Legislature(1993 - 1994)
03/19/1993 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 noted that since the bill's hearing on March 12, a coalition of parties had been working with the Resources committee staff on developing amendments to the HB 201. Number 135 RICK JOHANSSEN, AN ATTORNEY REPRESENTING USIBELLI MINES, spoke by teleconference from Anchorage to explain the amendments to HB 201 developed by the coalition. (A copy of the proposed amendments may be found in the House Resources Committee Room, Capitol Room 124, and after the adjournment of the second session of the 18th Alaska State Legislature, in the Legislative Reference Library.) He said the coalition was comprised of two of the four plaintiff groups in the Weiss litigation; representatives of development interests, including the Alaska Coal Association, the Alaska Miners Association, and the Resource Development Council; the oil company interveners in the Weiss litigation, including Marathon and Unocal; and, all the public interest interveners in the Weiss litigation. Of those eight public interest intervening groups, MR. JOHANSSEN said some are environmental organizations, and others include the Alaska Sportfishing Association, and the Susitna Valley Association. Number 168 MR. JOHANSSEN explained that because of the complicated legal aspects of the issues, the coalition groups were represented by attorneys in developing the amendments to HB 201. He referred specifically to amendments E.1 and E.5, and said they were products of the coalition's work. With those amendments, he added, the coalition believes HB 201 addressed most of the legal problems associated with Chapter 66. The amendment's were also intended to address the legal concerns of the Department of Law, he said. Number 197 MR. JOHANSSEN addressed amendment E.1, and said the first change it makes is to eliminate Section 3 of HB 201, leaving AS 37.14.031 in place in Chapter 66. He said the plaintiff's representatives in the coalition had wanted the income and proceeds of original mental health trust lands to go into the trust corpus, but the Department of Law felt this would violate the terms of the original 1956 Enabling Act. To eliminate that potential problem, he explained, the coalition had agreed it was best to have all income and proceeds go to the trust income account as established in Chapter 66. MR. JOHANSSEN explained the second change amendment E.1 proposed for HB 201, which would amend the collateral provision of the bill by clarifying that the pledged Legislatively Designated Areas (LDA) could continue to be developed by the state to the extent the law governing any particular LDA allows. The Department of Law, he said, expressed concerns that the pledge of those lands as security could prevent the state from doing anything that could diminish or impair the value of the collateral. Number 217 MR. JOHANSSEN addressed amendment E.5, and referred to a document in members' packets which he said contained a detailed explanation of that amendment. Amendment E.5, he explained, contained three substantive provisions: The first of these, he said, was a land management provision; second was a public interest safeguard provision; and third, a definition of unrestricted general fund revenues. The land management provision, he said, was the "meat" of the amendment. It requires, he explained, the trust to take original mental health trust lands back subject to existing third party interests, such as leases, contracts, and land use permits. MR. JOHANSSEN said amendment E.5 also requires that the Department of Natural Resources (DNR) manage the lands under the rules and regulations that the third parties bargained for. He likened that provision to a grandfather clause that protects third party interest holders' contract rights. MR. JOHANSSEN continued his explanation by saying that in exchange for allowing their properties to go back to the reconstituted trust, the third party interest holders, such as the owners of coal leases and mining claims, would be guaranteed the rules of the game would not change as long as the third party interests remained in effect. Alaska Statutes 38.04 and 38.05, he said, and the corresponding DNR regulations, would continue to apply to those lands. All other original mental health trust lands, he added, being returned to the reconstituted trust, which are vacant, unappropriated and unreserved, and not subject to any third party interest, would be managed under whatever land management standard the trust authority might adopt. Number 275 MR. JOHANSSEN addressed the second of the three substantive provisions of amendment E.5, the public interest safeguards provision. Reconstituted trust lands not grandfathered because there were no existing third party rights, he explained, could be managed by the trust authority or by the DNR as the trust authority's contractor, without compliance to AS 38.04 and 38.05, including the public interest safeguards in those statutes. To protect HB 201 from constitutional challenges because the constitution prohibits land disposal without prior public notice, amendment E.5 would require multiple purpose use of trust lands, while recognizing that with respect to non-grandfathered land, trust principles must take priority if they conflict with the objectives of multiple purpose use. MR. JOHANSSEN added that the amendment also requires public notice of land disposals. He then addressed the third substantive provision of amendment E.5 to HB 201. This provision, he explained, defined unrestricted general fund revenues. The definition ties the meaning of the phrase to the current manner in which money is categorized under the statewide accounting system. No limitation, he said, is placed on the power of the people or the legislature to restrict general fund revenues. Any such future restrictions, he said, would be disregarded for purposes of calculating the amount that is paid to the trust income account. MR. JOHANSSEN noted that the three percent provided in HB 201 would be calculated based on the way state funds are categorized today, even though the state