Legislature(1995 - 1996)
04/05/1995 08:20 AM RES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE RESOURCES STANDING COMMITTEE April 5, 1995 8:20 a.m. MEMBERS PRESENT Representative Bill Williams, Co-Chairman Representative Scott Ogan, Vice Chairman Representative Alan Austerman Representative John Davies Representative Pete Kott MEMBERS ABSENT Representative Joe Green, Co-Chairman Representative Ramona Barnes Representative Eileen MacLean Representative Irene Nicholia COMMITTEE CALENDAR Presentation on Mental Health Trust Lands SJR 12: Relating to the United States Department of Agriculture, Forest Service; relating to the United States Department of Agriculture, Forest Service, strategic plan known as "Reinvention of the Forest Service"; and advocating that implementation of the plan be suspended pending Congressional review and consultation with local governments. HEARD AND HELD WITNESS REGISTER STEVE PLANCHON, Executive Director Mental Health Trust Land Unit Department of Natural Resources 3601 C Street, Ste. 880 Anchorage, AK 99503 Phone: 762-2690 POSITION STATEMENT: Gave overview of Mental Health Trust Land Unit JOE AMBROSE, Legislative Assistant Senator Robin Taylor State Capitol, Room 30 Juneau, AK 99801 Phone: 465-3873 POSITION STATEMENT: Prime Sponsor SJR 12 PREVIOUS ACTION BILL: SJR 12 SHORT TITLE: U.S. FOREST SERVICE PLAN SPONSOR(S): SENATOR(S) TAYLOR,Pearce; REPRESENTATIVE(S) Williams JRN-DATE JRN-PG ACTION 01/25/95 81 (S) READ THE FIRST TIME - REFERRAL(S) 01/25/95 81 (S) RESOURCES 02/10/95 (S) RES AT 03:30 PM BUTROVICH RM 205 02/10/95 (S) MINUTE(RES) 02/14/95 266 (S) RES RPT CS 4DP SAME TITLE 02/14/95 267 (S) ZERO FISCAL NOTE (DNR) 02/20/95 (S) RLS AT 11:25 AM FAHRENKAMP RM 203 02/20/95 (S) MINUTE(RLS) 02/22/95 367 (S) RULES TO CALENDAR 2/22/95 02/22/95 368 (S) READ THE SECOND TIME 02/22/95 368 (S) RES CS ADOPTED UNAN CONSENT 02/22/95 368 (S) AM NO 1 FAILED Y8 N11 A1 02/22/95 369 (S) ADVANCED TO THIRD READING UNAN CONSENT 02/22/95 369 (S) READ THE THIRD TIME CSSJR 12(RES) 02/22/95 370 (S) PASSED Y18 N1 A1 02/22/95 370 (S) HALFORD NOTICE OF RECONSIDERATION 02/23/95 386 (S) RECONSIDERATION NOT TAKEN UP 02/23/95 390 (S) TRANSMITTED TO (H) 02/27/95 479 (H) READ THE FIRST TIME - REFERRAL(S) 02/27/95 479 (H) RESOURCES 03/03/95 575 (H) WTR REFERRAL ADDED 03/21/95 (H) WTR AT 05:00 PM CAPITOL 203 03/22/95 850 (H) WTR RPT 3DP 1NR 03/22/95 851 (H) DP: MULDER, PHILLIPS BARNES 03/22/95 851 (H) NR: KUBINA 03/22/95 851 (H) SENATE ZERO FISCAL NOTE (DNR) 2/14/95 03/22/95 851 (H) REFERRED TO RESOURCES 03/27/95 947 (H) CROSS SPONSOR(S): WILLIAMS 04/05/95 (H) RES AT 08:00 AM CAPITOL 124 ACTION NARRATIVE TAPE 95-46, SIDE A Number 000 The House Resources Committee was called to order by Co-Chairman Williams at 8:20 a.m. Members present at the call to order were Representatives Williams, Ogan, Austerman, and Kott. Members absent were Representatives Green, Barnes, Davies, MacLean, and Nicholia. HRES - 04/05/95 PRESENTATION ON MENTAL HEALTH TRUST LANDS STEVE PLANCHON, EXECUTIVE DIRECTOR, MENTAL HEALTH TRUST LAND UNIT, DEPARTMENT OF NATURAL RESOURCES (DNR), said he is not a representative of the Mental Health Trust Authority and therefore will not be reporting on their activities. He stated he would be providing a report on the DNR activities as they relate to the management and development of mental health trust lands. He noted he would also not be talking about lands being returned to general state status as a result of the settlement. He explained those lands will be managed by the Division of Land. He told committee members the subjects he will review include the framework the unit is working within, the guiding principles being used, the program responsibilities, the operations, example activities, and revenues and costs. Number 070 MR. PLANCHON stated the Mental Health Trust Authority has three programmatic responsibilities including the mental health programs, management of the $200 million trust fund through a contract with the permanent fund, and the overseeing of 1 million acres of land through a contract with the DNR. He said the Mental Health Trust Land Unit was set up specifically to manage trust lands. He noted that he reports directly to Commissioner Shively and works very closely with the Mental Health Trust Authority. MR. PLANCHON explained the four guiding principles stated in law include: Long term benefit of the trust, including sustained yield; management for the benefit of the trust; management for multiple use; and maintenance of the trust land base. He said the Mental Health Trust Land Unit added a few other guiding principles. He stated the first guiding principle is positive