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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Gillis v. Aleutians East Borough Adobe Acrobat PDF logo (8/19/2011) sp-6591
Notice: This opinion is subject to correction before publication in the PACIFIC REPORTER.
Readers are requested to bring errors to the attention of the Clerk of the Appellate Courts, 303
K Street, Anchorage, Alaska 99501, phone (907) 264-0608, fax (907) 264-0878, email
corrections@appellate.courts.state.ak.us.
THE SUPREME COURT OF THE STATE OF ALASKA
MELVIN B. GILLIS, )
) Supreme Court No. S-13620
Appellant, )
) Superior Court No. 3AN-08-09398 CI
v. )
) O P I N I O N
ALEUTIANS EAST BOROUGH and )
STATE OF ALASKA, DEPARTMENT )) No. 6591 - August 19, 2011
OF NATURAL RESOURCES, )
)
Appellees. )
)
Appeal from the Superior Court of the State of Alaska, Third
Judicial District, Anchorage, John Suddock, Judge.
Appearances: J.P. Tangen, Anchorage, and Lawrence V.
Albert, Anchorage, for Appellant. Joseph N. Levesque,
Walker & Levesque, LLC, Anchorage, for Appellee
Aleutians East Borough. John T. Baker, Assistant Attorney
General, Anchorage, and Daniel S. Sullivan, Attorney
General, Juneau, for Appellee State of Alaska.
Before: Carpeneti, Chief Justice, Fabe, Winfree, Christen,
and Stowers, Justices.
WINFREE, Justice.
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I. INTRODUCTION
The superior court interpreted a statutory preference for the purchase of
state land in a manner disqualifying an applicant. Because the superior court correctly
interpreted the statute, we affirm its decision.
II. FACTS AND PROCEEDINGS
In accordance with article VIII, section 10 of the Alaska Constitution, the
legislature enacted the Alaska Land Act shortly after statehood, providing in part "for the
selection, acquisition, management, and disposal of Alaska lands and resources."1 In
1984 the legislature amended the Act,adding a provision granting those meeting certain
requirements a preference right to purchase or lease state land.2 The provision, codified
at AS 38.05.035(f), provides in relevant part:
The director shall grant a preference right to the purchase or
lease without competitive bid of up to five acres of state land
to an individual who has erected a building on the land and
used the land for bona fide business purposes for five or more
years under a federal permit or without the need for a permit
and, after selection by the state, under a state use permit or
lease, if the business produced no less than 25 percent of the
total income of the applicant for the five years preceding the
application to purchase or lease the land.
In 1985 the State of Alaska, Department of Natural Resources (DNR)
promulgated the final regulation interpreting this preference right, which remains
unchanged and provides in relevant part:
1 Ch. 169, SLA 1959 (codified at AS 38.05.005-.990); Alyeska Ski Corp. v.
Holdsworth, 426 P.2d 1006, 1009 (Alaska 1967); see also Alaska Const. art. VIII, § 10
("No disposals or leases of state lands, or interests therein, shall be made without prior
public notice and other safeguards of the public interest as may be prescribed by law.").
2 Ch. 152, § 20, SLA 1984 (codified at AS 38.05.035(f)). A preference right
allows for the purchase or lease of state land without competitive bid. See, e.g., AS
38.05.035(b)(2), (b)(3), (f).
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Upon a written finding under AS 38.05.035(e) that the
interests of the state will best be served, the director will
grant a preference right to lease without competitive bid, or
purchase at appraised fair market value, up to five acres of
state land to an applicant who submits written proof
(1) of entering the land while the land was under
federal jurisdiction;
(2) of erecting and using, for at least five years while
the land was under federal jurisdiction, a building erected
[ ]
under any authorization required under federal law . . . . 3
Melvin Gillis, a professional sport hunting and fishing guide, obtained a 25-
year lease of five acres of state land in April 1989. Gillis built a lodge on the land, and
the operation of the lodge and his guiding business provide his principal source of
income.
