Legislature(1993 - 1994)
04/29/1994 08:40 AM House FIN
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
April 29, 1994
8:40 A.M.
TAPE HFC 94 - 145, Side 1, #000 - end.
TAPE HFC 94 - 145, Side 2, #000 - end.
TAPE HFC 94 - 146, Side 1, #000 - #437.
CALL TO ORDER
Co-Chair Larson called the House Finance Committee meeting
to order at 8:40 A.M.
PRESENT
Co-Chair Larson Representative Foster
Co-Chair MacLean Representative Martin
Vice-Chair Hanley Representative Therriault
Representative Brown Representative Parnell
Representative Grussendorf
Representatives Hoffman and Navarre were not present for the
meeting.
ALSO PRESENT
Bruce Bothelo, Attorney General, Department of Law; Tom
Koester, Independent Counsel, Department of Law; Senator
Loren Leman; Harry Noah, Commissioner, Department of Natural
Resources; Jeff Jesse, Advocacy Beneficiaries of Alaska,
Anchorage; David Walker, Attorney, Representing Weiss versus
State of Alaska, Juneau; Phillip Volland, Attorney,
Representing Mental Health Clients-Alcohol Related,
Anchorage; Ron Swanson, Director, Division of Lands,
Department of Natural Resources.
SUMMARY
HB 201 An Act amending provisions of Ch. 66, SLA 1991,
that relate to reconstitution of the corpus of the
mental health trust, the management of trust
assets, and to the manner of enforcement of the
obligation to compensate the trust; and providing
for an effective date.
HB 201 was HELD in Committee for further
consideration.
HOUSE BILL 201
"An Act amending provisions of ch. 66, SLA 1991, that
1
relate to reconstitution of the corpus of the mental
health trust, the management of trust assets, and to
the manner of enforcement of the obligation to
compensate the trust; and providing for an effective
date."
BRUCE BOTHELO, ATTORNEY GENERAL, DEPARTMENT OF LAW, noted
his appreciation to the legislature, the Governor and all
parties involved in resolving the mental health lands trust
issue. He added that the legislation had been a joint
effort of the Department of Law, the Department of Natural
Resources working closely with the mental health alliances,
development interests, environmental groups and
municipalities.
HARRY NOAH, COMMISSIONER, DEPARTMENT OF NATURAL RESOURCES,
announced that the Department strongly supported the
proposed committee substitute for HB 201, #8-LS0728\V,
Chenoweth, 4/27/94.
Commissioner Noah explained the changes from the original
bill. The legislation had been divided into three
components; money, acreage and incentive. Initially, the
provision would pay $225.0 million dollars over a fifteen
year period, whereas, the committee substitute would propose
a one time payment of $200.0 million dollars, in order to
establish a trust to be managed by the Mental Health Trust
Authority.
The second proposed change would address the acreage. A
total of 927,502 acres would be distributed in the
reconstructive mental health trust package. The original
trust land return provided for a total of 434,456 acres,
consisting of 134,358 acres of subsurface, 115,339 plus an
additional 243,349 acres of subsurface only land.
The incentive portion of the package would be the dismissal
of the case in December, 1994.
TOM KOESTER, INDEPENDENT COUNSEL, DEPARTMENT OF LAW, spoke
to the components of CSHB 201 (FIN):
1. The bill reconstitutes the mental health trust as
required by the Alaska Supreme Court in a way that
protects private third parties' and
municipalities' title to mental health land
conveyed to them, mental health land leased for
resource development, mental health land in state
parks and wildlife refuges, and mental health land
used by state agencies; and
2. Would be used as an incentive to the mental health
2
community for early dismissal of the litigation.
It provides that beneficiaries of the mental
health trust will receive a number of benefits if
the case is dismissed and the time for appeal
expires by December 15, 1994.
The Reconstitution Component
Mr. Koester continued more clearly defining the
reconstitution component of the proposed legislation:
* The bill would include several findings as to the
history of the Weiss litigation, the state's
obligations and management options under the 1956
federal Alaska Mental Health Enabling Act, the
legislature's power under the Alaska Constitution
to remove land from trust status if the trust is
compensated for the fair market value of the land,
and how this bill serves the interests of both the
beneficiaries of the mental health trust and the
public;
* It reconstitutes the mental health trust, as
required by the Alaska Supreme Court, with some
original mental health land;
* For original mental health land not returned to
the trust, it compensates the trust in three ways;
- Some other state land is designated as trust
land;
- Past state mental health expenditures of $1.3
billion dollars are claimed as a set-off
against monetary liability for the fair
market value of the land not returned, as
authorized by the Alaska Supreme Court;
- Future state mental health expenditures are
claimed as an additional set-off against
state monetary liability.
