An obscure clause in the just-passed $1.7 trillion federal omnibus budget law has awarded the University of Alaska a plot of land half the size of the state of Rhode Island.
The clause begins on page 2,819 of the 4,126-page law and calls for the university to receive 360,000 acres of federal land within the next four years, fulfilling the amount owed to it because of its status as a land-grant school.
The university earns between $7 million and $8 million per year in revenue from 151,000 acres it already owns, and development of the new land is expected to result in millions more per year for the state university system.
President Pat Pitney said the legislation was years in the making, and she cautioned that passage of the law is only a first step.
“It’s just really great news,” Pitney said. “It’s the necessary first step, and we’ll be working closely with the (Alaska Department of Natural Resources) on the (land) selections and moving forward.”
The university currently has the second-smallest land grant among the 50 states, and it has lobbied Congress and the state for years, seeking additional land. An Alaska Supreme Court ruling blocked one prior transfer approved by the state Legislature, and the slow pace of Congressional work meant limited progress at the federal level until this year.
The clause benefiting the university is the work of Sen. Lisa Murkowski, R-Alaska, who drafted it as the standalone “University of Alaska Fiscal Foundation Act.” Sen. Dan Sullivan, R-Alaska, also supported the legislation, Pitney said, (Sullivan voted against the final version of the budget bill, citing its size) and Rep. Mary Peltola, D-Alaska, supported it in the House, Pitney said.
Murkowski noted the passage of the section in a one-line summary on Dec. 23, and retired Fairbanks journalist Dermot Cole called it a “landmark decision” the following day.
Under the terms of the legislation, the Bureau of Land Management must create a program within four years to transfer 360,000 acres of federal land selected by the state of Alaska and the University of Alaska.
Under the Alaska Statehood Act and other federal laws, the state of Alaska was supposed to receive about 105 million acres of federal land. All but about 5.2 million acres has been transferred to the state, and Brent Goodrum, deputy commissioner of the Alaska Department of Natural Resources, said the university’s share will come from land that’s been selected but not yet transferred.
“My guess is that in the end, it’s going to be a lot of dispersed parcels,” he said. “I don’t know that you’re going to see a large contiguous block (of land).”
The university has already been in talks about what land it might seek, Pitney said, but Goodrum called those conversations preliminary and said they could change.
Once the university selects its preferences, BLM will survey the land, then convey it to the university. Pitney said she expects it will take “three to five years” before the land is accessible to the university, and then there will be a “period of development” before the university can earn revenue.
In a 2021 presentation to the Alaska Legislature, the university reported that more than a third of its land revenue comes from leasing or selling it to third parties. Another 23% comes from “forest resources,” which includes timber cutting. Smaller shares of revenue come from mining and drilling.
The university is planning to expand its carbon-credit program, which may involve preserving land from logging or development for a century. Public comments are being taken on a plan to preserve 21,000 acres under that program.
Land revenue is deposited into a trust fund, which is invested, and a share of the proceeds become available for spending each year.
Those trust funds are common across the United States, with the University of Texas’ Permanent University Fund being one of the most successful.
Efforts to establish a large fund in Alaska have been hampered by a provision of the Alaska Constitution that forbids dedicated funds.
When the state Legislature approved a bill transferring 250,000 acres to the university, the Alaska Supreme Court struck down the transfer, calling it an illegal dedication because land proceeds would be reserved for the university.
The Legislature subsequently requested action from Alaska’s Congressional delegation, and Pitney said that with federal authority now in place, the university should avoid the legal problem that negated the last land transfer attempt.
“It’s been teed up for several years, waiting for the opportunity, and it was Sen. Murkowski’s attention to it that took advantage of this opportunity,” she said.
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