Legislature(1993 - 1994)
03/24/1994 02:00 PM 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
JOINT HOUSE FINANCE AND RESOURCE COMMITTEE MEETING
March 24, 1994
2:00 p.m.
TAPE HFC 94-82, Side 2, #000 - end.
TAPE HFC 94-83, Side 1, #000 - 642.
CALL TO ORDER
Co-Chair Larson called the House Finance Committee to order
at 2:07 p.m.
PRESENT
HOUSE FINANCE COMMITTEE MEMBERS
Co-Chair Larson Representative Hoffman
Co-Chair MacLean Representative Martin
Representative Brown Representative Navarre
Representative Foster Representative Therriault
Representative Grussendorf
Representatives Hanley and Parnell were not present for the
meeting.
HOUSE RESOURCES COMMITTEE MEMBERS
Chair Williams Representative Davies
Representative Bunde Representative Green
Representative Carney Representative Mulder
Representative Finkelstein
Representatives Hudson and James were not present for the
meeting.
ALSO PRESENT
Senator Representative Gail Phillips; Bruce Botelho,
Attorney General, Department of Law; Harry A. Noah,
Commissioner, Department of Natural Resources; Ron Swanson,
Director, Division of Land, Department of Natural Resources;
Tom Koester, Independent Counsel, Department of Law.
SUMMARY INFORMATION
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."
HB 201 was HELD in Committee for further
discussion.
HOUSE BILL NO. 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."
BRUCE M. BOTELHO, ATTORNEY GENERAL submitted to the
Committee the following written testimony in its entirety.
He provided a summation of this testimony.
TESTIMONY BY ATTORNEY GENERAL BRUCE M. BOTELHO REGARDING
PROPOSAL TO RESOLVE MENTAL HEALTH TRUST LITIGATION,
WEISS v. STATE, 4FA-82-2208 CIVIL
Good afternoon, Mr. Chairman and members of the
committee. I am Bruce Botelho, Attorney General. Thank you
for the opportunity to discuss the proposed committee
substitute for HB 201 that is before you.
This proposal will resolve the mental health trust
land case, Weiss v. State, 4FA-82-2208 Civil. Unlike prior
legislation on this subject, it does not establish a
"process" for resolution that simply creates new
opportunities for conflict and delay. Instead, it is a
"product" resolution that takes effect immediately and
includes all of the elements required for dismissal of the
case.
The proposal draws on the legislature's powers
under the Alaska Mental Health Enabling Act and the Alaska
Constitution and several court decisions to cure the state's
breach of the mental health trust. These include:
- the legislature's power under the Enabling Act to
dispose of mental health land and spend the
proceeds on mental health and other purposes;
- the legislature's power under the Alaska
Constitution to remove land from trust status if
the trust is compensated for that land;
- the set-off for state mental health expenditures
that the Alaska Supreme Court held the state is
entitled to in determining the compensation owed
for removing mental health land from trust status;
and
- Judge Greene's recent determinations that (1) the
adequacy of mental health funding is not at issue
in the Weiss case, (2) the Enabling Act "did not
guarantee any particular level of services or full
funding for Alaska's mental health needs," and (3)
there is no evidence that "Congress intended to
provide funding for Alaska mental health programs
in perpetuity."
The proposal has two basic elements. First, it
contains provisions to reconstitute and compensate the trust
that will bring the case to an end even if all parties do
not agree with it
Second, as an incentive to the mental health
community for an early end to the litigation, it provides
for several of the mental health program enhancement
provisions of the 1991 legislation (chapter 66, SLA 1991) to
take effect in return for a final disposition of the case by
December 15, 1994.
I. The history of the Weiss case.
A. The Alaska Mental Health Enabling Act.
Congress enacted the Alaska Mental Health Enabling
Act, P.L. 84-830, 70 Stat. 709, in 1956 "[f]or the purpose
of vesting in the Territory of Alaska authority comparable
in scope to that of the States and other Territories of the
United States in the field of mental health." Because the
Territory of Alaska did not have the power to levy taxes to
raise revenue, Congress gave the territory the right to
select a million acres of land to generate funds to help pay
for the territory's mental health program.