market place reputation. The unit wants to turn the reputation of the mental health trust lands from the worst place to do business, to the best place to do business. He noted the second guiding principle is a dollar saved goes to the beneficiaries. The unit wants to be cost effective in all actions because when the unit does save money, the money stays in the income account and goes to the beneficiaries. MR. PLANCHON stated the third guiding principle is keeping trust activities separate from general state land activities. He said the Mental Health Trust Lands Unit does not want to be guilty of commingling activities and losing the pathway on the actions, decisions, and money. The unit wants to be fully accountable to the Mental Health Trust Authority. He noted the department order was signed a week ago making it official that the two activities will be kept separate. He said the next guiding principle is an effective working relationship with the DNR. He explained another guiding principle is listen, learn, and improve. He encouraged everyone to listen closely to any comments about what the unit is doing and if there are problems, report those problems to him. He noted the final guiding principle is do it correctly, not quickly. Number 167 MR. PLANCHON said the Mental Health Trust Land Unit has approximately 1 million acres in entitlement which resulted from the settlement. He stated the lands are spread throughout the state and noted there are 4,700 parcels. He explained the map handed out to committee members (may be found in the House Resources Committee Room, Capitol Room 124, and after adjournment of the second session of the Nineteenth Alaska State Legislature, in the Legislative Reference Library) is a generalization of those lands. The colors on the map show whether or not the lands were original trust land or substitute trust land. The map also shows land returned to general state land status. Number 195 MR. PLANCHON stated the Mental Health Trust Land Unit program responsibilities are the same as the DNR, a private corporation, or an Alaska Native Corporation. He said the unit covers a broad range of responsibilities including oil and gas, minerals, timber, recreational development, subdivisions, etc. The unit also has the typical administration responsibilities such as risk management, finance, legal, etc. He noted the unit only has four staff members and that small staff cannot cover the bases. The desire is to keep the core staff small and rely on the expertise of the DNR. He pointed out where there is a gap between what the unit needs to do and what can be done with existing resources, the gap will be filled with reimbursable services agreements (RSAs) with the DNR, the Alaska Department of Fish and Game (ADF&G) or private contractors. MR. PLANCHON told committee members in order for the Mental Health Trust Land Unit to operate, by law the unit has to have a contract with the Mental Health Trust Authority. He stated the agreement will come out of a work plan and approved budget, which the unit will work with the Trust Authority to develop. He noted the goal is to have the contract in place by July 1, 1995. He stressed that contract will require ongoing consultation with the Trust Authority. MR. PLANCHON stated the Mental Health Trust Land Unit has, in terms of operations, a very important responsibility which is to develop regulations to implement the trust settlement. At this time, the unit is hoping to have the regulations out within one year. He noted the unit will take its time putting out the regulations because the unit wants to use working groups of affected parties, interested individuals, companies, agencies, etc., to ensure that when the regulations are put on the table for consideration, everyone possible will be in agreement. MR. PLANCHON said the unit is focusing on two key operating arenas. The first is protecting the assets through land management. The second is development--generating revenue from the lands for the long-term benefit of the trust. He noted that means if the Mental Health Trust Land Unit is going to have a piece of land forever, it does not do something on that land today to maximize revenues, meaning the unit cannot make money off the land 20 years from now. He reiterated the unit wants to ensure that the actions taken today are in the long-term interest of the trust. Number 270 MR. PLANCHON stated example activities the Mental Health Trust Land Unit is involved in include trying to find ways to streamline the process within the DNR so the management of trust lands is not slower than what it typically is already within the DNR. He noted the