[Senate Hearing 108-490]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 108-490

   CAPE FOX LAND ENTITLEMENT ADJUSTMENT ACT; NEVADA NATIONAL FOREST 
DISPOSAL ACT; CRAIG RECREATION LAND PURCHASE ACT; CENTRAL NEVADA RURAL 
CEMETERIES ACT; AND TO EXTEND THE TERM OF THE FOREST COUNTIES PAYMENTS 
                               COMMITTEE

=======================================================================

                                HEARING

                               before the

                SUBCOMMITTEE ON PUBLIC LANDS AND FORESTS

                                 of the

                              COMMITTEE ON
                      ENERGY AND NATURAL RESOURCES
                          UNITED STATES SENATE

                      ONE HUNDRED EIGHTH CONGRESS

                             SECOND SESSION

                                   on
                                     

                           S. 1354                               H.R. 272

                           S. 1575                               H.R. 1092

                           S. 1778                               H.R. 3249

                           S. 1819


                                     

                               __________

                             MARCH 10, 2004


                       Printed for the use of the
               Committee on Energy and Natural Resources


                                 ______

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               COMMITTEE ON ENERGY AND NATURAL RESOURCES

                 PETE V. DOMENICI, New Mexico, Chairman

DON NICKLES, Oklahoma                JEFF BINGAMAN, New Mexico
LARRY E. CRAIG, Idaho                DANIEL K. AKAKA, Hawaii
BEN NIGHTHORSE CAMPBELL, Colorado    BYRON L. DORGAN, North Dakota
CRAIG THOMAS, Wyoming                BOB GRAHAM, Florida
LAMAR ALEXANDER, Tennessee           RON WYDEN, Oregon
LISA MURKOWSKI, Alaska               TIM JOHNSON, South Dakota
JAMES M. TALENT, Missouri            MARY L. LANDRIEU, Louisiana
CONRAD BURNS, Montana                EVAN BAYH, Indiana
GORDON SMITH, Oregon                 DIANNE FEINSTEIN, California
JIM BUNNING, Kentucky                CHARLES E. SCHUMER, New York
JON KYL, Arizona                     MARIA CANTWELL, Washington

                       Alex Flint, Staff Director

                   Judith K. Pensabene, Chief Counsel

               Robert M. Simon, Democratic Staff Director

                Sam E. Fowler, Democratic Chief Counsel

                                 ______

                Subcommittee on Public Lands and Forests

                    LARRY E. CRAIG, Idaho, Chairman

                CONRAD R. BURNS, Montana, Vice Chairman

GORDON SMITH, Oregon                 RON WYDEN, Oregon
JON KYL, Arizona                     DANIEL K. AKAKA, Hawaii
BEN NIGHTHORSE CAMPBELL, Colorado    BYRON L. DORGAN, North Carolina
LAMAR ALEXANDER, Tennessee           TIM JOHNSON, South Dakota
LISA MURKOWSKI, Alaska               MARY L. LANDRIEU, Louisiana
JAMES M. TALENT, Missouri            EVAN BAYH, Indiana
                                     DIANNE FEINSTEIN, California

   Pete V. Domenici and Jeff Bingaman are Ex Officio Members of the 
                              Subcommittee

                Thomas Lillie, Professional Staff Member

                    Scott Miller, Democratic Counsel


                            C O N T E N T S

                              ----------                              

                               STATEMENTS

                                                                   Page

Blair, Marilyn, President, Board of Directors, Cape Fox 
  Corporation....................................................    26
Craig, Hon. Larry E., U.S. Senator From Idaho....................     1
Lonnie, Tom, Assistant Director, Minerals, Realty and Resource 
  Protection, Department of the Interior.........................     9
Lundekugel, Buck, Conservation Director, Southeast Alaska 
  Conservation Council...........................................    22
Murkowski, Hon. Lisa, U.S. Senator From Alaska...................    12
Rey, Mark, Under Secretary, Natural Resources and Environment, 
  Department of Agriculture......................................     5
Watson, Dennis, Mayor, City of Craig, AK.........................    16
Wheeler, Dennis E., CEO and Chairman, Coeur d'Alene Mines Corp...    20

                               APPENDIXES
                               Appendix I

Responses to additional questions................................    37

                              Appendix II

Additional material submitted for the record.....................    41

 
   CAPE FOX LAND ENTITLEMENT ADJUSTMENT ACT; NEVADA NATIONAL FOREST 
DISPOSAL ACT; CRAIG RECREATION LAND PURCHASE ACT; CENTRAL NEVADA RURAL 
CEMETERIES ACT; AND TO EXTEND THE TERM OF THE FOREST COUNTIES PAYMENTS 
                               COMMITTEE

                              ----------                              


                       WEDNESDAY, MARCH 10, 2004,

                               U.S. Senate,
          Subcommittee on Public Lands and Forests,
                 Committee on Energy and Natural Resources,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 2:32 p.m., in 
room SD-366, Dirksen Senate Office Building, Hon. Larry E. 
Craig presiding.

  OPENING STATEMENT OF HON. LARRY E. CRAIG, U.S. SENATOR FROM 
                             IDAHO

    Senator Craig. Good afternoon, everyone. The Subcommittee 
on Public Lands and Forests of the Committee of Energy and 
Natural Resources of the U.S. Senate will come to order.
    I want to thank each of you for coming this afternoon.
    I would like to recognize our ranking member, Ron Wyden, 
when he gets here. We have worked closely together on a variety 
of pieces of legislation over the years and I look forward to 
partnering once again.
    Let me welcome each of the witnesses who have traveled here 
to testify on S. 1354, S. 1778, and S. 1819. I know that coming 
to Washington at this time of year can sometimes be 
challenging, especially when we force you to make trips, often 
several times during the course of the year, due to the ricin 
scare. Sometimes you do not even want to come near Capitol 
Hill. We used to give you other excuses for not wanting to be 
here. But I would suggest that you are probably in one of the 
safest buildings in the country today based on the overall 
security levels that you have probably had to experience 
getting through all of this.
    I also want to welcome Dennis Wheeler, CEO of the Coeur 
d'Alene Mines Corporation of Coeur d'Alene, Idaho. It is great 
to see you here, Dennis. We look forward to your testimony. I 
am glad that you came to Washington to testify on the Cape Fox 
bill and hope that your testimony will help ensure that that 
valuable project moves forward.
    Finally, I want to welcome Under Secretary Mark Rey, who 
used to be a fixture in this committee, not before this 
committee. Those times when he prepared Senators to be tough on 
administration people, now we oftentimes find it very enjoyable 
to turn the table on Under Secretary Rey.
    [Laughter.]
    I also want to welcome Tom Lonnie, who is the Director of 
Minerals, Realty and Resource Protection for the BLM. Welcome 
before the committee, Tom.
    I know that Senator Murkowski has a number of constituents 
here to testify today on S. 1354 and S. 1778. In a few minutes 
we will ask her, when she arrives, to make those appropriate 
introductions.
    We are taking up several bills that we dealt with during 
last Congress, which I hope we can work through quickly this 
year: S. 1354 and S. 1778, as I have mentioned, Senator 
Murkowski's Cape Fox lands, a conveyance bill, and her city of 
Craig, another land conveyance issue.
    We will also review two bills related to land conveyances 
in the State of Nevada. S. 1575 and its House companion, H.R. 
1092, are two new ones before the subcommittee. They address 
the conveyance of six parcels of land in and around Carson 
City, Nevada. We will also be examining S. 1819 and its House 
companion, H.R. 272, to convey cemetery lands in Lander and 
Eureka Counties in Nevada.
    Finally, we will take testimony on H.R. 3249, a bill to 
extend the mandate of the long-term Advisory Committee of the 
Rural Schools and Communities Self-determination Act of 2000.
    I know that it has been a long and difficult effort to 
effectuate the Cape Fox land conveyance and it is somewhat 
controversial. I look forward to hearing more from all of the 
witnesses and working with Senator Murkowski to move this 
important legislation forward.
    I am very interested in S. 1575 and H.R. 1092. It seems to 
me to be a novel approach to auction off Federal lands to help 
pay for the operational costs of reconstructing the Minden, 
Nevada Interagency Dispatch Center. But I am also somewhat 
troubled by provisions of this that will assign some of the 
potential revenues generated by the bill to be spent for public 
education and to the Carson Water Subconservancy District. I 
want to hear how the administration and others feel about this 
proposal.
    It would seem to me that the proceeds from the sale of 
lands managed by the Federal Government should either be 
deposited in the Sisk Act account to be used for acquisition of 
other lands to be managed by the Federal Government or to the 
U.S. Treasury or to be utilized to fund needed backlog 
maintenance of other Federal operating costs.
    Of course, I am quite sure that in the State of Nevada we 
do not worry about acquiring additional public lands. That 
State, other than Alaska, probably has the largest percentage 
of public lands of any State in the Nation.
    We are going to allow each witness 5 minutes to summarize 
their testimony before we proceed with questions of them.
    We also will have a time crunch in relation to Dennis 
Watson, who will be on the second panel, the mayor of the city 
of Craig, Alaska. As we move to that second panel, Lisa, I will 
ask you to make the appropriate introductions of your guests 
that are here from Alaska.
    With that, let us move immediately to our first panel and 
we will start with you, Secretary Rey, for your comments. Thank 
you.
    [The prepared statements of Senators Ensign, Reid, and 
Smith follow:]

         Prepared Statement of Hon. John Ensign, U.S. Senator 
                        From Nevada, on S. 1575

    Mr. Chairman, thank you very much for holding a hearing today on S. 
1575, the ``Nevada National Forest Land Disposal Act of 2003.'' I 
respectfully ask that my testimony be placed in today's hearing record.
    I am honored to join my colleague from Nevada, Senator Harry Reid, 
in sponsoring this important legislation. Congressman Jim Gibbons is 
the sponsor of identical legislation in the House of Representatives. 
S. 1575 is modeled on successful bipartisan laws that were enacted to 
competitively auction surplus federal land in Clark County, Nevada, and 
direct the proceeds to important public purposes such as parks, trails, 
and infrastructure.
    Eighty seven percent of Nevada's lands are managed by the federal 
government. Nevada, for the past two decades, has been the fastest 
growing state in the nation. As our population centers continue to grow 
by leaps and bounds, we have continually needed to reexamine our 
federal land boundaries to make sure they make sense. Such is the case 
in the Nevada National Forest Land Disposal Act of 2003, which seeks to 
dispose of seven relatively small parcels in Douglas County and Carson 
City in northern Nevada.
    The name of this measure is a little misleading. Yes, we seek to 
dispose of lands now under the jurisdiction of the U.S. Forest Service. 
But the lands we are putting up for competitive auction are isolated 
parcels next to or interspersed with private land. From a management 
standpoint, it does not make any sense to have the Forest Service 
managing parcels that do not have forest characteristics. These lands, 
when sold, will provide for orderly growth in the Carson City and 
Douglas County area and allow for quality expansion.
    S. 1575 calls for the auction of these seven parcels on a 
competitive basis, at no less than fair market value. I have a written 
commitment from the Humboldt-Toiyabe National Forest supervisor that 
the sale of the 231 acres of land identified in this bill will be 
conducted the way we sell lands in southern Nevada, a process that has 
earned high marks from the U.S. Interior Department's Inspector 
General. By putting out desirable land for auction, the taxpayers 
realize the highest price the market will bear. S. 1575 also give the 
Secretary of Agriculture the ability to reject a sale if it is not in 
the public interest. The taxpayers are protected and the federal 
government is assured that the future use of the land will not harm the 
National Forest system near these privatized lands.
    The proceeds from the sale of the seven parcels will be put to good 
public use. Five percent would go to the State of Nevada's general 
education fund, the same as under current law in the Southern Nevada 
Public Land Management Act. Another five percent would go to the Carson 
Water Subconservancy District, a bi-state agency that works to balance 
the interests of communities in Carson City and Douglas County and the 
Carson River Watershed's environment. The remainder of the funds would 
be earmarked for two worthy purposes: (1) the Interagency Dispatch 
Center in Minden to augment the Forest Service's and State of Nevada's 
ability to fight wildfires that are a major threat to our national 
forest in the area; and (2) parks, trails, and natural areas for the 
public to enjoy.
    Responding to concerns about ``directed'' sales of public forest 
lands, I would briefly like to explain the unique circumstances 
precipitating the legislation I introduced. First and foremost, 87 
percent of Nevada is owned by the federal government. No other state 
has such a high percentage of federal lands, which is an enormous 
burden on local governments. Most planning decisions in Nevada are not 
made in town halls or by county commissioners. The planning decisions 
must be made by Congress, an incredibly tough task in the fastest 
growing state in America. The seven parcels that are offered for sale 
in this legislation are simply not characteristic of the forest lands 
we all support preserving. Rather, the parcels are suitable for uses 
that are consistent with the population and economic growth that Nevada 
is experiencing and will continue to experience in the foreseeable 
future. It simply does not make sense--from a management or even a 
common sense perspective--to keep these pieces of land within the 
current national forest boundary and under federal management.
    Concerning the use of the sale proceeds, there is a clear national 
benefit in making available the sale proceeds to the Minden Interagency 
Dispatch Center and the Carson Water Subconservancy District. Enhanced 
fire fighting capabilities among all levels of government prevent 
catastrophic fires in our national forest lands along the Sierra Front. 
Wildfires have the potential to wipe out entire ecosystems, accelerate 
erosion into streams and rivers, and hasten the spread of non-native 
plant species and noxious weeds. The Carson Water Subconservancy 
District takes a lead role in the very health of the Carson River, the 
tributary to Walker Lake (a major stop for migratory birds) and the 
subject of significant federal interest. To argue that these 
beneficiaries are not of a national interest is a compartmentalized 
view that simply does not take into account the fact that federal, 
state, local, and private lands do not exist separately along distinct 
boundaries.
    The lands identified for disposal carry an added monetary value 
because of the investments made by local governments such as 
infrastructure and proximity to commercial and residential development. 
Certainly, local governments have a right to realize that added 
monetary value when selling public lands as long as the use of the 
proceeds is a public benefit. I believe that all Americans realize a 
tangible benefit from having a better equipped fire fighting capacity 
to protect priceless forest lands along the Sierra Front. Federal 
agencies do not have the money to take care of the lands they currently 
manage in Nevada, and this is an honest attempt to help the Forest 
Service.
    In closing, Mr. Chairman, the Nevada National Forest Land Disposal 
Act of 2003 has precedent in federal law. Nevada's need to grow 
responsibly depends on our action today, and I believe I have written 
this legislation to protect taxpayers and ensure that the funding 
generated from these directed land sales is used to benefit the public 
only. We should follow the lead of the House of Representatives and 
pass S. 1575 quickly.
    Again, Mr. Chairman, thank you for holding this hearing today.

                                 ______
                                 
      Prepared Statement of Hon. Harry Reid and Hon. John Ensign, 
                 U.S. Senators From Nevada, on S. 1819

    Mr. Chairman, thank you for holding this hearing and for the 
opportunity to speak on this important piece of legislation. As you may 
know, as much as 87 percent of the land in Nevada is controlled by 
federal agencies. The U.S. Forest Service, the Bureau of Land 
Management, the Bureau of Reclamation, the National Park Service: these 
are our neighbors. And because we have so much federal land in our 
state, Nevada's congressional delegation works closely with state and 
local leaders to ensure that federal land issues are dealt with in a 
fair and timely manner.
    The problem addressed by this legislation, the Central Nevada Rural 
Cemeteries Act, is a small issue with serious importance for two 
communities in the heart of my state--Kingston and Beowawe. Each of 
these towns was founded by pioneers who settled in Nevada's high desert 
valleys in the mid-to-late 1800s. And, as with all communities, the 
people of Kingston and Beowawe established local cemeteries to provide 
a final and sacred resting place for their friends and family. This is 
a fairly straightforward narrative, Mr. Chairman, except that when the 
boundaries of the federal lands in Nevada were demarcated-roughly one 
hundred years ago-the cemeteries of the two towns were not excluded as 
they should have been. Today, much of the original Kingston cemetery is 
on Forest Service land and the Maiden's Grave Cemetery in Beowawe is on 
land managed by the Bureau of Land Management.
    To rectify this situation, The Central Nevada Rural Cemeteries Act 
provides for the conveyance of the Maiden's Grave Cemetery to Eureka 
County and for the balance of the original Kingston Cemetery to be 
conveyed to Lander County. Plain and simple, this is the right thing to 
do. There is no question that the people of Beowawe and Kingston 
deserve the right to control and manage the ground in which their 
ancestors lie. We sincerely hope that our colleagues recognize the 
benefit that these conveyances would provide to the people of central 
Nevada and that they will support the passage of this legislation.
    Mr. Chairman, I am also a cosponsor of another piece of legislation 
before this committee today. I am pleased to support the Nevada Forest 
Land Disposal Act. Senator Ensign has provided detailed background on 
this bill in his submitted statement.
    I thank the Committee for its time and attention.

                                 ______
                                 
   Prepared Statement of Hon. Gordon Smith, U.S. Senator 
                       From Oregon, on H.R. 3249

    Mr. Chairman, I appreciate your willingness to hold this hearing 
today on several bills pending before the Subcommittee, particularly 
H.R. 3249, a bill to extend the term of the Forest Counties Payments 
Committee. As a Member who represents a state where half the land is 
managed by the Federal government, I support enactment of H.R. 3249. 
This will enable the Congress to receive better information about the 
effectiveness of the certain payment methodologies to eligible states 
and counties under a variety of county payments statutes.
    The Forest Counties Payments Committee was originally established 
in 2000, ``to develop recommendations, consistent with sustainable 
forestry, regarding methods to ensure that States and Counties in which 
Federal lands are situated receive adequate Federal Payments to be used 
for the benefit of public education and other public purposes.'' It was 
supposed to produce a report within 18 months of its establishment, 
which the Committee did. However, because of timing of the enactment of 
the Secure Rural Schools and Community Self Determination Act, of which 
I was an original cosponsor, the effectiveness of payments to counties 
under that Act could not be fully evaluated. That Act strengthens the 
historic link between the counties and the federal lands located in 
those counties by specifying that a portion of the county payments be 
invested in eligible projects on federal lands. The effectiveness of 
programs funded under Title II and Title III of the Act should also be 
evaluated.
    We should extend the term of the Forest Counties Payments Committee 
in order for the Congress to have a complete evaluation before the 
Secure Rural Schools and Community Self Determination Act comes up for 
reauthorization. I am convinced that payments made under the Act have 
been vital to schools in Oregon. However, since this is a nationwide 
program, I believe it is important to have a complete analysis of the 
effectiveness of this Act for all of the eligible counties.
    I look forward to working with my colleagues on the Energy and 
Natural Resources Committee pass H.R. 3249 in the near future. I want 
to thank all the witnesses appearing before the Subcommittee today.

        STATEMENT OF MARK REY, UNDER SECRETARY, NATURAL 
      RESOURCES AND ENVIRONMENT, DEPARTMENT OF AGRICULTURE

    Mr. Rey. Thank you, Mr. Chairman, Senator Murkowski, to 
appear before you today to offer the Department's view on the 
five bills that you mentioned.
    With regard to the Cape Fox bill, the Forest Service 
continues to work with Senator Murkowski's staff on the 
language of the provision. The Department supports the 
enactment of S. 1354. We have a couple of additional changes 
that we would like to work through. We believe that there are 
significant benefits to the Government from enactment, 
including consolidation of public lands on the southern portion 
of the Tongass and the elimination of split estate ownership.
    The Department supports enactment of S. 1778, the Craig 
Recreation Land Purchase Act. We have listed some suggested 
modifications for the committee's consideration as well.
    The Department does not object to making additional Federal 
lands available to Lander County, Nevada, as provided for in S. 
1819, but the Department believes the Forest Service can meet 
the objectives of this legislation under its current statutory 
authority that would allow it to convey national forest system 
land to Lander County for fair market value.
    S. 1575, the Nevada National Forest Land Disposal Act, 
recognizes the importance of orderly and responsible 
development in Carson City and Douglas County and that the 
disposal of specific parcels of Federal lands administered by 
the Forest Service may assist in the facilitation of that 
effort. The Department does not oppose S. 1575.
    Finally, the Department would have no objection to the 
enactment of H.R. 3249.
    That concludes my statement. I would be happy to respond to 
any questions.
    [The prepared statement of Mr. Rey follows:]

Prepared Statement of Mark Rey, Under Secretary, Natural Resources and 
          Environment United States Department of Agriculture

    Mr. Chairman, thank you for the opportunity to appear before you 
today in order to provide the Department's views on S. 1354 Cape Fox 
Land-Entitlement Adjustment Act, S. 1778 Craig Recreation Land Purchase 
Act, S. 1819 Central Nevada Rural Cemeteries Act, and S. 1575 Nevada 
Forest Land Disposal Act of 2003.

