved SCS CSHB 98(FIN) Out of Committee
+= HB 279 OUTDOOR ADVERTISING; ENCROACHMENTS TELECONFERENCED
Moved SCS CSHB 279(FIN) Out of Committee
+= HB 130 UNIVERSITY LAND GRANT/STATE FOREST TELECONFERENCED
Moved SCS CSHB 130(FIN) Out of Committee
                                                                                                                                
     CS FOR HOUSE BILL NO. 130(FIN) am                                                                                          
     "An  Act relating  to the grant  of certain  state land  to the                                                            
     University  of Alaska; relating  to the duties of the  Board of                                                            
     Regents;  establishing  the  university  research  forest;  and                                                            
     providing for an effective date."                                                                                          
                                                                                                                                
                                                                                                                                
This was  the second  hearing for  this bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
PETE  KELLY,  State   Relations  Director,  University   of  Alaska,                                                            
specified  that the  University is  a State land  grant entity  that                                                            
"was  founded with  the intent  that it  would create  a land  grant                                                            
trust"  that would  supplement its  day-to-day  activities. To  that                                                            
point, he emphasized  that the Land  Grant Trust is operational  and                                                            
does financially  support the University.  The debate regarding  the                                                            
University  land  grant  issue  began in  1915  when  a territorial                                                             
delegate,  James  Wickersham,  envisioned  a  State  university.  He                                                            
lobbied  before  the United  States  Congress  for this  land  grant                                                            
endowment,  and, in  1929, the  State received  its University  land                                                            
grant entitlement.  Unfortunately,  at the time, a vast majority  of                                                            
the State was  not surveyed; therefore  the process of transferring                                                             
land  was slow.  Only  two  grants,  totally  approximately  113,000                                                            
acres,  had  been transferred  to  the  University  by the  time  of                                                            
Statehood,  and "the  Statehood Act  superseded all  of the  federal                                                            
legislation dealing with Alaska."                                                                                               
                                                                                                                                
Mr. Kelly  stated that the  total acreage  that was provided  to the                                                            
University's  land  grant program  amounted  to 140,000  acres:  the                                                            
combination of the 113,000  federally granted acreage and other land                                                            
grants  to the  University. The  University  is "a  very small  land                                                            
grant institution"  which only ranks ahead of Hawaii  and Delaware's                                                            
land grant university programs in size.                                                                                         
                                                                                                                                
7:32:04 PM                                                                                                                    
                                                                                                                                
Mr. Kelly characterized  the University as having "a very successful                                                            
land department". Since  1986, the University has sold 1,200 parcels                                                            
of land.  The University  is "the most successful  public entity  in                                                            
the  State   for   getting  land   into  private   ownership".   The                                                            
University's  educational  endowment,  which  is  established  as  a                                                            
percent  of   market  value  (POMV)   payout  structure,   nets  the                                                            
University  approximately  $5,000,000 annually.  The endowment  fund                                                            
currently has a value of approximately $135,000,000.                                                                            
                                                                                                                                
Mr.  Kelly  stated  that  during  the  process  involved  with  this                                                            
legislation,  a significant  amount of public  comment in regard  to                                                            
how the University "treats its disposal of land" occurred.                                                                      
                                                                                                                                
7:32:40 PM                                                                                                                    
                                                                                                                                
Mr. Kelly communicated  that the University has attempted "to assure                                                            
everyone  at every step"  that "a  very very public  process"  is in                                                            
place.  "University land  issues are  routine subjects  of Board  of                                                            
Regents meetings" which  are public forums. The Board's decisions on                                                            
land are formed in consideration of the public process.                                                                         
                                                                                                                                
Mr. Kelly noted  that one of the greatest areas of  concern relating                                                            
to  this bill  has  been in  regard  to land  parcels  in  Southeast                                                            
Alaska.  To that  point,  he noted  that  private land  holdings  in                                                            
Southeast  Alaska  amount  to  approximately   one  percent  of  the                                                            
landmass. This  bill would change  that percentage "to one  and two-                                                            
tenths of one  percent". The University  has addressed the  concerns                                                            
of municipalities  that might  attempt to form  boroughs at  a later                                                            
date,  and in  addition  has  agreed to  take  lands that  might  be                                                            
subject to federal claims.  Furthermore, the University would accept                                                            
land  containing   established  trails.  In  the  past,   agreements                                                            
regarding  such trails  have been  made, to include  such things  as                                                            
providing easements  or relocation of the trail. Nonetheless,  a few                                                            
concerns continue.  "The University is a responsible  land developer                                                            
and a successful  land developer."  Even were  the University  to be                                                            
granted the  entirety of the lands  proposed in this bill,  it would                                                            
continue  to  be   defined  as  a  small  land  grant  institution.                                                             
Nonetheless,  the University  is looking forward  to increasing  its                                                            
land   holdings  to   a  level   "that  is   consistent  with   most                                                            
universities".                                                                                                                  
                                                                                                                                
7:34:18 PM                                                                                                                    
                                                                                                                                
Co-Chair Green  asked for verification that the land  being proposed                                                            
for transfer to the University was currently State owned land.                                                                  
                                                                                                                                
