Legislature(2003 - 2004)

02/18/2004 03:33 PM Senate RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    ALASKA STATE LEGISLATURE                                                                                  
              SENATE RESOURCES STANDING COMMITTEE                                                                             
                       February 18, 2004                                                                                        
                           3:33 p.m.                                                                                            
                                                                                                                                
TAPE(S) 04-10 & 11                                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Scott Ogan, Chair                                                                                                       
Senator Thomas Wagoner, Vice Chair                                                                                              
Senator Fred Dyson                                                                                                              
Senator Ralph Seekins                                                                                                           
Senator Kim Elton                                                                                                               
Senator Ben Stevens                                                                                                             
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Georgianna Lincoln                                                                                                      
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
SENATE JOINT RESOLUTION NO. 27                                                                                                  
Relating to the resolution of submerged land title disputes.                                                                    
                                                                                                                                
     MOVED SJR 27 OUT OF COMMITTEE                                                                                              
                                                                                                                                
SENATE BILL NO. 305                                                                                                             
"An Act relating to state ownership of submerged land underlying                                                                
water that was navigable at the time Alaska achieved statehood."                                                                
                                                                                                                                
     MOVED SB 305 OUT OF COMMITTEE                                                                                              
                                                                                                                                
SENATE BILL NO. 295                                                                                                             
"An Act extending the termination date of the Navigable Waters                                                                  
Commission for Alaska; and providing for an effective date."                                                                    
                                                                                                                                
     MOVED SB 295 OUT OF COMMITTEE                                                                                              
                                                                                                                                
^DONLIN CREEK PROJECT UPDATE                                                                                                  
  Gregg Bush, General Manager, Donlin Creek Joint Venture                                                                       
  Jeff Foley                                                                                                                    
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: SJR 27                                                                                                                  
SHORT TITLE: SUBMERGED LAND TITLE DISPUTES                                                                                      
SPONSOR(s): SENATOR(s) SEEKINS                                                                                                  
                                                                                                                                
02/06/04       (S)       READ THE FIRST TIME - REFERRALS                                                                        
02/06/04       (S)       RES                                                                                                    
02/18/04       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
                                                                                                                                
BILL: SB 305                                                                                                                  
SHORT TITLE: ASSERTING STATE TITLE TO SUBMERGED LAND                                                                            
SPONSOR(s): SENATOR(s) THERRIAULT                                                                                               
                                                                                                                                
02/06/04       (S)       READ THE FIRST TIME - REFERRALS                                                                        
02/06/04       (S)       RES, FIN                                                                                               
02/18/04       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
                                                                                                                                
BILL: SB 295                                                                                                                  
SHORT TITLE: EXTEND NAVIGABLE WATERS COMMISSION                                                                                 
SPONSOR(s): SENATOR(s) THERRIAULT                                                                                               
                                                                                                                                
02/06/04       (S)       READ THE FIRST TIME - REFERRALS                                                                        
02/06/04       (S)       RES, FIN                                                                                               
02/18/04       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
Mr. Brian Hove, Staff                                                                                                           
Senator Ralph Seekins                                                                                                           
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT: Commented on SJR 27 for the sponsor.                                                                      
                                                                                                                                
Mr. Ron Somerville, Resources Consultant                                                                                        
House and Senate Majority                                                                                                       
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT: Commented on SJR 27 and SB 295.                                                                           
                                                                                                                                
Ms. Joann Grace                                                                                                                 
Department of Law                                                                                                               
PO Box 110300                                                                                                                   
Juneau, AK  99811-0300                                                                                                          
POSITION STATEMENT: Commented on SJR 27.                                                                                      
                                                                                                                                
Senator Gene Therriault                                                                                                         
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT: Sponsor of SB 305.                                                                                        
                                                                                                                                
Mr. Dick Mylius, Deputy Director                                                                                                
Division of Mining, Land and Water                                                                                              
Department of Natural Resources                                                                                                 
400 Willoughby Ave.                                                                                                             
Juneau, AK  99801-1724                                                                                                          
POSITION STATEMENT: Commented on SB 305.                                                                                      
                                                                                                                                
Mr. Joe Balash, Staff                                                                                                           
Senator Gene Therriault                                                                                                         
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT: Commented on SB 305 for the sponsor.                                                                      
                                                                                                                                
Mr. Zach Warwick, Staff                                                                                                         
Senator Therriault                                                                                                              
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT: Commented on SB 295 for the sponsor.                                                                      
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                              
TAPE 04-10, SIDE A                                                                                                            
                                                                                                                                
              SJR 27-SUBMERGED LAND TITLE DISPUTES                                                                          
                                                                                                                              
CHAIR SCOTT  OGAN called the Senate  Resources Standing Committee                                                             
meeting  to order  at 3:33  p.m. Present  were Senators  Wagoner,                                                               
Dyson, Seekins, Elton and Chair  Ogan. Senator Stevens arrived at                                                               
3:35. The  first order of  business to come before  the committee                                                               
was SJR 27.                                                                                                                     
                                                                                                                                
MR.  BRIAN HOVE,  Staff to  Senator  Seekins, sponsor,  explained                                                               
that the  state has  been waiting for  the federal  government to                                                               
make  claims on  navigable  waterways within  the  state and  the                                                               
federal agency  has been "doing  a little foot dragging."  SJR 27                                                               
asks it to move the process along.                                                                                              
                                                                                                                                
CHAIR OGAN asked him why the process needs to move faster.                                                                      
                                                                                                                                
MR.  HOVE  replied that  the  state  needs  to  have use  of  the                                                               
waterways that were promised it at statehood.                                                                                   
                                                                                                                                
CHAIR OGAN said  that Alaskans already use the  waterways - "Just                                                               
get a boat and go on 'em. Nobody is stopping us, right?"                                                                        
                                                                                                                                
MR. HOVE clarified that he meant not only use, but manage.                                                                      
                                                                                                                                
SENATOR SEEKINS stated that this  resolution is very important to                                                               
the future of  the State of Alaska. The State  of Alaska has over                                                               
20,000 rivers  and over one million  lakes - or 60  million acres                                                               
of  submerged   lands  (anything   from  the  high   water  mark,                                                               
underneath, to the high water mark on the other side).                                                                          
                                                                                                                                
