Legislature(1993 - 1994)
03/12/1993 08:00 AM House RES
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 201: MENTAL HEALTH TRUST AMENDMENTS CHAIRMAN WILLIAMS explained that HB 201 was introduced by the House Resources committee after two overview hearings on the issue and committee discussion, followed by the appointment of a subcommittee. That subcommittee, he said, had recommended introduction of the bill. He announced that since the committee already had heard the background of the issue, the testimony at this meeting should focus specifically on the legislation itself. Number 375 CHARLES COLE, ATTORNEY GENERAL, ALASKA DEPARTMENT OF LAW, presented the state's opinion on HB 201. In his preliminary statement, he referred to the settlement agreement entered into between the counsel for the Weiss plaintiffs and those similarly situated, the attorney for the Alaska Mental Health Association, Mr. Walker and Mr. Gottstein. Also signatory to that agreement was Jeff Jessee, attorney for the intervening plaintiffs. MR. COLE read from the settlement agreement, then restated it in non-legal terms. He referred to an injunction precluding the state from issuing deeds to the so-called "moms and pops," the innocent third parties whose lands were tied up because of the pending land exchange. The state, he said, was concerned about that situation and wanted to afford relief to those people. He said those people had dealt with the state in good faith and had paid money. By virtue of the Superior Court in Fairbanks, he explained, the state could not perform, and so sought to afford relief by, in effect, pledging the full faith and credit of the state to protect the plaintiffs. MR. COLE said if such relief was not granted, the parties would have 60 days to try to reach a solution that gives appropriate relief to the moms and pops. The agreement further provided that "in the event the parties are unable to arrive at such an agreement, either party may terminate the settlement agreement," Mr. Cole explained. An application for relief for the moms and pops was made to the Superior Court in Fairbanks, he said, and the motion was denied on the grounds that the propriety of granting it was directly related to the validity of Chapter 66. Number 437 MR. COLE said that in a further effort to grant relief, the state petitioned the Alaska Supreme Court, asking it to review the order of the Superior Court denying the relief to the moms and pops sought by the motion. In this part of the petition the state asked the Supreme Court to help explain the scope of the set-off which it granted to the state in the original Weiss decision. On March 11, 1993, Mr. Cole said, the Supreme Court, without comment, denied the petition. The state, he said, was now considering what action, if any, it should take in light of the rejection by the Supreme Court in denial for relief from the Superior Court. Relief to the innocent third parties was one of the administration's major objectives in formulation of Chapter 66, Mr. Cole added. Number 480 MR. COLE said the administration's view has been that the breach by the state of its obligations under the Mental Health Enabling Act should be resolved on the basis of the merits of that claim, and the Weiss litigation should not be used as a vehicle to permanently obtain a mental health appropriation. So long as the mental health payments are guaranteed by statute at six percent of unrestricted general revenues, he said it would be difficult to achieve a settlement which, in his view, satisfactorily resolves the issues surrounding the Weiss claim. If litigation or statute exists which says six percent, he said, there would not be great incentive to wrap up the issues. MR. COLE, citing an additional problem, referred to settlements the state had reached with British Petroleum and Phillips, which resulted in $680 million dollars in revenue. He noted under the formula of encumbering six percent of revenues, it could be that six percent of that settlement could go to the mental health budget, which he commented, would constitute a windfall. Number 525 REPRESENTATIVE GREEN asked Mr. Cole to clarify what would happen if settlements are reached which include revenues to the state. Specifically, he asked whether additional windfalls would be dedicated to mental health. MR. COLE explained that the six percent figure presently generates $130 to $140 million dollars a year, when there are no large tax settlements entered in. Under those settlements, money properly should go into the general fund, and then the six percent figure would apply to them. If that is the legislature's intent, he said, "that's all well and good." Number 546 REPRESENTATIVE GREEN mentioned the six percent figure in the house bill may still be negotiable. MR. COLE understood that, and said he had been obliquely referring to the three percent figure in HB 201. He said