HOUSE FINANCE COMMITTEE April 29, 1994 8:40 A.M. TAPE HFC 94 - 145, Side 1, #000 - end. TAPE HFC 94 - 145, Side 2, #000 - end. TAPE HFC 94 - 146, Side 1, #000 - #437. CALL TO ORDER Co-Chair Larson called the House Finance Committee meeting to order at 8:40 A.M. PRESENT Co-Chair Larson Representative Foster Co-Chair MacLean Representative Martin Vice-Chair Hanley Representative Therriault Representative Brown Representative Parnell Representative Grussendorf Representatives Hoffman and Navarre were not present for the meeting. ALSO PRESENT Bruce Bothelo, Attorney General, Department of Law; Tom Koester, Independent Counsel, Department of Law; Senator Loren Leman; Harry Noah, Commissioner, Department of Natural Resources; Jeff Jesse, Advocacy Beneficiaries of Alaska, Anchorage; David Walker, Attorney, Representing Weiss versus State of Alaska, Juneau; Phillip Volland, Attorney, Representing Mental Health Clients-Alcohol Related, Anchorage; Ron Swanson, Director, Division of Lands, Department of Natural Resources. SUMMARY 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 consideration. HOUSE BILL 201 "An Act amending provisions of ch. 66, SLA 1991, that 1 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 BOTHELO, ATTORNEY GENERAL, DEPARTMENT OF LAW, noted his appreciation to the legislature, the Governor and all parties involved in resolving the mental health lands trust issue. He added that the legislation had been a joint effort of the Department of Law, the Department of Natural Resources working closely with the mental health alliances, development interests, environmental groups and municipalities. HARRY NOAH, COMMISSIONER, DEPARTMENT OF NATURAL RESOURCES, announced that the Department strongly supported the proposed committee substitute for HB 201, #8-LS0728\V, Chenoweth, 4/27/94. Commissioner Noah explained the changes from the original bill. The legislation had been divided into three components; money, acreage and incentive. Initially, the provision would pay $225.0 million dollars over a fifteen year period, whereas, the committee substitute would propose a one time payment of $200.0 million dollars, in order to establish a trust to be managed by the Mental Health Trust Authority. The second proposed change would address the acreage. A total of 927,502 acres would be distributed in the reconstructive mental health trust package. The original trust land return provided for a total of 434,456 acres, consisting of 134,358 acres of subsurface, 115,339 plus an additional 243,349 acres of subsurface only land. The incentive portion of the package would be the dismissal of the case in December, 1994. TOM KOESTER, INDEPENDENT COUNSEL, DEPARTMENT OF LAW, spoke to the components of CSHB 201 (FIN): 1. The bill reconstitutes the mental health trust as required by the Alaska Supreme Court in a way that protects private third parties' and municipalities' title to mental health land conveyed to them, mental health land leased for resource development, mental health land in state parks and wildlife refuges, and mental health land used by state agencies; and 2. Would be used as an incentive to the mental health 2 community for early dismissal of the litigation. It provides that beneficiaries of the mental health trust will receive a number of benefits if the case is dismissed and the time for appeal expires by December 15, 1994. The Reconstitution Component Mr. Koester continued more clearly defining the reconstitution component of the proposed legislation: * The bill would include several findings as to the history of the Weiss litigation, the state's obligations and management options under the 1956 federal Alaska Mental Health Enabling Act, the legislature's power under the Alaska Constitution to remove land from trust status if the trust is compensated for the fair market value of the land, and how this bill serves the interests of both the beneficiaries of the mental health trust and the public; * It reconstitutes the mental health trust, as required by the Alaska Supreme Court, with some original mental health land; * For original mental health land not returned to the trust, it compensates the trust in three ways; - Some other state land is designated as trust land; - Past state mental health expenditures of $1.3 billion dollars are claimed as a set-off against monetary liability for the fair market value of the land not returned, as authorized by the Alaska Supreme Court; - Future state mental health expenditures are claimed as an additional set-off against state monetary liability. * Reconstituted mental health trust land will be managed by the Department of Natural Resources consistent with the state's trust obligation under the Enabling Land Act and other state