Legislature(1993 - 1994)
03/29/1993 08:00 AM House RES
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE RESOURCES STANDING COMMITTEE
March 29, 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 Jeannette James
Representative David Finkelstein
MEMBERS ABSENT
Representative Joe Green
Representative Eldon Mulder
OTHER LEGISLATORS PRESENT
Representative Gail Phillips
Representative Tom Brice
Representative Cliff Davidson
Representative Carl Moses
COMMITTEE CALENDAR
HB 76: "An Act making a special appropriation to the
Department of Natural Resources for the purchase
of the inholdings of the Seldovia Native
Association and the Cook Inlet Region, Inc., and
the timber rights of the Timber Trading Company,
within the Kachemak Bay State Park; and providing
for an effective date."
PASSED FROM COMMITTEE WITH A DO PASS
RECOMMENDATION
HB 132: "An Act extending the time period of all permits
issued by the state relating to the extraction or
removal of resources if the holder of the permits
is involved in litigation concerning the issuance
or validity of any permit related to the
extraction or removal."
ADOPTED CS (RES) AND PASSED FROM COMMITTEE WITH A
DO PASS RECOMMENDATION
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."
ADOPTED CS (RES) AND PASSED FROM COMMITTEE WITH NO
RECOMMENDATIONS AND ATTACHED POSITION STATEMENT BY
REPRESENTATIVE JAMES
WITNESS REGISTER
Representative Gail Phillips
Alaska State Legislature
State Capitol, Room 216
Juneau, Alaska 99801-1182
Phone: 465-2685
Position Statement: Prime Sponsor, HB 76
Rick Johanssen
Attorney for Usibelli Mines, Coalition Member
Coalition for Alternative Settlement
1029 W. Third Ave., Suite 300
Anchorage, Alaska 99501
Phone: 279-8561
Position Statement: Described the coalition's proposed CS to
HB 201
Brian Bjorkquist
Assistant Attorney General
Alaska Department of Law
1031 W. 4th, Suite 200
Anchorage, Alaska 99501-1994
Phone: 269-5100
Position Statement: Advised that the state did not endorse
or support HB 201
David Walker
Attorney for Settling Plaintiffs
417 Harris
Juneau, Alaska 99801
Phone: 586-3537
Position Statement: Testified in opposition to the proposed
committee substitute to HB 201
Pam Finley, Assistant Revisor of Statutes
Legislative Affairs Agency
Legal Services Division
130 Seward Street, Suite 405
Juneau, Alaska 99801-1219
Phone: 465-2450
Position Statement: Proposed a change to HB 201
Representative Jeannette James
Alaska State Legislature
State Capitol, Room 501
Juneau, Alaska 99801-1182
Phone: 465-3743
Position Statement: Presented a position statement on HB 201
Bruce Phelps
Department of Natural Resources
Division of Land, Title Section
P.O. Box 107005
Anchorage, Alaska 99510-7005
Phone: 762-2239
Position Statement: Recommended amendments to HB 201
proposed CS
Representative Tom Brice
Alaska State Legislature
Court Building, Room 605
Juneau, Alaska 99801-1182
Phone: 465-3466
Position Statement: Prime Sponsor of HB 132
Raga Elim
Special Assistant to the Commissioner
Department of Natural Resources
400 Willoughby Ave.
Juneau, Alaska 99801-1724
Phone: 465-2400
Position Statement: Responded to questions on proposed CS HB
132
PREVIOUS ACTION
BILL: HB 76
SHORT TITLE: APPROP: KACHEMAK BAY ST. PK.TIMBER RIGHTS
BILL VERSION:
SPONSOR(S): REPRESENTATIVE(S) PHILLIPS
TITLE: "An Act making a special appropriation to the
Department of Natural Resources for the purchase of the
inholdings of the Seldovia Native Association and the Cook
Inlet Region, Inc., and the timber rights of the Timber
Trading Company, within the Kachemak Bay State Park; and
providing for an effective date."
JRN-DATE JRN-PG ACTION
01/22/93 129 (H) READ THE FIRST TIME/REFERRAL(S)
01/22/93 129 (H) CRA, RESOURCES, FINANCE
03/23/93 (H) CRA AT 01:00 PM CAPITOL 124
03/23/93 (H) MINUTE(CRA)
03/24/93 755 (H) CRA RPT 3DP 3NR
03/24/93 755 (H) DP: DAVIES, OLBERG, TOOHEY
03/24/93 756 (H) NR: SANDERS, BUNDE, WILLIAMS
03/24/93 756 (H) -ZERO FISCAL NOTE (F&G)
3/24/93
03/29/93 819 (H) RES RPT 6DP 1NR
03/29/93 819 (H) DP: HUDSON, CARNEY, JAMES,
FINKELSTEIN
03/29/93 819 (H) DP: DAVIES, BUNDE
03/29/93 819 (H) NR: WILLIAMS
03/29/93 819 (H) -PREVIOUS ZERO FN (F&G) 3/24/93
03/29/93 (H) RES AT 08:00 AM CAPITOL 124
BILL: HB 132
SHORT TITLE: EXTEND RESOURCE EXTRACTION PERMIT/LEASE
BILL VERSION:
SPONSOR(S): REPRESENTATIVE(S) BRICE,Kott,James
TITLE: "An Act extending the time period of all permits
issued by the state relating to the extraction or removal of
resources if the holder of the permit is involved in
litigation concerning the issuance or validity of any permit
related to the extraction or removal."
