Legislature(2003 - 2004)

03/17/2004 01:07 PM House RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
SB 305-ASSERTING STATE TITLE TO SUBMERGED LAND                                                                                
CO-CHAIR  DAHLSTROM announced  that  the next  order of  business                                                               
would  be  SENATE  BILL  NO.  305,  "An  Act  relating  to  state                                                               
ownership of  submerged land underlying water  that was navigable                                                               
at the time Alaska achieved statehood."                                                                                         
Number 1891                                                                                                                     
JOE  BALASH,  Staff  to Senator  Gene  Therriault,  Alaska  State                                                               
Legislature, presented  SB 305 on  behalf of  Senator Therriault,                                                               
sponsor.   Mr. Balash characterized SB  305 as a bill  that deals                                                               
with  the state's  ownership of  submerged lands  under navigable                                                               
waters throughout the state, and  he paraphrased from the sponsor                                                               
statement, which read [original punctuation provided]:                                                                          
     With  the  exception  of withdrawn  federal  lands,  at                                                                    
     statehood  in  1959  Alaska received  title  under  the                                                                    
     equal  footing doctrine  to all  submerged lands  under                                                                    
     state navigable  waters and marine waters  out to three                                                                    
     miles.  Unfortunately, the  federal government has been                                                                    
     slow  to   concede  any   navigability  determinations.                                                                    
     Since  Alaska entered  the  Union,  the federal  courts                                                                    
     have  determined   fewer  than  20   rivers  navigable.                                                                    
     Unless  the  state  is   pro-active  in  asserting  its                                                                    
     claims, it  stands to  lose up to  60 million  acres of                                                                    
     its statehood entitlement.                                                                                                 
MR.  BALASH noted  that  this  bill lays  out  some criteria  for                                                               
making the  navigability determinations,  and provides a  list to                                                               
the public as well as interested parties.  He continued:                                                                        
     In some  cases, the  federal government has  used every                                                                    
     possible  legal tactic  under the  Federal Quiet  Title                                                                    
     Act to impede the state's  assertion of ownership.  The                                                                    
     Black, Kandig,  and Nation  Rivers in  northeast Alaska                                                                    
     are  examples.   These  three Rivers  clearly meet  the                                                                    
     criteria   established  by   the  federal   courts  for                                                                    
     determining navigability  in Alaska.   Although  no one                                                                    
     contested the state's claim that  these streams met the                                                                    
     federal  criteria,  this  case   took  nine  years  and                                                                    
     millions  of state  and  federal  dollars to  litigate.                                                                    
     Eventually the state  won two of the three  cases.  The                                                                    
     third was  resolved by a Federal  Recordable Disclaimer                                                                    
     of Interest in 2003.                                                                                                       
     In  addition,  prior  to 1989  the  federal  government                                                                    
     applied incorrect  standards to  determine navigability                                                                    
     and may  have mistakenly  conveyed state-owned  land to                                                                    
     Native corporations, clouding the  title to hundreds of                                                                    
     thousands,  if  not millions,  of  acres.   This  is  a                                                                    
     critical  topic as  Congress considers  a deadline  for                                                                    
     completing   the   land    selection   and   conveyance                                                                    
MR. BALASH said the timeframe being discussed recently is 2009;                                                                 
the hope is to have completed everything by then.  He continued:                                                                
     Contributing  to   the  problem   is  the  lack   of  a                                                                    
     reasonable and  efficient way for  the state  to secure                                                                    
     title  to its  submerged  lands.   SB  305 takes  three                                                                    
     steps  to  begin  the   process  of  identifying  state                                                                    
     First, SB 305  provides notice to all  parties that the                                                                    
     state is  laying claim to  all submerged  lands, except                                                                    
     those  withdrawn at  the time  of statehood,  that meet                                                                    
     the   standards  and   criteria   established  in   the                                                                    
     Submerged  Lands  Act  and  in  various  federal  court                                                                    
     Second,  it provides  authority for  state agencies  to                                                                    
     identify,  in accordance  with the  appropriate federal                                                                    
     and state laws, which water  bodies the state claims as                                                                    
     navigable and non-navigable.  This  will help the state                                                                    
