Legislature(1993 - 1994)
03/29/1993 08:00 AM House RES
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
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.
| Document Name | Date/Time | Subjects |
|---|