and public interests may be taken into account and accommodated to the extent that the enabling act permits; * Municipalities returning land to the state for transfer to the trust will have two years to 3 select other municipal entitlement land; * The current allocation of six percent of the unrestricted general fund to the mental health trust income account is repealed. The Incentive Component * If the litigation is dismissed and the time for appeals expires with no appeals filed before December 15, 1994, the mental health community receives several benefits; * The mental health trust authority is established largely as provided in Chapter 66, SLA 1991, to oversee, coordinate, and make important decisions regarding the funding of the State's mental health program; * The authority makes recommendations regarding amounts of State general funds needed for the State's mental health programs the Legislature passes a separate appropriation bill for the program; any differences between the bill and the authority's recommendations must be explained in the accompanying report; * The mental health trust fund from Chapter 66 is established, to consist of a $200 million up-front appropriation and trust land revenues attributable to the principal of the trust; the fund will be preserved in perpetuity and managed by the Alaska Permanent Fund Corporation to generate income; * The mental health trust income account from Chapter 66 is established, to consist of the income from the mental health trust fund and the revenues from trust land not attributable to the principal of the trust (lease, etc.); the authority will used the money in the income account for grants and contracts to implement the State's mental health program; * The Chapter 66 provisions that improve the State's mental health program are to become effective. Co-Chair MacLean questioned how the Administration would fund the up-front $200.0 million dollars with so little funding available. Chairman Larson referenced the two proposals; first, appropriate the $200.0 million from the Earnings Reserve Account into a special fund within the permanent fund account. Those earnings would then be 4 available for mental health purposes. The alternative would be for the Mental Health Trust Income to be placed under the authority of the Department of Natural Resources. Mr. Koester added that the earnings would be placed into a Mental Health Trust Income Account (MHTIA) including revenue from lands managed by the trust. The Trust Authority could then use those funds for granting and contracting with private entities and nonprofit and state agencies in order to deliver mental health programs. Mr. Koester disclosed that on Page 5, the language would address the "findings" section of the bill, whereas on Page 6, the "purposes" would be explained. Co-Chair MacLean asked the consequences if the case was not settled by December 1994. Mr. Koester replied that the reconstitution clause would become law, thereby satisfying the state's obligation required under the federal law and the Alaska Supreme Court decision. In addition, the incentive component would be repealed. Attorney General Bothelo reminded Committee members that not settling by December 1994, would place the State in litigation before the Superior Court. Representative Brown requested further clarification of the relationship existing between the Mental Health Trust Fund and the Mental Health Income and Proceeds Account. Mr. Koester replied that language in Sections #10 and #11 would be repealed if the case was dismissed and then replaced within the Mental Health Trust Fund and the Mental Health Income Account. Representative Brown requested a sectional analysis of the bill in order that she could better understand the DNR administrative expenses. Mr. Koester reiterated that the Department would operate under contract with the Mental Health Trust Authority and that there would be a separate division to handle mental health funds. Discussion followed between Committee members, Attorney General Bothelo and Mr. Koester regarding potential costs to the Department of Natural Resources. Clarification was made that the separate "unit" was envisioned to have four employees, and that the Trust Authority would determine if there was additional need. Representative Brown aired a concern regarding the cost of additional funding requests by the Alaska Mental Health Board and the Advisory Board on Alcoholism and Drug Abuse. 