Legislature(2001 - 2002)

04/13/2002 03:10 PM JUD

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    ALASKA STATE LEGISLATURE                                                                                    
                   SENATE JUDICIARY COMMITTEE                                                                                 
                         April 13, 2002                                                                                         
                            3:10 p.m.                                                                                           
MEMBERS PRESENT                                                                                                               
Senator Robin Taylor, Chair                                                                                                     
Senator John Cowdery                                                                                                            
Senator Gene Therriault                                                                                                         
MEMBERS ABSENT                                                                                                                
Senator Dave Donley, Vice Chair                                                                                                 
Senator Johnny Ellis                                                                                                            
COMMITTEE CALENDAR                                                                                                            
HOUSE BILL NO. 307                                                                                                              
"An  Act  delaying to  June  30,  2007,  the  last date  by  which                                                              
hydrocarbon  exploration  geophysical work  must  be performed  or                                                              
drilling of a stratigraphic test  well or exploratory well must be                                                              
completed  in order  for a person  to qualify  for an  exploration                                                              
incentive credit."                                                                                                              
     MOVED HB 307 OUT OF COMMITTEE                                                                                              
CS FOR SENATE CONCURRENT RESOLUTION NO. 25(JUD)                                                                                 
Relating to the public trust for fish and wildlife in Alaska.                                                                   
     MOVED CSSCR 25 OUT OF COMMITTEE                                                                                            
PREVIOUS COMMITTEE ACTION                                                                                                     
HB 307 - See Resources minutes dated 3/18/02 and 3/25/02.                                                                       
SCR 25 - See Judiciary minutes dated 2/20/02.                                                                                   
WITNESS REGISTER                                                                                                              
Jay Hardenbrook                                                                                                                 
Staff to Representative Hugh Fate                                                                                               
State Capitol, Room 416                                                                                                         
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT:  Introduced HB 307                                                                                        
Dean Owen, Executive Director                                                                                                   
Fairbanks Economic Development Corporation                                                                                      
1397 Ithaca Rd.                                                                                                                 
Fairbanks, AK  99709                                                                                                            
POSITION STATEMENT: Supports HB 307.                                                                                          
Jim Dodson, Executive Vice President                                                                                            
Amdex Resources LLC                                                                                                             
No address given                                                                                                                
POSITION STATEMENT:  Supports HB  307.                                                                                        
Mark Myers, Director                                                                                                            
Division of Oil and Gas                                                                                                         
550 W 7  Ave Ste 800                                                                                                            
Anchorage, AK  99501-3560                                                                                                       
POSITION STATEMENT:  Neutral on HB 307.                                                                                       
Wayne Heimer                                                                                                                    
1098 Chena Pump Rd.                                                                                                             
Fairbanks, AK  99709                                                                                                            
POSITION STATEMENT:  Supports SCR  25.                                                                                        
Ralph Seekins, President                                                                                                        
Alaska Wildlife Conservation Association                                                                                        
1625 Old Steese Highway                                                                                                         
Fairbanks, AK  99712                                                                                                            
POSITION STATEMENT:  Supports SCR  25.                                                                                        
Tom Scarbourgh                                                                                                                  
1676 Taroka Dr.                                                                                                                 
Fairbanks, AK  99709                                                                                                            
POSITION STATEMENT:  Supports SCR  25.                                                                                        
Lynn Levengood                                                                                                                  
931 Vide Way                                                                                                                    
Fairbanks, AK  99712                                                                                                            
POSITION STATEMENT:  Supports SCR  25.                                                                                        
Dale Bondurant                                                                                                                  
Alaska Constitution Legal Defense Conservation Fund Inc.                                                                        
31864 Lawton Dr.                                                                                                                
Kenai, AK  99611                                                                                                                
POSITION STATEMENT:  Supports SCR  25.                                                                                        
Doug Isaccson                                                                                                                   
1003 Shirley Turnaround                                                                                                         
North Pole, AK  99705                                                                                                           
POSITION STATEMENT:  Supports SCR  25.                                                                                        
Mr. Herman E. Fandel                                                                                                            
702 Moonshine Dr.                                                                                                               
Soldotna, AK  99669                                                                                                             
POSITION STATEMENT:  Supports SCR  25.                                                                                        
Don Johnson                                                                                                                     
P.O. Box 876                                                                                                                    
Soldotna, AK  99669                                                                                                             
POSITION STATEMENT:  Supports SCR 25.                                                                                         
Donald Westlund                                                                                                                 
Ketchikan, AK                                                                                                                   
POSITION STATEMENT:  Supports SCR 25.                                                                                         
ACTION NARRATIVE                                                                                                              
TAPE 02-16, SIDE A                                                                                                            
CHAIRMAN  ROBIN  TAYLOR  called  the  Senate  Judiciary  Committee                                                            
meeting to order at 3:10 p.m. in  Fairbanks, Alaska.  Present were                                                              
Senator Cowdery, Senator Therriault and Chairman Taylor.                                                                        
           HB 307-OIL/GAS EXPLORATION INCENTIVE CREDIT                                                                      
CHAIRMAN TAYLOR announced  the first bill to be heard  would be HB
MR. JAY  HARDENBROOK, staff to  Representative Hugh  Fate, thanked                                                              
Chairman  Taylor  and  the Judiciary  Committee  for  holding  the                                                              
hearing on  HB 307 in Fairbanks.   Fairbanks is an area  that will                                                              
receive benefits from this legislation.                                                                                         
MR. HARDENBROOK explained  HB 307 extends the sunset  date for the                                                              
exploration incentive  credit program.   This program gives  a tax                                                              
incentive to companies that do exploratory  drilling for petroleum                                                              
in  Alaska.    The  Commissioner  of  the  Department  of  Natural                                                              
Resources (DNR) handles each tax  credit application on a case-by-                                                              
case basis before the credit is granted.   The judgment on whether                                                              
or  not  the  credit  is  given is  based  on  the  value  of  the                                                              
information to  the state.  This  program, though it has  not been                                                              
used as  of yet,  has the potential  to open  up the Interior  and                                                              
several   other  basins   throughout   the   state  to   petroleum                                                              
MR. HARDENBROOK  said DNR,  specifically the  Division of  Oil and                                                              
Gas,  was neutral  in earlier  hearings  on HB  307.   HB 307  had                                                              
bipartisan support in both the Senate and the House.                                                                            
MR. DEAN OWEN, Executive Director,  Fairbanks Economic Development                                                              
Corporation, said it supports HB 307 for the following reasons.                                                                 
   · It is good for economic growth in the Interior.                                                                            
   · It encourages responsible resource exploration.                                                                            
   · It helps create a positive environment for oil and gas                                                                     
MR. JIM  DODSON, Executive  Vice President,  Amdex Resources  LLC,                                                              
said Amdex filed on an exploration  license area west/southwest of                                                              
Fairbanks  in the  Nenana Basin.   Amdex  anticipates its  license                                                              
will be issued in  August or September of 2002.   It would like to                                                              
be in the Nenana Basin this winter  shooting seismic with the hope                                                              
of ultimately drilling some wells  in the winter of 2003 and 2004.                                                              
With  a successful  exploration  project  Amdex  will be  able  to                                                              
supply natural gas to the Fairbanks and Interior Alaska markets.                                                                
MR. DODSON  said HB 307 allows  a company to take  additional risk                                                              
when conducting  seismic and exploratory drilling  activities.  If                                                              
they have  an exploration incentive  credit attached to  a seismic                                                              
program  or an exploratory  well  they are more  willing to  shoot                                                              
more  seismic data  or drill  a well  deeper or  possibly drill  a                                                              
second or third  well they would not otherwise drill.   It extends                                                              
the  amount  of work  they  can  do in  a  particular  exploration                                                              
budget.  They are highly supportive of HB 307.                                                                                  
CHAIRMAN   TAYLOR  said   they  shared   the  excitement   in  the                                                              
