HOUSE RESOURCES STANDING COMMITTEE April 6, 1994 8:15 a.m. MEMBERS PRESENT Representative Bill Williams, Chairman Representative Bill Hudson, Vice Chairman Representative Con Bunde Representative Pat Carney Representative John Davies Representative David Finkelstein Representative Joe Green Representative Jeannette James Representative Eldon Mulder MEMBERS ABSENT None COMMITTEE CALENDAR HB 443 "An Act relating to the confidentiality of certain records relating to fish and wildlife; and providing for an effective date." ADOPTED CSHB 443(RES) AND PASSED OUT OF COMMITTEE WITH INDIVIDUAL RECOMMENDATIONS *HB 357 "An Act confirming and ratifying the conversion of certain former mental health to general grant land and disposals of that land, canceling the lis pendens notices recorded in state public records against third-party holdings of former mental health trust land, and urging the attorney general to seek the dissolution of a related injunction; and providing for an effective date." HB 357 PASSED OUT OF COMMITTEE WITH INDIVIDUAL RECOMMENDATIONS * (First Public Hearing) WITNESS REGISTER DAVID KELLEYHOUSE, Director Division of Wildlife Conservation Alaska Department of Fish and Game P.O. Box 25526 Juneau, Alaska 99802-5526 Phone: 465-4190 POSITION STATEMENT: Supported HB 443 HENRY WILSON, Assistant Attorney General Department of Law 1031 W. 4th , Ste. 200 Anchorage, Alaska 99501-1994 Phone: 269-5100 POSITION STATEMENT: Answered questions on HB 443 JAMES GOTTSTEIN 406 G Street, Ste. 206 Anchorage, Alaska 99501 Phone: 274-7686 POSITION STATEMENT: Supported HB 357 concept DAVID WALKER, Attorney 417 Harris Juneau, Alaska 99801 Phone: 586-3537 POSITION STATEMENT: Supported HB 357 concept JERRY GALLAGHER, Legislative Liaison Department of Natural Resources P.O. Box 107016 Anchorage, Alaska 99510-7016 Phone: 762-2165 POSITION STATEMENT: Answered questions on HB 357 PREVIOUS ACTION BILL: HB 443 SHORT TITLE: FISH & WILDLIFE CONFIDENTIAL RECORDS SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR JRN-DATE JRN-PG ACTION 02/04/94 2259 (H) READ THE FIRST TIME/REFERRAL(S) 02/04/94 2259 (H) RESOURCES 02/04/94 2259 (H) -ZERO FISCAL NOTE (F&G) 2/4/94 02/04/94 2259 (H) GOVERNOR'S TRANSMITTAL LETTER 03/23/94 (H) RES AT 08:15 AM CAPITOL 124 03/23/94 (H) MINUTE(RES) 03/25/94 (H) RES AT 08:15 AM CAPITOL 124 03/25/94 (H) MINUTE(RES) 03/25/94 (H) MINUTE(RES) 04/06/94 (H) RES AT 08:15 AM CAPITOL 124 BILL: HB 357 SHORT TITLE: REMOVE LIENS ON MENTAL HEALTH LAND SPONSOR(S): REPRESENTATIVE(S) JAMES JRN-DATE JRN-PG ACTION 01/10/94 2021 (H) READ THE FIRST TIME/REFERRAL(S) 01/10/94 2021 (H) RESOURCES, JUDICIARY, FINANCE 04/06/94 (H) RES AT 08:15 AM CAPITOL 124 ACTION NARRATIVE TAPE 94-46, SIDE A Number 000 The House Resources Committee was called to order by Chairman Bill Williams at 8:25 a.m. Members present at the call to order were Representatives Williams, Hudson, Bunde, Carney, Finkelstein, Green, and Mulder. Members absent were Representatives Davies and James. CHAIRMAN BILL WILLIAMS announced there is a quorum present. He stated the meeting is on teleconference with Anchorage. (CHAIRMAN WILLIAMS noted for the record that REPRESENTATIVE JAMES had joined the committee at 8:26 a.m.) HB 443 - Fish & Wildlife Confidential Records CHAIRMAN WILLIAMS stated this is the committee's second hearing on HB 443 which is a Governor's bill. He reminded members that at the first hearing on HB 443, testimony was heard from Wayne Regelin, Deputy Director of the Division of Wildlife Conservation and Dr. Gordon Haber, a biologist who had sought and won a court order to obtain radio collar information from the department for his own research. He said Dr. Haber sent several of his research reports for the committee's review which were made available to members of the committee. CHAIRMAN WILLIAMS stated when the committee adjourned the first meeting on HB 443, there was an amendment proposed by Representative James pending. The amendment is on page 1, line 14: Delete the word "or"; and on page 2, line 2: Insert ", or if the requestor has been authorized by the department to perform specific activities, and the requestor agrees to use the information only for purposes as provided under contract or agreement." Number 040 REPRESENTATIVE DAVID FINKELSTEIN stated he has an additional suggested amendment from the Alaska Department of Fish and Game (ADF&G) which he wishes to distribute. He said the suggestion is another approach to reach the same goal. He is attempting to address the issue of how to protect the department's interest on confidential information without precluding public release of those portions of the information which are not sensitive to interested parties or in the case of sensitive information, to only release the information under an agreement and in conformance with the terms of the department. Number 085 DAVID KELLEYHOUSE, DIRECTOR, DIVISION OF WILDLIFE CONSERVATION, ALASKA DEPARTMENT OF FISH & GAME (ADF&G), stated the suggested amendment which Representative Finkelstein is referring to was prepared only in response to potential amendments. He said ADF&G prefers that HB 443 remain in its original form with the pending amendment. CHAIRMAN WILLIAMS asked if there were any objections to the motion. Hearing none, the MOTION PASSED. REPRESENTATIVE FINKELSTEIN made a MOTION to AMEND CSHB 443(RES) as follows: On page 1, line 7, after "(2)", delete [WHEN THE KNOWLEDGE MAY BE DETRIMENTAL TO THE FISH