Legislature(2001 - 2002)
04/20/2001 01:50 PM House RES
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 185-ALASKA WATER USE ACT & FEES CO-CHAIR MASEK announced that the next order of business would be HOUSE BILL NO. 185, "An Act relating to fees for certain uses of state water and the accounting and appropriation of those fees; relating to authorizations for the temporary use of state water; making other amendments to the Alaska Water Use Act; and providing for an effective date." Number 2189 MARILYN CROCKETT, Deputy Director, Alaska Oil and Gas Association (AOGA), testified via teleconference. She informed the committee that she has faxed a letter of support to Co- Chairs Masek and Scalzi. She specified that AOGA supports CSSB 139, which was adopted by the Senate Finance Committee. She informed the committee that AOGA encourages the House Resources Standing Committee to adopt a similar substitute [for HB 185], which she understood may be considered today. Number 2161 BOB LOEFFLER, Director, Division of Mining, Land and Water, Department of Natural Resources (DNR), related his understanding that the committee would be considering a committee substitute (CS) that reflects the changes made [to SB 139, the companion to HB 185,] in the Senate Resources Committee. Therefore, he asked if he should speak to that version. CO-CHAIR MASEK said that Mr. Loeffler could speak to Version A, the original bill. MR. LOEFFLER explained that the constitution and the Alaska Water Use [Act] requires one to obtain a temporary water right or water use authorization before withdrawing a significant amount of water from the ground, that is from a stream or lake. However, the program has received significant funding cuts over the years and "quite frankly, this program is broken," he said. The staff of this program has decreased from 39 staff in the early 1980s to a staff of four, one of which is a section chief. The result of this lack of staff is a backlog. Mr. Loeffler informed the committee that approximately 250 water right applications are received each year as well as about 150 temporary water use permits. He explained that the program is able to keep up with the [temporary] water use permits, but only able to process 100 of the 250 water right applications. Therefore, there is a backlog of 600 applications as well as 3,000 other actions. MR. LOEFFLER explained the consequences of the backlog. He said, "While DNR processes state interest applications right away, most public and industries have a two to three year delay before getting a permit to withdraw water." He related the situation of a farmer in the Mat-Su who is considering purchasing a significant amount of (indisc.) [irrigation system] because the bank will not give him a loan until he has the water rights. The farmer was told that it would be 2-3 years before he received his water right. Mr. Loeffler said that farmer has a right to be angry because "a delay of two to three years is not the kind of service that our industries desire and it's not the kind of service Alaskans deserve." MR. LOEFFLER informed the committee that although single family dwellings don't require a water right, many want it, particularly in areas that are short of water. Mr. Loeffler said, "We're telling people, at our current budget level, that we'll never get to them, ever, because we're developing a backlog faster than we're able to process it." On the North Slope this year, staff took some shortcuts and has been the subject of many lawsuits. Consequently, industries are vulnerable, the environment is less protected and people don't have the necessary permits. MR. LOEFFLER then turned to the three-part solution, of which HB 185 is one part. The first part of the solution is in [recognizing] that "we" can't pretend to do work as if it were the early 1980s nor can [the program] pretend to do the procedures as if there were 39 people to process them. Therefore, within the next two weeks he expected that there would be regulations that would significantly streamline the process. The second part of the solution is the need for more money. He pointed out that even with a streamlined process, more money is necessary. Mr. Loeffler expressed his appreciation that the House and Senate operating budget includes $300,000 additional funds for this program. He related his understanding that some Finance members expect that the $300,000 will be a one-time appropriation and that DNR will make up [the backlog] by charging fees. This is where the bill, the [third part of the solution] comes in. Number 1983 REPRESENTATIVE FATE moved to adopt CSHB 185 [Version 22- GH1087\C, Luckhaupt, 4/18/01] as the working document before the committee. There being no objection, Version C was before the committee. MR. LOEFFLER continued with the two purposes of the bill. First, the fee methodology places limitations on what DNR can charge. The changes [to SB 139] in the Senate Resources Committee were done to ensure that the fees would not be raised too high. Mr. Loeffler noted that this bill utilizes a fees methodology pioneered by the legislature last year. This fees methodology is commonly referred to as the DEC fees bill, which "limits what DNR can charge to the reasonable direct costs of processing an application." Therefore, one would be charged just what it cost to do the application plus a $50 annual fee that was established