JRN-DATE JRN-PG ACTION
02/05/93 236 (H) READ THE FIRST TIME/REFERRAL(S)
02/05/93 236 (H) RESOURCES, JUDICIARY, FINANCE
03/22/93 739 (H) COSPONSOR(S): KOTT
03/29/93 (H) RES AT 08:00 AM CAPITOL 124
03/29/93 838 (H) COSPONSOR(S): JAMES
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
03/19/93 (H) MINUTE(RES)
03/29/93 (H) RES AT 08:00 AM CAPITOL 124
03/29/93 826 (H) JUD REFERRAL WAIVED Y22 N17 E1
ACTION NARRATIVE
TAPE 93-38, SIDE A
Number 000
The House Resources Committee was called to order by
Chairman Bill Williams at 8:16 a.m. Members present at the
call to order were Representatives Williams, Hudson, Bunde,
Carney, Davies, James and Finkelstein. Members absent were
Representatives Green and Mulder.
CHAIRMAN BILL WILLIAMS announced the bills for consideration
at this meeting would be HB 76, HB 201 and HB 132, in that
order, and he noted that the meeting was being held by
teleconference with sites in Anchorage and Fairbanks. He
introduced the prime sponsor of HB 76, Representative Gail
Phillips.
HB 76: APPROP: KACHEMAK BAY ST. PK.TIMBER RIGHTS
Number 044
REPRESENTATIVE GAIL PHILLIPS, PRIME SPONSOR OF HB 76,
briefly described the background of the Kachemak Bay State
Park timber rights purchase, which she said had been an
issue in Alaska for almost twenty years. Lands were set
aside for Kachemak Bay State Park but private lands within
the park became an issue when they were granted to the
Seldovia Native Corporation as part of the Alaska Native
Interests Lands Claim Act (ANILCA). Attempts at land trades
and sales have not been successful, she said. The state now
has the means to make a settlement, she explained, without
any money coming from the general fund.
REPRESENTATIVE PHILLIPS noted the events that have occurred
relating to financing the timber rights purchase. She
alleged $20.5 million was deposited in the Alyeska
Settlement Fund for an agreement and consent decree in a
civil settlement entered into on November 20, 1992. This,
she said, included an allotment of $7.5 million for the
purchase of the inholdings of Kachemak Bay State Park.
Additionally, the Exxon Oil Spill trust Council approved
$7.5 million from the Exxon Settlement Fund for Kachemak
Bay.
REPRESENTATIVE PHILLIPS said the purpose of the $7 million
appropriation requested in HB 76 will come out of the Exxon
criminal settlement fund that was not appropriated and not
spent in 1992. On March 4, 1993, she explained, Governor
Hickel formally announced an agreement between all parties
concerned to buy back the private inholdings in Kachemak Bay
State Park. She said the agreement was formally signed by
Seldovia Native Association, Cook Inlet Region, Timber
Trading Company, and the state of Alaska.
Number 097
REPRESENTATIVE PAT CARNEY asked Representative Phillips to
clarify whether the governor had already signed that
agreement.
REPRESENTATIVE PHILLIPS explained that a copy of the
purchase agreement was in committee members' packets, and
constituted an agreement toward which the money would come
from the three components she described. (A copy of the
purchase agreement 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.)
CHAIRMAN WILLIAMS noted for the record that Representative
Cliff Davidson was present, as well as Representative Tom
Brice.
Number 110
VICE CHAIRMAN HUDSON asked whether a previously raised
question regarding subsurface rights had been resolved.
REPRESENTATIVE PHILLIPS answered that the issue had been
resolved and was included in the agreement, signed for and
agreed upon by Cook Inlet Region.
REPRESENTATIVE JOHN DAVIES noted that he intended to sign
"do pass" on the bill.
REPRESENTATIVE CON BUNDE MOVED to pass HB 76 from the
committee with individual recommendations. He asked
unanimous consent.
CHAIRMAN WILLIAMS asked whether anyone else wished to
testify on HB 76. Hearing none, he asked whether there were
any objections to the motion. Hearing none, the MOTION
PASSED.
HB 201: MENTAL HEALTH TRUST AMENDMENTS
Number 142
CHAIRMAN WILLIAMS told the committee the next bill for
consideration would be HB 201, the Mental Health Lands Trust
Settlement amendment bill introduced by the House Resources
Committee. At the bill's last hearing, he explained,
several amendments had been proposed by a coalition of
groups involved in the issue. He said the committee had
asked for comments on the amendments from the Attorney
General and from the attorneys for the settling plaintiffs.
The coalition's recommendations had since been developed
into a proposed committee substitute, he said, with input
from the Department of Natural Resources (DNR).
Number 178
CHAIRMAN WILLIAMS said the work of the coalition had
concentrated on the lands-related issue, with work on fiscal
issues to be left to the finance committee. In addition to
the draft committee substitute, he explained there was an
additional amendment proposed by Rick Johanssen on behalf of
the coalition.