possibilities this  gas opportunity  will bring for  Fairbanks and                                                              
the  whole  Interior.     He  wished  Amdex  the   best  on  their                                                              
exploration venture.                                                                                                            
MR. DODSON  said they hope  to reduce  fuel costs to  the Interior                                                              
where people  are currently paying  just over $10 per  million BTU                                                              
and about $1.30 or $1.35 per gallon  for heating fuel delivered to                                                              
homes.  That is  an expensive source of energy and  Amdex hopes to                                                              
lower the cost by providing natural gas.                                                                                        
CHAIRMAN TAYLOR hoped Amdex has a successful venture.                                                                           
MR. MARK MYERS,  Director, Division of Oil and  Gas, was available                                                              
to answer questions.                                                                                                            
CHAIRMAN  TAYLOR   asked  if   the  Administration   supports  the                                                              
legislation to extend the date.                                                                                                 
MR. MYERS said  the Administration is neutral  on the legislation.                                                              
It recognizes that  the program has value and that  the bill gives                                                              
discretion to  the Commissioner of  DNR.  It is  his understanding                                                              
that the Governor is neutral on the bill.                                                                                       
SENATOR THERRIAULT  asked how transferability of  the credit would                                                              
work.  According to the fiscal note,  the credit may not exceed $5                                                              
million per  eligible project.  He  asked how an  eligible project                                                              
would be defined.                                                                                                               
MR. MYERS  said the credit is  good for royalties,  rentals, taxes                                                              
and bonus  bids and  is transferable  to other  companies if,  for                                                              
instance, that particular company  doesn't have production at that                                                              
time or doesn't have enough to offset  bonuses or rentals.  It has                                                              
not been used with this program but  it is almost identical to the                                                              
Economic Investment  Credit (EIC) program.  Many  of those credits                                                              
have been transferred  with the EIC structure that  is attached to                                                              
leasing.  It is an arrangement between  the companies.  The credit                                                              
itself is  transferable and  can be  used for royalties,  rentals,                                                              
taxes and bonus bids.                                                                                                           
SENATOR THERRIAULT asked for the definition of single project.                                                                  
MR. MYERS said that  is a discretionary call at this  point and is                                                              
not  specifically defined  in regulations.    An eligible  project                                                              
could be a  well or a group  of wells.  The commissioner  looks at                                                              
the  value of  the information.   If  the area  has three  tightly                                                              
spaced wells, a project will probably  consist of all three wells.                                                              
The strict informational  value from each well  in close proximity                                                              
wouldn't  be very  high so  the commissioner  would probably  type                                                              
that  as one  project.   Regional  seismic data  might be  another                                                              
project.  There  is a cap of $5 million per project  and the total                                                              
for  a  program can't  exceed  $30  million.   The  definition  of                                                              
"project"  is  not  specifically  defined  in  either  statute  or                                                              
regulation but  passes as  a common sense  test when they  see the                                                              
company's proposal before them.                                                                                                 
SENATOR THERRIAULT  asked if the  individual applicant  would make                                                              
that pitch to DNR when submitting an application.                                                                               
MR.  MYERS said  yes.   The EIC  would  be approved  prior to  the                                                              
drilling and  is based on so many  dollars per foot of  well or so                                                              
many dollars per line mile or square mile of seismic.                                                                           
CHAIRMAN TAYLOR  asked if  the entire question  of whether  or not                                                              
the  credit would  be granted  is totally  discretionary with  the                                                              
commissioner,  it would  then be  up to the  commissioner and  DNR                                                              
personnel  to  provide  the  parameters  or  definitions  for  the                                                              
project question.                                                                                                               
MR. MYERS answered yes.                                                                                                         
SENATOR COWDERY asked if there was  anyway to tighten up the issue                                                              
of discretion  and whether or not  it should be tightened  up.  He                                                              
commented  that  it  seems  the discretion  would  be  decided  by                                                              
regulation  and they had  discussed regulation  vs. statute  early                                                              
that day.  He  asked for Chairman Taylor's or  Mr. Myer's thoughts                                                              
on  the matter  and  said he  did  not like  the  idea they  could                                                              
hypothetically  tax the companies  $10 or $50.   He liked  to have                                                              
the things they did be tight.                                                                                                   
CHAIRMAN  TAYLOR  said  he  was   part  of  the  group  when  that                                                              
legislation was passed.  At that  time he was concerned about that                                                              
discretion  but  to date  no  one had  taken  advantage  of it  or                                                              
applied for credit.                                                                                                             
He  explained the  state  would  receive valuable  information  it                                                              
would not have a right to otherwise.   Most of that information is                                                              
seismic,  very proprietary  and very important  to the  companies.                                                              
The companies are willing to exchange  that if they receive credit                                                              
in return  for having  developed a  new project.   They  left both                                                              
sides of that  issue open.  They  have not set parameters  on what                                                              
would be  adequate information to  be conveyed by the  company and                                                              
yet at the same time they haven't  set parameters on what would be                                                              
considered adequate for value of  the project for the commissioner                                                              
to grant the credit.                                                                                                            
CHAIRMAN TAYLOR said a lot of this  is going to have to proceed on                                                              
a  trust  basis until  people  actually  start  to work  and  take                                                              
advantage of it.   If there is a dispute between  the commissioner                                                              
and the company,  something that defined  it would be in  front of                                                              
the legislature.  He thought they  should hold off rather than try                                                              
to define something in a vacuum.                                                                                                
SENATOR COWDERY  hoped if there were  any problems DNR  would come                                                              
back to the legislature.                                                                                                        
CHAIRMAN TAYLOR thought they would have to.                                                                                     
SENATOR THERRIAULT  asked Mr.  Hardenbrook if Representative  Fate                                                              
had  looked  at  the  regulations.    AS  41.09.010  section  (f),                                                              
referenced  in the legislation,  states  an "eligible project,  as                                                              
defined  by  the  commissioner  by   regulation."    He  asked  if                                                              
Representative Fate  or Mr. Hardenbrook looked at  that regulatory                                                              
definition to  see if  it was overly  stringent when  drafting the                                                              
legislation and  whether that  was the reason  they had  no takers                                                              
for this section of the statute.                                                                                                
MR. HARDENBROOK said  he had not and that the Division  of Oil and                                                              
Gas would be much better suited to answer the question.                                                                         
MR. MYERS replied:                                                                                                              
     Basically,   the  regulations   under  11  AAC   89.015,                                                                   
     eligible project,  basically describes the  project must                                                                   
     be   described  and   the  plan   submitted  under   the                                                                   
     regulations  providing  sufficient detail  to  determine                                                                   
     whether proposed  activity will provide data  to enhance                                                                   
     the   state's    resource   evaluation    program.   So,                                                                   
     fundamentally, it's  turned back to say that  again it's                                                                   
     the  value  of the  information  and  the value  of  the                                                                   
     information  has to be  determined by professionals,  in                                                                   
     this  case   either  geophysicists  or   geologists.  So                                                                   
     there's  again a  specialized  skill  there involved  in                                                                   
     determining what  is the value.   And I think  the level                                                                   
     of the  credit then would  be associated with  the value                                                                   
     the state sees in that information.                                                                                        
     Specifically  on state  owned  lands the  state would  -                                                                   
     does, in  fact, receive the  seismic data.  So  it would                                                                   
     be primarily  on private,  privately or federally  owned                                                                   
     or  federal government  lands  the state  would be  most                                                                   
     interested  in seeing  - paying  for an  EIC on  seismic                                                                   
     data historically  because again  we get the data.   The                                                                   
     only exception to that would  be if the state determined                                                                   
     that  showing  this  data  to a  third  party  was  very                                                                   
     important the  state could pay  for that even  though it                                                                   
     was getting  the data  because there  is a provision  in                                                                   
     that for specifically showing  that data, not giving but                                                                   
     showing to third parties.                                                                                                  
     On the well data, fundamentally  again, on private lands                                                                   
     the  state would normally  receive  that data 25  months                                                                   
