Legislature(1995 - 1996)
02/21/1996 08:07 AM RES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE RESOURCES STANDING COMMITTEE February 21, 1996 8:07 a.m. MEMBERS PRESENT Representative William K. "Bill" Williams, Co-Chairman Representative Joe Green, Co-Chairman Representative Scott Ogan, Vice Chairman Representative Alan Austerman Representative Ramona Barnes Representative John Davies Representative Pete Kott Representative Don Long Representative Irene Nicholia, via teleconference from Minto OTHER MEMBERS PRESENT Representative Gail Phillips MEMBERS ABSENT All members were present COMMITTEE CALENDAR HOUSE BILL NO. 344 "An Act authorizing the commissioner of the Department of Natural Resources to negotiate and enter into timber sale contracts that provide for local manufacture of high value-added wood products; and establishing an Alaska Forest Products Research and Marketing Program within the Department of Commerce and Economic Development." - HEARD AND HELD PRESENTATION: NAVIGABLE WATER AND SUBMERGED LANDS Department of Fish and Game Department of Law Department of Natural Resources PREVIOUS ACTION BILL: HB 344 SHORT TITLE: VALUE-ADDED TIMBER SALES; MARKETING SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR JRN-DATE JRN-PG ACTION 05/10/95 2085 (H) READ THE FIRST TIME - REFERRAL(S) 05/10/95 2085 (H) RESOURCES, FINANCE 05/10/95 2085 (H) FISCAL NOTE (DNR) 05/10/95 2085 (H) 3 ZERO FNS (DCED, CRA, UA) 05/10/95 2085 (H) GOVERNOR'S TRANSMITTAL LETTER 09/19/95 (H) RES AT 9:00 AM 02/21/96 (H) RES AT 8:00 AM CAPITOL 124 WITNESS REGISTER THOMAS H. BOUTIN, State Forester Division of Forestry Department of Natural Resources 400 Willoughby Avenue, 3rd Floor Juneau, AK 99801-1724 Telephone: (907) 465-2780 POSITION STATEMENT: Testified in support of CS HB 344. KARL OHLS, Resources Specialist Division of Trade and Development Department of Commerce and Economic Development P. O. Box 110804 Juneau, AK 99811-0804 Telephone: (907) 465-5467 POSITION STATEMENT: Testified in support of CS HB 344. JACK PHELPS, Executive Director Alaska Forest Association, Inc. 111 Stedman, Suite 200 Ketchikan, AK 99901-6599 Telephone: (907) 225-6114 POSITION STATEMENT: Testified in support of CS HB 344. RICK SMERIGLIO HCR 64, Box 565 Seward, AK 99664 Telephone: (907) 288-3614 POSITION STATEMENT: Expressed concern with CS HB 344. RONALD RICKETTS Fairbanks Industrial Development Corporation 515 7th Avenue Fairbanks, AK 99701 Telephone: (907) 452-2185 POSITION STATEMENT: Testified on CS HB 344. JULES V. TILESTON, Director Division of Mining and Water Management Department of Natural Resources 3601 C Street, Suite 800 Anchorage, AK 99503-5935 Telephone: (907) 269-8624 POSITION STATEMENT: Navigable Waters/Submerged Lands Presentation BRUCE BOTELHO, Attorney General Department of Law P.O. Box 110300 Juneau, AK 99811-0300 Telephone: (907) 465-3600 POSITION STATEMENT: Navigable Waters/Submerged Lands Presentation FRANK RUE, Commissioner Department of Fish and Game P. O. Box 25526 Juneau, AK 99811-5526 Telephone: (907) 465-6141 POSITION STATEMENT: Navigable Waters/Submerged Lands Presentation JOANNE GRACE, Assistant Attorney General Department of Law 1031 West 4th Avenue Anchorage, AK 99501 Telephone: (907) 269-5100 POSITION STATEMENT: Navigable Waters/Submerged Lands Presentation MARTY RUTHERFORD, Deputy Commissioner Department of Natural Resources 3601 C Street, Suite 1210 Anchorage, AK 99503 Telephone: (907) 269-8431 POSITION STATEMENT: Navigable Waters/Submerged Lands Presentation JIM CULBERTSON, Resources Manager Division of Land Department of Natural Resources 3601 C Street Anchorage, AK 99503 Telephone: (907) 269-8525 POSITION STATEMENT: Navigable Waters/Submerged Lands Presentation ACTION NARRATIVE TAPE 96-19, SIDE A Number 000 CO-CHAIRMAN WILLIAM K. "BILL" WILLIAMS called the House Resources Committee meeting to order at 8:07 a.m. Members present at the call to order were Representatives Williams, Green, Ogan, Austerman and Long. Representative Nicholia attended via the teleconference network from Minto. Representatives Barnes, Davies and Kott arrived late. HB 344 VALUE-ADDED TIMBER SALES; MARKETING Number 017 C0-CHAIRMAN WILLIAMS announced that the committee would hear HB 344 but it was not his intent to move the bill from committee. He said Co-Chairman Green would chair the agency presentation on navigable waters and submerged lands. CO-CHAIRMAN WILLIAMS noted the arrival of Representative Davies. Number 117 CO-CHAIRMAN GREEN moved to adopt committee substitute for HB 344 as the working document. Hearing no objection, it was so ordered. Number 170 REPRESENTATIVE JOHN DAVIES asked the origination of the committee substitute and an explanation of the changes. CO-CHAIRMAN WILLIAMS stated that the changes came primarily from the Board of Forestry and would be addressed by Tom Boutin, the State Forester. Number 252 THOMAS BOUTIN, State Forester, Division of Forestry, Department of Natural Resources said that he was expecting Karl Ohls, Department of Commerce and Economic Development, to join him at the conference table. He made available his prepared testimony on the committee substitute and distributed a draft fiscal note. He introduced Ms. Kathleen Morse, Forestry Economist, Department of Commerce and Economic Development. MR. BOUTIN read his testimony into the record: "Thank you for allowing the Board of Forestry to add to the public process on HB 344. Last Fall, the Board of Forestry held a hearing on the bill and then worked what they heard into recommendations. The committee substitute adopted virtually all of those recommendations. MR. BOUTIN proceeded, "We're very pleased with the processes of which we have been a small part on both HB 212 and HB 344. The work of the House Resources Committee and HB 212 sponsor Representative Jeanette James allowed virtually all stakeholders and interests to reach an understanding. With HB 344, the Board of Forestry was able to bring its role as a consensus building body of interest groups to the process, The Board of Forestry looks for sound science and good process. MR. BOUTIN informed, "The Governor introduced this legislation in response to concerns of many groups, including members of the timber industry that we better utilize the timber that is cut in Alaska. HB 344 is our response to what we think we heard from many constituents who want better utilization of state timber. MR. BOUTIN said, "What you see in HB 344 is what we heard from people like Steve Seley, of Ketchikan. The Governor's office told me that Steve would be here to talk with you today but we just received the sad news that Steve's Dad just passed away. I understand that some other small Southeast operators would be patched into this teleconference except for the busy scheduled you have before you today. MR. BOUTIN introduced the committee substitute: "Section 1. The purpose of HB 344 is to bring some certainty of wood supply to processors who bring high value in the manufacture of state timber. The administration has talked with many small operators and they agree on at least one point they can find a market for any high-value product they can produce but they cannot buy the capital equipment those products require unless there is a reliable supply of timber. While HB 344 is not a mandate to eliminate log exports or change the forest products industry, it is still true that round log export prices prohibit small operators in Southeast from putting capital equipment in place. MR. BOUTIN continued, "HB 344 is a tool and an incentive for high value-added processing. While Governor Knowles would like small independent commercial wood users to have an advantage, this bill is directed toward maximizing the number of jobs per acre harvested and does not favor any sector of the forest products industry. MR. BOUTIN proceeded, "Section 2. provides that negotiated timber sales of up to 10 million board feet and 10 years in duration can be negotiated for use in the local manufacture of high value-added wood products. HB 344 originally provided for sales of no more than 5 million board feet per year. We did not intend that would be enough to supply all the wood needs of some types of value-added processing. However, a firm that has a certainty of supply for a substantial part of its needs can then compete on the open market for timber sold by private and public timber owners. Very few wood users receive all of their supply from one source. Number 576 MR. BOUTIN stated, "While the CS now allows sales of up to 10 million board feet per year, we would feel more comfortable with 5 to 7 million board