Number 197
VICE CHAIRMAN HUDSON asked for clarification on whether the
work draft dated 3/27/93 was the document under discussion,
and whether it incorporated the major amendments proposed in
the previous hearing.
CHAIRMAN WILLIAMS confirmed this was the case.
RICK JOHANSSEN, ATTORNEY FOR COALITION MEMBER USIBELLI
MINES, explained that the coalition includes members of
industry; the Resources Development Council; two of the
Weiss litigation plaintiffs; all of the public interest
interveners; and the two intervening oil companies. He
explained that the coalition had worked closely with the
Department of Law and the DNR on the recommendations in the
committee substitute (CS).
MR. JOHANSSEN noted that the amendments marked K.1 were
typographical items that resulted from hasty drafting of the
CS. He clarified that the CS with the page of amendments
reflected a combination of the original bill, the three
amendments discussed at the previous meeting, and further
refinements developed with the departments of Law and
Natural Resources. The coalition, he said, felt the bill
was ready for action.
MR. JOHANSSEN remarked on the substantive changes that had
been incorporated into the CS. A detailed explanation of
those changes, he said, was contained in members' packets,
in a document titled "Explanation of Differences between the
Previously Proposed Amendments and the Committee Substitute
(work draft 3/27/93)." (A copy of this document 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. JOHANSSEN advised that those changes included first, a
change in the land management provision, and second, a
clarification in the way title is conveyed to the
reconstituted trust. Third, the CS included a mechanism for
funding the DNR's Mental Health Trust land management duties
from the Mental Health Trust income account.
MR. JOHANSSEN then described those three substantive changes
in greater detail. Regarding the changes to land management
provisions, he explained that under the amendments presented
at the previous hearing on HB 201, original mental health
trust lands currently subject to a third party interest,
such as a coal or surface lease, would be managed in total
by the DNR under the DNR's current land management
standards. Under the 3/27/93 CS, he said that only
preexisting third party interests would be managed under
current DNR rules. Subsequent property rights, he said,
would be issued and managed by the trust authority or the
DNR as its contractor, in a fiduciary manner like other
trust lands.
MR. JOHANSSEN commented that there was a potential for
conflict among the various users of a parcel of land in
having the DNR manage the preexisting interests while the
trust authority manages the subsequent interests. He said
this is not unusual in property law where the mineral estate
is often severed from the surface estate. The CS includes a
provision, he explained, that requires the trust authority
to honor the various legal principles developed to handle
the potential conflicts between concurrent users of real
property.
MR. JOHANSSEN addressed the subject of preexisting coal
leases. Those on original mental health trust lands, he
said, will have rent and royalty adjustments made by the DNR
under the DNR's existing standards. That allows for pricing
stability and consistency the coal industry needs to
continue marketing and development. Other resource
interests are also protected by the provisions, he added.
MR. JOHANSSEN addressed the second substantive provision of
the CS, which would require the DNR to convey title to the
trust authority for lands that are being returned to the
reconstituted trust, by giving a patent without a survey.
The purpose of the provision, he explained, is to satisfy
the Weiss plaintiffs' desire for a patent to reconstituted
trust land, while saving millions of dollars by not
requiring a survey of the lands until there is a reason to
do so. He said the bill accomplishes that by exempting
those conveyances that would go from the DNR to the trust
authority from the existing Alaska statute which requires a
survey.
MR. JOHANSSEN described the third substantive provision of
the CS. This provided a mechanism for funding the DNR's
land management duties for original mental health trust
lands. He said the DNR's position was that because the
mental health trust income account would receive all of the
proceeds of the DNR's land management efforts, the
legislature should have the ability to fund those efforts
from the income account.
Number 360
REPRESENTATIVE DAVIES asked Mr. Johanssen what time frame
would be used to determine whether land interests were
"preexisting."
MR. JOHANSSEN replied that it would be the date when Chapter
66 becomes effective, which would be when it is approved by
the courts.
Number 370
REPRESENTATIVE DAVIES asked whether new leases entered into
now would be considered preexisting by the time Chapter 66
becomes effective.
Number 377
MR. JOHANSSEN answered that that would be the case,
technically, but that the DNR was subject to a court
injunction which prevents them from issuing any interests
without court approval. As a practical matter, he
explained, that means that if anyone desired to obtain an
interest in original mental health land, they would first
have to go to the plaintiffs in the Weiss litigation and
negotiate a deal. The deal would then have to be brought to
the court, he said.
Number 385
BRIAN BJORKQUIST, ASSISTANT ATTORNEY GENERAL, testified from
Anchorage by teleconference. He told the committee that the
state does not endorse or support HB 201 as a whole, but
added that he had worked with the coalition on the statutory
language relating to the land portion of the bill. He said
the attorney general (AG) found that portion acceptable. He
noted a suggestion made by the AG's office that had not been
incorporated into the CS: On page 6, line 6, referring to
AS 38.05.800 (a)(1.C), Mr. Bjorkquist recommended that this
should include any municipal selection that has been either
approved or disapproved rather than just any selection that
has been approved.