           S. 1354--CAPE FOX LAND ENTITLEMENT ADJUSTMENT ACT

    This bill, as introduced, provides for an additional 99 acres of 
Alaska Native Claims Settlement Act (ANCSA) selection area for Cape Fox 
and Sealaska Corporations at Clover Passage on Revillagigedo Island, 
and removes the requirement for Cape Fox to select 160 acres of 
mountaintop land within their core township. It also requires the 
Forest Service to offer, and if the offer is accepted by Cape Fox, to 
complete land exchanges with the Cape Fox and Sealaska Corporations.
    Through this land exchange:

   Cape Fox Corporation would receive the surface and 
        subsurface of 2,663.9 acres of National Forest System (NFS) 
        lands at the Jualin Mine site near Berners Bay, north of 
        Juneau.
   Sealaska Corporation would receive the surface and 
        subsurface of NFS lands to equalize values of Sealaska 
        subsurface lands and interests in land it conveys to the U.S. 
        Sealaska Corporation would select NFS lands of equal value from 
        within a 9,329-acre pool of NFS lands at the Kensington Mine, 
        also near Berners Bay.
   The Forest Service would receive lands and interests in 
        lands of equal value from within: (1) a pool of approximately 
        2,900 acres, including a public trail easement, offered by Cape 
        Fox (surface) and Sealaska (subsurface) on Revillagigedo 
        Island; (2) 2,506 acres of Sealaska subsurface estate, located 
        at Upper Harris River and Kitkun Bay, on Prince of Wales 
        Island; and (3) 2,698 acres of Sealaska subsurface land 
        interests remaining to be conveyed to Sealaska pursuant to the 
        Haida Land Exchange Act and the Sealaska/Forest Service Split 
        Estate Exchange Agreement of 1991. Cape Fox would choose the 
        lands to be conveyed to the United States from the 2,900 acre 
        pool in (1) above.

    The Forest Service previously worked with Senator Murkowski's staff 
to clarify and improve the language when these exchanges were under 
consideration in the 107th Congress. The Department could support the 
enactment of S. 1354 with the changes below:

    1) We request that Sec. 5(d) be clarified to read ``. . . by Cape 
Fox under subsection (c) are equal in market value to the lands 
described in subsection (b) based on appraisal reports approved by the 
Secretary and prepared in conformance with the Uniform Appraisal 
Standards for Federal Land Acquisitions and the Uniform Standards of 
Professional Appraisal Practice.'' Similarly, we request that Sec. 6(b) 
be clarified to read ``. . . selected lands are equal in market value 
to the lands described in subsection (c), and may adjust amount of 
selected lands in order to reach agreement with Sealaska regarding 
equal market value based on appraisal reports approved by the Secretary 
and prepared in conformance with the Uniform Appraisal Standards for 
Federal Land Acquisitions and the Uniform Standards of Professional 
Appraisal Practice.''
    2) We request that Sec. 7(a) be clarified to read ``. . . shall be 
of equal market value.'' And ``. . . estimates of market value of 
exchange lands with supporting information in conformance with the 
Uniform Appraisal Standards for Federal Land Acquisitions and the 
Uniform Standards of Professional Appraisal Practice.''
    3) Sec. 5(f) gives the Secretary of Agriculture ninety days after 
enactment to attempt to consummate an exchange agreement with Cape Fox. 
During this ninety day period, Cape Fox (pursuant to Sec. 5(c)) has 
sixty days to identify lands to be conveyed to the U.S., potentially 
leaving only thirty days for the U.S. to complete an appraisal, obtain 
title information, and complete the exchange process. Similarly, Sec. 
6(d) only gives the Secretary of Agriculture ninety days after receipt 
of selections by Sealaska to attempt to enter into an exchange 
agreement with Sealaska. We request these time frames be extended.
    4) A normal component of a land exchange includes a provision 
requiring the exchanged lands to be subject to satisfactory 
environmental site survey and remediation pursuant to the American 
Society for Testing and Materials (ASTM) Standard Guide for 
Environmental Site Assessment E 1903. We request this requirement be 
added to Sec. 7(b).

    With these minor changes, the Department of Agriculture supports 
the enactment of S. 1354. We believe there are significant benefits to 
the government from enactment, including consolidation of public lands 
on the southern portion of the Tongass and elimination of split estate 
ownership.

              S. 1778--CRAIG RECREATION LAND PURCHASE ACT

    The Department would have no objection to the enactment of S. 1778 
if all the following concerns are addressed.
    S. 1778 would require the Secretary of Agriculture to purchase, at 
appraised value, the ``Sunnahae Trail and Recreation Parcel'' described 
in Sec. 2, as an addition to the Tongass National Forest. The funds 
received by the City of Craig under S. 1778 would be used by the City 
to purchase the ``Wards Cove Property'' described in Sec. 3, for local 
economic development.
    We support the City of Craig's interest in economic development 
opportunities. The City of Craig is surrounded by ANCSA corporate land, 
and has a limited taxable land base. Craig anchors the nine smaller 
towns and villages on Prince of Wales Island, and the economic 
stability of Craig is critical to the economy of the island as a whole.
    We do note that acquisition of the ``Sunnahae Trail'' parcel will 
present significant challenges for its administration as a component of 
the National Forest System. The parcel is small, isolated from other 
federal lands, and encumbered by outstanding mineral rights. We would 
like to work with the Committee and the City of Craig to investigate 
other options that address mutual interests. For example, the City of 
Craig holds beach lots adjacent to the Craig Ranger District compound, 
which might be more appropriate for sale to the United States.
    The ``Sunnahae Trail'' parcel includes about 350 acres of trail, 
trailhead, and mountaintop property surrounded by private land. Much of 
the parcel is a narrow strip on either side of a city trail in need of 
extensive reconstruction. Surrounding lands are owned by Shan Seet, an 
ANCSA Corporation, and have been extensively logged. The City of Craig 
owns only the surface estate; the subsurface estate is owned by 
Sealaska Corporation.
    S. 1778 would directly authorize appropriation of $ 250,000 to the 
Forest Service for reconstruction of the Sunnahae Trail. Reconstruction 
of the trail would cost far more. Section 2 would require the Secretary 
to purchase the Sunnahae Trail parcel, at appraised value. Without a 
current appraisal, we do not know how much this would cost, but a total 
cost to the government of more than one million dollars is possible. 
This purchase and reconstruction would limit the flexibility of the 
Forest service to address other priority needs throughout the full 
length of the trails under its administration. This flexibility is 
essential to protecting and enhancing the Nation's comprehensive 
interstate network of trails that provide a wide variety of 
experiences, resources, and services for all types of trail users.
    We also note that proper reconstruction of the Sunnahae Trail to 
avoid steep slopes and minimize environmental impacts would follow a 
different alignment. The parcel to be conveyed under S. 1778 follows 
the existing alignment.

              S. 1819--CENTRAL NEVADA RURAL CEMETERIES ACT

    In summary, Section 1 of S. 1819 requires the Secretary through the 
Chief of the Forest Service to convey to Lander County, Nevada for no 
consideration, all right, title, and interest of the United States in 
and to the 8.75 acres of National Forest System land know as Kingston 
Cemetery.
    In accordance with Public Law 85-569, the Townsite Act, we have 
already conveyed 1.25 acres of land (on which the cemetery is located) 
to the Town of Kingston for $500 on August 1, 2000. At the time of 
conveyance, the Town of Kingston indicated the 1.25 acres encompassed 
all known marked and unmarked gravesites. The Town of Kingston 
indicated that the 1.25 acres was adequate to accommodate their future 
expansion needs. Specifically, all of the gravesites were accounted for 
within a half acre fenced area that the 1.25 acres encompassed. The 
additional 0.75 acres were intended for parking and anticipated 
expansion of the current cemetery.
    If new unmarked gravesites have been discovered or the needs of the 
Kingston Cemetery have changed and are in the public interest, we would 
be supportive of making additional Federal lands available to the 
county or city for fair market value and granting the county an 
easement to maintain the access road to the cemetery as a county road.
    If Lander County is not willing to pay fair market value to 
purchase this land, we would be willing to consider authorizing its 
current and future use of this land under a special use permit 
authorization.
    The Department does not object to making additional Federal lands 
available to Lander County, Nevada in S. 1819, but the Department 
believes that the Forest Service can meet the objectives of Section 1 
of this legislation under its current statutory authorities that would 
allow it to convey National Forest System lands to Lander, County for 
fair-market value in cash.
    For example, under the Townsite Act, the Secretary of Agriculture 
may convey, for fair market value, up to 640 acres of land to 
established communities located adjacent to National Forests in Alaska 
or the contiguous western states. Within certain limits, the Sisk Act 
authorizes the Secretary of Agriculture to exchange lands with states, 
counties, or municipal governments or public school districts for land 
or money.
    Moreover, under the General Exchange Act, the Secretary of 
Agriculture can exchange National Forest System lands with State and 
local governments. These laws require the Secretary of Agriculture to 
obtain fair market value for exchanges or sales of National Forest 
lands. Indeed, the Federal policy, in recent decades has moved toward 
obtaining a fair return to the public for the value of lands conveyed 
out of federal ownership.

     S. 1575--THE NEVADA NATIONAL FOREST LAND DISPOSAL ACT OF 2003.

    In summary, Section 1 of S. 1575 directs the Secretary of 
Agriculture to sell at public auction six specific parcels of National 
Forest System land in Carson City or Douglas County, Nevada ranging 
from 3 to 80 acres in size with proceeds of said sales being dispersed 
to various state and local entities.
    S. 1575 recognizes the importance of orderly and responsible 
development in Carson City and Douglas County and that the disposal of 
specific parcels of Federal lands administered by the USDA Forest 
Service may assist in the facilitation of that effort.
    Section 3(d)(1)(A) of the bill would add a requirement that the 
Secretary shall ``pay five percent to the State of Nevada for use for 
the general education program of the state''; (B) ``pay five percent to 
the Carson Water Subconservancy District in the State''; and (D) 
``retain and use, without further appropriation, the remaining funds 
for the purpose of expanding the Minden Interagency Dispatch Center in 
Minden, Nevada, as provided in paragraph (3). Section 3(d)(2)(B) of the 
bill provides for ``The development and maintenance of parks, trails, 
and natural areas in Carson City, Douglas County, and Washoe County, 
Nevada, in accordance with a cooperative agreement entered into with 
the unit of local government in which the park, trail or natural area 
are located''.
    In addition, Section 3(d)(1)(C) requires the Secretary to ``deposit 
25 percent in the fund established under Public Law 90-171 (commonly 
known as the Sisk Act; 16 U.S.C. 484a)''. In general, we believe that 
proceeds generated from the sales of Federal lands should be made 
available for the acquisition of replacement National Forest System 
lands within the State of Nevada.
    While we support the premise of working closely with all agencies 
within the State and appreciate the reimbursement of sales processing 
costs, we would like to work with the committee to develop broader 
alternatives for the distribution and use of the proceeds generated 
from the sales of Federal parcels. Moreover, although we support the 
expansion of the Minden facility, we believe that funding of that 
construction should be included in the usual appropriation process. In 
addition, the President's FY 2005 Budget includes a proposal to amend 
the Small Tracks Act, the Sisk Act, and the Townsite Act, which provide 
the Secretary the authority to sell or exchange land, to provide more 
efficient real estate management of lands and facilities throughout the 
entire National Forest System.

   H.R. 3249--EXTENSION OF TERM OF FOREST COUNTIES PAYMENTS COMMITTEE

    H.R. 3249 would extend the term of the Forest Counties Payments 
Committee to September 30, 2007. The Department would have no 
objections to the enactment of H.R. 3249.
    The Forest Counties Payments Committee was created by Congress 
pursuant to Section 320, of the Department of the Interior and Related 
Agencies Appropriation Act of 2001, Public Law 106-291. The Committee 
is charged with developing recommendations to Congress for making 
certain payments to states and counties for education and other public 
purposes. The Committee was also instructed to monitor payments made to 
states and counties under certain payments, loans and related laws 
which would include the Secure Rural Schools and Community Self-
determination Act of 2000 (P.L. 106-393), to submit annual reports to 
Congress describing the amounts and sources of payments to states and 
counties, and be available to provide testimony, or comments on 
legislation or regulations to implement recommendations made in such 
reports.
    The Forest Counties Payments Committee submitted its Report to 
Congress on February 6, 2003. The Report includes recommendations for 
future payments to states and counties, as well as findings and 
information pertaining to allocation of education dollars by states, 
the importance of sustaining the health of our forests and communities, 
and the success of citizen advisory committees in reaching agreement on 
various management projects.
    Formal discussions between Congress and the Committee regarding 
recommendations and information contained in the Report have not taken 
place. This dialogue will be important as the Secure Rural Schools and 
Community Self-determination Act comes closer to its expiration date of 
2006. Also, there may be a need to provide additional information, or 
evaluate other options that congressional committees may be interested 
in considering.
    Extension of the termination date would allow the Committee to 
fulfill the requirements of the enacting legislation, continue the 
monitoring and evaluating of implementation of P.L. 106-393, and 
provide continued assistance to the six committees of jurisdiction.

                               CONCLUSION

    Mr. Chairman, this concludes my prepared statement. I would be 
pleased to answer any questions that you or the other members may have.

    Senator Craig. Thank you very much, Mark.
    Now let us turn to Tom Lonnie, the Assistant Director for 
Minerals, Realty and Resource Protection, the United States 
Department of the Interior. Tom?

         STATEMENT OF TOM LONNIE, ASSISTANT DIRECTOR, 
           MINERALS, REALTY AND RESOURCE PROTECTION, 
                   DEPARTMENT OF THE INTERIOR

    Mr. Lonnie. Thank you for the opportunity to appear here 
today. I will briefly summarize my prepared testimony.
    S. 1819 and H.R. 272 provide for the conveyance of two 
cemeteries in Nevada to Lander and Eureka Counties. I will 
confine my comments to the Eureka County provision of the bills 
and defer to the Forest Service on the Lander County provision.
    The BLM supports section 3 of S. 1819 and the identical 
section 2 of H.R. 272, providing for the conveyance of the 
Maiden's Grave cemetery near Beowawe, Nevada to Eureka County, 
Nevada. Approximately 10 acres would be conveyed to the county 
which would maintain the area as a cemetery.
    While we would typically expect to receive fair market 
value for such a transfer, we understand the unique 
circumstances in this case and the unique needs of Eureka 
County. We appreciate the opportunity to work cooperatively 
with local interests to the betterment of the community.
    During consideration of H.R. 272 by the House of 
Representatives, amendments were made to address BLM's concerns 
which were primarily technical in nature, and we support both 
H.R. 272 and its identical companion, S. 1819.
    We have submitted written testimony related to S. 1354, the 
Cape Fox Land Entitlement Act, a bill which the Department of 
the Interior supports. However, the Department is concerned 
about the conveyance deadline in the bill and has recommended a 
modification to it that is described in my written testimony. 
Because the bill concerns lands administered by the U.S. 
Department of Agriculture, the Department of the Interior 
defers to the Secretary of Agriculture on other aspects of S. 
1354.
    Finally, we have no objection to enactment of H.R. 3249 
which would extend the term of the Advisory Committee on Forest 
Counties Payments until September 30, 2007. The authorization 
for the advisory committee expired on October 11, 2003 before 
it was able to examine fully the impact of the Secure Rural 
Schools and Communities Self-Determination Act. Extension of 
the termination date will allow the committee to fulfill the 
requirements of the enacting legislation, continue the 
monitoring and evaluating of implementation of Public Law 106-
393 and provide continued assistance to the six committees of 
jurisdiction.
    Thank you for the opportunity to testify on these bills, 
and I would be happy to answer any questions you might have.
    [The prepared statements of Mr. Lonnie follow:]

Prepared Statement of Tom Lonnie, Assistant Director, Minerals, Realty, 
           and Resource Protection, Bureau of Land Management

                          H.R. 272 and S. 1819

    Thank you for the opportunity to appear here today. S. 1819 and 
H.R. 272 provide for the conveyance of two cemeteries in Nevada to 
Lander and Eureka counties. I will confine my comments to the Eureka 
County provision of the bills and defer to the Forest Service on the 
Lander County provision. The BLM supports section three of S. 1819 and 
the identical section two of H.R. 272 which provide for the conveyance 
of the ``Maiden's Grave Cemetery'' near Beowawe, Nevada (Bav-o-wah'-
wee) to Eureka County, Nevada. Approximately 10 acres would be conveyed 
to the county which would maintain the area as a cemetery. In addition, 
the Bureau of Land Management (BLM) would be required to grant access 
to the cemetery across adjacent public land.
    ``The Maiden's Grave'' is the final resting place of Lucinda Duncan 
who on August 15, 1863, died on her way to the gold and silver fields 
of Nevada. Mrs. Duncan at 71 was ``the mother of the wagon train'' 
which consisted largely of her seven surviving children, their spouses 
and a multitude of grandchildren. Following her death, the wagon train 
held a ceremony and their leaving was memorialized by a member of the 
party:

        ``. . . we paid our last debt & respect to the remains of the 
        departed mother. There upon that wild & lonely spot, we left 
        her, until Gabriel shall sound his trumpet in the last day. The 
        scene was truly a sad one to leave a beloved mother on the wild 
        and desolate plains. A board with the name of the deceased was 
        put up at the head & boulder was laid over the grave to keep 
        wolves from scratching in it. After this the train moved on.''

    Today, the site continues to receive occasional burials. Therefore, 
it is considered a ``modern cemetery'' and does not qualify for the 
National Register of Historic Places. The BLM, through its planning 
process, has identified the cemetery as suitable for disposal and the 
county has indicated a strong interest in taking responsibility for 
this parcel.
    While we would typically expect to receive market value for such a 
transfer, we understand the unique circumstances in this case, and the 
unique needs of Eureka County. Under other circumstances, we might have 
considered a Recreation and Public Purposes (R&PP) Act conveyance to 
lower the cost to the county, but the need for permanency in this 
transfer prevents this from being a viable option, thus the need for 
legislative intervention. We appreciate this opportunity to work 
cooperatively with local interests to the betterment of the community.
    During consideration of H.R. 272 by the House of Representatives, 
amendments were made to address the BLM's concerns which were primarily 
of a technical nature and we support both H.R. 272 and its identical 
companion S. 1819.