OR WILDLIFE POPULATION] and insert, "when in the opinion of the commissioner, the knowledge may be detrimental to fish, wildlife, human safety, or research or management programs being conducted by the department or authorized by the department,". On page 2, line 2, following the word "population." insert, "The department may also release records and information that are kept confidential under this subsection, except for telemetry radio frequencies and other electronic locating information, to a requestor conducting scientific research or other specific activities if the requestor agrees to use the records and information only as provided under terms of a contract or agreement with the department." REPRESENTATIVE FINKELSTEIN explained these are all areas where the department does not have to release information to the public so there is a need to make it as strict as possible. Under current law, the department is not allowed to release information when the knowledge may be detrimental to the fish or wildlife population. He stressed the problem with the current law is it has been treated as being broader than only fish or wildlife species--the release of the information has to be detrimental to an entire population, which is not realistic. He said the first part of the amendment is more definitive on the release of information and the department cannot make a decision to not release the information only because they do not want to. REPRESENTATIVE FINKELSTEIN stated the second part of the amendment says the department is able, except for the case of radio frequencies or other electronic information, to release records of information to someone conducting scientific research if that person agrees to use the information only as provided for under terms of a contract with the department. Therefore, if someone not employed or contracted by the state wants to conduct scientific research, the department limits them to information other than radio frequency information, and that person agrees to the terms specified by the department including confidentiality, then the department may release the information to that person. He stressed the amendment does not say the department is required to release the information and does not go anywhere near the current court order. Number 161 REPRESENTATIVE CON BUNDE asked for clarification from the department as to their position on the pending motion. MR. KELLEYHOUSE stated CSHB 443(RES) will provide the commissioner with the necessary discretion to keep confidential any information which may be injurious to the state's interest. He said ADF&G prefers the bill be passed out in its existing form rather than with the pending amendment. He stressed ADF&G has shown good judgment over the years in working with other cooperators and professional scientists. ADF&G is asking, through CSHB 443(RES), for a reaffirmation from the legislature and a tightening of the statute, so the department is not forced to release sensitive information to individuals who the department does not believe to be reputable. He said passage of the pending amendment will open the door a little wider and increase the department's liability in subsequent litigation. (CHAIRMAN WILLIAMS noted for the record that REPRESENTATIVE DAVIES had joined the committee at 8:35 a.m.) REPRESENTATIVE JEANNETTE JAMES felt all department information should be kept confidential and opposes opening the door any wider. She stated this information should be only for state business, performed by the department or any other person on contract with the state, for a specific purpose. REPRESENTATIVE JOHN DAVIES felt the state is everyone who lives here and public purposes are broader than only what the department is doing. He said there is a need to facilitate independent research and stressed the truth is best served when there is a variety of opinions offered in a free market place of ideas. He asked for a clarification as to why the proposed amendment will increase the department's liability. Number 221 MR. KELLEYHOUSE responded the current language in the bill will give the commissioner full discretion in the release of information. The proposed amendment will provide a risk for someone to argue in a court of law with the opinion of the commissioner because of the specifics noted. He said it is difficult for an agency, especially an agency based on science, to prove to the court's satisfaction that there will be a detriment to an individual animal, to a population, or to a research or management program because there are plausible arguments to be made in court on the other side, as were recently made. MR. KELLEYHOUSE stressed the department has seen evidence of harassment to collared animals as a result of the release of information. The department has experienced premature release of information to the press which ADF&G does not believe to be a reputable scientific practice. ADF&G does not disagree with people having differing opinions, but rather how they go about forwarding their particular opinion. He stated the premature release of raw data is not a proper way to argue another scientific viewpoint. He reiterated the language in the proposed amendment will provide opportunities for arguments to be made in court for the release of information. Number 262 REPRESENTATIVE DAVIES asked if state employees include university employees. MR. KELLEYHOUSE replied CSHB 443(RES) will allow the