Legislature(1993 - 1994)
02/03/1993 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
February 3, 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 Joe Green
Representative Jeannette James
Representative Eldon Mulder
Representative David Finkelstein
MEMBERS ABSENT
None
OTHER HOUSE MEMBERS PRESENT
Representative Kay Brown
Representative Ed Willis
Representative Gene Therriault
Representative Brian Porter
SENATE MEMBERS PRESENT
Senator Suzanne Little
COMMITTEE CALENDAR
Overview on Alaska Mental Health Lands Trust Settlement
WITNESS REGISTER
David Walker
Attorney for settling plaintiffs
417 Harris Street
Juneau, Alaska 99801
Phone: 586-3537
Position Statement: Suggested current settlement agreement
be given a chance to work
Jim Gottstein, Attorney for the
Alaska Mental Health Association
406 G Street, No. 206
Anchorage, Alaska 99501
Phone: 274-7686
Position Statement: Believed it most important to
reconstitute the trust with appropriate
lands
Jeff Jessee
Attorney for non-settling plaintiffs
615 East 82nd Street, Suite 101
Anchorage, Alaska 99518
Phone: 344-1002
Position Statement: Gave the history of his involvement in
the issue
Bob Stiles, President
Alaska Coal Association
1227 West 9th, Suite 201
Anchorage, Alaska 99501
Phone: 276-6868
Position Statement: Spoke of the problem of developable coal
on trust lands
Tom Waldo, Staff Attorney
Sierra Club Legal Defense Fund
325 Fourth Street
Juneau, Alaska 99801
Phone: 586-2751
Position Statement: Supported 95% of Chapter 66
Peter Maassen
Unocal/Marathon Oil
810 N Street
Anchorage, Alaska 99501
Phone: 276-6100
Position Statement: Felt threatened by implementation of
Chapter 66
Lois Ann Reeder
Susitna Valley Association
9600 Slalom Drive
Anchorage, Alaska 99516
Phone: 346-1943
Position Statement: Concerned about land exchange aspects of
Chapter 66
Jim Barnett, Assembly Member
Municipality of Anchorage
P.O. Box 196650
Anchorage, Alaska 99519-6650
Phone: 343-4431
Position Statement: Hoped for repeal of Chapter 66
Deborah Smith, Executive Director
Alaska Mental Health Board
431 N. Franklin
Juneau, Alaska 99801
Phone: 465-3071
Position Statement: Testified on the interests of the trust
beneficiaries
Representative Gene Therriault
State Capitol, Room 421
Juneau, Alaska 99801-1182
Phone: 465-4797
Position Statement: Inquired about foreclosure under Section
6(i)
ACTION NARRATIVE
TAPE 93-12, SIDE A
Number 000
The House Resources Committee was called to order by
Chairman Bill Williams at 8:05 a.m. Members present at the
call to order were Representatives Williams, Hudson, Bunde,
Carney, Davies, Green, James. Members absent were
Representatives Mulder and Finkelstein.
CHAIRMAN BILL WILLIAMS announced the meeting was being held
by teleconference with the Anchorage Legislative Affairs
Office as the other site. He stated the purpose of the
meeting would be to hear testimony from other parties to the
Mental Health Lands Trust settlement agreement. He recalled
the Attorney General's Office and the Department of Natural
Resources had testified on the state's perspective in a
committee meeting held on January 27, 1993.
CHAIRMAN WILLIAMS asked those testifying to restrict their
comments to five minutes so there would be time for
questions.
Number 105
DAVID WALKER, LEAD COUNSEL FOR THE SETTLING PLAINTIFFS,
addressed the committee. Accompanying him at the witness
table was Jim Gottstein, who also represented the settling
plaintiffs. Mr. Walker advised of his presence at the
meeting on January 27, where the state had presented a
summary of the Mental Health Lands issue, as well as the
state's viewpoint on the settlement agreement. He did not
disagree with the state's presentation of the factual
background.