5 Representative Brown further discussed the potential problem with the proposed appropriation delegation of power to the Mental Health Trust Authority in order to determine the fund's uses. Mr. Koester replied that it would be critical to the plaintiff to maximize their influence over a portion of the expenditure for mental health programs. He added that the plaintiffs understand the potential problems with the provision and do not expect a guarantee. DAVID WALKER, ATTORNEY, REPRESENTING VERN AND WEISS, JUNEAU, stressed that any settlement must provide for trust management under trust principles. Representative Brown asked Mr. Walker which portions of the legislation would need to be amended in order to conform with the trust principles. Mr. Walker asserted that under the trust law principles, the trustees should be the managers of the corpus of the trust. He maintained that the Court will not be satisfied with anything less. (Tape Change, HFC 94-145, Side 2). PHILLIP VOLLAND, REPRESENTING MENTAL HEALTH CLIENTS-ALCOHOL RELATED, ANCHORAGE, suggested that the components of the bill are fair. He acknowledged the risks in trying to shape the trust. He added the program provisions of Chapter 66 would be maintained in the legislation. He appealed to Committee members to pass the work draft indicating it to be the most fair settlement thus far. Mr Volland referenced Section 17, Page 17 which outlines the four basic principles of the trust: 1. Maintenance of the trust land base; 2. Management for the benefit of the trust; 3. Management for long-term sustained yield of products from the land; and 4. Management for multiple use of trust land. Representative Brown questioned if inclusion of proposed language would mandate that trust lands be managed for multiple use. Mr. Volland explained that it would not mandate multiple use although that should be taken into consideration when determining value of the land. JEFF JESSE, ADVOCACY BENEFICIARIES OF ALASKA, ANCHORAGE, summarized that although the bill was not responsive to all the plaintiffs desires, the five settlement provisions were supported. Representative Martin MOVED to adopt the work draft #8- 6 LS0728\V, Chenoweth, dated 4/27/94, as the version before the Committee. There being NO OBJECTION, it was so adopted. Chairman Larson MOVED to adopt Amendment #1. [Copy on file]. There being NO OBJECTION, it was adopted. Representative Martin MOVED to adopt Amendment #2. [Copy on file]. Mr. Koester explained Amendment #2 would add a provision to establish approval by the Attorney General in the contracting for independent counsel. He added that the Trust Authority would most likely have disputes with the departments. The beneficiaries and plaintiffs oppose the amendment. Mr. Jesse argued that Amendment #2 was opposed by the plaintiffs and beneficiaries. Mr. Volland noted opposition to the amendment stressing that the trustees were capable of overseeing their own choices for counsel. Mr. Walker also voiced opposition to the amendment. Representative Hanley pointed out that the Attorney General's oversight, as specified in statute, was nonspecific in regard to the Mental Health Trust Fund. Mr. Koester clarified that the Attorney General would simply oversee the appointing of counsel. Co-Chair MacLean questioned if the Permanent Fund Corporation had oversight by the Attorney General. Attorney General Bothelo replied they did noting the purpose of the amendment would be to address any potential abuse while not usurping the power of the Trust Authority. Representative Parnell questioned the need for the amendment when the authority already exists in statute. Attorney General Bothelo commented that the amendment was offered to provide more clarity to an ambiguous provision. (Tape Change, HFC 94-146, Side 1). Representative Brown stated the Authority should have the power to provide their own counsel and thereby MOVED TO AMEND Amendment #2 to delete all material after the comma and insert "not with standing AS 36.30.015D". Discussion followed among Committee members and the Attorney General regarding the independence of the Authority and the responsibility of the Attorney General. There being NO OBJECTION to the amendment to Amendment #2, it was so ordered. Representative Martin OBJECTED to the amended Amendment #2. 