Bulletin: AK000009

Dear Associates:

The Alaska Mental Health Enabling Act (AS 38.05.800) established a land trust for certain state land to be administered for the benefit of the mental health trust income account. This account is dispersed to meet the expenses of the mental health programs of the state. AS 37.14.011-.021.

The state has the authority to remove land from the trust and replace it with other land "equal in value". AS 38.05.800(f). The state removed considerable land from the trust and conveyed it through patent to private owners. Replacement land was sometimes not of equal value.

The handling of the trust was challenged by the plaintiff several years ago and the case ended up in the Alaska Supreme Court. The court ruled that the state had depleted the trust and ordered the state to replenish the trust with new land and/or money. There was no order that land which had been patented to private owners be returned.

Efforts to replenish the trust have not been considered sufficient by the plaintiffs and the lawsuit continues. The plaintiffs recently filed lis pendens throughout the state against both state and privately-owned lands alleging that "some or all of these dispositions are subject to challenge by the Plaintiffs". The plaintiffs have, however, not joined any private owners nor sought to recover their land. The plaintiffs are simply seeking to increase the pressure on the state to fund the account.

For these reasons we will except this lis pendens on all commitments and policies where the state still has an interest as owner, vendor or lessee.

We will except this lis pendens on all commitments where fee title is vested in a private owner with the following disclaimer just beneath the exception:

This lis pendens is being disclosed because it is of record. It is the position of the title company that it does not affect the title to this property and this exception will not be shown in the policy to be issued.

Please let me know if you have any problems or questions or if you disagree with this approach.