MR. WALKER stressed that the agreement was a result of some
of the most acrimonious negotiations in the state's history.
He suggested the current settlement agreement should be
given a chance to work, and that the plan to reconstitute
the trust was in keeping with the federal government's
intent of the original land grant. He said the land
exchanges were ready to go forward.
Number 152
JIM GOTTSTEIN, a land attorney representing the ALASKA
MENTAL HEALTH ASSOCIATION and others in the class, told the
committee his clients constituted the traditional segment of
beneficiaries of the trust. He said he had listened to the
testimony of the committee's January 27 overview. Regarding
a statement during that meeting by the state that no oil or
gas properties were included in the original trust lands,
Mr. Gottstein believed there were a couple of such
properties around Beluga and Nikiski. He said his clients
had nominated some lands for inclusion in the settlement,
and the state had indicated they would resist the transfer
of those lands to the trust. He added Chapter 66 provided a
mechanism for resolving the issue.
MR. GOTTSTEIN mentioned the question of Glacier Winter
Creek, the Girdwood property, and said no single piece of
property was sacrosanct. The most important thing, he
believed, was to reconstitute the trust with appropriate
lands. He reminded the committee that while listening to
the complaints about the proposed settlement, it was
important to remember how things were before the enactment
of Chapter 66. He recommended realistic alternatives be
considered, and noted that of all alternatives previously
considered, the current Chapter 66 was the only one that all
parties had agreed to.
Number 250
CHAIRMAN WILLIAMS noted for the record that Senator Suzanne
Little was in attendance.
Number 253
JEFF JESSEE, COUNSEL FOR THE NON-SETTLING PLAINTIFFS in the
settlement, reminded legislators they were trustees of the
trust, and were responsible to the beneficiaries of the
trust. Regarding the beneficiaries, he defined the four
qualifying groups: 1) the developmentally disabled (the
group represented by Mr. Jessee); 2) the mentally ill; 3)
the elderly with dementia and other related mental
disabilities; and, 4) chronic alcoholics with psychosis.
MR. JESSEE spent almost two years as a settling plaintiff in
the negotiations, and signed the agreement believing it was
a settlement he could recommend to his clients. Finally, he
said, he reached a conclusion that the settlement agreement
would not work. He felt it was working against the
interests of his clients, and had turned out not to be the
deal everyone thought it was when it was negotiated in May,
1991.
Number 278
MR. JESSEE explained the reason for his change in perception
of the settlement agreement. In May, 1991, he said,
everyone was eager to resolve the issue. The land exchange
appeared to be a good idea. In the process of negotiating
the land exchange, there were a number of legal issues that
arose but were not addressed at that time because the
parties believed it was important to reach an agreement
quickly. Those problems included section 6(i) of the
Statehood Act and land use laws. Once Chapter 66 was in
place, the problem issues resurfaced and it became apparent
the process was more complex than anticipated.
MR. JESSEE referred to the suit filed by the public interest
interveners. Their suit was anticipated, and the
intervention welcomed because at the time it was believed it
would be better to get the problem issues resolved by the
courts, "bullet-proofing" the settlement, he said. By
January, 1992, the parties realized the problems were
impediments to carrying out Chapter 66 quickly. For
example, Mr. Jessee pointed to section 6(i), which
prohibited the state from disposing of the mineral estates,
with the penalty of forfeiting the land back to the federal
government.
MR. JESSEE described the steps for resolving the problem
issues in the courts. From the Superior Court, the suit
would go to the Supreme Court, and since it related to a
Statehood Act provision, it could likely go before the U.S.
Supreme Court. He said it was known now that there would be
litigation over the land exchanges. In his view, it was not
in the beneficiaries' interests to go through years of
litigation to get the settlement approved only for the
opportunity to litigate against the state, the public
interest interveners, the oil companies and additional third
parties concerned about the valuable assets in the state
that were tied up in the agreement. He believed it was not
in the public's interest to settle now when lawsuits were
inevitable.