Mr. Kelly affirmed.                                                                                                             
                                                                                                                                
Co-Chair  Green   understood  therefore  that  the   State  has  the                                                            
authority to either sell that land or give it to someone else.                                                                  
                                                                                                                                
JANET  BURLESON-BAXTER,  Special   Assistant  to  the Commissioner,                                                             
Department of  Natural Resources affirmed that the  land in question                                                            
could be sold.                                                                                                                  
                                                                                                                                
Co-Chair  Green ascertained  therefore, that  the legislation  would                                                            
not  change  the classification  of  the  land,  or making  it  more                                                            
available  or more or less  restrictive.  The proposal would  simply                                                            
move land from one State entity to another.                                                                                     
                                                                                                                                
BOB  LOEFFLER,  Director,  Division   of  Mining,  Land  and  Water,                                                            
Department  of Natural Resources testified  via teleconference  from                                                            
an offnet  site and  agreed that,  "in general",  Co-Chair Green  is                                                            
correct that the State  "could do any number of things with the land                                                            
although there are land  use plans that say what" the State is going                                                            
to do with  the land. "For the most  part, the lands" identified  in                                                            
this  bill  that are  located  in  Southeast  Alaska  are  currently                                                            
included  in "development  categories".  To  that point,  the  State                                                            
could plan "to set the  land aside for a kind of development whether                                                            
that be sales  or commercial lodges  or whatever. However,  he noted                                                            
that there are  two to four parcels, however, that  are inconsistent                                                            
with "what the State's planning says".                                                                                          
                                                                                                                                
7:36:47 PM                                                                                                                    
                                                                                                                                
JOE  BEEDLE,   Vice  President,  Finance,   University  of   Alaska,                                                            
testified  via  teleconference  from an  offnet  site  and spoke  in                                                            
appreciation  for the  Committee subcommittee's  May  2, 2005  three                                                            
hour public hearing in  which approximately 40 individuals testified                                                            
about  the bill.  He also  noted that  "numerous  misconceptions  or                                                            
misunderstandings"  about  this  legislation  were  addressed  in  a                                                            
report  titled  "Department  of Natural  Resources  University  Land                                                            
Transfer Factsheet February 4, 2005" [copy on file].                                                                            
                                                                                                                                
Mr. Beedle  expressed that  the University  has deemed the  language                                                            
proposed in the Committee's  committee substitute, draft Version 24-                                                            
GH1034\P as being acceptable.                                                                                                   
                                                                                                                                
Co-Chair Green  asked whether any  of the land parcels selected  for                                                            
sale would  negatively impact  the Iditarod  Trail Sled Dog  Race or                                                            
other traditional dog sled racing trails.                                                                                       
                                                                                                                                
7:38:10 PM                                                                                                                    
                                                                                                                                
Mr. Loeffler  informed the Committee  that the Iditarod trail  would                                                            
not  be  affected  by  the  proposed  land  selection;  however  the                                                            
Haessler-Norris  Trail  System  does  transit  one of  the  selected                                                            
parcels.  In response  to  this concern,  the  State  has agreed  to                                                            
reserve  the Haessler-Norris  Trail  System before  that parcel  was                                                            
conveyed to  the University. He also  noted that that specific  land                                                            
parcel  is classified  for "settlement,  meaning  the State had  the                                                            
expectation  of selling it". Regardless  of whether that  parcel was                                                            
sold to  the University  or sold  for settlement,  the trail  system                                                            
would be preserved and protected.                                                                                               
                                                                                                                                
Co-Chair Green acknowledged the comments.                                                                                       
                                                                                                                                
7:39:10 PM                                                                                                                    
                                                                                                                                
Senator Hoffman  noted that during the public testimony  hearings on                                                            
this  bill, concern  was voiced  regarding  Native  claims on  land,                                                            
specifically to Parcel 10 around McCarthy.                                                                                      
                                                                                                                                
Mr. Loeffler informed  the Committee that the Department  of Natural                                                            
Resources is unaware  of any Native land allotments  in the McCarthy                                                            
parcel. Nonetheless,  were Native allotments uncovered,  "they would                                                            
have precedence over conveyance to the University".                                                                             
                                                                                                                                
Senator Hoffman  asked whether this would also be  the case with any                                                            
other parcels being considered for conveyance.                                                                                  
                                                                                                                                
Mr. Loeffler  affirmed that  to be true. Language  was added  to the                                                            
bill that specifically  stated that Native allotments  were "a valid                                                            
possessary  right  that  would  remain   valid".  In  addition,  the                                                            
question pertaining  to Native allotments to parcels  such as Biorka                                                            
Island  and  Lisianski  Peninsula   in Southeast   Alaska  would  be                                                            
addressed before those  parcels could be conveyed to the University.                                                            
                                                                                                                                
Senator  Stedman   asked  that  the  report  from  the  Committee's                                                             
subcommittee assigned to  review this bill be provided. In addition,                                                            
he asked that  the public process involved with this  legislation be                                                            
reviewed.                                                                                                                       
                                                                                                                                
