Legislature(1999 - 2000)
03/03/2000 01:50 PM House FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
MARCH 3, 2000
1:50 P.M.
TAPE HFC 00 - 47, Side 1.
TAPE HFC 00 - 47, Side 2.
CALL TO ORDER
Co-Chair Therriault called the House Finance Committee
meeting to order at 1:50 P.M.
PRESENT
Co-Chair Therriault Representative Foster
Co-Chair Mulder Representative Grussendorf
Representative Austerman Representative Moses
Representative Bunde Representative Phillips
Representative J. Davies Representative G. Davis
Representative Williams was not present for the meeting.
ALSO PRESENT
Mike Tibbles, Staff, Representative Gene Therriault; Kevin
Hand, Staff, Representative Andrew Halcro; Jim Pound, Staff,
Senator Robin Taylor; Susan Schrader, Alaska Conservation
Voters (ACV), Juneau; Ken Taylor, Director, Division of
Habitat and Restoration, Department of Fish and Game,
Juneau; Richard Bishop, Alaska Outdoor Council (AOC),
Juneau; Pamela LaBolle, President, Alaska State Chamber of
Commerce, Juneau.
TESTIFIED VIA TELECONFERNCE
Andrew DeValpine, Director, Bristol Bay Coastal Resource
Service Area (BBCRSA), Dillingham; Robert Loeffler,
Director, Division of Mining, Land and Water, Department of
Natural Resources, Anchorage; Ann Ringstad, Director,
Government Relations, Statewide Office of University
Relations, University of Alaska, Fairbanks.
SUMMARY
HB 218 An Act relating to property loaned to or held by
museums.
CS HB 218 (FIN) was reported out of Committee with
a "do pass" recommendation and with a zero fiscal
note by the Department of Education and Early
Development.
SB 7 An Act relating to the University of Alaska and
university land, and authorizing the University of
Alaska to select additional state land.
SB 7 was HEARD and HELD in Committee for further
consideration.
HOUSE BILL NO. 218
An Act relating to property loaned to or held by
museums.
Vice Chair Bunde MOVED to adopt work draft #1-LS0786\H,
Bannister, 3/3/00, as the version before the Committee.
There being NO OBJECTION, it was adopted.
MIKE TIBBLES, STAFF, REPRESENTATIVE GENE THERRIAULT,
commented that he had made a modification to the "H" draft
and noted that he would make his comments to that version.
Mr. Tibbles distributed a handout illustrating the "Timeline
for Acquisition". [Copy on File].
Mr. Tibbles pointed out that the original bill had required
return receipt notices which has been eliminated in the
proposed version. The second notice requirement was
eliminated and the timeline date was set at 90 days.
Mr. Tibbles pointed out another concern regarding the
"contracts". He stated that the language had been written
"permissively" by the use of "may". The language would
provide that there could be two exclusive mechanisms for
buying property. He advised that language had been added to
the definition to exclude all loans that have intent to
transfer the title of the property.
Co-Chair Therriault advised that if specifics were specified
in the contract, that language would take preference. He
pointed out that language on Page 2, Lines 16-18 had been
deleted.
Representative J. Davies questioned the 90-day timeline. He
pointed out the requirement for four weeks of newspaper
publishing. He noted that if there were a delay in
initiating that process, it would not occur on the 90th day.
He recommended that the 90th day should be replaced with
language: "Following the four weeks of notice".
KEVIN HAND, STAFF, REPRESENTATIVE HALCRO, explained that
language would stipulate that taking ownership by the museum
would happen on the 61st day after the first newspaper
announcement which would push the 90-days back.
Representative J. Davies pointed out that the 90 days was
referenced on Page 2, Line 15.
Mr. Tibbles added that section stipulates when it is
required to be included in the notice. It does not set out
the requirements for that provision. The section, which
outlines the requirements is on Page 3, Subsection (E).
Representative Phillips explained that the 90 days was only
for the notification. That language does not indicate the
notification process.