MR. JESSEE referred to the so-called "moms and pops," the
innocent third parties affected by the settlement and
litigation. He displayed a thick three-ring binder filled
with names of those parties. He said the parties to the
trust agreed to modify the injunction and remove the lis
pendens from their titles, but reserved the right to come
back and assert claims against the third parties' lands if
the deal did not go through.
MR. JESSEE directed the members' attention to the Summary
Decision and Order regarding the joint motion, and referred
to page eight which said, in part: "This relief in this
motion becomes nothing more than a cruel hoax visited on the
third parties. They will not get any better title than they
have now, they transfer an interest in the land, they would
be selling a lawsuit both they and the purchasers would
ultimately have to litigate." On page nine: "The court
concludes at this point in time, before all these things
have happened, the likelihood of final approval is
speculative at best."
Number 397
(Chairman Williams noted for the record that Representative
Mulder had joined the meeting.)
BOB STILES, PRESIDENT, ALASKA COAL ASSOCIATION, told the
committee he was also the general manager of a coal export
project located in Beluga Field. The problem coal concerns
had was that most of the state's developable coal was
located on original mental health trust lands. Some
reserves, he said, were partially on original lands. In
1956,when the lands were selected, he told the committee,
coal was one of the easiest minerals to find. Mr. Stiles
reported the Coal Association had no problem with the parts
of Chapter 66 that dealt with the trust itself, but took
exception to those portions that dealt with lands.
MR. STILES pointed out in the case of his company, the land
would be owned by the trust authority. When this will
happen was not known, he said, and this caused problems in
marketing coal. He gave an example of an attempted sale of
Wyoming coal to Japanese utility executives, who asked the
representative if Wyoming had mental health lands. Alaska's
perceived land freeze, he told the committee, was holding up
marketing efforts of Alaska coal, and was known worldwide by
potential customers, investors and competitors.
MR. STILES saw no end to the situation as long as the
settlement agreement was tied up in the courts. As an
example of the impact of the problem, Mr. Stiles referred to
the Wishbone Hill project. He said the project had its
mining permits in place, but could not go forward because of
the injunction, and it had lost markets. Market share was
lost in two ways, he said: Through the loss of investment
dollars in the exploration and development of mineral
resources; and, the direct loss of sales opportunities.
This was a long-term loss, he argued, because sales were
made as long-term contracts. A sale lost one year would
affect the Alaska economy for perhaps ten years, he said.
Number 459
(Chairman Williams noted for the record that Representative
Finkelstein had joined the meeting.)
TOM WALDO, STAFF ATTORNEY, SIERRA CLUB LEGAL DEFENSE FUND,
testified on behalf of the public interest interveners in
the settlement. He said his clients were a coalition of
environmental groups, sportfishing groups, and the Susitna
Valley Association, whose focus was on recreation and
tourism.
MR. WALDO reported his clients supported about 95% of the
provisions of Chapter 66, specifically those dealing with
the mental health programs. The part that the public
interest interveners opposed was the land provisions, which
he said were put together in closed sessions among a few
people in a period of a few days at the end of the 1991
legislative session. Those provisions, he said, required
the state to convey a huge amount of land to the trust
authority with no opportunity for public participation in
the selection process. Once the lands were in the hands of
the trust, he argued, there would be no provisions for
public input in the way the lands were managed.
MR. WALDO explained that the complaint of the public
interest interveners raised eleven claims, mostly under the
Alaska Constitution, which challenged the legality of the
settlement agreement. The key points as he described them
included three claims based on Article VIII, Section 10 of
the Alaska Constitution. That article permitted the state
to dispose of lands or interest in lands only in compliance
with safeguards of the public's interest. Because of the
lack of public participation, Mr. Waldo, on behalf of his
clients, alleged that the statute and the settlement lacked
the kinds of safeguards of the public's interest that were
contemplated in Article VIII, Section 10 of the
Constitution.