Congress placed the following conditions on the
land grant:
All lands granted to the Territory of Alaska
under this section, together with the income
therefrom and the proceeds from any
dispositions thereof, shall be administered
by the Territory of Alaska as a public trust
and such proceeds and income shall first be
applied to meet the necessary expenses of the
mental health program of Alaska. Such lands,
income, and proceeds shall be managed and
utilized in such manner as the Legislature of
Alaska may provide. Such lands, together
with any property acquired in exchange
therefor or acquired out of the income or
proceeds therefrom, may be sold, leased,
mortgaged, exchanged, or otherwise disposed
of in such manner as the Legislature of
Alaska may provide, in order to obtain funds
or other property to be invested, expended,
or used by the Territory of Alaska. The
authority of the Legislature of Alaska under
this subsection shall be exercised in a
manner compatible with the conditions and
requirements imposed by other provisions of
this Act.
Several of these provisions are noteworthy.
First, the land, the income from the land, and the proceeds
from disposal of the land must be managed as a "public
trust." But the mental health public trust thus established
is quite different from the school and university public
land trusts to which it is sometimes compared. School land
may only be leased, but mental health land may be "sold,
..., exchanged, or otherwise disposed of" in addition to
being leased. The proceeds from the sale of university land
must be deposited in a permanent trust fund but the proceeds
from dispositions of mental health land "shall first be
applied" to fund mental health programs -- i.e., they must
first be spent for programs and services -- and not be
preserved in perpetuity. Finally, revenue from school and
university land is dedicated exclusively to school and
university purposes but income and proceeds from mental
health land are not dedicated to mental health purposes and
may be used for other public purposes once the mental health
program has been funded.
Also noteworthy is the last sentence of the
subsection: The legislature's broad management authority is
to be exercised "in a manner compatible with the conditions
and requirements imposed by other sections of this Act" --
i.e., the maintenance of a mental health program -- and
Alaska has maintained a mental health program since
statehood.
B. State administration of mental health land.
The Alaska Mental Health Enabling Act land grant
was confirmed to the state in section 6(k) of the Alaska
Statehood Act, and mental health land was among the first
selected by the state. A separate board was established to
oversee management of the land and a record of income and
proceeds was kept. Mental health expenditures greatly
exceeded the revenues from the land.
In 1978, legislation was enacted to remove mental
health land from trust status by redesignating it as general
grant land. This made it available for a number of uses
that might not be permissible if the land had remained in
trust status, including:
- conveyance to private parties under all of the
state's land disposal laws, including those that
do not require payment of fair market value;
- conveyance to municipalities with no monetary
return to the state;
- claim staking and other mineral leasing and entry;
- placement in state parks, wildlife refuges, and
other legislatively designated areas to be managed
for those purposes and not to generate revenue;
and
- use by state agencies for state agency purposes.
The 1978 redesignation legislation provided for
the mental health trust to be compensated for the removal of
the land from trust status by payment of one and one-half
percent of all public land revenues into a permanent mental
health trust fund from which only the earnings would be
spent. The legislation made the payment of the one and one-
half percent "subject to legislative appropriation of
sufficient funds," however, and no money was ever
appropriated.
Both before and after the 1978 redesignation
legislation, many transactions occurred with respect to
mental health land, and thousands of acres have been
conveyed to third parties, municipalities, Native
corporations, and the university, been the subject of
significant resource development expenditures, placed in
parks and wildlife refuges, and used by state agencies.
So, as of 1982, all of the original mental health
land had been removed from trust status, the trust had not
been given any direct compensation for that land, and much
of the land had been conveyed out of state ownership or
dedicated to non-trust uses. At the same time, however, the
state had consistently maintained a mental health program as
contemplated by Congress in the Alaska Mental Health
Enabling Act.