     clarify  criteria  for  identifying  navigable  waters,                                                                    
     address  conflicts  involving  clouded  titles  due  to                                                                    
     inaccurate   conveyances  from   the  Bureau   of  Land                                                                    
     Management,  and  more   clearly  delineate  its  title                                                                    
     Third,  the  bill  directs the  Department  of  Natural                                                                    
     Resources  to  give  notice  to  all  private  property                                                                    
     owners,  including  native corporations  created  under                                                                    
     the Alaska Native Claims Settlement  Act, that may have                                                                    
     received  title to  lands that  could have  erroneously                                                                    
     included  state submerged  lands in  their conveyances.                                                                    
     This is  critical to resolve future  problems regarding                                                                    
     mineral  development,  gravel  extraction,  access  and                                                                    
     other related land uses.                                                                                                   
     This  legislation is  only one  step for  the state  to                                                                    
     eventually   resolve  the   title  disputes   over  its                                                                    
     submerged  lands,  and deals  only  with  the issue  of                                                                    
     state title  to submerged lands.   It does  not address                                                                    
     conflicts over federal fish  and wildlife management in                                                                    
       state navigable waters created by federal reserved                                                                       
     water rights claims.                                                                                                       
Number 2158                                                                                                                     
CO-CHAIR  MASEK asked  how much  acreage may  affect regional  or                                                               
village Native corporations under this bill.                                                                                    
MR. BALASH replied  that an accurate count had  not been provided                                                               
by the Department of Natural Resources,  and he is unaware of any                                                               
sort of estimate.                                                                                                               
Number 2204                                                                                                                     
DICK  MYLIUS,  Deputy  Director,  Division of  Mining,  Land  and                                                               
Water,  Department of  Natural Resources  (DNR), testified.   Mr.                                                               
Mylius, in response  Co-Chair Masek's question, said  DNR did not                                                               
have information about  the amount of acreage  relating to Alaska                                                               
Native Claims  Settlement Act  (ANCSA) or  state lands  that were                                                               
conveyed to ANCSA corporations.                                                                                                 
Number 2252                                                                                                                     
REPRESENTATIVE  HEINZE  asked  if  any of  the  land  erroneously                                                               
included  in  the conveyance  were  [Alaska  Mental Health  Trust                                                               
Authority] lands.                                                                                                               
MR. BALASH  replied that he  is not  certain that any  lands have                                                               
been erroneously  conveyed, but  said there is  that possibility.                                                               
He explained that it would take quite  a bit of effort to go back                                                               
and take a  look at the Bureau of Land  Management (BLM) files on                                                               
navigability  determinations  and  the  land  selected  by  ANCSA                                                               
corporations to see whether that has occurred.                                                                                  
REPRESENTATIVE HEINZE asked  if it is not known how  much land is                                                               
in question.                                                                                                                    
MR. BALASH replied correct.                                                                                                     
Number 2309                                                                                                                     
REPRESENTATIVE  HEINZE  told  the   members  that  she  remembers                                                               
fighting  10 years  ago  with DNR  to try  to  get the  navigable                                                               
definition down, so this is not  a surprised.  She asked how many                                                               
navigable rivers are affected.                                                                                                  
MR. BALASH said the figures are  quite astounding.  He said there                                                               
are  thousands of  rivers and  potentially tens  of thousands  of                                                               
water bodies [that  could be affected].  There  was a legislative                                                               
audit done a few years ago that  tried to quantify it and it came                                                               
up with some  high figures.  Mr. Balash explained  that the audit                                                               
was  the basis  for  the formation  of  the state's  navigability                                                               
certification team,  a work  group of  agency personnel  from the                                                               
Alaska  Department of  Fish  & Game  (ADF&G),  the Department  of                                                               
Natural Resources (DNR),  and the Department of Law  (DOL).  This                                                               
group has been working fairly  assiduously to try to quantify and                                                               