feet as a maximum. Most timber sale contracts will be far less. A higher amount would alarm the public without gaining any utility whatsoever. The Board of Forestry did not recommend any change to the contract volume. MR. BOUTIN proceeded, "The Board heard concerns about the increase in timber offered that might result from this bill. Section 2 adopted the Board's recommendation to provide for limiting the number of contracts per region by regulation. There has been some discussion about different possible interpretations of line 16, page 2. The way I understand it, the commissioner could set a maximum number of contracts per region and that maximum must be two or more. That is acceptable to us if that is the correct interpretation. MR. BOUTIN continued, "Another area that the Board of Forestry investigated is the portion of state timber that is of sufficient quality to produce high value-added products. The CS adopts the Board of Forestry recommendation to allow consideration of other value-added wood products. MR. BOUTIN said, "Section 2, paragraph (e), required the commissioner to consider not only the economic benefits for the manufacture of high and other value-added wood products, but also the likelihood of the venture being successful, job creation and stability, fish and wildlife habitat and multiple use, and the stumpage return to the state. MR. BOUTIN informed, "The CS adds public process in providing for an updated Forest Land Use Plan after a 5-year performance review. The requirements of AS 38.05.112 (Forest Land Use Plans) and AS 38.05.113 (5 year schedules of timber sales) apply to HB 344 because the Governor wants good public process. The public has told us that at least during the past 2 years, forest land use plans and 5 year schedules have provided good public process. MR. BOUTIN continued, "The Board of Forestry looked at the list of high value-added products and recommended adding to the list. The CS has the amended list to now include veneer, plywood, finger- jointed lumber and house-logs, exactly as the Board of Forestry recommended. MR. BOUTIN said, "The Board also wanted to encourage the processing of other value-added products where the resource just cannot make high value-added products. The CS includes the list of other value-added wood products in Section 2, paragraph (k)(2). Other value-added wood products means pulp, chips, waferboard, green lumber, fiberboard, cants, slabs or planks intended for remanufacture. Similar products can be specified by regulation. MR. BOUTIN added, "Section 3. As noted earlier, the Board of Forestry heard about the public concern that this bill could lead to large increases in the amount of timber offered. The CS limits the number of these timber sales to no more than 2 per region in 1996, 1997 and 1998. "HB 344 as originally drafted provided for an Alaska Forest Products Research and Marketing Program. We had not heard of any concerns over that proposal but the CS eliminates it. Karl Ohls will talk about that in a moment. MR. BOUTIN testified, "HB 344 does not add timber sales. Timber sales on state land are unlikely to approach the ceiling of sustained yield with multiple use because of budget realties. MR. BOUTIN concluded, "HB 344 is simply a method of sale option. It does not change public process for timber sales. It does not transfer any forest management responsibilities to the timber purchaser. It does not close the door on round log exports." Number 803 KARL OHLS, Resources Specialist, Division of Trade and Economic Development, Department of Commerce and Economic Development testified stating, "the committee substitute deletes the original Section 3, which created the Alaska Forest Products Research and Marketing Program within the Department of Commerce. I understand the committee made this change because of concerns about creating a new program and adding to the fiscal cost of state government. MR. OHLS said, "The Commerce Department recognizes and respects the committee's legitimate concerns about adding more functions to state government. The department had these same concerns in mind when it decided to address HB 344 by setting new priorities within its existing budget. We currently have a budgeted position for a forest specialist in the Division of Trade and Development. We are incorporating the job duties described in the original HB 344 into the job description for the forest specialist. No additional expense would be involved. MR. OHLS declared that the department's fiscal note is zero. Number 843 MR. OHLS introduced Ms. Kathleen Morse, who will fill Commerce's existing position. "Ms. Morse currently works as a regional economist for the U.S. Forest Service. We are working on the final details of an Intergovernmental Personnel Act agreement with the Forest Service that would allow Ms. Morse to work for the state, starting in mid-March, with the official title of forestry economist. MR. OHLS said, "Ms. Morse will have two main assignments. The first is working on a strategy for maintaining a viable timber supply for the forest products industry. The second is developing a strategy for the expansion of value-added wood products. Number 916 MR. OHLS concluded, "In conclusion, the Commerce Department's view is that Section 3, as originally drafted, should reassure Alaska's forest products industry that the administration is committed to the development of value-added wood products in Alaska. The administration is willing to reinforce this commitment with language in statute. MR. OHLS added, "If the committee, however, leaves the CS as is, the department still plans to commit a significant amount of Ms. Morse's time to the duties described in the original HB 344. We believe these duties are critical for the success of our efforts to promote the value-added wood products industry. Number 998 CO-CHAIRMAN WILLIAMS noted the arrival of Representative Pete Kott and Representative Irene Nicholia announced her presence in Minto. CO-CHAIRMAN WILLIAMS apprised the committee that Marty Rutherford, Department of Natural Resources; Joanne Grace, Department of Law; and Jane Angvik, Division of Lands were on the Anchorage network. Number 1030 REPRESENTATIVE DAVIES referred to the CS on page 2, line 16, where the commissioner sets the maximum number of contracts per region. He asked if the Board of Forestry had discussed this issue. MR. BOUTIN said the Board of Forestry asked for just what is in the bill, that there be no more than two contracts per region for the three years following enactment of the bill and then a maximum per region be set by regulation. He added that the board did not tender language specific to that but asked that, "Motion Number Seven" of what we submitted to the House Resources Committee, that limit for three years be a limit of two. However, they did not ask that there be at least two per region, they asked that there be no more than two per region for the three years following enactment and after that the commissioner set it by regulation. REPRESENTATIVE DAVIES wanted further clarification and asked if the board's position was that there should be a maximum of two, or did they contemplate that the commissioner might set a limit higher than two sometime in the future. MR. BOUTIN replied that the board wanted no more than two per region for the three years following enactment and then, after that, it should be set by regulation. He said they were silent on the number and did not put, as section 2 has, that there be no less than two. Number 1164 C0-CHAIRMAN WILLIAMS addressed Joanne Grace, Department of Law, and referred to the February 19, 1996 memorandum to his office from the Division of Legal and Research Services regarding a risk that the provisions of this bill requiring local manufacture may violate the interstate commerce clause of the United States Constitution. JOANNE GRACE, Assistant Attorney General, Department of Law, informed the chairman that her attendance related to the Navigable Waters and Submerged Lands presentation and said that she was not prepared to discuss HB 344. Number 1205 MR. BOUTIN responded that he had heard discussion by other attorneys on Gerald Luckhaupt's memorandum and said the attorneys seemed divided on that issue. He stated that he had talked to a number of attorneys in the Department of Law and it would seem that the consensus is that, on-balance, HB 344 is constitutional and there certainly is a consensus that it is enforceable. MR. BOUTIN continued the discussion stating that the strategy used by the assistant attorney general for forestry was