SENATE RESOURCES COMMITTEE February 28, 1996 3:37 P.M. MEMBERS PRESENT Senator Loren Leman, Chairman Senator Drue Pearce, Vice Chairman Senator Steve Frank Senator Rick Halford Senator Robin Taylor Senator Georgianna Lincoln Senator Lyman Hoffman MEMBERS ABSENT All members present COMMITTEE CALENDAR Oversight Hearing on Navigable Waters WITNESS REGISTER John Shively, Commissioner Department of Natural Resources 400 Willoughby Ave. Juneau, AK 99801-1724 POSITION STATEMENT: Reviewed navigable water issues. Bruce Botelho, Attorney General Department of Law P.O. Box 110300 Juneau, AK 99811-0300 POSITION STATEMENT: Reviewed navigable water issues. Joanne Grace, Assistant Attorney General Department of Law 1031 W 4th Ave., Suite 200 Anchorage, AK 99501-1994 POSITION STATEMENT: Commented on navigable water issues. John Baker, Assistant Attorney General Department of Law 1031 W 4th Ave., Suite 200 Anchorage, AK 99501-1994 POSITION STATEMENT: Commented on navigable water issues. Frank Rue, Commissioner Department of Fish and Game P.O. Box 25526 Juneau, AK 99811-5526 POSITION STATEMENT: Commented on navigable water issues. Clyde Stoltzfus, Special Assistant Department of Transportation 3132 Channel Dr. Juneau, AK 99801-7898 POSITION STATEMENT: Commented on navigability issues. Jane Angvik, Director Division of Land Department of Natural Resources 3601 C St., Ste 112 Anchorage, AK 99503-5947 POSITION STATEMENT: Commented on navigability issues. Jules Tileston, Director Division of Mining and Water Management Department of Natural Resources 3601 C St., Ste. 1130 Anchorage, AK 99503-5947 POSITION STATEMENT: Commented on navigability issues. ACTION NARRATIVE TAPE 96-21, SIDE A Number 001 CHAIRMAN LEMAN called the Senate Resources Committee meeting to order at 3:37 p.m. and announced an oversight hearing on Navigable Water issues. He said that Alaska has received about 60 - 65 million acres of submerged and tidal lands since statehood. These titles depend on the BLM and the State determining if waterways are navigable or non-navigable. Access to these lands is an issue as well. On July 26, 1995 Commissioner Shively distributed a memo saying the navigability section was essentially shut down, and many people believe that places Alaskan resources in jeopardy. The Senate Finance Committee had an overview of the Department's budget and recently the House had an oversight hearing in which major areas of uncertainty were identified between the administration and the legislature. The purpose of this meeting is to help identify those areas, to let the public know that the legislature is concerned, and to find ways to work with the administration to determine priority of public trust responsibilities, and to determine if statutory and budgetary changes are needed to protect the State's interest. Number 65 COMMISSIONER JOHN SHIVELY, Department of Natural Resources, said it was his personal opinion that there were a lot of State resources at risk, particularly in terms of navigability determinations. However, neither the Department of Interior or the State of Alaska can determine navigability. The only people who can actually determine navigability are the federal courts. For the most part, of the tens of thousands of bodies of water in the State, there probably isn't going to be a lot of controversy. Either they are going to be large enough like the Yukon River or they will be so small that people will agree that they are not navigable. In some cases there will be a conflict, like the Gulkana case, which is creating some guidelines about what may or may not be navigable. He said that the navigability issues are relatively simple. His approach is to provide resources when difficult situations arise. Last year there was a problem with the Russian River. ADF&G identified it and DNR went down and determined that it was navigable. If that needs to be litigated because of a third party claim, they are prepared to support the litigation. There are three rivers in the interior - the Kandik, Black, and Nation which have been under discussion since the mid-70's. They appear to be ripe for litigation and they are prepared to provide the field support the Attorney General needs to continue with those suits. He said there might come a time when that can't be done within the existing budget and then they would have to come to the legislature for specific appropriations. SENATOR LEMAN asked if the determination on the Russian River resulted in any more conflict. MR. SHIVELY said he thought the parties were not in agreement and there may be litigation. Number 139 ATTORNEY GENERAL BRUCE BOTELHO explained that there are two fundamental rights the State has to navigable waters. One is under the equal footing doctrine which says that the State of Alaska, at Statehood, took title to all the inland waters and lands of the State. The second is the Submerged Lands Act in which the State also acquired all submerged lands in the territorial waters of the State. One of the major questions that remains unresolved regards lands that the federal government reserved in some way before statehood. The State is currently involved in litigation in the Public Land Order 82 matter. The federal government took the position that the lands were withdrawn in 1943 and, hence, at statehood there could be no effective transfer. The question, in part, has been resolved by the Supreme Court (although the federal government has taken a different position). In the Utah Lake decision the U.S. Supreme