SENATE BILL 16 "An Act relating to the University of Alaska and university land, authorizing the University of Alaska to select additional state public domain land, and defining net income from the University of Alaska's endowment trust fund as 'university receipts' subject to prior legislative appropriation." Representative Kelly WITHDREW Amendment #4. [Attachment Amendment #4a. [Attachment #2]. Representative Kelly MOVED to adopt Amendment #5. [Attachment #3]. Representative Martin OBJECTED for purposes of discussion. He recommended deleting "by" on Page 1, Line 21, and inserting "to" the legislature. WENDY REDMAN, VICE PRESIDENT, UNIVERSITY RELATIONS, UNIVERSITY OF ALASKA, agreed with Representative Martin. She noted that the intention was clear and that the issue was a grammatical change. Representative Martin MOVED to amend Amendment #5. There being NO OBJECTION, it was amended to the language previously recommended. Representative Brown spoke to Amendment #5 questioning how it could work. Ms. Redman stated that the amendment would clarify the Legislature's authority and that they may act by: 1. Approving the list; 2. Disapproving the list; 3. Or no action in which case the list would deem to be approved. Representative Brown questioned the time limit the Legislature would have. Ms. Redman replied that the list would need to be approved by the end of the first session of the following legislature after it was introduced. Representative Brown questioned the reasoning in requiring that each list to contain not less than 25,000 acres for the 2 remaining entitlement. Ms. Redman stated that the University was trying to settle on a group of lands that would be large enough for investment yet not overwhelming to maintain. She explained that there could not be a final conveyance until approved by the Legislature. Representative Brown recommended clarifying the language that specifies when the University must submit the list to the Legislature. Representative Brown MOVED a change to Page 1, Line 7, delete "at" and insert "within thirty days of the". There being NO OBJECTION, it was adopted. There being NO OBJECTIONS to adoption of the amended Amendment #5, it was adopted. Representative Kelly MOVED to adopt Amendment #4a. [Attachment #2]. Representative Parnell OBJECTED. Representative Kelly stated that the amendment would provide a compromise to the size of the parcels selected. Ms. Redman stated that the amendment had resulted in response to an issue of the total state holding. Representative Brown thought the legislation should address the property already in possession for expansion. Representative Kelly and Representative Therriault clarified the intention of the amendment. Representative Martin voiced concern in limiting the parcels to 40 acres. He thought that the language of the amendment was not specific and would result in court orders. He added that the parcels should be large and be used for long range investment purposes. Ms. Redman pointed out that the original language specified 640 acres which the Department of Natural Resources and the University determined was too large. The University prefers land selections with as large of tracts as possible, however, the University would like to protect themselves so that if there is a State tract available totaling thirty five acres, the University would not be precluded from selecting that land. Current language would preclude the University from selecting that parcel. Representative Martin questioned the purpose for obtaining the land. Ms. Redman explained that the purpose of land selections would not be for campus expansion. The purpose of land grant lands would be to generate revenue. RON SWANSON, DIRECTOR, DIVISION OF LAND, DEPARTMENT OF NATURAL RESOURCES (DNR), noted the Department's concern that there exists many subdivision tracts which are contiguous and could total 25-30 acres. The University would like to own the entire parcel of that subdivisoned land. He suggested additional language be added to Amendment #4a, which would give that discretion to the Commissioner of DNR. Representative Kelly WITHDREW Amendment #4a. He offered to 3 provide language as suggested by Mr. Swanson as Amendment Representative Kelly MOVED to adopt Amendment #6. [Attachment #4]. There being NO OBJECTION, it was adopted. Representative Brown MOVED to adopt Amendment #7. [Attachment #5]. Representative Therriault OBJECTED. Representative Brown stated that Amendment #7 would isolate the University's selections to the surface estate. Ms. Redman commented that currently the University does