Co-Chair Wilken  read the May 7, 2005  memorandum [copy on  file] he                                                            
wrote to Co-Chair  Green on behalf  of the Committee's subcommittee                                                             
on HB 130 as follows.                                                                                                           
                                                                                                                                
     The Senate Finance  Subcommittee for House Bill 130, University                                                            
     Land Grant/State  Forest, met Monday evening,  May 2, 2005. The                                                            
     purpose  of the  meeting  was to  provide the  opportunity  for                                                            
     statewide public testimony.                                                                                                
                                                                                                                                
     The following is a numerical summary of the testimony given:                                                               
                                                                                                                                
     1) Total Number of Participants                39                                                                        
                                                                                                                                
     2) Geographical Area of the State                                                                                        
        S.E. Alaska Participants          24        61%                                                                         
        McCarthy Area Participants         7        18%                                                                         
        Mat-Su Area Participants           5        13%                                                                         
        Other Area Participants            3         8%                                                                     
                                          39        100%                                                                        
                                                                                                                                
     In addition, I would make the following comments:                                                                          
                                                                                                                                
          1) In regards to Southeast Alaska:                                                                                  
          The  testimony was spread  across many sites in  Southeast                                                            
          Alaska.  As you would expect, the testimony  was localized                                                            
          by  sub-area across  the broad  region. Most participants                                                             
          recommended  that specific land parcels not be conveyed to                                                            
          the University of Alaska.                                                                                             
                                                                                                                                
          2) In regards to the McCarthy area:                                                                                 
          The  testimony  revolved  around  the United  States  Park                                                            
          Service's   continued  restriction  and  constriction   of                                                            
          usable  land around the McCarthy area.  It was stated that                                                            
          further  withdrawals by  the University would just  make a                                                            
          bad situation worse.                                                                                                  
                                                                                                                                
          3) In regards to the Mat-Su area:                                                                                   
          The  testimony was almost entirely confined  to the Frying                                                            
          Pan  Lake area and the multiple system  of world-class dog                                                            
          mushing trails situated therein.                                                                                      
                                                                                                                                
     Thank you for the opportunity to accept the public's input on                                                              
     this important legislation. I commend House Bill 130 to you                                                                
      and stand ready to assist in passing it from Committee.                                                                   
                                                                                                                                
                          Gary Wilken, subcommittee chair                                                                       
                                                                                                                                
Senator  Stedman spoke  of his concerns  regarding  "the lack  of" a                                                            
public   process  pertaining   to  this  bill.   The  multitude   of                                                            
correspondence  he  has  received  from House  District  2  includes                                                            
correspondence  from mayors,  councils,  and assemblies  as well  as                                                            
individuals.  The  fact  that  the  majority  of  communities  in  a                                                            
specific  district have requested  their elected  official  to "slow                                                            
the process  down and  to have  more dialogue  with the communities                                                             
affected and  each community has a  little difference issues…"  is a                                                            
matter  of   concern.  The  issue   for  some  of  the  unorganized                                                             
communities  that were considering  expanding and forming  boroughs,                                                            
was that the land  selected was the only land available.  He allowed                                                            
that some of those issues have been addressed.                                                                                  
                                                                                                                                
Senator Stedman  continued that communities  that are boroughs  have                                                            
voiced  concern   that  the  public  process  guidelines   that  the                                                            
Department of Natural Resources  must follow regarding land disposal                                                            
"are   substantially   different"  than   those   required  of   the                                                            
University.  The concern  is  that the  in-depth  planning that  was                                                            
conducted over  the last couple of decades including  such things as                                                            
comprehensive   plans  and  coastal   management  plans,   has  been                                                            
"virtually derailed".                                                                                                           
                                                                                                                                
Senator Stedman  informed the Committee that letters  of concern are                                                            
continuing  to arrive  in  his office  from  communities  throughout                                                            
Southeast   Alaska.  "When  there's   that  much  concern,   there's                                                            
something wrong  with the system." As there does not  appear to be a                                                            
pressing  time element  pertaining  to  this legislation,  and  even                                                            
though "technically  the legislative process being  conducted is the                                                            
proper  process, "extra  efforts" could  be taken  "in such a  small                                                            
state" when there are such "broad concerns from communities".                                                                   
                                                                                                                                
Senator  Stedman also  echoed Senator  Hoffman's  concern  regarding                                                            
Native allotment  issues. Many of  the parcels "in Southeast  Alaska                                                            
are intertwined with either  Native grave sites or Native allotments                                                            
or  potential  Native allotments".   Written  records prior  to  the                                                            
creation  of the Tongass  Regional Forest in  1907, were sparse.  As                                                            
Native elders  die, it is difficult  to transfer the knowledge  from                                                            
one generation  to the next and attempt  "to substantiate  it to the                                                            
Western world  of paper and documentation".  While some Native  land                                                            
has been deeded and several  allotments have been platted but not of                                                            
yet deeded, quite a few have not reached the platting phase.                                                                    
                                                                                                                                