Court said there has to be an affirmative act of Congress that they intended to have the lands underlying this water body withdrawn. They also expressed intention to defeat the future State's acquisition of title. In that case the government was unable to establish those points. He believes that is what they are faced with in the current case. One of the major areas being litigated today is what constitutes navigable waters. Generally, the standard is use or susceptible of being used for commerce. The Gulkana case was decided in the State's favor in District Court and affirmed by the Ninth Circuit. ATTORNEY GENERAL BOTELHO said that they are involved in other federal litigation, most actively in three cases together dealing with the title to Kandik, Black, and Nation Rivers. That matter has been on-going for the last four years. It has been to the Ninth Circuit once where the federal government tried to dismiss the case. They were denied. They appealed that decision and the Ninth Circuit affirmed. It is back in front of U.S. District Court and an answer is due in April. They have just received an informal request for them to submit a proposal to settle the matter. He hasn't seen it, yet, but sees it as a very positive move. It may also reflect the federal government's view that the State will ultimately prevail. Other cases either directly involve navigability or implied navigability. The most notorious is the case that deals with primarily the Beaufort Sea and the extent of territorial waters and the mineral revenues that derive from that. They have been waiting several years for the special master's report to the Supreme Court. The Supreme Court has been pressuring the master to act and he has assured them he will issue the report before the conclusion of this term. He gave that assurance last year, as well. Number 263 COMMISSIONER FRANK RUE, Department of Fish and Game, said that their role is one of support for the Department of Law. Their concern is that access be maintained for use of fish and wildlife. People do not lose access to fish and wildlife. They supply background information the Department of Law may need to demonstrate use of waters and when it was used. SENATOR LEMAN asked if he knew of any instances where our resources are in jeopardy. COMMISSIONER RUE replied the Russian River case and there some nuisance issues going on with federal agencies, but he didn't think we would lose our rights. We just don't want the federal agencies to encroach, such as requiring permits for camping, etc. SENATOR LEMAN asked if the occurrences were being flagged to the agencies and being documented. COMMISSIONER RUE replied that was correct and that they would pursue whatever avenue seems most productive to get it fixed. Number 335 SENATOR HALFORD asked if he had seen any difference in the way the Department of Law supports the actions to assert navigability, state ownership of submerged lands, or any of the other easement and access provisions between the last administration and this administration. COMMISSIONER RUE replied that he hadn't noticed a significant difference in the Department of Law's support. With the loss of the navigability in DNR, they have had to do more of the work. Number 351 SENATOR HALFORD asked if the navigability determination on a lake triggers 17(b) determination on access to the lake from other public lands. JOHN BAKER, Assistant Attorney General, answered "yes" that can be a factor in preserving access across federal public lands to submerged land or navigable waters. SENATOR HALFORD asked if a 17(b) easement isn't asserted at the time of transfer and title, can it be asserted later. MR. BAKER replied that generally it comes up when BLM makes a decision to make the final interim conveyance to the Native corporation and either in the decision or attendant to the final easement there would be a decision on whether or not to reserve certain easements. The State would be taking a risk if we didn't appeal those decisions if we learned the title determinations weren't being reserved. COMMISSIONER SHIVELY commented that the State doesn't lose total right to access. It still has the right of condemnation over native lands. They just lose the right to free access over private lands if they don't get the 17(b) easement. MR. BAKER said that condemnation would be a different issue and it isn't necessarily an option with native corporation land. The 17 (b) easement is designed to provide access without resorting to condemnation. SENATOR HALFORD asked how does the State get back what it lost by the timing of the court cases which finally determine the existence and the preservation of the navigable waters and the submerged lands under it within a unit being transferred. MR. BAKER replied that the issue in the Gulkana case was not so much access to the water body across uplands, as the title to the bed of the river itself, because the conveyance to Ahtna Corporation did not purport to exclude the bed of the river. SENATOR HALFORD said his concern is because the later cases determine the rules for the preservation of the submerged lands or the navigability, but the earlier action transfers the land without the protection of the 17(b) easements, they cannot ever be recovered except through public access purchased on very limited terms and with very limited ability for condemnation for public access ever. MR. BAKER asked if the question meant if we don't determine navigability beforehand and because of that we don't