                               H.R. 3249

    Thank you for the opportunity to present the views of the 
Department of the Interior on H.R. 3249. This bill would extend the 
term of the Advisory Committee on Forest Counties Payments until 
September 30, 2007, to coincide with the expiration date of the Secure 
Rural Schools and Community Self-Determination Act. The Department 
would have no objections to the enactment of H.R. 3249.
    Litigation in the 1980s and early 1990s regarding the Northern 
Spotted Owl resulted in steep reductions in timber harvests in the 
Pacific Northwest, and correspondingly steep reductions in income to 
counties that depended on revenues from timber harvests on public lands 
and-national forests to fund local government services. Timber harvests 
were greatly reduced in the 18 counties in western Oregon that the 
Bureau of Land Management (BLM) managed for sustainable timber 
production under the Oregon and California Grants Lands Act of 1937 
(the O&C Act).
    In 2000, Congress enacted Public Law 106-393, the Secure Rural 
Schools and Community Self-Determination Act, to make up the shortfall 
to counties dependent on Federal timber revenues by providing a 
temporary payment to counties covered under the O&C Act at 85 percent 
of the average of their three highest timber receipt years from 1986-
1999. Public Law 106-393 also provided an additional 15 percent of the 
average of their three highest receipt years from 1986-1999 to support 
two types of projects: restoration (including watershed restoration, 
forest road maintenance, and road decommissioning or obliteration) and 
other county uses connected with BLM lands, including reimbursement for 
search, rescue, and other emergency services; reimbursement for 
expenses related to community service on Federal lands; and the 
purchase of conservation easements. As authorized by Public Law 106-
393, since FY 2002, the BLM has paid directly to the 18 O&C counties 
$332.2 million, and expects to pay an additional $112.7 million to 
these counties during fiscal year 2005. The Act expires on September 
30, 2007.
    The Advisory Committee on Forest Counties Payments, authorized by 
Section 320 of the Department of the Interior and Related Agencies 
Appropriations Act, 2001 (P.L. 106-291), was charged with developing 
recommendations, consistent with sustainable forestry, regarding 
methods to evaluate the Federal payments that States and counties in 
which Federal timber lands are situated (for BLM, the 18 O&C counties). 
The provisions of the Federal Advisory Committee Act (FACA) apply to 
this Advisory Committee. Its membership includes representatives of the 
Federal government (BLM Director, Chief of the U.S. Forest Service, and 
Director of the Office of Management and Budget), or their designees, 
and eligible counties (county-elected officials and elected members of 
school boards or superintendents of school districts).
    Specifically, Section 320 states that the Committee was required to 
evaluate:

   the method by which payments under the O&C Act are made to 
        eligible counties and States under provisions of the law;
   the impact on eligible counties and States of revenues 
        derived from historic multiple activities of the Federal lands;
   the economic, environmental, and social benefits that accrue 
        to counties containing Federal lands, including benefits to the 
        recreation and natural resources industries, and the value of 
        environmental services that result from Federal lands; and
   the expenditures by counties on activities on Federal lands 
        which are Federal responsibilities.

    The Advisory Committee's authorization expired on October 11, 
2003--before it was able to examine fully the impact of the Secure 
Rural Schools and Community Self-Determination Act. Extension of the 
termination date would allow the Committee to fulfill the requirements 
of the enacting legislation, continue the monitoring and evaluating of 
implementation of P.L. 106-393, and provide continued assistance to the 
six committees of jurisdiction.
    This concludes my statement. I would be happy to answer any 
questions.

                                S. 1354

    Mr. Chairman and Members of the Subcommittee, I appreciate the 
opportunity to appear before you today to present the views of the 
Bureau of Land Management (BLM) on S. 1354, the Cape Fox Land 
Entitlement Adjustment Act of 2003.

                               BACKGROUND

    Cape Fox Corporation (Cape Fox) is an Alaska Native Village 
Corporation organized pursuant to Alaska Native Claims Settlement Act 
(ANCSA) for the Native Village of Saxman, which is located near 
Ketchikan. Like the other nine southeast villages recognized for 
benefits under section 16 of ANCSA, Cape Fox received an entitlement of 
23,040 acres. All other ANCSA Village Corporations were restricted from 
making selections within two miles of the boundary of home rule cities. 
Cape Fox, however, was uniquely affected by the original terms of ANCSA 
as it was restricted from making selections within six miles of the 
boundary of the city of Ketchikan. As a result of the six-mile 
restriction, the only land within Cape Fox's core township available 
for conveyance is a 160-acre parcel which the corporation does not 
want. Under current law, the BLM must transfer this parcel to Cape Fox 
and charge the acreage to the corporation's ANCSA entitlement.
    The requirement for village corporations to take title to all 
available land within their core township is a basic component of 
ANCSA, applicable to all village corporations. Another basic component 
of the original settlement is that conveyances to village corporations 
will be restricted to lands withdrawn for that purpose under the 
original terms of ANCSA.
    S. 1354 waives an existing statutory requirement that would compel 
Cape Fox to use a portion of its entitlement under ANCSA for a remote 
160-acre mountainous parcel that is of no economic value to the 
corporation. The bill also directs the BLM to convey to Cape Fox, the 
surface estate to a 99-acre tract in the Tongass National Forest that 
was unavailable to the corporation under the original terms of ANCSA; 
the subsurface estate of this tract is to be transferred to Sealaska 
Corporation (Sealaska).
    Because S. 1354 extends benefits to Cape Fox that were not 
available under the original terms of ANCSA, the Department of the 
Interior has carefully considered the merits of this proposal and 
agrees that the Cape Fox situation is sufficiently unique to warrant 
the legislative remedy that is provided in S. 1354. However, the 
Department is concerned about the conveyance deadline in Sec. 4(c) of 
the bill. If Cape Fox decides to accept title to the lands offered, the 
BLM must issue conveyance documents within six months of receiving the 
corporation's selection. Current regulatory requirements for ANCSA 
conveyances take longer than the six months--typically closer to 12 
months--and must include identification of easements to be reserved, 
issuance of an appealable decision, and public notice of that decision. 
Unless the legislation specifies otherwise, or the ANCSA conveyance 
process is changed before then, the 99-acre tract must be conveyed 
under existing ANCSA regulations. The six month timeframe also could be 
unnecessarily disruptive to BLM conveyance transactions that are in 
progress.
    The Department of the Interior recommends that Sec. 4(c) of the 
bill be modified to read as follows: ``TIMING.--The Secretary of the 
Interior shall complete the interim conveyances to Cape Fox and 
Sealaska under this section as soon as practicable after the Secretary 
of the Interior receives notice of the Cape Fox selection under 
subsection (a).'' the Department understands the economic importance of 
this conveyance to Cape Fox ad will transfer title as quickly as 
possible in concert with other existing land transfer plans and 
commitments.
    Adjustment of Cape Fox's selections and conveyances of land under 
ANCSA requires adjustment of Sealaska's selections and conveyances to 
avoid the creation of an additional split estate between National 
Forest System surface lands and Sealaska subsurface lands. Because this 
adjustment concerns lands administered by the U.S. Department of 
Agriculture, the Department of the Interior defers to the Secretary of 
Agriculture for a position on this aspect of S. 1354.

    Senator Craig. Well, thank you very much, Tom.
    Now let me turn to my colleague, Senator Murkowski, for any 
opening comments she would like to make, and why don't you 
follow that up with any questions you might have of either Mr. 
Rey or Mr. Lonnie.

        STATEMENT OF HON. LISA MURKOWSKI, U.S. SENATOR 
                          FROM ALASKA

    Senator Murkowski. Thank you, Mr. Chairman. I do not have 
questions of either Secretary Rey or Mr. Lonnie this afternoon. 
I do appreciate your willingness to work with us on both of 
these Alaska bills and appreciate all the help that we have 
received thus far. We will keep working on it.
    I want to thank both of you for attending the hearing this 
afternoon, and I would also like to extend a personal welcome 
to those who have come so far to attend the hearing, both on S. 
1778, the Craig legislation, as well as S. 1354, the Cape Fox 
legislation.
    I might mention for the record that several of you have 
been here multiple times in anticipation of a hearing and with 
one natural disaster or a manmade disaster, we have not been 
able to do that. So I am glad to see that at least this end of 
the journey is over for you folks.
    I would like to recognize Ms. Marilyn Blair, the president 
of Cape Fox Corporation from Ketchikan; Mr. Dennis Wheeler, the 
president of Coeur Alaska, who will also be testifying on this; 
Mr. Buck Lindekugel, the conservation director of SEACC from 
Juneau; and Mr. Dennis Watson, the mayor of the city of Craig.
    I first would like to discuss S. 1778, the Craig Recreation 
Land Purchase Act. This is an important bill that will 
facilitate Forest Service land management on Prince of Wales 
Island and help community expansion and development. The city 
of Craig is the economic center of Prince of Wales Island, the 
third largest island in the Nation. The town contains the major 
retail shopping and service outlets on the island. Island 
residents drive up to 100 miles round trip to come to town for 
medical services and shopping. Craig also has the most active 
and largest commercial fishing harbor and fleet on the island.
    Due to land selection conflicts between the Forest Service 
and the State of Alaska in the 1960's, the city of Craig 
received no municipal entitlement land. This legislation will 
help alleviate some of the loss to the city from the lack of an 
entitlement.
    One of the Forest Service's main administrative facilities, 
the Craig Ranger District Station, is located in Craig, but 
currently there is no Forest Service land near the ranger 
station. My legislation would provide for a three-way 
conveyance process which would result in three parcels of land 
now owned by the city of Craig being conveyed into the Tongass 
National Forest and an inholding owned by a private company 
being acquired by the city. This legislation will provide 
recreational opportunities in the forest which will benefit 
both the public and the city of Craig and allow the city of 
Craig to obtain land that is truly vital to its future.
    As far as S. 1354, the Cape Fox Land Entitlement Adjustment 
Act of 2003, this is legislation that passed the Senate with 
bipartisan support in the 107th Congress. This addresses an 
equity issue in one of Alaska's rural village corporations and 
also helps to diversify the economy of Juneau.
    Cape Fox Corporation is an Alaska village corporation 
organized pursuant to the Alaska Native Claims Settlement Act 
by the native village of Saxman near Ketchikan. As with other 
ANCSA village corporations in southeast Alaska, Cape Fox was 
limited to selecting 23,040 acres under section 16, but unlike 
other village corporations, Cape Fox was further restricted 
from selecting lands within 6 miles of the boundary of the home 
rule city of Ketchikan. All other ANCSA corporations were 
restricted from selecting within 2 miles of such a home rule 
city. So this 6-mile restriction went beyond protecting 
Ketchikan's watershed and damaged Cape Fox by preventing the 
corporation from selecting valuable timberlands, industrial 
sites, and other commercial property not only in its core 
township but in surrounding lands far removed from Ketchikan 
and its watershed. As a result of the 6-mile restriction, only 
the mountainous northeast corner of Cape Fox core township, 
which is nonproductive and has no economic value, was available 
for selection by the corporation. Cape Fox's land selections 
were further limited by the fact that the Annette Island Indian 
Reservation is within its selection area and those lands were 
unavailable for ANCSA selection. Cape Fox is the only ANCSA 
village corporation affected by this restriction.
    So it is clear that Cape Fox was placed on an unequal 
economic footing relative to other village corporations in 
southeastern Alaska, and despite its best efforts during the 
year since ANCSA, Cape Fox has been unable to overcome the 
disadvantage that the law has built into this situation. It was 
for these reasons that I introduced this legislation to 
partially address the Cape Fox problem.
    Now, much concern has been raised regarding the 
environmental effects of this land exchange upon the 
recreationists of Berners Bay, and I would let the committee 
know we held rather extensive hearings in Juneau last year. I 
listened very clearly to those concerns. I reviewed the letters 
that came into my office regarding this legislation, and it is 
my intent to offer an amendment that will address both the 
viewshed and the public access concerns which were raised by my 
constituents in Juneau.
    So I look forward to hearing from those constituents and 
witnesses today. I do hope that the witnesses that are present 
will continue to work with my office to further refine this 
amendment so that we can reach a consensus that will support 
not only a diversified economy, but without compromising the 
beauty and the natural state that we have in Berners Bay. I 
truly believe, Mr. Chairman, that we can achieve that goal.
    With that, as I have indicated, I do not have questions of 
either witness. So I appreciate your consideration.
    Senator Craig. Thank you very much, Senator. The committee 
will work with you to fine tune these pieces of legislation so 
they can move forward.
    Senator Murkowski. Thank you.
    Senator Craig. And I thank you.
    Secretary Rey, I note that this bill--the bill that I am 
referring to is the Carson City conveyance--is similar to a 
legislative initiative that was included in the 2004 and 2005 
budget request by the President. Is that not correct?
    Mr. Rey. Roughly so, yes. The 2004 and 2005 budget request 
was not specific to a particular piece of land. It was 
legislation to give us the flexibility to convey unneeded 
assets and to retain the money received from those conveyances 
to do other work on the national forest system.
    Senator Craig. As I understand, S. 1575 and H.R. 1092 would 
allow the Forest Service to sell parcels of land and to use the 
proceeds to help pay for the reconstruction of the Minden 
Interagency Dispatch Center, including the construction of 
barracks for a hotshot crew. Would it be your preference that 
Congress begin to earmark the proceeds from such sales to those 
specific projects?
    Mr. Rey. No. Our first preference would be favorable 
consideration for the legislative authorities included in the 
fiscal year 2005 budget request, and should that authority be 
granted, we would then establish a priority list in areas where 
conveyances take place to do that work on the basis of that 
kind of a priority list.
    Senator Craig. You would prefer no earmarks.
    Mr. Rey. We would prefer in general legislation like that 
which we have proposed, that the proceeds from the conveyances 
not thereafter be subsequently earmarked.
    Senator Craig. I also see that this legislation proposes 
that 5 percent of the proceeds from the sale of these parcels 
to the State of Nevada are for general education and 5 percent 
to Carson City Water Subconservancy. I am wondering if this is 
a good precedent and if we should not include a larger share 
for public education from every sale of Federal lands. Would 
the administration support such provisions in every land 
transfer?
    Mr. Rey. I think in general terms, that is sort of double 
dipping. One of the reasons that we convey excess Federal 
assets into non-Federal or private ownership is so that we can 
assist other units of government to meet administrative needs. 
Of course, if that is the case, then there is no point in 
paying them a part of that back. We might as well just 
negotiate the purchase price accordingly.
    But where we convey those assets into private ownership, 
one of the reasons is to help affect local development, and we 
are adding those lands then to the local tax rolls, which tax 
rolls should be supporting education and other public service 
needs of local government. So I think our preference is, if we 
are going to convey unneeded Federal assets, that we use the 
proceeds for those conveyances to meet other Federal Government 
needs.
    Senator Craig. Now I am talking about the Craig, Alaska 
conveyance. Also, some suggest that the proposal would saddle 
the Forest Service with a parcel of land that they may not 
want. I am told that the trail to the top of that knob in 
Murielle City center is scenic and that it would be utilized by 
many of the visitors to Craig. Given the fact that Craig, 
Alaska is one of the fastest growing communities in southeast 
Alaska, why would the Forest Service not want the--is it the 
Sunnahae site?
    Mr. Rey. Sunnahae Trail site.
    Senator Craig. Sunnahae.
    Mr. Rey. Right. We are content to take the Sunnahae Trail 
site in exchange for the land that we would convey. There are a 
couple of parcels that would be of greater use to us and we 
have talked with the Alaska delegation and the city of Craig to 
see if we can adjust the exchange to include those two parcels, 
which would be of value to us for administrative purposes. They 
are relatively small parcels, however, and so they will not be 
enough to cover the equal value requirement of the exchange. So 
we will be content to take the Sunnahae Trail parcel as well 
and then maintain the trail for public use purposes.
    Senator Craig. Tom, I am speaking in relation to S. 1819 
and H.R. 272. This is the second time that this proposal has 
been heard by this subcommittee in the last two Congresses, and 
we have seen the Bureau of Land Management testify on it each 
time.
    Other than the potential for being nibbled to death by 
small land conveyances, is there anything wrong with these 
proposals?
    Mr. Lonnie. We see nothing wrong with these proposals, sir.
    Senator Craig. Lisa, any questions?
    Senator Murkowski. I'm fine. Thank you.
    Senator Craig. Well, gentlemen, thank you both. We will 
stay in close contact with both of the agencies as we work 
these pieces of legislation through the committee for any fine-
tuning necessary. Thank you.
    Now I would ask the second panel to come before us. That 
would be Marilyn Blair, Dennis Wheeler, Dennis Watson, and Buck 
Lindekugel. I am going to change the order and I am going to 
ask for Dennis Watson, the mayor of the city of Craig to go 
first. We will also question you, Dennis. I understand you have 
a tight time crunch and a flight to catch.
    Mr. Watson. Oh, I am OK right now. Actually I do not right 
now. Thanks. I am fine.
    Senator Craig. You do not now?
    Mr. Watson. No.
    Senator Craig. Well, we will start with you anyway. We will 
go ahead, Dennis, and start with you. Then we will step over to 
Dennis Wheeler. Anyway, the mayor of the city of Craig, Alaska. 
That city has got a great name to it. Thank you very much.
    [Laughter.]