DNR has a big job to do and does not have as many people as needed to get the job done, so sometimes it takes awhile to get permits processed, leases executed, etc. He said if the unit wants to change the marketplace's opinion from mental health lands being a problem place to work, to being a good place to work, the unit needs to ensure those things are processed quickly. He pointed out the administration of existing leases, contracts, rights-of-ways, etc., is a big job. He added where a lease or contract may not be in the best interest of the trust, if there is a way to work with the lessee or the party contracted with to improve that, the unit is making an attempt to do that. MR. PLANCHON said a couple of existing leases and contracts are important. For example, in Fairbanks, the Mental Health Trust Authority owns the ore deposit at Fort Knox and the mill site associated with the Fort Knox development. He stated the Fort Knox development is extremely important to the trust and to the community of Fairbanks. He noted at a recent public meeting, there was not one negative comment about the mine operation. He stressed the importance of the unit administering the Fort Knox lease in a good manner. He added in the Cape Yakataga area, the Trust Authority owns the infrastructure necessary for the University of Alaska to harvest approximately 17 million board feet of timber per year. Number 316 MR. PLANCHON stated new opportunities being looked at, in terms of operations, include an exercise he calls "loading the buckets." He said the unit is taking a look at its portfolio and determining where the near-term opportunities are for mineral development, timber development, residential development, tourism development, etc., and trying to determine strategic plans where those can actually get off the ground and make money for the trust. He stressed it is important that the Mental Health Trust Land Unit focus on activities having a practical chance of success. The unit does not want to waste money by going down a road that is not going to result in something happening. MR. PLANCHON said other things the unit is considering is information management. The unit wants to become experts on this land because if the unit knows as much as possible, it will be able to make faster and better decisions. He stated the final aspect is public relations. He felt the unit needs to work closely with the communities it is involved in, special interest groups, the general public, and the Alaska Native Corporations to talk about joint interests and ventures. Number 350 MR. PLANCHON told committee members in terms of revenues, if the Mental Health Trust Land Unit portfolio was reviewed as it exists today, it generates about $300,000 in annual revenue through existing contracts and leases. The unit is hoping to increase that revenue in the first year to $500,000 or $1 million. In terms of costs, for the fiscal year 1996 budget, the unit has a core staff which costs approximately $300,000, $300,000 in RSAs with other divisions and private contractors, if necessary, and $100,000 identified in a contingency fund available in case there is an opportunity to be addressed in a timely way. MR. PLANCHON stressed the Mental Health Trust Land Unit is open for business. The unit intends to have lean and effective operations and work closely with the Mental Health Trust Authority to chart a course to success. REPRESENTATIVE SCOTT OGAN asked what the total assets are in the Mental Health Trust portfolio. MR. PLANCHON replied there are different opinions about that figure but he estimated the figure is approximately $1 billion. REPRESENTATIVE OGAN stated he was glad to hear the Mental Health Trust Land Unit plans to be the best place to do business rather than the worst place. He said his district has suffered a lot because of the Mental Health suit and losing the Wishbone Hill Coal Mine project. MR. PLANCHON said that project is the reason the Mental Health Trust Land Unit took up the motto. REPRESENTATIVE OGAN noted the people involved with the project felt they jumped through all the hoops and did everything required yet they were not allowed to develop the project. He felt Alaska has sent a bad signal to the international business community and even though some of the problems were beyond anyone's control, perceptions count for a lot. MR. PLANCHON stated the unit is attempting to go out and visit with as many groups that have an interest in mental health land as possible to bring the message forth that things are now different. He gave several examples. CO-CHAIRMAN BILL WILLIAMS noted for the record that Representative Davies had joined