aggressively assert the need for a 17(b) easement, are we prejudiced. SENATOR HALFORD said yes. MR. BAKER replied that they generally don't wait for a title determination from the federal court before they decide that it's necessary to preserve overland access to a water body. SENATOR HALFORD said he was trying to figure out what happens when you change the rules after the process starts with a case like Gulkana and essentially BLM has issued conveyances before then without recognizing conditions the Court ratified and said were the rules in the Gulkana case. MR. BAKER replied that they have lost the right for a basis on which to preserve access to a water body because of changes in the federal navigability standard under the Gulkana River case. He is not aware of any place where that has happened. Number 450 CLYDE STOLTZFUS, Special Assistant, Department of Transportation, said their concern with this issue is in regard to materials they are sometimes able to get out of navigable waters and sometimes the right of ways crossing over navigable waters. He explained that their first concerns with materials has been greatly diminished over time because of conflicts with other uses. It could in the future add incremental costs to some of their facilities or projects, none of which would have major impact. SENATOR LEMAN asked what they would do to determine who owns the land they are crossing in a bridge project across a navigable body of water that hadn't been determined in court. MR. STOLTZFUS answered they would first assume that it belonged to the State and they would begin the process for assertion. SENATOR PEARCE commented to Commissioner Rue that some people in her Fairbanks office yesterday were praising the Habitat Division. They called the staff intelligent, constructive, and supportive. COMMISSIONER RUE acknowledged the compliment. SENATOR LEMAN asked if the State doesn't assert navigability on various water bodies, would that hurt the State's case regarding management of the fishery resource. COMMISSIONER RUE replied that the case now is hinging on reserve water rights which may or may not be attached to navigability. Number 495 SENATOR LEMAN asked about a task force to help get these things resolved. COMMISSIONER SHIVELY replied that one of the reasons it fell apart was because of the lack of man power. They also think that BLM is, for the most part, following the law on native conveyances which is where the big risk is and native conveyances have slowed dramatically. Also, he said, no matter how much they agree with BLM on the subject, he does not have the authority to make that decision. He didn't think it could be dealt with administratively. He added that we haven't had a lot of disagreement with BLM about what is or isn't navigable. He thought the future issue would be how the federal government treats our waters when it runs through their conservation system units. That's a management issue, not an ownership issue. He thought we would have to work with the federal government to come to an understanding about how they should treat people who are on our water ways. SENATOR HALFORD asked what an Alaskan should do when a federal bureaucrat requires a permit for that Alaskan citizen to use the property of the State of Alaska that is obviously navigable, but it goes through some federal unit that was created long after statehood. He asked if the State would defend its citizens against the federal government when they require a permit. COMMISSIONER SHIVELY responded that the federal government does have some rights when they are the upland owner for management if its in keeping with protecting the purpose of the unit. Just charging someone for floating down a river may not be, but charging a commercial person may be. He thought we would be having some test cases in this instance. SENATOR HALFORD said that basically the casual user gets away with it, but the person who has to have any other dealing with the federal agency is told they can't use the State land either unless they pay the "bounty." It was stated all through the 1980 bill, unless there is a specific provision, all the traditional uses were supposed to be protected. COMMISSIONER SHIVELY concurred with that. SENATOR HALFORD continued that he thought the uses were being attacked in every category and he wanted to know who needed the money, the effort, and the help to do something about it. COMMISSIONER SHIVELY agreed and said he thought it could be resolved through negotiation as opposed to litigation. COMMISSIONER RUE said they are putting significant effort into identifying and trying to resist those efforts in their review of federal management plans. SENATOR LEMAN mentioned Commissioner Shively's memo of last summer that identified a supplement to Department Order 125 and asked if that had been developed. COMMISSIONER SHIVELY answered they hadn't developed the supplement and they haven't changed the policy other than not to have as much man power. He has spent some time negotiating with Jules Tileston on how they would get the work done with the existing budget. He thought the manpower needed to be readily available when these things come up. SENATOR LEMAN asked about transferring manpower from the navigability section. He thought there was an agreement that the function would remain, but it wouldn't be the navigability section. COMMISSIONER SHIVELY said he thought there was some interest by the legislature in transferring the responsibility to the Division of