[House Report 108-313]
[From the U.S. Government Publishing Office]



108th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    108-313

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



 
            CAPE FOX LAND ENTITLEMENT ADJUSTMENT ACT OF 2003

                                _______
                                

October 15, 2003.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

  Mr. Pombo, from the Committee on Resources, submitted the following

                              R E P O R T

                             together with

                            DISSENTING VIEWS

                        [To accompany H.R. 1899]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Resources, to whom was referred the bill 
(H.R. 1899) to resolve certain conveyances and provide for 
alternative land selections under the Alaska Native claims 
Settlement Act related to Cape Fox Corporation and Sealaska 
Corporation, and for other purposes, having considered the 
same, report favorably thereon without amendment and recommend 
that the bill do pass.

                          PURPOSE OF THE BILL

    The purpose of H.R. 1899 is to resolve certain conveyances 
and provide for alternative land selections under the Alaska 
Native Claims Settlement Act related to Cape Fox Corporation 
and Sealaska Corporation, and for other purposes.

                  BACKGROUND AND NEED FOR LEGISLATION

    H.R. 1899, the ``Cape Fox Land Entitlement Adjustment Act 
of 2003,'' provides for a land exchange involving the Cape Fox 
Corporation, Sealaska Corporation, and the U.S. Forest Service 
in the Tongass National Forest, Alaska. The bill addresses an 
inequity regarding the Cape Fox Corporation arising under the 
Alaska Native Claims Settlement Act of 1971. The bill also 
rationalizes land ownership patterns, simplifies boundaries, 
and resolves ``split estate'' problems in the Tongass National 
Forest. The land exchange will enable Sealaska and Cape Fox to 
acquire lands adjoining an existing gold mine project.
    The Cape Fox Corporation is the Village Corporation 
organized pursuant to the Alaska Native Claims Settlement Act 
of 1971 (ANCSA) for the Native Village of Saxman, which is 
located near Ketchikan in the southeast panhandle of Alaska. 
Sealaska is the Regional Corporation for Natives from the 
entire southeast region of Alaska. Both corporations have 
holdings of surface and subsurface estate in varying patterns 
in the Tongass National Forest, which comprises most of 
Southeast Alaska.
    Under ANCSA, a village corporation in Southeast Alaska was 
required to select 23,040 acres of withdrawn public land in the 
core township in which the Native Village is located, and to 
the extent necessary, lands contiguous to or cornering such 
township. With the exception of Cape Fox, all other Southeast 
Alaska village corporations were restricted from selecting 
lands within two miles of a home rule city. Cape Fox was 
restricted from selecting lands from within six miles from the 
home rule City of Ketchikan. The six-mile restriction precluded 
Cape Fox from selecting valuable timber lands, industrial 
sites, and other commercial property within that area, leaving 
only the remote mountainous northeast corner of Cape Fox's core 
township, which is nonproductive and of no economic value, 
available for selection.
    Cape Fox's land selections were further limited because the 
Annette Island Indian Reservation is within its selection area, 