In June 2005 DNR conveyed lands, including the land Gillis leased, to
Aleutians East Borough. DNR also transferred its interest in Gillis's lease to the
Borough. Gillis offered to purchase the land in November 2005. The Borough Assembly
rejected Gillis's offer but proposed a new lease agreement. Gillis did not execute the
proposed lease, and in 2007 he claimed he was eligible to purchase the land under AS
38.05.035(f). The Borough maintained Gillis did not qualify for a preference right under
subsection .035(f) because his lease commenced after the federal government transferred
the land to the state. In 2008 Gillis reiterated his preference-right claim.
The Borough then filed a declaratory judgment action, asking the superior
court to determine whether Gillis qualified for a preference right to purchase the land
under subsection .035(f). Gillis counterclaimed against the Borough, filed a third-party
complaint against DNR, and moved for partial summary judgment against both parties.
The Borough and DNR cross-moved for summary judgment. At issue was whether
3 11 Alaska Administrative Code (AAC) 67.053(a)(1)-(2) (2005).
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subsection .035(f) required an applicant to enter land while it was under federal
ownership as a condition of the preference right.4
The superior court concluded that the plain meaning of subsection .035(f)
required an applicant to enter land when it was under federal ownership before the
federal government conveyed the land to the state. The court noted the legislative history
indicated subsection .035(f) was remedial and intended "for a limited class of people."
The court also noted DNR's implementing regulation tracked subsection .035(f)'s plain
meaning. The court entered summary judgment in favor of the Borough and DNR.
Gillis appeals.
III. STANDARD OF REVIEW
We review an agency's interpretation of a statute using our independent
judgment when "the agency's specialized knowledge and experience would not be
particularly probative on the meaning of the statute."5 "We will adopt the rule of law that
is most persuasive in light of precedent, reason, and policy after considering the plain
meaning of the statute, the legislative purpose of the statute, and the intent of the
statute."6
IV. DISCUSSION
4 We adopt the parties' use of various phrasings of "entry" to mean erecting
a building and using the land for a business purpose as required under AS 38.05.035(f).
5 Matanuska-Susitna Borough v. Hammond, 726 P.2d 166, 175 (Alaska
1986);see Longwith v. State, Dep't of Natural Res., 848 P.2d 257, 260 n.5 (Alaska 1992)
("[T]he interpretation of the statutory requirements for the grant of preference rights does
not involve agency expertise." (citing Madison v. Alaska Dep't of Fish & Game, 696
P.2d 168, 173 (Alaska 1985); Kelly v. Zamarello, 486 P.2d 906, 917 (Alaska 1971))).
6 Bradshaw v. State, Dep't of Admin., Div. of Motor Vehicles, 224 P.3d 118,
122 (Alaska 2010) (citingRubey v. Alaska Comm'n on Postsecondary Educ., 217 P.3d
413, 415 (Alaska 2009)).
-4- 6591
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A. Plain Meaning And In Pari Materia
Gillis argues that AS 38.05.035(f)'s plain meaning does not require an
applicant to enter land while it is under federal ownership to qualify for the preference
right. According to Gillis subsection .035(f) fails to "stat[e] that entry under federal
tenure is required whereas [it] does say that entry under a state use permit or lease is
required." He asserts that subsection .035(f) "deals with federal permitting only and does
not address the underlying land status." Gillis maintains that because he entered state
land and otherwise met the conditions of subsection .035(f), he is eligible for the
preference right.
We disagree. The plain language of AS 38.05.035(f) requires an applicant
to have entered land while it was under federal ownership to qualify for the preference
right. Subsection .035(f)'s crucial language is: "erected a building on the land and used
the land . . . under a federal permit or without the need for a permit and, after selection
by the state, under a state use permit or lease." Because the federal government owned
and administered all land available for state selection, land remained under federal
ownership until selected by the state.7 The legislature's use of the conjunction "and,"
combined with the phrase "after selection by the state," indicates that the subsection
applies to an applicant who, along with obtaining the necessary federal permits, erected
a building on and used what was then federal land and continued using that land after
state selection. Gillis's interpretation ignores the subsection's conjunction before the
temporal requirement; his interpretation would be more appropriate if the statute said "or,
after selection by the state" instead of "and, after selection by the state."
Gillis next argues that AS 38.05.035(f) should be interpreted in pari materia
7 See generally Alaska Statehood Act, Pub. L. No. 85-508, § 6(a), 72 Stat.
339, 340-43 (1958), reprinted in 48 U.S.C. ch. 2 (2006) (granting Alaska right to select
"public lands of the United States in Alaska" for state land).