that from the position of the Weiss claimants, three percent is less satisfactory than six percent. CHAIRMAN WILLIAMS noted Representative James had joined the meeting at 8:15 a.m. REPRESENTATIVE JOHN DAVIES referred to the comments on the percentage of unrestricted general fund revenues, and asked whether it was Mr. Cole's view that any permanent appropriation as a percentage of the general fund would be inappropriate because it does not meet the merits of the original settlement. Number 565 MR. COLE answered that it does not isolate the merits of the Weiss claims and what should be paid to settle them, from a perpetual appropriation to mental health. REPRESENTATIVE DAVIES asked why it would be inappropriate to substitute such a method for that portion of land that was not reconstituted. He noted the land itself, under the original congressional intent, was intended for a permanent income stream. MR. COLE did not believe the intent of the original enabling act was to provide a permanent fixed stream. Rather, he felt the intent was to make available lands from which income could be generated to support in whole or in part, depending on the legislature's desires, the mental health programs. Regarding the first part of Representative Davies' question, Mr. Cole said nothing would be wrong with that so long as the total dollars paid, made good the state's obligations under the enabling act. This, he said, is key to the damages sustained by the trust for the state's breach. Number 602 REPRESENTATIVE JEANNETTE JAMES returned to the question of the $680 million received by the state in settlements with oil companies. She noted the legislature disagrees with the administration's position that the money should go into the general fund, and believes instead that the revenue should go into the budget reserve account. If that is the case, she asked the attorney general whether it was then correct that the settlement money would not figure into the six percent revenue stream for mental health programs. MR. COLE replied in the affirmative. VICE CHAIRMAN HUDSON summarized the situation of the mental health lands issue by saying that the state erred in taking the mental health lands that were set aside for the trust; they erred in disposing of the lands; they erred in encumbering; and they erred in designating many of those lands into special use purposes. Those lands that are left, he said, can go back into reconstituting the trust. MR. COLE preferred to say he had no comment with respect to whether the state had indeed breached all those obligations. He agreed, however, that those are the claims of the plaintiffs. VICE CHAIRMAN HUDSON commented that to correct the situation, Chapter 66 was passed, which said the state would return the unencumbered lands to the trust and let the mental health trust select other lands. He said it was to the state's credit to release the moms and pops. When looking at the current status of the situation, Vice Chairman Hudson said the Resources subcommittee considered viewpoints that said the reconstitution would likely take years, with every party trying to position themselves to get the most out of it. VICE CHAIRMAN HUDSON said the subcommittee looked at a variety of alternatives, including the possibility of a lease-back mechanism. He said the committee was stymied as to how to resolve the issue, and the three percent revenue stream figure in HB 201 was an alternative to six percent, and it gave some consideration for the millions of dollars that the state had already paid into the trust. He asked Mr. Cole to comment on the current court impasse in trying to develop the reconstitution, and whether that solution could be expected to result in a satisfactory solution. Number 674 MR. COLE commented that he had been personally disappointed in the way the settlement agreement had functioned, particularly with respect to the land selection by the claimants. He also expressed disappointment in the inability to receive adjudication in the issues by the courts. TAPE 93-28, SIDE B Number 000 MR. COLE announced that he had to leave the meeting for another appointment, and noted Tom Koester, an attorney on contract with the Department of Law working on the mental health lands issue, would be available for further questions, if needed. BOB STILES, PRESIDENT OF THE ALASKA COAL ASSOCIATION, explained that he manages properties in the Beluga Coal Fields, all of which are situated on original mental health trust lands. He noted that he is not an attorney, and would analyze HB 201 from a businessman's perspective. Number 043 MR. STILES said it was important to recognize the concept of HB 201, as an attempt to fix the major sticking points on Chapter 66. He commented that the whole land exchange process was the biggest problem with Chapter 66, particularly as it relates to replacement lands. He said HB 201 removes that