ALASKA STATE LEGISLATURE
SENATE RESOURCES STANDING COMMITTEE
February 15, 2017
3:30 p.m.
MEMBERS PRESENT
Senator Cathy Giessel, Chair
Senator John Coghill, Vice Chair
Senator Natasha von Imhof
Senator Bert Stedman
Senator Shelley Hughes
Senator Kevin Meyer
MEMBERS ABSENT
Senator Bill Wielechowski
COMMITTEE CALENDAR
Overview: State Legal Efforts Related to the Alaska National
Interest Lands Conservation Act
- HEARD
SENATE BILL NO. 6
"An Act relating to industrial hemp; and relating to controlled
substances."
- MOVED CSSB 6(RES) OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: SB 6
SHORT TITLE: INDUSTRIAL HEMP PRODUCTION
SPONSOR(s): SENATOR(s) HUGHES
01/09/17 (S) PREFILE RELEASED 1/9/17
01/18/17 (S) READ THE FIRST TIME - REFERRALS
01/18/17 (S) RES, JUD
02/08/17 (S) RES AT 3:30 PM BUTROVICH 205
02/08/17 (S) Heard & Held
02/08/17 (S) MINUTE(RES)
02/13/17 (S) RES AT 3:30 PM BUTROVICH 205
02/13/17 (S) Heard & Held
02/13/17 (S) MINUTE(RES)
02/15/17 (S) RES AT 3:30 PM BUTROVICH 205
WITNESS REGISTER
JONATHAN SCHUMACHER, representing himself
Anchorage, Alaska
POSITION STATEMENT: Supported SB 6.
EMBER HAYNES
Denali Hemp Company
Talkeetna, Alaska
POSITION STATEMENT: Supported SB 6.
DON HART
Professional Paralegal Services
Wasilla, Alaska
POSITION STATEMENT: Supported SB 6.
RHONDA MARCY
Alaska Hemp Industries
Wasilla, Alaska
POSITION STATEMENT: Supported SB 6.
CARRIE HARRIS, representing herself
Anchor Point, Alaska
POSITION STATEMENT: Supported SB 6.
KAREN BERGER, representing herself
Homer, Alaska
POSITION STATEMENT: Supported SB 6.
FRANCINE BENNIS, representing herself
Trapper Creek, Alaska
POSITION STATEMENT: Supported SB 6.
AARON RALPH, representing himself
Anchorage, Alaska
POSITION STATEMENT: Supported SB 6.
LARRY DEVILBISS, representing himself
Palmer, Alaska
POSITION STATEMENT: Supported SB 6.
BRUCE SCHULTE, representing himself
Anchorage, Alaska
POSITION STATEMENT: Supported SB 6.
COURTNEY MORAN, Earth Law, LLC
Portland, Oregon
POSITION STATEMENT: Supported SB 6.
ATTORNEY GENERAL JAHNA LINDEMUTH
Department of Law (DOL)
Juneau, Alaska
POSITION STATEMENT: Provided Overview of State Legal Efforts
related to the Alaska National Interest Lands Conservation Act.
JESSIE ALLOWAY, Attorney
Special Litigation Section
Department of Law (DOL)
Juneau, Alaska
POSITION STATEMENT: Provided Overview of State Legal Efforts
related to the Alaska National Interest Lands Conservation Act.
TOM LENHART, Attorney
Natural Resources Section
Department of Law (DOL)
Anchorage, Alaska
POSITION STATEMENT: Provided Overview of State Legal Efforts
related to the Alaska National Interest Lands Conservation Act.
KENT SULLIVAN, Attorney
Natural Resources Section
Department of Law (DOL)
Juneau, Alaska
POSITION STATEMENT: Provided Overview of State Legal Efforts
related to the Alaska National Interest Lands Conservation Act.
ACTION NARRATIVE
3:30:42 PM
CHAIR CATHY GIESSEL called the Senate Resources Standing
Committee meeting to order at 3:30 p.m. Present at the call to
order were Senators Meyer, Hughes, Coghill, Stedman, Von Imhof,
and Chair Giessel.
SB 6-INDUSTRIAL HEMP PRODUCTION
3:31:21 PM
CHAIR GIESSEL announced consideration of SB 6, sponsor by
Senator Hughes. [CSSB 6, labeled 30-LS0173\U, was before the
committee.] Public testimony was open.
JONATHAN SCHUMACHER, representing himself, Anchorage, Alaska,
said the industrial hemp industry would bring in much needed
revenue for the state.
EMBER HAYNES, Denali Hemp Company, Talkeetna, Alaska, supported
SB 6. She and her husband own a business in Talkeetna that grows
and harvests Alaska plants to create herbal sundries. She looks
forward to the day she can incorporate Alaska-grown hemp seed
oil into her Alaskan Devil's Club Balm. Her family and many
others across Alaska are currently adding protein to their diets
with hemp seed, powder, and meal. She personally supplements
their animals' feed with high-protein, non-viable hemp seeds,
and right now she has a new litter of pigs nestled in some Dove
Tree Hemp Herd Bedding, a product she uses on a daily basis that
she wished could be all-Alaskan grown.
She asked if there might be further clarification on the
language in Section 1 (l) and (n) where it asks a registrant to
keep three years of records, and to add that the department
shall provide at least three days' notice before inspecting the
records. She said these could be working days and that is why
further time should be allowed. Other than that, she hopes to
see this industry flourish in Alaska and be exported worldwide.
3:36:33 PM
DON HART, Professional Paralegal Services, Wasilla, Alaska,
supported SB 6 and said it's extremely important for cultivation
of hemp to be legalized in Alaska, because Canada has made such
a success after legalizing it there; they ship all of their hemp
products into the United States.