7:48:07 PM                                                                                                                    
                                                                                                                                
Senator  Stedman  opined  that  "the  more  legitimate  concerns  of                                                            
watershed issues and planning  issues" are "screened or derailed" by                                                            
objections  from people  who  simply do  not "want  a neighbor".  He                                                            
urged that Committee  members "look beyond those "non-substantiated                                                             
or non-substantial  concerns and focus  more on the issues"  brought                                                            
forth  by the  local  communities.  He opined  that  "a poor  public                                                            
process"   has   been  experienced   with   this   legislation,   as                                                            
"unfortunately"  the concerns  of  the major  communities have  been                                                            
drowned  out".  It  has  not  "instilled   good  will"  between  the                                                            
University and the local communities.                                                                                           
                                                                                                                                
Co-Chair Wilken  moved to adopt the SCS CS HB 130(FIN),  Version 24-                                                            
GH1034\P as the working document.                                                                                               
                                                                                                                                
Senator Stedman  remarked that Version  "P" "looks better  than some                                                            
of the other bill versions".                                                                                                    
                                                                                                                                
There being  no objection,  Version "P" was  ADOPTED as the  working                                                            
document.                                                                                                                       
                                                                                                                                
Amendment  #1: This amendment  deletes "."  following "Bay"  in Sec.                                                            
3(n)(7) on page six, line nine and inserts ";                                                                                   
     (8) Parcel Number ST. 1002, Pelican;                                                                                       
     (9) Parcel Number MF. 1002, Idaho Inlet;                                                                                   
     (10) Parcel Number PA 1002, Mite Cove;                                                                                     
     (11) Parcel Number ST. 1001, Middle Island;                                                                                
     (12) Parcel Number PA. 1002, Biorka Island;                                                                                
     (13) Parcel Number PA. 1001, Port Conclusion;                                                                              
     (14) Parcel Number ST.LS.1001, Lisianski Peninsula;                                                                        
     (15) Parcel Number SD. 1001, Beecher Pass;                                                                                 
     (16) Parcel Number SD. 1001, Favor Peak;                                                                                   
     (17) Parcel Number CS.TL. 1001, Three Lake Road;                                                                           
     (18) Parcel Number SD. 1001, Read Island;                                                                                  
     (19) Parcel Number SD. 1001, Whitney Island;                                                                               
     (20) Parcel Number CS.EW. 1001, Earl West Cove;                                                                            
     (21) Parcel Number CS.OV. 1001, Olive Cove;                                                                                
     (22) Parcel Number SD. 1001, Thoms Place;                                                                                  
     (23) Parcel Number PW.HK. 1001, Hook Arm;                                                                                  
     (24) Parcel Number HA.CH. 1001, Haines-Chilkoot;                                                                           
     (25) Parcel Number PW.NA. 1001, Naukati Sound."                                                                            
                                                                                                                                
In addition,  this amendment deletes  subsections "o", "p",  and "q"                                                            
in Sec. 3 beginning  on page six, line ten through  page seven, line                                                            
15.                                                                                                                             
                                                                                                                                
Senator Stedman moved Amendment #1.                                                                                             
                                                                                                                                
Co-Chair Green objected.                                                                                                        
                                                                                                                                
Senator  Stedman  stated  that this  amendment  would  increase  the                                                            
amount of parcels in Southeast  Alaska that would not be conveyed to                                                            
the University.  He noted that were  this amendment adopted  and the                                                            
University  and the State to continue  their desire to convey  these                                                            
parcels,  "a more amiable  public process  and working relationship                                                             
with the communities" could be established.                                                                                     
                                                                                                                                
[NOTE: Co-Chair Wilken chaired this portion of the meeting.]                                                                    
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR: Senator Stedman                                                                                                       
                                                                                                                                
OPPOSED:  Senator Dyson  Co-Chair Wilken,  Senator Hoffman,  Senator                                                            
Olson, and Co-Chair Green                                                                                                       
                                                                                                                                
ABSENT: Senator Bunde                                                                                                           
                                                                                                                                
The motion FAILED (1-5-1)                                                                                                       
                                                                                                                                
[NOTE: Co-Chair Green resumed chair.]                                                                                           
                                                                                                                                
Amendment  #2: This amendment  deletes "."  following "Bay"  in Sec.                                                            
3(n)(7) on page six, line nine and inserts ";                                                                                   
     (8)Parcel Number ST. 1001, Middle Island;                                                                                  
     (9) Parcel Number PA. 1002, Biorka Island;                                                                                 
     (10) Parcel Number PA. 1001, Port Conclusion;                                                                              
      (11) Parcel Number ST. LS. 1001, Lisianski Peninsula;"                                                                    
                                                                                                                                
Senator Stedman moved to adopt Amendment #2.                                                                                    
                                                                                                                                
Co-Chair Green objected.                                                                                                        
                                                                                                                                