department to continue working in cooperation with the University of Alaska. REPRESENTATIVE DAVIES wondered if a university professor had an opinion differing from that of the department, would the cooperation between the two slow down. MR. KELLEYHOUSE stated the cooperation would not slow down as long as the different opinion was expressed and a study plan was put forward which tests the hypothesis. He said through the years, the department has cooperated with many people who have had differing opinions and that has not been a reason for denying a cooperative effort. He felt the specific issue is the radio frequencies. ADF&G has never released state radio frequencies, as in the manner which recently occurred. MR. KELLEYHOUSE explained the department has only a certain band to operate in. The department was granted a narrow band of frequencies to use, which the department will use forever. He said if the frequencies are released, the release will not just jeopardize the current study because the department reuses those frequencies on different species, in different areas, over and over again and has done so for over twenty years. He stated when the department works with other people, a permit is issued allowing that individual to accomplish their own collaring. He stressed the department has never invited an individual into a department's ongoing study, with animals collared at the state's expense, because of the long-term downside potential of having those frequencies out. Number 309 REPRESENTATIVE DAVIES commented there is another area where the cooperative sharing of the information is essential. He said the Federal Communications Commission allocates the exact same bands to the university for doing seismological research as they do for ADF&G. He stated another circumstance is that completely independent and nonbiological research may be impacted by the radio telemetry frequencies chosen, so there is a need to ensure that an exchange of that type of information is not precluded. REPRESENTATIVE BILL HUDSON said he is attempting to determine how the proposed amendment will fit in with the amended HB 443. He felt the original intent of the bill is a valid intent and supports the amended version even more because it provides for independent research to take place under a contract or agreement with the department. He cannot support the proposed pending amendment. Number 353 REPRESENTATIVE FINKELSTEIN said the first part of the amendment says all determinations can be made regardless of any detrimental impact to any fish or wildlife. He stressed this part of the amendment actually returns to existing law, except the amendment fixes the law so there is no unintended effect such as what the department found in the case where wildlife populations were determined to be much broader than only the impact on a particular species or animal. The first part of the amendment says the detriment can be to a particular animal, human safety, or research or management programs--any detrimental impacts found in the opinion of the commissioner. REPRESENTATIVE FINKELSTEIN stated in regard to the second part of the amendment, the reason this confidentiality issue is being dealt with is because the information is state information, publicly paid for which members of the state have an ownership interest in. The goal is to balance the public's interest with the department's need to protect the state's interest. He clarified the pool of people interested in doing independent scientific research is very small. MR. KELLEYHOUSE responded it is a very small pool of people. He stressed CSHB 443(RES) will allow the department to cooperate with those people. Number 400 REPRESENTATIVE FINKELSTEIN expressed concern the department will only get into cooperative agreements with people whose opinions are in agreement with the department. He understood that is not the intent of the department but the language currently in CSHB 443(RES) will allow the department to exclude people because the department does not agree with their viewpoint. He felt the legislature has an obligation to allow people in the state, with different views, to have access to information, as long as that access does not interfere with the department's operations. MR. KELLEYHOUSE responded he has been a scientist for twenty years and during that period of time, he has worked and shared information with many researchers holding different viewpoints than his own. He stressed a difference of opinion would never cause him or Commissioner Rosier to ever recommend or deny access to information. He said it is the total nature of the opposition which weighs into the decision on whether or not it is in the state's best interest to enter into an agreement. He reiterated that the proposed pending amendment may provide some risk for litigation or argument for involvement of individuals where the release of information will adversely affect the state's interest. REPRESENTATIVE FINKELSTEIN stated it is difficult to understand how someone may sue based on the language contained in the proposed amendment, since the release of information is discretionary upon the department and all of the findings remain with ADF&G. Number 445 HENRY WILSON, ASSISTANT ATTORNEY GENERAL, DEPARTMENT OF LAW, testified via teleconference and stated the question of detriment in current statute and in the proposed amendment is still going to be open to differing opinions