SENATE BILL REPORT

SSB 5973

BYSenate Committee on Ways & Means (originally sponsored by Senators Rasmussen, Johnson, Wojahn, Bottiger, Gaspard, von Reichbauer, Moore, Smitherman, Vognild, Zimmerman, Nelson, Owen, Benitz, Newhouse, Craswell and Deccio)

Authorizing state reinsurance of titles to tideland and river beds which may be subject to Indian ownership claims.

Senate Committee on Natural Resources

Senate Hearing Date(s):March 4, 1987

Majority Report:  Do pass and be referred to Committee on Ways & Means.

      Signed by Senators Owen, Chairman; DeJarnatt, Vice Chairman; Barr, Craswell, McDonald, Metcalf, Patterson, Rasmussen, Stratton.

Senate Staff:Kaleen Cottingham (786-7415)

                  March 5, 1987

Senate Committee on Ways & Means

Senate Hearing Date(s):March 6, 1987; March 9, 1987

Majority Report:  That Substitute Senate Bill No. 5973 be substituted therefor, and the substitute bill do pass.

      Signed by Senators Gaspard, Vice Chairman; Bauer, Craswell, Deccio, Hayner, Kreidler, Owen, Rasmussen, Talmadge, Vognild, Warnke, Wojahn.

Senate Staff:Charles Langen (786-7715)

                  March 17, 1987

AS PASSED SENATE, MARCH 16, 1987

BACKGROUND:

Currently there are several Indian land claim cases pending in federal courts in Washington:  Suquamish Tribe, Puyallup Tribe, Swinomish Tribe and the Kalispel Tribe.

These cases are based on the premise that the tidelands or beds of navigable rivers vested in the state at statehood only if not previously reserved for other purposes.  The tribes assert that the reservations were established prior to statehood and such federal reservations preclude the state from asserting ownership.

Several recent cases have held that former river bed lands within original Indian reservations are vested in a tribe rather than the state (Muckleshoot Tribe's claim to the bed of the White River and Puyallup Tribe's claim to the old river bed of the Puyallup River).

In each of the ongoing or potential cases, the state has a proprietary interest.  Should the U.S. and the tribe succeed in winning these cases, ownership of tidelands and former river beds, including those now filled in, would be placed in doubt.  Long established understandings of title, public rights-of-way and easements and access rights to the water will be disturbed.

This comes before the Legislature because in the areas of litigation or outstanding claims, title insurance companies have been refusing coverage if a new policy is needed.  In the absence or refusal of title insurance, financing by lending institutions is usually denied.  Thus, much of the land or businesses in the area of the disputed claims has become valueless at worst and an ownership risk at best.

If the U.S. or the tribes succeed in these actions, arguably the final liability will rest with the state for deeding land it had no right to deed.

SUMMARY:

The Legislature recognizes the problems landowners are experiencing with Indian land claims to former river beds and the refusal of title insurance companies to issue policies for these lands.

A reinsurance program is established to allow the state to reinsure any title insurance company for title insurance on lands lying beneath former river beds with a risk of a land claim by a federally recognized Indian tribe or one of its members.  The premium charged for such insurance may be increased by 25 percent above the applicable rate.  The reinsurance program becomes effective April 1, 1988.

The reinsurance fund is created to carry out this reinsurance program.  The fund derives its income from the insurance premiums on former river bed lands with Indian land claims and from appropriated moneys.  Payment of losses, settlements, judgments and all liabilities incurred by the state for reinsurance are paid from the fund.

Under this program, the Risk Manager in the Department of General Administration is authorized to:  1) adopt rules and regulations relating to the reinsurance program; 2) adjust and pay losses and judgments; 3) compromise and settle claims; 4) fix, change and adjust the amounts insured; and 5) adjust the premium rates.

The Department of Community Development is to conduct a study of the tax revenue and economic impact of Indian Tribal claims in tidelands, former tidelands, and lands formerly lying beneath the navigable waters of the state.  The study is to be submitted to the legislature no later than December 1, 1987.

Appropriation:    $100,000 from the general fund is appropriated to carry out the study.

Fiscal Note:      available

Effective Date:Section 2 becomes effective April 1, 1988.

Senate Committee - Testified: NATURAL RESOURCES:  Karl Anderson; Corey McFarland; Bill Short; Jim Waldo; Paul Vey; Doug Sutherland, Mayor of Tacoma; Don Anderson; Mrs. Messer

Senate Committee - Testified: WAYS & MEANS: Karl Anderson; Dick Carkeny; Mrs. Mesler; Jim Waldo