-5- 6591
----------------------- Page 6-----------------------
with the Alaska Land Act's other preference-right provisions.8 Gillis asserts the
legislature knew how to require federal tenure as an element for a preference right when
it used the phrase "federal land subsequently acquired by the state" in AS
38.05.035(b)(3)9 and provided for entry onto land "before January 3, 1959," the date of
Alaska statehood, in AS 38.05.035(b)(5),10 both enacted before subsection .035(f).11
Gillis argues this language's absence from subsection .035(f) favors his interpretation.
Assuming these preference rights should be read in pari materia, we find
Gillis's argument unpersuasive. The legislature employed inconsistent terminology to
convey preference right conditions and temporal requirements, such as when it required
8 We generally construe statutes together, or in pari materia, when they are
"enacted at the same time or deal with the same subject matter." Underwater Constr.,
Inc. v. Shirley, 884 P.2d 150, 155 (Alaska 1994).
9 AS 38.05.035(b)(3) provides in relevant part:
The director may . . . grant a preference right to a claimant
who shows bona fide improvement of state land or of federal
land subsequently acquired by the state and who has in good
faith sought to obtain title to the land but who, through error
or omission . . . has been denied title to it.
10 AS 38.05.035(b)(5) provides in relevant part:
The director may . . . when the director determines it is in the
best interest of the state and will avoid injustice to a person
or the heirs or devisees of a person, dispose of land, by direct
negotiation to that person who presently uses and who used
and made improvements to that land before January 3, 1959,
or to the heirs or devisees of the person.
11 Ch. 194, § 1, SLA 1968 (codified at AS 38.05.035(b)(5)); Ch. 58, § 1, SLA
1965 (codified at AS 38.05.035(b)(3)).
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----------------------- Page 7-----------------------
actions on or to land before statehood or state selection.12 We also distinguish subsection
.035(f) from subsection .035(b)(3), which "grant[s] a preference right to a claimant who
shows bona fide improvement of state land or of federal land subsequently acquired by
the state." Subsection .035(b)(3) does not require the applicant to act before the state
acquires federal land and uses the conjunction "or" before the temporal requirement. In
comparison, subsection .035(f) does require an applicant to act prior to state selection and
uses the conjunction "and" before the temporal requirement.13
We conclude that evaluating AS 38.05.035(f) in light of the above-
mentioned preference rights supports interpreting the statute according to its plain
meaning - an applicant must have entered the land while it was under federal ownership
to qualify for the preference right.
B. Legislative History And Intent
On May 16, 1984, then-DNR Commissioner Esther Wunnicke testified
before the House Committee on Finance regarding the proposed business preference
12 Compare AS 38.05.035(b)(5) (allowing for disposal of land when it "is in
the best interest of the state and will avoid injustice to a person . . . who presently uses
and who used and made improvements to that land before January 3, 1959" (emphasis
added)), with AS 38.05.820(a) (announcing state's policy "to allow preference rights for
the acquisition of tide and submerged land occupied or developed for municipal business,
residential or other beneficial purposes on or before the date of admission of Alaska into
the Union" (emphasis added)).
13 Compare AS 38.05.035(f) (granting "preference right to . . . an individual
who has erected a building on the land and used the land for bona fide business purposes
. . . under a federal permit or without the need for a permit and, after selection by the
state, under a state use permit or lease"), with AS 38.05.035(b)(3) (granting "preference
right to a claimant who shows bona fide improvement of state land or of federal land
subsequently acquired by the state").
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right.14 Wunnicke testified that DNR "was closely involved as the Senate Resources
Committee developed the bill."15 Wunnicke explained the proposed bill "provid[ed] for
a new preference right that would provide an applicant . . . with an assured right to state
land."16 Wunnicke hypothesized that an applicant would "usually [be] a sport hunting
or fishing guide who has had a lodge on federal land that has come into state
ownership."17 Although "supportive of preference rights," Wunnicke expressed concern,
due to timing and resource constraints, that the proposed bill would create "a new class
of about 100 preference right applicants."18
Ten days later the legislature published a document explaining changes to
the House of Representatives version of Senate Bill 375, the bill amending the Alaska
Land Act and adding the preference right.19 According to the document, the House's
preference right language added six provisions: (1) a "5 acre parcel"; (2) the applicant
"erected a building on the land"; (3) the applicant "used land for business purposes for
5 years under federal permit or without the need for a permit"; (4) the applicant "earned
25% of total income from the business"; (5) the applicant purchases the land at "fair
market value"; and (6) DNR "may deny [the preference right] if [it] interferes with public
14 Hearing on C.S.S.B. 375 Before the House Comm. on Fin., 13th Leg. 2d
Sess. (May 16, 1984) (testimony of Esther C. Wunnicke, Comm'r, Dep't of Natural
Res.), available at Alaska Leg. Microfiche Collection no. 2863.