years ago. Those two charges will allow new applications to process a typical new water right within 60 days and a typical temporary water use application within 15 days. Furthermore, those fees would allow the backlog to be completed in four to five years. MR. LOEFFLER then turned to the second purpose of the bill, which deals with temporary water use permits. On the North Slope this year, "we" were the subject of a variety of suits. This was, in part, because the temporary water use permits are implied by statute but are really created by regulation. This bill provides explicit statutory authorization for the temporary water use permit program in the way that it has operated for the past 20 years. MR. LOEFFLER, in response to Representative Kerttula, suspected that the lawsuits were brought on the grounds that [the department] was not adequately protecting the environmental resources of the North Slope. However, Mr. Loeffler related his belief otherwise. In further response to Representative Kerttula, Mr. Loeffler informed the committee that [the department] was, in part, sued because public notice was not provided on certain temporary water use permits. The judge remanded the suit back to DNR, where he believes it remains today. Mr. Loeffler said, "I believe in the expectation that on large, temporary water use permits we would, in his remand, provide public notice of those permits. That's something I don't believe is necessary." He offered to explain his belief. MR. LOEFFLER related his belief that [the department] has done a good job in protecting the public resources of the North Slope. He explained that things that are property rights require public notice and thus water rights, a property right, require public notice. However, things that are revocable permits, temporary water use permits, aren't required to have public notice. In general, the coastal districts on the North Slope have the opportunity to request public notice, although it isn't required. That is done through the "ABC" list. However, no coastal district in the state, through the "ABC" list, has required the department to do public notice. Therefore, "the coastal districts have come to the conclusion, then, that there is not significant potential for effects on coastal resources," he surmised. He said, "DNR is not obligated to do it and, I believe is not required to do it." Furthermore, most of these temporary water use permits are construction permits. He explained that temporary water use permits are used in the winter for ice roads and in the summer for the Department of Transportation & Public Facilities (DOT&PF). Frequently, the call will be from DOT&PF saying that they are out of water to mix cement. After [DNR] consults with the Department of Environmental Conservation (DEC) and the Alaska Department of Fish & Game (ADF&G), then the permit can be done quickly. Mr. Loeffler related his belief that because these are construction permits, the cost of delay to Alaska's industries could be high and "I believe there is limited, if any, environmental benefit." Number 1738 REPRESENTATIVE FATE turned to the instances in which lakes have reverted from federal to state [control]. He posed a situation in which a weir is in a lake that changes from federal to state control. When under state control it is determined that the weir is no longer in use. In such a situation, do the permits to take that weir out have to be obtained? MR. LOEFFLER answered yes, if the water is going to be used for another purpose such as drinking. REPRESENTATIVE GREEN pointed out that the CS changes the fiscal note. However, the first part of the fiscal note analysis is the same while there is a significant difference in the program receipts and the general fund. Therefore, he requested an explanation. MR. LOEFFLER explained that the original fiscal note expected a water use fee, which would be charged to the owners of current water rights. That fee was to fund the entire fund. However, the CS provides that people will only be charged for the services provided and thus people can't be charged for the backlog. Therefore, general funds are necessary to attack the backlog. So, the current fiscal note has no general funds in FY02 and thus there is no amount in the operating budget. However, in FY04, FY05, and FY06 the only additional general funds, $115.5, are designed to attack the backlog. In FY07 that is no longer necessary because the backlog will have been eliminated. He noted that FY03 is a transition year. REPRESENTATIVE GREEN related his understanding that in the original fiscal note, FY02 and FY03 would have been the backlog while the current fiscal note stretches the backlog over a longer period. MR. LOEFFLER didn't agree with Representative Green's understanding and pointed out that the backlog was going to take four or five years in the original fiscal note. Mr. Loeffler explained, "It required $300,000 in FY03, in FY02. That same amount would be here in FY02, except we took it out because it's in the operating budget. In FY03 we had a $100,000 because in that scheme of charging, that's what we thought we needed to -- we wouldn't get all the income ready in one year. In the current scheme of charging, we think we need $215,000 next year." Mr. Loeffler clarified that the previous version of [the bill and fiscal note] envisioned the department being able to charge things, an