Senator  Stedman explained  that this  amendment  would remove  land                                                            
parcels  within  the  City  and Borough  of  Sitka.  He  noted  that                                                            
language  had  been   added  to  the  bill  that  would   allow  the                                                            
unorganized  boroughs  of  Petersburg,   Pelican,  and  Wrangell  to                                                            
organize  by  the  year 2009.  Were  that  action  to  occur,  those                                                            
communities  could select from State  land around their communities                                                             
by the  year 2013.  That language  could not apply  to Sitka  as the                                                            
specified parcels  are within the  borough. Lisianski Peninsula  has                                                            
been logged; Biorka Island,  which is a secluded uninhabited island,                                                            
contains an aircraft communication station.                                                                                     
7:56:27 PM                                                                                                                    
                                                                                                                                
Senator Stedman noted that  the State has already sold the shoreline                                                            
areas  of Middle  Island. Therefore,  the  majority of  the land  on                                                            
Middle  Island  that  would  be conveyed  to  the  University  would                                                            
consist  of  a  small   mountain  in  the  center  of   the  island.                                                            
Discussions  have occurred  regarding demolishing  that mountain  as                                                            
jets fly  over it on their  approach to  the Sitka airport.  Neither                                                            
Middle Island nor Lisianski  Peninsula would be considered desirable                                                            
land sites. Port Conclusion has issues as well.                                                                                 
                                                                                                                                
Senator Dyson  asked Senator Stedman  whether Middle Island  was one                                                            
of the areas that contained military gun sites.                                                                                 
                                                                                                                                
Senator Stedman clarified that Biorka Island had gun placements.                                                                
                                                                                                                                
Mr.  Loeffler expressed  that  the University  could  utilize  these                                                            
areas in a manner consistent  with the needs of the Federal Aviation                                                            
Administration and within other physical parameters.                                                                            
                                                                                                                                
Senator Olson,  himself a  pilot, stated that  he has some  aviation                                                            
concerns relating  to conveying Biorka  Island and Middle  Island to                                                            
the University.                                                                                                                 
                                                                                                                                
Co-Chair  Green asked the  Department of  Natural Resources  whether                                                            
selection of these areas might raise aviation concerns.                                                                         
                                                                                                                                
Mr.  Loeffler  viewed  the  University   as being   "an intelligent                                                             
developer". While there  could "be things they would want to develop                                                            
around"…there  is "no significant disadvantage". They  could develop                                                            
the sites  in a manner  "consistent with"  the needs of the  Federal                                                            
Aviation  Administration  (FAA).  Were the  land was  not  developed                                                            
within ten years, the University's  Board of Regents could decide to                                                            
return it to the State if they deemed the land of "no value".                                                                   
                                                                                                                                
Mr.  Kelly informed  that  while the  FAA has  not  objected to  the                                                            
transfer of these land  parcels, they have asked that the University                                                            
contact them. The University has agreed to do so.                                                                               
                                                                                                                                
Senator Stedman noted that  Biorka Island contained some Native land                                                            
allotments.   In  addition,  Native   gravesites  have  been   found                                                            
"scattered amongst the  islands" around Sitka. Such sites could also                                                            
be found on Lisianski Peninsula.                                                                                                
                                                                                                                                
Co-Chair  Green  stated that  this  concern  could be  addressed  by                                                            
language in Sec. 3(e),  page three lines 27 through 31 that reads as                                                            
follows.                                                                                                                        
                                                                                                                                
     (e) Land  conveyed under this  section to the Board  of Regents                                                            
     in trust  for the University of Alaska is subject  to any valid                                                            
     possessory  interest or other  valid existing right,  including                                                            
     any  lease, license,  prospecting  site, claim,  sale,  permit,                                                            
     right-of-way,  Native  allotment, or easement  held by  another                                                            
     person,  including a  federal, state,  or municipal agency,  on                                                            
     the effective date of this section.                                                                                        
                                                                                                                                
8:01:55 PM                                                                                                                    
                                                                                                                                
Co-Chair  Green declared  that the  language in  this section  would                                                            
provide  "pretty  good safeguards  for  the various  interests  that                                                            
exist or might be found to exist".                                                                                              
                                                                                                                                
Senator Stedman  expressed that the only Native cemetery  gravesites                                                            
in Sitka were  developed after the Russians settled  in Sitka. Other                                                            
gravesites are unmarked.                                                                                                        
                                                                                                                                
A roll call was taken on the motion to adopt Amendment #2.                                                                      
                                                                                                                                
IN FAVOR: Senator Stedman, Senator Dyson, and Senator Olson.                                                                    
                                                                                                                                
OPPOSED: Senator Hoffman, Co-Chair Wilken, and Co-Chair Green.                                                                  
                                                                                                                                
ABSENT: Senator Bunde                                                                                                           
                                                                                                                                
The motion FAILED (3-3-1).                                                                                                      
                                                                                                                                
Amendment #2 FAILED to be adopted.                                                                                              
                                                                                                                                
Amendment  #3: This amendment deletes "AS 14.40.365 - 14.40.367[AS                                                              
14.40.365 - 14.40.368] in Sec.2, page two, line 31 through page                                                                 
three, line one and replaces it with "AS 14.40.365 - 14.40.368".                                                                
                                                                                                                                
