SB 67 - MENTAL HEALTH TRUST AMENDMENTS Testimony was presented by Tom Koester, Bruce Botelho, and Dave Walker. CSSB 67 (2d Fin) work draft "S" was adopted. CSSB 67 (2d Fin) was then REPORTED OUT of committee with individual recommendations. A $200.0 fiscal note from the Dept. of Law, a $278.9 note from Dept. of Natural Resources, a $331.7 note from the Dept. of Health and Social Services, and zero notes from the Dept. of Fish and Game and the Court System subsequently followed the bill. Co-chair Pearce directed that CS FOR SENATE BILL NO. 67(FIN) (Act amending provisions of ch. 66, SLA 1991, that relate to reconstitution of the corpus of the mental health trust and to the manner of enforcement of the obligation to compensate the trust; and providing for an effective date) be brought on for discussion and referenced CSSB 67 (2d Fin) (work draft 8-LS0409\S, 4/18/94, Chenoweth). Co-chair Frank MOVED for adoption of work draft "S." No objection having been raised, CSSB 67 (2d Fin), "S" version was ADOPTED. Co-chair Pearce asked that representatives of the administration provide a brief overview of the new draft. BRUCE BOTELHO, Attorney General Designee, Dept. of Law, HARRY NOAH, Commissioner, Dept. of Natural Resources, and TOM KOESTER, Contract Attorney for the Dept. of Law, came before committee. Mr. Koester advised that changes between the previous "Q" draft and the current "S" version consist of: Page 12, line 20 - The "Q" draft did not contain "or interests." Page 12, Sec. 17- Per language in the "Q" draft, the bill only addressed lands tentatively approved or patented to the state on or before the effective date of legislation passed in 1978. However, lands were tentatively approved or patented to the state after that date. Under revised Sec. 17 language in the "S" draft, the bill now addresses lands tentatively approved or patented to the state under the Mental Health Enabling Act, both before and after 1978. Co-chair Pearce next noted a proposed Amendment designated "S.1" and asked for comments from the administration. Mr. Koester said that it is designed to ensure that lands the state has conveyed to private third parties are the first for which the trust receives compensation under the bill. They would thus be the first to be "freed from the cloud of this litigation." That is the intent of the amendment. It also provides that lands conveyed by the state to municipalities be the second lands freed from litigation. It prioritizes release from litigation in favor of private third parties first, municipalities second, and remaining land removed from the trust third. Co-chair Frank MOVED for adoption of Amendment S.1. No objection having been raised, Amendment S.1 was ADOPTED. Senator Kerttula referenced correspondence from David Walker and read from the third paragraph: The administration's proposal presented in Chenoweth's work draft CS for Senate bill No. 67 (2d FIN) is not a settlement. It purports to buy out the Trust by funding the Mental Health program. It unfairly characterizes the beneficiaries and is in fact unacceptable to all the parties who represent beneficiaries. It is unrealistic to think that the measure would be accepted by the Plaintiffs or approved by the court. Any negotiated settlement would be very different from the proposition outlined . . . . The Senator asked if the proposed bill would improve the state's position. Attorney General Botelho voiced his belief that the legislation would "measurably" improve the state's position in court. He acknowledged the likelihood of continuing litigation but stressed that the state has sought to closely satisfy requirements in the 1985 supreme court State v. Weiss decision calling for reconstitution of the trust. The bill also satisfies the latest guidance from Judge Greene at the superior court level. DAVID WALKER, Attorney for Plaintiffs, Weiss et al, concurred in comments regarding active, ongoing, settlement negotiations and voiced his hope that they would come to fruition. He stressed that a negotiated resolution would look very different than SB 67. The proposed bill unfairly characterizes the beneficiaries. Mr. Walker said he strenuously disagreed with Attorney General Botelho about the position in which it places the state. He stressed that as currently structured, the proposed bill is unacceptable to those representing plaintiff/beneficiaries in the litigation. Co-chair Pearce called for additional testimony on the bill. None was forthcoming. The Co-chair noted recent arrival of an additional fiscal note from the Dept. of Health and Social Services and voiced her intent to move the bill this date and follow up with appropriate fiscal notes shortly thereafter. Co-chair Frank advised that he had asked the Office of Management and Budget to review the late-arriving note in terms of how it would fit into the spending plan. Co-chair Frank MOVED for passage of CSSB 67 (2d Fin) and requested unanimous consent. No objection having been raised, CSSB 67 (2d Fin) was REPORTED OUT of committee with individual recommendations. Co-chair Frank and Senators Jacko and Sharp signed the committee report with a "do pass" recommendation. Co-chair Pearce and Senators Kerttula and Rieger signed "no recommendation." The following fiscal notes were subsequently approved to accompany the bill: Dept. of Law $200.0 Dept. of Natural Resources 278.9 Dept. of Health & Social Services 331.7 Dept. of Fish & Game 0 Court System 0 ADJOURNMENT The meeting was adjourned at approximately 3:40 p.m.