     Those submerged  lands by virtue  of the  Equal Footing                                                                    
     Doctrine, when  we became a state,  were transferred to                                                                    
     the  State of  Alaska -  those that  were not  reserved                                                                    
     prior to  statehood. The  federal government  held them                                                                    
     in trust  for the future  of the State of  Alaska. Once                                                                    
     we were  admitted, those  lands became  sovereign lands                                                                    
     of the State  of Alaska. Yet, we've never  been able to                                                                    
     get title - and even  though the Equal Footing Doctrine                                                                    
     said,  and  our  statehood agreement  with  the  United                                                                    
     States of  America says, that  the Submerged  Lands Act                                                                    
     of  1953 also  applies  to the  State  of Alaska.  That                                                                    
     Submerged Lands Act says that  title to those submerged                                                                    
     lands would  be transferred  to the  state or  that the                                                                    
     title belongs to the state.  We've not been given clear                                                                    
     title. There  is still a  clouded title by  the federal                                                                    
     government. It lays  choate. In other words,  if at any                                                                    
     time on  a river  that has not  been determined  or the                                                                    
     title  has   been  clearly  transferred,   the  federal                                                                    
     government can  come along  and say  we now  believe we                                                                    
     have a claim in the  ownership of these submerged lands                                                                    
     and then we  have to go to court under  the Quiet Title                                                                    
     Act  to sue  the  federal government  to  get title  to                                                                    
     something  that was  given to  us at  statehood. That's                                                                    
     wrong. And the federal  government has drug their feet.                                                                    
     They've said that Alaska is  a huge state and it's just                                                                    
     really tough to get this  done, but it's been 45 years,                                                                    
     Mr. Chairman....                                                                                                           
                                                                                                                                
SENATOR SEEKINS said  that statements from a  Ninth Circuit Court                                                               
decision, written  by Judge  Kleinfeld, on  a quiet  title action                                                               
brought by the  Doyon Limited against the  federal government are                                                               
relevant  in  this  instance.  He   explained  that  the  federal                                                               
government  tried  to  include  the  submerged  lands  under  the                                                               
Kandik, Black and the Nations  Rivers as part of their allocation                                                               
to Doyon  Corporation under the  Alaska Native  Claims Settlement                                                               
Act (ANCSA). Doyon maintained that  couldn't be done, because the                                                               
submerged lands belonged  to the state. Title was  cleared on two                                                               
of the rivers, but since the  federal government had not yet made                                                               
a claim on the third river,  Judge Kleinfeld could not give quiet                                                               
title to the state. Senator Seekins quoted Judge Kleinfeld:                                                                     
                                                                                                                                
     It is undisputed that when  the Union was created, each                                                                    
     of the 13  original states retained title  to the lands                                                                    
     covered by  navigable waters and  that under  the Equal                                                                    
     Footing   Doctrine,  each   new  state   succeeds  upon                                                                    
     statehood to  the federal interest in  those lands. The                                                                    
     Submerged Lands  Act gave Alaska  title to the  beds of                                                                    
     navigable waters  on January  3, 1959. Under  the Quiet                                                                    
     Title Act,  the federal  government takes  the position                                                                    
     that its  sovereign immunity shields it  from the state                                                                    
     government's claim  to clear  title to  those submerged                                                                    
     lands.  Mr.  Chairman,  until  the  federal  government                                                                    
     itself makes  a claim, because  Alaska is very  large -                                                                    
     much  of  it  is  wilderness and  there  are  numerable                                                                    
     waters  the federal  government  has not  had time  [45                                                                    
     years]  to determine  what claims  it  wishes to  make.                                                                    
     Therefore,  the state  government must  wait until  the                                                                    
     federal  government makes  a claim,  if  it ever  does,                                                                    
     before  settling  whether  it  has  title.  That's  not                                                                    
     acceptable, in my  opinion, for me as  a legislator and                                                                    
     a trustee  of our lands  that should be  commonly owned                                                                    
     by the  people of the  State of  Alaska - to  have that                                                                    
     cloud on  our title.  This resolution asks  the federal                                                                    
     government  to join  with the  state to  help us  clear                                                                    
     that title.                                                                                                                
                                                                                                                                
CHAIR OGAN  said he met  with the  Secretary of Interior  and the                                                               
Senate  President last  summer  and was  very  encouraged by  the                                                               
progress  that had  been  made on  title  transfers of  submerged                                                               
lands. The  process is  arduous and  lengthy, even  if SJR  27 is                                                               
followed to the letter.                                                                                                         
                                                                                                                                
SENATOR  ELTON asked,  in reference  to  the Doyon  case, if  the                                                               
federal government transferred title  of submerged lands to other                                                               
entities.                                                                                                                       
                                                                                                                                
SENATOR SEEKINS replied that he wasn't aware of any.                                                                            
                                                                                                                                
SENATOR ELTON  said he would  like any history the  sponsor might                                                               
have that  could explain why  Congress considered, but  failed to                                                               
pass,  the legislation  that provided  for  federal officials  to                                                               
participate in the Navigable Waters Commission.                                                                                 
                                                                                                                                
MR. RON SOMERVILLE,  Resource Consultant to the  Senate and House                                                               
Majority, partially answered the  question saying the Legislature                                                               
was in  the process of  passing the 2002  State/Federal Navigable                                                               
Waters   Commission  when   he  and   Senator  Halford   went  to                                                               
Washington, D.C.,  to amend the Quiet  Title Act to speed  up the                                                               
process  and to  push  for the  Navigable  Waters Commission.  He                                                               
briefed the committee:                                                                                                          
                                                                                                                                
     That's  when  she  raised  this   issue  of  using  the                                                                    
     recordable  disclaimers  of   interest  as  a  possible                                                                    
     solution to it. One of  the reasons, I think, that this                                                                    
     is  included  in  here,   even  though  the  recordable                                                                    
     disclaimer of  interest has been effective  in one case                                                                    
     - that's the Black River  - it hasn't been subjected to                                                                    
     the court  challenges that the  environmental community                                                                    
     has   been   threatening   over   use   of   recordable                                                                    
     disclaimers of  interest on RS 2477  transfers in Utah.                                                                    
     I mean, that's where it's  probably going to hit first.                                                                    
     And  they've  threatened  to  do   the  same  thing  on                                                                    
     recordable  disclaimers   of  interest   for  navigable                                                                    
     waters  in Alaska.  It's a  painful  slow process  that                                                                    
     kind  of gets  you looking  at what  other options  are                                                                    
     there. One  is amend  the Quiet  Title Act,  initiate a                                                                    
     Navigable  Waters  Commission  and  continue  with  the                                                                    
     recordable  disclaimers of  interest as  best you  can.                                                                    
     It's  utilizing all  three of  the things  available to                                                                    
     the state.                                                                                                                 
                                                                                                                                
CHAIR OGAN supposed  that Congress could just  grant Alaska title                                                               
in one  fell swoop, if  it decided to  and asked how  likely that                                                               
was to happen.                                                                                                                  
                                                                                                                                
MR. SOMERVILLE replied  that first Congress would  have to define                                                               
what is  really meant  by transfer  of title  and agree  with the                                                               
state  on  what  water  is   navigable  and  what  water  is  not                                                               
navigable. He elucidated further:                                                                                               
                                                                                                                                
     It's  even further  complicated  by the  fact that  the                                                                    
     conveyances were made by the  Bureau of Land Management                                                                    
     (BLM)  prior  to  the Gulkana  case,  which  placed  an                                                                    
     additional clouded  title on conveyances to  the Native                                                                    
     corporations, because  a lot of state  navigable waters                                                                    
     were    transferred   as    part   of    their   upland                                                                    
     entitlement....  So, the  federal government,  in order                                                                    
     to  just transfer  something, the  state would  have to                                                                    
     clearly  describe  what  navigable  was  and  what  non                                                                    
     navigable was. We're  doing it on a case  by case basis                                                                    
     and at  the rate of 13  cases in 45 years,  I calculate                                                                    
     it will take us 76,153 years to get our entitlement.                                                                       
                                                                                                                                