[NOTE: This amendment was drafted to a bill version that was not in                                                             
the Committee's possession. The intent of the Committee was to                                                                  
conform the amendment to Version "X".]                                                                                          
                                                                                                                                
The amendment also adds a new bill section on page ten following                                                                
line nine as follows.                                                                                                           
                                                                                                                                
      Sec. 7. AS 14.40.368 is repealed and reenacted to read:                                                                   
          Sec. 14.40.368. Sale of land received under AS.                                                                       
     14.40.365.  (a)  The sale  of  land conveyed  to  the Board  of                                                            
     Regents  in  trust  for  the  University  of  Alaska  under  AS                                                            
     14.40.365  shall  be  made at  public  auction to  the  highest                                                            
     qualified  bidder as determined  by the Board of Regents.   The                                                            
     Board  of Regents  may accept  bids  and sell  land under  this                                                            
     section  at  no less  than 70  percent  of the  appraised  fair                                                            
     market  value of  the land.   To qualify  to participate  under                                                            
     this  section in a public  auction of  land under this  section                                                            
     that  is other  than commercial,  industrial,  or agricultural                                                             
     land, a bidder  shall have been a resident of  the state for at                                                            
     least  one year immediately preceding  the date of the  auction                                                            
     and  submit  proof  of  that  fact  as  the  Board  of  Regents                                                            
     requires.  A bidder may be represented by an  attorney or agent                                                            
     at the auction. An  aggrieved bidder may appeal to the Board of                                                            
     Regents  for reconsideration  within five days after  the sale.                                                            
     The  sale shall  be conducted  by  a person  designated by  the                                                            
     Board  of Regents,  and, at the  time of  sale, the  successful                                                            
     bidder shall deposit  with the Board of Regents an amount equal                                                            
     to at  least five percent  of the purchase  price.  The  person                                                            
     designated  by the Board of Regents  to conduct the  sale shall                                                            
     immediately  issue a  receipt containing  a description  of the                                                            
     land  or property  purchased,  the price  bid,  and the  amount                                                            
     deposited. The receipt  shall be acknowledged in writing by the                                                            
     bidder.                                                                                                                    
          (b) Before the signing of the formal conveyance, the                                                                  
     Board  of Regents may reject  all bids when the best  interests                                                            
     of the state and the  University of Alaska justify this action.                                                            
      Land  offered  at  public  sale  but  not  sold  may  be  made                                                            
     available  at  private sale  for not  less than  its  appraised                                                            
     value.                                                                                                                     
          (c) The contract of sale for land sold at public auction                                                              
     under this section  shall require the remainder of the purchase                                                            
     price to be paid in  monthly, quarterly, or annual installments                                                            
     over a period  of not more than 20 years, with  interest at the                                                            
     rate  provided in  (i) of  this section.  Installment  payments                                                          
      plus interest shall be set on the level-payment basis.                                                                    
          (d) The contract for each sale must set out the period                                                                
     for the  payment of installments  and the total purchase  price                                                            
     plus interest.   With the consent of the Board  of Regents, the                                                            
     contract  may also include conditions,  limitations,  and terms                                                            
     considered  necessary and  proper to  protect the interests  of                                                            
     the  state and the University  of Alaska.   A violation  of any                                                            
     provision  of the contract  of sale  subjects the purchaser  to                                                            
     appropriate   administrative   and  legal   action,   including                                                            
     specific  performance, foreclosure,  ejectment, or other  legal                                                            
     remedies in accordance with applicable state law.                                                                          
          (e) If a contract under this section has been breached,                                                               
     the  Board of Regents  may issue  a decision  to foreclose  and                                                            
     terminate  the contract at any  time that is more than  31 days                                                            
     after  delivering  by certified  mail a written  notice of  the                                                            
     breach  to the address  of record of  the purchaser.   A breach                                                            
     caused  by  the  failure  to  make  payments  required  by  the                                                            
     contract  may be cured within  30 days after the notice  of the                                                            
     breach  has been received  by the purchaser  by payment  of the                                                            
     sum  in default together  with the  larger of  a fee of  $50 or                                                            
     five  percent of  the sum  in default.  If  there are  material                                                            
     facts  in  dispute  between   the  Board  of  Regents  and  the                                                            
     purchaser,  the purchaser  may submit  a written request  for a                                                            
     public  hearing  for the  review of  the facts  within 30  days                                                            
     after the notice of the breach has been received.                                                                          
          (f) On a determination that there has been a breach of                                                                
     the  contract  based  on  the  administrative  record  and  the                                                            
     evidence  presented at  a hearing, the  Board of Regents  shall                                                            
     issue a decision foreclosing  the interest of the purchaser and                                                            
     terminating  the contract.    The obligation  to make  payments                                                            
     under the  contract continues through the date  of the decision                                                            
     to foreclose by the Board of Regents.                                                                                      
          (g) The Board of Regents shall deliver the decision to                                                                
     foreclose  and terminate  personally to  the purchaser  or send                                                            
     the  decision to  foreclose and  terminate  by certified  mail,                                                            
     return  receipt  requested, to  the address  of  record of  the                                                            
     purchaser.    If the  breach  is  a failure  to  make  payments                                                            
     required  by the contract, the  decision must include  a notice                                                            
     to the  purchaser that if, within  30 days, the purchaser  pays                                                            
     to  the University  of Alaska  the  full amount  of the  unpaid                                                            
     contract  price, including all  accrued interest, and  any fees                                                            
     assessed under (e)  of this section, the Board of Regents shall                                                            
     issue to the purchaser  a deed to the land.  If full payment is                                                            
     not  made  within 30  days  or the  breach  is for  other  than                                                            
     failure   to  make   payment,  the   decision  forecloses   and                                                            
     terminates all legal  and equitable rights the purchaser has in                                                            
     the land.                                                                                                                  
          (h) Within 30 days, the purchaser may request that the                                                                
     Board of  Regents reconsider the decision.  The  final decision                                                            
     by the Board of Regents is reviewable under AS 44.62.560.                                                                  
          (i) The interest rate for contracts under this section is                                                             
     the prime  rate as reported in  the Wall Street Journal  on the                                                            
     first business  day of the month in which the  contract is sent                                                            
     to the  purchaser for signature,  plus three percent;  however,                                                            
      the total rate of interest may not exceed 13.5 percent.                                                                   
                                                                                                                                