* Reconstituted mental health trust land will be
managed by the Department of Natural Resources
consistent with the state's trust obligation under
the Enabling Land Act and other state and public
interests may be taken into account and
accommodated to the extent that the enabling act
permits;
* Municipalities returning land to the state for
transfer to the trust will have two years to
3
select other municipal entitlement land;
* The current allocation of six percent of the
unrestricted general fund to the mental health
trust income account is repealed.
The Incentive Component
* If the litigation is dismissed and the time for
appeals expires with no appeals filed before
December 15, 1994, the mental health community
receives several benefits;
* The mental health trust authority is established
largely as provided in Chapter 66, SLA 1991, to
oversee, coordinate, and make important decisions
regarding the funding of the State's mental health
program;
* The authority makes recommendations regarding
amounts of State general funds needed for the
State's mental health programs the Legislature
passes a separate appropriation bill for the
program; any differences between the bill and the
authority's recommendations must be explained in
the accompanying report;
* The mental health trust fund from Chapter 66 is
established, to consist of a $200 million up-front
appropriation and trust land revenues attributable
to the principal of the trust; the fund will be
preserved in perpetuity and managed by the Alaska
Permanent Fund Corporation to generate income;
* The mental health trust income account from
Chapter 66 is established, to consist of the
income from the mental health trust fund and the
revenues from trust land not attributable to the
principal of the trust (lease, etc.); the
authority will used the money in the income
account for grants and contracts to implement the
State's mental health program;
* The Chapter 66 provisions that improve the State's
mental health program are to become effective.
Co-Chair MacLean questioned how the Administration would
fund the up-front $200.0 million dollars with so little
funding available. Chairman Larson referenced the two
proposals; first, appropriate the $200.0 million from the
Earnings Reserve Account into a special fund within the
permanent fund account. Those earnings would then be
4
available for mental health purposes. The alternative would
be for the Mental Health Trust Income to be placed under the
authority of the Department of Natural Resources.
Mr. Koester added that the earnings would be placed into a
Mental Health Trust Income Account (MHTIA) including revenue
from lands managed by the trust. The Trust Authority could
then use those funds for granting and contracting with
private entities and nonprofit and state agencies in order
to deliver mental health programs.
Mr. Koester disclosed that on Page 5, the language would
address the "findings" section of the bill, whereas on Page
6, the "purposes" would be explained.
Co-Chair MacLean asked the consequences if the case was not
settled by December 1994. Mr. Koester replied that the
reconstitution clause would become law, thereby satisfying
the state's obligation required under the federal law and
the Alaska Supreme Court decision. In addition, the
incentive component would be repealed.
Attorney General Bothelo reminded Committee members that not
settling by December 1994, would place the State in
litigation before the Superior Court.
Representative Brown requested further clarification of the
relationship existing between the Mental Health Trust Fund
and the Mental Health Income and Proceeds Account.
Mr. Koester replied that language in Sections #10 and #11
would be repealed if the case was dismissed and then
replaced within the Mental Health Trust Fund and the Mental
Health Income Account.
Representative Brown requested a sectional analysis of the
bill in order that she could better understand the DNR
administrative expenses. Mr. Koester reiterated that the
Department would operate under contract with the Mental
Health Trust Authority and that there would be a separate
division to handle mental health funds.
Discussion followed between Committee members, Attorney
General Bothelo and Mr. Koester regarding potential costs to
the Department of Natural Resources. Clarification was made
that the separate "unit" was envisioned to have four
employees, and that the Trust Authority would determine if
there was additional need.
Representative Brown aired a concern regarding the cost of
additional funding requests by the Alaska Mental Health
Board and the Advisory Board on Alcoholism and Drug Abuse.
5
Representative Brown further discussed the potential problem
with the proposed appropriation delegation of power to the
Mental Health Trust Authority in order to determine the
fund's uses. Mr. Koester replied that it would be critical
to the plaintiff to maximize their influence over a portion
of the expenditure for mental health programs. He added
that the plaintiffs understand the potential problems with
the provision and do not expect a guarantee.
