HOUSE BILL NO. 115 "An Act relating to the transfer of public land from the federal government to the state and to the disposal of that land; and providing for an effective date." 1:32:50 PM REPRESENTATIVE MIKE CHENAULT, SPONSOR, read the sponsor statement (copy on file): Committee Substitute for House Bill 115 (RES) enacts the Alaska Sovereignty and Transfer of Federal Public Lands to Alaska Act. The bill requires that the United States to transfer title to public lands to Alaska on or before January 1, 2017. The bill also affirms Alaska's state sovereignty under the Ninth and Tenth Amendments to the U.S. Constitution. Although there are a number of state and federal constitutional issues regarding the provisions contained within the bill, this bill was introduced since the 35-year deadline from the time Alaska was admitted into the Union as provided within the Statehood Act, PL 85-508, is long past. I believe there is a breach of good faith since the state is still entitled to and awaiting the transfer of the remaining 5.5 million acres. Thus far the state has received patent to about 99.5 million acres. Currently, the state has 10.9 million acres of selections from which to receive its 5.5 million acres of entitlement as well as 10.2 million acres of top- filings that may eventually become selections should applicable withdrawals be lifted. These withdrawals come in numerous varieties of federal action and processes. Two common executive branch actions that create withdrawals are Public Land Orders (PLOs, issued by the Department of the Interior) and Executive Orders issued by the President. The committee substitute for House Bill 115 (RES) requires the federal government to turn over all lands held by the federal government to the state subject to acceptance by the state with the exception of lands used for military purposes including military reservations. At this time according to the Department of Natural Resources, there are approximately 222 million acres within Alaska under federal ownership. 1:36:12 PM Representative Chenault relayed that he was open to questions. Co-Chair Thompson pointed to the Legislative Legal opinion that the bill would be unconstitutional. Representative Chenault agreed that the bill might be unconstitutional, but that the court system would need to make the final determination, not the legal opinion of one lawyer. Representative Gara felt that the legal opinion clearly stated that the bill was unconstitutional. He queried whether the sponsor knew of any provision in the U.S. Constitution that allowed a state to take federal land from the federal government. TOM WRIGHT, STAFF, REPRESENTATIVE MIKE CHENAULT, replied in the negative. Representative Gara noted that similar laws had been enacted; a 1982 initiative that had demanded that the federal government return all federal land within the state was deemed unconstitutional by the U.S. Attorney General, no movement had occurred on the issue for 32 years. He furthered that in Utah a similar bill had been passed, which had forced that state to set aside $2 million for litigation purposes. He feared that the bill would result in future litigation cost to Alaska. Mr. Wright answered that the path to litigation would be determined by the courts system and the governor. He shared that the "Tundra Rebellion", passed in 1983, was not enacted because the U.S. Attorney General took issue with the law. He argued that the state had been waiting for 35 years to receive approximately 5.5 million acres, which required that a strong message be sent to Congress. Representative Gara wondered whether the bill could be limited to the transfer of lands that had been promised to the state upon statehood. Mr. Wright replied that it would be up to the will of the committee. Co-Chair Thompson noted that department staff were online for questions. Vice-Chair Saddler spoke to the zero fiscal note. He asked where anticipated legal expenses to defend the legislation would come from. Mr. Wright pointed out that the fiscal note was indeterminate, not zero, because the legal costs were yet unknown. Vice-Chair Saddler asked about the Legislative Research Services Brief that discussed land outside of wildlife refuges and monuments. He wondered about the timing of the bill. Mr. Wright replied that the bill was related to timing due to the president's orders to set aside more of Alaska's land for conservation. 