C. The Weiss litigation.
In 1982, a class of plaintiffs needing mental
health services sued the state, alleging that the 1978
redesignation legislation breached the federally created
mental health land trust and was invalid. The state
defended on the ground that the 1978 legislation was
consistent with the purpose of the Enabling Act --
maintenance of a mental health program -- because the state
had maintained such a program since statehood and spent far
more on it than the lands had generated in proceeds and
income.
The superior court held that the 1978
redesignation legislation was a breach of the trust because
the trust had not been compensated for the land removed from
trust status, but that the remedy for the breach was not to
invalidate the 1978 redesignation legislation but instead to
order the state to compensate the trust for the fair market
value of the land. In reaching those conclusions, the
superior court relied on State v. University of Alaska, 624
P.2d 807 (Alaska 1981), in which the Alaska Supreme Court
held (1) article VIII, section 2 of the Alaska Constitution
gives the legislature the constitutional power to remove
trust land from trust status, (2) removing land from trust
status without compensating the trust for the fair market
value of the land is a breach of trust, and (3) the proper
remedy for such a breach is monetary compensation and not
invalidation of the legislation removing the land from trust
status.
The state appealed the superior court's finding
that the 1978 redesignation legislation was a breach of
trust. The plaintiffs appealed the finding that the remedy
was monetary compensation and not invalidation of the 1978
redesignation legislation.
In State v. Weiss, 706 P.2d 681 (Alaska 1985), the
Alaska Supreme Court affirmed the superior court's
determination that the 1978 redesignation legislation was a
breach of trust. It reversed the superior court's
determination that the appropriate remedy was monetary
compensation, however, and held that the 1978 legislation
was invalid. It distinguished the University of Alaska case
on the ground that one could infer a legislative intent to
compensate the university trust for the inclusion of 5,040
acres of university land in Chugach State Park in that case,
but it was not reasonable to infer a legislative intent to
pay for the entire million acres of mental health land for
which the Court believed there was no present use.
The Supreme Court gave the superior court the
following "guidance:"
Those general grant lands which were once mental
health lands will return to their former trust
status. In the event exchanges have been made,
those properties which can be traced to an
exchange involving mental health lands will also
be included in the trust. To the extent that
former mental health lands have been sold since
the date of conveyance the trust must be
reimbursed for the fair market value at the time
of sale. In calculating the total amount owed,
the trial court should grant a set-off for mental
health expenditures made by the state during the
same period. In the event that expenditures
exceeded the value of lands sold, the state need
not furnish cash as part of the reconstitution.
The goal is to restore the trust to its position
just prior to the conveyance effected by the
redesignation legislation.4/
_______________
4/ Amicus raises questions regarding the title
held by conveyances and bona fide purchasers of
mental health lands. In view of our disposition
of this case, we deem it unnecessary to address
those issues at the present time.
Several things are noteworthy about the Supreme Court's
Weiss decision. First, the Court confirmed its earlier
holding in the University of Alaska case that the
legislature can remove land from trust status if the trust
is compensated for the fair market value of the land.
Second, state mental health expenditures may be set-off
against amounts owed the trust as compensation, and no cash
appropriation is necessary if expenditures exceed the
amounts owed. Finally, the court found it unnecessary to
address specific title questions in light of its other
findings.
D. Previous legislation to resolve the case.
Legislation was passed in 1987, 1990, and 1991 to
settle the case, but they all were rejected by the
plaintiffs.
Chapter 48, SLA 1987, would have reconstituted the
mental health trust with state land in state parks, wildlife
refuges, and other legislatively designated areas that was
equal in value to the original mental health land grant.
The state then would have rented that land from the trust
for eight percent of its fair market value. While value was
being determined, the state voluntarily agreed to allocate
five percent of the state's unrestricted general fund
annually to a mental health trust income account, which
would first be used to fund the state's mental health
program as a transitional provision. The chapter 48
approach ultimately failed when the interim mental health
trust commission, a majority of which represented the
plaintiffs, valued the original land grant at $2.243
billion. That figure greatly exceeded what the Department
of Natural Resources believed the land was worth, and an
impasse was declared.