     after it's drilled.  The state  would look at it and say                                                                   
     it's important  for us to  get this information  earlier                                                                   
     than  is typical.   Or the  other thing  it does if  the                                                                   
     state pays for  the information, the well  cannot be put                                                                   
     under  extended  confidentiality  on either  private  or                                                                   
     state lands.   Those are released at 25 months  from the                                                                   
     date  of completion  [under]  normal circumstances.  But                                                                   
     there    are    circumstances    in    which    extended                                                                   
     confidentiality is  granted because of  the significance                                                                   
     of the information  from that well to  un-leased acreage                                                                   
     nearby.  So  when credit is granted on this  program the                                                                   
     companies  have  to  waive   their  right  for  extended                                                                   
     So those  are kind  of the sidebars  and issues  that go                                                                   
     into determining  sort of  whether or  not the value  of                                                                   
     the  information is  sufficient the  state will want  to                                                                   
        pay for it whether it wouldn't otherwise get the                                                                        
SENATOR THERRIAULT thanked Mr. Myers.                                                                                           
SENATOR  COWDERY moved  HB 307  from  committee with  accompanying                                                              
fiscal  note  and  individual recommendations.    There  being  no                                                              
objection, the motion carried.                                                                                                  
TAPE 02-17, SIDE A                                                                                                            
         SCR 25-FISH & WILDLIFE PUBLIC TRUST/ANILCA SUIT                                                                    
CHAIRMAN  TAYLOR announced  the next matter  before the  committee                                                              
was SCR 25.  The Judiciary Committee  previously held a hearing on                                                              
this resolution and  moved it from committee.  It  was returned to                                                              
the committee  for completion  of an  additional amendment  in the                                                              
Committee Substitute (CS) work draft before them.                                                                               
MR. WAYNE HEIMER, Fairbanks resident,  said he was testifying as a                                                              
reluctant student  of Alaska National Interest  Lands Conservation                                                              
Act (ANILCA)  history and  federal takeover  of fish and  wildlife                                                              
management in Alaska.                                                                                                           
MR. HEIMER  said during  the 25.4 years  he worked for  the Alaska                                                              
Department of Fish  and Game (ADF&G), 1971-1997,  he was primarily                                                              
a Dall sheep  manager and researcher.   He was involved  in ANILCA                                                              
when the  act was being drafted  in the 1970's because  Dall sheep                                                              
were  a focus  of  much of  the  federal conservation  unit  land.                                                              
Classifying  Dall  sheep  habitat  as national  parks  would  have                                                              
excluded  Dall ram hunting  as a  major economic  interest  to the                                                              
state. He was asked how any given  proposed boundary configuration                                                              
would affect  Dall ram  harvests.   He wrote several  contemporary                                                              
history  papers for professional  journals  on the subject  during                                                              
those years.                                                                                                                    
MR. HEIMER explained  that after the federal takeover  of wildlife                                                              
management  on federal  lands, Governor  Hickel  sued the  federal                                                              
government for return of management  to the state.  Someone had to                                                              
justify the harm  to the state resulting from  federal takeover to                                                              
establish  legal  standing in  the  State  of Alaska  vs.  Babbitt                                                              
lawsuit.   Because  of  previous experience  with  ANILCA, he  was                                                              
assigned to  work full time in the  area of ANILCA history  and to                                                              
document  complications  resulting   from  federal  management  of                                                              
Alaska's resident wildlife.  His  primary job was documenting dual                                                              
management  case histories  for attachment  to  the state's  legal                                                              
MR.  HEIMER compiled  a  history of  events  important to  federal                                                              
management issues  in Alaska.   This history  was published  as an                                                              
annotated  chronology  of  the  takeover   of  fish  and  wildlife                                                              
management  by  the  federal government  (pages  169-187)  in  the                                                              
Transactions  of the 2   North American  Wild Sheep  Conference in                                                            
Reno, Nevada, 1999.  He presented  three copies of that record for                                                              
the committee.                                                                                                                  
MR.  HEIMER asked  the legislature  to pass  SCR 25  and join  the                                                              
lawsuit  against  federal  takeover of  Alaska's  common  property                                                              
resources  by the  federal government.    Common private  citizens                                                              
brought the  suit because  the State of  Alaska failed  to protect                                                              
their rights as U.S. citizens and  residents of Alaska.  Reference                                                              
to the legislative and legal histories  of ANILCA issues in Alaska                                                              
show they  have reached  this point  of necessity  because  of the                                                              
legal  actions of  two  men.   One is  Federal  District Judge  H.                                                              
Russel  Holland and  the  other is  Governor  Tony  Knowles.   The                                                              
arbitrary decisions of these two  men require that the legislature                                                              
involve  itself in  protection  of all  Alaskans  under state  and                                                              
federal law.                                                                                                                    
MR. HEIMER  said reference  to Judge  Holland's decision  of March                                                              
30, 1994  in the Babbitt case  provides evidence of  his arbitrary                                                              
decision.  Judge  Holland, on pages 11 and 17,  states arbitrarily                                                              
that he thought  Congress intended to do things of  which there is                                                              
no record.  Mr. Heimer said the Judge  intuitively assigned intent                                                              
to Congress that Congress, particularly  the Senate, did not voice                                                              
and, in fact,  specifically deleted from the original  House bill.                                                              
Reference to  the legislative history  shows Congress  clearly did                                                              
not intend  for the  federal government  to take over  management.                                                              
The Senate specifically  amended federal takeover  language out of                                                              
the  House  version  of  ANILCA when  it  changed  the  preference                                                              
criterion for  subsistence from  racial to rural.   The  House did                                                              
not  protest.   Mr.  Heimer asked  how it  is  possible they  have                                                              
federal takeover and  pressure to divide Alaskans on  the basis of                                                              
residence today.  It resulted from an esoteric legal point.                                                                     
MR. HEIMER said legally Judge Holland  could do this because of an                                                              
arcane  legal/judicial concept  called "reasonable  construction,"                                                              
which  means  how  the  judge  interprets  the  law.    Reasonable                                                              
construction apparently need not  be congruent with history or the                                                              
text of the law, only legally reasonable.                                                                                       
MR.  HEIMER said  normally, higher  courts,  particularly when  at                                                              
odds  with  legislative history,  would  be  asked to  review  the                                                              
reasonable  construction  by  a single  judge.    Judge  Holland's                                                              
arbitrary  judgment, based  on  what he  thought  would have  been                                                              
reasonable  thinking  by  Congress  with respect  to  enforcing  a                                                              
subsistence preference,  was appealed.  The appeal  was within two                                                              
or three days of  being heard by the Ninth Circuit  Court when the                                                              
newly  elected Governor  Knowles arbitrarily  decided to  withdraw                                                              
the suit and end all other appeal options.                                                                                      
MR. HEIMER said Governor Knowles'  withdrawal of the Babbitt suit,                                                              
an election payoff to the Alaskan  Federation of Natives for their                                                              
endorsement of his candidacy, and  his failure to appeal the Katie                                                              
John case  were both  arbitrary decisions.   His decision  to drop                                                              
the  Babbitt  case   was  clearly  based  on   partisan  political                                                              
considerations.   His withdrawal of the  John case was based  on a                                                              
personal  feeling, "in  his heart."   The  issues developing  from                                                              
these decisions, who shall manage  and where shall they do it, and                                                              
Governor   Knowles'  insistence   on  amendment   of  the   Alaska                                                              
Constitution   to   comply   with   Judge   Holland's   reasonable                                                              
construction of  ANILCA, brought them  to a divisive  situation in                                                              
MR. HEIMER said  while most Alaskans were either  disinterested in                                                              
or overwhelmed by the rhetoric regarding  whether the state or the                                                              
federal  government should  discriminate against  the majority  of                                                              
Alaskans in order  to provide a subsistence  preference, something                                                              
beautiful  happened.  More  than 20  years ago,  a small  group of                                                              
equality minded  individual Alaskans began the process  of legally                                                              
challenging the  fundamental basis of federal takeover  to enforce                                                              
ANILCA's subsistence  preference.   That process  has now  come to                                                              
He said these  individuals are real "twill pants  and plaid shirt"                                                              
Alaskans who  believe passionately enough  in the U.S.  and Alaska                                                              
Constitutions  that they  will  exhaust their  personal  financial                                                              
resources  to assure  equality.    These are  the  same folks  who                                                              
challenged  the  federal  government's decision  that  would  have                                                              
forced  Alaska Natives  to include  water in  their Alaska  Native                                                              
Claims  Settlement Act  (ANCSA)  land selections.    They won  the                                                              
case.  Not only  did this allow Alaska Natives  to select millions                                                              