identify those  areas where the  state's sovereignty needs  to be                                                               
asserted  on  navigable  water   bodies,  so  the  state  retains                                                               
management rights,  as well  as all of  the privileges  that come                                                               
with it.                                                                                                                        
REPRESENTATIVE HEINZE asked if the  mapping department at DNR had                                                               
tried to map the 60 million acres.                                                                                              
MR. BALASH  replied that  he didn't think  DNR has  any statewide                                                               
maps, but  he believes he  has seen a  map related to  the Copper                                                               
River that identifies navigability in  certain areas of the river                                                               
and  its tributaries.   He  explained that  the fiscal  note does                                                               
provide  funds for  DNR to  acquire files  to incorporate  into a                                                               
larger digital map,  which would be available to  the public, and                                                               
would help to identify those [areas] statewide.                                                                                 
REPRESENTATIVE HEINZE  said she could  remember that DNR  used to                                                               
do a lot of mapping, and  she was curious about where that's gone                                                               
in 10 years.   She remarked, "We used to sit down  and look at it                                                               
all to try to get the tentative approval for state lands."                                                                      
Number 2433                                                                                                                     
REPRESENTATIVE  KERTTULA asked  if  the amendment  made to  ANCSA                                                               
Section 901 was  intended to resolve some of these  issues.  What                                                               
has  happened   since  then  to  necessitate   this  legislation,                                                               
especially with  respect to the turn  on the burden of  proof and                                                               
timelines, she asked.  Representative  Kerttula asked for someone                                                               
to provide her with the history  of that amendment and asked what                                                               
this [bill] would do.                                                                                                           
Number 2460                                                                                                                     
JOANNE  GRACE,  Senior   Assistant  Attorney  General;  Opinions,                                                               
Appeals and  Ethics; Office of  the Attorney  General; Department                                                               
of  Law,  testified.   Ms.  Grace  explained  that there  was  an                                                               
amendment  made to  Alaska National  Interest Lands  Conservation                                                               
Act  (ANILCA) that  was intended  to resolve  a problem  that was                                                               
created when BLM  was conveying land to ANCSA  corporations.  The                                                               
problem was  that in  conveying land  to ANCSA  corporations, BLM                                                               
had  to  consider  how  much  acreage  it  would  convey  to  the                                                               
corporations.      Therefore,   it   had   to   do   navigability                                                               
determinations  because  to  the   extent  that  there  were  any                                                               
navigable waters  on the lands  that that were being  conveyed it                                                               
could not  charge the Native  corporations for that  land because                                                               
BLM  didn't own  that land,  the state  owned it,  she explained.                                                               
Ms. Grace  told the members that  the navigability determinations                                                               
would become  part of its  conveyance decisions which  would have                                                               
to  be appealed  if  there was  any disagreement  with  it.   The                                                               
problem it  created was that  every time BLM did  a determination                                                               
of nonnavigability and the state  disagreed, the state was forced                                                               
to appeal  it and litigate  it in order  to reserve its  right or                                                               
claim to the title, she summarized.                                                                                             
MS. GRACE said  the result was the  ANCSA corporation conveyances                                                               
got  tied up  in all  this litigation  because the  state had  to                                                               
resolve navigability every time there  was a disagreement.  There                                                               
was  an agreement  made  that was  eventually  codified that  BLM                                                               
would   get   out  of   the   business   of  doing   navigability                                                               
determinations  and   it  would  simply  not   charge  the  ANCSA                                                               
corporations  for   any  waterways  that  were   greater  than  a                                                               
particular size (indisc.  - coughing) and that they  would now go                                                               
about actually  doing any navigability determinations.   She said                                                               
any lake  over 50 acres or  any river wider than  198 feet, [BLM]                                                               
would  meander out  and wouldn't  charge the  Native corporations                                                               
(indisc. - coughing)  with that land, and would  have to litigate                                                               
these issues.                                                                                                                   
MS. GRACE explained  that Section 901 eliminated  that statute of                                                               
limitations as  it applies to the  state, so the state  could not                                                               
