SB 227-STATE OWNERSHIP OF SUBMERGED LAND  3:35:38 PM VICE CHAIR MICCICHE announced the consideration of SENATE BILL NO. 227 "An Act relating to state ownership of submerged land within and adjacent to federal areas; and providing for an effective date." VICE CHAIR MICCICHE invited Mr. Goodrum and Mr. Walker to present the bill. 3:36:37 PM BRENT GOODRUM, Deputy Commissioner, Department of Natural Resources, Anchorage, Alaska, stated that SB 227 principally relates to identifying and codifying state submerged lands within federal areas. The committee's actions on this bill could be the most impactful regarding how Alaskans understand and can fully realize their hard-earned right achieved at the time of statehood. When Alaska became a state in 1959, it became entitled to all incidences of ownership in its navigable rivers and lakes, yet it is effectively deprived of clear title under the equal footing doctrine. Nonetheless, the state doggedly presses forward to assert that these rights are worth fighting for 63 years later. MR. GOODRUM stated that the current status quo of uncertainty and ambiguity of ownership, management, and control of the state's navigable water bodies is not in Alaska's best interest. The state has patiently waited for the federal authorities to make their declarations known regarding the navigability of Alaska's water bodies. He offered his view that the time has come for the state to decisively take action to identify and codify the navigable rivers and lakes for future generations of Alaskans and its visitors, so they confidently know who has ownership, management, and control. The state ought to be able to fully identify and manage its property. 3:39:50 PM JIM WALKER, Section Manager, Public Access Assertion and Defense, Division of Mining, Land, and Water, Department of Natural Resources (DNR), Anchorage, Alaska, began a PowerPoint on SB 227. He stated that the issue is straightforward but has become needlessly complicated. MR. WALKER paraphrased the bullet points on slide 2, The Navigable Waters Issue. [Original punctuation provided.] • Alaska holds an estimated 800,000 miles of navigable rivers. • Alaska holds an estimated 30 million acres of navigable lakes. • Alaska owns the submerged lands beneath every navigable in-fact river and lake, and beneath tidally influenced waters in the state--unless a valid pre- statehood withdrawal EXPLICITLY defeats state title. • In Federal Conservation System Unit areas created in Alaska post-statehood, the submerged lands beneath navigable-in-fact and tidally influenced waters are state-owned lands. 3:40:49 PM MR. WALKER reiterated that the equal footing doctrine, also known as equality of the states, is the principle in US constitutional law that all states admitted to the Union since 1789 enter on equal footing with the original 13 colonies already in the Union. 3:41:50 PM MR. WALKER reviewed slide 3, Federal Areas Where SOA Owns Submerged Lands, which shows a sampling of some post-statehood withdrawals where the state of Alaska owns the submerged lands. National Park Service: Noatak National Preserve (NPr), Kobuk Valley National Park (NP), Bering Land Bridge NPr, Denali National Park and Preserve (NPP) (ANILCA additions), Wrangell-St. Elias NPP, Glacier Bay NPP, Katmai NPP, Kenai Fjords NP, Gates of the Arctic NPP, Lake Clark NPP, Yukon-Charley Rivers NPr, etc. U.S. Fish and Wildlife Service: Becharof National Wildlife Refuge (NWR), Innoko NWR, Izembek NWR, Kanuti NWR, Kenai NWR, Kodiak NWR, Koyukuk NWR, Nowitna NWR, Selawik NWR, Tetlin NWR, Togiak NWR, Yukon Delta NWR, Yukon Flats NWR, etc. U.S. Forest Service: Tongass National Forest, Chugach National Forest Bureau of Land Management: Beaver Creek Wild and Scenic River (WSR), Birch Creek WSR, Fortymile River WSR, Gulkana River WSR, Unalakleet River WSR, Delta River WSR, etc. 3:42:05 PM MR. WALKER paraphrased the bullet points on slide 4, Status of Efforts to Clear Title 1959 to Present. The federal government acknowledges Alaska's clear title to its submerged lands beneath navigable-in-fact and tidally influenced rivers and lakes in only: • Only 9 percent of 800,000 river miles of submerged lands under state-owned rivers. • Only 16 percent of 30,000,000 acres of submerged lands under state-owned lakes. MR. WALKER related that clearing the title will take hundreds of years and tens of millions of dollars at this rate. 3:43:13 PM MR. WALKER reviewed slide 5, Sturgeon v. Frost, 136 S. CT. 1061 (2016), 139 S. CT. 1066(2019). US Supreme Court rules unanimously federal regulations do not supersede SOA ownership and management of navigable waters in ANILCA CSUs. MR. WALKER stated that SB 227 builds on the Sturgeon v. Frost decision by applying it statewide to other federal CSUs. 3:43:48 PM MR. WALKER reviewed slide 6, The Navigability Phase of the Initiative, which depicted a series of assertions, shown in ovals or bubbles that fit in with the "Unlocking Alaska Initiative" that began a year ago with phase one. He reviewed several assertions: Intensify quiet title litigation against the federal government Assert state management of submerged lands in federal areas. Legislatively codify state-owned navigable waters in federal areas. MR. WALKER stated that SB 227 builds on work his section of DNR has undertaken over the past year to analyze federal areas throughout Alaska to identify navigable tidally-influenced waters. SB 227 includes 1,873 rivers and lakes within National Park Service (NPS) and Tongass National Forest areas in Alaska. He indicated that if SB 227 were to pass, he would come before the legislature for several years to satisfy the reporting requirement in SB 227. He noted that the next phase would increase the list to include navigable waters, rivers, and lakes within the Chugach National Forest and US Fish and Wildlife Service (USF&WS) areas. 