      STATEMENT OF DENNIS WATSON, MAYOR, CITY OF CRAIG, AK

    Mr. Watson. I would like to mention that I am proud to be 
here and in the company of the people that helped to get the 
forest receipts legislation passed a couple of years ago. It 
has really helped us out.
    Mr. Chairman, members of the committee, my name is Dennis 
Watson. I am the mayor of the city of Craig, Alaska. Thank you 
for the opportunity to testify before this committee and for 
hearing testimony on S. 1778. My testimony will explain the 
need for this bill for Craig and Prince of Wales Island.
    S. 1778 is a mechanism that will provide the U.S. Forest 
Service with a net gain in acreage to the Tongass National 
Forest while also allowing the residents of Craig to better 
adjust to a changing economic climate. S. 1778 authorizes the 
Federal Government to accept the conveyance of 348 acres of 
land from the city of Craig and authorizes an appropriation of 
up to $2.1 million for the land acquisition. The funding would 
be used by the city of Craig to purchase private land at Craig.
    Craig is located on Prince of Wales Island in southeast 
Alaska. The island is home to some 4,500 residents. Since 1995, 
the economy of Craig and Prince of Wales Island has undergone a 
tremendous and painful economic contraction. The change in 
Tongass National Forest timber policy has reduced logging 
industry employment from 1,800 in 1992 to fewer than 600 in 
2002. Unemployment rates in the Prince of Wales census area 
have reached seasonal highs of between 19 and 25 percent in the 
past 10 years. The annual unemployment rate for our census area 
is frequently three times or more the rate for the United 
States as a whole.
    The loss of higher paying timber jobs has translated into 
related economic problems for our island. Despite the higher 
cost of living in Alaska compared to the continental United 
States, per capita earnings are much lower for POW residents 
than for residents of the contiguous lower 48. By the way, that 
is Prince of Wales Island. The 2000 census reports that per 
capita income in the Prince of Wales Island census area is 15 
percent less than the U.S. figure. Similarly, our median family 
income lags behind the United States as a whole and the 
proportion of families below the poverty level in the Prince of 
Wales Island/Outer Ketchikan area exceeds the national figure 
by more than 10 percent.
    Despite these problems, area residents are bullish on the 
future. Increasing private sector opportunities in our economy 
will improve chances of recovery. Passage of S. 1778 will 
assist us in providing basic public infrastructure that will 
lead to private industry investment.
    The single best site for redevelopment efforts in Craig is 
known as the old cannery property. The site contains 5 acres of 
uplands and 5 acres of tidelands. Acquisition of this parcel 
would allow the city to complete a needed harbor expansion. It 
would also make available a substantial area for commercial 
investment. This goal is important because unlike many other 
cities in Alaska, Craig did not receive its municipal 
entitlement lands it needed for community growth.
    S. 1778 is integral to the acquisition of the cannery site 
because the city cannot afford to purchase this property from 
its owner, who has told us he is willing to sell us the 
property. This bill will authorize a three-way land transaction 
by which the city will sell a prime recreational parcel that is 
formerly the site of a U.S. Forest Service trail and cabin. The 
city will then use the proceeds of this sale to purchase the 
abandoned cannery site.
    While it is often an overused term, this is truly a win-win 
transaction for all involved. The U.S. Forest Service will 
receive lands that will provide a recreation site close to the 
Craig Ranger District. Craig, in turn, will get the opportunity 
to purchase the cannery property.
    This entire transaction will be subject to the standard 
Federal appraisal standards for both parcels and will be 
overseen by the Forest Service. S. 1778 requires that the 
exchange be based on a value-for-value basis. It also can take 
place only on a willing seller/willing buyer basis and it be 
accomplished only by the passage of this legislation that will 
authorize the appropriation for the transaction. While there is 
no guarantee that funds will be made available for this 
transaction, we are working with Senator Stevens, a cosponsor 
of this bill, to make these funds available, if the committee 
and the Congress will pass this bill.
    Mr. Chairman, I have been involved in public policy on 
Prince of Wales Island for 25 years, and I can tell you that 
this property is absolutely the key to moving forward to 
diversify our economy in Craig. The city is reviewing a plan to 
redevelop this parcel if the bill is passed and the transaction 
is completed. The city had great success in attracting private 
sector development to our previously developed marine 
industrial park. We hope to build on this momentum at the 
cannery site.
    The city of Craig supports the passage of this legislation 
and urges the committee to act on this bill as soon as 
possible.
    Thank you for the opportunity to testify.
    Senator Craig. Well, Mayor, thank you. Before we go on to 
the Cape Fox issue, we are going to ask questions of you. We 
will separate the two. They are distinctively different types 
of legislation. So let me turn to my colleague from Alaska for 
any questions she would want to ask of the mayor.
    Senator Murkowski. Thank you, and thank you, Mr. Mayor. I 
appreciate your testimony.
    I am glad to hear your comments about the residents of 
Craig. You used the term ``bullish.'' They are bullish on their 
economy. And I felt the same when I was visiting there this 
summer. Craig has been hit very, very hard. It has a very 
depressed economy because of the downfall in the timber 
industry, but you would not know it from talking to the 
residents. They have got a great attitude about making it work, 
and this is one of those deals that I think, if we can offer a 
little assistance here, they really can pull together great 
things for the community, good economic opportunities and jobs 
for the residents, which is what everybody wants.
    In recognizing that, you have to wonder, though, what we 
have to do in exchange in order to facilitate this economic 
development. Could you still do in the city what you wanted to 
do even without this exchange?
    Mr. Watson. The short answer is that we are short on land.
    Senator Murkowski. Those of us who have been to Craig 
really appreciate how short you are.
    Mr. Watson. Craig is actually an island that has a spit 
that was built to Prince of Wales Island, and the surrounding 
property that actually goes beyond the spit, during the Native 
Land Claims Act, that was basically all selected by the native 
corporations. What we have left in town is just a couple of 
acres. It is actually not left. We have a couple of acres 
downtown that has our municipal infrastructure there, city 
hall, and our clinic, and those various things. So we are 
basically used up right now. The cannery site is an old 
downtown property that is fairly large and it fits the bill 
just as good as anything can to get this done.
    Senator Murkowski. Is it fair to suggest that this is 
really the last or the only developable chunk of land in the 
Craig proper downtown?
    Mr. Watson. Yes, it is. It, of course, has the old cannery 
on it yet. But it is the only large parcel that is left in our 
community.
    Senator Murkowski. Now, the question was asked by Senator 
Craig of Secretary Rey about whether or not they really wanted 
the trail. Now, I have heard from some--and I am not going to 
suggest that this is true, but some folks have suggested that 
this parcel is not really all that desirable and the trail is 
not as desirable as one might want. Can you speak to that? We 
understand that the Forest Service will have authorization so 
they can reconstruct the trail so it can be usable and not so 
muddy. If you could just speak to that issue.
    Mr. Watson. Well, first off, I think the trail is in better 
shape now than it ever was when the Forest Service owned it, 
and they obviously thought it was a nice place then. And they 
built a cabin. Actually at one time there was a cabin on either 
end. It goes and there is a flat area. A muskeg is what it is 
actually. And there was a cabin on either end of it. At one 
time the Forest Service thought it was a good idea in those 
days.
    We have spent thousands of dollars in reconstructing the 
trail, putting bridges and walkways and the different things in 
there through the years. It is a great experience. You can get 
up on the top and see 25-30 miles away to the Murielle National 
Monuments and several other things that you have got all kinds 
of landscape that is in the way of. It is actually a very 
beautiful place, similar to, say, like Deer Mountain in 
Ketchikan. It is a very popular tourist and local site to 
visit. So I disagree.
    Senator Murkowski. What you have done, you have really 
worked to do a lot of that reconstruction so that it is not a 
mud hole of a trail.
    Mr. Watson. It certainly is not.
    Senator Murkowski. And we recognize in southeast that if 
you do not do something with the trails, all you are going to 
have is a trail of mud with all that rain that we get.
    Mr. Watson. You have about a 1-year window of opportunity 
before the trail grows back in the forest again. We have been 
keeping after it.
    Senator Murkowski. Good.
    Is there anything else that we need to know about the 
exchange, about the trail that we have not yet covered?
    Mr. Watson. No. I think that you have pretty much covered 
it all. I just think it is most important to understand that, 
as you mentioned earlier, our statehood act provided for the 
State to select lands so communities could get municipal 
entitlement lands to be able to expand. And we just, because of 
some difficulties in the Forest Service in those days, were 
unable. They basically blocked the selections around our area. 
We were unable to do what everybody else was able to do, and we 
are just trying to make up for that in creative ways.
    Senator Murkowski. Well, this is certainly something that 
since we began pursuing this as an exchange, hearing from the 
people of Craig, they have been very receptive to this idea. 
They would like the ability to move forward with the cannery 
property and this exchange will facilitate all kinds of good 
things. So what we have been hearing from all those in your 
town has been very positive and very encouraging in terms of 
what we are trying to accomplish here. So we appreciate that 
support.
    Mr. Watson. Well, thank you.
    Senator Murkowski. Thank you. Thank you, Mr. Chairman.
    Senator Craig. Lisa, thank you. Mayor, thank you very much. 
We appreciate those comments.
    Four or five years ago I had the opportunity to visit Craig 
and to spend time there, and I appreciate not only what you are 
saying. Many of our small communities in Western States become 
landlocked for reasons of Federal and public lands around them 
and the inability to grow or expand. Of course, you have got 
water on most sides and a limitation. So we will do all we can 
to help facilitate the ability for you to grow and expand in 
that area. It is a delightful community.
    Mr. Watson. Thank you very much, Senator.
    Senator Craig. Now let us turn to testimony on the 
remaining pieces of legislation. Let me turn to Dennis Wheeler, 
CEO of Coeur d'Alene Mines Corporation of Coeur d'Alene, Idaho. 
Dennis, I say for the record we have been good friends over the 
years and I appreciate your leadership in the industry that has 
played a critical role in our economy in Western States 
development and continues to do so. Welcome to the committee.

STATEMENT OF DENNIS E. WHEELER, CEO AND CHAIRMAN, COEUR d'ALENE 
              MINES CORPORATION, COEUR d'ALENE, ID

    Mr. Wheeler. Thank you, Chairman Craig and members of the 
committee. We are pleased to appear here today and support S. 
1354. You have the context of my total remarks provided to the 
committee, so I will be brief today, but I do want to make just 
a few points.
    As Assistant Secretary Rey has pointed out in supporting 
the bill on behalf of the Forest Service, this exchange does 
relieve the Federal Government from the complexity and costly 
inefficient management of a public land area that is 
fractionalized. For example, Coeur itself within the area in 
question has over 12,000 acres of unpatented mining claims. One 
of the benefits of this legislation will be to consolidate, for 
administrative purposes and regulatory oversight purposes, the 
land into one manageable area.
    Second, although this is not a hearing on the environmental 
aspects of the project, I would like to point out that Coeur, 
as the largest primary silver producer in North America and a 
significant gold producer as well, has spent nearly $23 million 
for 900--and I emphasize 900--environmental studies for this 
project. And we are recognized in the mining industry as a 
leader in environmental stewardship, just last week having won 
again from the State of Nevada a prominent environmental award 
in recognition for our bat preservation program in our 
operations there.
    I would like to also remind the committee that the lands 
involved in this exchange are not virgin undeveloped 
properties. Rather, gold mining has taken place in the area 
since 1886 and historically half a dozen mines have operated 
there. We have been working on the project since 1987.
    I think that significantly and most importantly for your 
consideration from a social perspective this exchange will 
allow Coeur to work even more actively with the Alaska Native 
groups to provide needed, high-paying jobs to the area and 
economic opportunity for them to participate in the project as 
a result of the approval of this exchange.
    We are financially very strong, with nearly $250 million in 
cash and equivalents today and are perfectly capable of 
assuring the committee and the public that this if this 
exchange is approved, we will carry out our responsibilities in 
doing the project right and working further with Cape Fox to 
the benefit of all involved, including the Federal Government.
    So I appreciate the opportunity to appear here today and 
testify in support of this legislation.
    [The prepared statement of Mr. Wheeler follows:]
      Prepared Statement of Dennis E. Wheeler, CEO and Chairman, 
              Coeur d'Alene Mines Corporation, on S. 1354
    I am Dennis E. Wheeler, Chief Executive Officer and Chairman of 
Coeur d'Alene Mines Corporation. Coeur Alaska is a wholly-owned 
subsidiary of Coeur d'Alene Mines. Coeur Alaska, Inc. is pleased to 
present this testimony supporting Senate Bill 1354, the ``Cape Fox Land 
Entitlement Adjustment Act of 2003''.
    Coeur Alaska Inc., a wholly owned subsidiary of Idaho based Coeur 
d'Alene Mines Corporation, is headquartered in Juneau, Alaska. Coeur 
owns patented lands and mining leases in Alaska. These properties 
encompass the Kensington and Jualin mine sites in the Tongass National 
Forest, 45 miles north of Juneau.
    The historic Kensington and Jualin mines are situated within the 
northern reach of the historic Juneau Goldbelt. Gold was first 
discovered there in 1886 and led to the development and operation of 
half a dozen mines in the area. The Kensington and Jualin mines 
operated in various stages between 1886 and 1935. Since 1987, Coeur has 
been working to reopen the Kensington Mine, using the best available 
technology to design a mine which will be environmentally responsible 
and provide high paying jobs to Southeast Alaska.
    Coeur has invested over $150 million, including approximately $23 
million for environmental studies, to reopen and operate the Kensington 
Mine. Over 900 environmental and feasibility studies have been 
completed to date. The project has previously received all its major 
environmental permits, following completion of an Environmental Impact 
Statement (EIS) and Supplemental EIS (SEIS). Unfortunately, depressed 
gold prices prevented development of the project under that specific 
operating plan. Coeur is presently working closely with the U.S. Forest 
Service; the U.S. Environmental Protection Agency; and the Alaska 
Departments of Natural Resources, Environmental Conservation and Fish 
and Game, on the preparation of a second SEIS to reopen and operate the 
Kensington Mine in a manner that uses the best processes for mining, 
milling, tailings treatment and storage, transportation, and 
reclamation, and improves access and worker safety. The second SEIS is 
scheduled to be completed in the summer of 2004, following an extensive 
public process, including public meetings in Juneau and Haines, Alaska 
(the closest communities to the mine project). These meetings were 
conducted last week. The results of the meetings indicate substantial 
public support for the project, and emphasize the need for new job 
opportunities in a crippled Southeast Alaska economy. This SEIS is 
required as a result of reconfiguring the mine plan to make it 
operationally feasible under a wide range of gold prices. Importantly, 
the SEIS will be completed with or without the passage of S. 1354.
    Coeur owns, and controls through mining leases from other land 
owners, approximately 1,720 acres of patented land at the Kensington 
and adjoining Jualin Mine sites. These lands were patented over the 
years under the 1872 Mining Law by various mining entities. These 
private lands represent substantial holdings within the Tongass 
National Forest.
    The lands to be exchanged to the Cape Fox and Sealaska Corporations 
under S. 1354 surround Coeur's patented lands. The lands are heavily 
encumbered by 12,792 acres of unpatented mining claims held or leased 
to Coeur. These National Forest lands encompassing the unpatented 
claims are also classified by the Tongass Land and Resource Management 
Plan (Tongass Management Plan) for mine development. Transfer of these 
lands to Cape Fox and Sealaska will not affect the mining claim rights 
or represent a deviation from the Tongass Management Plan. Rather, the 
transfer will eliminate from the National Forest complicated mining 
claim and patented land boundaries. The transfer will also greatly 
simplify a currently complex and confusing management situation for the 
Forest Service, saving the public considerable administrative costs.
    Mine development and operations will continue to remain subject to 
stringent federal and state environmental protection requirements, 
including the SEIS. At the same time, by simplifying land ownership and 
regulatory regimes, S. 1354 will further serve the public interest by 
facilitating an environmentally and economically sound development of 
the Kensington Mine. Further, the exchanges under the legislation will 
provide a unique opportunity for Coeur to work cooperatively with 
Alaska Native entities and their shareholders in the operation of this 
enterprise.
    The proposed exchange is important to Coeur's plans for development 
of the Kensington project. It would allow consolidation of private land 
holdings held by Coeur at Kensington, and those leased to Coeur (held 
by Hyak Mining Co.) on the adjoining Jualin Mine property, with the 
Native lands conveyed by the Secretary to Cape Fox and Sealaska. 
Together, these lands would form a contiguous block of private land 
managed and regulated for development as a mining district. By 
facilitating a reduction in the number of isolated parcels, S. 1354 
will not only decrease the cost and complexity of the Forest Service's 
management of the area, but will simplify and provide important 
certainty to operational permitting and long-range reclamation planning 
for the Kensington gold project. Coeur re-emphasizes that the proposed 
land exchanges between the Forest Service, Cape Fox, and Sealaska will 
not short cut or eliminate key environmental requirements. For example, 
although responsibility for oversight of reclamation would move to the 
Alaska Department of Natural Resources, reclamation standards and 
obligations will not be diminished. Rather, the oversight and 
regulatory responsibilities for reclamation will shift to the State of 
Alaska. State regulation and oversight of the project, however, will 
add a much needed level of predictability for Coeur and other investors 
committing to development of this mining district.
    Development of the Kensington gold project will bring significant 
and diverse economic benefits to Southeastern Alaska. The project will 
add high paying jobs, create additional indirect jobs, and add 
additional tax base to a region of Alaska plagued by underemployment 
and significant economic challenges. Coeur proudly boasts a strong 
local/Native hire and training policy. Our relationship with the 
Berners Bay Consortium since 1994 has further promoted local mining 
vocational education, working directly with the State Department of 
Labor and University of Alaska SE. The project is projected to last 15 
years, including construction, startup and reclamation periods. Capital 
costs for construction and sustaining capital are expected to exceed 
$100 million. To date, Coeur has invested over $22 million at the site 
on environmental baseline studies, permitting and environmental impact 
studies.
    Coeur d'Alene Mines Corporation is an environmentally responsible 
operator, having been acknowledged by over 20 major national and 
international environmental awards since 1987. Coeur is strongly 
committed to sound resource development, and economic diversity in 
Southeast Alaska.
    Coeur urges the Committee to give favorable consideration to S. 
1354.

    Senator Craig. Well, Dennis, thank you very much for that 
testimony.
    Now let me turn to Buck--I am going to get this correct, 
Buck.
    Mr. Lindekugel. Lindekugel.
    Senator Craig. Lindekugel.
    Mr. Lindekugel. Hard on the D and that will help you.
    Senator Craig. All right. Thank you very much. Conservation 
Director for SEACC, Juneau, Alaska. Welcome before the 
committee.

          STATEMENT OF BUCK LINDEKUGEL, CONSERVATION 
       DIRECTOR, SOUTHEAST ALASKA CONSERVATION COUNCIL, 
                           JUNEAU, AK

    Mr. Lindekugel. Good afternoon, Mr. Chairman, Senator 
Murkowski. My name is Buck Lindekugel and I am the conservation 
director for SEACC, and I want to thank the committee for 
inviting SEACC to testify today at this hearing.
    Founded in 1970, SEACC is a grassroots coalition of 
volunteer citizen groups throughout southeast Alaska, 18 groups 
and 14 southeast communities from Ketchikan to Yakutat. SEACC 
is dedicated to preserving of southeast Alaska's unsurpassed 
natural environment while providing for balanced, sustainable 
uses of our natural resources.
    SEACC and a broad range of diverse local interests, 
including building contractors, hunters, fishermen, recreation 
business owners, and others who love Berners Bay strongly 
oppose this legislation. For example, here is a stack of 
letters, letters to Senator Murkowski, letters to the 
newspaper, petitions signed by hundreds of citizens in the 
region opposing this bill. With your permission, Mr. Chairman, 
I would like to introduce these letters and petitions into this 
hearing record.
    Senator Craig. We will file them for the record. Thank you.
    Mr. Lindekugel. Coeur Alaska has stated it does not need 
this exchange to develop the Kensington gold mine. If Coeur's 
proposed mine is in fact developed, the right way to manage it 
is to keep the lands proposed for exchange in public ownership. 
This is the best way for the Forest Service to minimize or 
avoid adverse effects to the wildland character of the adjacent 
land and resources that Congress chose to protect in perpetuity 
as the Berners Bay legislated LUD II. Therefore, leaving these 
public lands in public ownership is the best way for the 
subcommittee to protect the broader public interest and 
continued public access and use of Berners Bay's outstanding 
resources.
    In contrast, authorizing this exchange would trade 
valuable, nearby, and easily accessible lands for isolated 
private clear-cuts and subsurface rights of dubious value, 
hundreds of miles away from Juneau. It would harm lands 
culturally and spiritually important to the original settlers 
of Juneau, the Auk Kwaan, threaten the public's existing access 
and use of these wildlands for hunting, fishing, and 
recreation, frustrate the finality of the Alaska Native Claims 
Settlement Act and invite additional land selection conflicts 
across Alaska, and rely on an appraisal process that is 
appropriate for assessing the value of lands for logging and 
mining, but leaves no way of quantifying the ecological, 
cultural, and recreational values, the true heart of Berners 
Bay.
    Like so many deals in life, there are good deals and there 
are bad deals. We are counting on you Senators to screen out 
the bad deals like this proposed exchange and stop this bill in 
its tracks. Doing so will ensure that future generations enjoy 
the same opportunities and uses of Berners Bay that we now 
enjoy. We believe the best way for the subcommittee to judge 
whether this exchange is really in the public's interest is to 
come to Juneau, visit Berners Bay, and hear directly from local 
residents at a formal subcommittee hearing in Juneau.
    We appreciate the Senator coming last fall to Juneau to 
attend a couple-of-hour public meeting where she heard and saw 
a lot of concern from local residents. Unfortunately, that 
record was not formalized and is not before the committee 
before it is making this decision to move this bill forward.
    An example of a good deal. Please consider S. 1778, the 
city of Craig's proposed land purchase agreement with the 
Forest Service. For the record, SEACC supports this bill 
because it does not target a high value, old growth habitat. 
The land is within the city's municipal boundaries that have 
been previously industrialized. These lands are important for 
the city's economic diversification and will permit much-needed 
harbor expansion, downtown parking, and increases in necessary 
sales and property tax revenues.
    With the chair's permission, I submit the following 
testimony on behalf of SEACC in support of S. 1778.
    Senator Craig. Without objection.
    Mr. Lindekugel. Thank you for the opportunity to testify 
today. I would be happy to respond to any questions you may 
have.
    [The prepared statement of Mr. Lindekugel follow:]