He said that hemp grows very well in the northern climate and
Alaska has a lot of land to grow it on. Instead of saying it can
be raised as an affirmative defense or using the definition only
in the criminal statutes, to really benefit the farmers it would
be better to remove it entirely from AS 17.38. The reason is
that the definition of marijuana includes all parts of the plant
of genus cannabis. If it's not removed it will be illegal
anyway.
Secondly, AS 17.38.210 (a) allows hemp growing in Alaska to be
excluded by initiative. Two Alaska Supreme Court cases, Carmen
v. McKechnie and Griswold v. the City of Homer, state that
zoning by initiative or the municipality is invalid and
unconstitutional, because it creates a taking action.
3:40:57 PM
RHONDA MARCY, Alaska Hemp Industries, Wasilla, Alaska, supported
SB 6. She said she has an undergraduate degree, a Master's
degree, and along the way she studied industrial hemp at Oregon
State University. She supports the industry in Alaska and to
that end her business is trying to help the people who want to
have an industry in Alaska to process and have end products for
the hemp they are growing.
She visited a University of Kentucky hemp field two years ago
and found that the nutritional contents of the green part of
plant is higher than in alfalfa and when the meat of the seed is
added it is 100 percent complete nutrition with Omegas 3, 6 and
9. One of the reasons hemp will be such an asset to Alaska is
that it can be food for fish/salmon fry. Currently, last years
fry are ground up and fed back to the current years fry, a
decreasing nutritional cycle. Hemp is a perfect fish/salmon food
that Alaskans could grow, and that would also contribute to
having a stronger salmon industry in Alaska.
She suggested making a tribute to Senator Johnny Ellis for
starting this issue last year.
3:43:25 PM
CARRIE HARRIS, representing herself, Anchor Point, Alaska,
supported SB 6. She believes industrial hemp should be allowed
as well as cannabis. "The benefits are amazing." She feels that
in voting to legalize cannabis people set aside the issues the
federal government has with it.
3:44:10 PM
KAREN BERGER, representing herself, Homer, Alaska, supported SB
6. She said she was also testifying in the spirit of Julie
Suzerini, another hemp advocate. Thirty other states favor this
type of legislation and she would like to see Alaska as number
31. Agriculture is a big part of Homer's economy and the
economic base of our state needs all the help it can get.
3:45:08 PM
FRANCINE BENNIS, representing herself, Trapper Creek, Alaska,
supported SB 6. She also wanted to thank Senator Ellis for his
work on this issue. She said hemp is an amazing substance that
can be used for many things. The U.S. Declaration of
Independence was written on hemp paper, and both Thomas
Jefferson and George Washington had hemp plantations. Alaska can
really use another viable industry, and it will be well received
here. It is easy to grow here; Canada is begging the United
States to develop an infrastructure for growing hemp products,
because they can barely keep up with U.S. demand. Canada started
growing legally in 1998 and by 2010 they had over 25,000 acres
in cultivation. China is also producing hemp, but is buying it
from Canada, as well. Right now this country is importing over
$1 billion worth of hemp products from Canada including food and
clothing.
3:48:07 PM
AARON RALPH, representing himself, Anchorage, Alaska, supported
SB 6. Hemp has over 50,000 uses. It is great as a dietary
supplement and many food products can be made out of it. It
produces a higher amount of cannabidiol, which is a great tool
in treating most neurological disorders.
3:48:51 PM
LARRY DEVILBISS, representing himself, Palmer, Alaska, said he
doesn't use marijuana, but supported SB 6. He is a farmer in
Palmer and has been in many places around the world where hemp
is grown. It is unfortunate that it happens to be in the
cannabis family. Hemp has a lot of practical benefits that could
become an economic driver in Alaska. He mentioned that a Palmer
initiative banned marijuana products but exempted hemp, because
of its beneficial uses and none of the negatives that are
associated with other cannabis products.
3:50:28 PM
BRUCE SCHULTE, representing himself, Anchorage, Alaska,
supported SB 6, but shared some of the concerns over the scope
of regulation and government involvement as well as the fees. He
hoped the fees could be kept to an absolute minimum. He knew of
a lot of large tracts of land that could benefit from the hemp
industry, but there are also smaller land owners who could
benefit, and he would hate to see them left out because of high
fees. He observed recent news about CBD-containing products
around the state and he hoped that a clear distinction could be
made between hemp-based CBD products and its distance cousin,
marijuana products, so it wouldn't be open to challenge later
on.
3:52:56 PM
COURTNEY MORAN, Earth Law, LLC, Portland, Oregon, supported SB
6. She is an industrial hemp attorney with her firm, Earth Law,
LLC, and it has been her honor and pleasure to work with Senator
Hughes and Buddy Whitt and with all the comments from the
Division of Agriculture and this committee in drafting
legislation that does conform with federal law. SB 6 sets up a
robust regulatory framework that will provide for a successful
and sustainable industrial hemp program for farmers and
manufacturers throughout Alaska. She thanked the committee for
their thoughtful questions and discussion on SB 6 clarifying
that industrial hemp is an agricultural product subject to
regulation by the Division of Agriculture.
MS. MORAN noted that industrial hemp products, themselves, are
legal and always have been, but its cultivation has been a
federal issue for the past 80 years. The legality of industrial
hemp products was clarified by the Ninth Circuit Court in the
2004 Hemp Industries Association (HIA) v. Drug Enforcement
Agency (DEA) case. Mr. Carter with the Division of Agriculture
mentioned during this committee's March 13th hearing that
Section 763 of the Consolidated Appropriations Act of 2016
provides that:
No funds may be used by any federal agency to prohibit
the transportation, processing, sale, or use of
industrial hemp that is grown or cultivated in
accordance with Section 7606 of the Agricultural Act,
in or outside the state in which industrial hemp is
grown or cultivated.