the committee at 8:25 a.m. Number 438 REPRESENTATIVE JOHN DAVIES noted that one of the handouts outlines program responsibilities. He thought the list of responsibilities looked large for only four staff members. MR. PLANCHON stated the fiscal year 1996 budget for the Mental Health Trust Land Unit includes the core operations budget of approximately $300,000 which is the four staff. The unit also has about $300,000 for contracts to do RSAs with other DNR employees and divisions, the ADF&G, and private contractors when necessary. He said an example would be in mineral development. The unit is working closely with the Division of Mining, where the Mental Health Trust Land Unit is responsible for ensuring the job is done correctly but because that activity is not a daily activity for staff, it does not make sense to have a full-time staff member do it. Therefore, the unit works with the divisions within the DNR that have that expertise. If the expertise is not there, the unit will find it somewhere else. MR. PLANCHON said the Mental Health Trust Land Unit is currently looking at a timber sale at Cape Yakataga in fiscal year 1997 and to do that, the unit will work with the Division of Forestry for a layout of the timber sale. However, if the Division of Forestry cannot provide everything needed, the unit will look to the private sector to do what is needed in order to generate the dollars in a timely fashion. REPRESENTATIVE DAVIES asked for more examples of what the Mental Health Trust Land Unit will be doing in regard to public relations. MR. PLANCHON replied the small staff brainstormed on that exact question. He said it was determined the first thing to do was to get a multiplier. The multiplier chosen was to go out and talk to a select group of individuals in associations who have an interest in the lands and who have a broader constituency. He stated the unit also determined there was a need for a real public relations program because there is a problem with perception. He noted the University of Alaska has a public relations curriculum and one of the seniors has taken the Mental Health Trust Land Unit on as a project pro bono. Number 518 REPRESENTATIVE DAVIES asked if the unit has any specific targets on how to get to the various municipal governments. MR. PLANCHON gave examples of various people the unit has talked to. He said in order to manage for the long-term benefit of the trust, there is a need to do things in a way which will make the communities feel good about the unit. He noted the first door to go through is the municipal organizations. CO-CHAIRMAN WILLIAMS asked if it will be difficult for the unit to switch gears in the middle of a project, if needed, and go to a private contractor or get assistance from another division. MR. PLANCHON stated when the Mental Health Trust Land Unit looks at a project, they take a private sector view at it and work back from the desired end result. He said the unit does not want to get caught in a situation where a lot of time and money is put into a person and then that person cannot get the job done. Those difficult questions need to be asked early in the process and a decision must be made at the beginning as to whether or not a private contractor will be needed. MR. PLANCHON noted it will be somewhat difficult in the beginning because the unit has to operate under Title 38 until new regulations are developed and implemented. He said the Mental Health Trust Land Unit has to be consistent with Title 38 unless it is inconsistent with the Mental Health Enabling Act. He stated the unit's approach to avoid a situation of not being able to finish a project, is to look at projects where it will not be a handicap, which is usually a place where there is no competition. If there is no competition, the unit can take longer for the public notice process. If there is competition, the competition will win since the unit has to go to public notice and best interest findings and the competition does not. HRES - 04/05/95 SJR 12 - U.S. FOREST SERVICE PLAN Number 580 JOE AMBROSE, LEGISLATIVE ASSISTANT, SENATOR ROBIN TAYLOR, PRIME SPONSOR, stated SJR 12 is not in opposition to the Reinvention of the U.S. Forest Service Plan. SJR 12 asks for a suspension and review of that plan. He said early in December, the U.S. Forest Service (USFS) announced its Reinvention Plan. He told committee members a copy of that half-inch thick document is on file in Representative Taylor's office and noted the devil is in the detail. MR. AMBROSE explained that the plan would centralize decision making in Washington, D.C. He said such a policy flies in the face of President Clinton's