and those lands were unavailable for ANCSA selection. The 
inequity created by reducing lands Cape Fox could select has 
not been rectified.
    H.R. 1899 is a sensible solution. It provides for 
adjustments to Cape Fox's land selections and for a land 
exchange that is mutually beneficial to the village corporation 
and to the U.S. Forest Service. Lands that Cape Fox acquires 
under the exchange are adjacent to the Kensington gold mine 
project, which could lead to major economic opportunities for 
the Native shareholders, as mining is a critical ingredient in 
the future economy of southeast Alaska. The Forest Service 
would acquire lands rich in wildlife habitat, recreation and 
watershed values. In addition, the exchange will rationalize 
complex land ownership patterns in Southeast Alaska.
    The bill also provides for an exchange between Sealaska and 
the Forest Service to resolve long-standing ``split estate'' 
problems in which Sealaska owns the subsurface estate of 
certain lands owned by the U.S. in the Tongass National Forest. 
Split estates can be difficult and inefficient to manage.
    A summary of the exchanges authorized under this bill are 
as follows:
     Cape Fox not required to select and receive 160 
acres of certain ANCSA lands.
     Cape Fox receives surface (Sealaska receives the 
subsurface) to 99 acres of land outside Cape Fox's ANCSA 
selection area.
     Cape Fox receives surface and subsurface estate to 
2,664 acres of Tongass National Forest at Jualin Mine site near 
Berners Bay (north of Juneau).
     Sealaska receives surface and subsurface of land 
within the Tongass National Forest that is equal in value to 
lands exchanged to the United States. Sealaska selects its 
lands from 9,329-acre pool of Tongass lands at Kensington Mine, 
near Berners Bay.
     The United States receives lands and interests in 
land of equal value from within:
          (1) 2,900-acre pool and public trail easement offered 
        by Cape Fox (surface) and Sealaska (subsurface) on 
        Revilla Island;
          (2) 2,506 acres of Sealaska split estate subsurface 
        on Prince of Wales Island; and
          (3) 2,698 acres of Sealaska subsurface estate 
        remaining to be conveyed under Haida Land Exchange Acts 
        and Sealaska/Forest Service Split Estate Exchange 
        Agreement of 1991.
     Cape Fox would choose lands to be conveyed to U.S. 
from the 2,900-acre pool in (1) above.
     Lands received by the United States would be added 
to the Tongass National Forest and managed according to the 
Tongass Land Management Plan.
    The land exchanges under H.R. 1899 are required to be equal 
in value.
    Similar legislation passed the Senate in the 107th 
Congress, but no further action was pursued in the House. 
Attempts to address the inequities and land ownership problems 
concerning Cape Fox have been made in the past but without 
resolution.
    A hearing that was scheduled on H.R. 1899 on Thursday, 
September 18, 2003, was cancelled because of Hurricane Isabel. 
A hearing on the virtually identical Senate version of the 
measure, S. 1353 (Murkowski), was held in Anchorage, Alaska, on 
August 6, 2003. In that hearing, testimony on the measure was 
received from Under Secretary of Agriculture Mark Rey, Bruce 
Borup, the Chief Executive Officer of Cape Fox Corporation, 
Steve Borell of the Alaska Miners Association, Rosa Miller, 
Tribal Leader of Auk Kwaan Clan, in addition to other 
organizations and individuals.