Chapter 210, SLA 1990, provided that the mental
health trust consisted of all land in state parks, wildlife
refuges, and other legislatively designated areas as of 1987
which the state would rent for six percent of the state's
unrestricted general fund annually. The plaintiffs rejected
chapter 210 as not providing enough income in light of the
projected decline in state revenues, obtained a preliminary
injunction to prevent the state from issuing patents to
mental health land even when the contracts had been paid off
and otherwise preventing the state from authorizing
activities on mental health land, and filed with the state
recorder notices that title to all original mental health
land was in litigation. In the meantime, however, they have
benefited significantly from the six percent allocation as
mental health funding has increased in recent years despite
the dramatic drop in state revenues, and have recently
claimed that the trust is entitled to the six percent
allocation under chapter 210 -- which they simultaneously
profess to have rejected as inadequate! -- and have asked
the trial court to order the state to repay to the trust
amounts spent to reconstitute the trust and to pay their
costs and attorney fees.
Chapter 66, SLA 1991, proposed (1) reconstituting
the trust with some original mental health land and
exchanging other state land of equal value and equal revenue
generating potential for original mental health land
conveyed to third parties and municipalities or placed in
state parks, wildlife refuges, and other legislatively
designated areas, (2) creating a new Mental Health Trust
Authority to manage the reconstituted land trust, to
coordinate and oversee the state's mental health program,
and to have significant influence over the expenditure of
trust revenue, (3) making a number of improvements to the
state's mental health program, and (4) phasing out the six
percent annual allocation of the state's unrestricted
general over a twelve year period.
Chapter 66 was challenged by two of the four trust
beneficiary groups, a coalition of environmental, fishing,
and tourist industry groups, and two oil companies.
Although the superior court found that the basic approach
taken in chapter 66 was constitutional and otherwise legal,
the court denied preliminary approval because there was no
valid security for the state's performance of its
obligations under chapter 66 and, under the settlement
agreement between the parties, both the state and the
settling plaintiffs could terminate the settlement even it
was approved by the court.
In its December 30, 1993, decision, however, the
superior court made clear that "the adequacy of [mental
health] funding and services is outside the scope of this
case," that "[t]he only issues raised in this case have been
whether the State breached the trust and what constitutes
the proper remedy for the breach of trust," that the Alaska
Mental Health Enabling Act "did not guarantee any particular
level of services or full funding for Alaska's mental health
needs," that there is "no evidence that Congress intended to
provide funding for Alaska's mental health programs in
perpetuity," and that the Alaska Supreme Court's Weiss
decision "did not discuss any guaranteed income stream for
the trust."
As a consequence of the superior court's recent
ruling and the detailed analysis of the original mental
health land grant in preparation to implement chapter 66,
all parties now agree that under scenario the mental health
community will remain dependent on state general funds to
pay for most of the state's mental health program.
II. What is at risk.
At this point, the state is at a crossroads. All
previous attempts to provide a framework for resolving the
case have been rejected by the plaintiffs or the court or
both. The cloud of this litigation, we are told, has
adversely affected land sales and resource development in
Alaska, and the preliminary injunction continues to impede
management of the land. Third parties' and municipalities'
title to land is clouded, the plaintiffs have sued oil and
coal companies that have leased mental health land, and the
status of original mental health land in parks and wildlife
refuges is unclear.
All of this is contrary to the Alaska
Constitution's requirement that the legislature "provide for
the utilization, development, and conservation of all
natural resources belonging to the State, including land and
waters, for the maximum benefit of its people." Not taking
action at this time will leave things in the current
unsettled state, a status quo that is detrimental to
Alaska's economy and well-being.
At the same time, not acting to change the current
situation will adversely affect the mental health
community's ability to obtain state general funds to pay for
the state's mental health program. There is considerable
discussion in these halls of the "backlash" against the
mental health community because of its perceived inability
or unwillingness to seek settlement on terms that are both
fair to the beneficiaries of the mental health trust and the
rest of the state. A failure to bring this case to a close
will only make that problem worse.
