Legislature(2013 - 2014)HOUSE FINANCE 519
04/01/2013 09:00 AM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB129 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 27 | TELECONFERENCED | |
| += | HB 129 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 4 | TELECONFERENCED | |
SENATE BILL NO. 27
"An Act establishing authority for the state to
evaluate and seek primacy for administering the
regulatory program for dredge and fill activities
allowed to individual states under federal law and
relating to the authority; and providing for an
effective date."
HOUSE BILL NO. 129
"An Act relating to approval for oil and gas or gas
only exploration and development in a geographical
area; and providing for an effective date."
9:08:14 AM
Co-Chair Stoltze OPENED public testimony. [Public testimony
was opened concurrently for both SB 27 and HB 129.]
LISA WEISSLER, SELF, JUNEAU, testified on HB 129. She
reported that she was an attorney with particular expertise
in natural resource law. She believed the bill was
problematic. She referenced an Alaska Supreme Court
decision from the prior week related to oil and gas that
she thought would affect the legislation. She elaborated
that the decision affected the Department of Natural
Resources (DNR) oil and gas project reviews. She explained
that currently a comprehensive best interest finding was
required at the lease disposal phase of a project. Statute
mandated that the lease disposal finding had to include
"consideration of the reasonably foreseeable cumulative
effects of exploration, development, and production and
transportation of oil and gas" for the later phases. The
findings must include the effects on subsistence fish and
wildlife populations and historic and cultural resources.
She continued that according to prior Alaska Supreme Court
decisions, "a cumulative impact analysis did not require
speculation about unknown and unpredictable future events"
but was a whole project analysis done in the context of
existing development. The best interest finding phase was
limited to the information known at the time. Recently, the
court ruled that the state was "constitutionally required
to consider cumulative impacts throughout all phases of a
project." She quoted from court documents: "DNR was
required to continue to analyze and consider all factors
and material relevant to what is in the public interest
after the lease sale phase including the cumulative impacts
of the project and to provide the public the timely and
meaningful notice of its cumulative impacts assessment in
order to ensure the constitutional principle of maximum use
consistent with the public interest is given effect."
She related how the court ruling would affect HB 129.
Provisions in HB 129 authorized blanket approval of
exploration and development in geographic areas before the
identification of specific projects. The approvals were in
the same situation as the best interest findings; they were
going to proceed without knowing the potential impacts of a
project. The department intended to halt public notice for
the comprehensive plans of operation for projects. Yet, the
court required timely notice of the cumulative impacts of a
project for the public. She stated that the decision
"created a hole in the law." Currently plans of operation
were comprehensive but do not include cumulative impact
assessment. She indicated that DNR needed to implement a
procedure for cumulative impact analysis and public notice
"when exploration and development projects were proposed."
She cited Article 8, Section 2 of the Constitution that
stated the legislature was tasked with the duty to
determine the procedures necessary to meet the
constitutional requirements to "develop Alaska's resources
for the maximum benefit of the people." She recommended
that the committee table the bill and develop legislation
that met the courts mandates.
Representative Gara asked where the provision in the
legislation was that deprived public comment over the
cumulative impact statement. Ms. Weissler replied that the
plan to eliminate public notice was not contained in the
bill. The legislation did not address the cumulative impact
phase of development. She heard of DNR's plan through DNR
testimony. She stated that the department's intention was
to do a general analysis of exploration and development
before detailing specific activities. Plans of operation on
specific projects would subsequently be issued. Currently,
DNR did provide public notice for plans of operation. It
was DNR's intent to discontinue public notice. She
concluded that currently there was not a method to analyze
cumulative impacts on projects as a whole.
Representative Gara wondered where the bill stated that
public notice was limited. Ms. Weissler restated that the
exclusion was not contained in the bill. She stated that
currently public notice was not statutorily required but
that DNR provided public notice. In essence, DNR was
changing its practice which did not require a statute
change. She summarized that DNR wanted authorization for
broad based approvals in order to eliminate site specific
project reviews. She opined that the bill was potentially
benign if DNR completed general approvals and retained the
practice of public notice afterwards. She reiterated her
suggestion to table the bill and deal with the court
decision mandate.