that since every timber sale requires a best interest finding, and the DNR uses the Forest Land Use Plan to substantiate that and DNR always talks about the economics in the Plan, any value-added proposition that is an increased number of jobs as a result of this sale, would become part of this best interest finding. Number 1328 MR. BOUTIN went on to say that it is true that HB 344 would be much enhanced by action in Congress. He informed the committee that language had been provided to the Alaska Congressional delegation that the DNR wishes Congress would adopt and that would then settle the question. He said all the attorneys he had talked with say that HB 344 is certainly constitutional, but in the absence of that, still the attorneys we have talked with believe that, on- balance, it is constitutional. Secondly, all the attorneys believe that the contract can be crafted as such that it is enforceable without getting crosswise with southcentral timber development. Number 1372 CO-CHAIRMAN WILLIAMS asked that the Department of Law provide the committee with a written response to the constitutional question. NUMBER 1382 REPRESENTATIVE DON LONG stated a concern that there is a 10 million board feet limit in one area and then a designation of two contracts per region. He asked the department to explain whether they are going for the 10 million board feet or limiting operations to two contracts per region. MR. BOUTIN responded that the committee substitute allows timber sale contracts of up to 10 million board feet. He said he had a hard time imagining that there would be any contract as much as 10 million board feet. He said, except for the hardwood resource in the Interior that is not being used, he does not know of a place where the state has an ability to put together a 10 million board foot, per year contract. He said that one million board feet is a much more likely number than even five million board feet. It does allow up to two of these a year, per region. So, in theory six per year of these contracts. He said the 10 million board feet is the absolute ceiling on the contract size and it is higher than it needs to be and certainly most of the contracts would be far smaller. Number 1464 REPRESENTATIVE LONG asked Mr. Boutin how many regions there were. MR. BOUTIN answered that there are three regions as set up in the Forest Practices Act: coastal, southcentral and interior. Number 1480 REPRESENTATIVE DAVIES said with respect to the interstate commerce and the congressional exemption, has the Administration formally transmitted this request to the congressional delegation. MR. BOUTIN replied that the Governor's Office had done that and responded to Representative Davies that he would provide the committee with a copy of that communication. Number 1537 REPRESENTATIVE ALAN AUSTERMAN asked for clarification on the fiscal notes. MR. BOUTIN explained that the Department of Commerce and Economic Development fiscal note is zero. The draft of the Department of Natural Resources fiscal note is $26.5 for the first year, for principally putting together regulations, and $3.5 for each year thereafter. Number 1570 CO-CHAIRMAN WILLIAMS stated his intention was not to move CSHB 344 today and said he would take teleconference testimony at this time. Number 1580 REPRESENTATIVE DAVIES said the fiscal note conflicts the expense and asked if the department expects any additional state revenue as a result of the letting of the contracts. MR. BOUTIN replied that begs the question of would there be an increase in the amount of timber sold. The state's timber sale program brings more money to the general fund that it costs. In the calendar year ending 12/31/95, the state brought in $1.9 million in timber sale receipts and that is a multiple of the cost of putting that timber up for sale. He said, if there was an increase in some part of the state, in the amount of timber, and that timber would bring more money to the general fund than what it cost, then that would balance out the amount in that fiscal note. Number 1665 JACK PHELPS, Executive Director, Alaska Forest Association, Inc., testified that the association represents timber industry throughout Alaska and supports legislation that enhances economic opportunities by making the forest resources of Alaska available for sustained harvest. MR. PHELPS stated that the Alaska Forest Association wants to express its appreciation to Governor Knowles for introducing HB 344. "We especially applaud the concept of fostering the growth of the forest products industry in the Interior of Alaska. We would also like to commend your efforts, Chairman Williams, in working with industry to produce a substitute bill which is much more likely to succeed in its stated goals." MR. PHELPS said the AFA supports the proposed committee substitute for HB 344. "We believe that the changes embodied in CS reflect the real world needs that must be addressed if this bill is to help foster an expanded forest industry in the Interior of Alaska." MR. PHELPS recalled that at the House Resources Committee meeting held in Anchorage, September 1995, "the industry told you that it needed some assurance of a relatively long-term steady and reliable supply of timber before it could make the investment necessary to enlarge the industry in the Tanana Basin. HB 344, as originally introduced, provided a sufficiently long term for the proposed contract to satisfy the reliability factor, but it limited the contract to a maximum volume of only five million board feet. That simply is not large enough of a supply to support even a moderate good sized mill. Your proposed substitute increases that number to 10 million board feet. While we might like an even larger number, we believe that this amendment vastly improves the potential for this bill to do its job. We ask that you resist any attempts to reduce this maximum sale size. I point out that it is a maximum as the bill is currently written, the commissioner is free to craft a smaller sale if the situation suggests it." He said, the House Resources Committee has heard Tom Boutin suggest that in most instances that would be the case, and he did mention the Interior hardwoods which are clearly an exception if somebody comes along: there is a proposal on the table that would deal with that. MR. PHELPS said the other major issue concerns the industry, at the time of the Fairbanks hearing, and the severe limitations the original bill placed on products qualified for these negotiated sales. "In other words, the definition of high value-added was entirely too restrictive. The proposed committee substitute adopts the definition language that was recommended by the Board of Forestry and we believe that this change addresses our previous concerns. It also proposes an adjustable percentage of the harvest that must go into these high value-added products and allows the commissioner to consider the production of other value-added products in negotiating the contract. These are excellent and important improvements to the bill." MR. PHELPS said, "In summary, Mr. Chairman, the AFA believes that you have proposed a very workable solution to the problem of encouraging the responsible harvest of timber from Alaska's boreal forest while also helping build an increased employment base here in Alaska. We commend you for crafting a vastly improved version of HB 344. We urge you to continue on your present course. Please be assured that we are available to work with you as the measure makes its way through the legislative process." Number 1824 RICK SMERIGLIO, of Moose Pass, testified from Seward. "I would like to state my opposition to the provision in the bill that requires renegotiation of the stumpage price once every three years or, at least, once every three years. I do not believe that the taxpayers will get the highest price for the resource that they own when we only renegotiate the price once every three years. I would like to say that Governor Hickel was right in calling this the `owner state.' We, the taxpayers, do own that resource and I think all interests are best protected when we get the highest dollar value. MR. SMERIGLIO reiterated that his main opposition to CSHB 344 is the provision that requires renegotiation only once every three years. He said, "I believe that the taxpayers ought to get the highest value for the resource that they own and that means selling the timber when the price is high and getting the highest value that way." Number 1911 RONALD RICKETTS, Executive Director, Fairbanks Industrial Development Corporation, recalled that