Co-Chair Therriault noted that there is concern exists as it
is stated "90 days", however, it could be pushed to 95 days
or more. He recommended that the notice indicate the actual
number of days.
Representative J. Davies referenced Page 3, Subsection (E),
Lines 3-8. That language reads that as of the 61st day. He
questioned what would happen if the notice was out for only
two weeks rather than the stipulated four weeks. He asked
if it could be claimed that there was an interruption. Vice
Chair Bunde explained that the owner must submit their claim
within 90 days to access it.
Representative J. Davies voiced concern that there could be
an alternative attempt to make contact creating an arbitrary
circumstance. Mr. Tibbles pointed out that there had been
60 days built in; the article will run for 30 days and then
they will have an additional 30 days to make contact. Vice
Chair Bunde interjected that an owner would have 90 days,
however, the actual notification process would run for 100
days.
Representative J. Davies recommended that the language be
changed to the 31st day after the last public notice runs.
He proposed a conceptual amendment, to Page 3, Line 4, which
would require four weeks of newspaper notice. He voiced
concern that the "61st" day might not mesh with the
newspaper articles. Mr. Tibbles commented that seems to be
the same stipulation; he questioned the need. He pointed
out that the notice states that you have 90 days to respond.
Co-Chair Therriault pointed out that the if the person came
in on the "91st" day, they would not be precluded from making
the claim. Vice Chair Bunde countered that they would be
precluded. He commented that he agreed with Representative
J. Davies perspective.
Co-Chair Therriault pointed out that the wording on Page 2
references what the notices must include on Page 6. Vice
Chair Bunde emphasized that the wording is not accurate.
Co-Chair Therriault stipulated that he would have no problem
making the language consistent. Representative J. Davies
reiterated that it would need to be 31 days after the
publication required in Subsection c was complete.
Mr. Tibbles agreed that it was confusing. There are two
notices, the written notice and the one itemized in the
newspaper. That notice states that it is 30 days from one,
and 60 days from the other.
Representative J. Davies MOVED a conceptual amendment,
Amendment #1 that the "museum requires title of property, 31
days after the completion of the notice requirements
outlined in Subsection c". There being NO OBJECTION, it was
adopted.
Representative J. Davies MOVED Amendment #2 which would make
language on Page 2, Line 15, consistent with the conceptual
Amendment #1. There being NO OBJECTION, it was adopted.
Vice Chair Bunde MOVED to report CS HB 218 (FIN) out of
Committee with individual recommendations and with the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
CS HB 218 (FIN) was reported out of Committee with a "do
pass" recommendation and with a new zero fiscal note by
Department of Education and Early Development.
SENATE BILL NO. 7
An Act relating to the University of Alaska and
university land, and authorizing the University of
Alaska to select additional state land.
JIM POUND, STAFF, SENATOR ROBIN TAYLOR, commented that the
University of Alaska system was created under federal
authority as a land grant institution to provide for the
higher education requirements of Alaska's people into
perpetuity. Mr. Pound continued that most colleges
established under the land grant program were endowed with
sizable land bases from which to generate income to be used
for operating purposes. Unlike most institutions in the
lower 48 states, the University of Alaska does not have the
larger population base and proximity to other support
services that are so beneficial. The University of Alaska
additionally, suffers from a smaller pool of alumni and
other normal sources of endowment income which many
institutions rely on to help support operations.
Mr. Pound pointed out that in the past decade, several
legislators have introduced legislation allowing the
University of Alaska to select additional lands from the
State. The purpose of all legislative attempts to provide
more land for the University statewide system has been to
provide more income producing assets. SB 7 would continue
that effort to give the University of Alaska a larger and
more productive land base. Mr. Pound stated that the bill
also will provide clear expectations that the land conveyed
would be used for the development of value added industries.