a lot of gravel work and that it has become a lucrative business. Representative Grussendorf discussed that the municipalities are not given subsurface rights. He asked why the state would grant the University subsurface rights and not the municipalities. Representative Therriault noted that the University was a part of the State government, whereas, the municipalities are considered to be subsets of State government. He stressed that the two are classified in different categories. A roll call was taken on the MOTION to adopt Amendment #7. IN FAVOR: Brown, Grussendorf OPPOSED: Kelly, Kohring, Martin, Mulder, Navarre, Parnell, Therriault, Hanley, Foster The MOTION FAILED (2-9). Representative Brown MOVED to adopt Amendment #8. [Attachment #6]. Representative Therriault OBJECTED. Representative Brown explained that the amendment would balance the land interest in favor of State interest rather than the University. A roll call was taken on the MOTION. IN FAVOR: Grussendorf, Kelly, Martin, Navarre, Brown, Hanley OPPOSED: Kohring, Mulder, Parnell, Therriault, Foster The MOTION FAILED (6-5). Representative Brown WITHDREW Amendment #9. [Attachment Representative Kelly MOVED to adopt Amendment #4aa. [Attachment #8]. He explained that the amendment would give the Commissioner of DNR the authority to determine what would be in the best interest of the State in disposal of 4 those lands under 40 acres. Representative Brown noted that the wording did not make sense. Representative Mulder MOVED the "friendly" change recommended by Mr. Swanson to Amendment #4aa, deleting "unsurveyed" and inserting "larger" and deleting "shall be 40 acres". There being NO OBJECTION, to adopting the amended Amendment 4aa, it was adopted. Representative Mulder MOVED to report HCS CS SB 16 (FIN) out of Committee with individual recommendations and with the accompanying fiscal notes. Representative Brown stated that her questions from a previous meeting had not yet been answered. Representative Mulder WITHDREW to MOTION to move the bill from Committee. Representative Brown asked about the leases to the permanent fund. Ms. Redman replied that those leases were addressed on Page 8, Lines 26-27, and would subject the University lands to all of the same provisions that are contained in effect for other state lands. She concluded that the proceeds to the permanent fund would be 50%. Representative Brown referenced Page 5, Line 9, and asked if the leases would include a shore fisheries lease. Mr. Swanson noted that it would not, and that it would not be in the best interest of the State to include those. Representative Brown asked the language which indicates that the lease would not be covered in the legislation. Mr. Swanson replied that it is not specifically stated and that decision would be required to go through the "best interest" findings process. Representative Brown asked why there should be a different policy between the University and the municipalities. Ms. Redman commented that the intent of the legislation would leave that decision to the Commissioner of DNR and with the Legislature. She pointed out that the bill has many controls and that a shore lease would not be in the best interest of the State. Representative Brown disagreed and felt that the language should be spelled out. (Tape Change, HFC 95-120, Side 1). Representative Mulder MOVED to report HCS CS SB 16 (FIN) out of Committee with individual recommendations and with the accompanying fiscal notes. Representative Navarre OBJECTED. Representative Brown referenced the Memorandum provided by Legislative Counsel, Jack Chenoweth dated 5/8/95. [Attachment 9]. The memo references AS 14.40.400 indicating 5 that changing that status could be unconstitutional. Ms. Redman stated that Page 13, Line 6, essential changing the land grant lands, currently existing lands are a dedicated fund pre-statehood. She implied that Mr. Chenoweth had acknowledged that information in his memo. Currently, the original land grant lands and all of the new lands have placed them into the regular appropriation process as University receipts. In effect, the dedication of funds would be given up. Representative Navarre WITHDREW THE OBJECTION to moving the bill from Committee. There being NO FURTHER OBJECTIONS, it was so ordered. HCS CS SB 16 (FIN) was reported out of Committee with "no recommendations" and with fiscal notes by the Department of Fish and Game dated 3/27/95, the Statewide Budget Office and two by the Department of Natural Resources dated 3/27/95 and a zero fiscal note by the Department of Revenue dated 3/27/95.