3:46:20 PM MR. WALKER read slides 7 and 8, Proposed Codification Legislation. [Original punctuation provided.] • Codifies SOA ownership, management and control of navigable waters and submerged lands within federal areas not covered by a valid pre-statehood withdrawal explicitly defeating state title. • Sets forth specific navigable waters and submerged lands in federal areas statewide belonging to SOA. • Sets forth example "susceptibility" criteria derived from caselaw to guide in navigability determinations. 3:46:34 PM MR. WALKER stated that this mirrors the navigable waters in the RS 2477 [Revised Statute 2477 (Section 8 of the Mining Act of 1866)] upon which this bill is based., so the federal government and the general public relying on the map of navigable water or referencing the statutes [AS 38.04] will know precisely where state or federal property lies. The bill also sets forth basic susceptibility criteria derived from the case law to guide navigability determinations made by DNR.   • Proposed statute contains an annual reporting  requirement  • FIRST PHASE: All NPS areas statewide and Tongass National Forest. • SECOND PHASE: USFWS refuges and Chugach National Forest. • THIRD PHASE: Remaining USFWS refuges and BLM lands. • FOURTH PHASE: Ongoing process of clarification, modification and amendment. • Framework for proposed statute is based upon RS 2477 ROW codification project of 1990s [AS 19.30.400]. 3:48:16 PM MR. WALKER noted that slides 9 12 relate to the sectional analysis of the bill, but he would not cover them at this time. 3:48:31 PM MR. WALKER advanced to slides 12 and 13, State-Owned Navigable Waters Federally Acknowledged to Date and State-Owned Navigable Waters After Proposed Codification, which consisted of two maps of the State of Alaska. MR. WALKER indicated that the two maps provide an overall sense of the areas addressed by the bill. He said he was unsure why the federal government was reticent to acknowledge state ownership. He surmised that the federal government may not want in-holdings within federal land to co-manage or have concurrent land management. MR. WALKER explained that slide 12 is color-coded, showing the navigable and undetermined waters, and slide 13 shows the state- owned navigable waters after the passage of SB 227. 3:50:02 PM MR. WALKER advanced to slide 14, Noatak NP/Kobuk Valley NP Federally Acknowledged Navigable Waters to Date, which shows the Noatak National Preserve in tan and the Kobuk Valley National Preserve in green. The navigable rivers and waterways are shown in blue, the undetermined ones in pink, and the conflicts in blue and pink combined. MR. WALKER reported that the only rivers the federal government has acknowledged as navigable within the two large preserves are a portion of the Noatak River in the tan area and the Kobuk River depicted in the green area on the map. He noted every river shown in blue is identified in the 1,873 rivers and lakes defined within the statute. 3:51:13 PM MR. WALKER advanced to slide 15, Noatak NP/Kobuk Valley NP Navigable Waters after Codification, which shows the increased state-owned navigable waters were SB 227 to pass. He directed attention to the undetermined areas as depicted in pink, noting that DNR took a conservative approach when making determinations because the public relies on them when traveling on navigable waters, whether motorized or non-motorized vessels are allowed, and whether state or federal laws apply. However, he stated that if DNR litigated the navigable rivers, it would move those lines further into the headwaters. 3:51:36 PM SENATOR VON IMHOF joined the meeting. 3:53:00 PM VICE CHAIR MICCICHE directed attention to the undetermined waterways shown in pink on slide 15, Noatak NP/KOBUK VALLEY NP. He wondered whether the waterways listed as undetermined were ones that DNR had deemed as not navigable. 3:53:24 PM MR. WALKER answered no. He said that in this first wave of legislation, the undetermined waterways depicted in pink were waterways that the department has not yet identified as navigable waters. He stated that with the initial bill, DNR has substantially enhanced the inventory of state waters. DNR is reserving judgment on the upper headwaters to a later date. 3:53:56 PM SENATOR KAWASAKI asked whether DNR set a confidence level or used technical information to make the determination. MR. WALKER answered that DNR applied a strict methodology, using a group of technical experts within his section in the Division of Mining, Land, and Water, who examined aerial imagery, historical accounts, and other proof that would be considered in quiet title litigation. He indicated that the technical experts were confident in their determinations. He said DNR would stand behind their navigable water determinations and allow the public to access the waterways. 