This language provides clarity for industrial hemp product sales
across state lines. Also, as discussed in the past two hearings,
Section 7606 of the U.S. Agriculture Act of 2014 (the Federal
Farm Bill) provides a directive from Congress by not only
defining industrial hemp notwithstanding the Controlled
Substances Act and giving authority for the State Department of
Agriculture and institutions of higher education in states that
have already legalized industrial hemp to research the growth,
cultivation, and marketing of it. This measure provides clear
federal authority for the implementation of a state program.
She recalled comments about why Alaska is following federal
guidance for industrial hemp if the state is not following
federal guidance for marijuana, and the rationale was that clear
legal authority is lacking federally for marijuana except for
the Department of Justice's Cole Memo Guidance of 2013. In
contrast, there is clear federal statutory authority, and SB 6
will create the state legal authority for Alaska. That
institutions of higher education and universities can engage in
industrial hemp research is also provided in Section 7606.
Approximately 20 universities throughout the U.S. are currently
conducting industrial hemp research and SB 6 will provide that
authority for Alaska institutions of higher education.
Another important provision of SB 6 provides that food is not
adulterated solely because it contains industrial hemp. Other
states, such as Colorado, have had this issue, because it is not
clarified, and SB 6 will take care of this right away for
farmers and manufacturers at the beginning of the program's
implementation. She closed thanking them for their support and
encouragement for agricultural industrial hemp development in
Alaska.
3:56:09 PM
CHAIR GIESSEL, finding no one else to testify on SB 6, closed
public testimony. She said the committee had updated fiscal
notes and asked Senator Von Imhof, the member who is on the
Senate Finance Committee, if she had any comments on them.
SENATOR VON IMHOF reviewed the four fiscal notes as follows:
1. The DNR provides a zero value. The cost of
administering the registration program will be
determined after regulations are drafted. Those costs
will be recovered by approximately 25 farms and the
department anticipates to register that in the first
year. Additionally, the department anticipates a 10
percent growth of interest from the agricultural
community each year after.
2. The Department of Law: does not anticipate a fiscal
impact at this time. Zero value.
3. The Department of Public Safety: passage of this
legislation is not expected to result in a significant
increase in the crime labs controlled substance
analysis workload. Therefore, no fiscal impact to the
crime lab is anticipated. Zero fiscal note.
4. The Department of Public Safety: passage of this
legislation is not expected to have an impact on the
enforcement efforts of the Alaska State Troopers.
Therefore, a zero fiscal note is being submitted.
CHAIR GIESSEL recognized Division of Agriculture personnel who
were ready to answer questions. She invited Senator Hughes to
make closing remarks.
SENATOR HUGHES thanked the committee for hearing the bill and
everyone who testified. She thanked the Division of Agriculture
for their work with them. She also recognized Bruce Bush from
MatSu.
3:58:20 PM
SENATOR COGHILL moved to report CSSB 6(RES), labeled 30-
LS0173\U, from committee with individual recommendations and
attached fiscal note(s). There were no objections and it was so
ordered.
3:58:48 PM
At ease
^Overview: State Legal Efforts Related to the Alaska National
Interest Lands Conservation Act
Overview: State Legal Efforts Related to the Alaska National
Interest Lands Conservation Act
4:00:24 PM
CHAIR GIESSEL called the meeting back to order and said on
Monday the committee heard testimony from the Department of
Natural Resources (DNR) and the Alaska Department of Fish and
Game (ADF&G) on the Alaska National Interest Lands Conservation
Act (ANILCA). Today they would hear from the Department of Law
about the state's legal efforts related to it.
4:00:52 PM
ATTORNEY GENERAL JAHNA LINDEMUTH, Department of Law (DOL),
Juneau, Alaska, introduced herself and said she had with her
today Assistant Attorneys General Jessie Alloway from the
Special Litigation Section, and Tom Lenhart and Kent Sullivan
from the Natural Resources Section. They would walk through the
list of federal issues and conflicts dated January 23, 2017.
ATTORNEY GENERAL LINDEMUTH said they would spend about two
minutes per case. Most issues are in litigation and while they
are happy to describe the claims and their procedural posture,
as the attorneys for the state, they don't want to get too far
into strategy or the legal merits of different issues.
She started with the Sturgeon Case saying she became Attorney
General about six months ago. However, before that she was in
private practice at Dorsey & Whitney and actually worked on this
case. She has more in-depth knowledge about this case perhaps
than the other cases.
ATTORNEY GENERAL LINDEMUTH said the Native Corporations in the
state were aligned and actually worked together on these
matters. She is the one who drafted the Ninth Circuit brief and
the Supreme Court brief for the Arctic Slope Regional
Corporation (ASRC) and Cook Inlet Regional, Inc. (CIRI) in
support of the Sturgeon Case. The parties have actually waived
conflicts because they were aligned and she can now represent
the state on this matter.
ATTORNEY GENERAL LINDEMUTH said the theme in a lot of cases in
recent years has been that the federal government, through
regulation, has tried to expand federal jurisdiction and federal
powers in the state, and in doing so have, she believes,
violated the actual statutes and governing laws that really
control the issue. In many instances, these area manifested in
changes in positions.