accounting categorizations might change for other purposes in the future. He commented that the coalition had done its best to keep the other plaintiffs and the Department of Law informed of its positions and activities. He said the coalition fully recognizes that any dispute as complicated as this would generate differences of opinion and misunderstanding. He said the coalition would welcome the comments of the other plaintiff's attorneys and of the Department of Law. Number 342 MR. JOHANSSEN addressed a third amendment to HB 201, referred to as amendment E.6, and described it as making no substantive alteration to the provisions of the bill or the E.1 or E.5 amendments. CHAIRMAN WILLIAMS asked Mr. Johanssen to comment on a reference in a press release from the governor's office that set a 60-day deadline to reach agreement on releasing third parties from the case. Specifically, he asked how that deadline would affect HB 201. Number 359 MR. JOHANSSEN replied that HB 201 also relieves third parties. The press release, he explained, pertains to the "moms and pops" and under HB 201, the land they owned would not be reconstituted to the trust. As to whether or not the attorney general's actions with respect to those parties, obviates the need for legislation, the answer, he said, was no. Legislation, he said, was necessary to protect the other parties tied up in the litigation in the Superior Court. Without legislation, he predicted litigation would go on and on. REPRESENTATIVE PAT CARNEY commented that in order to solve the problem of the mental health trust, a bilateral agreement by both parties would be needed. He asked Mr. Johanssen whether he had talked with members of the mental health group about the proposed amendments to HB 201. MR. JOHANSSEN responded that two of those plaintiffs's representatives were in the coalition, and other parties were kept informed. Regarding the other representatives, David Walker and Jim Gottstein, Mr. Johanssen said the coalition had done its best to keep them informed, and hoped to have substantive comments from them soon. He said the coalition would like to work with those other parties to resolve the dispute. Number 383 VICE CHAIRMAN HUDSON referred to amendment E.5, page 2, and the definition of unrestricted revenues. He asked Mr. Johanssen to explain the effect in terms of allocated funds and whether they were excluded from the unrestricted general funds. Number 397 MR. JOHANSSEN believed that was the intent, especially with the budget reserve fund. He viewed that as a restricted fund, and said the percentage calculation was based only on unrestricted general funds. It would not include money deposited into the budget reserve fund, he said. Regarding the state's recent oil company settlement receipt, and the question of whether that money would by law be required to be deposited into the budget reserve fund, he said the percentage would not be calculated using those numbers if the money did go into the budget reserve fund. Number 410 VICE CHAIRMAN HUDSON asked about the earnings reserve account of the permanent fund and whether that would figure into calculations of the percentage called for in HB 201. MR. JOHANSSEN replied that it would not. BRIAN BJORKQUIST, ASSISTANT ATTORNEY GENERAL, testified from Anchorage by teleconference. He said the state had received the amendments submitted by the coalition and was in the process of reviewing them. He noted that the DNR was reviewing the amendments to look for any technical problems that could hinder the coalition accomplishing its goals, and would prepare a memorandum in response by Tuesday, March 23, 1993. Number 430 MR. BJORKQUIST remarked that the memorandum would address ambiguities in the amendments as to who would be responsible for different types of management authority and decision- making authority. He said the amendments to HB 201 left some overlapping management and decision-making amendments which would require some technical amendments to alleviate those concerns. CHAIRMAN WILLIAMS announced the committee would next take testimony from Fairbanks. ROGER BURGGRAF testified by teleconference from Fairbanks. He spoke in support of the proposed amendments to HB 201, and stated that Chapter 66 was dead if left as it was. He cautioned that without fast action, resolution of the mental health lands trust issue could be dragged out for years. Number 495 CHARLIE BODDY, USIBELLI COAL CO., testified by teleconference from Fairbanks. He said he was in agreement with the comments of Mr. Johanssen, and supported the efforts for resolution of the issue. Number 502 HAROLD GILLAM, testified from Fairbanks, and suggested that the committee seek resolution of the mental health lands trust issue. He felt the state had come to the best decision that was in keeping with the dictates of the Supreme Court. He expressed distress over the activities of lawyers and the failure to reach an agreement. Number 539 CHAIRMAN WILLIAMS, hearing that no others wished to testify by teleconference, announced that HB 201 would be taken up again on Wednesday, March 24, 1993. VICE CHAIRMAN HUDSON noted that there were still parties to the issue who had not yet been heard, including David Walker and Jim Gottstein. Number 561 REPRESENTATIVE JEANNETTE JAMES echoed Representative Hudson's remarks and stressed the need for everyone to agree to a solution. REPRESENTATIVE CARNEY suggested that as follow-up to the comments made during the meeting, committee staff should contact Mr. Walker and Mr. Gottstein to get their comments on HB 201 and the proposed amendments. CHAIRMAN WILLIAMS agreed that this would be done for the March 24th meeting. Number 580 ANNOUNCEMENTS CHAIRMAN WILLIAMS announced that on Monday, March 22nd, the committee would meet to hear HB 213 and HB 238. He also announced that he was waiving HB 191, having to do with cost recovery by contract operators of state-owned hatcheries. ADJOURNMENT There being no further business to come before the House Resources Committee, Chairman Williams adjourned the meeting at 9:35 a.m.
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