1:42:23 PM Representative Guttenberg wondered whether the state was behind in the survey work necessary to transfer most of the land and, if so, should the state be working on that issue while simultaneously pushing the legislation. Representative Chenault deferred the question to the Department of Natural Resources. He added that there could be reasons to hold back on certain land selections because other selections could become available. Representative Guttenberg asked whether the ninth and tenth amendments had ever been used successfully when arguing similar cases on court. Mr. Wright replied that the amendments had been included in the backup documents for the bill in order to highlight state sovereignty over certain issues. Representative Guttenberg restated his question. Mr. Wright believed that Utah was currently using those amendments to argue a similar court case. 1:44:38 PM ED FOGELS, DEPUTY COMMISSIONER, DEPARTMENT OF NATURAL RESOURCES, added that of the 100 million acres of land received by the state through the Statehood Land Entitlement, 65 million had been surveyed and patented to the state; approximately 35 million had yet to be surveyed and were considered "tentatively approved." He furthered that the 35 million acres essentially belonged to the state, to manage as it wished, and that the survey backlog was not currently limiting the state's ability to fully utilize its lands. Representative Guttenberg spoke to the conflict of property transfers among land owners sharing property lines. He wondered how far along the state was concerning resolution on native allotment and over-selection issues. Mr. Fogels thought that the question was broad and would require and extended amount of time for a response. He explained that the issues were ongoing and that the department was mandated by law to transfer lands to municipalities; some municipalities had completed their entitlements, some had not. He continued that there were many issues related to native allotments and the Bureau of Land Management (BLM) had conveyed many allotments to-date. He opined that the world of land management was complex. Representative Guttenberg asked how quickly the state could take the transfer of land, were the issues to be settled, and the legislation were to pass. Mr. Fogels felt he could not answer the question. He said that if the courts determined the additional 200 acres would be awarded to the states then it would be a significant task to identify which lands, in addition to the Statehood Land Entitlement lands, would be given to the state. 1:48:49 PM Representative Wilson felt that the fiscal note should be zero, and not indeterminate, because there would be no fiscal impact until a decision was made to litigate the issue. Mr. Fogels responded that the department's fiscal note was based on the assumption the bill would be successful. He said that the note accounted for the process and the additional land management by DNR. He added that additional revenues to the state could be expected. He stressed that the fiscal note was purely related to land management and did not consider litigation expenses. Representative Wilson felt that the fiscal impact of the bill should be viewed as a budget issue for the sake of accuracy. Mr. Fogels replied that the department had been asked to provide a fiscal note for potential costs due to additional land management. Representative Wilson hoped that the department would further scrutinize the fiscal note. Co-Chair Neuman wondered whether the federal government, or the state, would decide which lands would be returned. 1:52:11 PM Mr. Wright replied that approximately 5.4 million acres of land had been allotted to the state through the statehood act, 10.9 million acres of selections to receive the allotment, and 10.2 million additional acres of land that was considered "top filed", a contingent selection where the land would be subject to federal restrictions or withdrawals; the state could not take these lands but by executive order on the federal level. He gave an example of land that was rich with mineral deposits along Trans-Alaska Pipeline System (TAPS) that was currently under top filing status and was unavailable to the state. He noted that no wilderness refuges had been included in the bill. He thought that it would be financially prudent to exclude national parks from the bill because the state would not be able to afford to maintain them. Co-Chair Neuman surmised that the legislation asked the federal government to turn requested lands back over to the state for resource development. Mr. Wright believed there was wide national support for western states to win the transfer of federal public land back to states, mainly to open up utilization of the public land. Co-Chair Neuman repeated the question as to whether the bill would allow the state to select lands that it felt would be beneficial to the state. 1:55:54 PM Mr. Fogels responded that the state had 5.4 million acres left to go in its entitlements and that the state had selections on approximately 10.1 million acres, and an additional 10.3 top filed. He said that the state had to complete the statehood land entitlement process. He stated that the bill offered a strong recommendation that public land orders be lifted by the federal government to allow the state to broaden its selection pool of land. He shared that valuable lands had been identified that the state would like to control. He said that the bill would require the federal government to give additional lands; not specified, and lands could be rejected that were deemed to not be in the state's best interest. Co-Chair Neuman surmised that the state needed the land in order to diversify the economy. He believed that the bill would create jobs for the state. 