DAVID WALKER, ATTORNEY, REPRESENTING VERN AND WEISS, JUNEAU,
stressed that any settlement must provide for trust
management under trust principles.
Representative Brown asked Mr. Walker which portions of the
legislation would need to be amended in order to conform
with the trust principles. Mr. Walker asserted that under
the trust law principles, the trustees should be the
managers of the corpus of the trust. He maintained that the
Court will not be satisfied with anything less.
(Tape Change, HFC 94-145, Side 2).
PHILLIP VOLLAND, REPRESENTING MENTAL HEALTH CLIENTS-ALCOHOL
RELATED, ANCHORAGE, suggested that the components of the
bill are fair. He acknowledged the risks in trying to shape
the trust. He added the program provisions of Chapter 66
would be maintained in the legislation. He appealed to
Committee members to pass the work draft indicating it to be
the most fair settlement thus far. Mr Volland referenced
Section 17, Page 17 which outlines the four basic principles
of the trust:
1. Maintenance of the trust land base;
2. Management for the benefit of the trust;
3. Management for long-term sustained yield of
products from the land; and
4. Management for multiple use of trust land.
Representative Brown questioned if inclusion of proposed
language would mandate that trust lands be managed for
multiple use. Mr. Volland explained that it would not
mandate multiple use although that should be taken into
consideration when determining value of the land.
JEFF JESSE, ADVOCACY BENEFICIARIES OF ALASKA, ANCHORAGE,
summarized that although the bill was not responsive to all
the plaintiffs desires, the five settlement provisions were
supported.
Representative Martin MOVED to adopt the work draft #8-
6
LS0728\V, Chenoweth, dated 4/27/94, as the version before
the Committee. There being NO OBJECTION, it was so adopted.
Chairman Larson MOVED to adopt Amendment #1. [Copy on
file]. There being NO OBJECTION, it was adopted.
Representative Martin MOVED to adopt Amendment #2. [Copy on
file]. Mr. Koester explained Amendment #2 would add a
provision to establish approval by the Attorney General in
the contracting for independent counsel. He added that the
Trust Authority would most likely have disputes with the
departments. The beneficiaries and plaintiffs oppose the
amendment.
Mr. Jesse argued that Amendment #2 was opposed by the
plaintiffs and beneficiaries. Mr. Volland noted opposition
to the amendment stressing that the trustees were capable of
overseeing their own choices for counsel. Mr. Walker also
voiced opposition to the amendment.
Representative Hanley pointed out that the Attorney
General's oversight, as specified in statute, was
nonspecific in regard to the Mental Health Trust Fund. Mr.
Koester clarified that the Attorney General would simply
oversee the appointing of counsel.
Co-Chair MacLean questioned if the Permanent Fund
Corporation had oversight by the Attorney General. Attorney
General Bothelo replied they did noting the purpose of the
amendment would be to address any potential abuse while not
usurping the power of the Trust Authority.
Representative Parnell questioned the need for the amendment
when the authority already exists in statute. Attorney
General Bothelo commented that the amendment was offered to
provide more clarity to an ambiguous provision.
(Tape Change, HFC 94-146, Side 1).
Representative Brown stated the Authority should have the
power to provide their own counsel and thereby MOVED TO
AMEND Amendment #2 to delete all material after the comma
and insert "not with standing AS 36.30.015D". Discussion
followed among Committee members and the Attorney General
regarding the independence of the Authority and the
responsibility of the Attorney General.
There being NO OBJECTION to the amendment to Amendment #2,
it was so ordered.
Representative Martin OBJECTED to the amended Amendment #2.
7
A roll call vote was taken on the MOTION:
IN FAVOR: Brown, Grussendorf, Hanley, Parnell,
Therriault.
OPPOSED: Martin, Larson, MacLean.
Representatives Hoffman, Navarre and Foster were not present
for the vote.
The MOTION PASSED (5 - 3).
Representative Martin MOVED to adopt Amendment #3. [Copy on
file]. Mr. Koester explained that the amendment would
reflect the numbers provided by the legislative research
agency regarding "off set" expenditures by the State.
Representative Brown inquired if those amounts were opposed
by the plaintiffs. Mr. Volland replied the figures were
incorrect. There being NO OBJECTION, Amendment #3 was
adopted.
Co-Chair Larson MOVED TO RESCIND previous action taken on
adoption of Amendment #2 as amended. Representative
Grussendorf OBJECTED.