15 Id.
16 Id.
17 Id.
18 Id.
19 Alaska State Legislature, S.B. 375, 13th Leg. 2d Sess. (May 26, 1984),
available at Alaska Leg. Microfiche Collection nos. 2858-59.
-8- 6591
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use by residents."20 The document noted that the preference right "would usually apply
to hunting and fishing guides [and DNR] estimates 100 claimants statewide."21 In early
June 1984 the Senate Committee on Resources summarized the final version of Senate
Bill 375, noting that it in part "[g]rants a preference right to long-term landholders who
have derived business income from the land."22 On July 5, 1984, the Governor signed
the bill and subsection .035(f) became effective one day later.23
When examining legislative history we bear in mind that the statutory
language's clarity places "a greater burden on . . . the party seeking to dissuade us from
giving the statute its apparent meaning."24 But even when a statute appears facially
unambiguous, we will examine the legislative history as it "may demonstrate that an
ambiguity, although not apparent on the face of the statute, does exist with respect to the
legislature's use of a particular term."25 If the legislative history demonstrates no
ambiguity, then this court adheres to the statute's language and will not modify or extend
it by judicial construct.26
Gillis argues that Wunnicke's testimony is not probative of legislative intent
20 Id.
21 Id.
22 Sen. Comm. on Res., Final Version of S.B. 375, 13th Leg. 2d Sess. (June
4, 1984).
23 Ch. 152, §§ 1-87, SLA 1984.
24 State, Dep't of Natural Res. v. City of Haines, 627 P.2d 1047, 1049 (Alaska
1981).
25 Id. at 1049 n.6.
26 Id. (citing City & Borough of Juneau v. Thibodeau, 595 P.2d 626, 635 n.31
(Alaska 1979)).
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and should not be afforded deference.27 But Wunnicke's testimony and the subsequent
consistent legislative documentation indicate subsection .035(f) was intended to provide
a limited preference right to a small number of people who entered federal land that later
came into state ownership. If subsection .035(f) constituted the general land disposal
program Gillis argues for, we would expect a more thorough legislative debate about its
scope and a much richer legislative history supporting Gillis's position. This limited
legislative history does not create an ambiguity that would require us to deviate from
subsection .035(f)'s plain meaning.
Gillis challenges the superior court's determination that AS 38.05.035(f)
serves equitable and remedial purposes as "unsupported or otherwise contradicted by
extrinsic sources of legislative history," including Wunnicke's testimony and DNR's
administration of subsection .035(f). Gillis contends the legislature did not intend
subsection .035(f) to apply to federal land because the legislature enacted it 25 years after
statehood. Gillis also criticizes the superior court for its "speculative conclusion" that
without a requirement to enter federal land the subsection would create an "expanding
class" of applicants for preference rights.
Gillis's arguments are unpersuasive. First, granting a preference right to
applicants who legally constructed a building on and used federal land serves an
equitable and remedial purpose - ensuring that those who did so would not lose their
interest solely due to the land being transferred from federal to state ownership. Second,
1984 corresponds with the end of the 25-yearperiod granted in the Alaska Statehood Act
27 Gillis also discounts an Attorney General letter to the Governor interpreting
subsection .035(f) as requiring applicants to enter federal land and recommending that
the Governor sign the bill. See STATE OF ALASKA, DEP'T OF LAW, OP. ATT'Y GEN., file
no. 388-162-84 (July 3, 1984). The superior court, however, mentioned the letter only
to note that others thought the statute was ambiguous; it did not rely on the letter to
support its interpretation of subsection .035(f).