In addition, the amendment deletes "AS 14.40.368 is repealed." on                                                               
page 11, line one and inserts the following.                                                                                    
                                                                                                                                
     AS 38.05.125(a) is amended to read:                                                                                        
          (a) Each contract for the sale, lease, or grant of state                                                              
     land, including land  conveyed to the Board of Regents in trust                                                          
     for the University  of Alaska under AS 14.40.365, and each deed                                                          
     to  state  land,   properties,  or  interest   in  state  land,                                                          
     including  land conveyed to the  Board of Regents in  trust for                                                          
     the  University  of  Alaska  under  AS  14.40.365,  made  under                                                          
     AS 14.40.368, AS 38.05.045  - 38.05.120, 38.05.321, 38.05.810 -                                                          
     38.05.825,   AS 38.08,  or  AS 38.50  except   as  provided  in                                                            
     AS 38.50.050  is subject  to the following  reservations:  "The                                                            
     party  of  the first  part,  Alaska,  hereby  expressly  saves,                                                            
     excepts  and  reserves  out  of the  grant  hereby  made,  unto                                                            
     itself,  its  lessees,  successors,  and assigns  forever,  all                                                            
     oils,  gases,  coal,  ores, minerals,  fissionable   materials,                                                            
     geothermal  resources,  and  fossils  of  every name,  kind  or                                                            
     description,  and  which  may be  in or  upon said  land  above                                                            
     described,  or any part thereof,  and the right to explore  the                                                            
     same for  such oils, gases, coal,  ores, minerals, fissionable                                                             
     materials,  geothermal  resources,  and  fossils,  and it  also                                                            
     hereby  expressly saves  and reserves  out of the grant  hereby                                                            
     made,  unto  itself,  its  lessees,  successors,   and  assigns                                                            
     forever,  the right to  enter by itself,  its or their  agents,                                                            
     attorneys,  and servants upon  said land, or any part  or parts                                                            
     thereof,  at any  and all  times for  the purpose  of  opening,                                                            
     developing,  drilling, and working  mines or wells on  these or                                                            
     other  land and  taking  out and  removing therefrom  all  such                                                            
     oils,  gases,  coal,  ores, minerals,  fissionable   materials,                                                            
     geothermal  resources, and fossils, and to that  end it further                                                            
     expressly  reserves out of the grant hereby made,  unto itself,                                                            
     its lessees, successors,  and assigns forever, the right by its                                                            
     or their  agents, servants and  attorneys at any and  all times                                                            
     to  erect, construct,  maintain,  and use  all such  buildings,                                                            
     machinery,  roads, pipelines,  powerlines, and railroads,  sink                                                            
     such shafts, drill  such wells, remove such soil, and to remain                                                            
     on said  land or any  part thereof for  the foregoing  purposes                                                            
     and  to occupy  as much  of said land  as may  be necessary  or                                                            
     convenient  for  such purposes  hereby expressly  reserving  to                                                            
     itself,  its lessees,  successors, and  assigns, as  aforesaid,                                                            
     generally  all rights  and power  in, to, and  over said  land,                                                            
     whether  herein  expressed  or  not,  reasonably  necessary  or                                                            
     convenient  to render  beneficial  and efficient  the  complete                                                            
     enjoyment   of  the  property   and  rights  hereby   expressly                                                            
     reserved.                                                                                                                  
                                                                                                                                
Senator  Stedman moved Amendment  #3. This  amendment would  require                                                            
the University  to  conduct the  "more restrictive"  public  process                                                            
required of the  Department of Natural Resources in  regards to land                                                            
disposal.                                                                                                                       
                                                                                                                                