he had testified before the House Resources Committee at the hearing in Fairbanks. He said, "I am pleased with the results of your work to this date. The committee substitute is a good piece of work. I also commend the Board of Forestry for their input to this process." MR. RICKETTS referred to page 4, beginning on line 21 of CSHB 344, the definition of `high value-added wood products' and `other similar finished wood products.' He said he equated plywood with engineered wood products and felt it should fall into the category of other similar finished wood products. He advised that oriented strand board and plywood are used for exactly the same purposes. Number 1982 MR. RICKETTS referred to line 26, page 4, and questioned the language "high defect birch" and stated his opinion is that aspen is more likely to be high defect. He related that his company sent both birch and aspen to an Oregon mill for test runs through their veneer plant; the birch was very acceptable but the aspen had too much defect to be usable for the quality they were looking for. Number 2061 MR. RICKETTS said he would like to present a copy of a letter sent to the Board of Forestry last October having to do with a five-year area plan: the operation schedule in the Fairbanks area. He said the letter is from the Oregon company looking at the feasibility of building a veneer mill in the Fairbanks area. The company asked for 15 million board feet of hardwood timber sale within the Five Year Schedule. He said he brought up this issue because it relates to the volume of timber we are talking about. Number 2105 REPRESENTATIVE SCOTT OGAN interpreted the language on page 4, line 26 "deciduous aspen, poplar, and high defect birch, includes engineered wood products and paneled wood products" meant that for that high defect product, it can be made into engineered wood products. He said the language simply allows for the less than high quality material to be used in engineered and paneled wood products. Number 2143 MR. RICKETTS suggested that the language read high defect aspen, poplar and birch. He felt that definition would be clearer. CO-CHAIRMAN WILLIAMS said the committee would make sure that the language was clear to everyone. He proceeded to close the testimony on CSHB 344 and turned the gavel over to Co-Chairman Joe Green. BRIEF AT EASE Number 2262 CO-CHAIRMAN GREEN invited Attorney General Bruce Botelho, Commissioner Frank Rue and Director Jules Tileston to come forward. PRESENTATION: NAVIGABLE WATER AND SUBMERGED LANDS Number 2312 CO-CHAIRMAN GREEN introduced the subject of the hearing saying that the navigable waters issue dates back to statehood. It seems that there is a degree of contention between just who owns the waterways and the lands beneath them. He said of critical importance is who will actually end up with ownership. CO-CHAIRMAN GREEN asked, "Do we have title to submerged lands in the state of Alaska? If we do not, why not? If we do not, are we in jeopardy of losing those rights through any kind of statute of limitations?" Number 2333 BRUCE BOTELHO, Attorney General, Department of Law informed the committee that two of the departments water law experts were on line in Anchorage. MR. BOTELHO said the state of Alaska has title to all navigable waters within the state as a result of one law and one doctrine: The doctrine is called the Equal Footing Doctrine which provides that upon admission of a state to the union it is entitled to all waters that have been the equivalent of waters given in any other state. We have the benefit of previous admissions of, over the last two hundred years, those waters that have been historically recognized as waters belonging to a state. Under the Equal Footing Doctrine, Alaska would be entitled to those navigable waterways and inland waterways. MR. BOTELHO said under the Submerged Lands Act, the state has a separate leg to stand on with regard to navigable waters. He said submerged lands extend to the territorial waters three miles from the territorial lands of the state. He said there was controversy over exactly what the extent of that boundary is. In United States v. Alaska, particularly in the Beaufort Sea. MR. BOTELHO said that we have been in litigation as a state with the federal government in a couple of areas where the actual extent of the state's acquisition has been a question. Probably the most well known is the "PLO 82" lawsuit, involving a public land owner, issued by the federal government in 1943, in which some 48,000,000 acres were withdrawn. The federal government has taken the position that lands withdrawn prior to statehood, including those waters, would basically preclude the state from accessing title to submerged lands within that withdrawal. He said this is our test case in that regard. MR. BOTELHO said it is quite clear from the U.S. Supreme Court decision on the, so called, Utah Lake case where the federal government made a similar claim. The state challenged and the Supreme Court held that that withdrawal would not defeat the state's right to title unless there could be a two-fold finding: One, that Congress clearly intended to include the submerged lands in the withdrawal. Second, that Congress affirmatively intended to defeat the future state's title to the submerged lands. That is the point that we arguing in the "PLO 82"....(change tape) TAPE 96-19, SIDE B Number 000 MR. BOTELHO said, "...a major case to firm up the state's belief that it is entitled to all submerged lands that are navigable waters within the state. There has been a Gulkana case as well, ultimately decided in 1989 by the ninth circuit, that also found the river to be navigable water of the state. Again, supporting the state's basic position with regard to navigable waters." Number 035 REPRESENTATIVE DAVIES asked if there are any instances of the state losing a claim. MR. BOTELHO said he was unaware of any. The one area that was a matter of great concern surrounded pre-1983 transfers of land to Native corporations and whether the transfer included transfer to the title of lands underlying water bodies that were pertinent to, or adjacent to, these transfers. In 1983, there was an agreement between the state and the federal government that those transfers would specifically exclude transfers of submerged lands on navigable waters. Number 098 MR. BOTELHO followed up on Representative Davies concern about the statute of limitations. He said it was important to know `vis-a- vis' the federal government, there is no statute of limitations running against the state on quiet title of submerged lands with one exception. That is, to the extent that the federal government has undertaken some development activity on a water body or submerged lands, the state is limited to a 12-year period within which to assert its claim to title. Absent that one exception, that is some specific developmental activity, the state is not barred by the statute of limitations. There is a different story though if there is a transfer to a conveyee. At that point, the state statute of limitations probably would run the possibility of losing title. Number 141 CO-CHAIRMAN GREEN acknowledged the arrival of Speaker of the House, Gail Phillips. CO-CHAIRMAN GREEN wanted to know, if the state has sovereignty over submerged lands, why each individual case is contested and, often, results in litigation. Number 169 MR. BOTELHO said it reflects a variety of fact specific situations where the federal government, or some other party, might contest whether a particular water body is navigable where there might be an attempt by the federal government to assert that it has certain controls on, or the ability to restrict activities on, a water body. That is usually where the conflicts arise. We also want to remove any ambiguity on many of the water bodies of the state as to whether or not they are navigable. There are several reasons why one might for a policy choice decide to litigate. After litigation is resolved, definitively, with the federal government, what the status of the water bodies are, we have an excess of 2,000 rivers and streams that would be considered navigable in Alaska. Number 223 CO-CHAIRMAN GREEN asked if that meant the state has ownership to some and not others. MR. BOTELHO replied that the state has consolidated three cases in Northeastern Alaska that are being litigated. He said there has not been a firm assertion by the federal government that they are not navigable waters, generally, but we are fighting over the extent of it: the Kandik River, the Black River & the Nation River. Number 