7 A roll call vote was taken on the MOTION: IN FAVOR: Brown, Grussendorf, Hanley, Parnell, Therriault. OPPOSED: Martin, Larson, MacLean. Representatives Hoffman, Navarre and Foster were not present for the vote. The MOTION PASSED (5 - 3). Representative Martin MOVED to adopt Amendment #3. [Copy on file]. Mr. Koester explained that the amendment would reflect the numbers provided by the legislative research agency regarding "off set" expenditures by the State. Representative Brown inquired if those amounts were opposed by the plaintiffs. Mr. Volland replied the figures were incorrect. There being NO OBJECTION, Amendment #3 was adopted. Co-Chair Larson MOVED TO RESCIND previous action taken on adoption of Amendment #2 as amended. Representative Grussendorf OBJECTED. A roll call vote was taken on the MOTION. IN FAVOR: Foster, Grussendorf, Martin, Parnell, MacLean, Larson. OPPOSED: Hanley, Therriault, Brown. Representatives Hoffman and Navarre were not present for the vote. The MOTION PASSED (6 - 3). Representative Brown suggested the amendment be of a technical level, thus providing for oversight of procurement procedures, rather than the Attorney General having the authority to approve or disapprove of the counsel choice. Mr. Walker maintained that the trustees should have the authority to provide counsel for whatever purposes they deem necessary. Co-Chair Larson OBJECTED to the amended Amendment #2. A roll call vote was taken on the MOTION. IN FAVOR: Hanley, Therriault, Brown. OPPOSED: Grussendorf, Martin, Parnell, Foster, Larson, MacLean. 8 Representatives Hoffman and Navarre were not present for the vote. The MOTION FAILED (3 - 6). Representative Brown recommended deletion of Section 36. Mr. Koester responded that section 36 provides for an authorization for the commissioner of the Department of Natural Resources to appropriate funds from one part of the general fund to another. This would not be an authorization to spend funds. The purpose of the section would provide a back up in the event that the case was not resolved by December 1994. The language provides an assurance to the court to satisfy the liability of the trust until it is fully compensated. He noted that the provision would lasts until the liability of the state was satisfied. Representative Brown maintained her concern. Representative Hanley voiced support for Section 36 noting that the $1.3 billion offset would extend only through FY94. In the current budget, there is $108.0 million dollars allocated as Mental Health funds. Co-Chair MacLean explained that the provision was similar to the Mental Health Trust Income Account. Mr. Koester concurred with the Co-Chair MacLean's comment and added that the only difference would be that the provision in Section 36 will end. Representative Martin MOVED to report CS HB 201 (FIN) out of Committee with individual recommendations. Representative Brown OBJECTED. Chairman Larson announced that CS HB 201 (FIN) would be HELD with the motion pending for further discussion regarding the fiscal notes. ADJOURNMENT The meeting adjourned at 10:30 a.m. HOUSE FINANCE COMMITTEE April 29, 1994 8:40 A.M. TAPE HFC 94 - 145, Side 1, #000 - end. 9 TAPE HFC 94 - 145, Side 2, #000 - end. TAPE HFC 94 - 146, Side 1, #000 - #437. CALL TO ORDER Co-Chair Larson called the House Finance Committee meeting to order at 8:40 A.M. PRESENT Co-Chair Larson Representative Foster Co-Chair MacLean Representative Martin Vice-Chair Hanley Representative Therriault Representative Brown Representative Parnell Representative Grussendorf Representatives Hoffman and Navarre were not present for the meeting. ALSO PRESENT Bruce Bothelo, Attorney General, Department of Law; Tom Koester, Independent Counsel, Department of Law; Senator Loren Leman; Harry Noah, Commissioner, Department of Natural Resources; Jeff Jesse, Advocacy Beneficiaries of Alaska, Anchorage; David Walker, Attorney, Representing Weiss versus State of Alaska, Juneau; Phillip Volland, Attorney, Representing Mental Health Clients-Alcohol Related, Anchorage; Ron Swanson, Director, Division of Lands, Department of Natural Resources. SUMMARY 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 consideration. HOUSE BILL 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." 10 BRUCE BOTHELO, ATTORNEY GENERAL, DEPARTMENT OF LAW, noted his appreciation to the legislature, the Governor and all parties involved in resolving the mental health lands trust issue. He added that the legislation had been a joint effort of the Department of Law, the Department of Natural Resources working closely with the mental health alliances, development interests, environmental groups and municipalities. HARRY NOAH, COMMISSIONER, DEPARTMENT OF NATURAL RESOURCES, announced that the Department strongly supported the proposed committee substitute for HB 201, #8-LS0728\V, Chenoweth, 4/27/94. Commissioner Noah explained the changes from the original bill. The legislation had been divided into three components; money, acreage and incentive. Initially, the provision would pay $225.0 million dollars over a fifteen year period, whereas, the committee substitute would propose a one time payment of $200.0 million dollars, in order to establish a trust to be managed by the Mental Health Trust Authority. The second proposed change would address the acreage. A total of 927,502 acres would be distributed in the reconstructive mental health trust package. The original trust