Legislature(1999 - 2000)
03/21/2000 08:53 AM 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 21, 2000
8:53 A.M.
TAPE HFC 00 - 74, Side 1
TAPE HFC 00 - 74, Side 2
RECONVENED
Co-Chair Therriault reconvened the House Finance Committee
meeting from 3/20/00 at a.m. 8:53 a.m.
PRESENT
Co-Chair Mulder Representative G. Davis
Co-Chair Therriault Representative Foster
Vice Chair Bunde Representative Grussendorf
Representative Austerman Representative Williams
Representative J. Davies
Representatives Phillips and Moses were absent from the
meeting.
ALSO PRESENT
Senator Robin Taylor, Sponsor; Wendy Redman, Vice President,
Statewide Programs, University of Alaska; Mike Tibbles,
Staff, Representative Therriault.
TESTIFIED VIA TELECONFERENCE
James Morton, Manager, City and Borough of Yakutat; Robert
Loeffler, Director, Division of Mining, Land and Water,
Department of Natural Resources; Dick Mylius, Chief,
Resource Assessment and Development, Division of Mining,
Land and Water, Department of Natural Resources.
SUMMARY
CSSB 7(FIN) am
"An Act relating to the University of Alaska and
university land, and authorizing the University of
Alaska to select additional state land."
CSSB 7 (FIN) am was heard and HELD in Committee
for further consideration.
CS FOR SENATE BILL NO. 7(FIN) am
"An Act relating to the University of Alaska and
university land, and authorizing the University of
Alaska to select additional state land."
Co-Chair Therriault provided members with proposed committee
substitute, work draft 1-LS0072\W2, Laukhaupt 3/2/00 (copy
on file).
SENATOR ROBIN TAYLOR, SPONSOR testified in support of the
legislation. He emphasized that the state of Alaska is going
to gain a half million acres of land from the federal
government, as a result of the legislation. The only way
that the state can gain the additional land is to provide an
equal match of state land. He maintained that under the
legislation the university would receive an endowment of one
million acres of land, which would provide an economic base
and greater autonomy and reduce the state's general fund
support.
Co-Chair Mulder MOVED to ADOPT work draft 1-LS0072\W2,
Laukhaupt 3/2/00. There being NO OBJECTION, it was so
ordered.
MIKE TIBBLES, STAFF, REPRESENTATIVE THERRIAULT discussed
changes made by the committee substitute.
A technical change was made on page 3, lines 10 - 11:
deleting "except as provided in AS 14.40.368(2)" in order to
reflect changes made in that section.
In section 5 on page 4, line 10 "annually" was deleted and
"periodically" inserted to conform to the change made on
line 14. Under the change the university would not be
required to submit an annual land list selection. He
observed that there might be years when a list is not
submitted.
Vice Chair Bunde questioned the intent of the change.
WENDY REDMAN, VICE PRESIDENT, STATEWIDE PROGRAMS, UNIVERSITY
OF ALASKA observed that the bill has a 10-year window. The
university intends to make selections every year within the
10-year period. However, the legislation would allow them to
miss a year. Vice Chair Bunde concluded that, while the
selection may not be every year, it would be on a regular
basis.
Mr. Tibbles observed that "governor" was removed and
replaced with "commissioner" on line 14, page 4. This
removes a step and recognizes that the university would be
working with the Department of Natural Resources.
The process of approving the selection list was amended on
page 4, lines 23 and 24: legislative action would no longer
be required. The selection list would be approved if the
legislature does not take action.
Mr. Tibbles referred to page 4, lines 29 and 30. He
maintained that no additional language is necessary since
land that "has been reserved by law from the public domain"
would cover refuges and parks.
Subsection (2) was rewritten to clarify that there is a
three-step process: land can be selected if it is vacant,
unappropriated, or unreserved; municipalities are only given
120 days to submit their claim; and the university is
required to give notice to the municipality if land within
the municipality is selected.
