News from the Senate Majority

Alaska State Legislature

Wendy Lindskoog, Senate Majority Press Secretary
State Capitol
Juneau, AK 99801-1182
Phone: 907/465-4582
http://www.akrepublicans.org
Broadcast Actualities: 800/478-6540

For Immediate Release: March 6, 1997 Contact: Senator Gary Wilken 907/465-3709

Senate Passes Bill To Eliminate Middleman

Allows University To Manage Its Natural Resource Endowment Fund

Juneau -- The Alaska State Senate passed legislation Thursday by a vote of 19 to 1 to transfer control of the University’s Natural Resource Endowment Fund from the Department of Revenue to the University of Alaska.

"It is time that the University of Alaska be allowed to manage its assets in the most fiscally prudent way possible," said Senator Gary Wilken (R-Fairbanks) who sponsored SB 84. "This legislation places management of the fund with the University, sets out the orderly transfer of the fund, and sets in statute sensible endowment management principles" said Wilken.

Senator Wilken noted that Congress, in 1915 and 1929, granted the Territory of Alaska approximately 113,000 acres of land for the exclusive use and benefit of the University of Alaska as the successor institution to the Alaska Agricultural College, School of Mines. All the earnings from the sale, lease, or use of these lands has been deposited into a trust fund that as of June 30, 1996, has grown to approximately $32.6 million.

"Eliminating the Department of Revenue as middleman and allowing the University to manage this asset makes good financial sense," Wilken said. "The transfer will substantially lower the cost of administration, maximize the fund’s earnings potential and permit greater investment diversification."

Senate Bill 84 will create:

• Better accountability because the University would be responsible and accountable for its own money.
• Increased returns over existing investments.
• Savings of $35,000 per year in administrative costs.

"The University has established a good track history. It has demonstrated sound investment decisions in managing the University of Alaska Foundation endowment funds leaving us confident that the same expertise will be extended to the Natural Resource Endowment Fund," Wilken said.

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