4:03:45 PM
In the Sturgeon case, there had been long standing federal
regulation confirming that the federal government didn't have
regulatory power over the in-holdings within the CSUs or the
federal parks and refuges in Alaska, and the state, the Native
Corporations, and private lands really accounted for a lot of
that. So, when ANILCA was passed there were millions of acres of
private and state lands within the CSUs that would be in-
holdings, in effect. The federal government changed its
interpretation of a regulation that flipped the statute on its
head by deciding that indeed the federal government could
regulate the in-holdings and took the very statute that
confirmed they couldn't regulate them and tried to say that
meant that they could regulate them. That particular
interpretation went all the way up to U.S. Supreme Court and
Alaska won. So that issue is off the table.
They are back in front of Ninth Circuit now and the federal
government is arguing different, weaker arguments to expand
federal jurisdictions, and the state is just waiting to hear
from the Ninth Circuit about whether any of them have purchase.
4:05:20 PM
ATTORNEY GENERAL LINDEMUTH said this case has often been
described as a "navigable waters case," but it wasn't limited to
navigable waters before. It was over all lands. In fact, it has
led to the federal government actually asserting oil and gas
regulations that would regulate oil and gas exploration even on
state and private lands. The federal government backed off on
those regulations in November and did not go forward with
passing the additional oil and gas regulations, but are waiting
to see what happens with the Ninth Circuit. She turned the
presentation over to Ms. Alloway to describe the Mosquito Fork
Case.
4:06:07 PM
JESSIE ALLOWAY, Attorney, Special Litigation Section, Department
of Law (DOL), Juneau, Alaska, said the next group of cases she
would talk about involve the state's assertion of ownership over
the submerged lands underlying the navigable waterways. With few
exceptions she said the state owns the submerged lands under
navigable in-fact waterways as well as tidally influenced
waterways. The dispute with the federal government on navigable
waterways usually comes in two forms: one, they will say the
river is not navigable. They'll say it wasn't navigable at the
time of statehood by a water craft that was relevant at the
time, or two: they'll say that pre-statehood the federal
government either reserved the land for itself or conveyed the
land to another third party, so the state's interest was
defeated at statehood. Each of those issues has come up in the
group of cases she would talk about.
The first is the Mosquito Fork Case and that was over whether
the river was navigable in fact. The DNR's Public Access and
Assertion Defense Unit and some members of the Alaska Department
of Fish and Game (ADF&G) worked closely with the DOL to bring
this case. It was litigated for over three years, and three
weeks prior to trial the United States (U.S.) issued a
disclaimer of interest and recognized the state's ownership to
the Mosquito Fork, so that ended the need for a trial. But that
did not end the case.
The state decided to bring a motion for attorney's fees arguing
that the U.S. had acted in bad faith throughout the course of
the litigation by making arguments that were frivolous and
contrary to Ninth Circuit precedent. Judge Gleason agreed with
the DOL and last fall awarded the state approximately $600,000
in attorney's fees and costs. The U.S. is currently appealing
that decision to the Ninth Circuit; the state is cross appealing
on the issue of whether the state is also entitled to get
reimbursed for the expert witness fees this litigation incurred.
That is approximately another $380,000. That case is currently
before the Ninth Circuit; briefing is scheduled to begin in
April.
4:08:54 PM
The second case is the Stikine River that dealt with the other
type of issue of whether there was a pre-statehood withdrawal,
specifically the Tongass National Forest withdrawal that
defeated the state's interest in the Stikine River.
MS. ALLOWAY said the DNR had been trying to get a recordable
disclaimer of interest to the Stikine River for at least five
years through a Bureau of Land Management (BLM) administrative
process by which and BLM simply refused to act on the
application. So, once the Mosquito Fork trial went away, the DOL
filed a second complaint to quiet title to the Stikine River.
That case went a little bit smoother and didn't take three
years, and within a year, the U.S. filed another disclaimer of
interest recognizing the state's ownership instead of filing an
answer. That case is still pending, because even though the DOL
did not seek attorney's fees they sought costs as the prevailing
party of $400, but the U.S. is appealing that determination over
whether the state is the prevailing party. It is related to an
issue in the Mosquito Fork case, but these cases are both being
appealed to the Ninth Circuit and will likely be heard by the
same panel. She has been told by the U.S. that their notice of
appeal is provisional; they haven't received full authority from
the solicitor general to pursue it and she should receive an
update next week on whether they are going to pursue it.
4:10:57 PM
The next case is the Kuskokwim River that is an administrative
appeal. DNR did receive a recordable disclaimer of interest for
most of the Kuskokwim, except for a small section in McGrath
that the U.S. claims was withdrawn pre-statehood. The DOL has
appealed that to the Interior Board of Land Appeals (IBLA), an
administrative body that hears cases for the BLM. That was fully
briefed over a year ago, and they are simply waiting for a
decision.
4:11:13 PM
MS. ALLOWAY said the next case is the Knik River and whether it
is navigable in fact. In September 2015, BLM issued a conveyance
decision purporting to convey portions of the Knik River to
Eklutna Native Corporation to satisfy their entitlement. In
doing so, they neglected to reserve certain 17(b) easements that
the state thought were necessary in order to preserve public
access to the Knik Public Use Area. The 17(b) issue is being
appealed to the IBLA and the state is working closely with
Eklutna as well the BLM on settlement negotiations. That part of
the case will likely be settled, but they are still dealing with
whether the Knik River is navigable from the Eklutna conveyance
area up to the glacier and are in ongoing negotiations with BLM
on that issue. The state has filed a 180-day notice of its
intent to quiet title.