A roll call vote was taken on the MOTION.
IN FAVOR: Foster, Grussendorf, Martin, Parnell,
MacLean, Larson.
OPPOSED: Hanley, Therriault, Brown.
Representatives Hoffman and Navarre were not present for the
vote.
The MOTION PASSED (6 - 3).
Representative Brown suggested the amendment be of a
technical level, thus providing for oversight of procurement
procedures, rather than the Attorney General having the
authority to approve or disapprove of the counsel choice.
Mr. Walker maintained that the trustees should have the
authority to provide counsel for whatever purposes they deem
necessary.
Co-Chair Larson OBJECTED to the amended Amendment #2.
A roll call vote was taken on the MOTION.
IN FAVOR: Hanley, Therriault, Brown.
OPPOSED: Grussendorf, Martin, Parnell, Foster,
Larson, MacLean.
8
Representatives Hoffman and Navarre were not present for the
vote.
The MOTION FAILED (3 - 6).
Representative Brown recommended deletion of Section 36.
Mr. Koester responded that section 36 provides for an
authorization for the commissioner of the Department of
Natural Resources to appropriate funds from one part of the
general fund to another. This would not be an authorization
to spend funds. The purpose of the section would provide a
back up in the event that the case was not resolved by
December 1994. The language provides an assurance to the
court to satisfy the liability of the trust until it is
fully compensated. He noted that the provision would lasts
until the liability of the state was satisfied.
Representative Brown maintained her concern.
Representative Hanley voiced support for Section 36 noting
that the $1.3 billion offset would extend only through FY94.
In the current budget, there is $108.0 million dollars
allocated as Mental Health funds.
Co-Chair MacLean explained that the provision was similar to
the Mental Health Trust Income Account. Mr. Koester
concurred with the Co-Chair MacLean's comment and added that
the only difference would be that the provision in Section
36 will end.
Representative Martin MOVED to report CS HB 201 (FIN) out of
Committee with individual recommendations. Representative
Brown OBJECTED.
Chairman Larson announced that CS HB 201 (FIN) would be HELD
with the motion pending for further discussion regarding the
fiscal notes.
ADJOURNMENT
The meeting adjourned at 10:30 a.m.
HOUSE FINANCE COMMITTEE
April 29, 1994
8:40 A.M.
TAPE HFC 94 - 145, Side 1, #000 - end.
9
TAPE HFC 94 - 145, Side 2, #000 - end.
TAPE HFC 94 - 146, Side 1, #000 - #437.
CALL TO ORDER
Co-Chair Larson called the House Finance Committee meeting
to order at 8:40 A.M.
PRESENT
Co-Chair Larson Representative Foster
Co-Chair MacLean Representative Martin
Vice-Chair Hanley Representative Therriault
Representative Brown Representative Parnell
Representative Grussendorf
Representatives Hoffman and Navarre were not present for the
meeting.
ALSO PRESENT
Bruce Bothelo, Attorney General, Department of Law; Tom
Koester, Independent Counsel, Department of Law; Senator
Loren Leman; Harry Noah, Commissioner, Department of Natural
Resources; Jeff Jesse, Advocacy Beneficiaries of Alaska,
Anchorage; David Walker, Attorney, Representing Weiss versus
State of Alaska, Juneau; Phillip Volland, Attorney,
Representing Mental Health Clients-Alcohol Related,
Anchorage; Ron Swanson, Director, Division of Lands,
Department of Natural Resources.
SUMMARY
HB 201 An Act amending provisions of Ch. 66, SLA 1991,
that relate to reconstitution of the corpus of the
mental health trust, the management of trust
assets, and to the manner of enforcement of the
obligation to compensate the trust; and providing
for an effective date.
HB 201 was HELD in Committee for further
consideration.
HOUSE BILL 201
"An Act amending provisions of ch. 66, SLA 1991, that
relate to reconstitution of the corpus of the mental
health trust, the management of trust assets, and to
the manner of enforcement of the obligation to
compensate the trust; and providing for an effective
date."
10
BRUCE BOTHELO, ATTORNEY GENERAL, DEPARTMENT OF LAW, noted
his appreciation to the legislature, the Governor and all
parties involved in resolving the mental health lands trust
issue. He added that the legislation had been a joint
effort of the Department of Law, the Department of Natural
Resources working closely with the mental health alliances,
development interests, environmental groups and
municipalities.
