Legislature(1999 - 2000)
01/25/1999 03:10 PM Senate RES
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SENATE RESOURCES COMMITTEE
January 25, 1999
3:10 P.M.
MEMBERS PRESENT
Senator Rick Halford, Chairman
Senator Robin Taylor, Vice Chairman
Senator Pete Kelly
Senator Jerry Mackie
Senator Lyda Green
Senator Sean Parnell
Senator Georgianna Lincoln
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
SENATE BILL NO. 6
"An Act relating to the disposal of state land."
-MOVED OUT OF COMMITTEE
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."
-HEARD AND HELD
PREVIOUS SENATE COMMITTEE ACTION
SB 6 - No previous action to consider.
SB 7 - No previous action to consider.
WITNESS REGISTER
Mr. Dick Mylius
Division of Land
Department of Natural Resources
3601 C Street
Anchorage, AK 99503-5947
POSITION STATEMENT: Supported SB 6.
Ms. Marty Rutherford, Deputy Commissioner
Department of Natural Resources
3601 C Street
Anchorage, AK 99503-5921
POSITION STATEMENT: Opposed SB 7.
Ms. Wendy Redman
University of Alaska
3211 Providence Dr.
Anchorage, AK 99508-4675
POSITION STATEMENT: Supported SB 7.
Kay Brown
Alaska Conservation Voice
750 W 2nd Ave #109
Anchorage, AK 99501
POSITION STATEMENT: Opposed SB 7.
ACTION NARRATIVE
TAPE 99-2, SIDE A
Number 001
SB 6 - DISPOSALS OF STATE LAND
CHAIRMAN HALFORD called the Senate Resources Committee meeting to
order at 3:10 p.m. and announced SB 6 to be up for consideration.
MS. MEL KROGSENG, Staff to Senator Taylor, sponsor, said SB 6 is a
housekeeping measure that was recommended by the DNR last year. It
will provide the tools necessary for the Department to offer 50,000
acres of land that was previously offered and not sold or has come
back to the State for various reasons. It has a zero fiscal note.
SENATOR LINCOLN explained that rural and bush Alaska has a hard
time getting notification of the land disposals. She asked the
sponsor to make sure the notification would truly be statewide.
MS. KROGSENG responded that she would talk to the Department
specifically on this issue.
MR. DICK MYLIUS, Department of Natural Resources, supported SB 6
because it would allow them to get parcels for sale that have been
returned to them. In response to Senator Lincoln' concern, he said
he would try to get notification into newspapers several weeks in
advance of the offering.
SENATOR LINCOLN commented that smaller communities don't
necessarily get the newspapers or they get them way late and asked
if they could use other means of communication that the smaller
communities already utilize, like internet.
SENATOR TAYLOR moved to pass SB 6 out of committee with individual
recommendations. There were no objections and it was so ordered.
SB 7-INCREASE LAND GRANT TO UNIV. OF ALASKA
CHAIRMAN HALFORD announced SB 7 to be up for consideration.
Number 165
MS. MEL KROGSENG, staff to Senator Taylor, explained that there are
three minor changes to this University lands bill that was
introduced last year. It grants 250,000 acres of State land to the
University and removes the requirement for legislative approval of
the land selected, removes the reversionary clause that allows the
DNR to take the land back after a 10-year period if they didn't
feel it was being managed right, and removes the immunity clause.
The exempt lands would be 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 application is pending.
To encourage local support for the individual campuses, an amount
not to exceed 20 percent of the income derived from lands conveyed
would be give to the campuses in the region from which the revenues
were generated contingent on a similar amount being given to that
campus by the local municipality.
SENATOR PARNELL asked why the reversionary clause was removed.
SENATOR TAYLOR explained that the reversionary clause would cause
a cumbersome process because they would tentatively select lands
which would have to come back to the legislature for approval.
After the process was completed, there was still the 10-year
reversionary clause that would allow the Department to come back in
and take the lands back again. He wanted the University to have
complete discretion on how to use the land as they do now with
their lands.
Number 249
SENATOR PETE KELLY asked if they left the oversight in, would that
aid the DNR in a best interest finding.
SENATOR TAYLOR said he thought it would, but he didn't think it
should have to. Best interest findings are not required today on
existing lands.
SENATOR LINCOLN said according to the article that was passed out,
that this legislation was unattainable as well by the Clinton
administration.
Number 308
MS. MARTY RUTHERFORD, Deputy Commissioner, Department of Natural
Resources, opposed SB 7. She said that a number of similar bills
had been vetoed in past years. It would basically be very
difficult for DNR to carry out the conveyance because of the
complexity of identifying and managing all State lands until the
conveyance is complete and the impact to the development community
while the 20-year plus process is occurring and municipalities with
outstanding entitlements, the unknown impact of future
municipalities that might incorporate, and the interplay between
this entitlement with the new school trust land litigation. She
asked them to consider an alternative proposal that would bring new
revenues to the State, not just redirect existing revenues.