land return provided for a total of 434,456 acres, consisting of 134,358 acres of subsurface, 115,339 plus an additional 243,349 acres of subsurface only land. The incentive portion of the package would be the dismissal of the case in December, 1994. TOM KOESTER, INDEPENDENT COUNSEL, DEPARTMENT OF LAW, spoke to the components of CSHB 201 (FIN): 1. The bill reconstitutes the mental health trust as required by the Alaska Supreme Court in a way that protects private third parties' and municipalities' title to mental health land conveyed to them, mental health land leased for resource development, mental health land in state parks and wildlife refuges, and mental health land used by state agencies; and 2. Would be used as an incentive to the mental health community for early dismissal of the litigation. It provides that beneficiaries of the mental health trust will receive a number of benefits if the case is dismissed and the time for appeal expires by December 15, 1994. 11 The Reconstitution Component Mr. Koester continued more clearly defining the reconstitution component of the proposed legislation: * The bill would include several findings as to the history of the Weiss litigation, the state's obligations and management options under the 1956 federal Alaska Mental Health Enabling Act, the legislature's power under the Alaska Constitution to remove land from trust status if the trust is compensated for the fair market value of the land, and how this bill serves the interests of both the beneficiaries of the mental health trust and the public; * It reconstitutes the mental health trust, as required by the Alaska Supreme Court, with some original mental health land; * For original mental health land not returned to the trust, it compensates the trust in three ways; - Some other state land is designated as trust land; - Past state mental health expenditures of $1.3 billion dollars are claimed as a set-off against monetary liability for the fair market value of the land not returned, as authorized by the Alaska Supreme Court; - Future state mental health expenditures are claimed as an additional set-off against state monetary liability. * Reconstituted mental health trust land will be managed by the Department of Natural Resources consistent with the state's trust obligation under the Enabling Land Act and other state and public interests may be taken into account and accommodated to the extent that the enabling act permits; * Municipalities returning land to the state for transfer to the trust will have two years to select other municipal entitlement land; * The current allocation of six percent of the unrestricted general fund to the mental health trust income account is repealed. 12 The Incentive Component * If the litigation is dismissed and the time for appeals expires with no appeals filed before December 15, 1994, the mental health community receives several benefits; * The mental health trust authority is established largely as provided in Chapter 66, SLA 1991, to oversee, coordinate, and make important decisions regarding the funding of the State's mental health program; * The authority makes recommendations regarding amounts of State general funds needed for the State's mental health programs the Legislature passes a separate appropriation bill for the program; any differences between the bill and the authority's recommendations must be explained in the accompanying report; * The mental health trust fund from Chapter 66 is established, to consist of a $200 million up-front appropriation and trust land revenues attributable to the principal of the trust; the fund will be preserved in perpetuity and managed by the Alaska Permanent Fund Corporation to generate income; * The mental health trust income account from Chapter 66 is established, to consist of the income from the mental health trust fund and the revenues from trust land not attributable to the principal of the trust (lease, etc.); the authority will used the money in the income account for grants and contracts to implement the State's mental health program; * The Chapter 66 provisions that improve the State's mental health program are to become effective. Co-Chair MacLean questioned how the Administration would fund the up-front $200.0 million dollars with so little funding available. Chairman Larson referenced the two proposals; first, appropriate the $200.0 million from the Earnings Reserve Account into a special fund within the permanent fund account. Those earnings would then be available for mental health purposes. The alternative would be for the Mental Health Trust Income to be placed under the authority of the Department of Natural Resources. Mr. Koester added that the earnings would be placed into a