and the possibility of litigation. He said in the current case, the argument was made that the use would not be detrimental to fish and wildlife populations. He can foresee instances where similar types of arguments can be made. He did not think the question of the (indiscernible) opinion of the commissioner being the first determination of detriment would necessarily preclude litigation because an argument can be made that the commissioner's opinion was arbitrary. MR. WILSON said he shares the concern of ADF&G that interjecting the concept of detriment into the equation leaves the door open for litigation. He stated the Department of Law, in reviewing the original statute, determined the intent of the legislature was to confirm the department's authority to keep information confidential and only by interjecting the concept of detriment, was the door opened up in ways the legislature did not intend. He expressed concern about the concept of detriment being subject to different opinions. MR. WILSON stated the committee's discussion is focusing on the use of information for research purposes. He stressed there are other purposes which people might be requesting this information for, such as tourist businesses--groups who want to view wildlife. He felt there are other circumstances where people might request this information and argue their particular use is not detrimental, either to the population or the other subjects contained in the proposed amendment. Number 510 REPRESENTATIVE BUNDE expressed concern about commercial interests using confidential information and does not support releasing information, gathered at the expense of the state, for private gain. REPRESENTATIVE JAMES stated the pending amendment seems innocent but anytime more words are added into a definition, there will always be more people who want to make the words say different things. She felt the bill, as currently amended, already accomplishes the desired goal. She thought the pending amendment is unnecessary and is opening the door for disputes. REPRESENTATIVE FINKELSTEIN asked if there is anything in CSHB 443(RES) which precludes the department from not releasing information to people who disagree with the department. He felt without the language regarding the detriment to fish and wildlife, decisions will be based only on the department's viewpoint. MR. WILSON clarified that Representative Finkelstein was asking the question in regard to CSHB 443(RES), without the pending amendment. REPRESENTATIVE FINKELSTEIN said that is correct. MR. WILSON responded the only possibility is the provision (indiscernible) the release necessary to comply with a court order. Otherwise, he does not see language addressing the issue Representative Finkelstein mentioned, unless there is an instance where the department contracts with people they disagree with. REPRESENTATIVE FINKELSTEIN said that was his point. If there is an independent person who disagrees with ADF&G, the department can choose not to give out information based only on a disagreement. Number 595 REPRESENTATIVE HUDSON felt that perhaps part of the pending amendment can be used. He suggested beginning on page 1, line 5, it could read, (d) When in the opinion of the commissioner, the knowledge may be detrimental to fish, wildlife, human safety, or research or management programs being conducted by the department or authorized by the department, the department shall keep confidential... He said this change will at least give a purpose for the justification of the commissioner having... He stated along with the first amendment already adopted, this expands the department's interaction with specific activities which have been agreed to be used only for purposes under contract or agreement. MR. WILSON thought Representative Hudson's suggestion is a reasonable alternative but the possibility of litigation will still be faced, to determine whether a particular use of the information is detrimental and whether or not the commissioner's opinion is reasonable and not arbitrary. REPRESENTATIVE HUDSON clarified the suggestion sets up a potential standard which could be used by someone who believes that the commissioner's authority has not been properly executed. MR. WILSON responded that is a possibility. He said it depends on how much interest there is in the information, how active people are and how far they want to pursue the information. He stated it could take a series of court cases to define whether or not a particular group's use of the information is detrimental. TAPE 94-46, SIDE B Number 000 CHAIRMAN WILLIAMS asked if there were any objections to the amendment proposed by Representative Finkelstein. REPRESENTATIVE HUDSON OBJECTED. REPRESENTATIVE FINKELSTEIN stated if there is a desire to preclude lawsuits, all of the access to public information laws could be rewritten in a way that the state will never be sued. He said the result would be the least access, instead of the ultimate goal, which is the most access. He stressed there is a potential for lawsuits anytime there is an attempt to allow citizens access while protecting the state's interest. He said the other extreme is making information, which any department does not want anyone to see, unavailable. REPRESENTATIVE JAMES said she has less concern with the second part of the amendment than the first part. She felt the second part of the amendment is quite definitive. REPRESENTATIVE