Executive Order No. 12875, which calls for enhancing intergovernmental partnerships. The plan also puts lie to Vice President Gore's "Report on Reinventing Government," with its stated goals of "empowering state and local governments" and "decentralizing decision-making power." He stated under reinvention, regional forest supervisors and other front line leaders, who now have decision making authority, would be replaced with four people leadership teams answerable only to the Chief of the Forest Service and the Secretary of Agriculture. He noted gone would be any pretense of involving local and state governments in the USFS decisions. The plan goes so far as to consolidate the regional offices now located in Alaska and Montana to a central office in Oregon. MR. AMBROSE told committee members that SJR 12 calls for a suspension of the plan and true partnership meetings with states, communities, and tribal governments. He noted that a committee substitute has been suggested which would add the Alaska Native Claims Settlement Act corporations to the list. He said the goal would be the development of a new plan--one that would involve the affected entities up-front. He stressed the reinvention scheme goes far beyond the relocation of regional offices. If left to stand, the plan will mean a new era of USFS policy dictated from on high, without consulting the very people most impacted by those policies. MR. AMBROSE noted that in committee members folders, there is a memo from John Sandor, the former Regional Forester and former commissioner, which was developed by Mr. Sandor in conjunction with a group of resource professionals from around the country, including Mike Barton, who is also a Regional Forester. He stressed these professionals are very concerned about the direction the reinvention plan takes the USFS in the future and the lack of involvement with the entities most impacted by future decisions. Number 620 REPRESENTATIVE DAVIES noted the memo referred to was not very readable. He wondered if the original was available. MR. AMBROSE said the original is on gray paper and does not duplicate very well. REPRESENTATIVE DAVIES stated he supports the basic intent of SJR 12 but expressed concern about page 2, lines 8-10. He wondered how moving the Alaska Region Forest Service office is an example of flawed science. MR. AMBROSE requested committee members to refer to the memo just mentioned. He said the second paragraph says, "One striking example of the flawed scientific basis for and definition of ecosystems and ecological boundaries is illustrated in the proposed realignment of Forest Service Regional Office boundaries. The strategic plan states that regional boundaries will be realigned to more closely follow natural ecological boundaries. Incredibly, the strategic plan announces the timetable for incorporating Alaska's diverse and unique forest ecosystems under the direction of a Forest Service leadership team headquartered in Portland, Oregon. None of Alaska's forest ecosystems are the same as those represented in the Pacific Northwest. As a matter of fact, many of Alaska's boreal forests are more closely related to the ecosystems of the Northern Lake states and adjacent Canadian provinces." He added the stated goals and the plan to carry them out does not make any sense. REPRESENTATIVE DAVIES felt the premise for the paragraph just read is somewhat strange. He said it appears the premise of the USFS is to align their administrative boundaries with ecological boundaries which he thought was odd. He noted usually administrative boundaries are aligned more closely with political boundaries for operational reasons. He stated if that is an example of the science involved, it is flawed science. He thought good science could be done on ecosystems in Southeast Alaska from New York State. Number 665 REPRESENTATIVE DAVIES referring to page 3, lines 7-8, of SJR 12, stated he does not understand the intent. MR. AMBROSE said Senator Taylor's intent with this language was that the compensation level, cost of living, etc., for USFS employees be more reflective of the productivity of the USFS. REPRESENTATIVE DAVIES asked if that means Senator Taylor does not want the USFS employees to be paid at all. MR. AMBROSE replied no. REPRESENTATIVE DAVIES stressed he really does not understand the intent of this language. MR. AMBROSE responded it is Senator Taylor's belief that one of the primary functions of the USFS in its management of the national forests is timber production. Senator Taylor feels the USFS employee compensation should be reflective of their productivity level. REPRESENTATIVE DAVIES clarified if