Mr. Pound advised that the provisions of SB 7 would allow
the University of Alaska to select 250,000 acres of State
land. Lands selected for transfer would include interests in
minerals, oil, and gas, and would be subject to certain
limitations. Mr. Pound noted that certain lands would be
exempt from the selection, such as:
? Lands subject to a coal lease or where a lease
application is pending;
? Land reserved by law from the public domain;
? Land included in a five-year proposed oil and gas
leasing program; and
? Leased land where the lease applications are pending.
In an endeavor to encourage local support, up to twenty
percent (20%) of the income derived from lands conveyed as a
result of the legislation, would be given to the campus or
campuses in the region from which the earnings are derived.
That revenue is to be used for programs and services that
support the development of natural resources within that
region. The appropriation by the Board of Regents would only
happen, if the local municipality where the campus or
campuses were located, provided a match of the same amount.
Mr. Pound concluded that SB 7 would enable the University of
Alaska to begin making its way toward equal footing with
other land grant universities around the country.
Representative J. Davies referenced the language
"municipality" indicated on Page 4. He asked if that was
land which the municipalities had already claimed. Mr.
Pound replied that it would be land that the municipalities
or the boroughs "may" select. Mr. Pound admitted that was a
gray area and that the bill addresses a "negotiation
process" between the University and the particular
municipality.
Representative J. Davies asked if the language indicated
properties already selected by the municipalities. Mr.
Pound commented that was not the case. Representative J.
Davies referenced Page 4, Line 29, and asked what that would
include. Mr. Pound did not know. Representative J. Davies
requested that information be clarified.
Representative Grussendorf asked if the legislation would
stand-alone or if it would be tied in with legislation
currently happening in the U.S. Congress. Mr. Pound replied
that there are two bills in Congress that are stand-alone.
They would provide 250,000 federal acres to the University.
Co-Chair Therriault clarified that this legislation would be
separate from that passed on the federal level and would
double the amount of land available for the University.
Vice Chair Bunde noted that some of his constituents were
concerned with legislation "blocking up" lands. Mr. Pound
replied that the legislation was essentially dealing with
various accesses and processes already in place. He
believed that the legislation would not have any effect on
access of lands.
Representative J. Davies inquired about the timing between
SB 7 and the federal bills. Mr. Pound replied that he did
not know when the federal match would occur, but that SB 7
is based on a 20-year selection process.
Co-Chair Therriault asked if Senator Taylor had taken a
position on the bill having access to any of the
legislatively designated areas. Mr. Pound did not know. He
noted that the access concern was brought up during the
House Resources Committee hearing. He advised that there
was no intention by Senator Taylor to deny access under what
is considered "normal process".
Representative G. Davis pointed out that there was not a
fiscal note submitted by the Department of Law. He advised
that Department would definitely have an added cost
associated with the proposed legislation.
ANN RINGSTAD, DIRECTOR, GOVERNMENT RELATIONS, STATEWIDE
OFFICE OF UNIVERSITY RELATIONS, UNIVERSITY OF ALASKA,
FAIRBANKS, (TESTIFIED VIA TELECONFERENCE), read testimony
prepared by Wendy Redman, Vice President, University of
Alaska.
Ms. Ringstad advised that the House Resources version of SB
7, which is before the Committee, is not satisfactory to the
University for a variety of reasons, including provisions
that would give the commissioners of the Department of
Natural Resources and the Department of Fish & Game, policy
and regulation making authority regarding the management of
University lands.
Ms. Ringstad added that other amendments made during the
Resources Committee would weaken the University's ability to
generate revenue from lands that would be made available,
and curtail which lands would be available. She noted that
it was the University's intent to continue to work with Co-
Chair Therriault, Senator Taylor, other interested
legislators, representatives Department of Natural Resources
and Department of Fish and Game and interested constituent
groups, in order to develop a Finance Committee substitute,
that would be a more satisfactory bill.