aspect. He also noted HB 201 contains "technical fixes" for Chapter 66. He explained these changes section by section. MR. STILES referred to Section 1 of HB 201, and explained that this section, as well as Section 9, addresses the jurisdiction of the case, adjusting it first to the Superior Court. Section 2, he said, is identical to Chapter 66 except for paragraph four, where the language is strengthened with regard to land asset management by the Department of Natural Resources (DNR). This parallels paragraph five, he said, which establishes the Alaska Permanent Fund as the manager of the cash assets. MR. STILES addressed Section 3 of HB 201, and offered an amendment to submit to the committee that would remove Section 3. The problem with that section, he said, was that it allocates the income from the land to the Trust Fund, which he said was seen as a violation of the enabling act, which said the income from the land had to go to the trust income account. This is the way it was structured in Chapter 66, he said. MR. STILES explained that Section 4 repeals the substitute land exchange portion of Chapter 66, and replaces it with an allocation instead of an appropriation of a percentage of the unrestricted general revenues to the trust income account. Section 5, he said, establishes security for the state's carrying through of the allocation of the income. He again stressed that it was an allocation of income and not an appropriation. Effectively, he said, the section establishes rent on those lands that do not go back to the trust. MR. STILES said Chapter 66 reconstituted the land corpus of the trust from original trust lands that are not in Legislatively Designated Areas (LDAs), that are not municipal lands, and are not "moms and pops" lands. It only, he explained, puts back unencumbered original trust lands and encumbered lands with the encumbrances listed. Number 175 MR. STILES referred to an amendment to Section 5 that was included in committee members' packets. That amendment, he said, lifts some restrictions on the state's functioning on LDAs. It says, he explained, that the state could continue to allow and permit those activities that are permitted by law, so there would be no restriction on the use of the LDAs because they are held as security for the trust. MR. STILES noted the way Section 5 of HB 201 was originally written, it was conceivable that the state could not put a park bench in LDAs. More importantly from an industry perspective, he explained, was that the Wishbone Hill mine is inside of an LDA. This raised questions about the ability of the project to go forward, but the amendment should resolve that, he said. MR. STILES turned to Section 6, which he said reconstitutes the land corpus of the trust. The way the section is written in HB 201, he said, it is only a recognition of the existence of the mental health trust lands. That situation was unacceptable to the plaintiffs, he said, in that they are interested in having a patent to the lands. He recommended amendments to Section 6, and said he hoped to have them prepared and to the committee in the following week. MR. STILES addressed Section 7, which he said eliminates the repeal of Section 38.05.800. The reason for that, he said, was that the preceding section was, in fact, Section 38.05.800. In Chapter 66, he said, that section was repealed, and in HB 201, the repeal is being reversed. Section 8, he said, repeals all of the land portion of Chapter 66. Sections 54 through 57 of Chapter 66, he said, all spoke to the reconstitution of the land corpus of the trust, and Section 9 is jurisdictional, as explained under his comments on Section 1. Number 234 MR. STILES explained that Section 10 of HB 201 establishes the interface between HB 201 and Chapter 66. He suggested adding similar language to SB 67, the companion senate bill to HB 201. With that he concluded his analysis of the bill. Number 256 REPRESENTATIVE GREEN asked Mr. Stiles whether he supported HB 201 generally, or only the proposed amendments. MR. STILES responded that he was very much in support of HB 201, and noted he had worked with the coalition that included the public interest interveners, the oil interveners, and the non-settling plaintiffs and development interests. All parties, he said, had input in the development of the bill in order to make it as "bulletproof" as possible. Number 288 REPRESENTATIVE JAMES remarked that the mental health lands issue has been frustrating for everyone, and it seemed that there were two real points being pushed, which cannot seem to come together. The first of these, she said, is whether or not the state breached its obligations in the first place, denying some people in the process. The other question, she explained, was how to best proceed. She noted the state seems to be on one side and all the plaintiffs and interveners on the other side. She suggested