Prepared Statement of Buck Lindekugel, Conservation Director, Southeast 
          Alaska Conservation Council, Juneau, AK, on S. 1354*
---------------------------------------------------------------------------
    * A follow-up letter from Southeast Alaska Conservation Council can 
be found in the appendix.
---------------------------------------------------------------------------
    My name is Buck Lindekugel and I am the Conservation Director for 
the Southeast--Alaska Conservation Council (SEACC). The following 
statement is submitted on behalf of SEACC. SEACC respectfully requests 
that this written statement and accompanying materials be entered into 
the official record of this Subcommittee hearing.
    Founded in 1970, SEACC is a grassroots coalition of 18 volunteer, 
non-profit conservation groups made up of local citizens in 14 
Southeast Alaska communities that stretch from Ketchikan to Yakutat. 
SEACC's individual members include commercial fishermen, Alaska 
Natives, small timber operators, hunters and guides, and Alaskans from 
all walks of life. SEACC is dedicated to preserving the integrity of 
Southeast Alaska's unsurpassed natural environment while providing for 
balanced, sustainable uses of our region's resources.
    We have submitted testimony twice before on this ill-conceived and 
shortsighted bill. On August 6, 2003, we submitted written testimony at 
the Subcommittee's field hearing in--Anchorage, Alaska. SEACC opposed 
an identical version of this bill, S. 2222, in our testimony before 
this Subcommittee on June 18, 2002. Most recently, we joined hundreds 
of residents from Juneau at a public meeting, held in Juneau by Senator 
Murkowski on September 20, 2003, where they expressed their strong 
opposition to this bill. The simple reason-for this strong outpouring 
of public sentiment at the public meeting is the high cultural, 
ecological, economic, and recreational values of Berners Bay to 
residents of Juneau and Upper Lynn Canal. While we thank Senator 
Murkowski for taking the time to come to Juneau and listen to the 
heartfelt opinions of her constituents most directly affected by this 
proposal, we are extremely disappointed that she chose not to drop this 
bill from further consideration.
    For all the residents of Juneau and Upper Lynn Canal who hold the 
spectacular Berners Bay dear, we again urge the Senator and this 
Subcommittee to act in the public's interest and stop this bill in its 
tracks. Any activities allowed in Berners Bay must be designed and 
conducted in a manner that sustains and safeguards this spectacular 
watershed's unsurpassed abundance and diversity of renewable living 
resources, along with its capacity to continue to provide food, income, 
and enjoyment to local residents and visitors. All of us believe it is 
our responsibility to ensure that future generations can enjoy the same 
opportunities and uses of Berners Bay's incredible riches that we now 
enjoy.
    Please consider what this bill is really about:

   It is about giving away lands that belong to all of us. 
        High-value, forested wildlands. To private corporations. Mostly 
        in exchange for clearcuts, over 200 miles away.\1\
---------------------------------------------------------------------------
    \1\ See Exhibit 1: Maps and analysis of the public and private 
lands proposed for exchange in S. 1354 (Sept. 12, 2003).
    NOTE: Exhibits 1-6 have been retained in subcommittee files.
---------------------------------------------------------------------------
   It is about giving away sacred ancestral burial grounds and 
        old village sites of the Auk Kwaan tribe, the original settlers 
        of Juneau.
   It is about shutting the public out of lands which are very 
        important for hunting, commercial and sport fishing, tourism, 
        subsistence, and recreation.
   It is about speeding up development of a mine by eliminating 
        the Forest Service's oversight of mining operations and 
        reclamation. A mine which would provide jobs for about 12 
        years, yet invoke environmental damage for decades to come. A 
        mine operated by Coeur Alaska, a corporation on the edge of 
        financial insolvency as recently as April 2002.
   Interestingly enough, while this land exchange may 
        facilitate mine development, the mine could be developed 
        without it. Coeur Alaska's Senior Vice President Rick Richins 
        said so himself: ``the land we control through patented and 
        unpatented mining claims could be developed a this time without 
        the Cape Fox land exchange.'' \2\ Coeur Alaska has possessed 
        all necessary permits since 1998. They don't need this land 
        exchange, they need a higher price of gold. It is only the 
        people of Juneau and Upper Lynn Canal who will lose if these 
        lands are privatized.
---------------------------------------------------------------------------
    \2\ See Exhibit 2: What do you Think?, Juneau Empire, (Aug. 17, 
2003).
---------------------------------------------------------------------------
   It is about threatening the integrity of an incredibly 
        productive and ecologically significant bay. That same mining 
        corporation proposes to cross Berners Bay in large vessels 
        several times daily and dump its wastes in a pristine lake 
        draining into the bay. These activities could severely impact 
        the rich eulachon and herring fisheries, salmon, bald eagles, 
        Thayer's gulls, seals, Steller sea lions, and humpback whales.
   Lastly, it is about an ``equal value exchange'' that, sadly, 
        is not equal. The appraisal process, which would take place 
        after bill passage, will look at the ``highest and best use'' 
        of the land at fair market value. Appropriate to assessing the 
        value of lands for logging and mining, this method leaves no 
        way of quantifying the ecological, cultural, subsistence, and 
        recreational values--the true heart of Berners Bay.

    Sealaska Corporation may explain to you its reasons for wanting 
Congress to bless this special interest legislation, but what is it 
really about? We believe there is far more behind Sealaska's support 
for this bill than meets the eye. For the record, SEACC acknowledges 
that Sealaska has remaining rights and entitlements to additional 
Tongass lands, from lands specifically withdrawn by Congress for that 
purpose in the 1972 Alaska Native Claims Settlement Act (ANCSA). Yet, 
this proposed exchange clearly looks like some kind of bonus, above and 
beyond Sealaska's land entitlement under ANCSA. Furthermore, 
correspondence from Sealaska suggests that its real interest in this 
proposed exchange may not be the land it would receive in the proposed 
exchange but possibly the land it hopes to get if it earns Coeur 
Alaska's support for reopening this historic land settlement.\3\
---------------------------------------------------------------------------
    \3\ See Exhibit 3: Letter from Richard P. Harris, Sealaska 
Corporation Executive Vice President to Charles Paddock, Haines 
Enrollees Incorporated (July 31, 2003).
---------------------------------------------------------------------------
    That letter from Sealaska is troubling. SEACC and many other 
Alaskans have been on record for years opposing efforts to reopen ANCSA 
by establishing new, for-profit Native Corporations in Southeast 
Alaska. Such a step will almost certainly open a Pandora's box of 
additional land claims in Alaska, a never-ending flood of potential 
public land and timber grabs, intertwined with timber giveaways, 
leading to extensive clearcutting of forests now part of a public trust 
for all Americans: the Tongass National Forest.
    It is simply wrong to state that some Southeast Alaska communities 
had been ``inadvertently and wrongly denied'' corporation status in 
ANCSA.\4\ This erroneous claim, made in the past by then-Senator Frank 
Murkowski, is unsupported by the facts. The Congressionally mandated 
study that reviewed this issue did not make a finding that Congress had 
inadvertently omitted the study villages from land benefits, and it did 
not conclude that Congress must now award them land.\5\ We recognize 
that the Native people who are asking for these land benefits have 
histories and traditions in this region. We are sensitive to their 
concerns, but we must vigorously oppose proposals that, as a result, 
attack the Tongass and sacrifice a sustainable future for the entire 
region.
---------------------------------------------------------------------------
    \4\ 143 CONG. REC. S6502 (daily ed. June 26, 1997) (statement of 
Senator Murkowski introducing S. 967, Technical Amendments to ANCSA and 
ANILCA).
    \5\ See Letter from Linda Leask, University of Alaska's Institute 
of Social and Economic Research to Buck Lindekugel, SEACC (May 29, 
1996) (this letter, and the earlier letter referenced in it, are 
attached as Exhibit 4).
---------------------------------------------------------------------------
    Previous attempts by the Alaska Delegation to reopen ANCSA to 
establish new Native corporations and grant them lands from the Tongass 
resulted in strenuous objections from a broad range of sportsmen, 
business, and community interests.\6\ It must be noted that each time 
such a initiative has been launched in Congress, it has gone nowhere. 
If real problems with ANCSA emerge, they must be resolved by soliciting 
public input from all concerned Alaskans, respecting all forest users, 
and maintaining the integrity of the Tongass National Forest and other 
federal lands.
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    \6\ See, e.g., Letter from Rod Arno, Alaska Outdoor Council to The 
Honorable Senator Burns, Co-Chairman, Congressional Sportsmen's Caucus 
(Feb. 27, 1998) (stating opposition to H.R. 2812 and S. 967 (Section 
8)). Individually addressed letters were sent by AOC to the over 300 
members of the Congressional Sportsmen's Caucus, the largest caucus in 
Congress. See also Congressional Drop from Alaska Outdoor Council's, 
Alaska's Sportsmen are United in Their Opposition to H.R. 2812. Both 
the letter and fact sheet are submitted with our testimony as Exhibit 
5.
---------------------------------------------------------------------------
    The best way to understand why so many Juneau residents object to 
this bill is in their own words.\7\ The following quotations are taken 
from hundreds of letters opposing this bill:
---------------------------------------------------------------------------
    \7\ See Exhibit 6: a list of Letters, News Articles, and Citizen 
Petitions Opposing Cape Fox Land Exchange, submitted by local citizens 
from April 30, 2002 through March 3, 2004.

   ``The fact is, public lands that remain public are not 
        locked up--they are locked open. Open to the public. Open to 
        you and me. No land is more `locked up' than private land. If 
        anyone is trying to lock up (and destroy) Alaska, it's the 
        folks who want to privatize everything.''
   ``Spirit Mountain, also known as Lions Head Mountain, is 
        important to the culture of the Tlingit of the past, the 
        Tlingit of the present, and the Tlingit of the future. Please 
        do not give away our land. It is the only thing we have left.''
   ``During our stay at the Berners Bay cabin, people in a 
        dozen different boats plied the glacial rivers in search of 
        moose. In the bay, boaters pulled crab pots and trolled for 
        coho salmon. Thousands of people enjoy this amazing place each 
        year, whether from the state ferry, an air boat, a kayak, or a 
        cabin.''
   The value of our fishery that depends on healthy salmon runs 
        exceeds by far the short term life of this mine.''
   ``We can eat fish, but we can't eat timber or gold.''
   ``. . . the herring were so thick that I could reach under 
        my kayak and actually grab them! Hundreds of eagles and 
        thousands of gulls were feeding on them--I could see the 
        herring still wiggling as the gulls swallowed them!''
   ``I hunt, fish, and trap in Berners Bay, and I've been doing 
        it since 1970. I have a cabin up there in the bay itself. I'm 
        very disappointed that Sen. Murkowski wants to trade land 
        that's already been logged for premium land that hasn't.''
   ``To trade 12,000 acres of national forest land at the edge 
        of this critical habitat area for 3,000 acres of clearcuts is 
        not only a disgrace to the environment, it's an insult to 
        American taxpayers.''

    Again, we urge the Subcommittee to stop S. 1354 in its tracks. 
Trades, such as proposed in S. 1354, should not be mandated by Congress 
but enacted through existing administrative mechanisms and based upon 
the presumption that the greater public good will be served.
    Thank you for this opportunity to comment on this legislation.

    Senator Craig. Well, Buck, thank you very much. Now let us 
turn to Marilyn Blair, president of the Cape Fox Corporation of 
Ketchikan. Marilyn, welcome before the committee.