be forced  to file  suit every time  BLM did  the nonnavigability                                                               
determinations.  She  said it made the land conveyances  go a lot                                                               
(indisc. - coughing) and a lot  faster, but that was not intended                                                               
to  prevent  the  state  from   ever  asserting  title  over  any                                                               
navigable  waters.   It was  just a  solution to  the problem  of                                                               
having  to   litigate  every  time  BLM   did  a  nonnavigability                                                               
determination, she explained.                                                                                                   
Number 2629                                                                                                                     
REPRESENTATIVE KERTTULA  asked for  further clarification,  as it                                                               
appears the problem has now shifted to the ANCSA corporations.                                                                  
MS. GRACE told  the members that the bill does  not really change                                                               
anything in that regard, to the  extent that the state's claim of                                                               
title to its navigable waters  would mean that the state believes                                                               
it owns the  body of water.   The state has an  obligation to the                                                               
public to determine  whether it owns the waters  and puts private                                                               
landowners on  notice.  It  may start the statute  of limitations                                                               
running, she commented.                                                                                                         
Number 2707                                                                                                                     
REPRESENTATIVE KERTTULA  asked why the  bill is necessary  if the                                                               
state already has the right to proceed.                                                                                         
MS.  GRACE responded  that  one purpose  of the  bill  is to  put                                                               
people  on notice  that  the  state believes  it  owns the  lands                                                               
underlying that  water.  To  the extent that time  passes between                                                               
statehood, the  present, and as time  goes on, there is  a danger                                                               
in  failing to  assert title.   Private  landowners will  believe                                                               
they own  land, rely on that  belief, and make investments.   Mr.                                                               
Grace  said that  one of  the  main purposes  of the  bill is  to                                                               
ensure that it  is clear to everyone that just  because the state                                                               
does not  have final determinations  on all rivers does  not mean                                                               
the  state  doesn't  own  it.   It  is  good  public  policy  for                                                               
landowners and  the public  to know  about state  submerged lands                                                               
and  waters  so that  the  state  can  fulfill its  public  trust                                                               
obligations, she emphasized.                                                                                                    
REPRESENTATIVE KERTTULA  commented that originally the  burden of                                                               
proof was  on the state to  prove navigability.  She  said she is                                                               
concerned  that  the   [burden  of  proof]  is   shifting  in  an                                                               
unintended way.  She said she  is also concerned about the notice                                                               
requirement  in Section  3.   Representative Kerttula  asked what                                                               
needs to be  done to prove navigability.  How  would that change,                                                               
she asked.   Representative Kerttula indicated  that she believes                                                               
this  process  is  being  "speeded  up" and  it  may  not  be  as                                                               
thoughtful a process as is currently done.                                                                                      
MS. GRACE  spoke to  Representative Kerttula's  concern regarding                                                               
Section  3  and  advised  the  committee  that  this  section  is                                                               
intended to only  be a general notice to  the ANCSA corporations.                                                               
She  explained  that  with  the   2009  conveyance  deadline  the                                                               
property  conveyances will  be  wrapped up.    This is  important                                                               
because  BLM  might  have  been  using  incorrect  standards  for                                                               
determining  eligibility  and  the ANCSA  corporations  could  be                                                               
charged  for lands  it  actually does  not  own, she  summarized.                                                               
This gives the ANCSA corporations  the opportunity to ensure that                                                               
the correct standards are used.   A generic letter will go out to                                                               
all native corporations within 180 days, she added.                                                                             
REPRESENTATIVE KERTTULA  surmised that  there is  no navigability                                                               
determination that goes along with that notice.                                                                                 
MS. GRACE  replied that is  correct.   She told the  members that                                                               
this  notice will  ensure  that ANCSA  corporations  do not  lose                                                               
their  chance  to address  being  incorrectly  charged for  these                                                               
REPRESENTATIVE  KERTTULA  commented  that this  notice  does  not                                                               
trigger  any  kind requirement  that  the  Native corporation  do                                                               
anything  before  the 2009  deadline.    She  asked if  there  is                                                               
anything  new.     Will  the   statute  of   limitations  change,                                                               