the plaintiffs and interveners get on the side of the state in order to get on with reaching a solution. Number 300 MR. STILES agreed it was in the interest of the state to do that, but commented that a team cannot be built unless everyone wants to get on it and play. He had not found that to be the case with the Attorney General. He said the coalition would welcome the opportunity to sit down and talk with the Attorney General. REPRESENTATIVE JAMES made an analogy of the situation as being like a tug of war. She asked Mr. Stiles to comment on whether he agreed that some people go to one side in order to create an even playing field. MR. STILES asked whether she was suggesting that some members of the coalition, "unholy alliance" as he referred to them, go over to the attorney general's side. REPRESENTATIVE JAMES suggested that when that happens, the focus of the fight would change. Number 349 VICE CHAIRMAN HUDSON commented that everyone wanted something out of the issue, including coal. He referred to Chapter 66 and its intention to free up lands so that development and investment could proceed. He asked Mr. Stiles what he was being prevented from doing that led him to become involved in the mental health lands issue. MR. STILES replied that coal is more market driven than any other resource in the state, in that customers look strongly at the ability to get access to the land. The industry is based on long-term contracts, he said. The practical reality of Chapter 66, he said, is that the Alaska coal industry cannot sell its coal because of the perception created in the marketplace of a land freeze. In that respect, the industry is held hostage by the litigation. He said the industry is much like the moms and pops. The industry had entered into good faith agreements with the state and could not go forward because of the freeze perception, he added. MR. STILES explained that the coal interests in general end up in exactly the same place under Chapter 66, under HB 201, and SB 67, or under a strict reconstitution. Under any set of circumstances, he said, the coal company would have a new landlord, and neither the companies nor their potential customers have any idea who that landlord will be. Number 408 VICE CHAIRMAN HUDSON questioned why it would not be possible to resolve three-quarters of the problem, which would free up the moms and pops. He noted the courts were calling for a total settlement or no settlement, which could be Mr. Cole's justification for saying that he had concerns with the way the courts had behaved. He noted eventually, coal and other mineral investment interests would have to deal with the mental health people. He questioned why that could not happen now, and leave the last question, the land swap, to be determined later in the courts. He also questioned why the court would not agree to those steps. Number 430 MR. STILES explained that challenges had been raised to a piece-meal solution. He said HB 201 removes that problem with the substitute lands. Chapter 66 allows the trust to select lands now with more known about the lands than was known in 1956, at the time of the original lands' trust. Much of the original land is no longer available, which creates problems of valuation, he said. What HB 201 does, he said, is to take away those problems. It would identify remaining lands, return it to the trust subject to existing encumbrances, and let the parties proceed with a solution as early as the fall of 1993. Number 462 REPRESENTATIVE GREEN stated one of the concerns he would have if he were a potential investor in Alaska minerals was that the solution might not come to fruition and the investment might be lost. He suggested a ripple effect would continue until the whole matter was resolved. MR. STILES noted in the recent Supreme Court denial of a petition to grant relief to the moms and pops, the court essentially said it would be a cruel hoax to do that because the plaintiffs in the settlement agreement retain their right to reassert the claim at a future date. Number 490 CHAIRMAN WILLIAMS thanked Mr. Stiles for his testimony, and introduced the next witness, Mr. Jeff Jessee. Number 503 JEFF JESSEE, ATTORNEY FOR ADVOCACY SERVICES OF ALASKA, testified on behalf of his clients, the non-settling plaintiffs to the settlement agreement. He wished the Attorney General had stayed at the committee meeting to hear the testimony of the other parties, in order for him to better understand the viewpoints of others. Mr. Jessee commented that it seemed clear that the Attorney General did not agree with what the courts had said regarding the state's trust responsibility and breach of that responsibility. MR. JESSEE stressed the parties were not just alleging a breach of trust, but the Alaska Supreme Court had declared the breach to be a fact. He suggested the Attorney General's refusal to recognize that there was a