III. How this bill will end the litigation.
It accordingly is time for this case to end, and
the proposal before you will do that in a way that is fair
to both the beneficiaries of the mental health trust and the
public with interests in original mental health land.
First, it will return certain original mental
health land to trust status as the Supreme Court directed in
its Weiss decision. It will at the same time, however,
preserve all legal interests in those lands that exist on
the effective date of the Act in recognition of the
legislature's authority to sell, lease, exchange, or
otherwise dispose of mental health land. The land returned
to trust status will be managed by the Department of Natural
Resources consistent with the requirements of the Alaska
Mental Health Enabling Act under the provisions of state law
governing other state land to the extent they are consistent
with the Enabling Act under the Enabling Act's authorization
for the legislature to provide for the administration of
mental health land.
Second, it will confirm and ratify the removal
from trust status of certain other original mental health
land, an exercise of the legislature's constitutional power
to remove land from trust status, a power the Alaska Supreme
Court found the legislature has in the University of Alaska
case. It also will confirm and ratify all dispositions and
uses of that land -- sales and other conveyances to private
third parties, municipalities, Native corporations, and the
University of Alaska; resource development and other leases,
mining claims, and permits; inclusion in state parks
wildlife refuges, and other legislatively designated areas;
and uses by state agencies -- to fulfill the legislature's
constitutional obligation to provide for state land to be
managed for the maximum benefit of the people by validating
all previously created interests in and actions taken with
respect to that land.
The trust will be compensated for the land removed
from trust status by first exercising the legislature's
power under the Alaska Mental Health Enabling Act to
exchange certain other state land to the trust. The
exchanged land will be managed by the Department of Natural
Resources in the same way it will manage the original mental
health land returned to trust status.
To the extent there is additional state liability
to the trust for the land removed from trust status, the
bill identifies and claims the $1.3 billion in state mental
health expenditures since 1978 for the purpose of the set-
off to which the state is entitled under the Alaska Supreme
Court's Weiss decision. In the unlikely event that is not
sufficient, up to $100 million per year will be allocated
from the general fund to a new "mental health trust income
and proceeds account" in the general fund until the state's
liability is satisfied. As provided in the Alaska Mental
Health Enabling Act, those "proceeds" from the removal of
the land from the trust can then be appropriated by the
legislature to fund the state's mental health program.
As you can see, the proposal has all the elements
necessary to bring the case to an end, and the Department of
Law will move vigorously to remove the preliminary
injunction, free the third party hostages, and get the case
dismissed as quickly as possible.
IV. The incentive for an early dismissal.
While the provisions of the proposal I have just
described will bring the case to an end whether the
plaintiffs in the Weiss case like them or not, there is no
question that an earlier end to the case can be obtained
with their consent. And the proposal includes a substantial
incentive to them -- a premium, if you will -- for agreeing
to an early dismissal. If the case is dismissed by December
15, 1994, with no appeals pending or possible, a number of
the chapter 66 mental health program "enhancement"
provisions will take effect, including:
- Establishment of the Alaska Mental Health Trust
Authority to oversee the state's mental health
program and participate in the appropriation of
trust revenues for mental health program purposes;
- The separate process for appropriating trust
revenues, under which the mental health community
acting through the Trust Authority will have
substantial control over the use of those monies;
and
- The improvements to the state's mental health
program, including defining the beneficiaries of
the mental health trust, establishing priorities
for service delivery, coordinating the various
programs, equalizing each of the boards
representing the various beneficiary groups, etc.
In addition, $225 million from the state's royalty
share of the proceeds from oil and gas leases will be
allocated to the trust in 15 annual installments of $15
million each. That money will be considered trust income
which, through the special appropriation process for trust
revenue, can be spent or saved for future use.
We are continuing our discussions with all the
parties to the litigation, and hope to reach agreement with
them on all of the aspects of the proposal -- the land
lists, the management language for the reconstituted trust
land, and the "incentive" package.
The key point, however, is that it is time to
bring the mental health trust litigation to an end. This
proposal will do that, and we urge your favorable
consideration.