251 FRANK RUE, Commissioner, Department of Fish and Game (ADF&G) said the department is in a support role to the Department of Law and the Department of Natural Resources and share the concern that we want to be aggressive in asserting navigability for a number of reasons. Recently with dual management in subsistence, it may be important for the state's management of fish and wildlife that we assert navigability. Also, primarily, for public use, public access to fish and wildlife, the navigability issue can become significant. So, we have supported the Department of Law and the Department of Natural Resources in various litigations and/or assertions and that has been our role. We give information and point out areas where we think the federal agencies are overreaching and trying to restrict public uses on what believe are navigable waters. Number 304 JULES V. TILESTON, Director, Division of Mining & Water Management, Department of Natural Resources (DNR) said the DNR's technical people have worked on navigability determinations and assertions with the Attorney General's Office, the Department of Fish and Game and other state agencies. MR. TILESTON pointed out that last year the overall coordination role was eliminated from the budget. He said the division and the commissioner developed an alternate strategy which he would explain to the committee. MR. TILESTON said current budget deliberations provide leadership and technical support for navigability litigation involving the state, specifically, on the Kandik, Black and Nation rivers. He said the DNR has been working closely with the Attorney General. The original litigation was filed in the early 1990s, it has gone through the ninth circuit twice and was finally remanded with a decision that it is right. He said the state should have a decision from the federal government within the next several weeks on the determinations. MR. TILESTON said the DNR is already programming work for this summer to verify the factual information that the state needs. The DNR has contacted the Department of the Interior with a proposal, subject to legal advice, because of other pending litigation. If the DNR can get the Interior and the state to agree on hydrologic facts, or other facts, that determine navigability, then we can stipulate in court what the facts are and argue about what the interpretations would be. He said this is a cost savings. MR. TILESTON stated that the DNR is exploring with the Department of Interior whether to pick up on a project that was postponed last year when the funding was deleted. That was a cooperative effort with the Interior agencies to specifically look at arranging water bodies in the state into one of three categories. The first being water bodies that are clearly too small or ones that are clearly navigable, the Yukon River, for example, and there is no dispute. Then we can get the quiet title from the federal court. Number 419 MR. TILESTON said the second category of rivers would be those groups where there was not enough factual information to make that type of a determination. Then we would work out a cooperative program and seek funding to get the pieces of missing information that we need and proceed with that. MR. TILESTON said the third category of rivers are those where we absolutely could not agree, for whatever reason, and there was no administrative solution. Then we prepare and go to court on those particular things. But the whole objective was to get away from a water body-by-water body litigation which is very time consuming and expensive. He said this issue is not on the table but the DNR is exploring with the Department of Interior to see whether there is any interest in picking it back up. Number 449 MR. TILESTON said the DNR is prepared to take whatever programming effort it needs to ensure that technical support to the Attorney General's Office, on those three rivers, is there. If the federal government is doing something or there is a problem with land owners where navigability ownership questions arise, we are prepared to take those on. He said the ADF&G and concerned citizens called the DNR about the Russian River. After speaking with Commissioner Rue, we did the field work, we analyzed the data and we submitted a navigability assertion that (indisc. paper tearing) all things being equal, the Russian River was in state ownership. That in a nutshell is what we will be doing next year. Number 493 CO-CHAIRMAN GREEN asked Mr. Tileston to explain what he meant by the term "right" in referring to the three rivers. MR. BOTELHO explained that when the state filed suit in late 1993, the federal government did everything they could to get the case dismissed. The United States District Court ruled in the state's favor. The federal government then went to the ninth circuit. The ninth circuit upheld the district court, and, as a consequence, we have been jockeying back and forth. The court has now directed that the federal government has until March 6th to file its formal answer to the complaint. We filed our complaint timely and it will be a very short time before an answer will be required from the government, but because of procedural motions we are two and a half years waiting for that answer. The court has directed that the federal government file its answer by March 6th. Number 602 REPRESENTATIVE GAIL PHILLIPS, Speaker of the House, Alaska State Legislature stated that the first of her questions will be directed to the Department of Natural Resources and said that she would also appreciate a response from the Department of Law and the Department of Fish and Game. REPRESENTATIVE PHILLIPS asked Mr. Tileston if he thought asserting title to navigable water bodies is a public trust responsibility. MR. TILESTON indicated that his answer was yes. Number 625 MR. BOTELHO said the answer is an unqualified yes. The public trust term also has a very specific meaning which many members of the public are not aware of and that is the whole concept of title being held by the state being in trust for the public trust. That in turn means to make sure that the rivers are available to be navigated that the public can use it unhindered for commerce and for fishing: to be unburdened by any private rights. So, when we talk about the public trust term, there is the public trust concept in general which we clearly support. There is also a very specific meaning here that the state takes a major obligation, does take navigable title in trust to make sure that this free access is unhindered by unreasonable interference by private interests. Number 686 REPRESENTATIVE PHILLIPS addressed all three participants asking if this process meets state government's trust responsibilities under the state constitution. Is the process working? Number 705 MR. TILESTON responded that he has been working in this field both nationally, since the 1960s, and in Alaska, since 1972. The process is working from his perspective. This program is working and we are able to respond to those situations which are very significant. He said the Russian River is a good example. Number 750 MR. BOTELHO said the role of the Department of Law is a supportive role in the sense that we are trying to execute policies developed by the DNR. To the extent that our role is, primarily, front line litigation, we have had great support from the Department of Natural Resources. Their support has made it possible for us to engage in litigation to begin with, and to be able to carry it out. He said, from a more limited perspective, yes, I think the state is on the right track. The question is the extent to which we are able to enjoin the battle in other parts of the state, resources are obviously limited. Number 789 REPRESENTATIVE PHILLIPS asked if the state is constitutionally on track. MR. BOTELHO replied that the state is constitutionally on track in the sense of asserting our constitutional mandate and upholding what we think federal law is with regard to our entitlement to lands underlying navigable waters. Number 811 COMMISSIONER RUE stated that he was concerned when the DNR's budget was reduced and their ability to deal with navigability was jeopardized. The Department of Fish and Game is continuing to work with the DNR and will help them to assert navigability in critical situations to make sure that we have public access. REPRESENTATIVE PHILLIPS asked Commissioner Rue if the state is constitutionally on track from his perspective. COMMISSIONER RUE answered yes and deferred to the Department of Law. REPRESENTATIVE PHILLIPS questioned Mr. Tileston. "At