Legislature(2003 - 2004)
03/17/2004 01:07 PM House RES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= 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state, and he paraphrased from the sponsor statement, which read [original punctuation provided]: With the exception of withdrawn federal lands, at statehood in 1959 Alaska received title under the equal footing doctrine to all submerged lands under state navigable waters and marine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 processes. 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 claims. 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 decisions. 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 claims. 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 lands. 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 problem. 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,. 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,. 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, 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.