MARY MONTGOMERY, University  of Alaska, testified via teleconference                                                            
from an offset site and  stated that, while she had not been able to                                                            
review  the  amendment,  "the University  would  object  to  turning                                                            
ourselves  into  another  Department   of Natural   Resources".  She                                                            
credited  the  absence of  the  process required  of  Department  of                                                            
Natural Resources  as being one of  the reasons that the  University                                                            
is  successful  in  its  land management   program.  The  University                                                            
currently has  "a very adequate public  process". The Department  of                                                            
Natural Resources is required  to meet a larger public interest. The                                                            
University's  Land Grant  program "is  to generate  revenue for  the                                                            
Trust while  balancing the community's  interest". Adoption  of this                                                            
amendment  would  serve  "to  turn  the  University   into  another"                                                            
Department  of Natural Resources.  That Department "has a  difficult                                                            
time in getting real estate  available and into public hands because                                                            
of the cumbersome process" they must conduct.                                                                                   
                                                                                                                                
Co-Chair Green objected to the amendment.                                                                                       
                                                                                                                                
Co-Chair Wilken  identified language in Sec. 4, page  seven, line 16                                                            
through page  eight, line 12 as "clearly"  defining the process  the                                                            
University must conduct  before disposing its land to a third party.                                                            
He reviewed  the policies  mandated in the  section. The attempt  to                                                            
address  land  disposal  concerns  "is  very  inclusive"  and  would                                                            
involve the local community.                                                                                                    
                                                                                                                                
8:06:08 PM                                                                                                                    
                                                                                                                                
Senator Olson stated that  one of his concerns was in regards to the                                                            
conveyance  of  University   land  "to another   entity  or  private                                                            
person".  To that point,  he asked whether  preference language  was                                                            
included  in  the bill  that  could  provide  a local  community  or                                                            
municipality priority conveyance rights over another entity.                                                                    
                                                                                                                                
Mr. Loeffler responded  in the affirmative. Language  in this regard                                                            
is included in Sec. 4(c) on page seven, lines 29 through 31.                                                                    
                                                                                                                                
     (c) Before the Board of Regents of the University of Alaska                                                                
     offers a parcel of land for sale under this section, the board                                                             
      shall offer first refusal to the closest municipality.                                                                    
                                                                                                                                
Co-Chair Green  commented that several issues have  been considered,                                                            
as exampled  by language in Sec. 3(k)  page three, lines  12 through                                                            
14 combined  with language  in Sec.  3(k)(3), page  three, lines  19                                                            
though 21. This language reads as follows.                                                                                      
                                                                                                                                
     (k)  Notwithstanding  any  other  provision  of  this  section,                                                            
     within  10 years after conveyance  of land under this  section,                                                            
     the Board of Regents  may reconvey to the Department of Natural                                                            
     Resources land                                                                                                             
                                                                                                                                
          (3) that the Board of Regents and the commissioner of                                                                 
          natural resources jointly agree is in the best interests                                                              
           of the state and the university to reconvey.                                                                         
                                                                                                                                
A roll call was taken on the motion to adopt amendment #3.                                                                      
                                                                                                                                
IN FAVOR: Senator Stedman                                                                                                       
                                                                                                                                
OPPOSED:  Senator Olson,  Senator Dyson,  Senator Hoffman,  Co-Chair                                                            
Wilken, and Co-Chair Green                                                                                                      
                                                                                                                                
ABSENT: Senator Bunde                                                                                                           
                                                                                                                                
The motion FAILED (1-5-1)                                                                                                       
                                                                                                                                
Amendment #3 FAILED to be ADOPTED.                                                                                              
                                                                                                                                
Co-Chair Wilken  moved to report SCS CS HB 130 (FIN)  from Committee                                                            
with individual recommendations and accompanying fiscal notes.                                                                  
                                                                                                                                
Co-Chair  Wilken amended  his motion  to include  the House  Finance                                                            
Committee Letter of Intent.                                                                                                     
                                                                                                                                
Senator Stedman objected.                                                                                                       
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR: Senator  Dyson, Senator  Hoffman, Senator Olson,  Co-Chair                                                            
Wilken, and Co-Chair Green                                                                                                      
                                                                                                                                
OPPOSED: Senator Stedman                                                                                                        
                                                                                                                                
ABSENT: Senator Bunde                                                                                                           
                                                                                                                                
The motion PASSED (5-1-1)                                                                                                       
                                                                                                                                
S CS CS  HB 130(FIN), accompanied  by the  House of Representatives                                                             
Finance  Committee Letter  of Intent,  was REPORTED  from  Committee                                                            
with  zero  fiscal  note  #1,  dated  January   25,  2005  from  the                                                            
Department of  Fish and Game; $21,600 fiscal note  #2, dated January                                                            
11, 2005 from the Department  of Law; $380,000 fiscal note #3, dated                                                            
January  12, 2005  from the  Department  of Natural  Resources;  and                                                            
$500,000 fiscal note #4,  dated February 4, 2005 from the University                                                            
of Alaska.                                                                                                                      
                                                                                                                                
8:10:38 PM                                                                                                                    
                                                                                                                                

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