1:58:10 PM Representative Kawasaki asked about the acreage of state park land managed by the state. Mr. Fogels replied that the state currently had approximately 3 million acres in the state park system. Representative Kawasaki wondered whether the fiscal note for the bill would be increased by the state adopting the entire 54 million acres of park land currently under the federal government. Mr. Fogels replied that there was the possibility that revenue could be generated by acquiring the additional lands, but that a way to zero out the fiscal note had yet to be determined. Representative Kawasaki thought that if the state were to assume the 54 acres of federal park land it would be a cost to the state. He opined clean water responsibilities that the state took over in 2008, as well as wetlands permitting in 2013, both of which had been of additional cost to the state, and wondered if the legislation would produce similar results. 2:01:25 PM Mr. Wright replied that the sponsor intended to ask one of the finance committee members to introduce an amendment that would exclude national parks. Vice-Chair Saddler pointed to page 2, lines 5 through 6: (b) The affirmation, reservation, and assertion in (a) of this section include the reservation of the rights of the state to claim a credit or setoff for any amount or injury inequitably or unlawfully caused or claimed by the federal government. Vice-Chair Saddler asked whether there was a listing of the possible amounts identified in the section, and whether there was an estimate of the potential value of those injuries. Mr. Fogels answered that he would provide the information to the committee at a later date. Representative Gara asked whether the 5.4 million acres left to transfer to the state from the federal government were in dispute. Mr. Fogels replied no, the 5.4 million acres were the remaining land entitlement. He reiterated that there were 10.1 million acres of land in "selection status", of which selections had been prioritized, and that the state could ask for conveyance of those lands at any time. He shared that the "choicest" lands to the state were in the second group of top filed lands and amounted to an additional 10.3 million acres. Those choice lands were currently off-limits to the department because of the federal land withdrawals. He stressed that it was important that the Department of the Interior list the public land orders so that the state could broaden the selection pool to the full 20.4 million acres to choose from. He argued that the public land orders no longer served a purpose and should be lifted by the Department of the Interior. 2:05:08 PM Vice-Chair Saddler wondered if there had been any indication of willingness, or resistance, by the BLM to comply with the goals of the bill. Mr. Fogels believed that the BLM and Department of the Interior were reluctant to lift the public land orders. He relayed that Governor Walker had met with Department of the Interior Secretary Sally Jewell to discuss the issue. He state that the BLM would convey the state anything that was a valid state selection fairly expeditiously. He reiterated that he was speaking only to the statehood land entitlement; he could not answer how the federal government would react to the bill in regard to additional lands. Vice-Chair Saddler asked whether passage of the bill would encourage federal authorities to move more expeditiously with the conveyance of state lands or other federal lands to the state. Mr. Fogels thought that the bill would help to lift the public land orders. Representative Gara reiterated concern that the bill was unconstitutional. He hypothesized that if Alaska could take whatever federal land it wanted, what would stop other states from acting similarly, to the detriment of the country. Mr. Wright thought that decisions pertaining to the hypothetical situation would be determined on a state-by- state basis. Representative Gara offered the example of the state of Kentucky taking over the United States Mint and subsequently destroying the economy on the federal level. Mr. Wright responded that he could not speak to the example. Representative Gara added that Pennsylvania could take and sell the Liberty Bell. Mr. Wright rebutted that he could not speak to the intentions of other state, nor answer rhetorical questions. Co-Chair Thompson deduced that Representative Gara was speaking to material things, whereas the bill discussed land and the states right to the land after 50 years of waiting. Representative Gara stated that his concern was for passing a bill that was unconstitutional. He requested a fiscal note and an opinion from the Department of Law. Co-Chair Thompson argued that the committee was not at the point of appropriating money, but bringing the subject to the forefront by alerting the federal government that the state was ready to take back the land. Representative Gara shared that the State of Utah had passed a similar bill, which had garnered little response from the federal government. He said that nothing had happened in Utah for two years because the bill was unenforceable. He stated no litigation had been filed because the bill was unconstitutional. He wondered whether the bill was the appropriate vehicle for gaining the attention of the federal government. Co-Chair Thompson contended that if more states filed bill of a similar type, the federal government might revisit the issue of conveyance of lands to states. He believed that the bill was a good start in a possible national movement. Vice-Chair Saddler requested an overview of the development of public land ownership in the Eastern United States verses the Western United States. 