one point, the state of Alaska gave notice of its intent to file quiet title on nearly 200 streams in Alaska. What is being done on these cases?" Number 853 MR. TILESTON replied that the 200 streams were filed approximately three-five years ago when interagency groups met and selected the Kandik, the Nation and the Black Rivers as the ones to first take to court. The final answer on those three rivers would direct us to which next ones we would pick. The Kandik, Nation and Black rivers are Interior, they are not lake fed and they are non-glacial meaning that the court decision will have potential application to those types of rivers and they are all smaller other than the Black and the Gulkana. Depending on what the court tells us, we would then select, subject to funding, another set of criteria and then pursue those. Number 913 REPRESENTATIVE PHILLIPS addressed the Attorney General regarding his comments on the 12 year time limit, "Is it your assertion that of these 200 rivers or streams that unless any kind of federal development has occurred on them, then there is not a time limit for the state to assert its ownership?" MR. BOTELHO replied that is correct to the extent that these have not otherwise been conveyed to third parties. That is the first caveat. In which case, the statute of limitations would be a state statute of limitations. The only restriction is that there is some federal development activity putting the state on notice of an adverse view. The state is not subject to a statute of limitations. REPRESENTATIVE PHILLIPS interjected asking, "Of those 200 has the federal government put the state on notice on any of them?" MR. BOTELHO suspected that there very few, if any, and deferred to Mr. Tileston. MR. TILESTON said he would supply a written response. Number 972 REPRESENTATIVE PHILLIPS proceeded, "If the legislature determined by statute to ensure title within a time frame and, unless there was a federal intervention of some sort, that would be the process to take. The legislature by statute could determine a time frame for the state gaining title to those." MR. BOTELHO advised that where the legislature could act would be to extend the state statute of limitations on conveyances to third or private parties. It could not affect the 12 year federal statute of limitations in terms of federal conduct on waters. Number 1007 REPRESENTATIVE PHILLIPS inquired, "..if there was no federal intervention?" MR. BOTELHO responded that if there has been no federal transfer and there has been no federal activity, there is no statute of limitations. CO-CHAIRMAN GREEN asked if a conveyance would be a federal intervention. MR. BOTELHO said a conveyance to another party, in effect, takes it out of the federal quiet title act and makes the time subject to state statute of limitations. CO-CHAIRMAN GREEN expressed concern that something might slip through the cracks. Number 1049 REPRESENTATIVE PHILLIPS asked, "Have there been any conveyances?" MR. BOTELHO said the answer is that there have been numerous conveyances, mostly in the context of the Alaska Native Claims Settlement Act. "As I remarked at the outset, of particular concern are transfers prior to 1983. My recollection is that the Department of Natural Resources, on behalf of the state, worked closely with the federal government in trying to prevent any further conveyances that left ambiguous transfers of waters underlying navigable rivers. The law is that if it is not a navigable water, in the first place, the property line extends to the mid-point of the river or a water body. With respect to transfers that were taking place before 1983, there have been numerous transfers, and a great deal of confusion and concern about whether the state is going to be in a posture adverse to various Native corporations over the water bodies. Number 1130 CO-CHAIRMAN GREEN asked about the Utah Lake case. MR. BOTELHO explained that the United States v. Utah deals with the question of withdrawals of federal lands prior to statehood and whether those withdrawals effectively vitiated the Equal Footing Doctrine or the Submerged Lands Act, in terms of the state's acquisition. Number 1173 C0-CHAIRMAN GREEN stated that his concern is that the Utah Lake case established sovereignty with the states on navigable waters and, subsequent to that, there was conveyance by the federal government. He asked if the federal government is conveying rights on navigable waters, for example, to a Native Corporation, it no longer has. MR. BOTELHO replied that is precisely the concern that was raised and led to the agreement in 1983. REPRESENTATIVE LONG asked if the transfer included a designation by the federal government for parks, preserves, and wildlife? MR. BOTELHO explained that would not be a transfer, it is change of land status from the federal government and quiet title would not be affected in terms of the statute of limitations. Number 1281 MR. TILESTON said he had worked for the federal government in 1983, and stated that he would prepare a written response. MR. BOTELHO asked Joanne Grace to clarify if there are situations where the federal government has transferred lands to third parties where the title to the underlying or submerged lands is in question. "My recollection is that was an issue prior to 1983 and that, at least, since 1983, the state and the federal government have reached agreement that transfers would not explicitly exclude submerged lands adjacent to federal transfers." MS. GRACE replied that was correct and was codified in 1987-1988, in federal law, with the exception of waterways smaller than 198 feet. Those still have to be determined navigable or nonnavigable to determine whether they should be charged to Native corporations or not. She said that determination is made only for charging land status and does not prevent a state from bringing a quiet title action more than 10 years after. Number 1393 CO-CHAIRMAN GREEN asked if the state is in the process of bringing quiet title to some of those conveyed lands. MS. GRACE responded that she was not aware of any. She deferred to the Department of Natural Resources. CO-CHAIRMAN GREEN said if the state lost its appeal process after the 10 years, do we lose the chance to regain title to those lands? Number 1455 MS. GRACE said that the United States does not purport to convey submerged lands that are larger than a particular size lake or river. If they do purport to convey something larger than that, then the state has a certain amount to appeal that administrative determination. Number 1494 JIM CULBERTSON, Resources Manager, Division of Land, Department of Natural Resources, testified that the statute of limitations was repealed in 1987 and, prior to that time, a lot of lands had been conveyed to corporations by Interim Conveyance. For the purposes of chargeability of acreage to the entitlement of the Native corporations, if a lake was over 50 acres in size, or a stream was over 198 feet in width, it was meandered on the survey plat and the acreage was not charged to the corporation. That same law also repeals the statute of limitations in ANILCA and provided that the state would not be prohibited from recovering title to any of those lands that were conveyed by an Interim Conveyance document. That document is issued prior to survey, it is title to the land. The Native corporations that were conveyed land by Interim Conveyance, hold title to the land. What the survey rules do is compensate the entitlement in acreage but leave the issue of ownership up to future settlement or litigation. MR. CULBERTSON clarified that the statute of limitations was repealed at the same time the survey rules were implemented. Number 1598 CO-CHAIRMAN GREEN asked if, 10 or 15 years from now, a litigation for ownership of that which was conveyed and agreed to in 1983, could still be done, and we are not barred from that? REPRESENTATIVE PHILLIPS addressed the DNR, "In the February 1996 memo from Mr. Tileston, he indicated that navigability determinations are routinely made as part of a land transfer from the federal government. I assume that this means to the state or a third party such as a regional or village corporation. If this is being done routinely, does the DNR monitor all of these transfers and the navigability determinations?" Number 1644 MR. TILESTON said the BLM issues, as in the Gulkana decision, on all transfers so that they are applying the current court standards that have been used. To the extent that the DNR checks state acreages, we own it regardless if it becomes a chargeability thing which