Legislature(1993 - 1994)

03/19/1993 08:00 AM House RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
                                                                               
               HOUSE RESOURCES STANDING COMMITTEE                              
                         March 19, 1993                                        
                            8:00 a.m.                                          
                                                                               
                                                                               
  MEMBERS PRESENT                                                              
                                                                               
  Representative Bill Williams, Chairman                                       
  Representative Bill Hudson, Vice Chairman                                    
  Representative Con Bunde                                                     
  Representative Pat Carney                                                    
  Representative John Davies                                                   
  Representative Joe Green                                                     
  Representative Jeannette James                                               
  Representative Eldon Mulder                                                  
  Representative David Finkelstein                                             
                                                                               
  MEMBERS ABSENT                                                               
                                                                               
  None                                                                         
                                                                               
  COMMITTEE CALENDAR                                                           
                                                                               
  Briefing by the Department of Environmental Conservation on                  
  Project Chariot and other radiation issues.                                  
                                                                               
  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."                                            
                                                                               
            HEARD AND HELD IN COMMITTEE FOR FURTHER                            
            CONSIDERATION                                                      
                                                                               
  WITNESS REGISTER                                                             
                                                                               
  Mead Treadwell                                                               
  Deputy Commissioner                                                          
  Alaska Department of Environmental Conservation                              
  410 W. Willoughby Ave., Suite 105                                            
  Juneau, Alaska  99801                                                        
  Phone:  465-5050                                                             
  Position Statement: Presented briefing on Project Chariot                    
                      and other radiation issues                               
                                                                               
  Douglas Dasher                                                               
  Alaska Department of Environmental Conservation                              
  1001 Noble Street, #350                                                      
  Fairbanks, Alaska  99701                                                     
  Phone:  451-2172                                                             
  Position Statement: Presented briefing on Project Chariot                    
                      and other radiation issues                               
                                                                               
  Rick Johanssen, Attorney                                                     
  Representing Usibelli Mines                                                  
  1029 W. 3rd Ave,. Suite 300                                                  
  Anchorage, Alaska  99501                                                     
  Phone:  279-8561                                                             
  Position Statement: Explained amendments to HB 201                           
                                                                               
  Brian Bjorkquist, Assistant Attorney General                                 
  Department of Law                                                            
  1031 W. 4th St., Suite 200                                                   
  Anchorage, Alaska  99501-1994                                                
  Phone:  269-5100                                                             
  Position Statement: Testified on state's position regarding                  
                      amendments to HB 201                                     
                                                                               
  Roger Burggraf                                                               
  830 Sheep Creek Rd.                                                          
  Fairbanks, Alaska  99709                                                     
  Phone:  479-2596                                                             
  Position Statement: Supported amendments to HB 201                           
                                                                               
  Charlie Boddy                                                                
  Usibelli Coal Co.                                                            
  122 1st Ave., #302                                                           
  Fairbanks, Alaska  99701                                                     
  Phone:  452-2625                                                             
  Position Statement: Agreed with Mr. Johanssen's comments on                  
                      HB 201                                                   
                                                                               
  Harold Gillam                                                                
  104 2nd Ave.                                                                 
  Fairbanks, Alaska  99701                                                     
  Phone:  452-2534                                                             
  Position Statement: Urged resolution of mental health lands                  
                      dispute                                                  
                                                                               
  PREVIOUS ACTION                                                              
                                                                               
  BILL:  HB 201                                                                
  SHORT TITLE:  MENTAL HEALTH TRUST AMENDMENTS                                 
  BILL VERSION:                                                                
  SPONSOR(S):   RESOURCES                                                      
                                                                               
  TITLE: "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."                                            
                                                                               
  JRN-DATE     JRN-PG               ACTION                                     
  03/05/93       552    (H)   READ THE FIRST TIME/REFERRAL(S)                  
  03/05/93       552    (H)   RESOURCES, JUDICIARY, FINANCE                    
  03/12/93              (H)   RES AT 08:00 AM CAPITOL 124                      
  03/12/93              (H)   MINUTE(RES)                                      
  03/12/93              (H)   MINUTE(RES)                                      
  03/19/93              (H)   RES AT 08:00 AM CAPITOL 124                      
                                                                               
                                                                               
  ACTION NARRATIVE                                                             
                                                                               
  TAPE 93-32, SIDE A                                                           
  Number 000                                                                   
                                                                               