Representative Kerttula asked.                                                                                                  
Number 2949                                                                                                                     
MS. GRACE replied that is correct.   The only urgency would be if                                                               
a  Native   corporation  wanted  to   ensure  that  it   was  not                                                               
incorrectly charged  for acreage that will  ultimately be closed,                                                               
she said.   It does  not affect  the statute of  limitations, Ms.                                                               
Grace added.                                                                                                                    
TAPE 04-15, SIDE B                                                                                                            
CO-CHAIR MASEK commented that  Representative Kerttula brought up                                                               
some critical topics.   In 1989 the U.S. Court  of Appeals, Ninth                                                               
Circuit  Court, ruled  that incorrect  standards were  applied by                                                               
BLM in  determining navigable  waters.  She  asked what  else has                                                               
been done since that time.                                                                                                      
MR.  BALASH said  he  believes  that BLM  has  been applying  the                                                               
standard  which was  setout in  the Gulkana  decision [Alaska  v.                                                             
Ahtna,  Inc.] and  then later  refined in  a subsequent  decision                                                             
that was delineated in the Black River decision.                                                                              
Number 2923                                                                                                                     
MYRL THOMPSON  testified on  SB 305.   He  said that  he believes                                                               
this bill will  not only affect Native  corporations, but private                                                               
property owners too.  Mr. Thompson  asked if a river runs through                                                               
a  private landowner's  property, for  example, if  an individual                                                               
owns a 70 or 80 acre tract of  land, does this mean that the land                                                               
under the river  belongs to the state.  He  commented that he has                                                               
been paying  taxes on a part  of a river where  he owns property.                                                               
Mr.  Thompson said  he  would like  to know  how  this bill  will                                                               
affect him.                                                                                                                     
Number 2861                                                                                                                     
MR. BALASH replied that he  does not know the particulars related                                                               
to the land  Mr. Thompson owns, and would not  be able to provide                                                               
him  with any  advice.   He  suggested that  Mr. Thompson's  deed                                                               
would  delineate  where there  are  exceptions  to the  tract  of                                                               
acreage.  For  example, a right-of-way or easement  that might be                                                               
recorded across  his property would  be noted  on the deed.   Mr.                                                               
Balash summarized that the state  does own submerged lands unless                                                               
it was withdrawn by the federal government prior to statehood.                                                                  
CO-CHAIR  DAHLSTROM  told  Mr. Thompson  that  she  believes  Mr.                                                               
Balash is correct  in stating that it would  be inappropriate for                                                               
him to  advise him in  this setting.   She said she  is confident                                                               
that if Mr.  Thompson called the Department  of Natural Resources                                                               
or his Representatives' offices  they could provide assistance in                                                               
getting answers to his question.                                                                                                
MR. THOMPSON  said he  does not  agree.   He added  that Co-Chair                                                               
Masek  is his  representative.   Mr. Thompson  clarified that  he                                                               
would like  an answer  to his  question.   The response  does not                                                               
have  to  be  for  his  specific  circumstances,  he  said.    He                                                               
explained that he  was using his circumstances  as a hypothetical                                                               
example.  Mr.  Thompson posed another hypothetical  example of an                                                               
individual who owns 60 acres and  three of those acres are river.                                                               
If the  river is  the state's  land in  actuality then  why would                                                               
that  individual have  to  pay  property taxes  on  the land,  he                                                               
asked.   Mr. Thompson pointed out  that this bill may  be a drain                                                               
on boroughs that rely on  property taxes for revenue, because all                                                               
these individuals  will be exempt  from paying property  taxes on                                                               
these lands.                                                                                                                    
MR. THOMPSON  stated that  the way  his deed  reads, he  owns the                                                               
land under the river and is being charged taxes for it.                                                                         
Number 2726                                                                                                                     
MR.  BALASH responded  that if  the  federal government  conveyed                                                               
that land to Mr. Thompson  and erroneously conveyed that riverbed                                                               
to  him, then  he may  have  a problem.   However,  if the  state                                                               