4:12:27 PM
TOM LENHART, Assistant Attorney General, Natural Resources
Section, Department of Law (DOL), Anchorage, Alaska, said the
first case he had on the access of land issue has a deceptively
simple title of "Roadless Rule." It's a story of 16 years of
continuous litigation that has wound its way through 8 different
federal courts and it will be a challenge to cover it in two
minutes but he would try. The story starts in 2001 in the last
10 days of the Clinton Administration when the Department of
Agriculture worked desperately to finalize the rule and get it
out the door before the change in administrations. The rule
essentially sets aside 58 million acres of U.S. National Forest
land. To put that into context, 58 million acres is 2 percent of
the United States. Out of that 58 million acres almost 15
million is in Alaska and about 9 million of it is in the
Tongass. The Roadless Rule prohibits road construction and
timber harvest in roadless areas. It is nearly as restrictive as
a wilderness designation.
MR. LENHART said there are harms to utilities and community
access, particularly in Southeast, to timber, mining,
geothermal, and others. As a result, throughout the litigation
the department has had a large coalition of particularly
Southeast interests who have joined the state as intervenors in
various cases.
When the rule came out in 2001, the State of Alaska and others
almost immediately went to federal court with the initial
challenge. In 2003, the SOA entered a settlement with the
federal government and as a result of that settlement, a second
rule was promulgated, best known as the Tongass Exemption Rule,
that quite simply exempted the Tongass National Forest from the
Roadless Rule. That exemption remained in effect until 2011 when
the federal district court in Alaska invalidated the exemption,
reinstating the Roadless Rule.
4:15:25 PM
The State of Wyoming had also challenged the Roadless Rule and
succeeded in getting injunctions in the Tenth Circuit, so the
Roadless Rule for most of its life has never actually been in
effect. That changed in 2011 when the Tongass exemption was
invalidated; almost simultaneously, the Tenth Circuit also
lifted the injunction. So, at that point the Roadless Rule
actually went into effect across the country for the first time.
In response to what happened in 2011, Mr. Lenhart said, the
State of Alaska did two things: one they appealed the Tongass
exemption ruling and had to go it alone because at that point
the federal government was not interested in defending the
exemption. So, they played no part in what followed. The appeal
started with a three-judge panel in the Ninth Circuit and it was
successful there. On a 2:1 margin the exemption was reinstated.
But in what is a relatively rare situation, the Ninth Circuit
granted "en banc" review of that decision. It was reheard by an
11-judge panel and there the state lost 6 to 5. So, the Roadless
Rule was once again reinstated. The state pursued that to the
Supreme Court, but they chose not to hear the case. At that
point, in July 2015 the Roadless Rule was in effect and has been
in effect in Alaska since then.
The state also filed a new complaint on the same day the appeal
was filed in the federal district court for the District of
Columbia (D.C.) once again challenging the underlying Roadless
Rule. That was six years ago. He listed the court cases saying:
We've been down the road with the federal government
where first they challenged us on venue trying to take
the case back to the State of Alaska. Then they
challenged us on statute of limitation, which was
actually granted. We went to the Circuit Court of
Appeals in D.C. We were successful. So the case was
reinstated and remanded back to the district court for
argument on the merits.
4:17:45 PM
We initially completed the briefing on the merit in
September of 2015; waited for a full year for a
decision and almost on the one-year anniversary, the
judge in that case ordered a supplemental briefing.
So, we have completed the supplemental briefs; the
last one was filed on January 24 of this year. So,
once again it's ripe for decision and we await a
district court decision. Now, obviously, whoever loses
in the district court, there's a right to appeal to
the Circuit Court. "Will we go there? We always have."
MR. LENHART said the next case is King Cove, but it's also a
story of life and death. King Cove is a community of about 900
people; Cold Bay is a community of about 80 people and they are
about 30 miles apart on the Alaska Peninsula. King Cove has a
small gravel airport; it's not certified for night operations.
King Cove also has terrible weather so that the airport is not
serviceable for a good chunk of the year. Cold Bay has the
unique circumstance of having a 10,000-foot paved runway that
was built in WW II, and it still serves today as an emergency
landing field for even Boeing 747s inbound over the Pacific. For
medical emergencies you can almost always get out of Cold Bay,
but frequently you can't get out of King Cove.
No road connects them, so for a medical emergency in King Cove
on a day that is not flyable the options are by Coast Guard
helicopter or ocean transport, and because it's a day with high
wind, both modes of travel are a very rough trip. What has been
proposed for years is to finish a short 12-mile gravel road over
the Izembek National Refuge connecting the two villages.
Going back to 2009, Mr. Lenhart said, the U.S. Congress and the
Alaska Legislature both passed authorizations for a land
exchange that would give the state the small strip of land
through the national refuge that would be needed to construct
the road. That was subject to approval by only the Secretary of
Interior based on an environmental assessment. And in 2013, the
secretary decided that a road was not needed and opted for the
"no action alternative" for no road. Her decision rested very
heavily on a finding that a theoretical alternative of transport
between the two communities was using a landing craft. This was
not supported by the record. In fact, the record was adamantly
in the other direction.
So, a plaintiff's group from King Cove went to federal court on
that. The State of Alaska intervened as a plaintiff in support,
and the case was lost at the district court level. The state has
appealed to the Ninth Circuit and the briefing was completed in
August 2016. It's been six months now and the court has not even
docketed the case for oral argument.
One other option that is also being pursued is there is a
possibility of additional federal legislation, and that HJR 6 by
Speaker Edgmon, was recently passed by the state legislature in
support of that legislation.
4:22:25 PM
KENT SULLIVAN, Natural Resources Section, Department of Law
(DOL), Juneau, Alaska, said he would talk about the Chicken
RS2477 litigation. The RS2477 issue arose out of the Mining Act
of 1866. It basically indicated that anywhere the public creates
a road, trail, or highway across unreserved federal land, it
creates a public right-of-way (ROW) in favor of the state.