CHAIR OGAN  asked if a certain  size boat going down  a river was                                                               
criteria for navigable water.                                                                                                   
                                                                                                                                
MR.  SOMERVILLE  responded  that  the Gulkana  case  changed  the                                                               
criteria for  navigability as did  the Black, Kandik  and Nations                                                               
Rivers cases.  "Those cases  set the standard  by which  BLM must                                                               
abide in any navigability determinations  and that has helped the                                                               
state in getting reasonable determination from BLM."                                                                            
                                                                                                                                
He  said  that  a river  had  to  be  navigable  at the  time  of                                                               
statehood  to qualify.  People  who  were alive  at  the time  of                                                               
statehood and can  describe the commercial uses of  that river to                                                               
make  it navigable  are going  to be  passing away  soon and  the                                                               
state could lose its entitlement.                                                                                               
                                                                                                                                
SENATOR SEEKINS  said it's easy  to see  a river is  navigable by                                                               
floating a  boat on it, but  proving that someone floated  a boat                                                               
on it at  statehood is the threshold that  Judge Kleinfeld looked                                                               
at; and whether  there was trade or fishing  or transportation at                                                               
the time of statehood.                                                                                                          
                                                                                                                                
The  federal  government  has  claimed an  interest  in  some  of                                                               
Alaska's rivers  also, to  facilitate subsistence  management. He                                                               
hinted that there is some  discussion about whether that could be                                                               
a  cause  to bring  an  action  under  the  Quiet Title  Act.  He                                                               
digressed a little  saying the Submerged Land  Act indicates that                                                               
state ownership  includes everything in and  underneath the water                                                               
column and is subject to state  management. "So, there's a lot at                                                               
stake  in the  determination of  whether or  not those  submerged                                                               
lands belong to the State of Alaska."                                                                                           
                                                                                                                                
CHAIR OGAN  said that  Joann Grace  is probably  one of  the most                                                               
knowledgeable people  in the state  on submerged lands  and state                                                               
sovereignty and asked if she would answer questions.                                                                            
                                                                                                                                
SENATOR  ELTON  asked how  the  concept  of state  management  of                                                               
everything above  and underneath submerged lands  [and subject to                                                               
state management] played into the debate on subsistence.                                                                        
                                                                                                                                
MS. JOANN GRACE, Department of Law, replied:                                                                                    
                                                                                                                                
     If  the United  States owns  the submerged  lands, then                                                                    
     the river or  lake is public lands under  ANILCA and is                                                                    
     subject to  a subsistence  priority. If the  state owns                                                                    
     the  submerged  lands,  then the  subsistence  priority                                                                    
     depends on whether the United  State has an interest in                                                                    
     the water column,  not the land, but the  water. If the                                                                    
     court found  that the United States  had reserved water                                                                    
     rights  in the  water,  then the  water becomes  public                                                                    
     land  subject  to  the subsistence  priority.  So,  the                                                                    
     subsistence  priority  doesn't particularly  depend  on                                                                    
     [indisc.]  title  to  the  submerged  lands.  In  other                                                                    
     words, any  navigable water that flows  through federal                                                                    
     lands that  is reserved,  like any  conservation system                                                                    
     unit, is subject to a  federal reserve water right and,                                                                    
     therefore,  is  subject  to  the  subsistence  priority                                                                    
     regardless of who owns the submerged lands.                                                                                
                                                                                                                                
CHAIR OGAN asked, for the record,  if a molecule of water crosses                                                               
federal  land and  the quiet  title [for  that land]  hasn't been                                                               
transferred  to the  state, does  the federal  government reserve                                                               
the right to  manage the fisheries in that water  column based on                                                               
the Reserved Water Rights Doctrine.                                                                                             
                                                                                                                                
MS. GRACE replied that it does:                                                                                                 
                                                                                                                                
     As long  as the United  States has  a water right  in a                                                                    
     water  column,  then it's  public  land  as defined  in                                                                    
     ANILCA and,  therefore, a subsistence  priority applies                                                                    
     to it. That is very well-settled law at this point.                                                                        
                                                                                                                                
CHAIR  OGAN noted  that the  reason for  current land  management                                                               
policy is  because a  few years  ago, the  last governor  did not                                                               
appeal  a decision  on  the  State of  Alaska's  right to  manage                                                               
fisheries to the Supreme Court.                                                                                                 
                                                                                                                                
MS. GRACE  replied that is correct;  the governor did not  file a                                                               
serve petition  and a final  judgment from the Ninth  Circuit and                                                               
that is what is being addressed.                                                                                                
                                                                                                                                
CHAIR  OGAN asked  if another  lawsuit would  have to  be brought                                                               
forward if the state chose to litigate the question again.                                                                      
                                                                                                                                
MS. GRACE replied that is correct.                                                                                              
                                                                                                                                
SENATOR SEEKINS  asked if  ANILCA applies to  lands in  which the                                                               
United States has just an interest or to which it holds title.                                                                  
                                                                                                                                
MS.  GRACE  replied  that Title  VIII,  subsistence,  applies  to                                                               
public  lands, which  are  defined as  land,  water and  interest                                                               
therein [indisc.]. So the argument in  the Katie John case was if                                                               
the  United States  holds title  to any  part of  the water  in a                                                               
river  or  lake,  that  river  or  lake  is  public  land  and  a                                                               
subsistence priority applies to it. They have prevailed on that.                                                                
                                                                                                                                
CHAIR  OGAN asked  if managing  fish and  game was  a fundamental                                                               
element of state sovereignty.                                                                                                   
                                                                                                                                
MS. GRACE replied:                                                                                                              
                                                                                                                                
     I  don't think  that the  Supreme Court  has ever  said                                                                    
     that   it's   a    fundamental   attribute   of   state                                                                    
     sovereignty.  It  certainly  is  something  that  every                                                                    
     state does - mostly all  the lands in the boundaries of                                                                    
     the state.                                                                                                                 
                                                                                                                                
CHAIR OGAN asked if police  powers weren't a fundamental issue of                                                               
state sovereignty.                                                                                                              
                                                                                                                                
MS. GRACE replied that traditional  state police power is not the                                                               
same as an essential attribute.                                                                                                 
                                                                                                                                
CHAIR OGAN asked  if sovereigns are the only ones  to have police                                                               
powers.                                                                                                                         
                                                                                                                                
MS. GRACE replied  that the state has police  powers and Congress                                                               
can preempt those, because it represents a higher sovereign.                                                                    
                                                                                                                                
CHAIR OGAN noted there were no other questions for Ms. Grace.                                                                   
                                                                                                                                