  The House Resources Committee was called to order by                         
  Chairman Bill Williams at 8:09 a.m.  Members present at the                  
  call to order were Representatives Williams, Hudson, Bunde,                  
  Carney, Davies, Green, James, and Mulder.  Representative                    
  Finkelstein was absent at the call to order.                                 
                                                                               
  CHAIRMAN BILL WILLIAMS announced the committee would first                   
  hear from the Department of Environmental Conservation on                    
  Project Chariot and other radiation issues.  This would be                   
  followed, he said, with consideration of HB 201.                             
                                                                               
  Number 049                                                                   
                                                                               
  MEAD TREADWELL, DEPUTY COMMISSIONER OF THE DEPARTMENT OF                     
  ENVIRONMENTAL CONSERVATION, distributed for committee                        
  members' information two reports.  The first was produced by                 
  the U.S. Department of Energy, Nevada Field Office, titled                   
  Project Chariot:  Cape Thompson, Alaska, dated December,                     
  1992.  The second report, prepared by the Alaska State                       
  Emergency Response Commission, Emergency Response Committee,                 
  was titled Radiological Threats and Release Response                         
  Preparedness in the State of Alaska, dated March, 1993.  (A                  
  copy of these reports 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.)                                       
                                                                               
  MR. TREADWELL told the committee several radiation issues                    
  had arisen recently, including the presence of                               
  radioisotopes, generators, the presence of Project Chariot                   
  debris at Point Hope, and questions about the former nuclear                 
  power plant at Fort Greely.  He mentioned that there are                     
  four state agencies that oversee radiation in one form or                    
  another.  Those were the Department of Environmental                         
  Conservation (DEC), the Department of Health and Social                      
  Services (DHSS), the Department of Labor, and the Department                 
  of Military and Veterans' Affairs.                                           
                                                                               
  Number 074                                                                   
                                                                               
  MR. TREADWELL identified contact persons in some of those                    
  agencies, including Mike Conway, Director of Spill                           
  Prevention and Response (DEC); Jim Powell, Deputy Director                   
  of Environmental Quality (DEC); Linda Himmelbauer, state                     
  toxicologist; Doug Dasher, DEC; and Peter Nakamura, Director                 
  of the Division of Public Health (DHSS).                                     
                                                                               
  MR. TREADWELL referred to the recommendations contained in                   
  the Radiological Threats report, and directed members'                       
  attention to page 7, where five key recommendations were                     
  listed; as well as to page 10, where 15 general initiatives                  
  were listed, addressing radiological issues.                                 
                                                                               
  MR. TREADWELL briefly described the recommendations.  He                     
  said the most important one was related to health, based on                  
  a review done by an outside radiological research group.  He                 
  said that research team visited the state in the fall of                     
  1992 and found that Alaska's coverage of X-Ray facilities                    
  was not good.  He called it the largest radiological threat                  
  facing Alaska.  The second recommendation, he said, was to                   
  consolidate into one agency the major radiation protection                   
  and response planning activities.                                            
                                                                               
  MR. TREADWELL described another recommendation to                            
  consolidate and update state regulations and statutes                        
  pertaining to radiological hazards.  He said this                            
  recommendation would be developed over the interim.  A                       
  fourth recommendation was to increase the effort in                          
  communicating the risk from radiological sources to                          
  Alaskans, particularly rural residents.  He noted the                        
  perceived incidence of increasing cancer rates in Northern                   
  Alaska, and the perception that the U.S. government had not                  
  been telling the truth regarding radiological materials left                 
  behind.                                                                      
                                                                               
  MR. TREADWELL also mentioned the need to get a better hold                   
  of what radiological materials might have entered the waters                 
  and food chain from Russian practices.  The final                            
  recommendation he noted was to ask Governor Hickel to work                   
  to have the U.S. government consult with the government of                   
  the Russian federation on construction of new nuclear                        
  facilities.                                                                  
                                                                               
  MR. TREADWELL described an incident where an Alaska DEC                      
  official travelling in Russia on his own attended a                          
  conference at which he was the only one who did not sign a                   
  resolution endorsing a plan for large expansion of nuclear                   
  facilities.  He noted that a number of countries are                         
  spending $50 million dollars to help upgrade Russian nuclear                 
  power plants.  He cautioned that the results of a nuclear                    
  accident in Russia could be devastating to Alaska, depending                 
  on the location of an accident and the wind conditions at                    
  the time.                                                                    
                                                                               