Number 412
MR. BJORKQUIST said that selections that were disapproved
should be retained in state ownership instead of being
returned to trust status. The reason he cited was that
under the municipal selection process, the selection may be
disapproved only upon a finding that the public interest in
retaining state ownership of the lands outweighs the
municipalities' interest in obtaining the land. If a
selection has already been disapproved, he said, there would
have already been a finding of the public interest in
retaining the parcel in state ownership. Chapter 66, he
explained, protected that determination; HB 201 should also,
he added.
MR. BJORKQUIST referred to the amendments to HB 201 and said
those before the committee do not address amendments
suggested by the Department of Revenue in a memorandum dated
March 15, 1993. The coalition, he explained, had requested
those amendments be addressed by the House Finance
Committee. The state had no objection to the temporary
delay in addressing those amendments, but believed those
amendments should be dealt with at some point in the
process.
Number 431
MR. BJORKQUIST addressed the state's position on the
multiple use mandate on management of trust lands, stating
that this would be detrimental to the trust and would cause
management difficulties in the DNR. He said he would defer
discussion on that issue to Bruce Phelps of the DNR who
would provide greater detail.
MR. BJORKQUIST noted that the state had concerns about
HB 201 and the fact that the environmental interveners had
not publicly explained whether they believe the proposed
amendments remove all the constitutional challenges they
have raised regarding Chapter 66 as the settlement of the
mental health trust litigation. He noted that HB 201 was
being presented by the coalition as an alternative
settlement, and is being portrayed as a means to avoid the
constitutional and legal challenges that have been raised in
opposition to Chapter 66.
Number 453
MR. BJORKQUIST remarked that litigation over the
constitutionality of Chapter 66 had progressed at
considerable expense to the state, to the point, he added,
that the constitutional issues were pending before the trial
court. He did not believe it was in the state's best
interest to enter into an alternative settlement such as
that proposed by HB 201, which would be subject to the same
or similar constitutional challenges already litigated and
pending before the trial court. Litigation over challenges
to HB 201 would have to begin anew, he cautioned, and would
result in additional delays and expense to the state.
Number 460
MR. BJORKQUIST declared if HB 201 has constitutional
problems with respect to the public interest safeguards,
those problems should be fixed or HB 201 should not be
passed by the legislature.
MR. BJORKQUIST remarked that the AG believes the
environmental interveners should stipulate in writing
whether they believe there are any constitutional problems
with HB 201. He noted that HB 201 is the environmental
interveners' own bill. He said that if they do not believe
their bill passes constitutional mandates, the AG's office
believes the environmental interveners have an obligation to
the legislature to explain what portions of their bill they
believe are unconstitutional. Only by disclosing possible
problems, he said, would the legislature have full
opportunity to correct the problems.
Number 478
MR. BJORKQUIST commented that as a rule, the legislature has
a right to rely on the presumption that anyone who proposes
legislation believes it to be constitutional. He suggested
that to do otherwise would be to perpetrate a fraud.
Number 485
REPRESENTATIVE DAVIES asked about Mr. Bjorkquist's proposed
amendment on page 6, line 6, and asked if adding the words,
"or disapproved" would meet the intent.
MR. BJORKQUIST replied that it would.
Number 492
VICE CHAIRMAN HUDSON asked Mr. Bjorkquist about the issue of
default of the foreclosed lands and minerals pledged for
security, on page 4 of the CS. He asked what would trigger
that action.
MR. BJORKQUIST replied that the provision referred to,
regarding collateral of the Legislatively Designated Areas
(LDAs), secure the allocation under subsection (c) of
AS 37.14.036. The provision for foreclosure would only
arise if the legislature or the DNR's commissioner did not
allocate the percentage due the mental health income fund on
the annual basis as required under that section of AS 37.14.
Number 520
VICE CHAIRMAN HUDSON asked whether the funds would flow to
the mental health trust within the general fund holdings,
then be appropriated out by the legislature.
MR. BJORKQUIST replied that this was correct. The provision
for foreclosure, he said, would only arise if the allocation
did not occur to the mental health trust.
VICE CHAIRMAN HUDSON asked if it were accurate to say that
it had nothing to do with the appropriation, but rather with
the annual allocation and maintenance of the trust account.
MR. BJORKQUIST confirmed that.
Number 525
REPRESENTATIVE DAVID FINKELSTEIN asked why it appeared that
the views of the environmental interveners were more
important regarding the constitutionality of HB 201 than the
views of the other parties to the settlement and
legislation.
MR. BJORKQUIST explained that the concern was focussed on
the environmental interveners because of implications raised
in testimony before the Senate Judiciary committee on the
senate equivalent of HB 201. A representative of the
coalition, he said, had implied that the environmental
interveners are "convinced that the Alaska Supreme Court
would impose more restrictions on trust management or
safeguards of the public interest on trust management than
is contained in HB 201."
MR. BJORKQUIST suggested the implication that can be derived
from that statement, is that the environmental interveners
believe that HB 201 with its provisions for trust management
do not meet constitutional minimum requirements under
Article VIII, Section 10 of the constitution. If that is
the case, he stated, the environmental interveners should
come forward and explain what additional safeguards, in
their view, should be added to make the bill constitutional.