9:18:28 AM
JAMES SULLIVAN, SOUTHEAST ALASKA CONSERVATION COUNCIL
(SEACC), JUNEAU, spoke in opposition to SB 27. He
communicated that the council found the bill very
problematic. He urged the committee to examine the issues
and better determine what 404 Primacy would get the state;
he believed there was not a clear picture. He identified
that navigable waters, coastline in Alaska, and adjacent
wetlands to the coastline were not included in 404 Primacy.
The state was comprised of 33 thousand miles of coastline
and adjacent waters. He questioned why Alaska needed to
assume 404 Primacy. He felt that the few reasons stated by
the administration were not compelling. The CD5 delay at
the Colville River would always remain under the federal
Rivers and Harbors Act. Primacy would not affect such
delays. He noted that the Point Thompson permitting delay
was another stated reason for primacy. He argued that there
were no delays over 404 permitting. He stated that
litigation which began under the Murkowski Administration
in 2006 caused the delay. The issues were resolved and
permitting immediately restarted in March 2012. He felt
that Point Thompson permitting exemplified how efficiently
the Army Corps of Engineers handled permitting. The corps
signed off on the permitting in October 2012 and the state
completed additional permitting the following month. Exxon
Mobil began its Pt. Thompson project on time in January,
2013. He was concerned that the state would embark on a
project with unknown costs.
Mr. Sullivan related that the Army Corps of Engineers had
54 employees in the Alaska district with a budget of
approximately $7.9 million. The federal government would
not authorize primacy unless the state proved it could
perform as well as the corps. In light of the corps budget,
primacy was a huge bureaucratic "ramp up" and would
significantly increase state spending by millions of
dollars. He relayed that 404 primacy would take eight to
ten years to implement but necessitated hiring additional
employees immediately. He opined that the administration
failed to define any problems that occurred that primacy
could resolve which made primacy an imperative for the
state. He concluded that the Environmental Protection
Agency (EPA) retained ultimate veto authority if 404
Primacy was authorized.
Representative Munoz stated that the bill provided for a
study period of two years. She discerned that one of the
results of assuming primacy was that the state would gain
the ability to litigate appeals of permits. She asked if
SEACC had an opinion or was aware of state primacy
litigation or litigation with the federal courts. Mr.
Sullivan replied that the council was aware of the issue.
He pointed out that throughout the process if any issues
arose, the Fish and Wildlife service would go through the
EPA. The federal agencies can bypass the state. He believed
that the bill represented a huge cost for little reward.
9:29:03 AM
JAMES SULLIVAN, STAFF, SOUTHEAST ALASKA CONSERVATION
COUNCIL, testified in opposition to HB 129. He stated that
the bill created confusion for the public, who would not be
able to predict what effects a project might have in their
region of a geographic area. The council believed that it
was particularly troublesome in multi-use areas such as
Cook Inlet. The legislation placed an undue burden on the
public. He believed that the bill was antithetical to the
permitting reform effort; HB 129 created problems rather
than efficiencies.
NIKOS PASTOS, CENTER FOR WATER ADVOCACY, ANCHORAGE (via
teleconference), spoke in opposition to SB 27. He stated
that the bill was nebulous and he was concerned about
potential impacts on migratory birds and the wetlands
ecosystem. He thought that SB 27 was an expensive
undertaking and the costs were not properly measured. He
furthered that federal agencies with oversight of wetlands
permitting were obligated to consult with tribes. He noted
concern that the bill was curtailing public participation
and notification.
Mr. Pastos spoke in opposition to HB 129. He relayed that
proposing a ten year best interest finding was
"unworkable." Many changes occurred in a ten year period
that effected economic development as well as the
environment. The center believed HB 129 curtailed public
review and skirted public participation or involvement in
oil and gas exploration issues and development activity.
