Legislature(2003 - 2004)
02/18/2004 03:33 PM Senate RES
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* first hearing in first committee of referral
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+ 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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