Representative Martin expressed concern that the Department
of Natural Resources did not manage university lands well.
HARRY A. NOAH, COMMISSIONER, DEPARTMENT OF NATURAL RESOURCES
assured him that the Department would handle the mental
health lands differently.
Commissioner Noah provided members with a chart detailing
the schedule of events over the last months (Attachment 3).
He reviewed the chart. He reiterated that Judge Greene
denied the preliminary motion for approval on December 15,
1993.
(Tape Change, HFC 94-83, Side 1)
The state started contacting parties concerned with the
litigation in mid-January to begin discussions. By February
10, 1994 public notice was given identifying lands nominated
by the settling plaintiffs for use as proposed substitute
lands. The state gave a written proposal to each of the
parties involved.
Commissioner Noah emphasized that the mental health land
problem can be solved through resolution or settlement. He
defined a settlement as an agreement by all parties. He
noted that HB 201 would be a legislative solution to resolve
the issue in terms of the Mental Health Lands Trust. He
suggested that a settlement would be preferred to a
resolution. He emphasized that no action by the
legislature, absent a settlement, would result in gridlock.
Commissioner Noah emphasized that the court and plaintiffs'
have agreed that the land trust would not have been able to
fully fund the mental health programs. He anticipated that
the legislature will continue to fund mental health
programs. He observed that the effort is focused on curing
the breach. He maintained that it is in the best interest
of all parties to reach a settlement. He noted that the
settlement must be reviewed by the courts since it is the
result of a class action lawsuit.
Commissioner Noah reviewed the concerns of the involved
parties. He noted that some mental health lawyers want to
reconstruct the trust as close as possible to its original
form, have the trust authority manage the lands and
determine how money is spent. Other lawyers want assurance
that the Trust will have some cash flow. They are also
concerned over the administrative cost of managing trust
lands.
Commissioner Noah observed that environmental groups do not
want additional land to go into the Trust. They want some
of the original mental health trust land to come out of the
Trust. He maintained that environmental grounds want the
Department of Natural Resources to manage the lands under
title 38.
Commissioner Noah noted that resource development groups do
not want additional lands to go into the trust and also want
lands to be managed by the Department of Natural Resources.
Commissioner Noah stressed that municipalities want to
maintain mental health lands they received from the state.
They want to complete their municipal land entitlement
selection process. He asserted that municipalities want to
limit the amount of lands currently selected by the
municipalities from going into the trust.
Commissioner Noah observed that third party land owners just
want clear title to the lands they own.
Commissioner Noah suggested solutions to the concerns of
each of the concerned parties. He noted that to address the
concerns of the mental health lawyers the state has agreed
to reconstruct the trust, include substituted lands proposed
by the group, and maintain those provisions in Chapter 66
which set up the Trust. The state has also offered cash as
part of the settlement. The trust authority will stay in
place and the Department of Natural Resources has agreed to
manage the trust and address administrative costs.
Commissioner Noah remarked that to address concerns of
environmental groups, the state will use the current
regulatory scheme to the extent possible under the Mental
Health Enabling Act.
Commissioner Noah noted that to allay the concerns of
resource development groups, the state will eliminate from
negotiation for the land list, most large projects currently
permitted.
Commissioner Noah observed that to confront the concerns of
municipalities the state has offered to extend land
selection for two years. Titles would be cleared to allow
current selections to be finalized. He added that the
legislation should allow third party land owners to have
clear title to their land.
Commissioner Noah reviewed HB 201. He noted that the
legislation contains findings. He observed that the purpose
of the finding section is to outline to the court the
legislature's view of the issue. He commented that the
findings hold that the legislature has the power to remove
land from trust status if the trust is compensated for the
land. He maintained that substitution of lands is a key
component of the legislation.
Commissioner Noah discussed the Trust Authority. The Trust
Authority will be a public corporation of the state in the
Department of Revenue. The Trust will ensure that an
integrated comprehensive mental health program is developed.