                            COMMITTEE ACTION

    H.R. 1899 was introduced on April 30, 2003, by Congressman 
Don Young (R-AK). The bill was referred to the Committee on 
Resources. On October 1, 2003, the Full Resources Committee met 
to consider the bill. No amendments were offered and the bill 
was ordered favorably reported to the House of Representatives 
by voice vote.

            COMMITTEE OVERSIGHT FINDINGS AND RECOMMENDATIONS

    Regarding clause 2(b)(1) of rule X and clause 3(c)(1) of 
rule XIII of the Rules of the House of Representatives, the 
Committee on Resources' oversight findings and recommendations 
are reflected in the body of this report.

                   CONSTITUTIONAL AUTHORITY STATEMENT

    Article I, section 8 and Article IV, section 3 of the 
Constitution of the United States grant Congress the authority 
to enact this bill.

                    COMPLIANCE WITH HOUSE RULE XIII

    1. Cost of Legislation. Clause 3(d)(2) of rule XIII of the 
Rules of the House of Representatives requires an estimate and 
a comparison by the Committee of the costs which would be 
incurred in carrying out this bill. However, clause 3(d)(3)(B) 
of that rule provides that this requirement does not apply when 
the Committee has included in its report a timely submitted 
cost estimate of the bill prepared by the Director of the 
Congressional Budget Office under section 402 of the 
Congressional Budget Act of 1974.
    2. Congressional Budget Act. As required by clause 3(c)(2) 
of rule XIII of the Rules of the House of Representatives and 
section 308(a) of the Congressional Budget Act of 1974, this 
bill does not contain any new budget authority, spending 
authority, credit authority, or an increase or decrease in tax 
expenditures. According to the Congressional Budget Office, 
enactment of this bill could reduce offsetting receipts by up 
to $10,000 a year.
    3. General Performance Goals and Objectives. This bill does 
not authorize funding and therefore, clause 3(c)(4) of rule 
XIII of the Rules of the House of Representatives does not 
apply.
    4. Congressional Budget Office Cost Estimate. Under clause 
3(c)(3) of rule XIII of the Rules of the House of 
Representatives and section 403 of the Congressional Budget Act 
of 1974, the Committee has received the following cost estimate 
for this bill from the Director of the Congressional Budget 
Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                   Washington, DC, October 7, 2003.
Hon. Richard W. Pombo,
Chairman, Committee on Resources,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 1899, the Cape Fox 
Land Entitlement Adjustment Act of 2003.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Megan 
Carroll and Deborah Reis.
            Sincerely,
                                      Elizabeth M. Robinson
                               (For Douglas Holtz-Eakin, Director).
    Enclosure.

H.R. 1899--Cape Fox Land Entitlement Adjustment Act of 2003

    CBO estimates that enacting H.R. 1899 would have no 
significant impact on the federal budget. The bill could affect 
direct spending (including offsetting receipts), but we 
estimate that any such impacts would not exceed $10,000 a year.
    H.R. 1899 would direct the Secretary of the Interior to 
convey to Cape Fox Corporation, an Alaska Native village 
corporation, the surface estate to 99 acres of federal lands 
located within the Tongass National Forest in Alaska. The bill 
also would direct the Secretary to convey to Sealaska 
Corporation, an Alaska Native regional corporation, the 
subsurface estate to those lands. According to the Forest 
Service, those lands are not expected to generate significant 
receipts over the next 10 years; hence, CBO estimates that 
conveying them would have a negligible impact on the federal 
budget.
    In addition, H.R. 1899 would authorize the Secretary of 
Agriculture to convey to Cape Fox Corporation the surface and 
subsurface estates to about 2,664 acres of national forest 
lands in exchange for other lands currently owned by that 
corporation. Following that exchange, the Secretary would be 
authorized to convey to Sealaska Corporation the surface and 
subsurface estates to federal lands to be identified by that 
corporation in exchange for its interests in the subsurface 
estate of roughly 5,204 acres of other lands. Under the bill, 
any lands or interests exchanged must be equal in value.
    H.R. 1899 does not specify all of the lands to be exchanged 
under the bill but does identify areas from which such lands 
would be selected. Based on information provided by the Forest 
Service about the level of timber harvesting expected to occur 
on lands that could be affected by the bill, however, CBO 
estimates that any forgone offsetting receipts from such 
harvests probably would not exceed $10,000 a year.
    The bill contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would impose no costs on State, local, or tribal governments. 
The conveyances and exchanges authorized by the bill would be 
voluntary on the part of Cape For Corporation and Sealaska 
Corporation.
    The CBO staff contacts for this estimate are Megan Carroll 
and Deborah Reis. This estimate was approved by Peter H. 
Fontaine, Deputy Assistant Director for Budget Analysis.

                    COMPLIANCE WITH PUBLIC LAW 104-4

    This bill contains no unfunded mandates.

                PREEMPTION OF STATE, LOCAL OR TRIBAL LAW

    This bill is not intended to preempt any State, local or 
tribal law.

                        CHANGES IN EXISTING LAW

    If enacted, this bill would make no changes in existing 
law.