STATEMENT OF MARILYN BLAIR, PRESIDENT, BOARD OF DIRECTORS, CAPE 
                 FOX CORPORATION, KETCHIKAN, AK

    Ms. Blair. Mr. Chairman, Senator Murkowski, thank you for 
the opportunity to finally be here to testify on S. 1354. My 
name is Marilyn Blair and I am president of Cape Fox 
Corporation, the native corporation for the Village of Saxman, 
and today we need your help.
    Unlike other village corporations, Cape Fox has faced 
unique legal and geographical challenges that have impaired our 
economic success. No other village corporation in the State has 
had so much land denied from their original mandated selection 
area. As a result of these restrictions, only the mountainous 
northeast corner of Cape Fox's core township, which is of no 
economic value, was available for selection. We were compelled 
to select acres of marginal land, which had already been 
logged, and we were forced to forego other economic 
opportunities that would have been available had we been 
treated like everyone else.
    The Village of Saxman has 431 residents and the 
unemployment rate is over 25 percent. Job creation is critical 
to the economic survival of our families. Cape Fox Corporation 
is instrumental in developing jobs for our village and these 
past inequities have denied Cape Fox the capital it so 
desperately requires to promote economic development. Now, when 
it seems a common sense solution has finally been developed for 
us, we are being accused of not being able to be good stewards 
of the land that our people have managed for thousands of 
years.
    These accusations are being made by people who, when they 
leave this room, will pretend to care about our people, our 
culture, and our lands, but they refuse to let us help 
ourselves. We are not cultural museum pieces; we are families 
struggling to earn a living, but we will become museum pieces 
if you do not let us earn a living off of our lands.
    This solution is fair. It has taken years to get to this 
point. We have listened to all the stakeholders and worked hard 
to incorporate their concerns into the legislation. In fact, I 
wonder if any other private landowner in this room would be so 
accommodating with their own back yards.
    Here is really what this legislation is all about and why 
it is fair to all concerned.
    We have a responsible economic partner in Coeur Alaska. 
They have received 19 major national and international 
environmental awards since 1987.
    This is a mining district and has been for well over 100 
years since gold was first discovered in 1886. This land 
exchange is not going to change that fact. It will continue to 
be a mining district.
    This project makes economic sense for the whole area. Our 
fishing industry is gone. Our timber industry is gone, but this 
project will add 225 direct high-paying jobs for our people and 
other people in the area at a payroll cost of $16 million. It 
will also create up to 180 indirect jobs and add an additional 
tax base. Construction alone will inject over $150 million into 
the economy. Coeur has already invested $22 million at the site 
on environmental studies and permitting.
    Cape Fox has long established a reputation for responsible 
private lands management and has always worked with public 
agencies to provide access when it made sense. In fact, all of 
our land in the Ketchikan area is open for recreational use. 
This legislation provides reasonable access through buffers and 
easements.
    This exchange does not include any land within the Berners 
Bay LUD II recreational area. Concerns about massive clear-
cutting near Berners Bay are totally unfounded. This is 
emotional manipulation and nothing more. There is very little 
commercial timber on the land to be exchanged. This legislation 
even protects the viewshed.
    This is an equal value exchange. No manipulation of the 
numbers by opponents to this legislation will change that. We 
will give value for value received. In doing so, we will be 
able to earn an economic return from our lands and the Forest 
Service will get lands and recreational easements that they 
think are important for their management of the Tongass.
    You have the culmination of years of hard work in front of 
you. It is fair. It is reasonable, and it makes sense. Nobody 
is getting something for nothing. We are not asking for a 
handout. We are asking you to let us help ourselves create a 
better life for our families and that is all.
    Thank you.
    Senator Craig. Well, Ms. Blair, thank you very much for 
that testimony. That is very direct and straightforward and we 
appreciate that always.
    Let me turn to my colleague now, Lisa Murkowski, for 
additional questions of the panelists.
    Senator Murkowski. Thank you, Mr. Chairman. I would like to 
make clear for the record, Mr. Lindekugel mentioned the 
hearings that we held in Juneau. We had a field hearing, if you 
will recall, Mr. Chairman, in August in Anchorage and then 
several months later went down to Juneau to take additional 
testimony, but it was not part of that actual field hearing. It 
had been my understanding that we had already requested that 
all the comments that we received at that Juneau hearing be 
included as part of the committee record. Apparently that 
request has not yet been made or if so, it has not been made 
available. But I would like to make it clear that it was 
clearly our intention that that be included.
    Senator Craig. We will include all of that testimony given 
at that time in this hearing's record, so it will be made 
available for all Senators.
    Senator Murkowski. Good. I appreciate that, Mr. Chairman.
    A couple questions first of you, Mr. Wheeler. Welcome and 
thank you, and I appreciate the comments that you made about 
Coeur's environmental record. We feel that we do a lot of 
things well in the State of Alaska and we want to encourage all 
those companies that do things well to continue with us.
    Can you explain to the committee the status currently of 
the Kensington Mine permitting program? Where are we right now 
in the process?
    Mr. Wheeler. Yes, Senator. It is important to make the 
point that the Kensington mining project has already been 
completely permitted and has received a full environmental 
impact statement approval. We are, however, and will soon 
complete a second SEIS for the project because we too have been 
listening to all segments of the public, and we have actually 
reconfigured the project by relocating most of the surface 
facilities on the other side of the Lynn Canal, out of view, 
and it is going to make the project smaller, but better, and 
Coeur will benefit economically as well.
    I think those are really the highlights. We are in the 
final stages. The draft NPDS permit has been issued, and I 
think the Forest Service has put out for public comment the 
supplemental EIS and we expect that process will be completed 
soon.
    Senator Murkowski. One of the concerns that has been raised 
is the plans that Kensington has for the tailings, the tailings 
management at the site. Can you explain what you are planning 
to do with that and how you will handle any environmental 
issues with the tailings?
    Mr. Wheeler. Yes, I can. In response to public comment and 
agency involvement, the initial project, which has been 
permitted involved a dry tailings facility that would have 
taken several acres of wetlands to put in place even though it 
was fully permitted.
    We subsequently looked at submarine tailings disposal, 
which technologically would have been a preferred alternative, 
but we were concerned about ocean dumping as not being an 
appropriate method as far as the public was concerned.
    So what we have done now is, in relocating the project, we 
have taken a small area known as Slate Lake. This has been 
supported by the fishing groups, the community groups, other 
than the testimony here that you have heard, and because it is 
not a salmon fishery, there are not prolific numbers of fish 
there. And actually in our reclamation of the Slate Lake's 
project, following the mining itself, we will have created a 
much more favorable habitat for future fish populations that 
Coeur will provide there. So in terms of the small area 
utilized for tailing disposal now--and Slate Lake is on the 
other side of the mountain--we will end up and the public will 
end up with a far better fishery than currently exists there.
    Senator Murkowski. So you are actually enhancing.
    Mr. Wheeler. We are definitely going to enhance the 
environs. And as the Senator well knows, this area is 
recognized for mining under the Federal Tongass Forest 
Management Plan.
    Senator Murkowski. Thank you.
    Ms. Blair, the people with the Cape Fox Corporation have 
been waiting a long time for this issue to be resolved, for 
them to get the lands that were promised them under the Alaska 
Native Lands Claims Settlement Act. What happens if this bill, 
if this legislation, does not become law? Where are you then?
    Ms. Blair. Well, we will look for other ways to resolve the 
inequities that we have suffered due to that 6-mile limit. This 
is just one way to partially help Cape Fox resolve what we have 
suffered because of the 6-mile limit.
    Senator Murkowski. A couple comments have been made in 
reference to Cape Fox's intention of clear-cutting, and the 
issue of harvesting of the timber keeps being brought up. At 
the hearing that we held in Anchorage, at the testimony that we 
took in Juneau, my recollection was that the witnesses for Cape 
Fox indicated that they really had no intention of harvesting 
timber in this area, that it was not really marketable timber. 
But it was again suggested by Mr. Lindekugel that in fact what 
we may see, if this exchange takes place, is isolated private 
clear-cuts. Can you, once again for the record, indicate what 
Cape Fox's intention is?
    Ms. Blair. Cape Fox has no intention of clear-cutting any 
lands that would be traded in the Berners Bay area. Where they 
are getting that information is beyond me, but it is not from 
Cape Fox. They have never once approached us or asked us 
anything about that. It is false. We will not clear-cut any 
land there.
    Senator Murkowski. I appreciate that.
    Last, Mr. Lindekugel, I appreciate your comments on the 
record, your support of the Craig exchange. I thank you for 
that.
    I did want to get clear again, because we seem to be going 
back and forth on whether or not we are going to be seeing 
these extensive clear-cuts. It has certainly been our 
intention, as we have been dealing with the parties, that Cape 
Fox is making the statements that they are making with genuine 
assertions, not making a claim that we are not going to do 
something today and then next week we are going to change our 
mind. So it is important to make that clear.
    One of the things that we are also including, as we are 
drafting these amendments, is a provision that would allow for 
a viewshed protection. I guess what I would ask you is, as we 
are developing these, if SEACC, yourself or representatives 
from SEACC would be willing to work with my office as we draft 
this language to address some of the concerns that you have 
raised.
    You have indicated that your preference is to basically 
kill the bill. I believe, otherwise I would not be going 
forward with this, that we can have the development of the 
mine, we can allow for the redress for Cape Fox, and we can 
allow for the continued recreational opportunities by those who 
use Berners Bay with the appropriate steps. I think that 
through the amendments I am looking at, we can get there, and I 
would ask you if you would help us in coming up with that 
amendment language.
    Mr. Lindekugel. Thank you, Senator. We would be happy to 
review the language and get back to you as quickly as possible.
    Last session the subcommittee adopted some amendatory 
language to the bill. We do not think those amendments improved 
the bill too much. The bottom line is the bill still conveys a 
huge chunk of public lands that are valued for recreation, 
hunting, and fishing to private corporations for lands that are 
of little value for those uses.
    If I could just point your attention to this picture to the 
side, that is a picture of Slate Cove. Where the road comes 
down here is where they intend to build the marine facility. So 
this area here would be significantly developed, and that 
assumes that that is the only development that occurs on that. 
That will be clear-cut in order to build that facility. So I do 
not think SEACC has been out of line with regard to that. The 
plans that folks have said they were going to do are going to 
involve cutting trees, clearing the land, and blocking public 
access to those lands.
    The thing is once this bill becomes law and those lands 
become private, neither this subcommittee nor concerned 
residents of Juneau are going to be able to influence how those 
lands are managed. Right now while they are public lands, we 
have an opportunity to comment on how those lands are managed 
and to exercise our rights as citizens to pursue the uses that 
we think are appropriate.
    As Mr. Wheeler commented, the Forest Service has just 
complete the comment period on the supplemental draft 
environmental impact statement regarding modifications to the 
Cape Fox land exchange. Those modifications propose dumping 7.8 
million tons of mine waste into lower Slate Lake.
    Mr. Wheeler mentioned the 900 studies that Coeur has 
prepared. We looked at the administrative record for this that 
the Forest Service has developed for this project to this date 
and, unfortunately, sir, there were not 900 studies. We would 
like to see those studies. We think that the information the 
Forest Service used to make a decision needs to be high 
quality, peer-reviewed, scientific data that can withstand 
close scrutiny.
    Thank you, Senator.
    Senator Murkowski. Thank you. A comment was made--again, I 
want to just make a clarification for the record. I think you 
suggested that you had reviewed some amendments that we had 
adopted with regard to this legislation, and we have not 
formally made any amendments to the legislation.
    Mr. Lindekugel. A point of clarification, Senator. The 
amendments I referred to were to S. 2222 in the 107th Congress.
    Senator Murkowski. OK.
    Mr. Lindekugel. And addressed an equal value exchange. And 
we had problems with those amendments.
    Senator Murkowski. That is not mine.
    Thank you, Mr. Chairman.
    Senator Craig. Thank you, Senator.
    Buck, in listening to your testimony, I am trying to 
determine the concern you have as it relates to the Cape Fox 
bill. I am wondering, are you more upset with the aspect that 
it might be mined or are you upset with the land conveyance 
that would go to the Cape Fox Corporation and Sealaska?
    Mr. Lindekugel. We are concerned about maintaining the 
incredible productivity of Berners Bay for future generations. 
The same values and uses that we enjoy we are hoping to 
maintain and pass on to future generations, and we are 
concerned that this legislation, along with the most recent 
proposal by Coeur for their mine, is inconsistent with our 
vision for how this special place should be managed for the 
long-term benefit of all Americans.
    As Mr. Wheeler mentioned, they have a permitted project. 
That project is outside of the larger Berners Bay watershed and 
would not directly affect Berners Bay if developed. They have 
not developed it primarily because the low price of gold in the 
past few years made it uneconomical.
    Mr. Wheeler. Mr. Chairman, if I might just say a couple of 
comments.
    Senator Craig. Mr. Wheeler, yes.
    Mr. Wheeler. We have never been able to get the support 
from SEACC and Mr. Lindekugel for this project regardless of 
how it was configured.
    And the suggestions about clear-cutting any area for our 
facilities I would just like the record to show, as the 
Senators know, there are certain rights for the use of timber 
on unpatented and patented mining claims that do accrue to a 
holder like Coeur. I will say we have no intention of clear-
cutting this area at all. We are not in the logging business.
    There have been a myriad of public comments with regard to 
the numerous studies that have been done with regard to this 
project. To my knowledge, we have never had a request from Mr. 
Lindekugel or his group to come in and look at any information 
that has been made available anytime anybody has requested it.
    So with that, I would like to just conclude by thanking you 
for the opportunity to set some of the record straight here as 
to what I have heard.
    Senator Craig. Well, Dennis, is it not reasonable to 
assume, though, that if you are going to build a docking 
facility, there may be some trees cut down for the purpose of 
facilitating a construction site?
    Mr. Wheeler. Absolutely that would likely have to occur.
    Senator Craig. My guess is that if you were going to build 
a building and a site, you would clear that immediate area.
    Mr. Wheeler. Exactly, Senator, but not in the context of 
clear-cutting.
    Senator Craig. Well, that is what I am trying to establish 
for the record. Buck, you have said they are going to clear-cut 
that immediate area. Are you defining the clearing of an area 
for the purpose of the construction of a loading facility a 
clear-cut?
    Mr. Lindekugel. Regardless of how the land is managed after 
it is cut, if you clear all the trees from a large block of 
land, that is a clear-cut, even age management. That is how I 
was using the term.
    Senator Craig. Dennis, what would be the approximate size 
or acreage involved in the establishment of a transfer 
facility?
    Mr. Wheeler. I do not have that exact acreage, Senator. We 
can provide it to you. It is not a large portion of the land in 
question here.
    Senator Craig. Well, obviously, we can all play semantics.
    Mr. Wheeler. Exactly.
    Senator Craig. I know what a clear-cut is and I know what 
the Federal law calls a clear-cut, and I know that when you 
clear an area for the purpose of the construction of a 
facility, that is not termed a clear-cut by anybody's 
definition. Now, you may wish to call it that, Buck, and that 
is your obvious privilege to do so. But I have been involved in 
overseeing the forest products industry for a long time, and I 
know what a clear-cut is by definition both in size and scope 
and watershed shape and all of that. So we will leave it at 
that.
    But it is my concern, I guess, in working with Alaskans for 
nearly 28 years that we have worked to try to establish an 
economy in that State which will sustain a population, and in a 
State where you have about 88 percent or greater public lands, 
that is very difficult, beyond the hunting and the fishing, to 
establish anything that relates to resource development.
    Has your organization ever supported mining in the State of 
Alaska? Do you support active mining in any form?
    Mr. Lindekugel. We have not supported a specific mining 
project in southeast Alaska. That does not mean that we do 
not--we have not taken a ``we are against mining, all 
mining''--we have not taken a position that we are against all 
logging. We have supported fishing. We have opposed farm fish. 
We are doing the best we can, consistent with our objectives, 
to further long-term interests of the region.
    Senator Craig. But it is safe to assume that you have not 
actively or openly supported any specific mining project to 
date.
    Mr. Lindekugel. Correct.
    Senator Craig. Thank you.
    As it relates to the Alaska Claims Settlement Act, which 
was a legitimate and responsible way to Native Alaskans certain 
of the lands which rightfully they should claim, and when it 
comes to Cape Fox and the restrictive character that they have 
been put to as a result of certain types of land designation, 
has your organization ever proposed alternatives in land 
exchange so that the Cape Fox Corporation could, in fact, 
effectively identify what would be rightfully theirs under the 
Alaska Native Claims Act?
    Mr. Lindekugel. Thank you, Senator. Under the law, we were 
not in a position to do that. However, we have supported Cape 
Fox's proposal to develop a hydropower facility at Mahoney 
Lake, which is in their selections near Ketchikan. They were 
going to sell that power to the city of Ketchikan. 
Unfortunately, that effort was stymied by the efforts of 
Senator Murkowski's father and the other delegation members in 
halting Cape Fox's efforts to sell that power to Ketchikan in 
order to build an intertie connection, a corridor through 
Tongass wildlands, that at this point they lacked the money to 
actually build the infrastructure to support the intertie 
connection.
    Cape Fox had selected that land. It was within their 
selection rights. They had selected it for the purposes of 
hydropower development, and they were frustrated in carrying 
out that intent. We supported that intent. However, because we 
did that, does not mean that we are going to support these 
lands in this location. It is a different place.
    We would be happy to try to identify lands that would be 
more appropriate, closer to the Village of Saxman, closer for 
their workers to access. If that was the interest of the 
committee and Senator Murkowski, we would try to do that.
    For your information, we understand there is a timber sale 
that the Forest Service put out for public notice a short time 
ago. I have not had a chance to look at it very closely, but it 
appears to be national forest lands that are surrounded by 
lands that are owned by Cape Fox, and they might be eligible 
lands for replacing or achieving the objectives of this 
legislation without putting at risk the valuable public lands 
at Berners Bay.
    So we are happy to work with the Senator and you, Mr. 
Chairman, as you see fit.
    Senator Craig. Well, I appreciate those comments because I 
know that under the Alaska Native Claims Act, there were 
limitations as it relates to distance and location and all of 
that. I guess my frustration is that when you oppose one 
exchange it would seem reasonable, if you agree with the basis 
of the law itself--and you may or may not--that you at least 
work to facilitate others that are legitimate and within those 
limitations.
    Mr. Lindekugel. That is it, Mr. Chairman. We do not believe 
this exchange is within the limitations of ANCSA. It is added. 
It is trying to fix a problem. We understand their problem. We 
understand they had an opportunity to address that problem, and 
they have been frustrated in doing that. In our opinion, we do 
not believe this bill is about entitlements under ANCSA. We 
think it is above and beyond that.
    Senator Craig. Thank you.
    Ms. Blair, I heard something different from you. Do you 
have anything you wish to add to that?
    Ms. Blair. Thank you. I do not believe that we needed their 
input or their help in the Mahoney Lake hydroelectric facility. 
It is nice to know that they supported it, but it is not 
anything that was required of Cape Fox to get their support.
    Also, as far as the inequities that we have been suffering 
because of that 6-mile, Cape Fox and its staff and the board of 
directors are perfectly capable of finding other ways, aside 
from this one, without the help of SEACC. And we would like to 
be free to always do that on our own and try and find some 
other resolution. Cape Fox is a very responsible landowner.
    I agree with your--the clear-cutting. Any piece of land, if 
you want to build a house on it and there are trees on it, you 
are going to have cut down trees to build that house. And that 
is all this is. We would not cut any more trees than are 
necessary for roads or the development of the facilities. It is 
development. That is all it is.
    Thank you.
    Senator Craig. Thank you.
    Dennis, a couple of questions of you. One of them has been 
addressed in your comments. I am looking at an alert from SEACC 
here that talks about how the Coeur d'Alene Corporation would 
use Slate Lake--or turn it, I think it says, into a mine's 
tailing dump. The mine is already--and I am quoting--permitted 
to do dry tailings storage, but the corporation wants to cut 
the cost by dumping tailings into the lake instead.
    Was this part of the original EIS or the supplemental EIS 
on the Kensington Mine proposal?
    Mr. Wheeler. Yes, it is included within the supplemental 
EIS.
    Senator Craig. If this conveyance comes to pass and you 
want to use this site as a tailings site, would you not have to 
meet all of the State of Alaska standards, as it relates to 
site and site development?
    Mr. Wheeler. Yes. This exchange will have no impact 
whatsoever in terms of removing the Federal and State 
compliance that we will have to meet on all of the 
environmental laws and regulations that are in place. It has no 
impact on them whatsoever.
    Senator Craig. And I think Buck mentioned in passing, at 
least in part, SEACC's concern about whether or not the Coeur 
d'Alene Mining Corporation might get into financial trouble. 
With the price of gold where it is today, what is the likely 
prospect of that expression?
    Mr. Wheeler. Well, our estimated cost of the project today 
is $80 million, Senator. I commented that we had over $250 
million in the bank today. We are one of the strongest balance 
sheet companies in the precious metals sector today, and there 
are no concerns about our ability to meet our obligations here.
    Senator Craig. I appreciate that.
    Well, I thank you all very much for your testimony. I know 
that these are always controversial issues. They are whether 
they are in Alaska or in my State of Idaho. I have not at all 
been shy in being supportive of mining, but I have also been 
supportive of mining playing by all of the rules and that the 
rules comply with the Clean Air Act and the Clean Water Act and 
all of those very important environmental standards. In Alaska, 
with the unique fisheries and the marvelous fisheries that it 
has, you have an additional burden, but I have also seen it 
done very, very successfully in ways that do not damage 
fisheries and do add the kind of economies necessary to a State 
to afford a population base.
    So we will review these things with due caution, to make 
sure that the record is complete before the committee makes the 
appropriate decision in relation to these conveyances because I 
must tell you that when it comes to public lands, we take these 
matters seriously.
    But I am also one who has not at all been bashful about 
recognizing a balanced use of our public lands, and I do 
believe that mining plays a role, as does logging. We now know 
better how to do it than we have ever done it before to assure 
water quality and that we sustain habitats in a way that do not 
damage them or impair them in any form, or at least in a 
substantial way that is not recoverable in appropriate fashion.
    With that, I thank you all. The record for the committee 
will stay open for 10 days.
    Senator Murkowski.
    Senator Murkowski. Before we close, I just want to make an 
observation here. In listening to the testimony from Mr. 
Wheeler about this mining project that we anticipate will be a 
huge economic boon to the Juneau area in terms of jobs, in 
terms of revenues, in terms of a boon to the Cape Fox 
Corporation and in settling an outstanding issue of so many 
years and resolving that and with the amendments that I have 
proposed that would allow for limited access from the water's 
edge up to a certain portion so that those people that are 
kayaking in the bay have that opportunity to continue the 
recreation, additional provisions as they relate to some kind 
of a viewshed, I really feel that this legislation can work to 
the benefit of so many, not only the economy, not only the 
recreational users in the area, but the folks down in the 
Saxman area that have been waiting for resolution for a long 
time. So I would like to think that we can work this so that 
all interests are served.
    And I appreciate the chairman's support of this very 
important issue. Thank you.
    Senator Craig. Well, I thank you for your leadership, 
Senator.
    Mr. Lindekugel. Excuse me, Mr. Chair.
    Senator Craig. Yes.
    Mr. Lindekugel. If I may just add one thing to Senator 
Murkowski. The Forest Service just extended yesterday or 2 days 
ago the comment period on the supplemental draft EIS for the 
Kensington project. It might be appropriate to ask the Forest 
Service. They have the technology, the information base to 
evaluate the viewsheds and other potential ways of mitigating 
the impacts from this exchange if it does go forward. I would 
just urge that that is an opportunity the Senator may wish to 
explore.
    Senator Craig. I appreciate that advice and it is good 
advice. When we are dealing with these kinds of resources on 
public lands, we always include the managing agency of the land 
at the time of the exchange and their comments and 
recommendations as it relates to these kinds of activities. 
That is an appropriate suggestion. Thank you.
    And we thank you all very much for your testimony.
    The subcommittee will stand adjourned.
    [Whereupon, at 3:53 p.m., the hearing was adjourned.]


                               APPENDIXES

                              ----------                              


                               Appendix I

                   Responses to Additional Questions

                              ----------                              

                           Coeur d'Alene Mines Corporation,
                                 Coeur d'Alene, ID, April 26, 2004.
Hon. Larry E. Craig,
Chairman, Subcommittee on Public Lands and Forests, Committee on Energy 
        and Natural Resources, U.S. Senate, Washington, DC.
    Dear Senator Craig: With regard to the questions raised in your 
letter of March 31, 2004, please find attached a courtesy copy of our 
responses which were previously provided to Senator Murkowski. If you 
have any further questions or concerns, please do not hesitate to 
contact Mr. Wheeler or myself.
            Best regards,
                                         Heather R. Turner,
               Manager, Public, Community & Governmental Relations.
[Enclosure.]

    Question 1. What is the status of the Kensington mine permitting 
program, and will the land exchange in any way affect this program?
    Answer. All State permits have been submitted, the Forest Service 
is currently developing responses to all comments on the DSEIS. The EPA 
has released the Preliminary DNPDES permit for government to government 
review. Federal, state and local permitting requirements will be 
completed prior to enactment of the land exchange, and conveyance of 
the lands, since an appraisal must be completed to ensure that an equal 
value exchange can be consummated. This is required by S. 1354. This is 
the third EIS that has been performed on the project, and approximately 
900 studies and $25 million have been spent through a variety of 
environmental studies.
    Question 2. If S. 1354 is passed in 2004, will Coeur complete the 
EIS and permitting given the fact the USFS will not be the landowner?
    Answer. The Clean Water Act requires that an EIS is prepared for a 
``new source.'' The Kensington mine project is a new source. Therefore, 
an EIS would be required for the project, regardless of whether or not 
the land exchange legislation is passed. Having said this, it is 
important to note that Coeur has developed a schedule to place 
Kensington into production in early 2006. Delays to this schedule would 
be detrimental to the long-term strategy of the company and our 
shareholders. We have already experienced permitting delays that could 
jeopardize the viability of the project.
    Question 3. Does Coeur intend to log the area for the purpose of 
constructing mining and processing facilities?
    Answer. Yes, Coeur will be required to remove timber in those areas 
impacted by the construction of mine facilities. These include: the 
processing facilities (located on private land--patented mining claims, 
the tailings pipeline (located on private and federal land), and the 
tailings storage facility (located on private land). The new Coeur 
proposal would reduce the size of the tailings storage facility and 
necessary borrow areas from about 200 acres to 20 acres. The operating 
plan contemplates minimum tree clearing, stream buffers, and visual 
screening. The tailings management facility cannot be seen from Berners 
Bay or Lynn Canal.
    Question 4. Explain your plan for tailing management at the site 
(this is a SEACC claim of ``dumping toxic tailings into pristine 
lake''?
    Answer. Coeur plans to place inert (non-toxic) tailings into Slate 
Lake under a 404 Permit issued by the Corps of Engineers. The discharge 
from this facility will be monitored through a 402 Permit, issued by 
the RPA. This preferred alternative results in leg wetland disturbance 
than the currently permitted alternative, and provides for a tailings 
disposal method that meets applicable water quality standards, For 
clarification, the tailings from the Kensington project have less metal 
content than the sediments that currently exist in Slate Lake. In its 
current state, Slate Lake is not a high quality fishery. The lake 
supports a small Dolly Varden fishery. Approximately 11 acres within 
the 20-acre lake are considered ``anoxic.'' This means that low 
dissolved oxygen levels prevent benthic organisms and fish from living 
in the ``zone.'' Light does not penetrate into this zone. The Coeur 
lake restoration plan increases the size of the lake to 56 acres. The 
bottom contours of the lake, after tailings placement, create new 
habitat in that sunlight penetrates to a depth that supports aquatic 
habitat. New spawning areas for Dolly Varden will be created around the 
fringes of the larger lake, and new wetlands habitat will be created 
for wildlife. Coeur also intends to trap and relocate most of the Dolly 
Varden fishery, prior to placing tailings in the lake. Once operations 
cease, a new population of fish will be introduced to the lake. Public 
access will also be provided for recreation and fishing, once the 
mining operation has ceased.
    Question 5. Does Coeur intend to log the site, and sell timber 
commercially?
    Answer. No. USFS regulations (current) do not allow Coeur to log 
and sell timber commercially, as a result of approval of the Plan of 
Operations, EIS, and Record of Decision. If the land exchange 
legislation is enacted, Sealaska and Cape Fox will own the surface 
rights and commercial timber values. Both corporations have publicly 
stated they do not intend to log the area. Sealaska has indicated they 
plan to develop a portion of the exchange lands as a cultural 
management site. Both corporations would lease or rent the affected 
mining area (less than 200 acres) to Coeur, in order to conduct the 
mining operation. The post-mining reclamation plan described earlier 
highlights Coeur's intentions to rehabilitate the land.
    Question 6. Does Coeur have a local hire policy?
    Answer. Coeur maintains a local and native hire and training 
preference. They have and will continue to provide mining vocational 
training and education courses, working with the Berners Bay 
Consortium, University of Alaska, and Alaska Department of Labor. At 
Coeur's four other active mining operations, approximately 80-90 
percent of the employees are ``local hire.''
    Question 7. Will Coeur limit access to the minesite?
    Answer. Coeur will be required, by the Mine Safety and Health 
Administration, to limit access in active mine areas.
    Question 8. Does the Clean Water Act prohibit tailings disposal in 
Slate Lake?
    Answer. No. The Clean Water Act (the Act) defines strict water 
quality standards that apply to mining operations. The Act allow for 
the discharge of fill into waters of the U.S., provided all 
requirements of the Corps of Engineers and EPA are met. Further, any 
discharge from the Slate Lake treatment facility must meet water 
quality standards, and protect the existing uses of the stream. EPA has 
issued a preliminary draft discharge permit for the Kensington mine. 
The permit cannot be issued, unless all applicable EPA water quality 
standards are met.