3:55:11 PM MR. WALKER advanced to slide 16, Proposed Legislation. Alaska's Ownership of Submerged Lands beneath Navigable in-fact and Tidally Influenced Rivers and Lakes is One of the Fundamental Promises of Statehood. It's been 62 years. It is time for the Federal Government to keep its promise to the State of Alaska. SB 227 is a BOLD step in that direction. MR. WALKER reiterated that SB 227, which is phase one, more accurately codifies what the state truly owns within federal areas statewide. SB 227 is phase one of the project. The goal is for DNR to make determinations to identify lands that belong to the state, bringing clarity to title to state lands within federal lands. MR. WALKER urged members to pass SB 227. 3:56:43 PM SENATOR STEVENS asked how DNR would enforce the state's rights with the federal government. MR. WALKER answered that the federal government's position has been vague, that maybe it is or is not state navigable water, so the federal government retains possession. That position has made it difficult for the state to assert its ownership in federal court. However, this bill would assert state ownership and force the federal agencies to acknowledge or dispute the state's claims, allowing the state to litigate. He provided an example to illustrate his point. The federal agencies have been issuing permits precluding operators from doing certain things on state submerged lands. Several operators applied for permits this past year for a mooring buoy or boat storage at Crescent Lake on state submerged land. It led to a painstaking navigability determination and ultimately the state issued the permit. The federal agencies responded that the state shouldn't issue the permits. 4:02:52 PM VICE CHAIR MICCICHE invited Ms. Alloway to testify. 4:02:58 PM JESSIE ALLOWAY, Solicitor General; Statewide Section Supervisor, Opinions, Appeals, and Ethics Section, Civil Division, Department of Law, Anchorage, Alaska, emphasized that the state should move away from asking the federal government for permission to manage state-owned lands. The equal footing doctrine transferred these lands as a matter of law at the time of statehood. The state does not need a quiet title or a recordable disclaimer of interest, but in the past, Alaska took the position that it was required to manage state-owned land. She stated that the Sturgeon decision [Sturgeon v. Frost, 136 S. CT. 1061 (2016), 139 S. CT. 1066(2019)] shifted the dynamic and made it clear that navigable waterways are not within federally managed CSUs. This legislation fills a gap that has always benefitted the federal government. She agreed with Mr. Walker that the federal land managers would often not decide whether a waterway is navigable. SB 227 would indicate that per Sturgeon, DNR has identified this as a navigable waterway, and state management and rules will apply. If the federal land managers disagree with DNR's navigability determination, the onus is on them to make a determination, which could be litigated. The state would manage its state-owned lands if federal land managers agreed. 4:05:36 PM SENATOR KIEHL referred to Mr. Walker's Crescent Lake mooring buoy and boat storage issues in 2021. He asked whether the state would be precluded from litigating if the federal government had responded that the state could not issue a permit. MS. ALLOWAY answered that the state could not have litigated the matter because there was no case or controversy since the federal government did not take a solid position on ownership. She explained that if the federal government had responded by saying the state could not issue permits for mooring buoys, she would interpret that to mean they were asserting land ownership. At that point, either party could file a quiet title action in court. 4:07:09 PM VICE CHAIR MICCICHE asked whether the passage of SB 227 would allow the state to go to court and assert state ownership. He surmised that the federal government would likely challenge some of the navigable waterways. 4:08:04 PM MS. ALLOWAY answered that is correct. She related her understanding that DNR had identified the navigable waterways and is confident that they are navigable in fact. She opined that the federal government would not challenge many navigable waterway determinations but reluctantly accept them. Some disputes might need to be litigated. She stated that DNR was currently litigating several cases hoping to answer those questions. As more claims are litigated, the state will better understand the ownership of the smaller waterways. 4:09:09 PM VICE CHAIR MICCICHE referred to page 5, line 15, Plenty Bear Creek. He stated that DNR believes that there is a point in Plenty Bear Creek that the state believes is navigable, and there was a point where it becomes headwaters. He asked if DNR had an idea of when the creek becomes non-navigable. MR. WALKER answered yes. He stated that Plenty Bear Creek has a number assigned to it, number 10, which correlates to the official state navigable waters map. He noted that this is on the Alaska map program. The user can drill down with increasing specificity, focus on the creek, and determine when the navigability changes from exceptionally high to something else. He did not recall specifically, but typically there are natural features such as a landing strip or some historical account the department used to make the determination. 