SENATOR  ELTON asked  if the  chair  was planning  on moving  all                                                               
three pieces  of legislation since  they were all related  to the                                                               
same subject.                                                                                                                   
                                                                                                                                
SENATOR SEEKINS said  that he intended for this bill  to stand on                                                               
its own merit.                                                                                                                  
                                                                                                                                
SENATOR ELTON said  after debating the other bills,  there may be                                                               
a need to add a whereas or resolve clause to SJR 27.                                                                            
                                                                                                                                
SENATOR  SEEKINS  moved  to  pass  SJR  27  from  committee  with                                                               
individual recommendations  with the attached fiscal  note. There                                                               
were no objections and it was so ordered.                                                                                       
                                                                                                                                
4:00 p.m. - 4:01 p.m. - at ease                                                                                                 
                                                                                                                                
         SB 305-ASSERTING STATE TITLE TO SUBMERGED LAND                                                                     
                                                                                                                                
CHAIR SCOTT OGAN announced SB 305 to be up for consideration.                                                                   
                                                                                                                                
SENATOR GENE THERRIAULT,  sponsor, said one of  the issues behind                                                               
SB  305 is  that people  who  remember some  historic trails  and                                                               
navigable waters  and can help  the state assert title  will soon                                                               
be gone. He explained:                                                                                                          
                                                                                                                                
     With the  withdrawal of federal  lands at  statehood in                                                                    
     1959,  Alaska  received  title to  -  under  the  Equal                                                                    
     Footing Doctrine  - to all submerged  lands under state                                                                    
     navigable waters and marine waters  out to three miles.                                                                    
     Unfortunately, the federal government  has been slow in                                                                    
     conceding this  navigability. Since Alaska  entered the                                                                    
     Union, the  federal courts  have determined  fewer than                                                                    
     20 rivers  to be  navigable. Unless  the state  is pro-                                                                    
     active in  asserting its claims,  it stands to  lose up                                                                    
     to  60  million acres  of  land  that  were due  to  it                                                                    
     because  of  becoming  a  state.  In  some  cases,  the                                                                    
     federal  government  has   used  every  possible  legal                                                                    
     tactic under the federal Quiet  Title Act to impede the                                                                    
     state's assertion  of ownership. The Black,  Kandik and                                                                    
     Nations Rivers in northeast  Alaska are examples. These                                                                    
     three rivers  clearly meet the criteria  established by                                                                    
     the  federal  courts  for determining  navigability  in                                                                    
     Alaska.  Although  no  one has  contested  the  state's                                                                    
     claim that  these streams  meet federal  criteria, this                                                                    
     case took nine years and  millions of state and federal                                                                    
     dollars to  litigate. Eventually  the state won  two of                                                                    
     the three  claims and the  third was  recently resolved                                                                    
     by  the federal  recordable disclaimer  of interest  in                                                                    
     2003.                                                                                                                      
                                                                                                                                
     In  addition,  prior  to 1989  the  federal  government                                                                    
     applied incorrect  standards to  determine navigability                                                                    
     and may  have mistakenly conveyed state-owned  lands to                                                                    
     Native corporations, clouding the  title to hundreds of                                                                    
     thousands,  if  not  millions,  of  acres.  This  is  a                                                                    
     critical  topic  as  Congress considers  deadlines  for                                                                    
     completing   the   land    selection   and   conveyance                                                                    
     processes.  Of   course,  those  deadlines   are  being                                                                    
     suggested by our own congressional delegation.                                                                             
                                                                                                                                
     Contributing  to   the  problem   is  the  lack   of  a                                                                    
     reasonable and  efficient way for  the state  to secure                                                                    
     title to its submerged lands.  SB 305 takes three steps                                                                    
     to  begin  the  process   of  identifying  these  state                                                                    
     claims. First,  SB 305 provides  notice to  all parties                                                                    
     that the state is laying  claims to all submerged lands                                                                    
     except those  withdrawn at the  time of  statehood that                                                                    
     meet  the standards  and  criteria  established in  the                                                                    
     Submerged  Lands  Act  and  in  various  federal  court                                                                    
     decisions.                                                                                                                 
                                                                                                                                
     So, we're  just making a blanket  statement that unless                                                                    
     it was reserved at the  time of statehood, the state is                                                                    
     laying claim at  this time to all  submerged lands that                                                                    
     lie under navigable water ways.                                                                                            
                                                                                                                                
     Second, it provides authority  for the state's agencies                                                                    
     to identify in accordance  with the appropriate federal                                                                    
     and state laws  which water bodies the  state claims is                                                                    
     navigable and  non navigable. This will  help the state                                                                    
     clarify  criteria  for  identifying  navigable  waters,                                                                    
     address conflicts  involving clouded titles due  to the                                                                    
     inaccurate  conveyances  by  BLM  management  and  more                                                                    
     clearly  delineate its  title  claims.  There the  bill                                                                    
     directs the  Department of  Natural Resources  (DNR) to                                                                    
     give notice  to all private property  owners, including                                                                    
     Native  corporations created  under  the Alaska  Native                                                                    
     Claims Settlement  Act that may have  received title to                                                                    
     lands  that  could   have  erroneously  included  state                                                                    
     submerged lands  in their conveyance. This  is critical                                                                    
     to   resolve   future    problems   regarding   mineral                                                                    
     development,  gravel   extraction,  access   and  other                                                                    
     related land uses.                                                                                                         
                                                                                                                                
SENATOR THERRIAULT noted that if  submerged land comes out of the                                                               
Native corporation  entitlement, they are  due more land.  So, he                                                               
felt it  behooved them  to work  with the  state to  resolve this                                                               
problem. He concluded:                                                                                                          
                                                                                                                                
     This  legislation  is only  a  step  for the  state  to                                                                    
     eventually   resolve  the   title  disputes   over  its                                                                    
     submerged lands and deals only  with the issue of state                                                                    
     title  to   submerged  lands.   It  does   not  address                                                                    
     conflicts over federal fish  and wildlife management in                                                                    
     state navigable  waters created by the  Federal Reserve                                                                    
     Water Rights criteria.                                                                                                     
                                                                                                                                
SENATOR  ELTON  said  if  this   bill  passes,  he  assumes  that                                                               
different  entities  could  challenge  it. He  asked  if  Senator                                                               
Therriault  could  quantify  how   many  conveyances  to  village                                                               
corporations have occurred  that would need to  be reviewed under                                                               
this bill.                                                                                                                      
                                                                                                                                
SENATOR THERRIAULT  replied that  he didn't  know and  that folks                                                               
from the Department  of Natural Resources (DNR)  could testify on                                                               
that.                                                                                                                           
                                                                                                                                
SENATOR ELTON asked  if it would be reasonable to  assume if land                                                               
had been  conveyed to a  village or a regional  corporation, that                                                               
it was  because they wanted  those submerged lands and  that they                                                               
might want to protect the ownership right they thought they had.                                                                
                                                                                                                                