                            DISSENTING VIEWS

    We strongly oppose H.R. 1899.
    Under the guise of a land ``exchange,'' this special 
interest legislation would convey approximately 12,000 acres of 
valuable public lands from the Tongass National Forest to the 
Cape Fox Corporation and Sealaska Corporation. The national 
forest lands which would be transferred to private ownership--
with the result that they could be developed or sold--are 
adjacent to the Kensington gold mine project and border the 
Berners Bay conservation area which was permanently protected 
by Congress in 1990. The corporate properties to be acquired by 
the Forest Service in exchange under the bill include about 
3,000 acres of remote and isolated surface parcels, much of 
which has been roaded and clear-cut logged, along with about 
9,000 acres of subsurface rights of dubious value.
    Simply put, in this bill private corporations get the land 
gold while the Tongass National Forest--and the public--get the 
land shaft.
    The Tongass lands which would be given away under this bill 
have multiple resource values for the American people who own 
those lands. The undeveloped forested lands in Berners Bay 
include coastline and old-growth timber. The area is very 
scenic, is heavily used for recreation, and has high fish and 
wildlife values. And the economic value of those lands, if the 
Coeur mining corporation redevelops the old Kensington gold 
mine as planned, may be substantial. In a July 28, 2003 press 
release Coeur noted:


          The Kensington Gold Project is located approximately 
        45 miles north of Juneau, Alaska and contains an 
        estimated 1.8 million ounces of proven and probable 
        gold reserves and 1.4 million ounces of resources. 
        Capital costs necessary to place Kensington into 
        production are currently estimated to be $150 million, 
        while annual gold production is projected to average 
        175,000 ounces annually. * * * Coeur believes that 
        significant exploration potential exists at Kensington 
        that could materially increase the project's total 
        resources.

    A significant number of Alaskans oppose this exchange 
because they believe that the values of undeveloped national 
forest lands in Berners Bay exceed any potential economic 
return that may be derived from privatization and development 
to facilitate the Kensington gold mine project. See, e.g., 
``Land Swap Plans Spark Outcry,'' Anchorage Daily News, 
September 24, 2003. Opponents include the Auk Kwaan tribe, 
which has cultural and historic ties to the lands. 
Notwithstanding the opposition to the bill, the Majority failed 
to hold a field hearing in Alaska or bother to inspect the 
lands at issue. Moreover, a perfunctory public hearing 
scheduled in Washington, D.C. prior to the markup was 
cancelled.
    Compounding the insult of the Majority's failure to provide 
due public hearing process, is the substantive injury of 
stampeding a fundamentally flawed bill through the committee. 
Among the many concerns regarding H.R. 1899 are the following:
     The lands specified for exchange in the bill were 
not derived via negotiation with the Forest Service; instead, 
the two corporations identified the Tongass National Forest 
lands they want surrounding the Kensington gold mine project 
and self-selected their corporation lands and subsurface rights 
to be transferred to the Forest Service in exchange.
     The exchange has not been subject to any Forest 
Service hearings or public process as would be required under 
the National Environmental Policy Act (NEPA) for an 
administrative exchange; by a congressional mandate to execute 
the exchange, the bill provides for a defacto exemption from 
NEPA.
     No land appraisals have been done on the lands to 
be exchanged; although the lands to be exchanged are to be 
``equal value'' under the bill, there is no requirement for 
formal land appraisals following the standard process of 
applying the Uniform Appraisal Standards for Federal Land 
Acquisitions.
     While the direct benefits of the exchange to the 
corporations are clear--private ownership of 12,000 acres 
surrounding the Kensington gold mine project--there are no 
comparable benefits to the national forest to offset the loss 
of valuable lands in the scenic Berners Bay area; the 3,000 
acres of Cape Fox corporation lands which would be thrust upon 
the Forest Service are in remote and non-contiguous parcels, 
and any commercial timber has been clear-cut logged. The 
Sealaska Corporation's subsurface would add little of 
discernable value to the national forest, yet they would 
receive by exchange about 9,000 fee simple (surface and 
subsurface) acres with high development potential in the 
Berners Bay area near Juneau.
    In sum, H.R. 1899 violates every tenet in the rulebook for 
what constitutes a land exchange that is in the public 
interest. It would mandate a one-sided transaction which is a 
transparent give-away of valuable public lands to private 
corporations. We urge its rejection by the House.

                                   Nick Rahall.
                                   George Miller.
                                   Ed Markey.
                                   Frank Pallone, Jr.
                                   Ron Kind.
                                   Jay Inslee.
                                   Grace F. Napolitano.
                                   Mark Udall.
                                   Raul M. Grijalva.

                                
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