Ms. Ringstad reminded Committee members that of the original
350,000 acres that the University was provided between 1915
and 1929 by virtue of its land grant status, only 112,000
acres were actually transferred to the University. In 1959,
the Alaska Statehood Act cancelled the University's right to
receive all unsurveyed lands which amounted to 238,000
acres.
Ms. Ringstad acknowledged that it is true that there is no
legal obligation for the State to provide lands to the
University. However, there was an assumption at the time of
statehood that the State would use land from its federal
land grant to "make good" on the original commitment to
establish a land endowment for the University. She pointed
out that in direct response to that assumption, the first
Alaska Legislature passed a bill giving the University of
Alaska, one million acres of land to develop for the purpose
of providing support for the post-secondary needs of our new
State.
She pointed out that Governor Egan vetoed that legislation
citing that Alaska lands should be best developed by the
Department of Natural Resources. Governor Knowles cited
the same rationale when he vetoed similar legislation in
1994 and 1996. Ms. Ringstad noted that the Department of
Natural Resources has never had, nor does it now have,
adequate resources to meet the mandate. Ms. Ringstad
advised that the Department of Natural Resources has done an
outstanding job of managing Alaska's oil and gas lands,
however, they do not have the staff to actively manage all
of the states additional lands.
Ms. Ringstad advised that support for the legislation comes
down to a philosophical decision about the development of
State lands.
Ms. Ringstad stated that there is not a large quantity of
good, income producing State land available. Additionally,
it is true that the income generated from additional lands
to the University would not be significant in the short
term. The University is not looking to the legislation as a
panacea. The University would much rather have $250 million
dollars than 250 million acres of land. The University has
an excellent record of land management.
Over the years, the legislation has generated controversy
from a wide variety of constituencies, all of whom have
their own self-interests to protect when it comes to
Alaska's lands. The bill is full of amendments and
compromises to meet the interests of miners, hunters,
fishers, berry-pickers, recreationalists, and oil and gas
interests. She requested additional time to work with the
Committee to adequately address the legislation.
ANDREW DEVALPINE, DIRECTOR, BRISTOL BAY COASTAL RESOURCE
SERVICE AREA (BBCRSA), DILLINGHAM, (TESTIFIED VIA
TELECONFERENCE), noted that the legislation proposes a
"threat" for the resource areas. He noted that the bill
appears to exempt the University from AS 38.04, which speaks
to State land use plans. Mr. DeValpine stated that there is
no guarantee that the University would honor the priorities
established by the municipalities. The bill represents an
invasion of a rural area. Those residents rely on the
natural abundance of fish and game provided for their
families.
ROBERT LOEFFLER, DIRECTOR, DIVISION OF MINING, LAND AND
WATER, DEPARTMENT OF NATURAL RESOURCES, ANCHORAGE,
(TESTIFIED VIA TELECONFERENCE), noted that the Department
would be willing to enter into negotiated agreements with
the University. He listed the fundamental concerns of the
Department:
? The Department believes that the bill puts the
University in competition with the municipalities in a
way in which the University would win.
? The Department believes that the bill would have a
significant effect on State land and timber sale
programs. The Department has been working with the
Senate to come up with a stable land disposable program
favored by Alaskans. SB 7 would put that bill in
jeopardy. He thought that the University would chose
all saleable State land.
? He noted that the bill could have a "chilling" effect
on development of Alaska land in many ways. The bill
carries an uncertainty in land tenure. That is one of
the reasons that the Alaska Mental Health Land Trust
(AMHLT) stopped development throughout Alaska during
the years before selections were final. Also, the bill
allows selection of the fiberoptics.
? He addressed the bill's effect on promises made to the
public. The Department of Natural Resources identifies
public use areas, areas used for subsistence, and areas
used for public access. There is no similar process in
the bill.
Mr. Loeffler advised that there are two additional technical
problems with the bill. He noted that they were addressed
in the letter from Commissioner Shively to the members.