conveyed the land and title to  Mr. Thompson [then there is not a                                                               
problem].   The state is capable  of conveying its title  to him,                                                               
but  the  federal  government cannot  convey  title  without  the                                                               
state's permission, he concluded.                                                                                               
MR. THOMPSON replied  that Mr. Balash's comment  is some comfort,                                                               
but it  still does not  answer the question about  tax liability.                                                               
He restated the hypothetical example that  if he owns 57 acres of                                                               
land and  three acres of it  are water, which he  is paying taxes                                                               
on, who  will make  up the  difference in  property taxes  to the                                                               
boroughs [when he no longer pays taxes on those acres].                                                                         
MR.  BALASH told  Mr.  Thompson  that the  question  he has  with                                                               
respect to how  he is being assessed by the  borough for property                                                               
tax purposes  is a question  that needs to  be taken up  with the                                                               
borough.    He said  he  believes  the  property tax  bill  would                                                               
identify that  information.  The borough  accessor's office would                                                               
also have  the information as to  whether he is paying  taxes for                                                               
the value of the riverbed, he added.                                                                                            
Number 2648                                                                                                                     
MR. THOMPSON  replied that he is  indeed paying the taxes  on the                                                               
riverbed and  has since he purchased  the property.  That  is the                                                               
CO-CHAIR  DAHLSTROM encouraged  Mr. Thompson  to talk  with local                                                               
officials or call  her office or his  representative's office for                                                               
further assistance.                                                                                                             
REPRESENTATIVE  KERTTULA  asked  if  Mr.  Mylius  could  describe                                                               
whether there will be any change in navigability determinations.                                                                
MR.  MYLIUS  responded that  DNR  does  not  plan on  making  any                                                               
changes  in the  process of  making navigability  determinations.                                                               
He said that Section 2 of  the legislation directs DNR to compile                                                               
a  list  of  existing   navigability  determinations,  which  are                                                               
primarily done by BLM,  but the state may have had  a part in the                                                               
decisions.  He commented  that there is no where to  go to find a                                                               
list of what has already been done,  so DNR is taking on the task                                                               
of putting together a list and map.                                                                                             
MR. MYLIUS  emphasized that  Section 3 of  the bill  provides for                                                               
the   state  to   send  generic   notifications  to   the  Native                                                               
corporations  which  says that  the  corporations  may have  been                                                               
conveyed  navigable waters,  but  there won't  be information  on                                                               
what rivers have been found to be navigable.                                                                                    
CO-CHAIR  MASEK moved  to report  SB  305 out  of committee  with                                                               
individual recommendations and the accompanying fiscal notes.                                                                   
Number 2495                                                                                                                     
REPRESENTATIVE GATTO objected.   He told the members  that he has                                                               
a  question on  the  fiscal note.    The numbers  do  not add  up                                                               
correctly, he said.  He said it looks like $186,500.                                                                            
MR. BALASH  asked if Representative  Gatto is adding up  the line                                                               
items and coming up with a different number than $186,[500].                                                                    
REPRESENTATIVE  GATTO  responded  that   he  is  looking  at  the                                                               
analysis.  He referred to the  list of positions and salaries and                                                               
said the amount is over $186,[500].                                                                                             
MR.  BALASH pointed  out that  a  number of  these positions  and                                                               
salaries are for  a multiple number of years  which would account                                                               
for the  amount being over $186,[500]  for one fiscal year.   The                                                               
fiscal  note covers  FY05, FY06,  and  FY07.   He commented  that                                                               
compiling this list will be a lengthy process.                                                                                  
CO-CHAIR DAHLSTROM  reminded the members that  the next committee                                                               
of referral  is the House  Finance Committee, where  every dollar                                                               
in the fiscal note will be examined.                                                                                            
Number 2391                                                                                                                     
REPRESENTATIVE GATTO withdrew his objection.                                                                                    
There being  no objection, SB 305  was reported out of  the House                                                               
Resources Standing Committee.                                                                                                   

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