Vice Chair Bunde questioned if municipalities must approve
the university's action. Mr. Tibbles explained that the
municipality would have to take action to select the land.
Co-Chair Therriault observed that the municipality could
insert their selection before that of the university, but
that they only have 120 days to take action.
Ms. Redman noted that the municipality and university could
make an agreement for joint ownership of land within a
municipality.
Mr. Tibbles observed that if the commissioner denies land
selected by a municipality, the land would fall back to the
university's selection list.
On page 5, line 21 the "5" was changed to "3". Mr. Tibbles
explained that if oil and gas were discovered on land
selected by the university within the first "three" years of
the selection, the state would keep the resources.
Co-Chair Therriault clarified that the university cannot
select lands that have an existing oil or gas lease. Ms.
Redman noted that if oil or gas is found within the three-
year period that the resource belongs to the state of Alaska
for perpetuity.
The minimal size requirement of the parcels for land
selection was changed from 640 acres to 40 acres on page 6,
line 2. The change was made in response to concerns that the
university may be forced to select land that could not
support income.
On page 6, line 22 language was added requiring the
commissioner of the Department of Natural Resources to
provide his determination denying the selection in writing.
On page 6, lines 30 and 31 a new subsection (3) was added to
give a new municipality the first option to select lands.
The new municipality would only have three years to make the
selection. The commissioner can deny the selection.
In response to a question by Co-Chair Mulder, Ms. Redman
noted that there are two newly formed municipalities. She
observed that there is currently no time limit on their
selection. Co-Chair Mulder questioned if the language is
redundant. Ms. Redman clarified that the intent is not that
the commissioner would try to anticipate new municipalities.
The legislation refers to currently formed new
municipalities. Co-Chair Mulder agreed and noted that it
would be problematic to try to anticipate the formation of
new municipalities.
On page 7, line 5 "within 120 days" was inserted to conform
to prior sections.
The period of time in which the commissioner can refuse to
convey land without a determination was changed from 3 to 2
years on line 12, page 7. Ms. Redman noted that the change
would speed up the process of conveyance. Mr. Tibbles
observed that the commissioner has broad powers to say no
within the two-year period. Ms. Redman stressed that the
intent is to go on with other selections if necessary.
There is a new subsection (6) on page 6, to allow the
commissioner to withdraw land that he believes is not in the
best interest of the state to convey outside of state
ownership.
Page 8, line 12 clarifies that the university would bear the
cost of its own selection: platting and surveying.
Line 22 - 24 and 28 - 30 on page 8 makes changes consistent
with the requirement that the legislature has to take action
to disallow the selection.
There was a technical change on page 9, line 1 in subsection
(k) to reflect previous changes.
Mr. Tibbles referred to subsection (m) on page 9. He noted
that the House Resources version stated that "the
commissioner may not convey the land unless the commissioner
reserves easements, rights-of-way, and other forms of access
. sufficient to ensure all current access and reasonably
foreseeable future access, to adjacent public or private
land or water." He felt that there was enough protection
under AS 14.40.365(h)(1)(e). He stressed that the language
creates an unknown situation with "foreseeable future
access". The committee substitute was amended to state: "The
commissioner shall convey land . with notice to the
university if the land under conveyance includes easements,
rights-of-way, and other forms of access." Co-Chair
Therriault concluded that any easement that was in place at
the time of conveyance would continue.
Subsection (n) is new and would allow the university to
appeal a decision by the commissioner through the review
process that is in place within the Department of Natural
Resources.
On line 20 of page 9: "consistent with the Constitution of
the state of Alaska and the Alaska Statehood Act" was added.
On page 10, line 19 the Board of Regents was required to
adopt a permitting process consistent with the subsection.
A few additional financial categories were added to the
confidentiality section on page 10, lines 29 and 30. The
university is already complying with this requirement. Ms.
Redman affirmed that the section is based on current policy.
A clarification was made on page 11, subsection (1). A
selection cannot be made if there is an existing oil and gas
mining lease, but land may be selected with a different type
of lease. The provision is divided into leases on the land
prior to selection and those after the selection. Subsection
(A) states that the university is entitle to receive income
obtained from an existing lease after the land is conveyed.
