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The land grants, totaling 40,114 acres in Southeast Alaska, would entitle the university to hold, develop or sell 44 parcels around towns including Pelican, Port Alexander, Baranof Warm Springs and Tenakee Springs.

Residents in Tenakee Springs and Port Alexander said the university's financial interests are incompatible with their subsistence needs.

"We hunt and recreate on these lands," said Anisa Berry, of Point Alexander. "It infringes on our rural Alaska lifestyle."

The university system is hosting an open house on the bill from 8 to 5 p.m. today at Centennial Hall.

But out of all the state lands selected for the university, the Southeast properties are expected to generate the most income for the university system.

"Those are really our most valuable lands," Loeffler said.

Some legislators questioned whether the land would really be profitable and a half-dozen residents testified against the bill at a House Resource committee hearing on Wednesday.

"We recognize that there's emotion associated with real estate," said University of Alaska Vice President for Finance Joe Beedle. "We walk a delicate line."

Beedle said the university system won't select land that is controversial "right away." But when Rep. Gabrielle LeDoux, R-Kodiak, asked Beedle if the university would take some sensitive parcels off the table, he said, "We would be concerned (about) a dilution of this bill."

Rep. Harry Crawford, R-Anchorage, questioned whether the land would be marketable. "Are these parcels actually going to make money? I think we are going off half-cocked here."

For example, Crawford said he doesn't understand the rationale behind selecting a 438-acre parcel on Biorka Island, a popular sea lion viewing site near Sitka.

Loeffler said the island parcel has been described as appropriate for remote cabin sites.

Opposition to the fast-track bill is also brewing in larger cities, such as Ketchikan and Kodiak, where the land grants would include the Southeast Alaska Aquaculture Association's (SARA) hatchery operation at Neets Bay and the Kodiak Rocket Launch Facility, respectively.

Resources committee member Jim Elkins, R-Ketchikan, said he cannot support the university's ownership of land at Neets Bay because development there could jeopardize SARA, one of the most profitable hatcheries in Southeast Alaska.

University and state officials said the land grants are needed to put the University of Alaska on par with other Western land grant universities.

But some residents and community activists said Wednesday the state is limiting public review of the proposed bill. Previous legislation that attempted to transfer state lands to the university system involved a 10-year public process costing the state $17 million.

The current bill provides for a three-year process. In his Feb. 4 statement on the bill, Gov. Murkowski stated that the previous legislation was "difficult, expensive, time-consuming and subject to litigation."

The university system has estimated that in 20 years, it will receive an annuity of about $5 million by acquiring state lands proposed in the bill.

• Elizabeth Bluemink can be reached at elizabeth.bluemink@juneauempire.com.