the USFS employees are not producing timber, they should not be compensated. MR. AMBROSE replied it is Senator Taylor's position that if the USFS is not producing timber, they should probably be a part of the National Park Service. TAPE 95-46, SIDE B Number 000 REPRESENTATIVE DAVIES stressed he cannot support that kind of statement. He felt the Resolves in resolutions need to be directed at issues the legislature can attempt to influence. He seriously doubted the legislature would be able to impact the federal compensation policies in a manner such as SJR 12. REPRESENTATIVE DAVIES made a MOTION to AMEND SJR 12, on page 3, lines 7-8, delete the entire FURTHER RESOLVED. REPRESENTATIVE OGAN OBJECTED. CO-CHAIRMAN WILLIAMS wondered how this Resolve pertains to the real intent of the resolution. MR. AMBROSE stated a similar motion for amending SJR 12 was made when the resolution was debated in the Senate. He said Senator Taylor felt this Further Resolved was in keeping with the general tone of the entire resolution in regard to asking that the entire process be reassessed. He noted this language was the subject of a debate in Sitka. The Sitka Borough Assembly passed a resolution supporting SJR 12 and were called to question by members of the community. They revisited the issue including a briefing by USFS on ecosystem management, and did not withdraw their support for SJR 12. REPRESENTATIVE DAVIES said the reason he moved the amendment was because he supports the basic notion in SJR 12, but does not feel it furthers the legislature's position in asking for things to happen by putting things in resolutions which can be taken as insulting. He stated unless the language can be removed, he cannot support the resolution. If the language is removed, he would support SJR 12. Number 082 CO-CHAIRMAN WILLIAMS agreed with Senator Taylor's position on this Further Resolved. He noted he comes from an area which is basically run by the USFS. He stressed the USFS is not making enough timber available to keep the mills working and described the situation in the Ketchikan area. He noted the USFS is making timber available but it is not possible to get the timber because of the weather. He felt it was important to keep this Further Resolved in SJR 12, as it will send a strong message. He did not feel it was embarrassing but felt shutting down an entire industry is embarrassing. MR. AMBROSE stated this is one of the issues Senator Murkowski raised with the new Secretary of Agriculture and he has made a commitment to reassess the USFS role. He noted the Senate did not feel the language in SJR 12 was too strong and added that the Senator who proposed the same amendment as Representative Davies, ended up voting for the resolution. Number 145 REPRESENTATIVE DAVIES felt what happens in the Senate is irrelevant to this committee. He stated the issue is whether or not timber is available for the mills in Southeast Alaska. He said he did not believe that Senator Murkowski discussed USFS employee compensation with the Secretary. He thought it would be more appropriate for this Further Resolved to consider the Secretary's compensation or the Regional Administrator's compensation rather than USFS employees in general, because USFS employees are carrying out policies set by their supervisors. REPRESENTATIVE DAVIES pointed out there are USFS employees just as frustrated as others about the rate at which timber is being made available. However, those employees are required to work at the direction of their supervisors and their supervisors are required, by law, to operate under the laws of the U.S. He said if there is a desire to change how that fundamentally is done, then there is a need to change those laws. He said it is not fair to single out one class of federal employees and reduce their pay because of a frustration with the law they are working under. CO-CHAIRMAN WILLIAMS asked for a roll call vote on the amendment. Voting in favor of the amendment was Representative Davies. Voting against the amendment were Representatives Austerman, Kott, Ogan, and Williams. The MOTION FAILED 4-1. REPRESENTATIVE OGAN made a MOTION to MOVE CSSJR 12(RES) with attached fiscal note out of committee with individual recommendations. REPRESENTATIVE DAVIES OBJECTED. CO-CHAIRMAN WILLIAMS asked for a roll call vote. Voting against the motion was Representative Davies. Voting in favor of the amendment were Representatives Kott, Ogan... CO-CHAIRMAN WILLIAMS announced SJR 12 would be held until a later date. ADJOURNMENT There being no further business to come before the House Resources Committee, Co-Chairman Williams adjourned the meeting at 9:15 a.m.