To a state like Alaska with relatively few roads and
infrastructure, RS2477 is incredibly important. It has been
estimated that roughly 70 percent of the roads and highways in
the western U.S. arose by an RS2477. Despite the fact that
Alaska is the largest state in the country, it has fewer linear
miles than Connecticut, the third-smallest state. Just the
codified RS2477s that have been recognized by the State
Legislature so far comprise roughly 20,000 linear miles. There
are very few highways in Alaska and RS2477s actually tie them
all together.
Having large federal conservation units making up such a large
percentage of the state makes having RS2477 rights very
important. So, Mr. Sullivan said, one of the things DNR was
tasked with many years ago was creating favorable RS2477
precedent, particularly against the federal government, because
there are not a lot of cases in the entire country (less than
200 nationwide). The legislature made appropriations and funded
DNR to basically analyze RS2477 and among other things to find
best-case scenarios for cases to bring to create precedent.
After many years, some of the RS2477s in the Chicken area appear
to qualify to do that, and litigation was filed on six of them
roughly three years ago. They are all very similar in how they
arose; they have strong historical support and they cover
approximately 40 square miles. They are used by hundreds of
recreationalists every fall and many miners to access mining
claims. They go through federal Wild and Scenic River corridors
among others. That case was filed and those claims were brought.
The state was initially challenged by a couple of allotment
owners who had property near Chicken and who these RS2477s ran
across their allotments before going up onto federal land. The
challenge was basically on a procedural issue saying that the
state couldn't bring RS2477 claims against the Native allottees.
When the trial court ruled against the state on that issue, it
was appealed and the Ninth Circuit confirmed that while the
state couldn't get a RS2477 confirmed against the Native
allottees, in fact, the state could in essence condemn what it
already held by RS2477. He explained that the court wasn't
saying that the state didn't have RS2477 rights across the
allotment; it simply said there wasn't a procedural mechanism in
place that would allow the court to address it. Again, the state
believes it has rights-of-way there and now the case is back
down before the trial court and is proceeding.
Once the allotment issue is addressed the case will continue
against the federal government as to the real focus. In this
particular instance, the federal government has attempted to
place very onerous restrictions on miners among other things for
using these rights-of-way and has required them to do
environmental assessments before using them, to pay thousands of
dollars in fees annually, and has even purported to require
miners to have BLM employees accompany them on the first trip in
and the first trip out to and from their mining claims across a
state RS2477 right-of-way. Needless to say, this case is very
important from a state sovereignty perspective and basically
will create and establish favorable precedent on RS2477 issues
as against the federal government.
4:28:16 PM
MR. LENHART said the next case is the Big Thorn timber sale. One
notable thing is that it is one of the very few cases on the
list where the state is aligned with the Forest Service. The
state is always aligned when the Forest Service does actually
sell some timber, but the problem is getting them to have timber
sales.
He said the Big Thorn sale is important because it is the
largest timber sale that has come up in decades. It is 120
million board feet, which is actually at least a couple of
years-worth of timber for the one remaining mill. It was
challenged by multiple environmental organizations. One of the
key issues in this case is the status of the Prince of Wales
Island wolf population. The state is always an important player
in those instances, because it is the primary manager of the
wolf in conjunction with the federal government, but since the
state is manager and the wolves are the issue, it's rather
important that the state support the federal government on these
types of challenges.
In this case, the state prevailed in district court. So, the
sale went forward. It was appealed to the Ninth Circuit where
the plaintiff sought a preliminary injunction and did not get
it. The oral argument was held on February 3, 2016, and a
decision is awaited still, but since there is no preliminary
injunction the best information he could find is that
approximately one-half of the total timber that is authorized to
sell under this record of decision is actually already cut.
4:29:56 PM
MR. SULLIVAN said the next issue he would address is 4407
easements that arose pursuant to a congressional grant to the
State of Alaska for the purpose of tying together Alaska
communities, resources, and power sources in order to get across
Forest Service land in Southeast, because it has so much Forest
Service land that is very disconnected. This is an attempt by
Congress to give the state an easy means to get across those
Forest Service lands. The case in litigation right now extends
the road system from Ketchikan to Shelter Cove and gets it very
close to Ketchikan's power source. Ultimately, the hope is that
the road may go all the way to the Canadian border and connect
to the existing Canadian road system and utilities and intertie
all of them together.
MR. SULLIVAN said the problem is that the federal government has
failed to recognize the 4407 grant and has challenged the state
in many respects on it. One of the cases that arose actually
conveyed permits and an authorization to construct that road,
but it was challenged by environmental groups. The state
intervened and agreed that everything had been put in place to
allow the road to be built. That case has been fully briefed,
but at the same time the state decided that it would be a good
idea to have a case that addressed the grant, itself, and
basically force the federal government to recognize that 4407
easements exist and that it couldn't simply re-characterize an
easement as they are doing with road building. The state wants
the federal government to recognize that these easements were
being done per the 4407 grant, because a lot fewer restrictions
that can be put in place. So, a second case was filed in
December to do just that, and the federal government's answer is
due very soon. Once that happens, that case will also be briefed
on summary judgement like the other case.
4:33:14 PM
MR. SULLVIAN said both cases have now been combined and joined,
and a decision is hoped for by the end of the year after the
summary judgement briefing is complete.
The other good news on the 4407 issue is that it's not limited
to just the Shelter Cove Road. Some other projects are in
development including Katlian where the road will be extended
northeast from the Sitka ferry terminal to Forest Service lands
and an existing Forest Service road system on Baranof Island.