MR. WALDO raised another claim, also mentioned by Mr.
Jessee, that being Section 6(i) of the Alaska Statehood Act,
which restricted the state from selling or giving away its
mineral rights. He pointed out the trust authority would
act independently of the state, much like a city or borough.
He believed it would be inappropriate to convey lands with
their mineral rights to the trust authority.
MR. WALDO addressed a third claim of the public interest
interveners, which was that Chapter 66 was potentially a
raid on the permanent fund. Chapter 66, he said, did not
provide for payment of mineral revenues on new trust lands
into the permanent fund. He relayed his clients' eagerness
to avoid protracted litigation and to reach an agreeable
settlement that met the interests of all the parties.
Number 525
PETER MAASSEN, representing the interests if Unocal and
Marathon oil companies, told the committee that Judge Green
had granted a motion to let the two companies intervene in
the litigation. The companies felt their interests as oil
and gas producers were being threatened by the way Chapter
66 was being implemented.
MR. MAASSEN referred to the Weiss litigation and said it had
not concerned the major oil and gas producers initially, but
in 1991, with the passage of Chapter 66 and its
incorporation of the hypothecated lands list, the concern
was with the hundreds of oil and gas leases that were
pledged as security for the state's performance of its
obligations under Chapter 66, and the provisions for
foreclosure procedures by which leases would be transferred
to the trust. As a result, the producers faced the prospect
of getting a new landlord, which they had not seriously
considered before, since major leases were not on original
mental health trust lands.
(Chairman Williams noted for the record that Representative
Hudson had joined the meeting.)
MR. MAASSEN told the committee the state had a greater
amount of discretion than landlords were ordinarily given in
oil and gas leases. He said the oil and gas companies knew
what their obligations were. In April, 1992, he said, the
settlement agreement was made public and it concerned the
producers that the document said the state would share with
the settling plaintiffs confidential information regarding
any lands the plaintiffs nominated as proposed substitute
lands.
MR. MAASSEN also referred to the Department of Natural
Resources (DNR) departmental order number 135, created as a
result of the settlement agreement, which instructed
employees of the DNR to manage all lands on the hypothecated
lands as if they had already been transferred into the
trust. This raised issues of concern to the oil and gas
producers. The first issue was to prove that the state did
not have the contractual right under its lease terms to
transfer the oil and gas rights out of state ownership.
They also hoped to prove the administrative order, number
135, should have been passed pursuant to the Administrative
Procedure Act.
MR. MAASSEN concluded it would be in the interest of
Marathon and Unocal to keep their leases in state ownership.
He said litigation would continue as long as the efforts to
settle the mental health lands issue presented conflicts
with the state's contractual agreements with third parties.
Number 582
LOIS ANN REEDER testified by teleconference from Anchorage,
on behalf of the Susitna Valley Association (the
Association), which represented tourism and recreational
interests. The Association intervened to protect its
interests in public use and sound management of public
lands. The concern the Association had with the settlement
centered on the land exchange aspect of Chapter 66 advanced
in the last days of the 1991 legislative session. Ms.
Reeder said the Association objected to the replacement
lands being tied up and public access being denied or
restricted to those lands.
MS. REEDER referred to a land use plan, the Susitna Valley
Plan, developed by a coalition of 81 organizations. Every
acre of that land had been included in the hypothecated
lands list, she said. She did not believe Chapter 66 was a
workable solution. The lands would not be able to generate
the funds necessary to meet the needs of the state's mental
health beneficiaries, she concluded.
Number 652
JIM BARNETT of the ANCHORAGE CITY ASSEMBLY testified via
teleconference from Anchorage. He mentioned the development
of the Valley Girdwood winter recreation area. One of the
parcels he described as a potentially important development
was the up-valley area known as Glacier Winter Creek. The
Municipality of Anchorage, he said, had been unable to
acquire rights to that property without getting rid of
mining claims. At the time the city was trying to negotiate
those issues with the Bureau of Lands, Chapter 66 had
already passed, but the municipality was not advised, he
said, of the impact of the Mental Health Lands agreement on
the transfer of that land.