Mental Health Trust Income Account (MHTIA) including revenue 13 from lands managed by the trust. The Trust Authority could then use those funds for granting and contracting with private entities and nonprofit and state agencies in order to deliver mental health programs. Mr. Koester disclosed that on Page 5, the language would address the "findings" section of the bill, whereas on Page 6, the "purposes" would be explained. Co-Chair MacLean asked the consequences if the case was not settled by December 1994. Mr. Koester replied that the reconstitution clause would become law, thereby satisfying the state's obligation required under the federal law and the Alaska Supreme Court decision. In addition, the incentive component would be repealed. Attorney General Bothelo reminded Committee members that not settling by December 1994, would place the State in litigation before the Superior Court. Representative Brown requested further clarification of the relationship existing between the Mental Health Trust Fund and the Mental Health Income and Proceeds Account. Mr. Koester replied that language in Sections #10 and #11 would be repealed if the case was dismissed and then replaced within the Mental Health Trust Fund and the Mental Health Income Account. Representative Brown requested a sectional analysis of the bill in order that she could better understand the DNR administrative expenses. Mr. Koester reiterated that the Department would operate under contract with the Mental Health Trust Authority and that there would be a separate division to handle mental health funds. Discussion followed between Committee members, Attorney General Bothelo and Mr. Koester regarding potential costs to the Department of Natural Resources. Clarification was made that the separate "unit" was envisioned to have four employees, and that the Trust Authority would determine if there was additional need. Representative Brown aired a concern regarding the cost of additional funding requests by the Alaska Mental Health Board and the Advisory Board on Alcoholism and Drug Abuse. Representative Brown further discussed the potential problem with the proposed appropriation delegation of power to the Mental Health Trust Authority in order to determine the fund's uses. Mr. Koester replied that it would be critical to the plaintiff to maximize their influence over a portion of the expenditure for mental health programs. He added 14 that the plaintiffs understand the potential problems with the provision and do not expect a guarantee. DAVID WALKER, ATTORNEY, REPRESENTING VERN AND WEISS, JUNEAU, stressed that any settlement must provide for trust management under trust principles. Representative Brown asked Mr. Walker which portions of the legislation would need to be amended in order to conform with the trust principles. Mr. Walker asserted that under the trust law principles, the trustees should be the managers of the corpus of the trust. He maintained that the Court will not be satisfied with anything less. (Tape Change, HFC 94-145, Side 2). PHILLIP VOLLAND, REPRESENTING MENTAL HEALTH CLIENTS-ALCOHOL RELATED, ANCHORAGE, suggested that the components of the bill are fair. He acknowledged the risks in trying to shape the trust. He added the program provisions of Chapter 66 would be maintained in the legislation. He appealed to Committee members to pass the work draft indicating it to be the most fair settlement thus far. Mr Volland referenced Section 17, Page 17 which outlines the four basic principles of the trust: 1. Maintenance of the trust land base; 2. Management for the benefit of the trust; 3. Management for long-term sustained yield of products from the land; and 4. Management for multiple use of trust land. Representative Brown questioned if inclusion of proposed language would mandate that trust lands be managed for multiple use. Mr. Volland explained that it would not mandate multiple use although that should be taken into consideration when determining value of the land. JEFF JESSE, ADVOCACY BENEFICIARIES OF ALASKA, ANCHORAGE, summarized that although the bill was not responsive to all the plaintiffs desires, the five settlement provisions were supported. Representative Martin MOVED to adopt the work draft #8- LS0728\V, Chenoweth, dated 4/27/94, as the version before the Committee. There being NO OBJECTION, it was so adopted. Chairman Larson MOVED to adopt Amendment #1. [Copy on file]. There being NO OBJECTION, it was adopted. 