Landmark lawsuit to be filed on behalf of Alaska’s schoolchildren

By Heidi Zemach

Attorney Mark Choate and Seward PTSA President Al McCarty discuss the lawsuit. Heidi Zemach photo

Attorney Mark Choate and Seward PTSA President Al McCarty discuss the lawsuit. Heidi Zemach photo

Mark C. Choate, a Juneau attorney with 33 years of experience and a passion for education, will file a lawsuit Friday against the State of Alaska to reclaim School Trust Lands on behalf of all Alaska public schoolchildren, with the help of some committed Seward PTSA board members as plaintiffs. Seward PTSA President Al McCarty told a small gathering at a special meeting Monday April 1st that the landmark lawsuit has the potential to improve school funding throughout Alaska, as similar efforts have done in several other states.

The plaintiffs will ask the Alaska Superior Court Judge in the First Judicial District in Juneau to declare that there have been violations of the trust responsibilities, including a fiduciary duty to protect the land.  It also asks the judge to declare a breach in the management of the trust as there’s never been a valuation of theschool trust lands, resources and minerals that are not recoverable, and that there now must be an accounting so the trust can be made whole.

Choate, who has fought several major class-action lawsuits on a pro-bono basis, estimates that the legal part of the case could take 3-5 years. But more difficult and time-consuming will be bringing about the changes that a legal win would help establish. These include creating an independent school trust lands board to manage the fund and assure that the trust lands are being used at its highest fiduciary value; and an independent advisory board to assure that the board is fulfilling its mission.

“We don’t anticipate it being easy, but we anticipate it being successful,” Choate said.

Lynn Hohl, of Seward, an Alaska PTA officer who is also the east peninsula representative on the Kenai Peninsula Board of Education, was surprised to learn in 2004 that an estimated 11 million acres of school-trust lands had been designated throughout Alaska since 1915, to be used in perpetuity for the benefit of funding public schools. Hohl is a former real estate appraiser who was familiar with the Alaska Mental Health and University of Alaska lands trusts, but had never heard of the school trust lands, which were all but forgotten byhistory.

Seward PTSA President McCarty learned of the trust when he became the legislative chair.  He later served as the Alaska PTA Legislative Vice President where he lead advocacy efforts in Juneau and Washington DC in support of the public school land trust.

Some 45 million acres of reclaimed children’s trust lands, set aside by the federal government, managed in trusts (worth more than 35 billion) are currently helping to fund schools in states throughout the Lower 48 including Colorado, Utah, Oklahoma, Arizona and Mississippi, according to Children’s Land Alliance Supporting Schools, or “CLASS.”  But by 2005, almost half of the original trust lands had “been diverted, squandered, wasted, and shamelessly embezzled,” CLASS said in its educational video.

Choate, who had served 15 years on the Juneau Board of Education, agreed to file a lawsuit at the urging of his persistent friends Al and Lynn, on Alaska children’s behalf.  He too believes it wrong that so much time and effort must be spent every year trying to secure funding for public education. With billions of dollars more in state revenues potentially leaving the state’s coffers with the new oil tax reform and tax credit bills, Alaska’s public school boards and PTAs anticipate even tougher school funding battles in the future, he said.

What has happened to the Alaska’s Children’s Trust Land in is complicated, but some background may help.

The idea of establishing trust land for children came with the nation’s founders more than 200 years ago, as an effort to give every township America a place for a public school, and land to help support education. The townships were established through the federal survey system. A township is a square of 6 miles on each side, or 36 square miles total. A section is a mile on each side and contains 640 acres.  The federal government promised the public school children of Alaska every Section 16 and 36, including mineral rights, in the Territory of Alaska in federal ownership not already reserved for another use in 1915.  There are 508 townships in Alaska, and the state’s total land and water area covers 424,491,520 acres. 

In 1959 at Alaska Statehood, the Federal government granted the remainingsurveyed sections 16 and 36 to Alaska for support of the public schools. This grant totaled 105,000 acres, but a great deal of the lands to be set aside are not included in the total, Choate said.