(TAPE CHANGE HFC 00 - 47, Side 2)
Mr. Loeffler stated that there are general grant lands
subject to and which the Legislature can not exempt from
constitutional requirements otherwise applicable to State
land.
Mr. Loeffler noted the second technical defect is the
University selection of the designated areas and their
definition of public domain. He believed that the bill
intended that the University not select areas that are
critical habitat areas, however, the language accomplishes
the opposite that intent.
Co-Chair Therriault asked if these concerns had been
expressed to the House Resources Committee. Mr. Loeffler
stated that they were, however, the technical defects were
submitted in a letter afterward.
SUSAN SCHRADER, CONSERVATION ADVOCATE VOTERS (CAV), ALASKA
CONSERVATION VOTERS, JUNEAU, stated that the Alaska
Conservation Voters, formerly Alaska Conservation Voice, is
a not-for-profit organization dedicated to protecting
Alaska's environment through public education and advocacy.
The membership represents over 22,000 registered Alaskan
voters. She stated that ACV believes that investment in the
University system is critical for the State's continued
economic prosperity and for enabling the State's
participation in the developing intellectual and knowledge-
based economy fueling our country's progress.
Ms. Schrader noted that ACV is pleased to see that the House
Resource Committee substitute for the bill addresses several
concerns with environmental impacts, namely providing for
consultation with Department of Fish and Game and requiring
protection of riparian areas. Nevertheless, ACV believes
that the bill does not guarantee adequate or reliable
funding for the University. The University's attention
should be directed towards education and not be diverted
towards the complex and often contentious arena of land
management.
Ms. Schrader noted that ACV has serious concerns with SB 7
which include:
? Alaskans may lose the use of 250,000 acres of public
lands, including the potential loss of acreage within
our State game refuges, State game sanctuaries, State
recreation areas, recreational mining areas, State
critical habitat areas, etc., including one of our
State parks, all of which are located in the public
domain.
? Because of the University's aggressive development
polices, the bill threatens fish and wildlife re-
sources, as well as the subsistence, recreational, and
commercial uses that depend on them. The bill would
threaten community water sources and local use,
expansion and planning options, at both the local and
regional level. The University land selections would
further complicate confusing land ownership patterns
and make sorting out the conflicts a costly and time-
consuming process.
? Even with the language in the committee substitute to
ensure access, SB 7 might impact highly valued access
rights on selected lands that the University chooses to
sell to a third party or develop in such a way as to
preclude access. Potentially at risk are the hunting,
fishing, skiing, mushing, and innumerable other
recreational and commercial activities that Alaskans
depend upon.
? SB 7 very likely violates the Dedicated Fund Clause,
Article IX, Section 7, of the Alaska Constitution. The
Dedicated Fund Clause explicitly allows continuation of
dedicated funds that predated ratification of the
constitution and it also allows dedicated funds
required participating in federal programs. While the
existing University land trust does not violate the
clause because it meets the two circumstances. However,
any new grant of land created by SB 7 would not meet
either circumstance.
Ms. Schrader concluded that if SB 7 becomes law, the
University would select 250,000 acres with the highest
potential for future revenue generation. At a time of
significant budget shortfalls, the last thing that the
legislature should remove is the State's 250,000 most
promising acres for future revenue.
Representative Austerman mentioned the fish and game
resources and asked if there could be a "crisis" because of
the legislation. Ms. Schrader replied that there would most
likely be an impasse, as 250,000 acres of State land would
be transferred to the University. Representative Austerman
could not guess the impact that the legislation could have,
not knowing the lands selected. Ms. Schrader replied that
the very existence of setback requirements found in the
Forest Practices Act, are examples that government
appreciates those private lands needed to protect our
resources. Putting 250,000 acres into private ownership
places our resources at risk.