15 Representative Martin MOVED to adopt Amendment #2. [Copy on file]. Mr. Koester explained Amendment #2 would add a provision to establish approval by the Attorney General in the contracting for independent counsel. He added that the Trust Authority would most likely have disputes with the departments. The beneficiaries and plaintiffs oppose the amendment. Mr. Jesse argued that Amendment #2 was opposed by the plaintiffs and beneficiaries. Mr. Volland noted opposition to the amendment stressing that the trustees were capable of overseeing their own choices for counsel. Mr. Walker also voiced opposition to the amendment. Representative Hanley pointed out that the Attorney General's oversight, as specified in statute, was nonspecific in regard to the Mental Health Trust Fund. Mr. Koester clarified that the Attorney General would simply oversee the appointing of counsel. Co-Chair MacLean questioned if the Permanent Fund Corporation had oversight by the Attorney General. Attorney General Bothelo replied they did noting the purpose of the amendment would be to address any potential abuse while not usurping the power of the Trust Authority. Representative Parnell questioned the need for the amendment when the authority already exists in statute. Attorney General Bothelo commented that the amendment was offered to provide more clarity to an ambiguous provision. (Tape Change, HFC 94-146, Side 1). Representative Brown stated the Authority should have the power to provide their own counsel and thereby MOVED TO AMEND Amendment #2 to delete all material after the comma and insert "not with standing AS 36.30.015D". Discussion followed among Committee members and the Attorney General regarding the independence of the Authority and the responsibility of the Attorney General. There being NO OBJECTION to the amendment to Amendment #2, it was so ordered. Representative Martin OBJECTED to the amended Amendment #2. A roll call vote was taken on the MOTION: IN FAVOR: Brown, Grussendorf, Hanley, Parnell, Therriault. 16 OPPOSED: Martin, Larson, MacLean. Representatives Hoffman, Navarre and Foster were not present for the vote. The MOTION PASSED (5 - 3). Representative Martin MOVED to adopt Amendment #3. [Copy on file]. Mr. Koester explained that the amendment would reflect the numbers provided by the legislative research agency regarding "off set" expenditures by the State. Representative Brown inquired if those amounts were opposed by the plaintiffs. Mr. Volland replied the figures were incorrect. There being NO OBJECTION, Amendment #3 was adopted. Co-Chair Larson MOVED TO RESCIND previous action taken on adoption of Amendment #2 as amended. Representative Grussendorf OBJECTED. A roll call vote was taken on the MOTION. IN FAVOR: Foster, Grussendorf, Martin, Parnell, MacLean, Larson. OPPOSED: Hanley, Therriault, Brown. Representatives Hoffman and Navarre were not present for the vote. The MOTION PASSED (6 - 3). Representative Brown suggested the amendment be of a technical level, thus providing for oversight of procurement procedures, rather than the Attorney General having the authority to approve or disapprove of the counsel choice. Mr. Walker maintained that the trustees should have the authority to provide counsel for whatever purposes they deem necessary. Co-Chair Larson OBJECTED to the amended Amendment #2. A roll call vote was taken on the MOTION. IN FAVOR: Hanley, Therriault, Brown. OPPOSED: Grussendorf, Martin, Parnell, Foster, Larson, MacLean. Representatives Hoffman and Navarre were not present for the vote. The MOTION FAILED (3 - 6). Representative Brown recommended deletion of Section 36. 17 Mr. Koester responded that section 36 provides for an authorization for the commissioner of the Department of Natural Resources to appropriate funds from one part of the general fund to another. This would not be an authorization to spend funds. The purpose of the section would provide a back up in the event that the case was not resolved by December 1994. The language provides an assurance to the court to satisfy the liability of the trust until it is fully compensated. He noted that the provision would lasts until the liability of the state was satisfied. Representative Brown maintained her concern. Representative Hanley voiced support for Section 36 noting that the $1.3 billion offset would extend only through FY94. In the current budget, there is $108.0 million dollars allocated as Mental Health funds. Co-Chair MacLean explained that the provision was similar to the Mental Health Trust Income Account. Mr. Koester concurred with the Co-Chair MacLean's comment and added that the only difference would be that the provision in Section 36 will end. Representative Martin MOVED to report CS HB 201 (FIN) out of Committee with individual recommendations. Representative Brown OBJECTED. Chairman Larson announced that CS HB 201 (FIN) would be HELD with the motion pending for further discussion regarding the fiscal notes. ADJOURNMENT The meeting adjourned at 10:30 a.m. 18