  Number 218                                                                   
                                                                               
  DOUG DASHER, DEPARTMENT OF ENVIRONMENTAL CONSERVATION'S LEAD                 
  CONTACT ON PROJECT CHARIOT, told the committee that there                    
  were three primary issues on which the DEC is working with                   
  the federal Department of Energy.  The first issue was how                   
  and when clean-up of the Project Chariot site would take                     
  place.  Second was a push for broader health studies and                     
  radiation monitors to give real-time warning of radiological                 
  air emissions.  The third issue, he said, was reimbursement                  
  to Alaska for activities surrounding the clean-up of Project                 
  Chariot.  The state, he explained, had spent $60,000 so far                  
  on the project.                                                              
                                                                               
  MR. DASHER presented slides that showed the site near Point                  
  Hope where Project Chariot began as a program that would                     
  have blasted a harbor at Point Hope, and became an                           
  experimental large-scale biological study.  He said the                      
  project became controversial and was discontinued in 1962.                   
  The U.S. Geological Survey had conducted research at the                     
  site to test the effects of radiation on drinking water, and                 
  nuclear fall-out material was brought to the Snowbank Creek                  
  site.  He told the committee that the experiments were                       
  conducted with minimum safeguards, and when the project was                  
  discontinued, the radioactive soil was dumped and mixed with                 
  other materials, and covered in mounds that were only                        
  temporarily marked.  The identifying markers are no longer                   
  visible, he explained.                                                       
                                                                               
  MR. DASHER said that in August of 1992, a researcher from                    
  the University of Alaska found the materials, and since that                 
  time, Senator Frank Murkowski had held hearings, and the                     
  U.S. Department of Energy took responsibility, and has                       
  prepared a clean-up plan, which he said was currently in the                 
  public review and comment phase.                                             
                                                                               
  Number 490                                                                   
                                                                               
  MR. DASHER explained that after the clean-up, long-term                      
  monitoring would be conducted, and the land would finally be                 
  turned over to the Native Corporation.  Of approximately                     
  1,500 pounds of material that had been buried, he said 43.5                  
  pounds have been hauled up.  He estimated that the actual                    
  radioactive isotopes remaining in the materials are about                    
  equal to the size of a penny.  He said that studies of the                   
  material that had been recovered showed very low levels of                   
  radiation.  One major concern related to the project, he                     
  said, had to do with classified data, and suspicions that                    
  some other activities may have occurred besides those that                   
  are known.                                                                   
                                                                               
  REPRESENTATIVE JOE GREEN asked Mr. Dasher what the half-life                 
  of the radioactive materials was, and whether the materials                  
  would still be strongly radioactive.                                         
                                                                               
  Number 512                                                                   
                                                                               
  MR. DASHER answered that the type of radioactive material                    
  found at the site was CCM-137, with a half-life of 30-years.                 
  Another substance, iodine-131, has a half-life of 8.7 days.                  
  Strontium-85, he added, was around 60 days.  After seven                     
  half-lives, he explained, the radioactivity of those                         
  materials is not detectable.  Mr. Dasher told the committee                  
  that the materials could have all been hauled out of the                     
  area on a barge when the project was completed, and they                     
  were cited by the Atomic Energy Commission, and ended up                     
  getting permission to leave the materials at the site from                   
  the Atomic Energy Commission.  At the time, the commission                   
  did not cite a significant health risk, Mr. Dasher                           
  commented, but a future public relations problem was                         
  predicted.                                                                   
                                                                               
  Number 535                                                                   
                                                                               
  REPRESENTATIVE CON BUNDE raised concerns that the clean-up                   
  might disturb materials and actually cause more problems                     
  than if the site was left alone.  He suggested the clean-up                  
  program should be driven by sound scientific principles and                  
  not be P.R.-driven.  Regarding the declassification of                       
  information, he asked whether that process was happening                     
  rapidly so any additional activities not now known would be                  
  made public.                                                                 
                                                                               