MS. RUTHERFORD said they have found there is minimal viably
developable lands and the University would add to the existing
municipal competition. Entitlement lands were designated as an
incentive for incorporation and as a means for munis to support
themselves through revenue legislation. Furthermore, about one
half of Alaska remains in the unorganized borough. This would make
it difficult for future borough to receive any developable
entitlement lands. It would also create uncertainties about land
ownership hampering development. She noted it would reduce instate
timber processing because the University would most likely select
the most productive timber lands reducing the State's timber base
which is used to calculate the sustained yields and allowable
harvest levels. As a trust, the University manages its lands for
maximum revenues and, therefore, sells its timber for export.
This bill allows the State's oil and gas properties to be selected
unless they are already leased or proposed to be leased every year
during the University's 20-year selection period. This does not
protect areas of interest under the new oil and gas exploration
licensing program and this is just when there is interest in areas
that have had no previous interest.
SB 7 would essentially eliminate the State's land disposal program
for the next 20 years as the University would most likely select
most of the already subdivided State tracts which are most suitable
for future land disposal areas.
In the legislative interim new litigation was filed against the
State alleging that the State breeched the trust of the School
Lands Trust and proposes reconstituting it. SB 7 compounds the
difficulty in resolving the litigation as the University will
probably select lands that will be necessary if the State is
required to reconstitute the land trust.
MS. RUTHERFORD added that it would be extremely expensive to
transfer 250,000 acres costing an estimated $1.5 million for each
of 10 years. Most State revenues are produced from subsurface
resources and the University will select the most productive lands
it can within the boundaries of SB 7 removing them from management
in the best interest of all Alaskans and decreasing revenues to the
general fund.
The Administration has historically supported increasing the
University's land entitlement from the federal government. It is
incumbent to believe the University did not receive a fair and
equitable land entitlement from the feds when compared to other
institutions. The limited federal conveyance foreclosed the
University's ability to generate revenues. However, the Governor
has stated that lands conveyed by the federal government to the
State under the Alaska Statehood Act should be managed for the
benefit of all Alaskans and not earmarked for single agencies and
has recommended seeking enactment of legislation which would
earmark a portion federal revenues from oil and gas development in
the National Petroleum Reserve Alaska to fund the corpus of a
University endowment. Interest from this endowment could then be
used by the University. She added that she had 12 proposed
amendments to submit to the Committee. She commented to Senator
Taylor that the bill does not propose a federal match.
SENATOR TAYLOR retorted that he thought they should have the lands
whether the feds came through or not.
Number 443
MS. WENDY REDMAN, University of Alaska, said the University was
established as a land grant university. Because they were caught
in the statehood issue, the lands that would have been appropriated
to them with the federal legislation were eliminated. So the
University did not get the full land grant rights they are entitled
to. Secretary Babbit's position is that the feds don't owe us
anything. The State made a decision going into statehood that they
would not segment lands, that we would be better served as a state
if we didn't separate lands for different agencies.
She suggesting naming the acres in the bill to define who would
oppose the bill. However, she added that as many say, this bill
won't really solve the University's problems. It is very long term
and is merely another tool to help the University and perhaps the
State.
Number 499
MS. REDMAN explained that Senator Lincoln inserted section
14.40.369 into the bill some years ago which requires the
University to provide for continued customary and traditional use
on all its lands, a condition that does not exist for any other
University. As long as that clause remains, our attorneys feel
that we need additional tort immunity. This bill provides a
provision, however, for the Commissioner to withhold conveyance of
land if it is not in the best interests of the State which she
thought was a powerful statement.
SENATOR PARNELL asked Ms. Redman for a fiscal note that would
project the revenue this will produce.
MS. REDMAN answered that they would not produce any revenue during
the first five years.
SENATOR LINCOLN asked her to explain where the $1.6 million for
operating the program would come from.
MS. REDMAN explained that there would be no State general funds
utilized for the land, but funds would come from management of
other lands.
SENATOR MACKIE asked where the money would come from and would it
come from existing programs that would have normally been budgeted.
MS. REDMAN said it would come from existing and new lands. Money
that would go to develop new lands would be coming from current
programs. She explained that funds from the Land Grant Trust are
not tied to on-going programs because there isn't enough money to
do that. It wouldn't cut into operating expenses for the individual
campuses.
TAPE 99-2, SIDE B
Number 560
MS. KAY BROWN, Alaska Conservation Voice, opposed SB 7 because it
comes at too high a cost to all Alaskans and SB 7 does not
guarantee adequate or reliable funding for the University. It robs
Alaskans of more effective opportunities to capitalize on our
assets rather than simply liquidating them to finance a specific
state function. It is deleterious to local economies. Because the
University seeks to maximize revenue, it would rapidly liquidate
its existing timber assets in the round. The University has
ignored local processing and hiring opportunities in the three past
timber sales. Third, because of the University's aggressive
development policies, the bill threatens fish and wildlife
resources as well as subsistence, recreational, and commercial uses
that depend on them. It threatens community water sources, local
use and planning options. It would further complicate confusing
ownership patterns and make sorting out the conflict a costly and
time consuming process. Fourth, SB 7 curtails highly valued access
rights. She concluded by urging the legislature to support the
University through time-tested endowment methods, not land give-
aways like SB 7.
SENATOR HALFORD said they would take testimony on SB 7 at another
time and adjourned the meeting at 4:05 p.m.
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