He noted that he had heard no comments from other parties
that would indicate potential problems related to the
constitutionality of the legislation.
Number 560
DAVID WALKER, COUNSEL FOR SETTLING PLAINTIFFS, addressed the
proposed committee substitute to HB 201. The purpose of the
bill and the CS, he summarized, is to amend the settlement
that had been entered into by the plaintiffs and the state
which is before the court for approval. The purpose for
passing a bill that amends the settlement, he explained,
would be to diminish the litigation and resolve the
controversy. He noted that he had suggested that to do
that, it would be necessary for the state to negotiate
alternative settlements and discuss those with counsel and
with the plaintiffs.
MR. WALKER expressed his concern with the process and
suggested any settlement of the litigation could be
challenged. Any settlement involving large amounts of land,
he said, would cause conflicts among the parties having
interests in those lands.
Number 575
MR. WALKER referred to letters in members' packets as well
as to the previous testimony of the Attorney General before
the Resources Committee, that the AG had requested the
settling plaintiffs to meet with him to discuss relief to
third parties, among other matters. Mr. Walker said those
meetings were scheduled for later in the week of March 29,
1993.
Number 598
REPRESENTATIVE PAT CARNEY commented that he had been under
the impression some agreement had been reached between the
plaintiffs and the state regarding relief to the third
parties, and that the agreement had been turned down by the
court. He asked Mr. Walker if that was a true assessment.
MR. WALKER replied that it was accurate. Under the terms of
the settlement agreement, he said the parties were to submit
a stipulation to the court providing a release while the
litigation was pending to the private third parties who
received trust land. The court, he explained, refused to
grant the stipulation. The state asked the Supreme Court to
review the decision, and the Supreme Court said it would not
review it. Following that, he noted, the AG provided Mr.
Walker with notice that under the terms of the settlement,
the timetable of 60 days would be implemented to find a way
to provide that relief. If not, the state would withdraw
from the settlement.
Number 614
MR. WALKER explained that as a consequence of that, the
plaintiffs had asked to meet with the AG, and the settling
plaintiffs independently filed a motion with the court
asking the court to reconsider the decision. The judge, he
said, held that it would be appropriate to approve the
stipulation if it became more likely that the settlement
before her would be approved, and not appropriate if the
settlement were not to be approved. He said the plaintiffs,
in asking her to readdress that issue, pointed out that were
the state to follow through on withdrawing from the
settlement, unless the judge readdresses the issue, she
would never get to the equity issue.
Number 634
VICE CHAIRMAN HUDSON asked Mr. Walker who he represented.
MR. WALKER replied that he represented the original
plaintiffs in the litigation, Carl Weiss and Vern Weiss, and
other plaintiffs similarly situated.
VICE CHAIRMAN HUDSON asked Mr. Walker whether he supported
existing law, and holding off on making changes to existing
law until the results of the court are known.
MR. WALKER answered that the parties who signed the
settlement and still support the settlement on the
plaintiffs' side include his own clients and the Alaska
Mental Health Association, represented by Jim Gottstein.
VICE CHAIRMAN HUDSON asked Mr. Walker if he still supported
Chapter 66.
MR. WALKER said yes, he did. He added that Chapter 66 is
awaiting preliminary approval as the settlement of the
litigation.
Number 645
REPRESENTATIVE FINKELSTEIN commented that he shared the
feeling of the plaintiffs on the importance of negotiation,
but added that the legislature faces the dilemma that the
legislative process is slow and to consider an issue the
process needs to begin only. By taking action, he said the
legislature is not trying to slight the importance of the
negotiations.
Number 658
VICE CHAIRMAN HUDSON asked whether there was anything in
HB 201 that might enhance Chapter 66.
MR. WALKER replied that he had not focussed on the
amendments, but said he did have one concern. That was
regarding the naming of parts in one amendment, which
contained a definition of an unrestricted earnings
deferment fund. He called it an improvement to define that.
Number 675
PAM FINLEY, ASSISTANT REVISOR OF STATUTES, LEGISLATIVE LEGAL
SERVICE DIVISION, proposed one suggested change to HB 201.
She referred to page 5, line 17, and recommended the
language regarding survey requirements be amended to read,
"the requirements of this section do not apply to the
conveyance of land to the Alaska Mental Health Authority"
(striking "to be conveyed"). She said the reason for the
change was so no one would think that land that was
originally conveyed to the authority does not have to be
surveyed.
TAPE 93-38, SIDE B
Number 000
REPRESENTATIVE JEANNETTE JAMES read a position statement she
had authored, which was included in members' bill packets.
She noted that she did support moving the bill. She
requested that the position statement be passed with HB 201
to the next committee of referral.
Number 062
BRUCE PHELPS, DEPARTMENT OF NATURAL RESOURCES, DIVISION OF
LANDS, addressed the portion of HB 201 that dealt with
multiple use. He said the concerns that the DNR had have to
do with the section of HB 201 dealing with multiple use and
requirements for fiduciary responsibility. He said the
DNR's reading of that section indicates that when there is a
conflict between multiple use standards and fiduciary
responsibilities, the department would always have to side
with the fiduciary responsibilities. This would create
confusion and ambiguity, he said, when the DNR needs clear
objectives in terms of development. This could cause a
reduction in development possibilities of trust lands, he
said.