  MR. DASHER addressed Representative Bunde's concern about                    
  disturbing and moving radioactive materials, and stated that                 
  the risk would primarily be the possibility of accidents in                  
  the transportation of the material.  He noted that nothing                   
  found to date indicated a health risk posed by the mounds,                   
  and that the perception of a threat was creating stress more                 
  than any actual threat. In particular, he noted the concerns                 
  held by the owner of land downstream on Snowbank Creek, Mr.                  
  Wilbur Lane, as well as concerns that the lands would                        
  eventually be turned over to the Native Corporation for                      
  allotments in the area.  At a meeting of the Science                         
  Advisory Committee, Mr. Dasher commented, the possibility                    
  was raised that it could be better to leave the mounds.  He                  
  explained that there was no consensus on that question, but                  
  more would be known after the closing of the public comment                  
  phase on the Department of Energy plan, on March 24, 1993.                   
                                                                               
  Number 559                                                                   
                                                                               
  MR. DASHER addressed the question regarding the classified                   
  data, and said that 24 or 26 documents have been released.                   
  The two remaining documents, he said, pertain to a bomb and                  
  will not be released.  He also referred to other data in                     
  storage in Germantown, Maryland which was in the process of                  
  being declassified and would then be released.  Boxes of                     
  other unclassified information have already been sent to                     
  Point Hope, he added.                                                        
                                                                               
  Number 570                                                                   
                                                                               
  CHAIRMAN WILLIAMS noted for the record that Representative                   
  Finkelstein had joined the meeting at 8:40 a.m.                              
                                                                               
  VICE CHAIRMAN BILL HUDSON brought up the question of                         
  reimbursement to the state of expenses incurred in the                       
  project.  He asked Mr. Treadwell the status of that issue.                   
                                                                               
  Number 585                                                                   
                                                                               
  MR. TREADWELL replied that there are a number of federal                     
  contaminated sites in Alaska, and with various federal                       
  agencies, the state has cost-reimbursable agreements,                        
  including the Corps of Engineers and the Department of                       
  Defense.  The two sites overseen by the Department of Energy                 
  include the Point Hope site and the bomb blast site at                       
  Amchitka.  Mr. Treadwell said the state was negotiating an                   
  agreement to reimburse costs forward and back.  He noted                     
  that Senator Ted Stevens got a million dollar appropriation                  
  in 1992, and that it was anticipated full reimbursement                      
  would be received.                                                           
                                                                               
  Number 598                                                                   
                                                                               
  VICE CHAIRMAN HUDSON raised concerns about radioactive                       
  materials being dumped by Russia and the former Soviet                       
  Union, and asked Mr. Treadwell to comment on the threats                     
  posed in the Arctic.                                                         
                                                                               
  MR. TREADWELL apprised the committee on the existence of the                 
  Arctic Environmental Protection Strategy, which he said was                  
  an agreement among eight nations concerned about Russian                     
  radiation.  The group, he said, had a delegation meeting in                  
  late March, 1993, in Copenhagen to review the work being                     
  done by the eight nations to bring information forward.                      
  Governor Hickel had written to the Secretary of State Warren                 
  Christopher urging a better emergency notification network                   
  from Russian nuclear power plants.  He also referred to a                    
  federal appropriation of $30 million and two pending                         
  University of Alaska research proposals that hope to have                    
  funding.                                                                     
                                                                               
  Number 624                                                                   
                                                                               
  REPRESENTATIVE GREEN asked Mr. Treadwell to comment on the                   
  plans for the two sites previously mentioned, at Fort Greely                 
  and Amchitka.                                                                
                                                                               
  MR. TREADWELL said the Amchitka site had been a deep                         
  underground blast, which might have caused some                              
  contamination of ground water in a period of years.  He said                 
  the DEC was working with the federal Department of Energy to                 
  ensure there would be monitoring of the site.  The Fort                      
  Greely project, he said, had been one of the first small                     
  nuclear reactors developed, and it was shut down in the                      
  1970's.  Decommissioning nuclear power plants has been a                     
  problem, he explained, and he said the contaminated soil was                 
  being moved to a long-term disposal site in Hanford,                         
  Washington.                                                                  
                                                                               
  Number 650                                                                   
                                                                               
  MR. TREADWELL continued by describing efforts to encourage                   
  Russia to deal with potential nuclear facility accidents                     
  which, because of the proximity to Alaska, could pose health                 
  threats in Alaska.  He noted that there are sites within a                   
  day's air movement of Alaska.                                                
                                                                               