The bill was vague and could affect the subsistence and
commercial economies of rural communities. He urged the
committee to oppose the legislation.
MARTHA ITTA, TRIBAL ADMINISTRATOR, NATIVE VILLAGE OF
NUIQSUT (via teleconference), spoke in opposition SB 27.
She voiced that the bill would change the process for
development. The legislation would have major impacts
across the state and especially on native communities. She
pointed out that the community was located on the Coleville
Delta and was surrounded by wetlands as well as oil and
gas. Any building on wetlands required permits. She spoke
to the importance of permitting in the area when the oil
industry wanted to build infrastructure. Permitting
provided protection for native lands. Public input was
equally important. She stated that projects would
significantly impact the village's surroundings. Currently,
federal law required that federal agencies consult with
tribal government during the wetlands permitting process.
No similar state law existed in Alaska. She urged the
committee to vote against SB 27.
Ms. Itta addressed HB 129. She spoke in opposition to the
legislation. She stated that the bill would greatly impact
her village. The legislation curtailed public participation
and local input on natural resource decisions. Natural
resource decisions should benefit all Alaskans. Her
community was greatly impacted by oil and gas development.
She offered that a "blowout" had occurred in Nuiqsut in
February 2012 in a well operated by Repsol. The community
did not receive any help. The state did not assist the
community. The blowout released benzene at harmful levels.
She reported that high levels of benzene were related to
leukemia. Two children in the village were stricken with
leukemia since the accident. She stressed that a ten year
blanket approval over natural resources was inappropriate
and unsafe. She stated that "one best interest finding for
the North Slope's 5 million acres cannot cover the varied
landscape of the region." She continued that the Artic
environment was rapidly changing. A ten year approval
period was too long and unpredictable. She mentioned the
possibility of unconventional drilling methods such as
shale oil fracturing. Public input could not predict future
technologies ten years in advance. Development deserved
"robust" public review. She furthered that currently DNR
allowed for public notice on leasing and later phases for
exploration and development. The bill removed public
involvement in the later phases and did not work in the
best interest of Alaskans. She advised that the committee
vote against the bill.
9:42:49 AM
SAMUEL KUNAKNANA, NATIVE VILLAGE OF NUIQSUT (via
teleconference), spoke in opposition to SB 27. He stated
that the bill would take away the village's right to have a
voice on oil development in the area.
Co-Chair Stoltze asked whether he was opposed to both
bills. Mr. Kunaknana replied in the affirmative.
ROSEMARY AHTUANGARUAK, SELF, BARROW (via teleconference),
was opposed to HB 129. She stated that the bill abrogated
the public's ability to participate in the process of
natural resource development. She believed that
participation was crucial to voice concerns over natural
resource issues that could adversely affect the traditional
way of life. [The phone connection was lost.]
PAUL METZ, SELF, FAIRBANKS (via teleconference), spoke in
support of SB 27 with one important reservation. He
discussed the legal definition of wetlands. He quoted from
that Army Corps of Engineers 1987 permafrost manual "if the
active layer of permafrost was less than 50 centimeters
than by definition the soils are not wetlands." He
contended that large areas of Alaska were underlined by
permafrost consisting of active layers under 50 centimeters
and should not be classified as wetlands. He reported that
the Army Corps of Engineers classified areas of shelf
permafrost as wetlands. He wondered whether the state of
Alaska was attempting to assume 404 Primacy as a way to
waive its right to challenge the corps classifications of
wetlands. He thought that the state should not assume
primacy if it compromised the state's ability to challenge
the corps' wetland classifications in court. Otherwise, he
was in favor of the legislation.