TAPE 93-12, SIDE B
Number 000
MR. BARNETT expressed the belief that the land troubles
could not be resolved until the matter was appealed to the
Supreme Court. The Director of Lands, he said, had
indicated the city would receive the thousand acres first.
He told the legislators that the future of the Glacier
Winter Creek lands was in their hands. The municipality and
the people of Girdwood expected the current land use
planning process to govern the way those lands were
developed. If the Mental Health Trust intervened, he said,
the Title 38 land use process would not be applicable.
MR. BARNETT concluded his remarks by saying that unless
Chapter 66 was repealed, at least as it affected Glacier
Winter Creek, and its ability to select lands that were
never contemplated, the development potential would be lost.
Number 058
CHAIRMAN WILLIAMS noted Tom Koester, on contract to the
Department of Law on the Mental Health Lands issue, was
present at the meeting and available to respond to
questions.
REPRESENTATIVE CON BUNDE addressed a question to Mr. Waldo.
Regarding the hand-out, "Principles of an Alternative
Settlement," referring to paragraph two, he asked Mr. Waldo
to clarify the position on transferral of subsurface rights
to the Mental Health Trust Authority. He asked whether that
position was endorsed, even though it might raise Section
6(i) questions to be resolved in federal courts.
MR. WALDO explained the principles referred to by
Representative Bunde were for a settlement that involved
transferring only the original trust lands back to the
trust, with another form of compensation for the original
trust lands that could not be conveyed back to the trust.
He added that the claim under section 6(i) applied only to
the replacement lands. The section 6(i) restriction, he
said, did not apply to those original trust lands.
REPRESENTATIVE BUNDE referred to public notice requirements
of AS 38.05.945(b) and (c). He asked Mr. Waldo to
paraphrase the requirements of that statute.
MR. WALDO responded that the statute required 30 days'
notice before the disposal of any state lands, with the
notice provided to a list of organizations and people
specified in the statute.
REPRESENTATIVE BUNDE then asked for clarification of the
settlement's reference to return to the Mental Health
Authority all unencumbered lands that were in the original
settlement, additional lands that might be necessary, plus
the state's contribution of six percent of unrestricted
general fund revenues.
MR. WALDO affirmed that was correct, but did not know what
the additional lands would be. In addition to the original
trust lands that were returnable, he said, there would be
the six percent revenue. Regarding that six percent, he
clarified it would not mean the state would have to spend
six percent of the unrestricted revenues on mental health
programs. He explained that the six percent would be placed
into a mental health income account within the general fund
of the state, and would still require state appropriation
before it could be spent. The legislature, he said, would
be able to exercise discretion over the spending of the
revenue, as long as the needs of the mental health programs
were being met. Other purposes might also receive funding
from the account.
Number 150
REPRESENTATIVE BUNDE asked about the lands that would be
used to secure the six percent revenue stream.
Specifically, he asked about the role of state forests,
parks, and recreation areas. He also asked what would be
done with those lands, assuming foreclosure.
MR. WALDO answered that they would likely be involved in the
foreclosure proceedings, urging the court to allow
foreclosure over certain lands, and specifying which
restrictions would be appropriate. He reiterated the
purpose of compensating the trust for the state's failure to
make a six percent transfer into the income account.
Ultimately, he said, they would be subject to whatever
became necessary to achieve that compensation. That could
be a significant risk to his clients, he added, and a
compromise his clients were willing to make to avoid having
to live with the Chapter 66 settlement.
Number 181
REPRESENTATIVE BUNDE questioned the income potential of
lands that were already dedicated to preservationist
activities.