Number 113
VICE CHAIRMAN HUDSON asked Mr. Phelps where this language
was contained in the committee substitute work draft.
MR. PHELPS told the committee he had referred to the section
located on page 2, lines 30 and 31, and on page 3, line 2
and line 5.
MR. JOHANSSEN responded to Mr. Phelps' comments. He said
the way the CS is drafted, the trust authority will
promulgate its land management program by regulation through
the administrative procedures act. The trust authority
would contract with the DNR. He understood Mr. Phelps'
concerns about the statutory language, but noted that this
was not uncommon in legislation.
MR. JOHANSSEN said the coalition was in support of the
amendment requested by Mr. Bjorkquist to page 6, line 6.
With respect to the change proposed by Pam Finley of Legal
Services, he said it was a good change that was consistent
with the intent of the coalition.
REPRESENTATIVE DAVIES asked Mr. Johanssen to respond to the
concerns of the attorney general's office regarding the
constitutionality of HB 201.
Number 174
MR. JOHANSSEN saw those concerns as litigation posturing.
He said the coalition was here to solve a problem, and this
involves legislation which required compromise. The court
case, he said, involves litigation that requires the parties
to state their positions, and which often involves parties
taking shots at each other to use information in court to
their advantage. He said the coalition's primary goal was
resolution of the issue.
Number 182
REPRESENTATIVE DAVIES asked Mr. Johanssen whether he saw any
constitutional problems with HB 201.
MR. JOHANSSEN replied that only the court can finally decide
what is constitutional and what is not, but he did believe
the bill was constitutional. Article VIII, Section 10 of
the constitution says the state shall dispose of state
lands, consistent with public interest safeguards
established by the legislature. He said HB 201 was an
attempt to do that, and he felt the courts would find the
bill constitutional.
Number 199
REPRESENTATIVE CARNEY asked whether Mr. Johanssen was
convinced there would be no litigation resulting from
HB 201.
MR. JOHANSSEN commented that no one could make that
assurance because there is always a risk of litigation. In
his view, he said, the risk of litigation over HB 201 is no
worse than the risk of litigation that exists each time the
DNR makes a land management decision. He suggested the
committee recognize that the provision included in HB 201 is
an existing state statute, in Title 38.05. Under Chapter
66, he explained, the trust authority is exempt from 38.04
and 38.05. House Bill 201 just takes one section of 38.05
and puts it back in the bill so the trust authority must
comply with it.
Number 216
REPRESENTATIVE JAMES made a MOTION to adopt the 3/27/93
committee substitute.
CHAIRMAN WILLIAMS asked if there were any objections to the
motion. Hearing none, CS HB 201 (RES) was ADOPTED.
REPRESENTATIVE JAMES made a MOTION to adopt amendment K.1,
plus the proposed amendment to page 6, line 6 inserting
"disapproved," and the proposed amendment to page 5, line 17
replacing "to be conveyed" with "conveyance."
CHAIRMAN WILLIAMS asked if there were any objections to the
amendments. Hearing none, the AMENDMENTS were ADOPTED.
Number 242
REPRESENTATIVE FINKELSTEIN OFFERED one additional amendment,
to page 3, line 17, changing the percentage from three to
4.5%. He said his primary concern was what amount would go
to mental health programs. He felt the higher amount would
better meet the actual needs of those programs. He MOVED
that the percentage be changed to 4.5%.
VICE CHAIRMAN HUDSON OBJECTED and stated the percentage
should be a Finance Committee decision.
REPRESENTATIVE CARNEY, addressing the motion, stated that he
did not see that changing the percentage in the Resource
Committee would cause any problems. He agreed with
Representative Finkelstein that the programs are costing
more than the three percent called for in HB 201. He felt
4.5% was a good compromise.
Number 289
REPRESENTATIVE JAMES commented that the percentage did not
make any difference; that the legislature would always make
a sufficient appropriation to mental health programs.
Number 292
REPRESENTATIVE DAVIES expressed concern with leaving the
number as low as 3% in the Resources CS, because it could
end up actually being that low in the bill's final version.
He suggested 4.5% would be a good compromise.
REPRESENTATIVE BUNDE remarked that if the number is being
changed from the proposed 6% as a negotiating strategy, it
would be best to start low and work up, rather than start in
the middle and work higher.
VICE CHAIRMAN HUDSON explained that one reason for making
the number less than 6% was that there had been substantial
contributions over the years into the mental health programs
by the state, and he was convinced the legislature would in
future years guarantee those programs would be appropriately
funded. The question, he said, was how much of the income
stream in the future should be put into the trust account.
He recommended the decision regarding the percentage take
into consideration funds that have in the past been put into
the mental health programs. The Finance Committee would be
the appropriate place for those decisions to be made, he
commented.
Number 337
REPRESENTATIVE FINKELSTEIN noted that he actually supported
6% but in the spirit of compromise had offered the 4.5%.