KRISTIN CARPENTER, EXECUTIVE DIRECTOR, COPPER RIVER
WATERSHED PROJECT (via teleconference), urged the committee
to vote no on SB 27. She spoke in opposition to HB 129. The
group was concerned about the impact on wetlands and the
state's finances. She noted her experience with
construction projects. The group encouraged consideration
of fish habitat and promoted sustainable development in the
Copper River drainage. She commented that the region had
multiple fishing economies. She agreed with previous
testimony that 404 Primacy was a "huge fiscal undertaking"
and added to the state's financial obligations. She
furthered that the bill could have a "huge impact" on rural
Alaska. She questioned DEC's ability to carry out the 404
permitting process. She related that wetlands on small
streams were critical fish habitat for sustaining salmon
populations. Salmon fisheries were the state's largest
renewable resource. The legislation's impact on sustaining
salmon fisheries would be felt in future years. She wanted
the state to protect family and small rural fishing
businesses. She recommended bringing back coordinated
permitting that existed under the former coastal management
program if the governor believed that there was a problem
with permitting.
Co-Chair Stoltze asked whether she was opposed to both
bills. Ms. Carpenter replied in the affirmative.
9:53:36 AM
Representative Gara asked whether Ms. Carpenter had
experience with the Army Corps of Engineers current
permitting process. He wondered whether the corps'
decisions were timely. Ms. Carpenter replied in the
affirmative. She mentioned culvert replacement projects and
stated that "the corps had always been good to work with."
She added that she had been in situations in which the
corps was in opposition to her groups desires.
Representative Gara asked whether the corps made decisions
in a timely manner. He wondered whether the corps'
engineers lived in Alaska or Washington D.C. Ms. Carpenter
replied that everyone she dealt with at the corps lived in
Alaska.
Co-Chair Stoltze CLOSED public testimony on SB 27 and HB
129.
Representative Wilson referred to public testimony that
related to the definition of wetlands. She requested
clarification.
RUTH HAMILTON HEESE, SENIOR ASSISTANT ATTORNEY GENERAL,
ENVIRONMENTAL SECTION, DEPARTMENT OF LAW, addressed the
definition of wetlands. She listed the jurisdictional
exceptions to 404 Primacy: Navigable waters, tidally
influenced waters, and wetlands adjacent to navigable and
tidally influenced waters. The exceptions were prescribed
by the federal Commerce Clause that regulated foreign or
interstate commerce. The state would gain control over
water and wetlands within their boundaries. She mentioned
"EPA guidance documents" referencing state control over the
majority of waters and wetlands outside of the exceptions
within its borders with the assumption of 404 Primacy.
Co-Chair Stoltze clarified that the question related to the
"evolving" definition of wetlands.
Representative Wilson wondered whether the state would lose
the ability to challenge the definition of wetlands related
to permafrost if primacy was acquired. Ms. Heese replied
that the definition of wetlands was not solidified. She
reported that the Supreme Court had "visited" the question
and also whether the federal agencies had properly guided
federal jurisdictional wetlands policy. She stated that the
issue would be examined when evaluating primacy. The
Department of Law (DOL) wanted the distinction made so not
all permafrost lands were considered federally
jurisdictional wetlands. Representative Wilson wanted to
ensure that other rights were not relinquished under
primacy. Ms. Heese agreed.
10:01:35 AM
Co-Chair Stoltze asked whether the wetlands issues were due
to political or environmental changes.
ED FOGELS, DEPUTY COMMISSIONER, DEPARTMENT OF NATURAL
RESOURCES (DNR), answered that the intent outlined in the
Clean Water Act was in favor of the state assuming control
over most of the wetlands. The state shared that opinion.
He commented that the wetlands issue would dominate the
evaluation process. He thought that "political
considerations from changing administrations" dictated
federal policy over wetlands which was an argument for
gaining regulatory authority based in the state.
Representative Gara understood that if the Supreme Court
ruled in favor of states and interpreted the Commerce
Clause to allow the state to define and regulate its own
wetlands away from navigable waters or ruled in opposition
taking over primacy would not affect the ability of the
state to manage its wetlands. Primacy would not matter in
regards to that issue. Ms. Heese answered in the
affirmative. She replied that the federal government had
the "prerogative" to determine how the state regulated
wetlands.