The Trust will be composed of seven members appointed by the
governor based on their ability in financial management and
investment or services to the beneficiaries of the trust.
The trustees will be responsible for managing the cash
assets of the Trust, coordinating state agencies providing
services to the beneficiaries of the Trust, and making
recommendations to the governor and the legislature for
appropriations of both trust revenue and general funds to
pay for mental health programs.
Commissioner Noah noted that the legislation provides that
the governor and legislature must accept the authority's
recommendations for appropriations of trust revenues unless
they make findings explaining the reasons for any changes
and provide the basis for determining that the
appropriations meet the needs of the beneficiaries of the
Trust. In addition, the Trust Authority will be responsible
for the policy making on the use and disposition of lands
and resources associated with the designated Mental Health
Trust Land.
Commissioner Noah examined the monetary payments proposed by
the legislation. He noted that the state would pay $15.0
million per year for 15 years.
Commissioner Noah commented on the intent to reconstruct the
Trust. The Trust would be reconstructed with approximately
500,000 acres of original trust lands and 400,000 acres of
proposed substitute lands. He emphasized that this portion
of the legislative solution is undergoing further
discussions with the parties involved.
Commissioner Noah pointed out that the Department of Natural
Resources will continue to manage the trust lands under
current statutes and regulations which are consistent with
the Mental Health Enabling Act. He noted that all existing
rights would be maintained on the lands. Instead of
conveying the lands to the Trust the lands would be
redesignated. Reconveyance would be more costly. He
discussed the selection of lands.
Representative Grussendorf expressed concern that two years
may not be long enough for municipalities to approve land
selections. Commissioner Noah assured him that public
comment has been extensive and that municipalities want to
resolve the issue.
Representative Brown referred to section 20, additional
compensation. She noted that section 16, reconstituted
lands, would not take place until after the legislature's
adjournment. Commissioner Noah observed that the intent is
to allow closure to take place without further action. The
provisions would allow action if the Supreme Court declares
that additional compensation is needed.
Co-Chair MacLean asked if a sunset date is needed.
Commissioner Noah pointed out that if by December 16, 1994,
the case is not dismissed that a number of the provisions in
Chapter 66 would be appealed.
Representative Davies asked if there is a time limit on the
offer to municipalities to reconvey land.
RON SWANSON, DIRECTOR, DIVISION OF LANDS, DEPARTMENT OF
NATURAL RESOURCES explained that the department has met with
all the municipalities. Representative Davies suggested
that additional language is needed to clarify that there is
not an open ended offer to the municipalities to reconvey
lands.
Representative Davies referred to section 16. He asked
about the description of lands on the lands list.
Commissioner Noah stressed that the Department intends to
present the legislature with a specific land list.
Co-Chair MacLean asked for further explanation of section 4.
Commissioner Noah explained that the Department of Natural
Resources will manage lands and that the Alaska Permanent
Fund Corporation will manage the monetary land assets.
TOM KOESTER, OUTSIDE COUNSEL, DEPARTMENT OF LAW explained
that provisions for management by the Alaska Permanent Fund
Corporation contained in Chapter 66 were negotiated and
agreed to by the Corporation in 1991.
Representative Martin expressed concern that section 10
would provide for on going general fund appropriations. Co-
Chair Larson replied that revenues from the land trust alone
are not enough to meet mental health needs. He maintained
that the settlement is not dependent upon the Trust being
self sufficient. He asserted that mental health funding
will remain a state obligation. He stressed that the Mental
Health Enabling Act intended that the state general fund
would continue to supplement mental health trust money.
Representative Martin expressed concern that administrative
activities not be duplicated. He suggested that the
Department of Natural Resources not manage trust lands.
BRUCE BOTELHO, ATTORNEY GENERAL, DEPARTMENT OF LAW
emphasized that the settlement will combine legislative and
court required solutions. He stressed that
environmentalists and resource development concerns both
agree to management by the Department of Natural Resources.
HB 201 was HELD in Committee for further discussion.
ADJOURNMENT
The meeting adjourned at 3:40 p.m.
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