SENATOR  THERRIAULT said  that could  be the  case for  some, but                                                               
other corporations may be interested  in not having the submerged                                                               
land  count against  their acreage  and claim  additional uplands                                                               
instead.                                                                                                                        
                                                                                                                                
SENATOR RALPH  SEEKINS asked if lands  were conveyed erroneously,                                                               
wouldn't that be  a wrongful conveyance and need  to be corrected                                                               
sooner or later.                                                                                                                
                                                                                                                                
SENATOR  THERRIAULT replied  certainly, the  sooner it's  cleared                                                               
up,  the  better.  The  trigger   would  be  a  determination  of                                                               
navigability  on that  particular stretch  of water.  The Gulkana                                                               
case  has established  clear criteria  from which  the state  can                                                               
make assertions.                                                                                                                
                                                                                                                                
SENATOR SEEKIN  asked if the  Native corporations should  have an                                                               
interest in clearing their land titles.                                                                                         
                                                                                                                                
SENATOR  THERRIAULT responded  that he  thought the  corporations                                                               
would want  to know  what land  was theirs,  just like  the state                                                               
does.                                                                                                                           
                                                                                                                                
CHAIR OGAN asked what the following language on page 3, line 13,                                                                
meant and how he envisioned it working:                                                                                         
                                                                                                                                
     (6) in  1989, the  United States  Court of  Appeals for                                                                    
     the  Ninth  Circuit  ruled  that  the  Bureau  of  Land                                                                    
     Management   had   applied   incorrect   standards   in                                                                    
     determining  navigability  for  its  land  conveyances;                                                                    
     however,  the   Bureau  of  Land  Management   has  not                                                                    
     reconsidered most of its pre-1989 determinations;                                                                          
                                                                                                                                
SENATOR  THERRIAULT replied  that  Dick Mylius,  DNR, could  talk                                                               
about the technical details, but  the determination would be made                                                               
under federal  law on  court criteria  that had  been established                                                               
through litigation. He  felt it is more important  that the state                                                               
move forward on its assertions than  to make a list of rivers for                                                               
the public, at this point.                                                                                                      
                                                                                                                                
MR. DICK  MYLIUS, Deputy Director,  Division of Mining,  Land and                                                               
Water, DNR, said  the department is being asked  to inventory all                                                               
past  determinations that  had been  made, most  significantly by                                                               
the BLM. It  envisioned inventorying those lands,  but not making                                                               
a decision on every stream.                                                                                                     
                                                                                                                                
CHAIR OGAN  asked if  the department would  be looking  mostly at                                                               
BLM determinations.                                                                                                             
                                                                                                                                
MR. MYLIUS  replied yes because  the BLM  has done most  of them,                                                               
but the court  had done a few,  also. The DNR has  made about 100                                                               
navigability determinations  (although the bulk of  them may have                                                               
come through BLM conveyances).                                                                                                  
                                                                                                                                
CHAIR OGAN  asked how the department  had determined navigability                                                               
- by floating a boat on it?                                                                                                     
                                                                                                                                
MR. MYLIUS  replied that is  generally correct. The  Gulkana case                                                               
states a raft that can carry 1,000 pounds is navigable criteria.                                                                
                                                                                                                                
SENATOR  SEEKINS  asked if  there  was  any tension  between  the                                                               
entities that had determined navigable waters.                                                                                  
                                                                                                                                
MR. MYLIUS replied the department  would not limit itself to only                                                               
BLM conveyances.                                                                                                                
                                                                                                                                
SENATOR  SEEKINS asked  if the  state is  asserting title  on the                                                               
lands regardless of who determined it.                                                                                          
                                                                                                                                
MR. MYLIUS replied yes, but  if the assertion was challenged, the                                                               
courts would resolve the dispute.                                                                                               
                                                                                                                                
SENATOR ELTON  asked if  a dispute arises  between the  state and                                                               
someone  who  thought they  had  been  conveyed submerged  lands,                                                               
would that dispute  go to state court or federal  court or either                                                               
court.                                                                                                                          
                                                                                                                                
MS. GRACE jumped  in and replied that it would  depend on whether                                                               
the United States was a party.  A dispute between a private party                                                               
and the state would be resolved in state court.                                                                                 
                                                                                                                                
SENATOR WAGONER said Mt. Redoubt  erupted years ago and channeled                                                               
the Drift  River into Montana  Bill Creek. Since then,  the Drift                                                               
River had  switched back  to its  original channel.  Montana Bill                                                               
Creek probably  would not  have been  classified as  navigable at                                                               
the  time,  but  the  Drift  River  would  have.  He  asked  what                                                               
classification it would have.                                                                                                   
                                                                                                                                
TAPE 04-10, SIDE B                                                                                                            
                                                                                                                                
MR. MYLIUS  replied that is  very difficult to determine.  If the                                                               
river  was  navigable  at  statehood and  changed  because  of  a                                                               
natural occurrence  and the change  could be seen,  it's possible                                                               
that state ownership would still be in the old river corridor.                                                                  
                                                                                                                                
CHAIR  OGAN  asked  him  if  he has  an  inventory  of  potential                                                               
navigable waters.                                                                                                               
                                                                                                                                
MR.   MYLIUS  replied   that  the   department  doesn't   have  a                                                               
comprehensive  list of  all  state  rivers, but  it  does have  a                                                               
comprehensive  list   of  over   200  rivers  that   are  clearly                                                               
navigable.                                                                                                                      
                                                                                                                                
CHAIR OGAN asked  if this situation was similar to  the one a few                                                               
years ago when the BLM  extensively identified and mapped rights-                                                               
of-way for RS2477s.                                                                                                             
                                                                                                                                
MR.  MYLIUS replied  that  the  RS2477 project  tried  to dig  up                                                               
historical  information  that  might  not  be  available  in  the                                                               
future.  This is  more like  a  project digging  through BLM  and                                                               
state files to figure out what's there.                                                                                         
                                                                                                                                
CHAIR OGAN said  testimony has indicated that it  would take many                                                               
lifetimes  to prove  up on  the  navigable water  claims and  yet                                                               
people who have  the histories are passing away. He  asked if Mr.                                                               
Mylius thought the  state was losing something by  not doing that                                                               
historical research now.                                                                                                        
                                                                                                                                
MR.  MYLIUS replied  that  the BLM  did  historical research  and                                                               
compiled an extensive navigability  portfolio and the state wants                                                               
to get a  copy of it. Yes, some information  will be lost because                                                               
people  with historical  knowledge are  dying. He  clarified that                                                               
the  standard the  state  has  to prove  is  that  the river  was                                                               
acceptable for use  at statehood, not that it  was actually used,                                                               
a somewhat lower standard than for RS2477s.                                                                                     
                                                                                                                                
SENATOR SEEKINS asked  if the intent of this effort  is to assert                                                               
title the state was granted  under the Equal Footing Doctrine and                                                               
the Submerged Lands Act.                                                                                                        
                                                                                                                                