His reason, he said, is that the interpretation of how we
define mental health programs has been very broad, and that
we are already spending more than 3%. He said he saw many
unmet needs in the state in those areas and that a higher
percentage would be appropriate.
CHAIRMAN WILLIAMS called for a roll call vote on
Representative Finkelstein's amendment. Voting YEA were
Representatives Carney, Davies and Finkelstein. Voting NAY
were Representatives Hudson, Bunde, James, and Williams.
The MOTION FAILED.
VICE CHAIRMAN HUDSON made a MOTION to move CSHB 201 (RES) as
amended with a revised fiscal note from committee with
individual recommendations. He asked unanimous consent.
REPRESENTATIVE JAMES requested that her position statement
be conveyed with the bill and fiscal note.
VICE CHAIRMAN HUDSON AMENDED his MOTION to ask that
Representative James' statement be included with CSHB 201
(RES) and the fiscal note.
Number 372
CHAIRMAN WILLIAMS asked if there were any objections to the
motion. Hearing none, the MOTION PASSED.
CHAIRMAN WILLIAMS announced the committee would next take up
HB 132.
HB 132: EXTEND RESOURCE EXTRACTION PERMIT/LEASE
Number 380
REPRESENTATIVE TOM BRICE, PRIME SPONSOR of HB 132, explained
that the bill helps the so-called moms and pops with timber
interests where the title is unclear. He said the bill
would allow permits enjoined in court and found to be issued
properly, to have time elapsed in the court case not be
taken from the permit time period. He saw it as a question
of equity, if the developer had been working within the
letter of the law. The bill was initiated by concerns by
the Alaska Minerals Commission, he explained. The
Governor's Task Force on Regulations came up with the same
proposal, he added.
Number 415
REPRESENTATIVE BUNDE asked Representative Brice to address
the position paper by the Department of Commerce and
Economic Development (DCED) in members' packets, and
specifically, the improvements proposed there.
REPRESENTATIVE BRICE replied that he had amendments drawn up
to address the first and second of those recommendations.
Number 425
CHAIRMAN WILLIAMS noted that Representative Carl Moses had
joined the meeting.
REPRESENTATIVE DAVIES asked to see copies of the amendments.
REPRESENTATIVE BRICE distributed copies of one amendment to
HB 132, which defines the permit, and said that the second
one was being drawn up, which relates to expansion of the
application beyond resource extraction and removal. He
noted that the language was being clarified with the DCED.
Number 454
REPRESENTATIVE BRICE described the amendment to page 2,
following line 17, adding a new subsection, "in this
section, permit means the permit, lease, authorization,
license, or any other determination necessary for or related
to resource extraction or removal for the expansion of a
permit." On page 2, line 18, following "applicability,"
insert (a). On page 2, following line 21, he said a new
subsection would be inserted, to read, "(b) in this section
permit has meaning given in AS 46.35.300(D), added by
section 1 in this act."
Number 473
REPRESENTATIVE JAMES asked whether the sponsor would prepare
a committee substitute reflecting the amendments.
REPRESENTATIVE BRICE said he had a CS drawn up, which
included recommendations of the Alaska Miners Association,
which would include language relating to when an agency has
a suit brought against it, and when permittees are not able
to use a permit.
Number 488
REPRESENTATIVE CARNEY suggested that if a CS had been
prepared, the committee should work off that.
Number 500
REPRESENTATIVE FINKELSTEIN commented that he had a hard time
understanding HB 132 because of the complexity of the
situation and the variety of permits it appeared to apply
to. He suggested it could invite abuse of the provisions,
if a permittee intentionally enlisted someone to file a suit
against him for the purpose of prolonging the permit period.
Number 523
REPRESENTATIVE BRICE replied that there was nothing in law
to prevent that now.
RAGA ELIM, SPECIAL ASSISTANT TO THE COMMISSIONER OF NATURAL
RESOURCES, interjected that a lawsuit would be dismissed if
the court deemed it frivolous.
Number 534
REPRESENTATIVE FINKELSTEIN suggested that it was conceivable
the parties could make the case so factually complex that it
would not be dismissed as frivolous.
CHAIRMAN WILLIAMS agreed that frivolous lawsuits are
wasteful and commented that he saw HB 132 as helping to
alleviate the harm they cause.
REPRESENTATIVE FINKELSTEIN said that loopholes in the law
could be used for the advantage of the permittee, with the
company getting into a lawsuit as a delaying tactic. He
referred to section 2 at the top of page 2, addressing
activity being prevented from occurring. He asked what
degree of activity would have to be impaired if there is a
big operation and one small portion is the subject of the
suit. He wanted to know if the entire operation would be
subject to the provisions of HB 132.
REPRESENTATIVE BRICE asked whether the committee had
suggestions to resolve that potential problem.
Number 562
MR. ELIM suggested that HB 132 could be fashioned so the
permittee's activities on the larger portion (not subject to
a suit), could continue while the smaller portion would be
on hold. The extension of rights with respect to the permit
would be extended only in connection with that smaller
percent, he explained. That activity would be held in
abeyance pending the outcome of the litigation, and they
would then have that period of time extended after the
litigation was settled to complete the permitted activity.