DAVIES made a MOTION to DIVIDE the question. CHAIRMAN WILLIAMS asked if there were any objections to the motion. Hearing none, the MOTION PASSED. CHAIRMAN WILLIAMS asked for a roll call vote on the MOTION to AMEND CSHB 443(RES), on page 1, line 7, after "(2)", delete [WHEN THE KNOWLEDGE MAY BE DETRIMENTAL TO THE FISH OR WILDLIFE POPULATION] and insert, "when in the opinion of the commissioner, the knowledge may be detrimental to fish, wildlife, human safety, or research or management programs being conducted by the department or authorized by the department,". Voting in favor of the amendment were Representatives Davies and Finkelstein. Voting against the amendment were Representatives Williams, Hudson, Bunde, Carney, Green, James, and Mulder. The MOTION was DEFEATED 7-2. CHAIRMAN WILLIAMS asked for a roll call vote on the MOTION to AMEND CSHB 443(RES), on page 2, line 2, following "population." and insert, "The department may also release records and information that are kept confidential under this subsection, except for telemetry radio frequencies and other electronic locating information, to a requestor conducting scientific research or other specific activities if the requestor agrees to use the records and information only as provided under terms of a contract or agreement with the department." Voting in favor of the amendment were Representatives Finkelstein, James, and Davies. Voting against the amendment were Representatives Williams, Hudson, Bunde, Carney, Green, and Mulder. The MOTION was DEFEATED 6-3. REPRESENTATIVE MULDER made a MOTION to MOVE CSHB 443(RES), with accompanying fiscal notes, out of committee with INDIVIDUAL RECOMMENDATIONS. REPRESENTATIVE FINKELSTEIN OBJECTED. REPRESENTATIVE FINKELSTEIN stated there are very few people in the state who want this information, and there are very few independent scientists, researchers, biologists in the state. He said everyone is employed by the state or federal government or municipalities. He felt there should be some limited access provided to these few people, where the department's and state's interests are not going to be harmed and also where the release of the information is not purely discretionary upon the department. CHAIRMAN WILLIAMS asked for a roll call vote. Voting in favor of the motion were Representatives Williams, Hudson, Bunde, Carney, Green, James, and Mulder. Voting against the motion were Representatives Finkelstein and Davies. The MOTION PASSED 7-2. Number 075 HB 357 - Remove Liens On Mental Health Land REPRESENTATIVE JEANNETTE JAMES, PRIME SPONSOR, stated she filed HB 357 because at the beginning of the session, there was no indication that the Mental Health Lands issue would be solved and she felt it was very important that the more than 3,000 Moms and Pops be freed from the situation they have been stuck in for years, having the lis pendens on their property. Subsequently, she put the bill on hold because the Department of Natural Resources (DNR) had told her they had a solution. Now, nearly three months later, she is fearful that the presentation made by the department to settle the Mental Health Lands issue may or may not be passed. Therefore, she requested a hearing on HB 357 so it could be passed out, moved to Finance, and join HB 201, which is the substitute presented by the department. REPRESENTATIVE JAMES said while HB 357 only addresses a small portion of the Mental Health Lands litigation, there are more than 3,000 people affected and a solution must be found so they are not held hostage any longer. The committee substitute for HB 201, if passed, will accomplish the same goal as HB 357 but HB 201 has many other things in it which may hold up its progress. She believed that HB 357 will at least address the situation with the Moms and Pops. Number 105 REPRESENTATIVE DAVIES commented Judge Greene's statements in the past suggest this approach will be, in her words, a cruel hoax and would not preclude somebody on behalf of the mental health program from going in and taking one of the third party purchasers to court individually. He did not see how the passage of HB 357 will prevent that circumstance. REPRESENTATIVE JAMES responded the court order resulted because in trying to free the Moms and Pops, there was no identification of those lands sold and no provision made for payment of those lands, except that the settlement would eventually accomplish that. She stated HB 357 is different in that it specifically puts the state of Alaska on record to committing money or additional land to cover the costs of the third party lands. The original court order said that the state would reconstitute the Mental Health Lands Trust, except for lands which were sold, and those lands would be compensated at fair market value. She stressed HB 357 provides that fair market value be paid to the Mental Health Lands Trust for the Moms and Pops. Therefore, the third party purchasers will be held harmless because the state is promising to meet that commitment. Number 160 JIM GOTTSTEIN, REPRESENTATIVE, ALASKA MENTAL HEALTH ASSOCIATION, testified via teleconference and stated passing HB 357 will not have much effect. However, he felt the bill has ideas which can be used to solve specific problems with the third party purchasers. He said the 1978 legislation, which the Supreme Court declared invalid in 1985, did contain a promise to pay for the land taken. The Supreme Court did not even consider