MR. JOE  BALASH, Staff  to Senator  Therriault, said  the Senator                                                               
had  to  step out  and  answered  that  is  correct. One  of  the                                                               
concerns  is that  another  45 years  could  pass before  someone                                                               
tries to get title for the  state. The court, at that time, could                                                               
look back and say the state never really tried.                                                                                 
                                                                                                                                
SENATOR SEEKINS  read the pertinent  part of the  Submerged Lands                                                               
Act into the record:                                                                                                            
                                                                                                                                
     43  U.S.C.  13.11  Rights  of  the  States  [under  the                                                                    
     Submerged Lands Act of 1953]                                                                                               
                                                                                                                                
     It  is hereby  determined  and declared  to  be in  the                                                                    
     public interest that (1) title  to and ownership of the                                                                    
     lands  beneath navigable  waters within  the boundaries                                                                    
     of  the respective  states, and  the natural  resources                                                                    
     within such  lands and  waters, and  (2) the  right and                                                                    
     power  to manage,  administer, lease,  develop and  use                                                                    
     the said lands and  natural resources all in accordance                                                                    
     with  applicable  state law  be,  and  they are  hereby                                                                    
     subject   to   the    provisions   hereof   recognized,                                                                    
     confirmed, established  and vested  in and  assigned to                                                                    
     the respective states....                                                                                                  
                                                                                                                                
     (b)(1)   The   United   States  hereby   releases   and                                                                    
     relinquishes   unto  the   said  states   [and  persons                                                                    
     aforesaid],  except as  otherwise reserved  herein, all                                                                    
     right,  title, and  interest of  the United  States, if                                                                    
     any it  has, in  and to  all said  lands, improvements,                                                                    
     and natural resources;....                                                                                                 
                                                                                                                                
SENATOR SEEKINS said that is the  issue the state is battling. We                                                               
have a  quitclaim in the  1953 Submerged  Lands Act, but  yet the                                                               
quitclaim has no validity because title hasn't been transferred.                                                                
                                                                                                                                
SENATOR  ELTON asked  if  a trapper  running his  dog  team up  a                                                               
stream in  the wintertime  makes it a  navigable waterway  - even                                                               
though the water isn't flowing.                                                                                                 
                                                                                                                                
MR.  MYLIUS replied  no and  that the  traditional definition  of                                                               
navigable refers to, basically, flowing water.                                                                                  
                                                                                                                                
CHAIR OGAN announced that SB 305 would be set aside.                                                                            
                                                                                                                                
           SB 295-EXTEND NAVIGABLE WATERS COMMISSION                                                                        
                                                                                                                                
CHAIR SCOTT OGAN announced SB 295 to be up for consideration.                                                                   
                                                                                                                                
MR.  ZACH   WARWICK,  Staff   to  Senator   Therriault,  sponsor,                                                               
explained that  SB 295 adds  two years to  the life of  the Joint                                                               
Federal   and  State   Navigable  Waters   Commission  that   was                                                               
established in  2002, but  not funded.  The hope  is that  if the                                                               
state  passes   legislation  again,  the  federal   side  of  the                                                               
commission will be funded.                                                                                                      
                                                                                                                                
CHAIR OGAN asked why this bill  is needed since the Department of                                                               
Natural Resources (DNR) legislation asks the same thing.                                                                        
                                                                                                                                
MR.  WARWICK replied  SB 295  is  an attempt  to build  consensus                                                               
between the state  and federal governments on  creating the lists                                                               
and maps.                                                                                                                       
                                                                                                                                
MR. RON SOMERVILLE, consultant to  the Senate and House Majority,                                                               
explained:                                                                                                                      
                                                                                                                                
     It's the  quickest possible  way you  could essentially                                                                    
     identify  those reaches  of  those particular  streams,                                                                    
     which  both  parties  agree are  navigable.  Certainly,                                                                    
     that  then  leaves  the  remainder  to  be  settled  in                                                                    
     court.... The  concept here was  to entice them  to sit                                                                    
     down, because  of the  massive size  of the  state, and                                                                    
     cooperatively identify  them so we could  resolve these                                                                    
     clouded  titles, if  you  will, in  many  areas of  the                                                                    
     state.                                                                                                                     
                                                                                                                                
CHAIR OGAN asked what is driving the situation now.                                                                             
                                                                                                                                
MR. WARWICK  replied that  the state side  of the  commission was                                                               
passed last year, but wasn't  funded. Current language says seven                                                               
members  are appointed  by the  state, which  would drop  down to                                                               
four upon  federal appointment of  their four members.  The state                                                               
members  could  get  some  groundwork  done  before  the  federal                                                               
members came on board.                                                                                                          
                                                                                                                                
SENATOR ELTON  said if SB  305, which asserts state  ownership of                                                               
certain submerged lands, is adopted,  the state might not want to                                                               
have a commission. Why would the  state want to sit down with the                                                               
feds and negotiate away something it has just asserted?                                                                         
                                                                                                                                
MR. SOMERVILLE answered  that the concept in SB 295  is to try to                                                               
develop  a  mechanism  whereby  the   state  can  have  title  as                                                               
described by Mr.  Mylius. Developing the lists  would happen much                                                               
faster   with  a   commission   rather   than  using   recordable                                                               
disclaimers or by developing a state list.                                                                                      
                                                                                                                                
     It seems  to me that  it's complementary. If  the state                                                                    
     has its list,  it would be submitted  to the commission                                                                    
     for hopefully  ratification by  the combined  state and                                                                    
     federal  representatives. It  would be  similar to  the                                                                    
     Federal  State Land  Use Planning  Commission that  was                                                                    
     created out  of ANCSA [Alaska Native  Claims Settlement                                                                    
     Act].                                                                                                                      
                                                                                                                                
SENATOR ELTON asked if anyone  had actually been appointed in the                                                               
past.                                                                                                                           
                                                                                                                                
MR. WARWICK replied that no one had been appointed.                                                                             
                                                                                                                                
CHAIR OGAN  remarked that, based  on the fiscal note,  it doesn't                                                               
look  like the  administration intends  to appoint  anybody until                                                               
the  federal government  does and  the  feds aren't  going to  do                                                               
anything until the  state does. The commission  could be extended                                                               
for another two-year stalemate.                                                                                                 
                                                                                                                                
MR.  SOMERVILLE  said that  Senator  Therriault  thought the  law                                                               
could be kept  on the books and noted that  Senator [Ted] Stevens                                                               
made  some  mention  of  the commission  that  the  Secretary  of                                                               
Interior was  supportive of  at the time.  If Congress  does pass                                                               
something,  this  process would  be  much  quicker than  using  a                                                               
supplemental  appropriation  to   quickly  initiate  the  state's                                                               
portion of the commission.                                                                                                      
                                                                                                                                
SENATOR  ELTON  replied that  he  didn't  dispute that,  but  the                                                               
future cost of  the commission could be out of  the state's hands                                                               
until the feds  enacted their side. He could  envision a scenario                                                               
in which the feds wouldn't pass  a law, but the state would still                                                               
have  to   fund  seven  commissioners   and  not  have   the  BLM                                                               
information it wanted.                                                                                                          
                                                                                                                                