Representative J. Davies pointed out that the University
would have to adhere to the stipulations established in the
Forest Practices Act. He advised that State law protects
many of the concerns voiced by ACV. Ms. Schrader agreed
that the State law would protect fish on private land,
however, the reality of the situation given the current
funding allocated to Department of Environmental
Conservation and the Department of Fish and Game, it would
be difficult for those agencies to do the type of monitoring
that would need to be done on private lands.
KEN TAYLOR, DIRECTOR, DIVISION OF HABITAT AND RESTORATION,
DEPARTMENT OF FISH AND GAME, responded to a query voiced by
Representative J. Davies regarding the public domain issue
in relationship to designated areas. None of the 10
designated State game refuges, 17 critical habitat areas, or
the 3 State game refuges have been removed from the public
domain. The proposed legislation would free the University
to select many of those areas.
Mr. Taylor added that the legislation could include many
very important areas as indicated on Page 6, Line 16-22,
Section (365b-1). He commented that to deal with the broad
language terms would be difficult for the Department.
Mr. Taylor pointed out that these areas were designated by
the Legislation to be statutorily protected. SB 7 would
minimize that protection. It would reduce it from statutory
protection to the discretion of future governors and
commissioners.
Mr. Taylor added that the Department is concerned with the
lack of protections for lands designated as important fish
and wildlife habitat in the Department of Natural Resources
areas management plans. These plans were developed with
strong public participation. The legislation would not
afford the same protection to these lands. A lot of these
lands have a high economic value.
Mr. Taylor added that the Department of Natural Resources
had submitted a fiscal note with the bill.
Vice Chair Bunde commented that if the University wanted to
select a specific land, they would have to meet legislative
approval and they would be responsible to see that the State
game refugee continues. The uses would be limited by
overlying covenants. Mr. Taylor replied that the statute
would remove the University lands from the public domain and
that if they were removed from the domain they would not
remain part of the refugee.
Vice Chair Bunde reiterated that the legislative approval
would still remain. Mr. Taylor agreed. He suggested that
if the bill passes, most likely there would be annual
selections. The parcels will be as small as 650 acres. Mr.
Taylor emphasized that is a lot of pieces and for the
Legislature to enter into detail on each parcel will be a
lot of additional work.
RICHARD BISHOP, VICE PRESIDENT, ALASKA OUTDOORS COUNCIL,
JUNEAU, noted that the Council has followed the bill for
several years. He stated that AOC's principle interest is
in the lands. The Council recognizes that the amount
suggested is a relatively small portion of State private
lands, however, because there are differences in the
importance of habitats and access, it would be prudent to
look at the terms of the bill in relationship of principle
interest of sound conservation and the opportunity to using
public resources.
Mr. Bishop recommended adding an amendment to Page 5, Line
2, which would delete the entire text and replace it with
the following language:
"Is a legislatively designated area, including but not
limited to state critical habitat areas, wildlife
refuges, wildlife sanctuaries, forests, parks,
recreation areas, range areas, public use areas, and
recreational mining areas, of is a state
administratively designated site dedicated to public
access or other uses."
PAMELA LABOLLE, PRESIDENT, ALASKA STATE CHAMPBER OF
COMMERCE, JUNEAU, voiced support for the legislation. She
noted that the State Chamber recognizes the valuable
contribution that an academically strong and financially
secure State University system can make to Alaska's future.
Management of lands provides the University system with a
source of recurring revenues.
Ms. LaBolle pointed out that in managing its current land
portfolio, the University has demonstrated that it can meet
and exceed the requirements of responsible land development.
Conveyance of State and federal lands to the University for
appropriate development will enhance economic opportunities
on many fronts.
Representative Foster remarked about the total fiscal amount
which had been submitted. Co-Chair Therriault advised that
the fiscal notes would be reevaluated during the further
consideration of the legislation.
Co-Chair Therriault asked if all State lands would be
available for selection. Ms. Ringstad understood that they
would.
SB 7 was HELD in Committee for further discussion.
ADJOURNMENT
The meeting adjourned at 3:15 P.M.
H.F.C. 13 3/03/00
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