In 1978, the Alaska legislature combined the school lands with other State lands to be managed in unison. To offset the income loss of the land taken, .5% of revenues from all State lands are now deposited into the Public School Trust Fund. In FY 2005 this fund was worth $317 million. Its interest and dividends go to schools via the school foundation program.

Some beneficiaries with lands involved in the consolidation, such as Mental Health and University trust advocates, filed suit and recovered their lands, comparable lands and monetary compensation. The schools did not, however legal action was taken to determine the extent to which schools were harmed. In 1980, an additional 75,000 acres was promised through Alaska National Interest Lands Conservation Act to make up for land not obtained at Statehood. Selection of the ANILCA lands was completed in 1992.

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Kasayulie v. State of Alaska was filed in Anchorage Superior Court in 1997 on behalf of rural western Alaska schools. It charged there was disparity between rural and urban school districts in obtaining reimbursement of school construction costs, and that the state had failed to properly manage the school trust lands and the school trust fund.

On Sept. 1, 1999, Judge John Reese ruled in favor of the plaintiffs on both school facility and school trust issues. His ruling stated, in part: “The Court holds that the State has breached its duties as a trustee of the public school lands.” Judge Reese also ordered an appraisal be made of the trust lands, but to date that has not happened. “This was a huge decision,” Choate said. Unfortunately, he said, the lands trust was a secondary issue, and in 2011, Citizens for the Educational Advance of Alaska’s Children (CEAAC) the group that brought the lawsuit, accepted a settlement for their facilities and “walked away” from taking the land trust outcomes any further.

The judge’s ruling created some important legal precedents that will help lay the legal groundwork for Choates’ new case.  He feels confident about its chances because so much was already determined by the Kasayulie ruling, and because all of the other states’ children’s land trust cases have all been won in favor of the beneficiaries, public school children.

The plaintiffs in the new lawsuit ask the judge to declare that all public school lands should be managed, and this time to assure that the children’s trust is gaining the full potential from the value of the land, and also that natural resources, including sub-surface minerals are received and retained for the trust. If the public hunts, camps, or fishes on the land, the state could require they pay fees for its use, for example. Or if a private business is, or has been drilling or mining on the land, it would be required to pay extraction fees to the trust. With the amount of trust land and natural resources extracted, “the potential’s phenomenal,” McCarty said.

The best idea, he said, is to establish an independent trust board, separate from the state to assure that the trust is not managed according to the political whim of whoever is in power at the time, and that the trust fund is not raided by the state for its own preferred funding purposes.Board members also would not be political appointees, but would be carefully selected for their areas of expertise, such as in managing fishing, mining, recreation, or timber lands. An independent advocacy group would be created to assure that the board is fulfilling its mission.

PTA had earlier asked Choate to file a friend of the court brief on the trust lands issue while the Kasayulie case was underway, Hohl said. But after the plaintiffs settled, and after eight years of lobbying state administrators and lawmakers proved fruitless, they decided to follow the lead of the Mental Health and University Trust folks, and bring the Children’s Trust issue into court.

Resources:

Children’s Alliance

 http://gov.alaska.gov/parnell/press-room/full-press-release.html?pr=5921

 Alaska PTA Resolution School Land Trust And Funds

A Promise to Keep: The Alaska Public School Trust Fund Abstract May 2005

A Promise to Keep: The Alaska Public School Trust Fund 2005

History and Status of Alaska’s Public School Trust Land Abstract 2009

History and Status of Alaska’s Public School Trust Land 2009

Timeline Info on Alaska Public School Lands Trust

Anchorage Daily News Compass Piece by E. Dean Coon

One Comment

  1. E. DEAN COON says:

    Heidi Zemach:; Just read your story headlined “Landmark lawsuit to be filed . . .”

    Well done. Glad you were able to devote enough space to include the brief history of the public school trust.

    I am the author of six of of your listed resources and have been monitoring the trust since 1984.

    CHEERS: E. DEAN COON, Anchorage