CHAIR OGAN closed public testimony.                                                                                             
                                                                                                                                
SENATOR THOMAS WAGONER  moved to pass SB 295  from committee with                                                               
individual recommendations  and attached fiscal note.  There were                                                               
no objections and it was so ordered.                                                                                            
                                                                                                                                
         SB 305-ASSERTING STATE TITLE TO SUBMERGED LAND                                                                     
                                                                                                                                
CHAIR  SCOTT OGAN  announced SB  305 to  be up  for consideration                                                               
again.                                                                                                                          
                                                                                                                                
SENATOR THOMAS WAGONER  moved to pass SB 305  from committee with                                                               
individual recommendations and attached fiscal note.                                                                            
                                                                                                                                
SENATOR ELTON objected to make a statement.                                                                                     
                                                                                                                                
     I don't have a good  enough grasp, yet, to know whether                                                                    
     I should object or not. So,  I'm going to sign 'no rec'                                                                    
     on this, but  clearly this is a  rather broad assertion                                                                    
     and it seems to me that  if, in fact, we do, it's going                                                                    
     to be more  than just a catalogue exercise  on the part                                                                    
     of DNR  - that, in fact,  we may be setting  in motion.                                                                    
     It's  like tugging  at the  shorts  on one  end of  the                                                                    
     clothesline  and not  watching  the pants  jump at  the                                                                    
     other  end.  I  would   anticipate  it's  the  kind  of                                                                    
     sweeping assertion  of rights  that could lead  us into                                                                    
     extended  litigation  with  entities who  already  have                                                                    
     conveyed   land.  I   don't  understand   all  of   the                                                                    
     implications of  that. I'm  not going  to vote  no; I'm                                                                    
     going to withdraw  my objection. Let's just  say I have                                                                    
     a lot of questions that surround this, yet.                                                                                
                                                                                                                                
CHAIR  OGAN  said  he  felt very  strongly  about  expanding  the                                                               
state's  efforts  with resource  development  and  this issue  is                                                               
probably one of  the most important things  the Legislature could                                                               
do for  the future of  the state.  He noted that  Senator Elton's                                                               
objection  had  been removed  and  that  SB  305 had  moved  from                                                               
committee.                                                                                                                      
                                                                                                                                
CHAIR  OGAN noted  that the  whole committee  was present  except                                                               
Senator Lincoln.                                                                                                                
                                                                                                                                
4:47 p.m. - 4:48 p.m. - at ease                                                                                                 
                                                                                                                                
CHAIR SCOTT OGAN  announced the next order of business  to be the                                                               
Donlin Creek Project update and felt  it was located in a part of                                                               
the state that desperately needed more development.                                                                             
                                                                                                                                
MR.  GREGG BUSH,  General Manager,  Donlin  Creek Joint  Venture,                                                               
noted that he  had passed a brief presentation on  the project to                                                               
the  committee. He  highlighted a  number of  points saying  that                                                               
Placer  Dome Corporation  was formed  in 1987  by joining  Placer                                                               
Development,  Dome  Mines Limited  and  Campbell  Red Lake  Mines                                                               
Limited of  Ontario. It is  now one  of the world's  largest gold                                                               
mining companies employing about  12,000 people around the world,                                                               
with a market capitalization of  almost $5 billion in 2002. Their                                                               
portfolio contains 18 mines that  produced $3.6 million ounces of                                                               
gold and  400 million pounds of  copper in 2003. Placer  Dome has                                                               
three of the top ten  undeveloped gold projects around the world;                                                               
Donlin  Creek  is  one  of them.  Calista  Corporation  owns  the                                                               
subsurface  rights  and  is  a  15  percent  participant  in  the                                                               
project.                                                                                                                        
                                                                                                                                
A  total of  $51  million  had been  spent  on  the Donlin  Creek                                                               
project that contains  11.1 million ounces of gold at  a 1.5 gram                                                               
per ton cut off, with an average  grade of 3 grams per ton and an                                                               
additional inferred resource  of 14.3 million ounces  for a total                                                               
of  25.5  million ounces  of  contained  gold (between  measured,                                                               
indicated and referred resource).                                                                                               
                                                                                                                                
Because this part  of Alaska is very poor  in infrastructure, Mr.                                                               
Bush  said,  that  is  the  key driver  in  development  of  this                                                               
project.  There  is no  current  power  supply  and that  is  the                                                               
largest hurdle.  The mine  requires a peak  load of  75 megawatts                                                               
and would have an  average load of 61 megawatts over  a 15 to 20-                                                               
year lifespan.  Options being evaluated  range from  a coal-fired                                                               
power plant  in Bethel, on-site  diesel power,  alternative fuels                                                               
(LPG coming  up the  Yukon River  and being  stored underground),                                                               
the possibility  of shallow natural  gas or coalbed  methane, the                                                               
Railbelt  Intertie and  various  possibilities  coming from  Cook                                                               
Inlet (either  power or  gas pipelines).  Along with  looking for                                                               
power,  Placer  Dome  is conducting  an  internal  evaluation  of                                                               
alternatives and trying  to minimize the mine's  power needs. The                                                               
preferred options would be known in October.                                                                                    
                                                                                                                                
Other major issues are wetland  impacts and water management. The                                                               
mine's footprint is  very large and most of the  area it occupies                                                               
is classified  as wetlands. The  pit will most  certainly require                                                               
dewatering,  although they  aren't  sure what  the water  quality                                                               
will  be.  Logistics  is  another  concern  and  new  roads  have                                                               
recently been  agreed upon. The  Kuskokwim River  provides access                                                               
by two to  four barges per day with a  maximum shipping season of                                                               
120 days  per year. Large  quantities of limestone and  fuel will                                                               
be  hauled in.  A  potential  fatal flaw  in  the project  became                                                               
evident when the pit got so  large that the stability of the high                                                               
walls  was uncertain  and  quite a  bit of  time  has been  spent                                                               
evaluating that.                                                                                                                
                                                                                                                                
CHAIR OGAN asked what the limestone is used for.                                                                                
                                                                                                                                
MR. BUSH  explained that Donlin  Creek is a refractory  ore body,                                                               
which means  the gold  is contained  in sulphide  minerals, which                                                               
has  to be  oxidized  to  get the  gold  out.  The sulphides  are                                                               
converted to  acid and  the limestone is  used to  neutralize the                                                               
acid before the tailings are disposed of.                                                                                       
                                                                                                                                
He  explained  that  historical  baseline  data  is  continuously                                                               
being collected  for water air quality,  wetlands delineation and                                                               
meteorology.   The  wetlands   work  is   almost  completed   and                                                               
preliminary   waste   rock   characterization  has   been   done,                                                               
particularly in Crooked Creek where  facility components would be                                                               
located. Studies of  the socio-economic impacts of  the mine have                                                               
been on-going  with local community participation  since 1996 and                                                               
will continue  into 2004.  Placer Dome is  looking at  having its                                                               
major permit applications  all submitted by January  2005 with an                                                               
eye toward having the final  environmental impact statement (EIS)                                                               
issued by the  end of 2006. Provided everything  goes well, there                                                               
would be a two and a half year construction period.                                                                             
                                                                                                                                