of acres  of more  productive land,  it also  assured the  state's                                                              
title to navigable  waters.  These folks are not  a bunch of self-                                                              
serving, Native  bashing, ideologues.   They simply hold  that all                                                              
men are  created equal and endowed  by their Creator  with certain                                                              
inalienable  rights including  life,  liberty and  the pursuit  of                                                              
MR.  HEIMER said  presently  these  Alaskans call  themselves  the                                                              
Alaska  Constitutional Legal  Defense Conservation  Fund and  they                                                              
are at  law with  the federal  government over  its abuses  of the                                                              
U.S.  Constitution   because  of  issues  stemming   from  federal                                                              
takeover of  fish and wildlife  management in Alaska.   Plaintiffs                                                              
in their suit include four Alaskans and three nonresidents.                                                                     
He said  on February  4,  2002,  their suit  to determine  whether                                                              
discrimination should  be allowed  at all received  an encouraging                                                              
ruling from  Judge H.  Russel Holland,  the same Federal  District                                                              
Court Judge who ruled on the Babbitt  and Katie John cases.  Judge                                                              
Holland  denied federal  motions  to simply  dismiss  the case  on                                                              
technical   grounds.       The    surviving   case    argues   the                                                              
unconstitutionality  of discrimination  and  is based  on the  14                                                               
Amendment to the U.S. Constitution.                                                                                             
     No  state shall  make  or enforce  any  law which  shall                                                                   
     abridge the privileges or immunities  of citizens of the                                                                   
     United States;  nor shall any  state deprive  any person                                                                   
     of life,  liberty, or property,  without due  process of                                                                   
     law; nor deny to any person  within its jurisdiction the                                                                   
     equal protection of the laws.                                                                                              
MR. HEIMER said many Alaskans now  understand that is exactly what                                                              
the Alaska Legislature did when,  at Senator Stevens' urging, they                                                              
finalized  the state  subsistence law  in 1978.   Senator  Stevens                                                              
told the legislature  that passing a state  subsistence preference                                                              
law would preempt federal subsistence  law in ANILCA.  It did not,                                                              
and shortly thereafter Congress itself  seems to have violated the                                                              
5   Amendment of  the U.S.  Constitution, which  the U.S.  Supreme                                                              
Court considers  equivalent to the  14  Amendment where  state and                                                              
federal   matters  are   concerned,   when   it  passed   ANILCA's                                                              
subsistence preference provision.                                                                                               
He said oddly  the most basic question, whether  discrimination is                                                              
allowable under the U.S. Constitution,  was never an issue for the                                                              
state.   The federal  government and  the Knowles'  Administration                                                              
have  opposed  even  asking this  question.    Paradoxically,  the                                                              
state's lawsuits  over who should  manage (the Babbitt  suit), and                                                              
where they  should do  it (the  Katie John  suit), if they  hadn't                                                              
been  dropped   by  the  Governor  to  appease   Native  political                                                              
interests, would have  eliminated the need to ask  this most basic                                                              
MR.   HEIMER   said  Governor   Knowles   forfeited   the   polite                                                              
opportunities for dignified legal  closure by dropping the Babbitt                                                              
and John suits.  These arbitrary  choices extended this problem by                                                              
at least  ten years  and raised  the issue  to much more  divisive                                                              
levels.  Because  Alaska's governor represents the  state in court                                                              
and because  Governor Knowles chose  to withdraw both  the Babbitt                                                              
and  John  cases   from  final  litigation,  the   course  of  the                                                              
subsistence issue  remains directed by Judge  Holland's presumably                                                              
reasonable  construction of  what  ANILCA should  have said,  even                                                              
though it contains  no provisions for federal takeover.   Hence it                                                              
has  come down  to a  handful of  individual  Alaskan patriots  to                                                              
protect themselves  from discrimination  because their  government                                                              
or governments would not.                                                                                                       
He said  thankfully the basic  question of discrimination  was not                                                              
included in the state's arguments  so it is still valid before the                                                              
Court.  Under  Judge Holland's February 4  ruling,  the Court will                                                              
proceed  to  recognition  of the  requests  for  summary  judgment                                                              
against the federal  government and perhaps to  injunctive relief.                                                              
The  outcome  is uncertain  but  clearly  the most  obvious  legal                                                              
solution remains untested.  Whatever  the outcome, the decision is                                                              
certain to be  appealed.  This is where the  legislature should be                                                              
MR.   HEIMER  said   just   as  the   governor   is  the   state's                                                              
representative  in legal  matters, the  legislature is  ultimately                                                              
responsible  for   publicly  owned  trust  resources   like  fish,                                                              
wildlife,  timber and  water.   Hence the  legislature, which  has                                                              
been  frustrated  by  the governor's  management  of  the  state's                                                              
lawsuits  against the federal  government,  should join this  suit                                                              
MR. HEIMER concluded  the very real prospect of  a successful suit                                                              
brought by  individuals apart  from political interference  should                                                              
embolden  the   legislature  to  resist  the   Governor's  present                                                              
political pressure  to amend the Alaska Constitution  before final                                                              
legal judicial resolution is reached.                                                                                           
SENATOR  COWDERY said  it cost  a  tremendous amount  of money  to                                                              
prepare the  cases up  to the point  when they  were dropped.   He                                                              
asked if  anybody knew how  much money had  been spent up  to that                                                              
date and was thrown away when the cases were dropped.                                                                           
CHAIRMAN TAYLOR did  not know but said it was a  good question for                                                              
the  Department  of  Law  and the  Attorney  General's  Office  to                                                              
SENATOR  THERRIAULT asked  where  the federal  motions to  dismiss                                                              
stood in the case Mr. Heimer talked about.                                                                                      
MR.  HEIMER  said,  as  he understood  it,  that  case  is  called                                                              
Bondurant Olsen  vs. The Federal  Government.  Judge  Holland will                                                              
hear  that  case   in  Federal  District  Court   whenever  it  is                                                              
scheduled.    Recently, the  federal  side  and its  friends  were                                                              
directed to  respond.  He  did not know  where their  arguments to                                                              
the case stood.                                                                                                                 
CHAIRMAN  TAYLOR  said  the  issue   first  litigated  on  summary                                                              
judgment was  whether or not Bondurant  Olsen had any  standing to                                                              
suit  on  that subject  and  they  prevailed.    That had  been  a                                                              
critical hurdle  the legislature had  never been able  to surmount                                                              
in the  past when it  attempted to intervene  in suits  brought by                                                              
the state because only the governor  had standing to represent the                                                              
SENATOR THERRIAULT  asked if it was  the legal argument  that they                                                              
had not yet been disadvantaged.                                                                                                 
CHAIRMAN  TAYLOR said  yes,  that was  part  of it.  Now they  can                                                              
certainly  show  the  subsistence  panels have  acted  and  passed                                                              
regulations and in fact people are  participating in activities on                                                              
a discriminatory basis.                                                                                                         
He asked if Mr. Heimer had a copy of his testimony.                                                                             
MR. HEIMER  said he submitted copies  of what he intended  to read                                                              
but his presentation was slightly different.                                                                                    
CHAIRMAN  TAYLOR appreciated  the  copy and  made it  part of  the                                                              
SENATOR THERRIAULT  appreciated the testimony.  As  they move into                                                              
special  session  he  would  receive  emails  and  public  opinion                                                              
messages  (POMs) from people  that only  understood the  emotional                                                              
arguments   being  made   and  really  did   not  understand   the                                                              
background.   He thought Mr.  Heimer's presentation was  a concise                                                              
summary of the background.                                                                                                      
MR. HEIMER was  hopeful the additional long paper  he presented to                                                              
them would be of assistance.                                                                                                    
MR.  RALPH   SEEKINS,  President,  Alaska  Wildlife   Conservation                                                              
Association  (AWCA),  said the  AWCA  is a  group  of hunters  and                                                              
fishers, all of whom are residents of the State of Alaska.                                                                      
MR.  SEEKINS gave  the following  testimony.   A  number of  years                                                              
earlier  they  had produced  a  couple  of  white papers  for  the                                                              
legislature  to use  in  debates during  special  sessions.   They                                                              
looked at the legal arguments involved  in how the State of Alaska                                                              
should  proceed  in  trying  to  defend  itself  in  the  area  of                                                              
sovereign rights.   The first thing they did was  to bifurcate the                                                              
issue.  The issue was not subsistence  because most of the hunters                                                              
and fishers  they knew in  the State of  Alaska do not  argue with                                                              
providing fish and game for subsistence  for those people who need                                                              
it.  What they  did not think was kosher was the  fact the federal                                                              
government was  stepping into areas  of sovereign  power belonging                                                              