trust, and there was a breach, and there needs to be an agreement, was a fundamental problem in getting everyone on one side to reach an agreement. Number 530 MR. JESSEE disagreed with Representative James' comments that the parties needed to get on the side of the Attorney General. He called Mr. Cole's position an untenable one for the executive branch to continue to take. Regarding the relief to the moms and pops, Mr. Jessee called it no relief at all. Addressing HB 201 and the concept of an income stream, Mr. Jessee said he disagreed with the Attorney General, and said he believed the land was certainly intended to produce a stream of income to support the mental health programs. Instead of using it for that purpose, he continued, the state had used the revenues for its own purposes. MR. JESSEE felt the concept of ongoing financial support for mental health programs was appropriate. Regarding the six percent revenue stream, he remarked that now the onus was on the plaintiffs to justify the six percent when he said, that had not been their idea in the first place. In 1991, he noted, the legislature and the executive branch pushed the idea of the six percent as an idea of a fair settlement. He commented now that the plaintiffs were trying to make that concept work, they are being seen as greedy. He pointed out the suggestion that the problem be "cashed out" which would require taking money and putting it into a corpus account. The percentage approach, he said, is different from that, in that it did not require a sum of money to be taken off the table and put into a bank account. Rather, he said, it would be used to supplant state general fund revenues. Number 575 MR. JESSEE explained that the revenue stream approach had been reached to allow the state to benefit the beneficiaries, by giving them some influence over how mental health monies are spent. He suggested the beneficiaries might do a better job at that than the legislature does. He mentioned that he had spent time with the Mental Health Board determining their budget and emphasized that their focus had been getting the most in mental health services for their investment. MR. JESSEE suggested the failure to reach a solution in the mental health lands issue stemmed from the state's reneging whenever an agreement had been reached. He said it happened in Chapter 48 and was happening with Chapter 66. He referred to letters from settling plaintiffs in the committee members' packets, as well as a page out of the settlement agreement. He suggested that agreement clearly shows that intent of the agreement. He expressed dissatisfaction with the cycle of litigation, and with the blame being placed on the settling plaintiffs. Regarding the state's claims that original trust lands did not contain oil and gas, Mr. Jessee displayed a long list of lands which he said have significant oil and gas potential. The list was compiled, he said, by consultants hired by the settling plaintiffs. Number 626 MR. JESSEE suggested when HB 201 is heard in the House Finance Committee the revenue percentage could be looked at, as well as appropriations and the scope of programs. He believed HB 201 was an appropriate direction to go, and hoped the Attorney General and the Governor would realize they need to get on the side of the coalition. Number 648 REPRESENTATIVE JAMES clarified her previous comments and said her goal was for the parties to come to some common agreement stemming from negotiations. Regarding Mr. Jessee's statement that the beneficiaries' goal was to have input in the mental health budgeting process, she asked him to clarify who the parties are specifically. MR. JESSEE explained that he had referred to the beneficiaries and their representatives. REPRESENTATIVE JAMES asked how that group would work differently than the current Mental Health Trust Board. MR. JESSEE explained that the board does not make decisions; rather, it makes recommendations which, he said, the legislature and the executive branch routinely ignore with no rationale or justification as to why their view is so different from the board's recommendations. REPRESENTATIVE JAMES said it was her understanding that the funds that would be in the mental health trust would be appropriated for mental health expenditures by the legislature. MR. JESSEE confirmed this. REPRESENTATIVE JAMES then asked if there was more money in the trust than needed for mental health expenditures, the legislature could take money out and appropriate it somewhere else. MR. JAMES confirmed this, also. REPRESENTATIVE JAMES asked Mr. Jessee to comment on the scenario where, if the beneficiaries were making up a budget that represented the way they thought the money should be spent, but there was not enough money, they would then come back to the legislature to ask for another appropriation. MR. JAMES answered that if they asked for more funding, it