Legislature(1999 - 2000)
01/25/1999 03:10 PM RES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
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.