that promise to pay worthy of note, since nothing was ever paid regardless that the statute said the state intended to pay, and that statute was declared invalid. MR. GOTTSTEIN stated the Supreme Court has been clear that there are two ways to resolve the Mental Health Lands Trust litigation: 1) a settlement which both sides bring to the court for its consideration and approval if fair; and 2) litigate the issue under the Supreme Court's decision in 1985. Therefore, the legislature cannot just pass a bill and fix it. MR. GOTTSTEIN said the basic structure of HB 357 is to trade out the private third party purchasers as a separate piece. He noted the Mental Health Association has been proposing that idea for some time. He added the work done over the past two and one-half years to identify land, establish values, etc., makes it very easy to take this specific part of the problem and fix it this year. He felt an exchange package can be developed and enacted. That kind of suggestion has been made by the Mental Health Association to the state, but the idea has not been pushed because the Administration and the legislature have expressed a great desire to solve that particular problem. Number 213 MR. GOTTSTEIN stated the Administration has wanted to develop a global settlement solution so there has been no desire to review this particular piece of the pie. He also felt the committee substitute for HB 201 is a step backwards as well. REPRESENTATIVE JAMES said under discussion is approximately 50,000 acres and over 3,000 people who are being held in a trial type situation. She thought there will be a benefit to the state as a whole, to the 3,000 people, and to the Mental Health community if the third party purchasers problem can be eliminated, so the rest of the problem can be solved. MR. GOTTSTEIN agreed. He felt the idea of HB 357 is good. However, there cannot just be an intent to compensate, there has to be an actual compensation provision to make the bill work. He said all of the pieces to accomplish that are in place but there is a need to determine what that compensation should be and then do it. REPRESENTATIVE JAMES asked if part of HB 357 indicates that the attorney general's office will go to court to dissolve the injunction, which will involve a settlement with the third parties. MR. GOTTSTEIN responded the attorney general's office has tried to get around injunctions on other court rulings many times and has even asked the Alaska Supreme Court to dissolve the injunction or grant another release and has been unsuccessful. He said if an actual compensation package is worked out for the third party purchasers, the lis pendens will be released with respect to those parcels and the preliminary injunction will be canceled. He felt the key is not just an expression of intent to compensate, but there has to be an actual compensation. Number 271 REPRESENTATIVE DAVIES commented in reading Judge Greene's decision, it is obvious that she is very skeptical of any promises made by the legislature to resolve this issue. He asked if the third party purchasers are to be separated out and actually compensated by finding suitable substitute lands, will that type of deal withstand Judge Greene's scrutiny and will she agree to solving the issue in two steps. MR. GOTTSTEIN replied he felt she would. He stated if all of the plaintiffs side agree on this arrangement, this kind of release will fly through the court and can be accomplished very quickly. He felt the Moms and Pops issue is the easiest part of the overall issue to fix because there is not a lot of acreage involved and the land has already been identified. Number 300 REPRESENTATIVE HUDSON asked if most of the parcels being discussed are held by municipalities. REPRESENTATIVE JAMES stated many of the parcels are held by municipalities. She said many of the Moms and Pops in her district have actually purchased the land from the state on a state subdivision, have paid for the land, and have title to it, subject to the lis pendens. She noted there are many who are still paying to the state with the lis pendens and there are some lands which have been transferred to municipalities, subdivided, sold and are mortgaged to banking institutions. She felt the problem needs to be solved for these people who are entirely innocent and cannot be held hostage any longer, either by the plaintiffs or the state of Alaska. Number 339 REPRESENTATIVE HUDSON clarified every parcel has had a value and in some cases, the land has already been paid for. He assumed there has been a total value established for the entire package, a value which has been lost and needs to be made up. MR. GOTTSTEIN said that is correct and added that most of the work, in terms of the value, has already been done. He stated most of the work, in terms of the value of the replacement lands, has also been completed. He felt there are no significant disagreements between the state and the Mental Health Association in regard to the value of the lands. REPRESENTATIVE GREEN said the fiscal note analysis states that although the plaintiffs will most likely challenge the elimination of the encumbrances, adoption of this bill may help advance the state's cause in the overall mental health trust litigation. He noted there have been differences amongst the plaintiffs as well as the other side. He wondered if the other attorneys for the plaintiffs will think HB 357 is a good