MR. WALDO answered that some development might be necessary
to generate the six percent revenue. That would likely be a
subject of the foreclosure proceedings, he added.
REPRESENTATIVE BUNDE next asked if all those who had
testified during the meeting would submit a written reaction
to the alternative settlement presented by the environmental
interveners.
Number 202
REPRESENTATIVE JEANNETTE JAMES directed her question to Mr.
Walker. She referred to the beginning of the Weiss lawsuit,
and commented that the whole purpose of the long process was
to be certain the state's mental health needs were met. One
concern she had was that Chapter 66 was not effective until
the courts made their decisions and all appeals were
completed. She pointed out the December, 1994 deadline and
asked for a realistic projection on when the land
transactions would be completed, and what would happen if it
did not happen by the December, 1994 deadline.
Number 232
MR. WALKER explained the timetable. He believed the
exchanges would be complete by the deadline, and noted the
land exchanges were mandated under Chapter 66. He referred
back to the congressional intent of the original million-
acre land trust, and said that it had been anticipated
problems might arise regarding the management of the trust.
The record showed, he said, that Congress never intended the
land trust would guarantee full funding of mental health
needs. The settlement that was finally reached, he said,
had the support of all parties, in lieu of any alternative.
He expressed confidence all land exchanges would be complete
by the deadline. The litigation schedule in Chapter 66, he
said, was an abbreviated schedule.
Number 285
REPRESENTATIVE JAMES asked for clarification that the
litigation time frame spelled out in Chapter 66 did not
include litigation that might go on for years regarding the
land transfer.
MR. WALKER doubted there would be litigation that would
continue for years. The transfer itself would not take
place until final acceptance of the settlement by the court,
he said. He suggested this process would take less time
than the original litigation.
Number 328
REPRESENTATIVE JAMES asked Mr. Walker if he believed the
court would accept the settlement once the lands were
identified.
MR. WALKER expressed absolute confidence in the court's
approval. He suggested there remained disagreement among
the parties regarding the trust's ability to develop
properties, and the reasons for selection.
REPRESENTATIVE JAMES again questioned the intended use of
the six percent revenue for mental health programs, and said
it had been her impression that the funds were for the
specific purpose of meeting mental health needs. She asked
Mr. Walker to clarify the use of that funding source.
MR. WALKER said it was intended that the incoming proceeds
of the trust be used to meet the mental health program needs
of the state of Alaska, and that was the primary purpose.
To the extent it was needed to meet the mental health needs,
it had to go to that purpose, he said. He clarified,
however, that Congress had not guaranteed a trust that would
necessarily provide adequate funding for mental health
needs. He said at the time the trust was established,
Congress just did not know whether the trust could
adequately fund the programs.
Number 348
REPRESENTATIVE JAMES asked Mr. Walker whether he agreed with
the interpretation of the Enabling Act that gave the
legislature the authority and responsibility to appropriate
those funds for the mental health uses, as well as the
authority to put additional funds into the mental health
lands trust from other sources.
MR. WALKER answered that this was clear under both the
Enabling Act and Chapter 66.
Number 356
REPRESENTATIVE JOHN DAVIES asked Mr. Walker to respond to
the issue raised by the interveners regarding the need for
public involvement in the process of land selection and
disposal, under Chapter 66.
MR. WALKER told the committee that the public's involvement
in the process was provided for in the public notice
requirements. The settlement attempted to put the trust
authority in the position of a private land owner, he
explained, as it would have been if the lands had not been
taken from the trust in the first place.
Number 385
REPRESENTATIVE DAVIES asked about the negotiation process
between the beneficiaries and the state, and what
opportunities there were for public comment on what lands
would reconstitute the trust.
MR. WALKER answered that the exchanges themselves had not
taken place yet, but a large amount of publicity had
surrounded the process. No single piece of property, he
said, was essential to the trust.