  Number 660                                                                   
                                                                               
  REPRESENTATIVE JOHN DAVIES asked Mr. Treadwell to comment on                 
  the DEC's current ideas relating to seeking primacy on                       
  nuclear regulation in Alaska, and plans for improving the                    
  state's own monitoring capabilities.                                         
                                                                               
  Number 668                                                                   
                                                                               
  MR. TREADWELL responded that currently, for nuclear                          
  materials that are used in Alaska, licensing is done by the                  
  Nuclear Regulatory Commission.  Some is done under general                   
  permits, he explained, and some of those are difficult to                    
  track exactly what nuclear devices are being used in the                     
  state.  The U.S. Army, he said, is given world-wide license                  
  to use their Radioactive Thermal Generators (RTG) anywhere.                  
  He said some licenses are classified, but that the DEC had                   
  received information on the RTG at Fairway Rock in the                       
  Bering Sea.  He explained that if the state of Alaska were                   
  to ask for primacy from the Nuclear Regulatory Commission                    
  (NRC) for licensing of nuclear materials, the DEC believes                   
  the current fees charged by the NRC could pay for the                        
  program.                                                                     
                                                                               
  MR. TREADWELL noted that the state has asked for a stronger                  
  partnership with the NRC.  Revenues from the fees charged if                 
  the state had primacy, he said, could help pay for more up-                  
  to-date inspection of X-Ray facilities in the state.  He                     
  suggested the committee take on the matter as an interim                     
  project.                                                                     
                                                                               
  REPRESENTATIVE GREEN asked whether the state would incur any                 
  liability if it assumed primacy.                                             
                                                                               
  Number 698                                                                   
                                                                               
  MR. TREADWELL replied that he did not believe the state                      
  would incur any greater liability if it were the sovereign                   
  than it incurs for any other regulations.  The problem with                  
  the NRC, he said, has to do with the inspections based in                    
  Walnut Creek, California, and the fact that Alaska has no                    
  central record-keeping.                                                      
                                                                               
  TAPE 93-32, SIDE B                                                           
  Number 000                                                                   
                                                                               
  REPRESENTATIVE GREEN returned to the concerns raised over                    
  airborne radiation threats from Russia, and asked whether                    
  precipitation in the form of rainfall and snow tends to                      
  clear the air somewhat of radioactive contaminants.                          
                                                                               
  MR. TREADWELL replied that one of the things being addressed                 
  through the Arctic Environmental Protection Strategy, as                     
  well as the Northern Forum, is an attempt to get a better                    
  handle on information regarding materials deposited in                       
  Alaskan streams and lakes from airborne precipitation.                       
  Airborne fall-out from Russian testing does settle out in                    
  precipitation over time, he explained.  A major concern now,                 
  he said, is the fact that there have been many nuclear                       
  explosions in Russia with poor monitoring and safety                         
  precautions.  Isotopes and heavy metals, he said, are                        
  showing up in the food chain, and the basic effort with the                  
  international community is to find out where it's coming                     
  from.                                                                        
                                                                               
  Number 079                                                                   
                                                                               
  MR. TREADWELL referred to the U.S. approval of a $13 billion                 
  aid package to Russia, and at the request of Alaska's DEC,                   
  Senator Murkowski included a request that part of that aid                   
  package be used to work on environmental problems that have                  
  a potential threat in the United States.  Given Alaska's                     
  proximity to Russia, he said it was a high priority to                       
  respond to the fall-out threat.                                              
                                                                               
  Number 099                                                                   
                                                                               
  CHAIRMAN WILLIAMS thanked the representatives of the DEC for                 
  their presentation, and said that in the interest of time,                   
  the committee would proceed with its agenda.                                 
                                                                               
  REPRESENTATIVE JEANNETTE JAMES distributed for members'                      
  attention a draft position statement on the Mental Health                    
  Lands Trust issue.  (A copy of this draft 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.)                                                                    
                                                                               
  Number 104                                                                   
                                                                               
  CHAIRMAN WILLIAMS announced that the remainder of the                        
  meeting would be held by teleconference with sites in                        
  Anchorage, Kodiak, Mat-Su and Fairbanks, to hear testimony                   
  on the next item for the committee's consideration, HB 201.                  
                                                                               
  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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