Representative Gara restated his question. He wondered
whether gaining primacy rescinded the states right to
define its wetlands if the Supreme Court ruled in favor of
the states. Ms. Heese replied in the negative.
Representative Gara cited examples given in prior testimony
as an argument for state assumed 404 Primacy. He noted the
CD5 decision. He stated that CD5 was located in navigable
waters and was exempt from 404 Primacy. Pt. Thompson
permitting delays were cited as another example. He relayed
that the delays were due to litigation and also related to
navigable waters so were separate from the issue of
primacy.
Co-Chair Stoltze remarked that the testimony was from Mr.
Sullivan with SEACC.
Mr. Fogels answered that the state came close to losing two
years in delays with the Pt. Thompson EIS (environmental
impact statement) permitting process.
Representative Gara understood that the EIS process had
taken a long time. He asked whether the EIS process would
continue under primacy. Mr. Fogels responded that the
question would be addressed during the 404 Primacy
evaluation process. If a project was under the state's
wetlands jurisdiction the process should progress without
federal involvement. Without a "federal hook" the Army
Corps of Engineers likely would not be involved in an EIS.
Most of the large projects were likely to have a "federal
hook." The department guessed that "a good portion of the
Pt. Thompson project may have been delegated to the state"
under primacy.
10:08:28 AM
Representative Kawasaki asked whether the entire Pt.
Thompson project would have needed an EIS. He wondered what
projects would be under the state's jurisdiction under
primacy. Mr. Fogels could not provide a clear answer. He
stated that the purpose of SB 27 was to seek definitive
answers. The point was to work with the federal government
to determine what wetlands the state would gain
jurisdiction over. He informed the committee that soon
after implementation of the Clean Water Act the EPA
(Environmental Protection Agency) "clearly" indicated its
expectation that states would receive primacy over the
majority of its wetlands. He surmised that there was some
portion of wetlands in the Pt. Thompson region that the
state would likely gain jurisdiction over. He reiterated
his uncertainty about EIS requirements in the Pt. Thompson
region under state assumed primacy. However; under 404
Primacy the state was required to carry out the 404-B1
process which mandated an environmental analysis in order
to choose the environmentally safest alternative.
Representative Kawasaki wondered whether a state had ever
negotiated a primacy agreement as a first step. Mr. Fogels
answered that the evaluation stage was necessary to provide
more clarity on what wetlands the state would assume
jurisdiction over. Evaluation included discussions with the
EPA and Army Corps of Engineers. He disclosed that
discussions were currently in progress.
Representative Kawasaki surmised that the department was
already going through the process of negotiations. He
wondered why the bill was necessary at this time. Mr.
Fogels replied that discussions were very preliminary. The
discussions were fact findings centered on setting up the
evaluation process. The EPA indicated that the SB 27 fiscal
note was sufficient to move forward with the evaluation
process.
Representative Kawasaki asked whether the legislation would
address the permafrost issue.
LYNN KENT, DEPUTY COMMISSIONER, DEPARTMENT OF ENVIRONMENTAL
CONSERVATION, communicated that the bill allowed the state
to examine the "potential" to assume 404 Primacy. Besides
the exceptions, primacy related to waters of the United
States, which were defined by the Clean Water Act,
implementing regulations and through court cases. She
maintained that "there was nothing in the bill" that would
limit the state's ability to challenge the federal
definition of "waters of the U.S." She added that wetlands
were considered waters of the U.S.
Co-Chair Stoltze asked the department to follow up with a
more detailed definition of permafrost in relation to
wetlands.
10:15:44 AM
Representative Kawasaki asked whether "a useful tool in
programmatic permitting" existed for placer mining in the
Fairbanks area and why it wasn't used more "actively." Mr.
Fogels responded that within the guidelines of the
programmatic general permit DNR currently had the authority
to "take over" permitting certain classes of activities
that have lower levels of impact. Placer mining might fit
into that category. Programmatic general programing was
another tool besides primacy for the state to gain more
control over wetlands permitting. The state was examining
what other "tools" were available besides primacy to garner
control over wetlands permitting. He guessed that the state
would adopt some of the other tools if primacy wasn't a
viable option.