Joanne Grace was talking about earlier. It is an acreage issue that we need to keep track on but it is not an ownership question. As far as the Native corporations are concerned, there is a route, but not a case-by-case check. We do a screening check, but we do not go through each and every application and that is one of the concerns that the Department of Fish and Game has raised. Number 1728 REPRESENTATIVE PHILLIPS said if it came to your attention that there was a problem, "What would be your next step?" MR. TILESTON answered the first thing would be to look at the records and see whether we have a conflict. Because of Native conveyances to date, the Native corporations have received title to approximately 30,000,000 acres. A large part of the conveyances that are being made involve lands and water bodies for which previous determinations have been made. He said the first thing the department would do is to go back and see what the previous federal decisions were in that area. If it was inconsistent, then we would call our lawyer. Number 1785 C0-CHAIRMAN GREEN noted the arrival of Representative Ramona Barnes. REPRESENTATIVE PHILLIPS addressed Mr. Botelho, "Commissioner Shively testified at the Senate Finance Committee overview of the DNR that the state need not worry about navigability and title because there is no statute of limitations for the state filing its claims. Is that true?" Number 1825 MR. BOTELHO responded that the answer is yes, it is true. REPRESENTATIVE PHILLIPS said, "As a result of the Ninth Circuit, court of appeals decision in the Katie John case, federal agencies could attempt to exert management authority over some navigable and nonnavigable waters. How are the state's interests being protected and is the Department of Law getting the technical support it needs in this case? MR. BOTELHO said the state had filed, as of January 6, 1996, a petition (indisc) with the United States Supreme Court in the Katie John case precisely because of concerns raised by the Speaker. "We solicited support from all Western states to join as amicus support of our petition. We have garnered the support of 11 states, and several states joined because of the efforts of the Speaker's Office in making contact with counterparts in those states. We have also made efforts with the U. S. Department of Justice and the Department of the Interior to try and get them to support our petition for certiorari? The winning parties may not see a great a deal of advantage in doing so but we have a directly conflicting Supreme Court case on point. And sooner or later, we are going to see a major conflict that is between state and federal officials that are going to affect the citizens of the state in trying to decide which law to follow. In that respect, it is in everyone's interest to see the Supreme Court resolve the issue once and for all." Number 2092 CO-CHAIRMAN GREEN asked the status of the eleven states that had joined with Alaska because of the issue. MR. BOTELHO replied that none of them have language similar to ANILCA, which is Alaska specific, but the underlying principles of what constitutes public land is one of great concern to Western states and the overall, overreaching, in our view, of the federal government in this area. There is a very strong motivation on their part to join in this effort. There are numerous parties within the state and around the country who are aligning themselves to oppose the petition in amicus, in opposition to the certiorari being taken. REPRESENTATIVE PHILLIPS added that her office requested support from 14 Western states. Eleven states offered their support and the other three were not opposed to it but could not afford to enter into the legal battle at this point in time. After it gets to the court, they will revisit it. Number 2154 MR. BOTELHO said that the Department of Law retained Paul Anzini to draft a brief for amicus support, but it was largely due to the efforts of Ron Sommerville who enlisted individual states to sign on. In addition Cheri Jacobus, formerly of the AG's office, now with the Idaho Attorney General's office, drafted a separate amicus brief which elicited support from half of the 11 states. MR. BOTELHO assured Chairman Green that if the state of Alaska was forced to pay all of the costs, it would be well worth it. Just getting the psychological sign-on by the states, sends a powerful message to the Department of the Interior and, hopefully, to the court itself. Number 2245 REPRESENTATIVE PHILLIPS addressed Commissioner Rue, "There has been considerable confusion and concern over navigability determinations on the Russian River on the Kenai Peninsula. Because of the importance of this stream for public recreation, primarily fishing, can you explain how the state is protecting the public interest access interest to this river?" COMMISSIONER RUE responded that the Department of Fish and Game has worked closely with the DNR to assert our rights to navigability on the Russian River. MR. TILESTON assured the committee that the Russian River is in public ownership. Number 2365 REPRESENTATIVE PHILLIPS referred to Mr. Tileston's memorandum of February 7, 1996 and stated that the DNR is asserting navigability only on the lower Russian River. MR. TILESTON explained that the lower Russian River was the only section up for potential land transfer. Number 2416 MR. TILESTON explained to Chairman Green that the Gulkana decision established a limit of 1,000 pounds for a raft, essentially for adults.....(change tape) TAPE 96-20, SIDE A Number 031 REPRESENTATIVE PHILLIPS addressed Marty Rutherford and Commissioner Rue, "Would there ever be an occasion in a navigability debate whereby the resource of the waterway, the habitat, and the environmental resource of the waterway would hinder the navigability assertion?" "If you determine that this river was primarily going to be used for fishing, but not necessarily navigable and we are asserting that the navigability status should be transferred to the state, would we have a battle between the DNR and the Department of Fish and Game to block the navigability assertion?" Number 108 COMMISSIONER RUE stated that the Department of Fish and Game pressed the DNR hard to assert navigability because of the presence of the resource, like fish, so that the people who have access to it, can use it. MARTY RUTHERFORD, Deputy Commissioner, Department of Natural Resources, agreed with Commissioner Rue stating that the DNR's experience has been that the ADF&G has encouraged the Department of Natural Resources to assure that a river is navigable when there was sport fishing opportunities. She said the DNR would continue to look at the criteria for navigability of 1,000 pounds for a raft. Number 259 MR. BOTELHO explained that the big issue with Utah Lake, and the reason that it is important is the question of withdrawals pre- statehood, and whether or not that withdrawal took the waters within that withdrawal outside of the Equal Footing Doctrine or the Submerged Lands Act. The importance of the Utah Lake case was the rejection of the federal government assumption that a simple withdrawal, absent an explicit finding by Congress that the withdrawal included the waters, and an explicit finding by Congress of an attempt to defeat a future state's right to those waters. The state would assume, at statehood, title to those submerged lands. He stated that the Utah Lake case is the state of Alaska's "ace" in the PLO 82 litigation and the 48,000,000 acres included in that 1943 withdrawal. MR. BOTELHO said that all the water bodies within that 48,000,000 acres that are navigable would become the state's. Number 410 MR. BOTELHO answered Chairman Green's question saying that it is the land underneath it that is really the issue. He referred to "PLO 82" and said the 48,000,000 acres of land and waters and the argument that the federal government has made that everything that was in those outer boundaries is federal. We are taking the position that the federal government is wrong. The navigable waters in there belong to the state of Alaska, and the lands underlying those waters title rests with the state of Alaska not the federal government. That is the point that we expect to prevail on. Number 497 MR. TILESTON discussed with the committee instances of short stretches of a river which are not navigable and discussion ensued on natural physical conditions and the river being susceptible to navigation and seasonal variations. Number 718 REPRESENTATIVE DAVIES asked if there are situations other than Interim Conveyances where