to  the people  of  the  State of  Alaska;  that  is the  area  of                                                              
authority of the legislature of the State of Alaska.                                                                            
MR. SEEKINS  said they were  talking about  the public trust.   He                                                              
gave a  hypothetical situation  where he was  the trustee  and the                                                              
three  legislators had  a  common  ancestor who  had  left them  a                                                              
trust.   That ancestor  had instructed Mr.  Seekins to  divide the                                                              
trust income equally  among the beneficiaries on  an annual basis.                                                              
In this scenario Mr. Seekins explained  to Senator Therriault that                                                              
his business  was doing  well but  it had been  a little  slim for                                                              
Senator Taylor  this last year.   Mr. Seekins was going  take part                                                              
of the earnings  of this trust  that would normally go  to Senator                                                              
Therriault and  give it to Senator  Taylor instead.  Were  that to                                                              
occur, Mr. Seekins would go to jail.  The cornerstone of trust law                                                              
says all  beneficiaries have  to be treated  equally.   The people                                                              
who  established  this  public trust  doctrine  long  before  this                                                              
nation  started understood  that.   It was enshrined  in the  U.S.                                                              
Constitution that people had to be treated equally.                                                                             
MR. SEEKINS said  prior to Statehood, the federal  government held                                                              
all of the assets  of the State of Alaska in trust  for the people                                                              
of the  future state.   When Alaska became  a state the  corpus of                                                              
that  trust came  to the people  of the  State of  Alaska and  the                                                              
legislature   became   the  trustee   rather   than  the   federal                                                              
government.    The  governor  and   the  administration  were  not                                                              
trustees   but  help  administer   the   trust  even  though   the                                                              
legislature  was the  trustee.  The  federal government  is  not a                                                              
factor in that trust.                                                                                                           
They  found a lot  of U.S.  Supreme Court  cases  on the issue  of                                                              
public trust.   For example, in Baldwin vs. Montana  Fish and Game                                                              
Commission, 75%  of all  the Elk killed  in Montana are  killed on                                                              
federal property yet  it is the state legislature  responsible for                                                              
managing that  asset because that  asset belongs to the  people of                                                              
the State  of Montana.   They found in  the Public  Trust Doctrine                                                              
every Alaskan  shared equally as  a beneficiary.  It  violates the                                                              
very cornerstone of  trust law to say because a person  lives in a                                                              
particular  zip code they  get a  greater share  of the  corpus or                                                              
earnings or benefits from the trust than another.                                                                               
MR.   SEEKINS  said   when   the  Alaska   Wildlife   Conservation                                                              
Association looked at  SCR 25 they said the legislature  is on the                                                              
right  track  along  with  Mr.  Bondurant  and  Mr.  Olsen.    The                                                              
governor,   for  admitted  political   reasons,  dismissed   these                                                              
lawsuits.  The beneficiaries of the  trust look to the legislature                                                              
to manage  the assets fairly and  equally and the  legislature has                                                              
that responsibility.  Their lawyers  told them the legislature has                                                              
some liability  if they  do not  manage the  trust on that  basis.                                                              
The legislature can  be brought to court on the  grounds it failed                                                              
to protect  the assets  of the trust  owned by  the people  of the                                                              
State of  Alaska.  They  urged the legislature  to take a  look at                                                              
that advice from attorneys who deal primarily in trust law.                                                                     
MR. SEEKINS  said the  document the  Alaska Wildlife  Conservation                                                              
Association  produced  contains summaries  of  U.S. Supreme  Court                                                              
cases and the 1976 Montana case.   That case came after Kleppe vs.                                                              
New  Mexico,  the  case  the  federal   government  used  for  its                                                              
authority  to  manage  subsistence   in  Alaska.    He  asked  the                                                              
committee to read Kleppe vs. New Mexico and stated:                                                                             
     It  says  the states  are  the  ones who  determine  who                                                                   
     harvests  wild game  and how  they are  harvested.   So,                                                                   
     their own, their own cornerstone  crumbles under careful                                                                   
     scrutiny.   We think  that the  governor may have  known                                                                   
     this and didn't  want these cases to go  farther because                                                                   
     it may, he may have lost and  the people of the State of                                                                   
     Alaska may have won.                                                                                                       
MR. SEEKINS said  Alaska already won in the U.S.  Supreme Court in                                                              
1997.  He read  the following section out of a  U.S. Supreme Court                                                              
decision, United States of America vs. Alaska, June 19, 1997.                                                                   
     Justice O'Conner delivered the  opinion of the court and                                                                   
     in  here  she  wrote  that  several  general  principles                                                                   
     govern our  analysis of the  party's claims.   Ownership                                                                   
     of submerged  lands, which carries with it  the power to                                                                   
     control  navigation, fishing  and other  public uses  of                                                                   
     water, is  an essential attribute  of sovereignty.   And                                                                   
     then she  goes on to write  the majority opinion  on how                                                                   
     Alaska  got that  sovereignty.   And,  according to  the                                                                   
     United States  Supreme Court,  one of the issues  that's                                                                   
     there  is the  Public Trust  Doctrine.   And the  United                                                                   
     States Supreme  Court has already  ruled in  effect that                                                                   
     Alaska, as part  of its sovereign rights  as a sovereign                                                                   
     entity,  has  the  power  to   control  fishing  in  its                                                                   
     navigable  waters.   Yet the  governor  fails to  defend                                                                   
     that  and the  federal  government continues  to  assert                                                                   
     that.    So we  would  also urge  you  to join  in  this                                                                   
     lawsuit  with Mr.  Bondurant and Mr.  Olsen and  protect                                                                   
     the public  trust assets of  the people of the  State of                                                                   
CHAIRMAN TAYLOR  thanked him  on behalf of  the committee  for the                                                              
great effort  he and others in  that community had made  to assist                                                              
the legislature.                                                                                                                
MR. TOM SCARBOURGH, Fairbanks resident,  said he had been involved                                                              
with this issue  for a long time.  He read through  the packet and                                                              
found  an interesting  question.  A dissenting  opinion had  asked                                                              
what might  this cost.   He said  that was a  good question.   The                                                              
question was not what the litigation  might cost but what it might                                                              
cost if they  do not litigate.   That may cost the  state billions                                                              
plus a whole  lot of its rights.   That needs to be  considered as                                                              
they go forward.                                                                                                                
Alaska was singled  out as no other state had  been. Its sovereign                                                              
rights  were  removed  and  federal  management  had  taken  over.                                                              
Alaska is  one of  37 western  states that  were brought  into the                                                              
Union  under the  Equal  Footing  Doctrine.   With  that came  the                                                              
sovereign right to manage their natural resources.                                                                              
MR. SCARBOURGH submitted a letter  he had written to the editor of                                                              
the Fairbanks  Daily News Minor  concerning deception  by Governor                                                              
Knowles dated  November 17,   1997 for  the record.   He  read the                                                              
     On October  31, 1997, Governor  Knowles filed  an appeal                                                                   
     with  the  U.S.  Supreme  Court   charging  the  federal                                                                   
     government  with breaking the  oil royalty provision  of                                                                   
     the Alaska Statehood Act.                                                                                                  
     But  how valid  is such  a claim,  when  the same  state                                                                   
     Administration is willing to  choose which of the public                                                                   
     trust responsibilities it wishes to ignore or support?                                                                     
     The  Administration uses  some high  sounding, but  very                                                                   
     true, rhetoric.   Attorney  General Bruce Botelho  wrote                                                                   
     in his appeal:  'Fewer agreements are of  greater moment                                                                   
     in the annals of the Nation  than the compact by which a                                                                   
     State gains  admission to the Union. This  case presents                                                                   
     basic   questions   concerning  the   constitution   and                                                                   
     enforceability  of Statehood  Compacts and whether  they                                                                   
     are equally binding on the United States.'                                                                                 
     That issue is before us, right?                                                                                            
     Because the Governor's intent  so politically focused on                                                                   
     just the oil  resources value, he purposely  ignores the                                                                   
     most  important constitutional  equal footing  provision                                                                   
     as it applies to the Submerged  Lands Act, which is also                                                                   
     provision of the Statehood Compact.                                                                                        
MR. SCARBOURGH said  elected legislators are the trustees.   It is                                                              
spelled  out very  clearly  in the  written  record excerpts  from                                                              
Putting the Public Trust Doctrine  to Work.  (Prepared by: Coastal                                                            
States Organization,  Inc.) They took an oath of  office to uphold                                                              