Mr. Tibbles explained that if the lease happens after the
land is selected, but before it is conveyed, than the money
is to be set-aside in a separate account. When the land is
conveyed the money would also be conveyed. Co-Chair
Therriault noted that it would take an appropriation by the
legislation.
Page 12, subsection (2) deals with the responsibility of the
management of the land. The responsibility for the
management of the land begins on the day the land is
recorded as conveyed to the university.
Section 7 is new and provides for a university demonstration
forest.
Co-Chair Therriault observed that Representative J. Davies
expressed concern regarding the use of "may" instead of
"shall" in section 7.
Mr. Tibbles observed that "in consultation with" should be
added after "a management plan is prepared" on page 12, line
22. Co-Chair Therriault noted that Representative J. Davies
expressed support for the change.
Mr. Tibbles noted that the final change was made on page 14,
section 9: "own by the university" was changed to "land
conveyed to the University of Alaska under AS 14.40.365."
Co-Chair Therriault observed that the setback requirement
under the bill is more than is required by the Forest
Practices Act. The legislation maintains the setback that is
currently used by the university (100-foot). The Forest
Practices Acts requires a 60-foot setback, but the
university currently uses a 100-foot setback.
Representative Williams expressed concern that the language
not adversely impact the Forest Practices Act.
Co-Chair Therriault pointed out that the management of state
forestland adheres to a 100-foot buffer zone; the Forest
Practices Act applies to private land. Ms. Redman observed
that the language conforms to current law for management of
state forestland under AS 41.17. The underlying portion
clarifies that any state forestlands conveyed to the
university would fall under the same provisions.
Representative Grussendorf referred to page 4, line 31. He
observed that if the commissioner denies the municipal
selection that the university would be the next in line for
the selection. He questioned under what situation the
commissioner of Department of Natural Resources would refuse
land selected by a municipality and have it fall back for
selection by the university. He questioned the criteria used
by the commissioner to deny the selection.
Co-Chair Therriault stressed that the provision only applies
to the selection and that the university selection could
also be denied. The commissioner is under no obligation to
approve either selection.
Co-Chair Mulder noted that the secretary of the Interior is
opposed to any selection of federal land. He expressed
concern that the commissioner of the Department of Natural
Resources could stop all state land transfers if they
opposed the principle of land selection. Ms. Redman agreed
that the commissioner is endowed with a great deal of power
and expressed the hope that they would not use the power in
a frivolous way. The intent is to allow the commissioner to
oversee the state's best interest. The commissioner would
have to provide a written reason for the denial. She
stressed that the commissioner would be subjected to
political pressure and felt that there would be a sufficient
appeal process.
Co-Chair Mulder expressed concern that the mechanism allows
an exchange to occur and includes an appeal process.
Co-Chair Therriault stressed that it is important to the
university and the legislature that the reason for denial be
placed in writing.
Representative Grussendorf pointed out that the university
is being allowed to pick small parcels and that they would
not be forced to take the bad with the good. He questioned
if the confidentiality provisions could allow interest
groups to influence the university's decision.
Representative Foster asked what would prevent the
university from forming parks with their land. Ms. Redman
emphasized that there is a fiduciary responsibility to
provide income for the university. She pointed out that the
university has a history of commitment to develop the lands
in a responsible way and to provide income for the
university.
Representative Foster questioned if the university could
select land that was already over selected by Native
corporations. Ms. Redman observed that the legislation
contains provisions to reduce over selections. Page 4, lines
17 to 28 limit the university's ability to over select.
Co-Chair Mulder discussed over selections and suggested that
the legislation would encourage resolution of over
selections through competition.
Co-Chair Therriault observed that the university is able to
submit a list on an annual basis of not more than 25 percent
of all the land that they are eligible to select. The land
would be conveyed gradually over the 10-year period.