                                 ______
                                 
                     Southeast Alaska Conservation Council,
                                        Juneau, AK, April 26, 2004.

Hon. Larry E. Craig,
Chairman, Subcommittee on Public Lands and Forests, Committee on Energy 
        and Natural Resources, U.S. Senate, Washington, DC.
    Dear Mr. Chairman: Your letter, dated March 31, 2004, gave the 
Southeast Alaska Conservation Council (SEACC) over two weeks to give 
``prompt consideration'' to the question from Senator Lisa Murkowski to 
SEACC for the record regarding S. 1354. Unfortunately, as is sometimes 
the case with mail coming to Alaska, we did not get your letter until 
April 19, 2004, nearly a week after our response was due.
    Last week I spoke with Trish Aspland from Senator Murkowski's staff 
and left a message with Frank Gladics from your office notifying them 
of the letter's late receipt and our intent to respond to your query 
promptly. Given the circumstances, we respectfully request this 
response to Senator Murkowski's question be included in the official 
subcommittee hearing record on S. 1354.
    The question posed by Senator Murkowski was as follows:
    Question. Mr. Lindekugel, with the concerns you have raised 
regarding loss of public access to these lands and the potential 
degradation to the viewshed from the waters of Berners Bay, would your 
organization be willing to work with my office on language that would 
address these issues and protect these lands to your satisfaction?
    Answer. We would like to take this opportunity to reconfirm the 
statement I made to a similar question from Senator Murkowski at the 
March 10, 2004 subcommittee hearing in Washington, DC. As I stated 
then, SEACC is willing to review specific draft language proposed by 
Senator Murkowski's office to see if it addresses our concerns.
    As I elaborated at the subcommittee hearing, however, we are 
concerned that any new amendments will fail to improve S. 1354. We feel 
this way because it is our view that the amendments adopted by the 
subcommittee last session fell far short of fixing the serious problems 
with this bill. The bill introduced by Senator Murkowski as S. 1354 on 
June 26, 2003, included all of the amendments from last session. Rather 
than addressing the fundamental problem with this legislation, the 
giving away of large chunks of public lands currently used by Juneau 
residents for hunting, commercial and sport fishing, and recreation to 
private corporations for clearcut lands hundreds of miles away, last 
session's amendments actually made this giveaway worse. Below, we 
address some of the specific failings of last session's amendments that 
Senator Murkowski carried forward into S. 1354:
    1) Last session's amendments dropped the provision originally 
contained in S. 2222 that prohibited the Secretary of Agriculture from 
offering ``all land from the mean high tide mark to a point five 
hundred feet inland to all marine shorelands in and adjacent to the 
waters of Berners Bay.'' This ``beach fringe'' is the most productive 
and highly used portion of the land to be given away by S. 1354.
    2) Another amendment accepted last session that fell far short of 
improving the bill dealt with the loss of Tongass old growth forest 
under this bill. Instead of replacing all the oldgrowth forest acreage 
that could be lost on lands given to Cape Fox and Sealaska, this 
amendment only applies to about one-third of the old growth forest 
transferred to these corporations.
    3) Last session's amendments also stated that the lands exchanged 
were to be of ``equal value.'' S. 1354, however, does not even require 
the Forest Service to follow the Uniform Appraisal Standards for 
Federal Land Acquisitions, as required by the agency regulations. See 
36 C.F.R. Sec. 254.9. We further question whether an appraisal process 
designed to assess the value of lands for logging and mining purposes 
is even appropriate in this instance because it provides no way to 
quantify this bill's effect on the heart of Berners Bay--its tremendous 
cultural, ecological, and recreational values.
    4) Last session the subcommittee amended S. 2222 to provide that 
lands conveyed to Cape Fox and Sealaska corporations under Section 5 or 
6 would have no effect on those corporations' land entitlements under 
the Alaska Native Claims Settlement Act. Such an approach ignores the 
fact that this exchange basically increases both corporations' land 
entitlement by allowing them to obtain beach front property with high 
resource and public values for lands of lesser and dubious value.
    While we stand ready to address the issues of public access and 
protection of viewsheds, we are keenly interested in the specific 
language Senator Murkowski, working with your committee staff, may 
propose to address the above-mentioned issues. The question posed SEACC 
in your letter refers specifically to concerns raised by ourselves and 
a broad range of diverse local interests relating to public access and 
the viewshed. We wish to clarify that while important, the identified 
issues relating to public access and protection of the viewshed do not 
reflect all the concerns that SEACC and others have with this proposed 
legislation. We hope the testimony and exhibits SEACC has previously 
submitted for the record on this proposed legislation serve to identify 
the host of issues that exist with this legislation, including its 
adverse effect on the culturally significant ancestral burial grounds 
and old village sites of the Auk Kwaan, the original settlers of the 
Juneau area. If you have any questions concerning this material, please 
do not hesitate to contact us.
    Thank you for the opportunity to formally respond to Senator 
Murkowski's question. Again, we are willing to review any specific 
draft language proposed by Senator Murkowski to address the concerns we 
have raised with this legislation.
            Best regards,
                                           Buck Lindekugel,
                                             Conservation Director.


                              Appendix II

              Additional Material Submitted for the Record

                              ----------                              

                                      Goldbelt Corporation,
                                      Juneau, AK, January 22, 2004.
Hon. Larry E. Craig,
Chairman, Subcommittee on Public Lands and Forests, Committee on Energy 
        and Natural Resources, U.S. Senate, Washington, DC.
    Dear Mr. Chairman: My name is David Goade, Executive Vice President 
of the Goldbelt Corporation. I am writing to express my wholehearted 
support for Senate Bill 1354, the Cape Fox Land Entitlement Adjustment 
Act of 2003 (``land exchange''). My viewpoint integrates my 21 years of 
public and private sector experience in Alaska land management and 
development issues. My view also embodies what is in the best long-term 
economic interest of Goldbelt.
    Goldbelt unequivocally supports the land exchange and the well-
reasoned position statements already submitted by the Cape Fox and 
Sealaska Corporations. As a fellow Alaska Native Corporation, Goldbelt 
applauds their untiring efforts to resolve longstanding land conveyance 
inequities and to bring long-lasting economic benefits to their 
respective Alaska Native shareholders. The proposed land exchange 
provides a means to meet both these critical objectives. Goldbelt 
shares this long-tern vision and commitment.
    Goldbelt is headquartered in Juneau, Alaska and has over 3,300 
Alaska Native shareholders. The corporation owns 1,382 acres of 
waterfront land at Echo Cove, which is only 10 miles from the proposed 
exchange lands at Berners Bay. Aside from the direct benefits to Cape 
Fox and Sealaska noted above, the land exchange provides at least one 
more major benefit--a benefit to Goldbelt.
    The operation of the Kensington Mine presents many important long-
term business opportunities for Goldbelt. Such opportunities involve 
mineworker transportation and housing service contracts. It also 
provides long-tern jobs for Alaska Natives of which many will be 
Goldbelt shareholders. Any circumstance that enhances the enduring 
economic viability of the mine operation is of great benefit to 
Goldbelt. The land exchange enables the mine operator to, in this case, 
be more efficient in its decisionmaking process by shifting land 
ownership to Native Corporations and primary government oversight to 
Alaska state agencies. This translates into real, significant time and 
cost savings for the mine operation by reducing regulatory duplication 
and increasing agency access, consistency, and predictability over 
time. In my view, this circumstance created by the land exchange will 
enhance the long-term economic viability of the mine project.
    In summary the land exchange:

   Resolves long-standing land conveyance inequity issues for 
        the Cape Fox Corporation.
   Brings many long-lasting economic benefits to the Sealaska, 
        Cape Fox, and Goldbelt Corporations and their respective Alaska 
        Native shareholders.
   Enhances the long-term economic viability of the Kensington 
        Mine project.
   Increases the likelihood that Goldbelt will receive 
        sustainable, long-term economic benefits through owning and 
        operating mineworker transportation and housing services. Such 
        operations will provide many job opportunities for its 3,300+ 
        Alaska Native shareholders.

    Thank you for the opportunity to comment on this land exchange 
matter.
            Sincerely,
                                            David D. Goade,
                                          Executive Vice President.
                                 ______
                                 
Hon. Lisa Murkowski,
Public Lands and Forests Subcommittee, Committee on Energy and Natural 
        Resources, U.S. Senate, Washington, DC.
    Dear Senator Murkowski: I am writing this letter in support of two 
pieces of legislation before the Public Lands and Forests Subcommittee 
of the Energy and Natural Resources Committee. I request that this 
letter be entered into the record of the hearing of the Subcommittee to 
take place on February 4, 2004.
    First, I support the passage of S. 1354, the ``Cape Fox Land 
Entitlement Adjustment Act of 2003.'' The Cape Fox Corporation faced 
many restrictions on its land selection according to the Alaska Native 
Claims Settlement Act. These restrictions forced Cape Fox to select 
lands that were not economically productive. The land exchange between 
Cape Fox and the Tongass National Forest proposed in this bill-will 
provide Cape Fox with productive lands and a base for economic 
development.
    I also support the amendment you plan to introduce to this bill. 
The amendment will ensure that a right-of-way can eventually be granted 
to the State of Alaska for the construction of the Juneau Access road 
and maintenance facility. This road and maintenance facility are 
necessary to remedy the situation where Juneau, Alaska's state capital, 
is not accessible to the continental road system.
    Also at issue will be S. 1778, the ``Craig Recreation Land Purchase 
Act.'' I support this legislation to allow the City of Craig to 
purchase lands in Wards Cove while relinquishing title to other lands. 
This bill will give the City of Craig access to needed lands for 
economic development while conserving other lands in the public domain.
    Thank you for your consideration of my views. If you have any 
questions, please do not hesitate to contact me.
            Sincerely yours,
                                        Frank H. Murkowski,
                                                          Governor.
                                 ______
                                 
                     Southeast Alaska Conservation Council,
                                        Juneau, AK, March 19, 2004.
Hon. Larry Craig,
Chairman, Subcommittee on Public Lands and Forests, Energy and Natural 
        Resources Committee, U.S. Senate, Washington, DC.
    Dear Chairman Craig: This letter follows up on your recent hearing 
in Washington, DC, regarding S. 1354, the Cape Fox Land Entitlement 
Adjustment Act, which would give away valuable public lands and invite 
further land selection conflicts by waiving the Alaska Native Claims 
Settlement Act's (ANCSA) land selection requirements. In addition to 
the written statement we provided for the March 10, 2004 hearing in 
Washington, DC, we submit this followup statement responding to some of 
the claims made by other witnesses at the March 10th hearing. We 
respectfully request that these supplemental comments be included as 
part of the official, written hearing record.
    Given our past testimony before this Subcommittee, including 
exhibits and materials introduced into the record at the March 10 
Subcommittee hearing, you are well aware of the staunch opposition to 
this bill from SEACC and a broad range of diverse local interests. This 
bill has also provoked unfavorable reactions from members of Congress, 
who have urged its rejection. We recommend the Subcommittee consider 
the strong dissenting views voiced by Democratic Members of the House 
Committee on Resources on the House companion bill for S. 1354 in 
2003.\1\
---------------------------------------------------------------------------
    \1\ See H.R. REP. NO. 108-313 at 6-7 (2003) (dissenting Views on 
H.R. 1899).
---------------------------------------------------------------------------
    All who oppose this public land giveaway share some common 
concerns. This land giveaway, and the mine development it will 
facilitate, are the first steps in the industrialization of the Berners 
Bay watershed; the first of a multitude of projects that threaten the 
Bay's ecological, cultural, and recreational values. Any activity or 
use allowed in Berners Bay must he designed and conducted in a manner 
that sustains and safeguards this spectacular watershed's unsurpassed 
abundance and diversity of renewable living resources, along with its 
capacity to continue to provide food, income, and enjoyment to local 
residents and visitors. All of us believe it is our responsibility to 
ensure that future generations can enjoy the same opportunities and 
uses of Berners Bay's incredible riches that we now enjoy.

I. RESPONSE TO STATEMENTS OF DENNIS E. WHEELER, CHIEF EXECUTIVE OFFICER 
            AND CHAIRMAN OF COEUR D'ALENE MINES CORPORATION

    One of the witnesses who testified before the Subcommittee in favor 
of S.1354 was Dennis Wheeler, Chief Executive Officer and Chairman of 
Coeur d'Alene Mines. Mr. Wheeler's testimony before the Subcommittee 
contains several statements that we believe do not tell the whole 
story.
    Wheeler Statement No. 1: ``Further, the exchanges under the 
legislation will provide a unique opportunity for Coeur to work with 
Alaska Native entities and their shareholders in the operation of this 
enterprise.''
    SEACC Response: This legislation is ``unique'' indeed. Even before 
then-Senator Frank Murkowski introduced S. 1354's predecessor, S. 2222, 
on April 23, 2002, Coeur d'Alene Mines had negotiated and entered into 
land-use agreements with Sealaska and Cape Fox corporations for 
property around the mine site.\2\ How can it be in the public interest 
for 3 private corporations to put their heads together to decide how to 
divvy up lands that do not belong to them, but to all Americans, and 
then seek Congressional approval for this ``private'' deal? Is the 
Subcommittee aware of what terms and conditions are included in these 
land-use agreements? If so, then we believe it is the Subcommittee's 
responsibility to share the contents of these agreements with the 
public. If not, then this Subcommittee should take no further action on 
this bill until these land-use agreements are provided for review by 
the Subcommittee and public.
---------------------------------------------------------------------------
    \2\ See Press Release, Coeur d'Alene Mines Corporation, Kensington 
gold project moving forward at 2 (April 25, 2002) (attached as Exhibit 
1).
---------------------------------------------------------------------------
    Wheeler Statement No. 2: ``Development of the Kensington gold 
project will bring significant and diverse economic benefits to 
Southeastern Alaska. The project will add high paying jobs, create 
additional indirect jobs, and add additional tax base to a region of 
Alaska plagued by underemployment and significant economic 
challenges.''
    SEACC's Response: There are inherent costs of hitching any local 
economy to a liquidating industry such as metal mining. An increased 
role of mining in a region's economy virtually always leads to 
increased instability in job levels and payroll, at least to the short 
and medium term, and usually in the long term.\3\ The Greens Creek mine 
on Admiralty Island provides a good example of this. This mine opened 
in 1989 but shut down about 4 years later because of low metal prices, 
before re-opening in 1996.
---------------------------------------------------------------------------
    \3\ See generally, Thomas Michael Powers, The Role of Metal Mining 
in the Alaskan Economy, (Feb. 2002). This report can be found at our 
web site, www.scacc.org.
---------------------------------------------------------------------------
    Benefits from increased property taxes may accrue to the local 
government. This assumption, however, ignores the adverse effect that 
the environmental degradation associated with industrialization of 
Berners Bay could have on people's willingness to live, work, and do 
business in Juneau. According to the Kensington Gold Project Draft 
Supplemental Environmental Impact Statement (DSEIS) (4-97 through 4-
100), ``Short-term direct adverse impacts would be expected'' for 
housing, schools, and public services (e.g. fire and police protection, 
health care, and emergency services).
    Experts opine that ``the characteristics of a local area that allow 
it to attract and hold people are an important part of the area's 
economic base. If this is not recognized, that part of the economic 
base may be irreversibly damaged.''\4\ We contend that a significant 
reason why residents choose to live in Juneau is the level of access to 
the natural environment that we enjoy, and the breadth and quality of 
the recreation opportunities we have, particularly in Berners Bays.\5\
---------------------------------------------------------------------------
    \4\ Powers, supra note 3, at 37. See also Russell Heath, ``My Turn: 
Juneau gets nothing from Berners Bay land trade,'' Juneau Empire (Mar. 
15, 2004) (attached as Exhibit 2).
    \5\ See U.S. Forest Service, Shoreline Outfitter/Guide Draft 
Environmental Impact Statement R10-MB-425 at 63 (July 2002).
---------------------------------------------------------------------------
    Wheeler Statement No. 3: ``Over 900 environmental and feasibility 
studies have been completed to date [for the Kensington Mine].'' \6\
---------------------------------------------------------------------------
    \6\ See also Dennis Wheeler, Letter to the Editor, Mine proposal 
creates jobs, meets standards, Juneau Empire (Feb. 26, 2004) (attached 
as Exhibit 3).
---------------------------------------------------------------------------
    SEACC's Response: Where are these studies and how can we get a copy 
of them? Our review of the ``Reference'' section of the Forest 
Service's planning record for the Kensington Gold Project DSEIS reveals 
just over 200 studies. If these studies are as critical ``to ensure the 
highest environmental standards and to protect Slate Lake and Berners 
Bay'' as Mr. Wheeler states in his letter to the editor, why are they 
not contained in the Forest Service's planning record?
    Wheeler Statement No. 4: ``The second SEIS is scheduled to be 
completed in the summer of 2004, following an extensive public process, 
including public meetings in Juneau and Haines, Alaska . . . The 
results of the meetings indicate substantial public support for the 
project . . .''
    SEACC's Response: We seriously question the basis for Mr. Wheeler's 
conclusion. The Forest Service limited the referenced public meetings 
to a ``question and answer'' format; the Forest Service did not accept 
oral testimony for or against the mine or make a formal record of the 
public comment received at these public meetings. Consequently, there 
is no way the Forest Service or Mr. Wheeler could capture the comments 
or ``results'' of those meetings.\7\
---------------------------------------------------------------------------
    \7\ See Aaron Brakel, Letter to the Editor, ``Comments were lost at 
mine meeting,'' Juneau Empire (Mar. 3, 2004); Dave Albert, ``Hold 
public hearing about Berners Bay,'' Juneau Empire (Feb. 27, 2004); Skip 
Gray, ``My Turn: Let's bring back public hearings,'' Juneau Empire 
(Mar. 9, 2004). The referenced materials are attached as Exhibit 4.
---------------------------------------------------------------------------
    Wheeler Statement No. 5: ``Coeur d'Alene Mines Corporation is an 
environmentally responsible operator, having been acknowledged by over 
20 major national and international environmental awards since 1987.''
    SEACC's Response: Lets look at what entities have granted Coeur 
these national and international awards. Many of these awards were 
granted by trade and industry groups, including the American Institute 
of Mining, Chile's National Mining Society, the American Institute of 
Mining, Metallurgical, and Petroleum Engineers (AIME), and the 
Northwest Mining Association. Coeur's reliance on environmental awards 
from industry groups like this fails to assuage Juneau residents' 
concerns about Coeur's proposed gold mining project adjacent to Berners 
Bay.
    Coeur is especially proud of an award received from oil and 
chemical giants Conoco and Dupont because that award's selection 
committee included groups like the Mineral Policy Center, a non-profit 
organization dedicated to protecting communities and the environment 
against the adverse impacts of mining. The Mineral Policy Center has 
publicly disavowed its role in granting this award because:

        After it was issued, information came to light that Coeur's 
        Rochester mine was polluting the groundwater with toxic 
        pollutants. The problem has continued. Last year the state of 
        Nevada issued a notice of violation because cyanide levels were 
        in violation of state water quality standards. . . .\8\
---------------------------------------------------------------------------
    \8\ See Bonnie Gestring, Letter to the Editor, ``Policy, Center 
promotes responsible mining,'' Juneau Empire (Mar. 10, 2004) (attached 
as Exhibit 5).

    Consequently, it is no wonder that a significant number of Juneau 
residents object to Coeur's ill-fated plan to increase company profits 
by dumping nearly 8 million tons of mine waste into a pristine mountain 
lake with resident fish populations and which drains directly into the 
resource-rich Berners Bay.