HARRY NOAH, COMMISSIONER, DEPARTMENT OF NATURAL RESOURCES,
announced that the Department strongly supported the
proposed committee substitute for HB 201, #8-LS0728\V,
Chenoweth, 4/27/94.
Commissioner Noah explained the changes from the original
bill. The legislation had been divided into three
components; money, acreage and incentive. Initially, the
provision would pay $225.0 million dollars over a fifteen
year period, whereas, the committee substitute would propose
a one time payment of $200.0 million dollars, in order to
establish a trust to be managed by the Mental Health Trust
Authority.
The second proposed change would address the acreage. A
total of 927,502 acres would be distributed in the
reconstructive mental health trust package. The original
trust land return provided for a total of 434,456 acres,
consisting of 134,358 acres of subsurface, 115,339 plus an
additional 243,349 acres of subsurface only land.
The incentive portion of the package would be the dismissal
of the case in December, 1994.
TOM KOESTER, INDEPENDENT COUNSEL, DEPARTMENT OF LAW, spoke
to the components of CSHB 201 (FIN):
1. The bill reconstitutes the mental health trust as
required by the Alaska Supreme Court in a way that
protects private third parties' and
municipalities' title to mental health land
conveyed to them, mental health land leased for
resource development, mental health land in state
parks and wildlife refuges, and mental health land
used by state agencies; and
2. Would be used as an incentive to the mental health
community for early dismissal of the litigation.
It provides that beneficiaries of the mental
health trust will receive a number of benefits if
the case is dismissed and the time for appeal
expires by December 15, 1994.
11
The Reconstitution Component
Mr. Koester continued more clearly defining the
reconstitution component of the proposed legislation:
* The bill would include several findings as to the
history of the Weiss litigation, the state's
obligations and management options under the 1956
federal Alaska Mental Health Enabling Act, the
legislature's power under the Alaska Constitution
to remove land from trust status if the trust is
compensated for the fair market value of the land,
and how this bill serves the interests of both the
beneficiaries of the mental health trust and the
public;
* It reconstitutes the mental health trust, as
required by the Alaska Supreme Court, with some
original mental health land;
* For original mental health land not returned to
the trust, it compensates the trust in three ways;
- Some other state land is designated as trust
land;
- Past state mental health expenditures of $1.3
billion dollars are claimed as a set-off
against monetary liability for the fair
market value of the land not returned, as
authorized by the Alaska Supreme Court;
- Future state mental health expenditures are
claimed as an additional set-off against
state monetary liability.
* Reconstituted mental health trust land will be
managed by the Department of Natural Resources
consistent with the state's trust obligation under
the Enabling Land Act and other state and public
interests may be taken into account and
accommodated to the extent that the enabling act
permits;
* Municipalities returning land to the state for
transfer to the trust will have two years to
select other municipal entitlement land;
* The current allocation of six percent of the
unrestricted general fund to the mental health
trust income account is repealed.
12
The Incentive Component
* If the litigation is dismissed and the time for
appeals expires with no appeals filed before
December 15, 1994, the mental health community
receives several benefits;
* The mental health trust authority is established
largely as provided in Chapter 66, SLA 1991, to
oversee, coordinate, and make important decisions
regarding the funding of the State's mental health
program;
* The authority makes recommendations regarding
amounts of State general funds needed for the
State's mental health programs the Legislature
passes a separate appropriation bill for the
program; any differences between the bill and the
authority's recommendations must be explained in
the accompanying report;
* The mental health trust fund from Chapter 66 is
established, to consist of a $200 million up-front
appropriation and trust land revenues attributable
to the principal of the trust; the fund will be
preserved in perpetuity and managed by the Alaska
Permanent Fund Corporation to generate income;
* The mental health trust income account from
Chapter 66 is established, to consist of the
income from the mental health trust fund and the
revenues from trust land not attributable to the
principal of the trust (lease, etc.); the
authority will used the money in the income
account for grants and contracts to implement the
State's mental health program;
* The Chapter 66 provisions that improve the State's
mental health program are to become effective.
Co-Chair MacLean questioned how the Administration would
fund the up-front $200.0 million dollars with so little
funding available. Chairman Larson referenced the two
proposals; first, appropriate the $200.0 million from the
Earnings Reserve Account into a special fund within the
permanent fund account. Those earnings would then be
available for mental health purposes. The alternative would
be for the Mental Health Trust Income to be placed under the
authority of the Department of Natural Resources.
