Legislature(2001 - 2002)
04/13/2002 03:10 PM Senate JUD
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ 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
th
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
307.
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
exploration.
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
exploration.
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
confidentiality.
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
information.
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
briefs.
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
nd
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
Alaska.
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
fruition.
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
happiness.
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.
th
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
th
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
th
5 Amendment of the U.S. Constitution, which the U.S. Supreme
th
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
question.
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
th
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
involved.
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
immediately.
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
answer.
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
state.
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
record.
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
Alaska.
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
th
Knowles dated November 17, 1997 for the record. He read the
following.
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
action.
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:
th
... 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
communities.
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
way.
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
definition.
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
information.
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
lawsuit.
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 |
|---|