step as this step may indicate an interruption of the delicate balance which is being worked out between DNR, the plaintiffs, and the Mental Health Trust. Number 385 DAVID WALKER, ATTORNEY FOR SETTLING PLAINTIFFS, testified via teleconference and stated although he cannot speak for all of the plaintiffs or guarantee their reactions, he felt the reaction will be positive because in talking with them, they indicated support for this idea. He said the key issue with these third party purchasers is the fact they are being used as leverage. He stated settling this part of the issue will help. He felt all the plaintiffs will support the idea in HB 357. He stated there is a need to go forward with a discreet (indiscernible) package (inaudible) state lands into the trust in exchange for the private third party purchaser lands. If that is accomplished, then the lis pendens and the injunction will be released in respect to those parcels. He felt the court will approve this idea. Number 420 REPRESENTATIVE PAT CARNEY asked how HB 357 will be accomplished. He assumed there will be a land exchange and if so, asked how that will affect HB 201. MR. WALKER stated this will be a discreet package exchanging these lands for other lands and the third party purchaser portion will be eliminated from HB 201. Number 437 CHAIRMAN WILLIAMS thought the courts had said they will not accept a piecemeal solution. MR. WALKER responded the court's greatest concerns about this issue were not only the concerns regarding the rights of the private third party purchasers but also a deep concern over the rights of the trust. With HB 357, those concerns will be taken care of because it will not complicate things for the court and it will clearly be something that the parties can come forward and say the trust is not being harmed, because even though the trust is releasing lands which are claimed by private third party purchasers, they are getting other lands in exchange. He felt the court will not insist on a full resolution of all issues at once. REPRESENTATIVE CARNEY clarified it is the Administration's position that if a definite settlement on Chapter 66 is not reached, all of that law is null and void, resulting in no Mental Health Trust authority in existence. MR. WALKER said that is correct. REPRESENTATIVE CARNEY asked if this land exchange is made and that falls through, how will HB 357 work. MR. WALKER responded if there is a failure ultimately and there is no Mental Health Trust authority, this property will be put in the Mental Health Trust Corpus. Therefore, there still will be a trust. There will be arguments about how that trust will be managed and what constitutes proper stewardship of it. There will be an inclusion of this land into the body of the Corpus of that trust and in exchange for release of the claims against the private third party purchasers. MR. GOTTSTEIN added if there is a trust, a trustee is needed although there may not be an exact trust authority. One of the issues in the litigation is what the obligation of the state is in terms of acting like a trustee. He said the key point is that it is possible to carve this portion out, replace these encumbered lands with unencumbered lands in the trust and then however those lands get resolved in the case will apply to these new lands. REPRESENTATIVE DAVIES felt there is some question whether or not the courts will accept HB 357, but having read Judge Greene's opinions several times, he said there is a reasonable chance the court will allow HB 357 to go forward, as it only involves 10 percent of the disputed lands and will have a concrete exchange included, if amended. He thought if a partial settlement is presented, which both sides agree to, the third party purchasers could be taken off the hook. He suggested that Representative James bring back a committee substitute which includes a specific land exchange. CHAIRMAN WILLIAMS stated in the interest of time, since HB 357 has to go to the House Judiciary and Finance Committees, perhaps the bill could be amended in one of those committees. Number 536 REPRESENTATIVE JAMES said she is willing to amend the bill in one of those committees, if the bill can be moved out of this committee. JERRY GALLAGHER, LEGISLATIVE LIAISON, DEPARTMENT OF NATURAL RESOURCES, reminded committee members that HB 201 solves the broad range of problems. The department has no objection to HB 357 moving on, but believes the legislature's effort should be geared toward the entire problem because it is a large problem. He said the issue of a lands list is very complicated and the department has promised the House Finance Committee they will have a list of proposed substitute lands by next Monday. That list will be beyond what is necessary for the Moms and Pops exchange. REPRESENTATIVE DAVIES said Mr. Gottstein has indicated that a noncontroversial package can be put together and a settlement be reached, which is consistent with the discussions he has had with a number of people interested in the litigation. He added that the problem with the 400,000 acres that the state is proposing is there are some controversial lands included but it may be easy to get up to 200,000 acres. He felt if that is true, 50,000 acres can be found and an agreement can be reached. MR. GALLAGHER stated everyone has sympathy for the Moms and Pops because they are in a very difficult situation. He cannot answer the question of whether