II. RESPONSES TO STATEMENTS OF MARILYN BLAIR, PRESIDENT OF THE BOARD OF 
                  DIRECTORS FOR CAPE FOX CORPORATION.

    Another witness who testified at the March 10th Subcommittee 
hearing was Marilyn Blair, President of the Board of Directors for the 
Cape Fox Corporation, the Native Corporation for the village of Saxman, 
located about 5 miles south of Ketchikan. We take this opportunity to 
respond to several of her comments as well.
    Blair Comment No. 1: ``Unlike other village corporations, Cape Fox 
has faced unique legal and geographic challenges that have impaired our 
economic success. No other village corporation has had so much land 
denied from their original mandated selection area.''
    SEACC Response: The argument that ANCSA needs to be modified as 
proposed in S. 1354 to address the equity of ANCSA's land selection 
criteria over thirty years later is not compelling. First, Cape Fox did 
not have ``land denied from their original mandated selection area.'' 
In fact, the lands Congress decided to withdraw from the Tongass 
National Forest for selection by Cape Fox were specified in ANCSA. See 
43 U.S.C. 1621(1). Cape Fox received the same amount of land as every 
other Southeast village and urban corporation under ANCSA 
(approximately 23,000 acres).
    Second, constraints on the selection of lands resulted in some 
disparities between the value of timberlands conveyed to each village 
and urban corporation in Southeast Alaska. However, the economic 
benefits realized per shareholder from logging these lands were divided 
between widely varying numbers of people. Cape Fox Corporation has 
fewer original shareholders (230 shareholders) than all but one other 
village corporation.\9\ Consequently, the direct financial benefit per 
shareholder was higher for Cape Fox than nearly all village 
corporations in Southeast Alaska.\10\
---------------------------------------------------------------------------
    \9\ Only the village of Kasaan had fewer, with 119 shareholders. 
See Knapp, Native Timber Harvests in Southeast Alaska, Table 2 at p.7, 
USDA Forest Service, PNW-GTR-284 (1992) (This exhibit was attached as 
Exhibit 9 to the testimony submitted by SEACC for the Subcommittee's 
August 6, 2003 field hearing on S. 1354 in Anchorage, Alaska).
    \10\ See Institute for Social and Economic Research, University of 
Alaska, Anchorage, A Study of Five Southeast Alaska Communities, at 94-
98 (1994) (attached as Exhibit 6).
---------------------------------------------------------------------------
    Cape Fox, like other Southeast Alaska village and urban ANCSA 
corporations, has cut virtually all the timber from the lands it 
selected under ANCSA in roughly 20 years. Plainly, S. 1354 sets the 
precedent that Congress will make additional grants of valuable Tongass 
National Forest lands as recompense for the unsustainable land 
management practices carried out on private lands by Cape Fox and other 
Southeast Alaska ANCSA corporations. This giveaway of public lands will 
frustrate the finality of ANCSA and invite additional land selection 
conflicts across Alaska.
    Blair Comment No. 2: ``This project will add 225 direct high paying 
jobs,for our people and other people in the area at a payroll cost of 
$16 million.''
    SEACC Response: This optimism about anticipated ``high quality jobs 
for our people,'' does not comport with the Forest Service's analysis 
of socioeconomic impacts associated with the Kensington Gold Project. 
As noted in the January 2004 draft supplemental environmental impact 
statement (DSEIS) for the Kensington Gold Project, the Forest Service 
assumes that 80% of the construction and operations workforce would be 
hired from outside the Juneau area.\11\ There is a need to import 
workers because there is a highly limited pool of local workers with 
the technical skills needed to construct and operate the mine.\12\ 
Based upon the DSEIS analysis for the alternative proposed by Coeur, 
the 16-month construction phase would provide 64 locally-hired jobs 
while the 10-year operation phase would only employ 45 locally-hired 
workers.\13\ Once these few locally-hired positions are divided among 
Juneau, other nearby communities, and Cape Fox shareholders, the 
anticipated job opportunities are sharply diminished. While few local 
residents would benefit directly from jobs at the mine, many more will 
be negatively impacted by the industrialization of Berners Bay.
---------------------------------------------------------------------------
    \11\ DSEIS at 4-89; 4-93.
    \12\ Id. at 4-89.
    \13\ Id. at 4-93; 4-96.
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    Blair Comment No. 3: ``This solution is fair. It has taken years to 
get to this point. We have listened to all of the stakeholders and 
worked hard to incorporate their concerns into this legislation.''
    SEACC Response: On August 6, 2003, at the Subcommittee's field 
hearing in Anchorage, Alaska, Tribal Leader Rosa Miller testified on 
behalf of the Auk Kwaan, the original settlers of Juneau. She described 
the cultural significance of the Auk Kwaan's ancestral lands in Berners 
Bay. Looming over Berners Bay is Lions Head Mountain, which the Auk 
Kwaan consider sacred because the spirits of their shamans dwell in it. 
Berners Bay also contains-several village sites, and where there were 
villages, there are also burial sites.\14\ Tribal Leader Miller further 
testified:
---------------------------------------------------------------------------
    \14\ See Statement of Rosa Miller, Tribal Leader of the Auk Kwaan, 
Regarding S. 1354 (submitted to the Subcommittee on Public Lands and 
Forests, U.S. Senate Energy Committee, for the Anchorage, Alaska field 
hearing on August 6, 2003).

        Senate Bill 1354 proposes to give away our ancestral lands to 
        both the Sealaska and Cape Fox Corporations. In the old days, 
        when you traveled to someone else's territory, you could not 
        land your canoe until you got permission from the clan who 
        lived in the area. We've heard absolutely nothing from either 
        corporation about their intentions for our lands in Berners 
        Bay. We fear that the relentless drive for corporate profits 
        will override culture, tradition, and the protection of sacred 
---------------------------------------------------------------------------
        grounds.

    To date, we are unaware of any efforts by Cape Fox to meet with 
Tribal Leader Miller to address the Auk Kwaan's concerns.
    Blair Comment No. 4: ``[W]e were forced to forego other economic 
opportunities that would have been available had we been treated like 
everyone else.''
    SEACC Response: We agree with this statement. In the past, actions 
taken by the Alaska Delegation have frustrated an important economic 
development opportunity pursued by Cape Fox on land conveyed to it 
under ANCSA. This opportunity, one that SEACC supported, was the 
development of the Mahoney Lake hydroelectric project by Cape Fox. 
``[Cape Fox] selected this site under ANCSA primarily for its 
hydroelectric potential.'' \15\ But instead of helping Cape Fox pursue 
this project, the Alaska Delegation worked to stifle this private 
initiative by promoting other projects over the objections of Cape 
Fox.''\16\
---------------------------------------------------------------------------
    \15\ See Letter from Gigante, Cape Fox CEO, to Senator Frank 
Murkowski, at 2 (Feb. 16, 2001). This letter was submitted with SEACC's 
testimony for the August 6, 2003 Subcommittee field hearing held in 
Anchorage, Alaska as Exhibit 10.
    \16\ See Letter from Alaska Delegation to Boergers, FERC (Feb. 8, 
2001). This letter was submitted with SEACC's testimony for the August 
6, 2003 Subcommittee field hearing held in Anchorage, Alaska as Exhibit 
11.
---------------------------------------------------------------------------
    In closing, we appreciate this opportunity to supplement our 
previous testimony on S. 1354. We are counting on this Subcommittee to 
screen out the ``bad'' deals, like the proposed Cape Fox giveaway, and 
to stop this bill in its tracks. To protect the public's interest in 
these special lands, it is imperative that the Subcommittee take a hard 
look at the land use agreements entered into between Coeur and the 
Sealaska and the Cape Fox Corporations for these lands before this 
giveaway bill moves another inch.
    Thank you for your careful attention to our supplemental testimony.
            Best Regards,
                                           Buck Lindekugel,
                                             Conservation Director.
                                 ______
                                 
     Prepared Statement of Alfred McKinley, Sr., on Behalf of the 
                        Wooshkeetaan, on S. 1354

    My name is Alfred McKinley, Sr. My Tlingit name is Aan xis koox. I 
am of the Wooshkeetaan (Eagle/Shark) Clan and am submitting this 
testimony, as the recognized Wooshkeetaan spokesman, in support of 
Sealaska Corporation receiving the land at Berners Bay in Southeast 
Alaska.
    The Wooshkeetaan people are the recognized original owners of the 
Berners Bay area. Our traditional ownership has been recorded on page 
38 in Haa Aani, Our Land, Tlingit Land Rights and Use, by Walter R. 
Goldschmidt and Thomas H. Haas, edited with an introduction by Thomas 
F. Thornton. Chart 6: Juneau-Douglas Territory, in Appendix C of this 
published book also shows the Wooshkeetaan as the aboriginal owner of 
the area.
    The Tlingit people accept Haa Aani as an accurate report on our 
land ownership and traditional property rights. It is the result of an 
assignment in 1946 from the Commissioner of Indian Affairs to help 
settle land ownership disputes with the increase in Western migration 
to Alaska. Dr. Goldschmidt, an anthropologist, and Mr. Haas, an 
attorney, traveled throughout Southeast Alaska interviewing Elders and 
Clan leaders in the villages to gain a first hand account of who owned 
the land and the waters and under what rules. They were accompanied by 
Joe Kahklen, Sr., a respected Tlingit Elder, who has since passed away. 
I have enclosed a copy of page 38 and Chart 6 for your information.
    Sealaska Corporation met with representatives of the Wooshkeetaan 
Clan in Juneau last year regarding this issue. As the traditional 
people of Berners Bay, we support Sealaska Corporation receiving this 
land because it will allow us to have places like Slate Creek, which is 
one of our old village sites, back in Native ownership. The Native 
Cemetery & Historic Sites of Southeast Alaska report, prepared in 
October of 1975 by consultants Wilsey & Ham, Inc., reports that this 
site is ``Identified as a 500 to 600 year old permanent village site, 
probably with remains present.'' (p. 654). I first went there as a 
young man with my uncle, John B. Fawcett. Over the years, we used the 
area for fishing and hunting, and it remains important to me and my 
Clan today. Returning this significant historical site to Native 
ownership is one of main reasons the Wooshkeetaan support this project.
    We understand that there may be others who purport to speak for us 
or on our behalf. These people, though well intentioned, are not 
authorized to represent our Clan or speak about our property.
    In conclusion, the Wooshkeetaan Clan supports Sealaska Corporation 
receiving the land at Berners Bay.
                                      Alfred McKinley, Sr.,
                                      Spokesman, Wooshkeetaan Clan.
                                 ______
                                 
                                      Juneau, AK, February 2, 2004.

    Dear Honorable Senators: Greetings from Juneau, Alaska. I am 
writing in regards to S. 1354 the Cape Fox Entitlement Adjustment Act 
(S. 1354, H.R. 1899). The land exchange proposed by Senator Murkowski, 
albeit justified in meeting obligations due to native corporations in 
Alaska, is unfair as an economically equivalent exchange to owners of 
the public land. If the land management style (clear cuts, excessive 
road building) that these native corporations have shown on their 
current properties occurs on these newly exchanged lands, one of the 
strongest coho salmon producing streams in SE Alaska is vulnerable. 
Exchanging approximately 12,000 acres to Cape Fox and Sealaska 
Corporations along with rights to log, subdivide, sell, and develop a 
large swath of wild lands on the northwest side of Berners Bay for 
3,000 acres of mostly timber harvested lands and certain subsurface 
interests near Ketchikan is unfair. The Cape Fox land exchange offers a 
quick ``fix it'' solution to an treaty issue that has been lingering 
for almost 30 years. An exchange should occur, but not with such a huge 
gap in the gains to one group (native corporations) and the loss to 
another(the public).
    Please do not pass S. 1354, until other solutions are explored. If 
this parcel must be exchanged please consider the suggestion offered at 
a public meeting that Senator Murkowski offered in Juneau. The 
suggestion was to only exchange the subsurface rights--those the Cape 
Fox and Sealaska Native Corps are particularly interested in this 
exchange. A majority of the 300 attendees at this public meeting were 
against this land exchange.
    Thank you for your time and considerations.
            Sincerely,
                                              Andrew Eller,
                                                        Juneau, AK.
                                 ______
                                 
 Prepared Statement of Chris E. McNeil, Jr., Chief Executive Officer, 
                    Sealaska Corporation, on S. 1354
    Mr. Chairman and Members of the Subcommittee, thank you for the 
opportunity to testify on behalf of Sealaska Corporation regarding 
Senate Bill 1354, the ``Cape Fox Land Entitlement Adjustment Act of 
2003.'' Sealaska is the Alaska Native Regional Corporation for 
Southeast Alaska under the Alaska Native Claims Settlement Act 
(``ANCSA'').
    Sealaska Corporation supports the enactment of S. 1354 because it:

   allows for native ownership of a recognized Native historic 
        site;
   creates a potential opportunity for jobs for Sealaska 
        shareholders;
   creates business opportunities for Sealaska and other Native 
        Corporations in services relating to mine development;
   makes another step towards the fair resolution of the Alaska 
        Native Land Claims Settlement Act; and
   resolves management inefficiencies for Sealaska and the 
        United States Forest Service on the Tongass National Forest by 
        resolving split estates.

    In sum, the bill resolves the outstanding Cape Fox and related 
Sealaska entitlement issues in a fair manner that furthers the 
objectives of ANCSA, benefits Tongass National Forest management, and 
otherwise serves the public interest. The bill provides for adjustments 
to resolve inequities in Cape Fox's outstanding land entitlements under 
ANCSA. The adjustments to Cape Fox surface land and selection rights in 
turn require adjustments concerning Sealaska's title and ANCSA 
conveyance rights to subsurface lands underlying the Cape Fox lands. S. 
1354 provides for these adjustments.
    The bill also resolves land encumbrances that negatively impact the 
U.S. Forest Service management of certain split-estate lands (where the 
U.S. Department of Agriculture is the surface owner and Sealaska is the 
subsurface owner) and ensure that valid subsurface selection rights, in 
which Sealaska has conveyance rights to the subsurface beneath Tongass 
National Forest surface lands, do not create additional split-estate. 
This legislation will ensure that the split-estate areas do not present 
a continuing encumbrance and management problem for the Forest Service.
    In regards to split estates, Sealaska would like to note that S. 
1354 would be an appropriate place to address another split estate 
created by a previous Act of Congress, the Kake Tribal Corporation Land 
Transfer Act, P.L. 106-283. This Act left unresolved the status of the 
Sealaska-owned subsurface of lands transferred by Kake Tribal 
Corporation to the SEAL Trust for protection of the City of Kake's 
watershed. The Act did, however, authorize the Secretary of Agriculture 
to acquire from Sealaska Corporation the subsurface estate to the 
approximately 1,127 acres of lands through a land exchange. See 43 
U.S.C. Sec. 1629h(c)(3). Accordingly, Sealaska would like to propose an 
amendment to S. 1354 to incorporate the approximately 1,127 acres left 
unresolved in P.L. 106-283 into the lands to be exchanged to the United 
State by Sealaska Corporation in S.1 354, at subsection 6(c).
    The resolution of these issues in S. 1354 involves exchanges of 
Cape Fox and Sealaska lands and conveyance rights for equal value lands 
in the Kensington and Jualin mining district area on the Tongass 
National Forest. The transfer to Sealaska and Cape Fox of adjacent 
tracts in this area, as provided in the bill, will eliminate from the 
national forest lands that are already heavily encumbered with 
unpatented mining claims. This is an area that is already designated 
under the Tongass Land Management Plan for mining development. This 
area surrounds patented claim, private land inholdings.
    The simplification of national forest boundaries and management 
that will be achieved through the exchanges are of substantial benefit 
to the Forest Service and the general public. The exchanges will not 
have any significant effects on Forest resources, uses, or values. In 
addition, the exchanges do not involve any Berners Bay LUD II lands. 
Any mine development in the area will remain subject to federal and 
state environmental protection requirements.
    The mining claim holders are supportive of these exchanges. The 
ANCSA conveyances to Cape Fox and Sealaska in these exchanges will 
remain fully subject to all existing mining claims, State of Alaska 
selections and rights-of-way, and other existing third-party rights. 
The exchanges will provide Alaska Natives an opportunity for 
partnership with the claim holders and to gain experience in mine 
development and related enterprises, including potential jobs for 
Sealaska shareholders.
    The Sealaska/Forest Service exchange provided for in S. 1354 also 
allows Sealaska to receive conveyance to a site of historical value to 
Native shareholders in the vicinity of Slate Creek Cove. This site has 
not been eligible for selection and conveyance under Section 14(h)(1) 
of ANCSA because of the presence of mining claims. Once conveyed, 
guidance for the protection of this site will be provided through the 
Sealaska Heritage Institute (``SHI''), its Board of Trustees and 
Committee of Traditional Scholars. SHI was organized to preserve the 
language and culture of Tlingit, Haida and Tsimshian Indians.
    Sealaska is confident that the parties can expeditiously reach 
agreement regarding the equal value of the particular lands to be 
specified for the exchange, as provided in S. 1354. Significant 
progress has already been made to that end. Sealaska and the Forest 
Service have already achieved substantial progress on other elements of 
the Sealaska/Forest Service land exchange provided for in the bill.
    The Sealaska exchange in the bill could be accomplished 
administratively with the Forest Service, without the need for 
legislation, as an additional modification of the existing Sealaska/
Forest Service Split Estate Exchange Agreement under Section 17 of the 
Alaska Land Status Technical Corrections Act of 1992, Pub. L. 102-415. 
However, enactment of S. 1354 would facilitate and expedite the 
exchange, and assure that the Sealaska exchange is completed in 
conjunction with the resolution of the Cape Fox entitlement issues 
incorporated in the bill.
    In conclusion, Sealaska supports prompt enactment of S. 1354 into 
law. Sealaska stands ready to actively cooperate with the Secretaries 
of Agriculture and the Interior and with Cape Fox to implement S. 1354 
once enacted.
                                 ______
                                 
   Prepared Statement of Alec Brindle, Chairman, Wards Cove Packing 
                          Company, on S. 1778

    Mr. Chairman and members of the Committee, my name is Alec Brindle. 
I am the Chairman of Wards Cove Packing Company. Thank you for the 
opportunity to submit this statement to the committee in support of S. 
1778. We strongly support passage of this bill and will work to 
implement the transaction authorized in the bill if passed.
    In 2002, after 75 years in the salmon business in Alaska, Wards 
Cove decided to sell its Alaskan salmon operations to other operators, 
while concentrating its ongoing Alaskan operations in other fisheries 
and in retailing. One result of this decision is that Wards Cove began 
selling many of its real estate holdings in Alaska. Unlike our other 
properties in Alaska, Wards Cove agreed to delay marketing its Craig 
site so that the City of Craig would have the first opportunity to 
acquire the property. I understand from conversations with city 
officials that the municipality has plans for the property that include 
a number of developments benefiting the general public in Craig and on 
Prince of Wales Island.
    Wards Cove has now held its Craig property off the market for more 
than two years. As a family company founded in Alaska, we have 
benefited greatly from Alaska, and would like where possible to work 
with communities for the benefit of all concerned. While the company is 
willing to continue delaying the marketing of the site for a bit 
longer, we can not hold this property indefinitely. Most of our other 
Alaska salmon sites have already been sold, and our divestiture must be 
complete in the near future. Ultimately Wards Cove Packing will move to 
market this property to other potential buyers if the city is unable to 
arrange for its purchase.
    Mr. Chairman, I support the City of Craig's efforts to acquire this 
property from Wards Cove Packing. The site is in Craig's downtown. The 
city's efforts to meet the community's needs through ownership of this 
parcel is the ideal way to redevelop the land. The City of Craig's 
willingness to transfer ownership of other land that they own to the 
Forest Service in exchange for the Wards Cove parcel makes this 
exchange a fair and equitable one both on its face and in practice.
    It is my hope Mr. Chairman that this committee and the Congress 
will approve this legislation. Thank you for considering my comments.

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