Roughly 16 miles of road are needed to link the two road
systems, and once that is done it will open up a world of roads
to access Forest Service lands. That project is very far along
in the process and the Department of Transportation and Public
Facilities (DOTPF) is doing the design work on it right now. The
state is anticipated to be in a position to request the 4407
permit by late this year.
Another 4407 project of interest is a road linking Petersburg to
Kake. That one is in the works but in very preliminary stages.
In summary he said 4407 is very important for interconnecting
roads, resources, communities, and power sources in Southeast
and the state is actively pursuing it.
SENATOR COGHILL asked if 4407 is Forest Service code.
MR. SULLIVAN answered no; it arises out of the SAFT-LU section
of the Congressional grant, and he would get the citation for
him.
SENATOR STEDMAN said that citation is in Representative Young's
Transportation bill - section 4407. He had marked those
easements on a map and that was the beginning of this process.
Shelter Cove was funded 10 years ago just to give the committee
a timeline of how long it takes to get something done. Katlian
is probably eight in a bond package voted on by the people.
His understanding on dealing with 4407 issues is that the log
transfer facilities (LTF) where the timber industry would put
the timber into the water involved some deed transfers to the
Forest Service and some land exchanges in conjunction with the
4407s, and he is under the impression the state had put up its
property but didn't get the deed from the other guy.
MR. SULLIVAN said that was true, and a lot of these arose out of
situations where the federal government wanted access to shore
facilities. The State of Alaska owned and controlled a lot of
access points to salt water, and the federal government wanted
to be able to go from federal land down to the salt water for
various access reasons of its own. It wasn't something that was
beneficial to just the state; it was actually beneficial to both
sides. The state has done everything it needs to do to uphold
its end of the deal and now it is waiting for the federal
government to convey these easements as it has been directed to
do. But there is a lot of reluctance and feet dragging on the
part of the government.
4:38:01 PM
That is what they are trying to accomplish by way of these
cases: get them to recognize that the federal grant for 4407
easements exists and are valid and something they have to adhere
to. This is very important, because once that occurs there are a
bunch of them out there.
4:38:33 PM
SENATOR STEDMAN noted the state values its tidelands and marine
access extremely high, and for it to give them up as well as
access is a big deal. One might be fortunate enough to have
patent to that claim previous to statehood, or outside of that a
claim had to be filed by 1963. He noted that it was
disheartening that the state would put something so valuable on
the table, and in return a reciprocal exchange is not occurring.
He thanked the department for dealing with the issue upfront and
getting it settled.
4:39:36 PM
ATTORNEY GENERAL LINDEMUTH said maybe with the change in
administration at the federal level, many of these issues will
be worked out more quickly and without litigation. She proposed
skipping pages 4 and 5 since the hearing time is limited; she
and Mr. Sullivan return to Juneau regularly and could continue
that conversation. She turned to the water and fishing cases on
page 6.
4:40:32 PM
ATTORNEY GENERAL LINDEMUTH started with the Waters of the U.S.
case saying Alaska joined a coalition of 12 other states in
filing in federal district court in North Dakota challenging an
EPA rule defining waters of the United States. That change in
definition in the federal regulations was designed to greatly
increase Clean Water Act jurisdiction: again the federal
government making regulatory changes to expand their powers. The
federal district court in North Dakota entered an injunction
against enforcement of that rule in the plaintiff states and the
Sixth Circuit extended that stay nationwide. So, right now they
are seeing pretty good that that rule is not being enforced, and
the basis for the injunction showed the state has strong merits
on the claim. Again, with the change in administration they are
hoping it can be resolved quickly. She invited Ms. Alloway to
cover the stream protection rule.
4:41:48 PM
MS. ALLOWAY said shortly before leaving office, the Obama
Administration finalized a rule related to surface coal mining.
It was initially meant to deal with intermittent and perennial
streams, but the rule was expanded and affected the state's
permitting process including how the state grants permits, the
types of reclamation required, and how operations are bonded.
Alaska joined with several other states including Ohio and West
Virginia to challenge the stream protection rule on both the
processes, how they were implemented as well as the content of
the rule. That litigation is still pending and the U.S. has not
filed an answer, but what has happened is that both the House
and the Senate have voted to rescind the rule using the
Congressional Review Act. That resolution has yet to be signed
by President Trump, however. Assuming that happens, the state
will have to relook at that litigation.
4:42:55 PM
ATTORNEY GENERAL LINDEMUTH commented that the Congressional
Review Act allows Congress to review recently passed
regulations, and it has to be done within a short period of
time, 60 legislative days. There is no reason to think President
Trump won't sign this, and it will be the second time that this
act has been used to undo regulation. In other words, the
planets are aligned right now.
She said the fish and game cases are on page 7. The Salmon
Fishery Management Plan Case is the United Cook Inlet Drift
Association v. National Marine Fisheries Service (NMFS). This is
a rare case where the state is aligned with the federal
government. She explained that the state and the federal
government have had a long-standing agreement that the state
manages fishing in the federal waters off of Cook Inlet
(offshore waters beyond three miles). The state has managed that
salmon fishery since statehood, and to clarify the state
management, the NMFS approved Amendment 12 to the Federal Salmon
Fisheries Management Plan confirming state management. The North
Pacific Fisheries Management Council (NPFMC) approved that
amendment and removed that area of Cook Inlet from the
management plan. In both, the NMFS and the NPFMC concluded that
the state's management of that fishery is better at preventing
over-fishing, which is the primary focus of the Magnuson Stevens
Fishery Conservation and Management Act, the federal law that
oversees that fishery.