2:11:58 PM Representative Chenault replied that he could not provide a history. He said that as states became states, more land from each wound up under federal control. He related that the biggest problem that Congress faced when Alaska became a state was the state's small population and large land mass; there was fear that Alaska would become another colony, leaving the federal government to take care of the state's needs. He felt that, because approximately 62 percent of the Alaska's land was currently under federal authority, the state had not been able to develop its resources to sustain its economy. He suggested that the state might not have to rely on federal dollars for certain programs if it was allowed to develop its lands in a responsible manner. He remarked that that initial fear of Congress was what had occurred, not because of Alaska's lack of ingenuity, but because the federal government had not allowed the state to develop its land. He believed that the legality of the bill should be decided in court. Representative Munoz understood that lands that were top- filed related to new land designations on preliminarily selected lands. She asked whether the top-filing happened before or after the lands had been identified by the state. Mr. Wright deferred the question to the department. Mr. Fogels answered that top-filed meant that the land was wanted by the state, but that the land could not become an officially selected parcel because of federal action. He said that clean federal land, managed by the Bureau of Land Management would be a valid selection; top-filings were a selection on top of a federal withdrawal and not an official selection allowed by Alaska National Interest Lands Conservation Act (ANILCA). 2:16:08 PM Representative Munoz surmised that top-filing could include designations for refuges, parks, and national forest land. Mr. Fogels replied in the negative. He explained that all of the selections and top-filings were on BLM land, multiple use federal lands, and the state had no selections on refuges. He shared that national forests were handled differently, the state had a special "flavor" of selection, particularly in Southeast Alaska. He provided an example of the pipeline corridor; when TAPS was first built BLM put a withdrawal called Public Land Order 5150 from Prudhoe Bay to Valdez. He explained that any BLM within the corridor was withdrawn from state selection, resulting in a narrow right-of-way. He furthered that the selections within the corridor were not valid selections, but top-filings, meaning that as soon as the federal government lifted the public land order the top-filings would turn into valid selections. Representative Munoz asked why the state was not selecting land within the 10.1 million acres that were still valid for selection. Mr. Fogels replied there was valuable land in the 10.1 million acres of selected lands, the issue was that there was also valuable and in the other 10.3 million acres of top-filed land, some of which was even more desirable. Representative Munoz surmised that the 10.1 million acres was unencumbered with top-filing and the legislation would lift the top-file designation on the 10.3 million acres, further expanding the pool of land that state could request. Mr. Fogels replied in the affirmative. Vice-Chair Saddler asked for verification that the bill would not require the transfer of military bases. Mr. Wright replied in the affirmative. 2:19:56 PM Representative Guttenberg understood that asking the federal government remove its restrictions would allow the state to expand its selection criteria. Mr. Fogels reiterated that the state was entitled to 5.4 million acres under the Statehood Land Entitlement, where those 5.4 million acres were chosen from was the question. The state wished to grow the pool to choose that acreage from to 20.4 million acres. Representative Guttenberg wondered how many employees in the department interacted with federal land managers. Mr. Fogels replied that the department interacted with federal employees on many issues, on a daily basis. He said that he could not provide a number related to the issue. 2:22:30 PM Representative Guttenberg asked whether the department was actively pursuing lands that were rich in heavy metals. Mr. Fogels replied that most of the lands currently managed by the state were open to mineral entry; there were a number of mineral prospects begin worked throughout the state. He said that the state encouraged and increase in the mining industry and recognized that responsible mining practices contributes greatly to Alaska's economy. He assured the committee that the department was encouraging additional responsible mining in the state. HB 115 was HEARD and HELD in committee for further consideration. Co-Chair Thompson requested to be a co-sponsor of the legislation.