Mr. Koester added that the earnings would be placed into a
Mental Health Trust Income Account (MHTIA) including revenue
13
from lands managed by the trust. The Trust Authority could
then use those funds for granting and contracting with
private entities and nonprofit and state agencies in order
to deliver mental health programs.
Mr. Koester disclosed that on Page 5, the language would
address the "findings" section of the bill, whereas on Page
6, the "purposes" would be explained.
Co-Chair MacLean asked the consequences if the case was not
settled by December 1994. Mr. Koester replied that the
reconstitution clause would become law, thereby satisfying
the state's obligation required under the federal law and
the Alaska Supreme Court decision. In addition, the
incentive component would be repealed.
Attorney General Bothelo reminded Committee members that not
settling by December 1994, would place the State in
litigation before the Superior Court.
Representative Brown requested further clarification of the
relationship existing between the Mental Health Trust Fund
and the Mental Health Income and Proceeds Account.
Mr. Koester replied that language in Sections #10 and #11
would be repealed if the case was dismissed and then
replaced within the Mental Health Trust Fund and the Mental
Health Income Account.
Representative Brown requested a sectional analysis of the
bill in order that she could better understand the DNR
administrative expenses. Mr. Koester reiterated that the
Department would operate under contract with the Mental
Health Trust Authority and that there would be a separate
division to handle mental health funds.
Discussion followed between Committee members, Attorney
General Bothelo and Mr. Koester regarding potential costs to
the Department of Natural Resources. Clarification was made
that the separate "unit" was envisioned to have four
employees, and that the Trust Authority would determine if
there was additional need.
Representative Brown aired a concern regarding the cost of
additional funding requests by the Alaska Mental Health
Board and the Advisory Board on Alcoholism and Drug Abuse.
Representative Brown further discussed the potential problem
with the proposed appropriation delegation of power to the
Mental Health Trust Authority in order to determine the
fund's uses. Mr. Koester replied that it would be critical
to the plaintiff to maximize their influence over a portion
of the expenditure for mental health programs. He added
14
that the plaintiffs understand the potential problems with
the provision and do not expect a guarantee.
DAVID WALKER, ATTORNEY, REPRESENTING VERN AND WEISS, JUNEAU,
stressed that any settlement must provide for trust
management under trust principles.
Representative Brown asked Mr. Walker which portions of the
legislation would need to be amended in order to conform
with the trust principles. Mr. Walker asserted that under
the trust law principles, the trustees should be the
managers of the corpus of the trust. He maintained that the
Court will not be satisfied with anything less.
(Tape Change, HFC 94-145, Side 2).
PHILLIP VOLLAND, REPRESENTING MENTAL HEALTH CLIENTS-ALCOHOL
RELATED, ANCHORAGE, suggested that the components of the
bill are fair. He acknowledged the risks in trying to shape
the trust. He added the program provisions of Chapter 66
would be maintained in the legislation. He appealed to
Committee members to pass the work draft indicating it to be
the most fair settlement thus far. Mr Volland referenced
Section 17, Page 17 which outlines the four basic principles
of the trust:
1. Maintenance of the trust land base;
2. Management for the benefit of the trust;
3. Management for long-term sustained yield of
products from the land; and
4. Management for multiple use of trust land.
Representative Brown questioned if inclusion of proposed
language would mandate that trust lands be managed for
multiple use. Mr. Volland explained that it would not
mandate multiple use although that should be taken into
consideration when determining value of the land.
JEFF JESSE, ADVOCACY BENEFICIARIES OF ALASKA, ANCHORAGE,
summarized that although the bill was not responsive to all
the plaintiffs desires, the five settlement provisions were
supported.
Representative Martin MOVED to adopt the work draft #8-
LS0728\V, Chenoweth, dated 4/27/94, as the version before
the Committee. There being NO OBJECTION, it was so adopted.
Chairman Larson MOVED to adopt Amendment #1. [Copy on
file]. There being NO OBJECTION, it was adopted.
15
Representative Martin MOVED to adopt Amendment #2. [Copy on
file]. Mr. Koester explained Amendment #2 would add a
provision to establish approval by the Attorney General in
the contracting for independent counsel. He added that the
Trust Authority would most likely have disputes with the
departments. The beneficiaries and plaintiffs oppose the
amendment.