the  Constitution of  the State  of Alaska,  which includes  their                                                              
responsibilities  as trustees.    He thought  they  could be  held                                                              
responsible  and derelict  in  their  duties if  they  were to  do                                                              
anything  other than  file  the proper  action  in federal  court,                                                              
whether  they  join the  Bondurant  Olsen  suit or  take  separate                                                              
CHAIRMAN TAYLOR  commended him on the  years of effort he  had put                                                              
forward on this issue.                                                                                                          
SENATOR THERRIAULT  said Mr.  Scarbourgh mentioned an  information                                                              
statement in the packet.  There is  a quote with no name on it and                                                              
there  is  a  name  attached  to  all  the  other  public  opinion                                                              
messages.   He asked if Chairman  Taylor or his staff knew  who it                                                              
came from.                                                                                                                      
CHAIRMAN  TAYLOR said  at the top  it said  Alaska House  Minority                                                              
Committee Report.  He said it should have a name on it.                                                                         
MR. LYNN LEVENGOOD,  Fairbanks resident, supported SCR  25.  It is                                                              
the closest piece of legislation  to frame the issue needing to be                                                              
addressed by  the State  of Alaska the  boundary in the  sovereign                                                              
relationship between the state and the federal government.                                                                      
MR. LEVENGOOD  said  the U. S.  Supreme Court  decision, U.S.  vs.                                                              
State of  California, 1947, held  that the federal  government had                                                              
the  paramount  rights  in  and   sole  dominion  and  power  over                                                              
navigable  waters,  submerged  lands  and  the  resources  therein                                                              
seaward of the ordinary  low water mark.  That is  how the federal                                                              
government is  currently interpreting  ANILCA.  In  1953 Congress,                                                              
overwhelmed  by  the  state's  reaction   to  that  Supreme  Court                                                              
decision, passed  the Submerged  Lands Act.   The Submerged  Lands                                                              
Act undid  what  the U.S. Supreme  Court  had done  in 1947.   The                                                              
states retained  ownership and title  to the submerged  lands, the                                                              
water column and the natural resources therein.                                                                                 
MR.  LEVENGOOD  said lands  were  held  in  trust by  the  federal                                                              
government for future  Alaskans prior to state  ownership.  Alaska                                                              
became  a  state  after  the  Submerged   Lands  Act  was  passed.                                                              
Alaska's  Statehood  Act  expressly provides  that  the  Submerged                                                              
Lands Act applied  to the State of Alaska.  That  was litigated in                                                              
the Dinkum Sands  case (United States v. Alaska,  No. 84 Original)                                                              
when  Supreme   Court  Justice  O'Connor  held   that  the  Alaska                                                              
Statehood Act does expressly provide  that the Submerged Lands Act                                                              
applies  to  Alaska providing  state  sovereignty  over  submerged                                                              
lands.  An essential attribute of  the sovereignty of the State of                                                              
Alaska  is the  power  to control  navigation,  fishing and  other                                                              
public uses of water.                                                                                                           
MR. LEVENGOOD explained the following.                                                                                          
     A 1992 case, New York vs. United  States, another recent                                                                   
     U.S. Supreme  Court case, said very importantly  that if                                                                   
     a  power is  an  attribute in  state  sovereignty it  is                                                                   
     necessarily a  power that the U.S. Constitution  has not                                                                   
     conferred   on  Congress.      And  the   constitutional                                                                   
     authority of  Congress cannot be expanded -  expanded or                                                                   
     contracted by  the consent of a governmental  unit whose                                                                   
     domain is thereby narrow, whether  the unit is executive                                                                   
     branch or the  state.  What that says in  layman's terms                                                                   
     is that no state can by a vote  of the people, by a vote                                                                   
     of   its   legislature   or   by  a   consent   of   the                                                                   
     administrative    branch   expand   or    contract   the                                                                   
     sovereignty of  that state vis-à-vis the  sovereignty of                                                                   
     the federal government.                                                                                                    
     Why  is that important  in this  time in  this state  in                                                                   
     this place?   And the answer is there's people  that are                                                                   
     spending  hundreds  of thousands  of  dollars trying  to                                                                   
     pull the wool  over the citizens of the State  of Alaska                                                                   
     to  say   we  need  to   vote  whether  to   change  our                                                                   
     Constitution.   Senators, whether we vote  is absolutely                                                                   
     immaterial.   Alaskans cannot  expand or contract  their                                                                   
     sovereign  authority.    This  is  an issue  that  is  a                                                                   
     constitutional issue  of divide between  the sovereignty                                                                   
     of the State  of Alaska and the sovereignty  of the U.S.                                                                   
     federal  government and it  can only  be decided by  the                                                                   
     U.S. Supreme Court.                                                                                                        
MR.  LEVENGOOD   said   the  trust  relationship   is  where   the                                                              
legislature gets its standing to  raise this issue.  The political                                                              
issue,  the powers  of  state government  vs.  the  powers of  the                                                              
federal government,  only the  Attorney General  of the  state can                                                              
bring that  issue up to the  Supreme Court.  However  the trustees                                                              
have standing to  bring trust issues before the  Supreme Court and                                                              
challenge  the  usurpation  of  Alaskan  trust  resources  by  the                                                              
federal government.                                                                                                             
Two things have happened since the last suit was filed.                                                                         
   · Previous suit was brought by individual legislators as                                                                     
     individual citizens.  They were named as plaintiffs.  They                                                                 
     were not named as trustees.  The Public Trust Doctrine was                                                                 
     not plead for standing in that case.                                                                                       
   · Very importantly the final regulations of the federal                                                                      
     government  had not  been  implemented, so  there  was not  a                                                              
     usurpation  by  the  federal government  over  the  sovereign                                                              
     trust resources.  Now there  are federal regulations for both                                                              
     hunting and  in marine waters allocating the  trust resources                                                              
     of the State of Alaska.                                                                                                    
MR. LEVENGOOD  said the federal government  has no title  to these                                                              
assets.  It is clear in the Submerged  Lands Act and the Statehood                                                              
Compact  that  Alaska holds  title  to  the  wildlife.   Only  the                                                              
trustees of that resource can allocate  it.  Kleppe vs. New Mexico                                                              
does  give  the  power  to  the   federal  government  to  protect                                                              
endangered  resources.   They can  use  the power  of the  federal                                                              
government to protect resources.   There is not and has not been a                                                              
case that  allows the  federal government  to allocate  a resource                                                              
for which they do not have title.                                                                                               
He said  the federal  government does not  have title  to Alaska's                                                              
wildlife, therefore  under trust law they can't allocate  it.  The                                                              
legislature  is the trustee  for all  the people  in common.   The                                                              
Alaska Constitution  makes that resource  a trust asset  and makes                                                              
the legislature the trustee of that trust.                                                                                      
MR. LEVENGOOD  urged them  to pass SCR  25 and do everything  they                                                              
can to  join the  Bondurant Olsen  suit or  file another  original                                                              
suit directly  to the U.S. Supreme  Court.  If they choose  not to                                                              
join the  current suit in District  Court, an original  action can                                                              
be  filed in  the  U.S. Supreme  Court  based  on the  sovereignty                                                              
between the United States and State rights.                                                                                     
CHAIRMAN  TAYLOR  asked if  as  trustees  they could  file  direct                                                              
action to the U.S. Supreme Court.                                                                                               
MR.  LEVENGOOD said  he had  not researched  that.   The cause  of                                                              
action can  be brought.  He  did not know whether  the legislature                                                              
could  bring suit  without going  through  the Attorney  General's                                                              
Office because that is the government of the State of Alaska.                                                                   
CHAIRMAN TAYLOR said  at least they could file  an original action                                                              
in  the District  Court  or join  with  the Bondurant  Olsen  case                                                              
already on trial with the District Court.                                                                                       
MR. LEVENGOOD said absolutely.                                                                                                  
MR.   DALE   BONDURANT,   Alaska    Constitution   Legal   Defense                                                              
Conservation  Fund Inc., appreciated  the committees  concern over                                                              
the issue and stated:                                                                                                           
     I fully  support SCR 25  as a responsible  resolution to                                                                   
     protect the  public trust common properties  of fish and                                                                   
     wildlife  and  water resources  for  all  beneficiaries,                                                                   
     both now  and in the future.   I'm a 75 year  citizen of                                                                   
     the United  States and  only a 55  year resident  of the                                                                   
     State of Alaska.                                                                                                           
     I've been involved  in several very important  cases.  I                                                                   
