03/26/1999 09:45 AM Senate FIN

                                                                                                                                
CS FOR HOUSE JOINT RESOLUTION NO. 12(FIN)                                                                                       
Relating to federal claims against funds obtained by                                                                            
settlement of state tobacco litigation.                                                                                         
                                                                                                                                
                                                                                                                                
JOHN MANLEY, staff to Representative John Harris the prime                                                                      
sponsor of the bill, testified before the committee.  He                                                                        
said that HJR 12 would send a message to the President of                                                                       
the US and to Congress that the State Of Alaska brought a                                                                       
lawsuit to the tobacco companies and came to a settlement,                                                                      
which the federal government was not involved. Therefore,                                                                       
they were not entitled to a share of the money.                                                                                 
                                                                                                                                
The state stood to receive about $669 million from the                                                                          
settlement over the next 25 years.  If the federal                                                                              
government had its way in exercising its prerogative under                                                                      
the proposed US Senate bill, they could take as much as                                                                         
$400 million of that amount.                                                                                                    
                                                                                                                                
Therefore, the resolution asked that Congress pass a law                                                                        
directing federal agencies to not take that money.                                                                              
                                                                                                                                
Co-Chair John Torgerson referred to page 2 line 16 and 17                                                                       
that basically stated that the president was to review the                                                                      
fact of the settlement and refrain from taking steps to                                                                         
recoup dollars, which the federal government was not                                                                            
entitled. He asked if the sponsor was saying that the                                                                           
federal government might be entitled to some of the                                                                             
settlement. That was his interpretation.  John Manley                                                                           
replied that intention was they would not be entitled to                                                                        
any of the settlement.  Co-Chair John Torgerson stated that                                                                     
was not what the statement said. It needed clean up.  John                                                                      
Manley suggested that portion of the language should be                                                                         
removed.                                                                                                                        
                                                                                                                                
John Manley shared that the federal government felt they                                                                        
are entitled to two-thirds of the settlement under the                                                                          
Social Security Act.                                                                                                            
                                                                                                                                
Co-Chair John Torgerson detailed the language discrepancy.                                                                      
                                                                                                                                
Senator Sean Parnell moved to adopt Amendment #1. This                                                                          
would delete language on page 2 beginning with line 16,                                                                         
"review the facts related to the tobacco settlement with                                                                        
the State Of Alaska" and then at line 17 insert a period                                                                        
after "dollars" and delete the remainder of the line. He                                                                        
read the revised language into the record. This would                                                                           
comply with line, which stated that the State Of Alaska was                                                                     
entitled to all the funds. Without objection it was                                                                             
adopted.                                                                                                                        
                                                                                                                                
Senator Lyda Green suggested adding Senator Kay Bailey-                                                                         
Hutchinson to the list of recipients of the resolution. She                                                                     
was the co-sponsor of the federal legislation to claim the                                                                      
funds, SB 36 to page 2 after Senator Trent Lott. John                                                                           
Manley did not oppose this. Senator Lyda Green moved to                                                                         
adopt Amendment #2. Without objection, it was adopted.                                                                          
                                                                                                                                
DOUG GARDNER, Assistant Attorney General, Oil, Gas and                                                                          
Mining Section, Civil Division, Department of Law, came to                                                                      
the table to answer any questions of the committee.                                                                             
                                                                                                                                
Senator Al Adams asked if there was a fear that the federal                                                                     
government could take a portion, such as two-thirds, of the                                                                     
money that was entitled to Alaska. Doug Gardner said it was                                                                     
a real concern and that the federal legislation was                                                                             
attached to an emergency spending appropriation and had 99                                                                      
co-sponsors.                                                                                                                    
                                                                                                                                
Senator Sean Parnell moved to report SCS CS HJR 12 (FIN) as                                                                     
amended out of committee.  There was no objection and it                                                                        
was so ordered.