4:11:27 PM SENATOR KIEHL referred to Sections 6 and 7 of the bill, which define terms used in determining navigability. He wondered if any of these were in question or if these terms are well- established case law. He asked how contentious these definitions were. 4:12:27 PM MS. ALLOWAY responded that the federal government may still contest the definitions, even though DNR pulled them from case law. For example, the Gulkana River was litigated in the 1980s. In that case, the Ninth Circuit Court of Appeals (Ninth Circuit) opined that if a person could float an inflatable raft down that waterway to fish, it was sufficient commercial use to establish that it was a highway of commerce. MS. ALLOWAY noted that in current litigation, attorneys continue to argue whether an inflatable raft is a customary and traditional watercraft. She stated that she was confident in reviewing this legislation that everything in it is supported by federal case law, either by the Ninth Circuit or the US Supreme Court. However, her hesitancy in responding is because the federal government could likely contest whether it's true. MR. WALKER added that all these definitions, except for federal areas, could be found elsewhere in statute. For example, the Alaska Department of Fish and Game may use the term ordinary high water mark or mean high water line. He stated that these definitions are similar and primarily mirrored in AS 38.04. 4:14:42 PM SENATOR KIEHL agreed with the deputy commissioner, the section chief, and the assistant attorney general that the second Sturgeon case said what it said. He said he was trying to figure out what SB 227 effectively does legally. He referred to the ovals on slide 6. Legislatively codify state owned navigable waters in federal areas. SENATOR KIEHL asked if the bill doesn't pass, whether the department will continue to move forward with the assertions. MR. WALKER answered that the department intends to move forward with all the assertions in the ovals on the slide. He emphasized that SB 227 is important because it would clearly assert Alaska's ownership of these lands. The bill and the map of navigable waters could help clear up anything murky. He agreed that DNR's efforts wouldn't come to a standstill, and the department would continue to move forward if the bill didn't pass. However, it would be easier if the bill were to pass because it asserts state ownership. He referred to the Ninth Circuit in the Black River decision. The court used the expression "a dog in the manger The Ninth Circuit Court of Appeals opined that the federal government, in many respects, seemed to behave like a dog in the manger, where the dog guards the food trough and won't let allow other animals have access. The dog doesn't eat the food, but it won't allow other animals access. 4:17:44 PM MR. WALKER offered his view that that is what the federal government does, through inaction, by being vague, that maybe it's navigable water and maybe it's not. This frustrates the state's ability to fully realize state ownership granted at statehood. He reiterated that SB 227 would help make the state's case of asserting ownership, management, and control. 4:18:24 PM SENATOR KAWASAKI related that he reviewed definitions from Washington State and the US Army Corps of Engineers for ordinary high water mark," which were similar but different. He asked whether that was a term of art or if that language could be litigated. MR. WALKER answered that navigability means different things depending on the purpose. For instance, the US Coast Guard would be concerned with boating safety. However, for DNR's purposes, the definitions in AS 38.04 relate to navigability for title purposes or who owns the land. The bill uses definitions from case law on navigability for title but not used by Environmental Protection Act, the USCG, or other navigability purposes. 4:19:45 PM VICE CHAIR MICCICHE noted that he related to the "dog in the manger" expression, but the Alaska National Interest Lands Conservation Act (ANILCA) defines those rights. The state was successful in the Sturgeon case for the Nation River in the Yukon Charley Preserve in 2007, so the state has case law. He wondered at what point DNR would have sufficient evidence or cause to litigate, negating the necessity for a bill to assert state ownership for each navigable body of water, stream, or creek. He asked how many bills or litigation costs are necessary before the state has sufficient case law that proves ANILCA provides adequate standing for the state to manage its navigable waters. 