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for the state to select federal land; therefore subsection .035(f)'s reference to federal land
and land selected by the state is logical.28 Third, we agree with the superior court that
Gillis's interpretation of subsection .035(f), which does not require entry on federal land,
would result in an ever-expanding class of applicants for preference rights contrary to the
plain meaning and legislative history of subsection .035(f).
C. DNR's Regulation And Decisions
Gillis argues that we should apply our independent judgment and not defer
to 11 AAC 67.053,29 DNR's 1985 regulation implementing AS 38.05.035(f), because:
(1) the regulation refers to "federal jurisdiction," which he argues is distinct from and
broader than federal ownership; and (2) DNR did not adequately explain its previous
denial of an application for a preference right.
We agree with Gillis that jurisdiction and ownership carry distinct
meanings.30 But the consistent and longstanding manner in which DNR has applied both
its regulation and subsection .035(f) helps resolve any possible ambiguity in either the
subsection or regulation. Although we agree with Gillis that we use our independent
judgment, "we have recognized that an agency's interpretation of a law within its area
of jurisdiction can help resolve lingering ambiguity, particularly when the agency's
28 See Alaska Statehood Act, Pub. L. No. 85-508, § 6(a)-(b), 72 Stat. 339, 340-
43 (1958), reprinted in 48 U.S.C. ch. 2 (2006) (requiring state to select land "within
twenty-five years after the date of the admission of the State of Alaska into the Union").
29 See supra text accompanying note 3.
30 "Jurisdiction" is defined as a "government's general power to exercise
authority over all persons and things within its territory" and a "geographic area within
which political or judicial authority may be exercised." BLACK'SLAW DICTIONARY 927-
28 (9th ed. 2009). "Federal jurisdiction" is defined as "[t]he exercise of federal-court
authority." Id. at 929. "Ownership" is defined as "[t]he bundle of rights allowing one
to use, manage, and enjoy property, including the right to convey it to others." Id. at
1215.
-11- 6591
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interpretation is longstanding."31 DNR denied a request for a preference right in 1986
in part because the applicant failed to prove he entered federal land before state selection;
DNR denied an informal request in 2008 for the same reason.32 DNR's interpretation of
subsection .035(f) and application of 11 AAC 67.053 span decades and support our plain
meaning interpretation.
D. Absurd Results
Gillis finally argues that interpreting AS 38.05.035(f) as requiring an
applicant to enter federal land creates an absurd result "because no person would ever
qualify for the preference right." Gillis concedes that requiring entry on federally owned
land is not by itself absurd, but argues that when considering the legislative history and
DNR's administration of the statute the result is absurd.
We disagree. We have recognized that "[i]n ascertaining the legislature's
intent, we are obliged to avoid construing a statute in a way that leads to a glaringly
absurd result."33 Although an interpretation nullifying a statute can sometimes produce
an absurd result,34 interpreting this statute as requiring an applicant to have entered
31 Bartley v. State, Dep't of Admin., Teachers' Ret. Bd., 110 P.3d 1254, 1261
(Alaska 2005) (citing Union Oil Co. v. State, Dep't of Revenue, 560 P.2d 21, 23, 25
(Alaska 1977)).
32 In 1986 DNR denied the applicant a preference right under subsection
.035(f) in part because he failed to provide written proof of "occupancy of the land before
its selection by the state." In 2008 DNR denied an informal request for a preference right
under subsection .035(f) in part because the potential applicant failed to provide written
proof "that he had been using the site prior to the conveyance of th[e] land to the State."
33 Sherbahn v. Kerkove, 987 P.2d 195, 200-01 (Alaska 1999) (citing
Underwater Constr., 884 P.2d at 155 n.21).
34 See Premera Blue Cross v. State, Dep't of Commerce, Cmty. & Econ. Dev.,
Div. of Ins., 171 P.3d 1110, 1120 (Alaska 2007) (holding statutory interpretation that
(continued...)
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federal land, thereby limiting the number of eligible applicants, neither invalidates
subsection .035(f) nor contradicts the legislative intent of providing a narrow preference
right.
V. CONCLUSION
We AFFIRM the superior court's interpretation of AS 38.05.035(f) and its
summary judgment decision.
34 (...continued)
rendered statute "a nullity" created absurd result).
-13- 6591
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