     started  in 1977 and  sued the  federal government  over                                                                   
     reasonable  access over all  waters of  the state.   The                                                                   
     legislature then  passed a law  that said all  waters in                                                                   
     the State of Alaska were public waters.                                                                                    
     We also  fought in the  Gulkana Case (Alaska  vs. United                                                                   
     States, 1986).   We had to drag the state  into that and                                                                   
     we  figure  we won  several  hundred thousand  miles  of                                                                   
     navigable waters  and we got, under the  Submerged Lands                                                                   
     Act, title to  them and management authority  of all the                                                                   
     resources  on  the  Submerged   Lands  Act  and  on  the                                                                   
     submerged lands  themselves.  We  got title to  the gas,                                                                   
     oil  and  mineral  resources  in  the  navigable  waters                                                                   
     themselves.   We got management  authority over  all the                                                                   
     fish.   They  don't stop  and  say just  fish, they  say                                                                   
     clams, crabs,  shrimp and so forth and all  marine plant                                                                   
     and animal life.                                                                                                           
     We have  had a hard  time of getting  the state  to back                                                                   
     that up  but we won  it by showing  that Alaska  did not                                                                   
     have a  history of navigability  like the United  States                                                                   
     did   so  we   got   a  change   in   which  they   said                                                                   
     susceptibility to navigability.  So we won that case.                                                                      
     We  fought in  the McDowell  case -  McDowell vs.  State                                                                   
     1989  - which  says that  there's several  jurisdictions                                                                   
     that  were  struck down  when  they  tried to  make  the                                                                   
     regulations that  governed fishing and hunting  and that                                                                   
     you couldn't base it on where you lived.                                                                                   
     The  first  and only  adoption  of a  public  individual                                                                   
     rights  in our  Constitution  was adopted  in the  first                                                                   
     Constitutional   Convention  and   it  was  called   the                                                                   
     Privilege and  Immunity Clause.  And that  Privilege and                                                                   
     Immunity Clause has been expanded  to several amendments                                                                   
     to show that the privilege and  immunity from one state,                                                                   
     the people  of one  state have  the same privileges  and                                                                   
     immunities as the people of the other states.                                                                              
     Another  thing  that  I think  we  should  realize  that                                                                   
     Alaska is unique in the fact  that they not only own and                                                                   
     have title  to the navigable  waters but they  also have                                                                   
     management  authority  and   title  to  all  ground  and                                                                   
     surface waters.  There is a  part of the Submerged Lands                                                                   
     Act that a lot people [tape change]...                                                                                     
TAPE 02-17, SIDE B                                                                                                            
MR. BONDURANT continued:                                                                                                        
     ...  and it says  all states  west of  the 96   meridian                                                                   
     have these special rights.                                                                                                 
     So there's  a lot of  things that I  could bring up.   I                                                                   
     appreciate   the  testimony   that  you  received   from                                                                   
     Fairbanks people.   And there  is one thing;  that we're                                                                   
     not going to  give up this right.  We're  going to fight                                                                   
     this battle and they might as well admit to it.                                                                            
     One of  them quoted  the fact that  we can't do  this by                                                                   
     popular  vote.  Well  Judge Robert Bork,  who is  up for                                                                   
     appointment  in the  U.S. Supreme Court  stated, and  he                                                                   
     referred to  the Privilege and Immunity Clause,  he said                                                                   
     that is  one Constitutional  Doctrine which states  that                                                                   
     you cannot  take an  individual's rights  and put  it up                                                                   
     for  a popular  vote.  So  this vote  that the  governor                                                                   
     wants to have and all this propaganda  that they've been                                                                   
     further pushing  along is a  waste of time.   Because if                                                                   
     they  do this  and there's  any  attempt to  do it,  and                                                                   
     joined by  the legislature or  whatever, we're  going to                                                                   
     file a restraining order against  it and get it stopped.                                                                   
     I  made  a  broad  analysis   of  the  Alaska  and  U.S.                                                                   
     Constitution   Doctrines  that   are  affected  by   the                                                                   
     application of  a discriminatory prescribed  subsistence                                                                   
     users.  Results are as follow.                                                                                             
           · The Alaska Constitution: 22 sections are                                                                           
             violated and 57 points are corrupted.                                                                              
           · The U.S. Constitution: 8 sections are violated                                                                     
             and 40 points are corrupted.                                                                                       
MR.  BONDURANT  concluded  that  there  would  be a  total  of  30                                                              
sections  of  the Alaska  and  U.S.  Constitutions that  would  be                                                              
violated by this  and 97 points that would be corrupted.   He said                                                              
he sent copies of this to Judiciary Committee members.                                                                          
CHAIRMAN TAYLOR  thanked Mr.  Bondurant for  his great  service to                                                              
the state over  the years in protecting and preserving  the rights                                                              
of all Alaskans.                                                                                                                
MR. DOUG  ISACCSON said  he was a North  Pole City  Councilman but                                                              
was not  speaking on  behalf of the  council.   He said this  is a                                                              
concern to many  individuals in the North Pole area.   It appeared                                                              
they are coming to a critical time  in our state and in our global                                                              
     It  seems to be  that we  are approaching  a time  where                                                                   
     there  are  three  Alaskas.    There's  Alaska  for  the                                                                   
     federal government and perhaps  that's the lion's share.                                                                   
     Then   there's   the   Alaska  owned   by   the   Native                                                                   
     Corporations and  such and that is a much  larger share.                                                                   
     Then the rest of Alaska, which  belongs to the remainder                                                                   
     of us.   Perhaps people are feeling that  it's coming to                                                                   
     a head and  perhaps to a war.  We are at  a war of words                                                                   
     right now but, never the less, emotions are tight.                                                                         
MR.  ISACCSON encouraged  them  to  pursue SCR  25.  They need  to                                                              
establish the  Constitutional basis  for state sovereignty  and in                                                              
the process  establish one  state and one  people.  They  have one                                                              
legislature, one  governor, one Constitution  but they  don't have                                                              
just one  defining legal way to  address issues relating  to state                                                              
sovereignty  and the  management  of its  resources.   Perhaps  by                                                              
pursuing  this action they  will be  closer to  that and  it might                                                              
lessen  the  tensions  between  people   because  they  will  have                                                              
something  to interpret  laws and  manage resources  in a  unified                                                              
SENATOR COWDERY  said the people  in Anchorage had  recently voted                                                              
in favor of placing  a constitutional amendment on  the ballot for                                                              
a vote of the  people on rural preference for  subsistence. He had                                                              
been  interviewed  by his  newspaper  in  Anchorage and  had  said                                                              
something similar to what Mr. Isaccson  had said.  Senator Cowdery                                                              
thought that  vote had said  people want  a legal definition.   It                                                              
didn't  say   they  want  unequal   treatment.  Some   people  had                                                              
interpreted it to mean they want  a rural preference. He asked Mr.                                                              
Isaccson if  he thought the vote  in Anchorage meant  the majority                                                              
of the people want a legal definition.                                                                                          
MR.  ISACCSON said  the people  just want  to have  one basis  for                                                              
interpreting rather  than the federal interpretation  of the State                                                              
Constitution,  which seems  to  be at  odds.   "And  who then  has                                                              
priority?   At this  moment it seems  that the federal  government                                                              
has  priority and  so  all those  who  can go  to  the main  power                                                              
source, as  it were, are  migrating in  that direction and  in the                                                              
process  dividing  the state  and  ripping it  up  in  a way  that                                                              
doesn't need to be there."                                                                                                      
SENATOR  THERRIAULT asked  if  there had  been  discussion at  the                                                              
North Pole City Council level on  whether the council should weigh                                                              
in on  this issue.   He  believed the  forces could stampede  them                                                              
into a quick political decision.                                                                                                
MR. ISACCSON answered no.                                                                                                       
SENATOR THERRIAULT said he did not  know how to interpret the vote                                                              
in Anchorage.   It did not mean  should they deal with  the issue;                                                              
it was always what  was the best way to deal with  the issue. Many                                                              
people  wanted it  dealt with  only as  they saw  it.  He  thought                                                              
people could  have gone to the  ballot and voted yes  meaning they                                                              
wanted it  solved their way.   Now it  was being portrayed  as the                                                              