Mr. Jesse argued that Amendment #2 was opposed by the
plaintiffs and beneficiaries. Mr. Volland noted opposition
to the amendment stressing that the trustees were capable of
overseeing their own choices for counsel. Mr. Walker also
voiced opposition to the amendment.
Representative Hanley pointed out that the Attorney
General's oversight, as specified in statute, was
nonspecific in regard to the Mental Health Trust Fund. Mr.
Koester clarified that the Attorney General would simply
oversee the appointing of counsel.
Co-Chair MacLean questioned if the Permanent Fund
Corporation had oversight by the Attorney General. Attorney
General Bothelo replied they did noting the purpose of the
amendment would be to address any potential abuse while not
usurping the power of the Trust Authority.
Representative Parnell questioned the need for the amendment
when the authority already exists in statute. Attorney
General Bothelo commented that the amendment was offered to
provide more clarity to an ambiguous provision.
(Tape Change, HFC 94-146, Side 1).
Representative Brown stated the Authority should have the
power to provide their own counsel and thereby MOVED TO
AMEND Amendment #2 to delete all material after the comma
and insert "not with standing AS 36.30.015D". Discussion
followed among Committee members and the Attorney General
regarding the independence of the Authority and the
responsibility of the Attorney General.
There being NO OBJECTION to the amendment to Amendment #2,
it was so ordered.
Representative Martin OBJECTED to the amended Amendment #2.
A roll call vote was taken on the MOTION:
IN FAVOR: Brown, Grussendorf, Hanley, Parnell,
Therriault.
16
OPPOSED: Martin, Larson, MacLean.
Representatives Hoffman, Navarre and Foster were not present
for the vote.
The MOTION PASSED (5 - 3).
Representative Martin MOVED to adopt Amendment #3. [Copy on
file]. Mr. Koester explained that the amendment would
reflect the numbers provided by the legislative research
agency regarding "off set" expenditures by the State.
Representative Brown inquired if those amounts were opposed
by the plaintiffs. Mr. Volland replied the figures were
incorrect. There being NO OBJECTION, Amendment #3 was
adopted.
Co-Chair Larson MOVED TO RESCIND previous action taken on
adoption of Amendment #2 as amended. Representative
Grussendorf OBJECTED.
A roll call vote was taken on the MOTION.
IN FAVOR: Foster, Grussendorf, Martin, Parnell,
MacLean, Larson.
OPPOSED: Hanley, Therriault, Brown.
Representatives Hoffman and Navarre were not present for the
vote.
The MOTION PASSED (6 - 3).
Representative Brown suggested the amendment be of a
technical level, thus providing for oversight of procurement
procedures, rather than the Attorney General having the
authority to approve or disapprove of the counsel choice.
Mr. Walker maintained that the trustees should have the
authority to provide counsel for whatever purposes they deem
necessary.
Co-Chair Larson OBJECTED to the amended Amendment #2.
A roll call vote was taken on the MOTION.
IN FAVOR: Hanley, Therriault, Brown.
OPPOSED: Grussendorf, Martin, Parnell, Foster,
Larson, MacLean.
Representatives Hoffman and Navarre were not present for the
vote.
The MOTION FAILED (3 - 6).
Representative Brown recommended deletion of Section 36.
17
Mr. Koester responded that section 36 provides for an
authorization for the commissioner of the Department of
Natural Resources to appropriate funds from one part of the
general fund to another. This would not be an authorization
to spend funds. The purpose of the section would provide a
back up in the event that the case was not resolved by
December 1994. The language provides an assurance to the
court to satisfy the liability of the trust until it is
fully compensated. He noted that the provision would lasts
until the liability of the state was satisfied.
Representative Brown maintained her concern.
Representative Hanley voiced support for Section 36 noting
that the $1.3 billion offset would extend only through FY94.
In the current budget, there is $108.0 million dollars
allocated as Mental Health funds.
Co-Chair MacLean explained that the provision was similar to
the Mental Health Trust Income Account. Mr. Koester
concurred with the Co-Chair MacLean's comment and added that
the only difference would be that the provision in Section
36 will end.
Representative Martin MOVED to report CS HB 201 (FIN) out of
Committee with individual recommendations. Representative
Brown OBJECTED.
Chairman Larson announced that CS HB 201 (FIN) would be HELD
with the motion pending for further discussion regarding the
fiscal notes.
ADJOURNMENT
The meeting adjourned at 10:30 a.m.
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