5:08 p.m.                                                                                                                       
                                                                                                                                
TAPE 04-11, SIDE A                                                                                                            
                                                                                                                                
CHAIR OGAN asked,  "What would the state's take be on it?"                                                                      
                                                                                                                                
MR. BUSH  replied that  it would  be 7  percent net  proceeds tax                                                               
after the first three and a half years of operation.                                                                            
                                                                                                                                
CHAIR OGAN asked how net proceeds were figured.                                                                                 
                                                                                                                                
MR. BUSH said after expenses and also after amortization.                                                                       
                                                                                                                                
CHAIR OGAN  asked what kind of  revenues this would bring  to the                                                               
state.                                                                                                                          
                                                                                                                                
MR. BUSH said he didn't have details on those numbers.                                                                          
                                                                                                                                
CHAIR OGAN asked Mr. Bush to get back to him on that.                                                                           
                                                                                                                                
MR. BUSH agreed to do so.                                                                                                       
                                                                                                                                
SENATOR WAGONER  asked, once the  road was built to  the project,                                                               
how far would it be to the Yukon River.                                                                                         
                                                                                                                                
MR.  BUSH said  it  was approximately  35  additional miles  from                                                               
Donlin Creek.                                                                                                                   
                                                                                                                                
MR.  JEFF FOLEY,  Calista  Regional  Corporation, testified  that                                                               
Placer Dome and Calista signed  an exploration of mining lease in                                                               
1995.  Placer  Dome has spent $38 million  dollars, a significant                                                               
part of  which has been  direct payroll to  Calista shareholders.                                                               
He told members that this  project is the single largest economic                                                               
stimulus the  region has seen  in modern times and  Calista looks                                                               
forward to  continuing the 400  to 500  jobs, as well  as support                                                               
businesses, throughout the mine's life.                                                                                         
                                                                                                                                
MR. FOLEY said  Novista, a non-profit formed by  Calista to bring                                                               
lower-cost power to the region,  has been partially funded by the                                                               
state in the form of  money for feasibility and power alternative                                                               
studies. Calista's  strategy for getting  power has focused  on a                                                               
coal-fired  plant  in Bethel  with  a  transmission line  to  the                                                               
project site, powering  nine villages - including  Bethel - along                                                               
the way.   This would  lower the  power costs for  those villages                                                               
and bring the lowest-cost option to  the site.  He predicted that                                                               
the  feasibility study  would be  released, at  the earliest,  in                                                               
April [2004]. He informed them  that Bob Charles, Vice President,                                                               
Corporate Governmental  Relations, Calista  Regional Corporation,                                                               
will be  addressing the Joint  Energy Task Force on  that subject                                                               
in Anchorage on March 9 and,  on March 31, will address the House                                                               
in Juneau,  presenting the  results of that  study and  the Joint                                                               
Energy Task Force's comments.                                                                                                   
                                                                                                                                
SENTOR ELTON  asked if  the Denali  Commission has  been involved                                                               
with the  study on alternative  power sources and  questioned the                                                               
connection between the region's and the mine's power needs.                                                                     
                                                                                                                                
MR. FOLEY  replied that the  Denali Commission has  been involved                                                               
and, to some extent, controls  the appropriated federal funds for                                                               
engineering design permits.  He  understood that those funds have                                                               
not been released, yet.                                                                                                         
                                                                                                                                
SENATOR  ELTON   referenced  Greens   Creek  Mine's   efforts  to                                                               
establish   a  working   schedule   for  the   mine  to   provide                                                               
opportunities for people  in communities in the  region to access                                                               
jobs.   He  asked if  conversations  with Placer  Dome had  taken                                                               
place regarding  "how you can  best run the  camp and set  a work                                                               
schedule so that  you maximize the opportunity for  people in the                                                               
region to make those jobs work for them?"                                                                                       
                                                                                                                                
MR. FOLEY  affirmed that Placer Dome  has taken the lead  on this                                                               
throughout  the project,  actively visiting  and consulting  with                                                               
communities,  specifically   on  employment   opportunities,  and                                                               
keeping the villages apprised of upcoming employment schedules.                                                                 
                                                                                                                                
MR. BUSH said that during  production, the answer to the question                                                               
was also  yes.   He said  there is  currently a  shareholder hire                                                               
coordinator, and if the mine  gets into an operational phase, the                                                               
quality  of the  training programs  in place  will determine  the                                                               
number of local people who will be hired.                                                                                       
                                                                                                                                
SENATOR  ELTON   referred  to  the  challenges   of  transporting                                                               
limestone on the  river system and asked if there  were any other                                                               
hazardous products or waste that  would need to be transported on                                                               
the river system.                                                                                                               
                                                                                                                                
MR.  BUSH replied  not  hazardous  waste, but  there  would be  a                                                               
number of hazardous materials transported  up and down the river;                                                               
the  two  largest  concerns  would be  diesel  and  cyanide  (the                                                               
primary  leeching  agent),  and   there  would  be  other  lesser                                                               
concerns as well.                                                                                                               
                                                                                                                                
CHAIR  OGAN asked  if  limestone was  considered  as a  hazardous                                                               
substance:  he wondered  if the  change in  the PH  of the  river                                                               
would be hazardous to fish and so forth.                                                                                        
                                                                                                                                
MR. BUSH said no; he didn't think so.                                                                                           
                                                                                                                                
CHAIR OGAN asked what kind  of protections or mitigation measures                                                               
would  be used  regarding cyanide,  suggesting that  EPA and  DEC                                                               
would  have fairly  strict  requirements  regarding handling  and                                                               
shipping containers.                                                                                                            
                                                                                                                                
MR.  BUSH said  there would  certainly be  an emergency  response                                                               
plan in place.  He said  there is only one cyanide container that                                                               
has been  approved by  the U.N.  for marine  transport.   "It's a                                                               
one-time boxed-bag,  it's a  double bag, it's  a plastic  bag and                                                               
then a PVC bag, and then a box."                                                                                                
                                                                                                                                
SENATOR ELTON  pointed out that  Juneau has been  through several                                                               
major mine  permits, and that cyanide  was the focal point  for a                                                               
lot of community interest.   He suggested that similar or greater                                                               
challenges  might be  faced  because  this transportation  system                                                               
will be going past  a lot of villages.  "It  was a challenge here                                                               
in Juneau when we were dealing with the issue."                                                                                 
                                                                                                                                
CHAIR OGAN  thanked the  presenters for  the update,  noting that                                                               
the region certainly needs the development.                                                                                     
                                                                                                                                
CHAIR OGAN adjourned the meeting at 5:24 p.m.                                                                                   
                                                                                                                                

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