Opinion ID: 1318625
Heading Depth: 3
Heading Rank: 1

Heading: The Best Interests Determination

Text: Alaska's Constitution and the Alaska Land Act, AS 38.05, express a policy of encouraging settlement of the state's lands by making them available for maximum use consistent with the public interest. Alaska Const. art. VIII, § 1; AS 38.05.910. Alaska Statute 38.05.035(e) authorizes the director of DNR's Division of Lands, acting with the consent of the Commissioner, to dispose of state land upon making a written finding that the interests of the state will be best served. [5] Alaska Survival contends the Chase agricultural homestead disposal is unlawful because it is not in the state's best interests. In reviewing DNR's substantive decision to dispose of Chase-area land, we apply the reasonable basis standard of review. This limited review is appropriate when a court considers an administrative agency's decision where questions of fact and law involve agency expertise and/or broad policy considerations. State v. Weidner, 684 P.2d 103, 108 n. 4 (Alaska 1984) (citations omitted). Here, the decision to dispose of agricultural homesteads involves both policy considerations and agency expertise on a matter committed to DNR's discretion. We thus confine our review to determining whether the decision was arbitrary, unreasonable or an abuse of discretion. North Slope Borough v. LeResche, 581 P.2d 1112, 1115 (Alaska 1978) (footnote omitted). Alaska Survival first argues that DNR's disposal decision was arbitrary because the agency failed to adequately consider the potential effects on area water quality. However, the record shows that DNR officials specifically considered water quality when they designed the site plan and when they later decided to reduce parcel sizes. DNR also considered a Department of Environmental Conservation study concerning the effects of agricultural development on water quality as well as input from local residents offered during the numerous public hearings held to discuss plans for a Chase disposal. DNR concluded that water quality could be protected by retaining buffer zones of state land along streams and by requiring farmers to file and secure DNR approval of homestead conservation plans showing the location of proposed clearing and ground-breaking. See 11 AAC 67.155. Based on this record we conclude that DNR did not act arbitrarily in determining water quality would be adequately protected. We next address appellant's contention that the disposal violates the intent of the Homestead Act, AS 38.09, and contravenes the constitutional mandate that state land be developed consistent with the public interest, Alaska Const. art. VIII, § 1. Alaska Survival asserts that because the disposal involves land with severely limited agricultural uses, the resulting homesteads will not be economically feasible and clearing requirements will be minimal. In appellant's view, the transfer of such land for free constitutes an illegal waste of state resources. Alaska Survival is correct that the disposal of parcels with little or no class II or III soils will result in minimal clearing requirements. See AS 38.09.050(a)(5). [6] However, this does not violate any statutory requirement and DNR could reasonably conclude that such a disposal also does not constitute a waste of state resources. First, even where clearing requirements are minimal, a homesteader still must mark the boundaries and survey the land, build a permanent dwelling and reside there. AS 38.09.050(a). Second, there is no statutory requirement for actual cultivation or harvesting, regardless of the soil quality. The legislature apparently recognized that agricultural homesteads might be located in marginal areas. In fact, the legislature in 1984 amended AS 38.09.050(a)(5) to reduce the clearing requirement on parcels with poor-quality soil. Ch. 152, § 53, SLA 1984. We therefore reject appellant's claim that the Chase disposal will result in a waste of public resources. We turn now to Alaska Survival's argument that it was unreasonable and arbitrary for DNR to proceed with the lottery after learning that the soils data used to plan the disposal was seriously inaccurate. DNR had based both the original commercial agriculture proposal and the revised homestead proposal on the premise that the land contained predominantly class II and III soils, and therefore was suitable for farming. These soil classifications were specifically noted in the best interests finding. The new information received shortly before the scheduled lottery showed that the disposal area contained predominantly class IV or worse soils, which are generally suitable only for grazing and, in some cases, growing hay. This new information obviously was significant: a special meeting of division directors was called to discuss the soils data and decide whether to alter the planned disposal. Alaska Survival asserts that the decision by DNR officials to proceed with the disposal was improper and that DNR should have postponed the lottery, sought additional public comment and seriously evaluated the new soils information, particularly the effect grazing might have on water quality and area wildlife. If the agency then decided to proceed, Alaska Survival contends DNR should have issued an amended best interests finding. There is no explicit statutory requirement for an amended finding and/or additional public comment upon the discovery of new information. However, an agency's failure to consider an important factor will render its decision arbitrary. Southeast Alaska Conservation Council, Inc. v. State, 665 P.2d 544, 548-49 (Alaska 1983). Our role is to ensure that the agency has taken a `hard look' at the salient problems and has genuinely engaged in reasoned decision making. Id. at 549 (quoting Leventhal, Environmental Decision Making and the Role of the Courts, 122 U.Pa.L.Rev. 509, 511) (emphasis in original). We have recognized that complete and accurate information is not a prerequisite for all disposal decisions. For example, in Hammond v. North Slope Borough, 645 P.2d 750 (Alaska 1982), we upheld the Commissioner of DNR's decision that the sale of oil and gas leases in the Beaufort Sea was in the state's best interests, despite some uncertainty about the impact on the subsistence lifestyle of the Inupiat Eskimos. Id. at 759-61. Similarly, the federal courts, in construing the National Environmental Policy Act, have held that an agency has a continuing duty to gather and evaluate new information, but that a supplemental environmental impact statement (EIS) is not always required when new information becomes available. Warm Springs Dam Task Force v. Gribble, 621 F.2d 1017, 1023-24 (9th Cir.1980). The test is whether the agency evaluated the information and made a reasoned determination not to re-open the review process. Id. at 1024. A question similar to the one before us was raised in State of California v. Watt, 683 F.2d 1253 (9th Cir.1982), rev'd on other grounds sub nom. Secretary of Interior v. California, 464 U.S. 312, 104 S.Ct. 656, 78 L.Ed.2d 496 (1984). There, plaintiffs sought to enjoin a federal off-shore lease sale on the grounds that revised estimates of oil and gas reserves in the lease area required supplementation of the EIS. The new data showed twice the reserves as originally estimated. Id. at 1267. The court upheld the decision to proceed without supplementation after concluding that the Department of Interior had carefully considered and made public the new data. Id. at 1268. Here, DNR division directors met to evaluate the new soils information and consider whether to proceed with the disposal. The director of the Division of Lands prepared a Decision Memorandum which analyzed the soils data and its effect on the Chase project. He concluded that while some of the disposal area was not suitable for traditional cultivation as originally planned, the land still was suitable for grazing and other less intensive agricultural uses. The memorandum recommended that no changes be made in the disposal plan. The directors unanimously decided to go ahead with the lottery  then scheduled for two weeks away  and both deputy commissioners and a special assistant to the Commissioner concurred. Following the lottery, DNR informed the winners of the new soils data. Given these facts, we are not prepared to say that DNR acted arbitrarily or unreasonably, although we consider it a very close question whether DNR gave the new soils information the kind of scrutiny necessary. Agency officials clearly considered the new soils information, then decided to proceed because, in their view, the project still contained enough land suitable for agricultural homesteads. The question whether land is suitable for such a purpose and whether the public interest is best served by such a disposal falls directly within the agency's area of expertise. We will not substitute our judgment. Hammond v. North Slope Borough, 645 P.2d at 758-59. We note, however, that it would have been preferable for DNR to have made public the new soils information prior to the lottery, and to have more extensively analyzed the information and its impact on the planned disposal. In summary, we hold that there was a reasonable basis for DNR's finding that the Chase agricultural homestead disposal would be in the state's best interests, and that DNR's subsequent decision to proceed with the lottery after considering the revised soils data was not arbitrary.