In response to a question by Representative Grussendorf, Co-
Chair Therriault clarified that there is a 3-year provision
on oil and gas leases and that the university cannot select
land with oil and gas leases.
Vice Chair Bunde concluded that subsurface rights of private
land belong to the state. The university would own
subsurface rights with the exception of oil and gas. Co-
Chair Therriault agreed and pointed out that the university
is a subdivision of the state.
Representative Foster asked about land with an undeveloped
mining claim. Ms. Redman stressed that the university would
be disallowed from selecting any land with an existing
mining claim.
ROBERT LOEFFLER, DIRECTOR, DIVISION OF MINING, LAND AND
WATER, DEPARTMENT OF NATURAL RESOURCES testified via
teleconference. He commented on changes made by the
committee.
(TAPE CHANGE, HFC 00 - 74, SIDE 2)
Mr. Loeffler referred to changes made on page 11, line 18.
He observed that when land with a lease is conveyed to the
university that the income of the land would go to the
University of Alaska. He maintained that the provision would
allow the university to select lands that the state has
developed. He maintained that the provision could have an
adverse affect on the landfill program; the university could
select lands developed by the state under the landfill
program.
Mr. Loeffler discussed changes made on page 6, line 2. The
previous version of the legislation allowed selection of 640
acres: this was changed to 40-acre parcels in the committee
substitute. He observed that a previous version of the bill
containing 40-acre selections was changed to 640 acres
because of the additional survey costs. He estimated that
40-acre parcels would add $600 thousand dollars a year to
the cost of the legislation. The university would pay the
cost, through the Department of Natural Resources.
Mr. Loeffler referred to access provisions on page 9, line
8. Previous versions of the bill required the Department of
Natural Resources to reserve easement rights; the committee
substitute only requires that the department notice that
easements exist. He maintained that the bill would give the
process to the university. He stressed that this provision
would be contrary to the provisions of established law. He
pointed out that the department has had an aggressive
program, in concert with the Department of Fish and Game, to
ensure the protection of public easement on all state lands
and waters. He thought that the department was required to
reserve public access.
Mr. Loeffler reviewed changes made in subsection (2) on page
4. He observed that the state is concern with the
competition between the municipalities and university. He
felt land denied to municipalities should not be available
to the university. He maintained that the provision
anticipates that some items denied to municipalities would
be allowed to the university.
Mr. Loeffler summarized that the Division has concerns
regarding: revenue, public access, increase in costs from
going from 640 to 40 acres and the fact the bill would allow
land to the university that has been denied to
municipalities.
Representative Foster observed that there is a window of
opportunity for Native Viet Nam a veteran to select land. He
questioned if a veteran could place a claim on land selected
by the university.
DICK MYLIUS, CHIEF, RESOURCE ASSESSMENT AND DEVELOPMENT,
DIVISION OF MINING, LAND AND WATER, DEPARTMENT OF NATURAL
RESOURCES explained that veterans could not select state
selected or state owned land. There is no potential for
conflict with the legislation.
Ms. Redman responded to concerns brought up by the
Department of Natural Resources. She emphasized that land
might not be selected, within a municipality, unless it is
vacant, unappropriated and unreserved.
Mr. Loeffler responded that he interpreted page 4, section 5
as having three independent clauses. Land must be vacant,
unappropriated and unreserved land; if it is disapproved
(and municipal land is often disapproved because it is not
vacant, unappropriated and unreserved) than the university
gets priority. There is also a definitional clause. He
agreed that if the interpretation is as Ms. Redman stated
that it is not an issue. He observed that the language is
confusing.
JAMES MORTON, MANAGER, CITY AND BOROUGH OF YAKUTAT testified
via teleconference. He stated that his concerns were
addressed by the previous testimony.
Co-Chair Therriault noted that the legislation would be
heard again at 1:30 p.m.
SB 7 was heard and HELD in Committee for further
consideration.
ADJOURNMENT
The meeting was adjourned at 9:50 a.m.
House Finance Committee 9 3/21/00
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