the state statute of limitations is running. MS. GRACE responded that a conveyance to anyone other than a Native corporation. She felt that the normal statute of limitations would apply to other conveyances to private parties, but did not know of any. Number 799 REPRESENTATIVE DAVIES asked Mr. Tileston to research that issue for the committee. CO-CHAIRMAN GREEN said that prior Native allotments would only go to the waters edge, they do not go to the mid-point of the stream. MR. TILESTON replied that it would not include the stream if it is navigable. He referred to the Third Judicial District Court Palmer decision dealing with the Chickaloon River; it specifically dealt with a Native allotment. In that case, the state court said it did have jurisdiction; the public had the right on the Chickaloon River because of the documented rafting that had been going. The BLM made that determination in 1988, and the allotment went to court in 1990. The court said the public had the right to use the river because of the state's ownership of the water itself, irrespective of who owned the land, and the allotment did include the river bottom when it was navigable. Number 931 MR. CULBERTSON said there seems to be a lot of confusion about the statute of limitations with third parties. He said he is not aware of any state law that provides a statute of limitations for navigability. There is an issue dealing with whether or not Native allotments, in particular, which are federal trust lands and have been conveyed to third parties, have a statute of limitations or some other bar to recovering title. That may be where some of the confusion is coming from because the case in Chickaloon did deal with the Native allotment and basically what the court did was skirted the issue of whether the state had title by falling back on a state statute that that access was provided by the water column itself regardless of the ownership of submerged lands. Number 1007 MR. CULBERTSON responded to Chairman Green that because allotments are in a special trust status there is a question about the 12 year statute of limitations and how that would apply to them. It was the federal 12 year statute of limitations that was revoked in 1983 when the survey rules were put into effect. Number 1048 MR. BOTELHO said that given the obvious importance of the statute of limitations and, the lack of clarity internally, he recommended that the Resources Committee allow him the opportunity to prepare a chart, that graphs out where the statute of limitations does and does not apply, and highlight where there is ambiguity. Number 1086 REPRESENTATIVE RAMONA BARNES asked if RS 2477 lands are access corridors and said is there not a statute of limitation on that. MR. BOTELHO replied that RS 2477 is an issue the Administration has spent a great deal of time on. It is our view that we do not have a statute running with the land changes reflected in ANILCA. Number 1140 REPRESENTATIVE BARNES said her understanding was that there was a specific period of time for the state to assert corridor claims on RS 2477 lands. She asked what the Department of Law is doing on that issue. MR. BOTELHO said with regard to RS 2477, the state filed notice, with the DNR taking the lead, and engaged in a major study of various RS 2477 routes in the state. There were some 1900 hundred potential routes identified. The list was narrowed to about 500, to those where there was little ambiguity about the historical basis, or not otherwise duplicated. He said the Department of Law and the DNR identified routes that we gave notice on, as required by federal law, to the federal government. This Administration, like the Hickel Administration, filed its opposition to the Department of the Interior's proposed role making that takes the position that RS 2477 determinations are a federal law issue and not a state law issue. He said the state is also working to try and revitalize a process with Interior to try and resolve some of these routes without having to resort to case-by-case litigation. Number 1406 REPRESENTATIVE OGAN reported that during the interim, in a joint House/Senate State Affairs meeting, Mr. Botelho stated that RS 2477 was not a priority because the department's priority was protecting the children. "Now you are asserting that it is becoming more of a priority, and you have identified 11 out of the 500, out of 1500 possibilities, that you are going to assert state's rights." MR. BOTELHO responded that Representative Ogan was correct that he had specifically identified that one of the areas the Department of Law would be forced to cut was the staff position doing RS 2477 litigation. MR. BOTELHO affirmed that there are 11 routes and the department is reevaluating whether there are others. He said that it is important that these are very fact specific and they are not any different, in kind, than the issue of navigable waters where you have to litigate on a fact specific basis, the historical use. Number 1591 REPRESENTATIVE OGAN confronted Mr. Botelho saying, "Given your past record with dropping lawsuits, with prejudice, which were done forever, what assurances do we have that you will not do the same on navigable waterways and RS 2477?" MR. BOTELHO replied that his track record is not very long, people point obviously to the Babbitt lawsuit. He said, "I serve the Governor of the state. He is the elected chief executive, and to the extent that policies and litigation are set by the Governor, in terms of executing his views of what is in the state's interest, that is what I will fall on. I think that you are giving an indication here, and it has been consistent about what the state's views are on RS 2477, they have not changed appreciably from Administration to Administration on this issue nor have they on navigable waters." Number 1669 REPRESENTATIVE BARNES disputed Mr. Botelho's comment about the CEO establishing policy. She said, "That is true, but you as the chief law enforcement agent of the state of Alaska have an absolute responsibility to the people of this state. If your only assertion is to serve whomever happens to be the chief executive, I think we should again visit the question of an elected Attorney General." REPRESENTATIVE BARNES refuted Mr. Botelho's testimony about either protecting the children or asserting states rights in RS 2477. She reminded him that she had served on finance for many years and she did not believe that was a choice the Attorney General had to make. Number 1741 MR. BOTELHO said the choices are limited to very few sections that are unrestricted general funds. Number 1811 CO-CHAIRMAN GREEN addressed Commissioner Rue and asked if the department exercised jurisdiction on anadromous streams. COMMISSIONER RUE affirmed that was correct. CO-CHAIRMAN GREEN expressed concern about agency budget reductions and suggested that a re-prioritization may be necessary in some departments where the legislature is forced to cut expenditures. He said we want to know that we are not subject to any kind of statute of limitations which would bar our right to exercise jurisdiction ownership. He emphasized that the Department of Law not allow that to slip through the cracks and suggested that this become a high priority issue in the budget. Number 1952 MR. BOTELHO said none would dispute the fact that we could use more resources to do a job much more aggressively. The Administration is very committed with competent individuals who are interested in pursuing these matters. REPRESENTATIVE OGAN asked if there is a time line on RS 2477. "Do we have a deadline that if we do not file, we are done forever with these assertions?" MR. BOTELHO answered that it is the Administration's view that there is not a statute of limitations running. There is an argument that has not been asserted, but might be asserted, that we are faced with some time line. Within the last several weeks, the Department of Law communicated with the Department of the Interior to find out if they might join in atolling agreements so that, if there is any ambiguity, we have got it shut off. Interior inferred that the Department of Justice will not authorize them to enter into such an agreement, and that will play a role in our decision on how we are going to move forward on this. CO-CHAIRMAN GREEN thanked all participants for their attendance. He announced that the House Resources Committee would meet in Kenai on Friday, February 23, 1996. ADJOURNMENT There being no further business to come before the House Resources Committee, Chairman Green adjourned the meeting at 10:17 a.m.