or not it will be easy to accomplish HB 357. He said his concern is that taking the easy lands and allocating them to this one group, the residual issues might become that much more difficult to solve. REPRESENTATIVE JAMES agreed that an effort needs to be made to solve the entire issue. She said her intent in moving HB 357 forward is to not close out an option--if the big issue is not resolved, HB 357 is an option to get through the legislature this year. She felt the Moms and Pops have been held hostage and there has been no real intense desire on the part of the plaintiffs or the state to get the Moms and Pops out before the entire issue is resolved. She stressed the release could have been done three years ago if the intent was really to do that. She noted that the agreement is probably going to involve land more valuable than what the third party purchasers' land is worth but it is a price which must be paid to get these people free. She is willing to let HB 357 sit in the House Finance Committee and push HB 201 on, but if she sees at the last minute that HB 201 is not going to pass, she wants HB 357 to pass, to ensure these people are taken care of. Number 658 MR. WALKER emphasized the plaintiffs are in support of solving the problem and assisting in this exchange but in reading HB 357, there are many statements contained in the bill which he opposes. He does not feel HB 357 sets the tone required to accomplish the settlement of this part of the issue. He said the plaintiffs are continuing to work on the resolution of the entire issue. REPRESENTATIVE GREEN expressed continued concern about HB 357 jeopardizing the resolving of the entire Mental Health Lands issue. TAPE #94-47, SIDE A Number 000 REPRESENTATIVE HUDSON felt the final solution on HB 357 will rest with the final committee of consideration. He said whether or not HB 357 will be able to ride on its own merits or whether or not it will upset the ultimate state's negotiations on the total package is beyond this committee. REPRESENTATIVE HUDSON made a MOTION to MOVE HB 357 with accompanying zero fiscal notes and a letter of transmittal indicating that the bill needs amending, out of committee with INDIVIDUAL RECOMMENDATIONS. REPRESENTATIVE FINKELSTEIN said the bill, as written, does not meet the legislature's obligation to the Mental Health Trust and felt HB 357 will be another empty promise. Therefore, he cannot support the bill. REPRESENTATIVE DAVIES wondered if the motion to move and the attached recommendation for amendment could be made more specific. He would feel more comfortable if there were some reference in the needs amending statement which refers to the issue of needing specific language for the land exchange. He felt if HB 357 does not contain a land exchange provision, it will be an empty promise and he could not support it either. He would agree to pass HB 357 out of committee if a recommendation be made that in the transit to the next committee that kind of CS be brought forward. CHAIRMAN WILLIAMS said the sponsor wants the bill to move and will amend it. Number 054 REPRESENTATIVE GREEN expressed concern about the zero fiscal note analysis stating "most likely will challenge" and "funds are available in existing mental health lands budget." He wondered if there actually will be a zero fiscal note. MR. GALLAGHER responded the fiscal note in committee members folders is from the Department of Law which he cannot speak to. He said DNR is preparing a zero fiscal note, because there is funding in effect currently for the Chapter 66 settlement, which includes the conveyance of land. HB 357 will not require additional funding. REPRESENTATIVE GREEN felt if HB 357 is going to cost money, the committee should know that. REPRESENTATIVE HUDSON said the reason he cannot offer a specific amendment is because he does not know what it should be. He felt HB 357 is a fall back position which will have to be weighed in the overall scheme of things as it moves on to House Finance where it will join HB 201. He stated when HB 357 gets to that point, the necessary specific amendments will be attached or it will never pass on the floor. He stressed he would never vote for HB 357 in its current form. REPRESENTATIVE DAVIES stated there needs to be a recognition that the land exchange is a fundamental problem with the bill as it is currently drafted. REPRESENTATIVE JAMES said she will be happy to put down on record that the recommendation of the committee is that instead of a promise to exchange, the language in the bill will actually require a land exchange. REPRESENTATIVE HUDSON said the letter of transmittal will state that the bill is transferred with a notation that it requires amending in the language concerning the land exchange provision. CHAIRMAN WILLIAMS asked if there were any objections to the motion. Hearing none, the MOTION PASSED. CHAIRMAN WILLIAMS asked what the committee's wishes are in regard to the confirmation hearings for the ten Governor's appointees which have been referred to the committee. REPRESENTATIVE DAVIES asked if all of the resumes could be submitted to committee members for review before the next committee meeting. ANNOUNCEMENTS CHAIRMAN WILLIAMS announced the committee will meet Friday, April 8 at 8:15 a.m. to hear SCR 13 and SCR 16. ADJOURNMENT There being no further business to come before the House Resources Committee, Chairman Williams adjourned the meeting at 10:00 a.m.