Land, but the money was not transferred with it. He said they may use Division of Land personnel at some point and they do keep track of things, but not as aggressively as before. The main push for looking at navigability issues, the transfer to native corporations, is mostly done. COMMISSIONER SHIVELY said he knew the intent was for the Division of Land to do it, but the positions were not put there to do it. He would try to get the work done, but it won't get done in the same way it was done before. SENATOR FRANK asked what was different. COMMISSIONER SHIVELY explained that they aren't as aggressively reviewing the documents that come from BLM. TAPE 96-21, SIDE B Number 580 SENATOR FRANK asked him to explain the review. COMMISSIONER SHIVELY explained that they probably take a cursory look at the issue rather than spending a lot of time going section by section on a map. He said they attempt to identify navigable waters because it is an acreage issue for the Native corporation, because navigable water is not chargeable. Also, it's the primary driving force for 17(b) easements to water. SENATOR FRANK asked how many transfers come through typically. JANE ANGVIK, Director, Division of Land, replied that at this point it has closed down considerably. She would get the information for him. Number 560 SENATOR LINCOLN asked how all the navigability issues were being compiled so that they know nothing is slipping between the cracks. COMMISSIONER SHIVELY answered that DNR has and continues to be the lead in terms of conveyance documents for Native corporations. It's not a legal issue at that point. It's a policy issue. SENATOR LINCOLN asked if he had a time frame for when the Department's Order 125 would take place. COMMISSIONER SHIVELY answered no. SENATOR LINCOLN said she would like to see a response to the questions in their packet dated 2/6/96. Number 507 COMMISSIONER RUE said they rely on DNR to keep the record on navigability. With DNR's budget being cut, they may have to go there to look at files if someone has a complaint about a federal agency. It's harder for DNR to provide that service. SENATOR LEMAN asked Commissioner Shively if he had actually lost people from the last fiscal year to this year who were working on these issues. JULES TILESTON, Director, Division of Mining and Water Management, answered saying that they had two people working on navigability who were reassigned to mining positions where they are working on totally unrelated issues. But when it came to the Russian River, he pulled that individual from his staff. He and a hydrologist, who wasn't part of a navigability group, prepared the report for the Russian River. The technical capability is still there, but they are not working under navigability. They are actually working for and being paid from receipts from mining. SENATOR HALFORD asked why the Nation, the Kandik, and the Black Rivers were asserted out of a list of about 200 rivers and what was the plan for the other 197 rivers. ATTORNEY GENERAL BOTELHO replied the strategy was to identify collectively, with primarily DNR in the lead, certain principles that could be established by groups of rivers. After those principles are established presumably in the State's favor, another class of rivers could be identified to push the principle further. COMMISSIONER RUE said they have information on rivers they think might be good test cases. SENATOR HALFORD asked if there were no financial considerations, what would the Department of Law's limit be in terms of asserting navigability. ATTORNEY GENERAL BOTELHO answered that dealing with three rivers right now is a strategic decision. SENATOR HALFORD said he would like something out of the Department of Law on the assertion of RS2477's and the navigability assertions. He wanted to know what we could get for how many dollars. He also asked from DNR what it would take to reassert an aggressive navigability section in DNR that's based on the last administration's interpretation of "if it was on a map and if it was wet, it was navigable" so that we're not losing things we can never get back. SENATOR LEMAN noted for the record that the people testifying were nodding in agreement. ATTORNEY GENERAL BOTELHO said he was nodding in understanding of the assignment. COMMISSIONER SHIVELY asked if he was concerned mostly at this point about how the federal government is treating management of waters within these units. He said the ownership issue is not time sensitive, but management issues are. SENATOR HALFORD said he thought ownership issues were indirectly involved in the management issues. Number 403 COMMISSIONER RUE said he thought they were doing a pretty good job of watching for abuse by the federal government to try to stop people from doing what was not intended under ANILCA. He has tried to maintain a good program despite the budget cuts. SENATOR LEMAN asked if it would be possible within the next several days for each of them to identify those elements in their budgets that are related to navigability and let the Committee know. SENATOR LEMAN took a short break to acknowledge the presence of members of the Soil and Water Conservation Board. SENATOR LEMAN asked if it was possible to put together an atlas of navigable waters. MS. ANGVIK noted that there already existed a number of atlases in the Division of Land and they were working on doing the remaining areas. She said she would get this atlas to the Committee. Number 359 SENATOR LEMAN adjourned the meeting at 4:50 p.m.