MR. GOTTSTEIN also responded to the question regarding
public participation. He directed members' attention to
page 24 of the settlement agreement. He addressed a
provision for notice of proposed exchanges, which called for
identification of parcels and notice to the public. Both
parties had the right under the agreement to change their
positions after hearing public comment. He said the process
carefully balanced the state's and public's interests in
retaining certain parcels. The complaint from the
interveners, he said, was that there were not as many
procedural mechanisms available to them to block exchanges,
because multiple layers of public participation were not
provided for in Chapter 66.
Number 439
DEBORAH SMITH, EXECUTIVE DIRECTOR, ALASKA MENTAL HEALTH
BOARD (the Board), expressed the Board's eagerness to have
the issue settled. She described the Board's
responsibilities to review any legislation relating to the
mentally ill. She clarified that the Board was not a party
to the settlement, and described the Board's prior position
on the settlement agreement, specifically surrounding the
question of section 6(i). Since that time, an amendment to
the settlement agreement had been made which resolved the
section 6(i) issue as much as possible. She read the motion
passed by the Board in July, 1992, which accepted Chapter 66
as the basis of settlement, subject to the adoption of the
June 22, 1992 amendment.
MS. SMITH discussed the section 6(i) issue and its possible
application to the replacement lands. She understood the
issue would have to be decided by the courts, but nothing in
Chapter 66 imposed those restrictions on the original trust
lands. The Board's interest, she said, was in what was best
for the beneficiary groups.
Number 493
REPRESENTATIVE DAVIES asked about the principles of an
alternative settlement; specifically, how the six percent
figure had been arrived at.
Number 508
MR. GOTTSTEIN explained that in 1987, under Chapter 48, an
interim provision of five percent of unrestricted general
fund revenues was specified to go into the trust fund until
the trust was reconstituted. In 1990, Chapter 210 was
passed as an attempt to unilaterally resolve the litigation
without the plaintiffs' concurrence, and the percentage was
increased to six percent to gain the concurrence of the
plaintiffs. The current six percent was a continuation of
that figure, he added.
Number 523
REPRESENTATIVE JOE GREEN was concerned with the assertion
that the problems could be settled in a timely manner. He
remarked on the considerable difference of opinion that
could evolve around land rights, and even surface rights.
He was not optimistic that Alaska's land use problems could
be quickly resolved, and could see the disagreements going
on and on, requiring an endless morass of litigation.
Number 566
MR. WALKER suggested the reconstitution of the trust had
caused some problems, but the court had ordered
reconstitution of the trust. He was heartened by the
professional efforts to reach a mutual conclusion.
Number 590
REPRESENTATIVE GREEN was more concerned with the amount of
time allotted than with the process itself. It seemed that
the interests of some parties were being ignored in the land
exchange, he said. Potential income to the state had to be
deferred because of uncertainty over the land exchange.
MR. GOTTSTEIN responded, saying he had worked closely with
the DNR to allow appropriate development to go on.
Transactions were occurring, he said, on lands in every
category in the exchange pool. It was in the trust's
interest, he said, to have opportunities for income
generation, and to avoid tying up the lands unnecessarily.
Number 624
MR. GOTTSTEIN described the cooperative effort and said the
process was designed to avoid multiple appeals. He referred
to provisions of Chapter 66 which called for abbreviated
litigation, with hearings by a special master as quickly as
possible. Regarding the overselection problem of the Alaska
Native Claims Settlement Act, he mentioned that had been a
concern of the state. He directed members' attention to
Article 3, Section 11(b) of the settlement agreement, on
page 16, which included a provision for the state to knock
out selections that were inappropriate or if there were too
many. Selections would expire after one year unless they
were under active consideration. He said that around 550 -
600,000 acres had been nominated as substitute lands, and
that did not constitute the kind of massive selections that
had been raised as a problem. Mr. Gottstein said the most
suitable lands had been the focus of the selection.