would come from general funds and the legislature would be in no way obligated under the trust to appropriate. REPRESENTATIVE JAMES asked why the process could not be shortened to put the beneficiaries in that position. In other words, she asked if the mental health board could not be exchanged for the mental health beneficiaries. MR. JAMES explained that this was essentially what Chapter 66 and HB 201 would do. TAPE 93-29, SIDE A Number 000 MR. JESSEE added the manner of compensation was the subject of disagreement in the mental health lands issue. REPRESENTATIVE JAMES noted her concern is that the court order exists from 1985 that tells the parties what they must do. Even if 100% of all the people involved agreed on the way to solve the issue, she asked whether, if the solution does not meet the demands of that court issue, the court would approve it. Number 035 MR. JESSEE clarified what the Supreme Court decision meant. He said the decision was a directive to the lower court that, barring a settlement, this was how the lower court should proceed to resolve the issue. Chapter 66, he said, does not strictly comply with what the Supreme Court said. The court did not say, he explained, that the parties should go find some other lands and substitute those into the trust. The court, he said, required the original lands to be put back into the trust. None of the settlements will track exactly what the Supreme Court has said, he added. The court has to approve the settlement, but not on the basis of it meeting the letter of the Supreme Court's decision as to how the trust would be reconstituted in the absence of a settlement. VICE CHAIRMAN HUDSON asked Mr. Jessee to comment on the amendments proposed by Mr. Stiles. The first, he said, was to remove section 3 of HB 201, and the other would insert, on page 2, line 31, a new statement, "not withstanding the pledge of the lands secured in the state would continue to conduct all activities that are authorized by law." MR. JESSEE addressed the amendment that would delete Section 3. He said this was a good idea that became too hard to make work. In an effort to try to make the trust more self- sufficient in the long run, with anticipated declines in state revenues, the idea was to take the fairly minimal income from the lands the trust would get back, and put them in what would amount to a permanent fund. He said building up such a fund over 20 or 30 years, then when the state did not have general fund dollars, the trust would be more self- sufficient. The reason that would not work, he said, was because the Attorney General said it violated the dedicated fund and the enabling act. The solution, Mr. Jessee explained, was to get rid of the idea, and instead, the minimal income from the land would be added to the income account and spent every year as has been done in the past. VICE CHAIRMAN HUDSON asked Mr. Jessee whether he agreed that Section 3 does not need to be in HB 201. MR. JESSEE agreed that, unfortunately, that was his position. As to the other amendment proposed by Mr. Stiles, Mr. Jessee commented that it was always understood those lands would continue to be managed, and the amendment just makes that clear. Number 092 CHAIRMAN WILLIAMS said that in the interest of time, and in order for all witnesses to be heard, the committee would hear from the next witness. Number 109 DAVID WALKER, ATTORNEY FOR THE WEISS PLAINTIFFS, testified as lead counsel for the remaining settling plaintiffs in the action. He referred to HB 201's predecessor, introduced in the 17th Alaska Legislature, and noted he had had reservations related to the issue of enforceability and the security that would be required for promises made under that bill. He pointed to a letter in member's packets explaining those concerns. MR. WALKER commented that in using the approach of introducing HB 201, it was proper to consider and debate the expenses of the mental health program, separate from the issue of enforceability. In order for any scenario to be considered, he said, by the remaining settling plaintiffs, it must be enforceable. If there is an obligation to pay, rather than a transfer of assets, he said that must be secured. He noted the Attorney General had stated he was opposed to guaranteeing by statute the six percent revenue stream. Mr. Walker called this "baloney" and said the issue had become a mess because the state breached the statute, and statute cannot guarantee the payment of six percent in perpetuity. Number 142 MR. WALKER said in the past, the Department of Law had said the six percent could not be guaranteed by statute. The only way, he suggested, to guarantee the payment and thereby obviate the need for security and answer questions of enforceability, would be to have a constitutional amendment. A promise, rather than a transfer of assets, he explained, has to be enforceable and properly secured. Because