4:20:41 PM MS. ALLOWAY said she could not answer that question. She offered her view that determining ownership of navigable waters in Alaska is a federal task, so the legislature would not impact what that task means in the federal court. However, SB 227 informs the federal government and the public that in situations where the federal government or the state has expressly said who owns what, the state owns the navigable waters. She stated that the Sturgeon case found that the federal government cannot subsume submerged lands within its CSUs. SB 227 shifts the burden to the federal government to decide whether it will litigate to defend federal ownership. Otherwise, the state must continue obtaining federal government permission to manage state lands, which gives the federal government substantial power. MS. ALLOWAY stated that since the federal government often will not take a position on who owns the land, the state has two options: litigate or go through the Recordable Disclaimer of Interest (RDI) process. She explained that the state needs a case of controversy in order to litigate. The Ninth Circuit's "dog in the mangeranalogy informed the federal government that if it doesn take a position, the state can't litigate. MS. ALLOWAY reviewed the second option, the RDI process, in which the state files an RDI application and pays the federal government to investigate whether the land is state-owned. Often the federal government holds the application for 5 to 10 years on big rivers, such as the Kuskokwim or the Stikine, without taking action. She offered her view that SB 227 would place the burden on the federal government in disputes over state-owned land to justify its ownership. 4:23:00 PM VICE CHAIR MICCICHE characterized DNR's assertive actions on submerged lands as "poking the bear." He suggested that the public and federal government view Alaska differently than they did in 1959. He asked whether the risk of Congress amending ANILCA might make this expensive, annoying, inefficient problem permanent. MS. ALLOWAY answered that while she cannot predict what Congress will do, she did not envision any substantial risk because the federal government cannot change what the state owns. The US Constitution and the equal footing doctrine in the Submerged Land Act granted the state ownership of its submerged lands. She offered her belief that if the federal government took the state's submerged lands, it would be taking, which requires just compensation. She acknowledged that the federal government could attempt to amend ANILCA, Section 103(c), to broaden its powers, asserting that it can manage these lands within the internal boundaries of its CSUs. She envisioned that the state could raise numerous legal questions because ANILCA was a grand compromise. It would raise issues, including what the state would need in return for taking some of its rights away. 4:25:18 PM SENATOR KIEHL directed attention to the retroactivity clause in SB 227 that goes back to January 3, 1959, the date of statehood. He agreed Alaska owns its navigable waters. He referred to Dredge Lakes near the Mendenhall Lake and US Forest Service (USFS) infrastructure. He asked whether this bill would provide authority for the state to assert that the USFS must acquire a permit going back to the date of construction. MR. WALKER answered yes. He stated that DNR has requested that the Department of the Interior provide an inventory of all federal infrastructure constructed on state lands since the federal government did not comply with state permitting requirements. Although DNR will not assess permitting fees, DOI must go through the state permitting process for any federal infrastructure on state lands. Secondly, the federal government has issued permits for groups to engage in certain activities on state lands for scientific or other reasons. The state informed the federal government that its permittees must obtain state permits for those activities. DNR has offered to work with DOI to determine whether federal or state regulatory authority applies to Alaska's federal and state lands. For example, this might mean a person needs a permit for any activities conducted above the high water line. Still, activities conducted below the high water line require compliance with state law. He reported that Mr. Goodrum has participated in biweekly meetings with federal counterparts to bring federal infrastructure on state lands into compliance. 4:28:40 PM SENATOR KIEHL offered his view that contacting those conducting new or ongoing activities makes sense. Still, he wondered about the cost of reaching back to statehood versus looking forward. He offered his view that it might make more sense for DNR to put its efforts into navigability determinations for navigable lakes or streams. He expressed concern about the effective date regarding the state's priorities. 4:30:10 PM VICE CHAIR MICCICHE opened public testimony on SB 227. 4:30:45 PM CHRISTINE HUTCHISON, representing self, Kenai, Alaska, spoke in support of SB 227. She said she had been a resident since 1972. She offered her belief that this bill is long overdue. She said she listened to attorneys discussing the importance of defining navigability last week, but the federal government does not wish to define it. She offered her support for the state to move forward with the assertions in the ovals [listed on slide 6]. She suggested that the legislature should introduce a bill for each assertion, and the legislature should focus on this issue rather than arguing about the permanent fund dividend or election integrity. She stated that this bill is the first step to affirming that Alaska is a sovereign state. She urged members to pass SB 227. 4:34:31 PM SENATOR BISHOP joined the meeting. 4:34:49 PM VICE CHAIR MICCICHE closed public testimony on SB 227. VICE CHAIR MICCICHE held SB 227 in committee.