voters wanting it solved it a particular way.                                                                                   
SENATOR COWDERY  said people want  a legal definition, not  a bias                                                              
MR. HERMAN  E. FANDEL,  Soldotna resident,  thanked the  committee                                                              
for its time.  He was a 35 year resident  of Alaska and he and his                                                              
family are  some of the  majority of Alaskans being  discriminated                                                              
against by  allowing their fish and  game to be taken away.   That                                                              
was where it looked like they were headed.                                                                                      
MR. FANDEL  felt that Governor  Knowles had betrayed  the majority                                                              
of  Alaskans  by disbanding  the  lawsuit.    He agreed  with  Mr.                                                              
Seekins and  Mr. Bondurant  and encouraged  the committee  to give                                                              
serious thought  to supporting the  lawsuit Mr. Bondurant  and the                                                              
Alaska Constitution  Legal Defense  Conservation Fund Inc.  had on                                                              
the table.  The suit was a winner  and he wanted to see it carried                                                              
through the U.S.  Supreme Court.  It is the only  way all Alaskans                                                              
can win.                                                                                                                        
MR. DON JOHNSON,  Soldotna resident, thanked the  Senate Judiciary                                                              
Committee for  addressing the  subject.  He  was 100% in  favor of                                                              
the Legislative  Council  joining this  lawsuit.   If it had  been                                                              
done ten or twenty years earlier  it would have kept them from the                                                              
mess they are in now.                                                                                                           
MR. JOHNSON  thought the vote in  Anchorage was people  acting out                                                              
of  frustration on  the issue  because  they really  did not  know                                                              
exactly  what is  going  on.   They  are  not privy  to  a lot  of                                                              
It is  not an  issue that  can  be voted  on.  The  issue is  like                                                              
trying to vote away somebody's right  to vote.  They can't go into                                                              
a state and say you have a right  to vote if you are rural and you                                                              
don't have a  right to vote if  you're not rural.  It  is an issue                                                              
that should have been taken up a  long time ago by the legislature                                                              
because they have  the trust duty of the resources  in Alaska.  He                                                              
did  not believe  a vote  would settle  anything  because, as  Mr.                                                              
Bondurant had stated, it would just  initiate another lawsuit that                                                              
would prevent  the vote from happening  and then it would  just go                                                              
into the courts again.                                                                                                          
MR.  JOHNSON  requested   the  legislature  fund   money  for  Mr.                                                              
Bondurant's  lawsuit,  100%  of  which  is being  carried  by  the                                                              
public.  He and a lot of local organizations  had donated money to                                                              
that suit.   It  is nothing compared  to the  amount of  money the                                                              
state will lose if this litigation  isn't successfully carried out                                                              
in favor of Alaska.                                                                                                             
MR.  JOHNSON estimated  the  subsistence environment  the  federal                                                              
government envisioned  would devastate a billion  dollar sport and                                                              
commercial fishery  economy in  Cook Inlet alone.   The  limits on                                                              
the areas of access coming up will  never support themselves.  The                                                              
subsistence  goals of the  federal government  are not  realistic.                                                              
They will probably  cause the same types of results  that occurred                                                              
in the lower 48 when implemented.   Most of the places the federal                                                              
government  starts  managing end  up  with the  natural  resources                                                              
being depleted to levels no one could survive on.                                                                               
MR.  JOHNSON supported  the legislature  initiating  a lawsuit  or                                                              
joining  Mr.  Bondurant.    He asked  any  legislator  that  voted                                                              
against  SCR  25  to  explain  how   they  are  defining  Alaska's                                                              
Constitution.   The legislature  swore to  support the  Common Use                                                              
Clause  in  the  Constitution,  which   specifically  states  each                                                              
resident  in  the state  is  to  receive  an  equal share  of  the                                                              
resources.   Were  they to  vote against  this type  of action  it                                                              
would say they really  did not believe in what they  said they did                                                              
believe in.   He thought  that would  open the legislature  up for                                                              
possible litigation in the future.                                                                                              
With statehood,  the federal government  gave up its  authority to                                                              
manage  any fish  and wildlife  resource  within the  state.   The                                                              
problem began  in the  70's and is  coming to  a head because  the                                                              
federal government is coming in and  attempting to force Alaska to                                                              
change its  Constitution.   The federal  government has  to change                                                              
its approach or the State of Alaska  has to amend its Constitution                                                              
in  more than  one  location.   Both  the  federal  and the  state                                                              
Constitutions are wrapped  up together on this issue.   To inflict                                                              
a  rural  priority  is a  rather  simplistic  solution  and  would                                                              
initiate one lawsuit  after the next and cost  millions of dollars                                                              
for litigation.                                                                                                                 
MR. JOHNSON said they might lose  a billion dollars a year in Cook                                                              
Inlet and  possibly tens  of billions of  dollars annually  in the                                                              
State of Alaska and maybe, in the  future, hundreds of billions of                                                              
dollars.   The legislature could  not overspend in  resolving this                                                              
issue because the long term effect is unbelievable.                                                                             
MR. DONALD WESTLUND, Ketchikan resident,  agreed with the previous                                                              
speakers.    He suggested  the  legislature  look at  joining  the                                                              
MR. WESTLUND said  according to the Alaska statistics  in the 2000                                                              
census there were  approximately 100,000 Alaska Natives.   He said                                                              
he was not bashing  anybody but wanted to show what  was wrong and                                                              
why the Alaska  Federation of Natives should join  the legislature                                                              
in trying to get  this resolved instead of trying  to be as greedy                                                              
as  they  are showing  themselves  to  be.   Natives  received  44                                                              
million  square acres  of  land.   Dividing  that  by the  100,000                                                              
Natives  results  in approximately  440  square  acres per  Alaska                                                              
Native of private land they can go  out and hunt on.  If they have                                                              
an  average  household  of  three   that  is  1320  square  acres,                                                              
approximately 2.2 sections  of land, per household.   A section of                                                              
land equals 640 acres.                                                                                                          
MR. WESTLUND said  the largest section of state  land in Southeast                                                              
Alaska is  around Haines.  There  is very little  around Ketchikan                                                              
or Juneau.   He lived  about 15 miles  north of Ketchikan  and was                                                              
considered   an  urbanite.     The  town   of  Saxton,   which  is                                                              
approximately three  miles outside  the city limits  of Ketchikan,                                                              
is considered  a rural community.   He  had nowhere to  go hunting                                                              
and they will have it all.                                                                                                      
MR. WESTLUND said  the only way to solve this was  a ruling by the                                                              
highest  court.  He  was  not  in  favor  of  changing  the  state                                                              
Constitution. He asked  Chairman Taylor for copies  of the written                                                              
testimony from the speakers.                                                                                                    
CHAIRMAN TAYLOR said that would not be a problem.                                                                               
MR. WESTLUND  was trying to show  the inequity of how  much actual                                                              
land  certain people  have  the express  privilege  of hunting  on                                                              
because  they  own it  and  everybody  else  is dependent  on  the                                                              
federal lands around them.                                                                                                      
MR. SEEKINS  interpreted the vote  in Anchorage as  people wanting                                                              
finality.  He   and  Senator  Cowdery  had  been   carpenters  and                                                              
carpenters always start  at the foundation and build  up. They had                                                              
tried to build this issue from the  roof down.  The foundation was                                                              
whose laws apply.                                                                                                               
He  was one  of seven  children and  they  didn't have  a bed  for                                                              
everybody.  He and his older brother  shared a bed and there was a                                                              
line  right  down the  middle  with  sovereign territory  on  both                                                              
sides.   Occasionally  someone  tried  to intrude  into  another's                                                              
sovereign territory  and expand their  area.  They had to  call in                                                              
their Supreme Court.   Their mom had to come in  and redefine that                                                              
boundary.  That  is where they are with this issue.   That is what                                                              
people  see without  understanding exactly  what they  see.   They                                                              
want finality  and the quickest  way to  get there is  through the                                                              
U.S. Supreme  Court.  The  U.S. Supreme Court  had said this  is a                                                              
very  delicate sovereignty  question  and they  are  the ones  who                                                              
provide the answers.  They need to  know whose rule they must play                                                              
by and then play by that rule and get rid of the issue.                                                                         
SENATOR  COWDERY  moved  CSSCR  25 (JUD)  out  of  committee  with                                                              
individual   recommendations.  There   being   no  objection   the                                                              
resolution was so moved.                                                                                                        
The meeting was adjourned at 4:35 p.m.                                                                                          

Document Name Date/Time Subjects