Co-Chair Austerman referred to Mr. Fogel's testimony about
the federal government having a "hook" on a project. In
relation to the Pt. Thompson project permitting he asked
about the environmental analysis under primacy as opposed
to an EIS. He asked for clarification. Mr. Fogels replied
that he did not want to imply that an EIS for Pt. Thompson
would not have been necessary under primacy. He restated
that some of the project likely would have fallen under
federal jurisdiction for Pt. Thompson making an EIS
necessary. He expounded that the hope for 404 Primacy was
the department would be a cooperating agency; therefore,
placed in a stronger position related to EIS oversight. He
stated that the EIS issue required thorough examination.
Primacy required the state to analyze the environmental
impacts of a project.
Representative Gara had received a document from the Army
Corps of Engineers that provided permitting statistics. He
relayed that over 80 percent of the corps' general permits
were decided in 60 days and less than one percent of
permits were denied. He wondered whether the information
was accurate and if primacy was worth the financial costs.
Mr. Fogels responded that seeking primacy was not related
to a backlog, it was about the quality of permitting, the
stipulations placed on the permits, and the kind of
litigation required. The administration believed that
primacy provided greater state control over permit
stipulations and litigation.
Ms. Kent added that the information came from a pie chart
provided by the corps. She detailed that the administration
viewed the corps information differently. The corps'
statistics were counted from the date the application was
completed. The permit process to completion could take
months to years. She explained that 84 percent of the
general permits fell into a category of small in scope or
minor dredge and fill activities. The activities had
limited cumulative impact and could be covered under an
existing general permit. The permits were issued in less
than 60 days. She pointed out that 109 general permits for
small projects took more than 60 days to issue. She stated
that 67 percent of the permits had been issued under 128
days. The department was concerned about the 33 percent of
projects that took longer to issue and wondered how much
more time was necessary. She reiterated that seeking
primacy was not just about a backlog or length of
permitting. The goal was to ensure that the state had a
role in the permitting and decision making process and was
setting the priorities. Timely issuance of permits
represented real jobs to Alaskans.
10:23:55 AM
Representative Munoz relayed that the Kennsington mine
received a 404 permit, which was challenged by the EPA and
litigated by the US Supreme Court. She wondered whether the
result might have been different if the state had 404
Primacy. Mr. Fogels stated that he could not provide a
clear answer. He opined that under primacy the project
would have fallen under state jurisdiction. One of the
benefits of primacy would mean that administrative and
judicial challenges would remain in the state. He remarked
that seeking primacy was not meant to disparage the corps.
An Alaskan process would benefit Alaskans.
Co-Chair Stoltze commented that the role of the legislature
was to engage in political and policy discussions regarding
the states working relationship with the federal
government.
HB 129 was HEARD and HELD in committee for further
consideration.
SB 27 was HEARD and HELD in committee for further
consideration.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 129 DNR Response 3-29-13.pdf |
HFIN 4/1/2013 9:00:00 AM |
HB 129 |
| HB 4 ABC-Rep Hawker Letter.pdf |
HFIN 4/1/2013 9:00:00 AM |
HB 4 |
| SB 27 Corp of Engineers Handout Gara.pdf |
HFIN 4/1/2013 9:00:00 AM |
SB 27 |
| SB 27 Cheeshna Tribal Council Letter.pdf |
HFIN 4/1/2013 9:00:00 AM |
HB 129 SB 27 |
| SB 27 Support.DOC |
HFIN 4/1/2013 9:00:00 AM |
SB 27 |
| HSEFIN SB27 Support ltr.doc |
HFIN 4/1/2013 9:00:00 AM |
SB 27 |
| AGC SB 27 Support Letter.pdf |
HFIN 4/1/2013 9:00:00 AM |
SB 27 |
| SB 27 (H) FIN Response .pdf |
HFIN 4/1/2013 9:00:00 AM |
SB 27 |