HB 201 constitutes an unenforceable promise, he said the settling plaintiffs will not support HB 201. Number 184 REPRESENTATIVE DAVIES asked Mr. Walker to restate his reason for his feeling that the security that HB 201 attempts to offer is inadequate. MR. WALKER explained that the problem has to do with the amount of the security as well as with constraints put upon the security. For example, he said if there was a suggestion that LDAs should serve as security, then it has to be clear that those lands are able to be foreclosed upon. Once foreclosed upon, it needs to be clear they can be developed, he added. Regarding the amounts of security, Mr. Walker said he did not think the state could take LDAs away from the trust, or the lands given to municipalities or to the "moms and pops" and then say "we're not going to let you have those back, we're going to give you a cash income stream for it," and as security let them have some kind of hold on the LDAs. MR. WALKER compared that to going to the bank and borrowing $100,000 with $50,000 as security. He said that in effect, the LDAs would be put up as security for themselves. Number 216 REPRESENTATIVE JAMES commented that she did not see the LDAs as good security. She suggested the plaintiffs be given the LDAs now with full fee-simple title and then enter into an agreement where the state would rent those lands and if the state stopped paying rent the plaintiffs would take back control of the lands. She asked Mr. Walker to comment on that scenario. Number 230 MR. WALKER replied that the question of the use of the Legislatively Designate Lands was proper for debate. He explained that it was clear those lands were originally mental health trust lands and were taken away from the trust. He mentioned that Senator Robin Taylor had said to him, "You will take those back if we give them to you." Number 240 MR. WALKER said there had been so many attempted solutions to the mental health lands problem, and he mentioned one of those, Chapter 48. Under Chapter 48, he said, there was an idea that the LDAs would continue to retain that designation and be used in a rental arrangement. The difficulty in reaching a solution, he said, has to do with the fact that there was a large amount of valuable mental health trust land that was taken, and the people who got it want to keep it, while nobody wants to pay for it. Number 250 REPRESENTATIVE JAMES presented a follow-up question, regarding the potential time in court if the parties proceeded with the course they are on. MR. WALKER could not predict that at the time, but said by the end of the 1993 legislative session, they would be closer to being able to do that. He foresaw, because of the difficulty of the situation, that under any solution proposed, there would be litigation. VICE CHAIRMAN HUDSON asked Mr. Walker to confirm a summary of his statements: First, the plaintiffs would not be satisfied with either three or six percent because it was not backed up with assets for security. MR. WALKER agreed that any percentage would not be acceptable because of the questions of security and enforceability. Number 293 VICE CHAIRMAN HUDSON asked whether it was correct that if the state failed to carry through on its obligation of a certain percentage, the plaintiffs could go to the courts and begin to take the LDAs. Because they were prior mental health trust lands, he said, they would be excluded from the underground resource issue. Number 300 MR. WALKER did not believe HB 201 made it clear that the lands could be foreclosed upon in the ordinary way foreclosures are made, or if foreclosed upon, there would be no legislative designation on the lands, or that the trust could develop the lands the way any private landholder would. Number 312 VICE CHAIRMAN HUDSON commented that in his view, the intention of HB 201 was to give a guarantee to the people from whom the assets had been taken. He also asked if, in its present form, HB 201 does not do anything that Chapter 66 did not do, then why not let the courts go ahead and decide the issue. MR. WALKER advised that was what should be done. Number 323 REPRESENTATIVE GREEN expressed personal concern about letting the court decide what is best for the state. He asked Mr. Walker what would be the problem if the only way there could be enforceability was to go to the people for a constitutional amendment. Number 337 MR. WALKER's response was that Representative Green was "preaching to the choir." Number 340 ANNOUNCEMENTS CHAIRMAN WILLIAMS announced the committee would take up HB 201 again, probably on Friday, March 19, 1993. He said at that time additional amendments would be prepared for the committee's consideration. ADJOURNMENT There being no further business to come before the House Resources Committee, Chairman Williams adjourned the meeting at 9:55 a.m.
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