MR. ELIM noted that this could change the whole economics of
the project because the company would have its
infrastructure in place to complete a project as a whole,
and it might not be economical to complete that small
percentage when the rest has been completed.
MR. ELIM added that in that scenario, the parcel that was
frozen for the period of litigation would be extended.
Number 583
REPRESENTATIVE FINKELSTEIN suggested that HB 132 was not
written to allow that. Another problem, he added, was that
in the permitting process, there could be several issues
within one permit, and the language in the bill needs to
address that.
Number 593
VICE CHAIRMAN HUDSON raised an issue which he said could
present a bigger challenge. He explained that currently, if
a party applied for a permit to do resource extraction or
other activity, they could be sued by a person other than
the state and they could be prevented from going ahead with
whatever the project was. Meanwhile, the time clock has
been running on the permit period. He said this presents a
policy question of whether the permit time should be stopped
by the suit. If a suit is filed, he said, the clock is
stopped. If the suit is not successful, the clock starts
running again.
VICE CHAIRMAN HUDSON suggested this was a question of
fairness, as to which way it should apply. The legislature
had to make a policy call on this matter, he stated.
Number 622
REPRESENTATIVE DAVIES commented that at first the issue
seems simple, but that it opens arcane issues of resource
extraction. He also noted ambiguity in the distinction
between the applicant for a permit and the holder of a
permit. He recommended that a distinction be made in
HB 132.
Number 630
REPRESENTATIVE CARNEY commented that HB 132 was trying to
correct a potential problem, and that it would be preferable
to take care of the honest people through this bill, and to
worry about the crooks later.
REPRESENTATIVE FINKELSTEIN agreed with the intent of HB 132,
but thought it was possible to find a solution to the
questions raised. He discussed the permitting process, and
said when someone applies for a permit, and then someone
sues, there would be a temporary restraining order on the
issuance of the permit.
MR. ELIM clarified that usually there would be an injunction
on the activity itself if the permit had been issued.
REPRESENTATIVE FINKELSTEIN asked if the case of the
temporary restraining order would not apply if the permit
had not begun. So, he added, the permit would have had to
be issued for the activity to begin, and if a suit is then
filed, it seemed to him that HB 132 was trying to get at a
suit that tries to undo the purposes of the permit.
REPRESENTATIVE FINKELSTEIN suggested an amendment to deal
with that situation where an insignificant portion of an
activity is all that is stopped, allowing the rest of the
permitted activity to go on. This would be on page 2, line
2, adding language to say "completely prevented" or
"substantially prevented." This, he explained, would
address the potential for a small portion of an operation
holding up the whole project.
REPRESENTATIVE CARNEY suggested that since a committee
substitute had not been adopted, perhaps the suggestions
could be considered in a work session.
Number 680
REPRESENTATIVE JAMES addressed the suggestion made by the
Alaska Miners Association, on page 2, line 24 of the
proposed committee substitute to HB 132, to include "that
related to resource extraction are removable as defined by
AS 46.35.204."
TAPE 93-39, SIDE A
Number 000
REPRESENTATIVE BRICE noted that he was looking into the
questions regarding conflicting permits. He believed the
miners' suggestions were intended to address that, but he
was concerned that their suggested language referred to an
old section of law that had not been updated since 1977.
This was something he said he planned to look into. He
suggested HB 132 be moved on with the commitment to make
sure the questions were addressed in the next committee.
Number 026
VICE CHAIRMAN HUDSON made a MOTION to adopt the committee
substitute for HB 132.
CHAIRMAN WILLIAMS asked for objections to the motion and,
hearing none, CSHB 132 (RES) was ADOPTED.
Number 033
REPRESENTATIVE FINKELSTEIN MOVED to make a conceptual
amendment to page 2, line 2, relating to the degree of work.
He recommended inserting the word "substantially."
REPRESENTATIVE BRICE said he was amenable to the change.
REPRESENTATIVE BUNDE agreed that "substantially prevented"
would address the problem.
CHAIRMAN WILLIAMS asked if there were any objections to the
motion. Hearing none, the AMENDMENT was ADOPTED.
REPRESENTATIVE JAMES MOVED to amend page 2, line 24, to add
the language suggested by the Miner's Association, "as
defined by AS 46.35.204."
CHAIRMAN WILLIAMS asked if there were objections. Hearing
none, the AMENDMENT was ADOPTED.
VICE CHAIRMAN HUDSON MOVED to pass CSHB 132 (RES) as amended
with zero fiscal note with individual recommendations. He
asked unanimous consent.
Number 119
CHAIRMAN WILLIAMS asked if there were any objections to the
motion. Hearing none, the MOTION PASSED.
ANNOUNCEMENTS
CHAIRMAN WILLIAMS noted that he was distributing to the
members a legal opinion from the Department of Law
addressing the governor's point of view on the appointees to
the Board of Game. He asked that members review the opinion
for the next meeting on the Board of Game appointments. He
reminded members that the next meeting of the Resources
Committee would be on Wednesday, March 31, 1993, at 8:00
a.m. to hear HB 197 and HB 239.
ADJOURNMENT
There being no further business to come before the House
Resources Committee, Chairman Williams adjourned the meeting
at 9:57 a.m.
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