annual water right fee, that it can't [under Version C]. Therefore, there is the need for more general funds. Number 1469 TOM CRAFFORD, Alaska Miners Association (AMA), testified via teleconference. Mr. Crafford expressed support for HB 185 with the inclusion of the amendments that were included in CSSB 139. He explained that the AMA recognizes the need to provide adequate and reliable funding for water rights and permitting functions with DNR. Furthermore, AMA believes that the adoption of the approach of the DEC fees bill is an appropriate means to achieve this. Number 1392 BOB STILES, President, Resource Development Council (RDC), testified via teleconference. Mr. Stiles announced RDC's strong support of HB 185 with the additions made in the amendment [to SB 139]. The council has worked closely with DNR on the original version of the bill and developed a charging scheme. Mr. Stiles noted that RDC is supportive of the issues addressed in HB 185, particularly addressing the backlog. CO-CHAIR MASEK directed attention to page 5, lines 8 and 9, subsection (e), and requested that Mr. Loeffler discuss the statute, AS 46.15.080, mentioned in that subsection. Number 1256 MR. LOEFFLER explained that the AS .080 is the best interest criteria used to grant a property right that requires a finding and a specific determination. The department wants to ensure that the structure and finding dosn't [necessitate] come to temporary water use permits. He clarified: While we want to protect fish and wildlife, ... public health, and any public interest, we don't want to have to do a particular appealable finding and have the court require us for temporary water use permits .... But we want to make it very clear that they're not a property right, they don't have the procedures that are required of disposing of a property right. Therefore, two things were added in the Senate Resources Committee in order to address AS .080. That committee added the last part of subsection (f), which ensures that the department will impose reasonable conditions or limitations to protect fish and wildlife habitat, public health, or other public interests. Furthermore, [the Senate Resources Committee's amendment] ensured that the department would consult with ADF&G and DEC. CO-CHAIR MASEK turned to the list of things that a person would have to do in order to obtain a permit. MR. LOEFFLER explained that when the department grants a permit, there is review by DNR, ADF&G, and DEC - if they're interested - in order to determine that this [permit] isn't going to harm fish and wildlife and public health. Rather than writing a separate finding, the permit is issued. However, the permit is appealable. CO-CHAIR MASEK related her belief that that's weakening the provisions to protect the public. MR. LOEFFLER pointed out that this is the way the statute as well as the regulations have worked for 20 years. There hasn't been a separate document explaining why the department is issuing the permit for temporary permits; that has only been done for disposable interests. Number 1110 REPRESENTATIVE KERTTULA asked whether a coastal district requesting greater notice and latitude in commenting would be given such. MR. LOEFFLER said that happens through the coastal zone process, which he didn't thoroughly understand. He did say that the department would certainly work with the coastal district. CO-CHAIR MASEK inquired as to how small multiple-use wells would be monitored or permitted under this bill. MR. LOEFFLER remarked that typically the department doesn't require a lot of monitoring. He explained that a community well is a water right and thus isn't impacted by this statute, save the fees portion. Therefore, the water right procedures would be done as quickly as possible and a finding written. In further response to Co-Chair Masek, Mr. Loeffler confirmed that water rights are permanently attached to land titles and transfer with the land. However, the owner could sever it, if the owner wishes. Because this is a property right, the department can't take [the water permit] away without just compensation or loss. CO-CHAIR MASEK inquired as to how much water use is exempt from permits. MR. LOEFFLER answered that under current regulations 500 gallons a day for everyone and 1,500 gallons a day for residential use is exempted. CO-CHAIR MASEK asked how cities will pay for water. MR. LOEFFLER explained that currently once a water right is obtained, a $50 fee is charged. He acknowledged that it isn't a large charge. CO-CHAIR MASEK asked if there is a large backlog of permits. MR. LOEFFLER reiterated that for water rights, there is a backlog of 600-700 applications. That is quite a bit when one considers that the department does 100 a year. Furthermore, the department has a backlog of 3,000 other things, which includes transfers, amendments, extensions, et cetera. Mr. Loeffler said, "I believe that backlog is an insult to our citizens and our industries." REPRESENTATIVE FATE inquired as to why there is such a backlog in water rights permits. MR. LOEFFLER reiterated that the department's funding has fallen such that there are only about 3.5 staff and there is more work than 3.5 people can do. He noted that two years ago there were nine staff and in the early 1980s there was a staff of 39. CO-CHAIR MASEK announced that HB 185 would be held.
| Document Name | Date/Time | Subjects |
|---|