Third parties litigated that issue and the Ninth Circuit
concluded that the Magnuson Stevens Act requires that councils
adopt a federal management plan for every fishery that is in
need of conservation and management, a defined term under the
act, and concluded that the federal and state governments had
conceded that this fishery is in need of conservation and
management, something that didn't happen on the record. The
court held that the Magnuson Stevens Act only allows states to
manage a fishery through a delegation of authority set forth in
the federal plan, itself. The trick here is that federal
management plans usually require catch limits that are different
than the state's escapement-based management. So, there is that
difference in management styles. The state lost this case in the
Ninth Circuit and is working on an appeal to the U.S. Supreme
Court that is due at the end of February. Meanwhile this case
has been remanded back to the district court for a remedy, and
there is litigation over what the remedy will be. The issue
whether this is something that requires a remedy now when there
is no fishing in those waters while a plan gets put in place or,
as they hope happens, there is a stay and fishing is allowed
until the council is allowed to reconsider the plan and make
that change in the future.
4:47:13 PM
ATTORNEY GENERAL LINDEMUTH turned over the last two cases for
today to Ms. Alloway.
MS. ALLOWAY said she would talk about the National Park Service
(NPS) Subsistence Collection Rule before finishing with the
litigation against the Park Service. The Collection Rule was
recently finalized just for the Park Service and it applies to
subsistence users in Alaska. In some ways the rule is
beneficial, because it resolves a conflict that existed between
the national regulations and ANILCA and it makes clear that
subsistence users can collect plants and non-edible animal parts
on federal lands. But the problem with the rule that ADF&G has
is that the regulation actually requires subsistence users to
obtain a permit before they go out and collect non-edible
plants. Given how Alaska works, ADF&G just feels like this is an
overburden on subsistence users.
ADF&G has concerns about other things in the regulations
including some changes to how subsistence users can engage in
bear baiting. This is a relatively new regulation, so the
Department of Law is working with ADF&G on how to proceed by
analyzing all options.
4:50:53 PM
MS. ALLOWAY next talked about litigation with the NPS and NFWS
that each separately promulgated regulations that prohibit
certain hunting methods and means that were authorized by the
state on preserve and refuge lands. The state is not alone in
this battle. It filed the lawsuits and two additional lawsuits
have been filed, one by Safari Club International and that has
already been consolidated with the state's case and recently the
Alaska Professional Hunters Association as well as the
Sportsman's Alliance Foundation filed a separate lawsuit to
challenge these regulations.
Based on the hearing she listened to on Monday, it's clear that
the legislature is very concerned about preserving the state's
rights under ANILCA and this case raises several of the
provisions that Ms. Magee and Mr. Palach discussed on Monday and
were very instrumental in helping prepare this case. They
developed comments on behalf of ADF&G throughout the regulation
process and have set up the case quite well for DOL to pursue
it. Several of the ANILCA provisions they already talked about
on Monday will be at issue including section 1314, which says
that ANILCA does not expand or diminish the state's authority
over the management of fish and wildlife on public lands as well
as section 1313, which expressly provides that the taking of
fish and wildlife on national preserves for sport purposes as
well as subsistence uses is allowed. They will also pursue
another claim, whether the federal government meaningfully
consulted with the state as they are required to do when
developing these regulations.
It's early on in the litigation and the United States hasn't had
to file its answer yet. The state has a motion to intervene by
several environmental groups that need responses, but there is
something that is percolating with the Congressional Review Act
that might impact part of the case as Attorney General Lindemuth
talked about previously.
She said that Representative Young has introduced a resolution
that would impact the USFWS's versions of the regulation, but
how they calculate the 60 legislation is quite complicated. They
are still within the timeframe for the USFWS regulations, so he
has proposed a resolution and that is going through the House
this week. It has passed the Rules Committee and there may be a
vote on it tomorrow. A similar provision is in the Senate. If
that is passed and the Congressional Review Act is used to
nullify the USFWS provision, that would impact the state's
litigation and they would have to figure out how to go forward
against the NPS.
MS. ALLOWAY said that is all they were planning on covering
today.
ATTORNEY GENERAL LINDEMUTH said that case illustrates what she
has been talking about. The state has had a long standing
understanding based on federal statutes that the state manages
all fish and game in Alaska, and the federal government under
the Obama Administration with recent federal regulations is
trying to change the rules of the game and expand the federal
powers over those areas, which they think violates the governing
statutes.
She said with the few remaining minutes they could take
questions or take up the Endangered Species Act, or she and Mr.
Sullivan could come back and talk about the access and land
cases on page 4 and the Endangered Species Act cases on pages 5
and 6 at another time.
CHAIR GIESSEL said they would hold the other two issues for
another time and said this review was fantastic.
4:53:26 PM
SENATOR COGHILL said he wanted to hear what is being done on the
Endangered Species Act, because it is time sensitive.
CHAIR GIESSEL said that would take more than five minutes and
she would have them back in the very near future.
ATTORNEY GENERAL LINDEMUTH said to answer what they are doing on
that in the short term, the Alabama case involves the definition
of critical habitat. There is a letter from all of the attorneys
general that are involved in that case, including her, to the
new administration asking them to reconsider and pull that
regulation. That case is stayed and could be reconsidered by the
new administration, but the rest of the cases involve more
litigation background and detail that can be covered in the next
hearing.
4:54:40 PM
SENATOR HUGHES thanked them, because they did an excellent job
of breaking down the cases in a very understandable way.
CHAIR GIESSEL remarked that Attorney General Lindemuth's
expertise was evident and the committee sincerely appreciates
it. These are critical issues for Alaska and she is out there
defending us, she said.
4:55:36 PM
CHAIR GIESSEL adjourned the Senate Resources Committee meeting
at 4:55 p.m.