Number 649
MR. STILES commented on Representative Green's question. He
said that although process and procedures were important in
settling the lands' question within the state, those aspects
were irrelevant to international markets. Rather, he said,
the perception was what affected the markets. With high
levels of competition for customer markets on an
international scale, he said investors became nervous at the
perception of a land freeze. The investment decisions to
put money into other countries affected Alaska for many
years, he said, because the companies needed to make a ten
year investment in a market.
TAPE 93-13, SIDE A
Number 000
MR. JESSEE expressed pessimism that the land exchange and
trust reconstitution could be implemented quickly, in spite
of all the good-intentioned efforts of the parties. While
the identification phase was going smoothly, Mr. Jessee
said, that did not mean the more time-consuming actual land
exchanges would be less time-consuming. All parties were
trying to make it work, he said, but as an example of the
potential problems with the exchange, he referred to Chapter
66, where it was expected that the Trust Authority would be
appointed and would have passed regulations regarding the
management of the land and the program, and would have
issued reports about the status of the Mental Health Lands
by January, 1993. He pointed out that date was two weeks
prior to this meeting of the House Resources Committee.
Number 089
REPRESENTATIVE BILL HUDSON agreed the process of resolution
seemed to be no further along than it was four years ago.
He asked if each of the parties represented would provide a
viewpoint on which lands would include subsurface rights, as
well as commenting on the subsurface rights of the
legislatively designated areas (LDAs), and the lands with
contracts on them. He also asked for a response on the
question of dedicated funding, with the six percent revenue
fund for mental health programs. It appeared to be
dedicated funding, which the Alaska Constitution prohibited,
and that question needed to be clarified, he said. He
suggested it should be decided whether to take legislative
action or let the courts work it out. He also asked for a
matrix describing where the parties were in the process.
Number 189
REPRESENTATIVE GENE THERRIAULT offered a question stemming
from the proposed alternative settlement. He asked if the
state had set aside the LDAs as collateral, what was the
answer on the question of foreclosure under the restrictions
of Section 6(i).
Number 214
REPRESENTATIVE HUDSON reiterated his concern about the
subsurface rights in the LDAs, and their status in the land
exchange.
Number 218
MR. JESSEE commented on the aspect of the six percent
general fund revenues for mental health programs. With the
LDAs, he said those were original trust lands, and the
Section 6(i) issue was not a concern with those lands.
Those mineral rights came to the state with the trust lands
through the Enabling Act, not through the Statehood Act, he
added.
MR. JESSEE, regarding the dedicated fund issue, said a
constitutional amendment would be needed to dedicate state
funds. He said that in Chapter 210, the initial six percent
figure was a "promise to pay" with lack of security. Now
the LDAs were held as collateral so future legislatures did
not have to pay the six percent and it was, therefore, not a
dedicated fund. They had appropriated original trust lands
in LDAs into a collateral status. From the plaintiff's
standpoint, that was security for the promise to pay, and it
created a trust authority. This gave the plaintiffs some
influence over whether the funds were spent on the needs of
the beneficiaries. It was understood the state was not
going to put the LDAs back into jeopardy by failing to make
the allocation of the six percent, especially when they
retained the authority to spend those funds as they saw fit.
Number 266
CHAIRMAN WILLIAMS asked the parties to provide any
information requested giving legislators some direction on
how to proceed on the issue.
ANNOUNCEMENTS
Number 288
REPRESENTATIVE GREEN suggested the committee defer action
until written comments had been provided to the committee.
He announced a joint House and Senate Oil and Gas Committee
meeting at 10 a.m. on Thursday, February 4, 1993, in the
Butrovich Room, regarding the repeal of the 65-day deadline
for oil spill response plans.
Number 314
CHAIRMAN WILLIAMS announced the House Resources Committee
would not meet on Friday, February 5, 1993, but invited
members to attend a Fisheries Committee meeting that
morning.
ADJOURNMENT
There being no further business to come before the House
Resources Committee, Chairman Williams adjourned the meeting
at 9:50 a.m.
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