Legislature(2001 - 2002)

02/20/2002 01:10 PM House RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
HB 420-TEMPORARY WATER USE PERMITS                                                                                            
                                                                                                                                
CO-CHAIR MASEK announced  that the only order  of business before                                                               
the committee would  be HOUSE BILL NO. 420,   "An Act relating to                                                               
the use  of water; and  providing for  an effective date."   [The                                                               
bill was sponsored by the House Resources Standing Committee.]                                                                  
                                                                                                                                
CO-CHAIR MASEK  read from  the sponsor  statement:   "A statutory                                                               
revision  is  needed to  better  facilitate  the ability  of  the                                                               
Department of  Natural Resources  [DNR] to issue  temporary water                                                               
use permits.   A  repeal of  the sunset  clause included  in last                                                               
year's HB  185 is  intended to protect  the state's  interests in                                                               
water use distribution cases currently under appeal."                                                                           
                                                                                                                                
Number 0236                                                                                                                     
                                                                                                                                
MARILYN CROCKETT,  Deputy Director, Alaska Oil  & Gas Association                                                               
(AOGA), informed the  committee that AOGA is  a trade association                                                               
of  18 oil  and gas  companies with  interests and  operations in                                                               
Alaska.   She  explained  that  HB 420  would  repeal the  sunset                                                               
provision  that was  contained within  HB 185,  which passed  the                                                               
legislature last  year.   She said  HB 185  put into  statute the                                                               
existing practices  that DNR had  been using for many  years with                                                               
regard to issuance of temporary  water use authorizations.  Those                                                               
authorizations are  important to the  oil and gas  industry; they                                                               
provide a  mechanism to construct  ice roads on the  North Slope.                                                               
She  explained  that  ice  roads  have  been  identified  as  the                                                               
preferred method of accessing remote  areas during the wintertime                                                               
without having  to place gravel.   She remarked that the  oil and                                                               
gas industry  is minimizing  the impact  on the  environment from                                                               
constructing the ice roads and using the temporary water.                                                                       
                                                                                                                                
Number 0390                                                                                                                     
                                                                                                                                
MS.  CROCKETT  said temporary  water  use  authorizations do  not                                                               
convey a water  right; they are revocable at any  time.  She said                                                               
temporary water  use authorizations do not  require public notice                                                               
requirements  that a  water right  or  water appropriation  would                                                               
carry with it because the  authorizations provide some additional                                                               
rights  that temporary  water use  does not  have.   She remarked                                                               
that [AOGA] encourages the committee to move HB 420.                                                                            
                                                                                                                                
Number 0438                                                                                                                     
                                                                                                                                
BOB  LOEFFLER,  Director,  Division  of Mining,  Land  and  Water                                                               
(Central   Office),  Department   of  Natural   Resources  (DNR),                                                               
informed the committee  that the state has had  a temporary water                                                               
use  program in  effect for  20 years.   He  said the  program is                                                               
administered in  a way  that protects  the environment  and meets                                                               
the temporary water needs of Alaskans  and industry.  He said DNR                                                               
fully supports the passage of HB 420.                                                                                           
                                                                                                                                
Number 0483                                                                                                                     
                                                                                                                                
REPRESENTATIVE KERTTULA reflected  on the passage of  a bill from                                                               
the prior  year.   She asked  Mr. Loeffler for  an update  on the                                                               
[water permit] backlog and also  for a description of the process                                                               
that DNR set up to administer the water permits.                                                                                
                                                                                                                                
MR. LOEFFLER said he believes  last year the legislature gave the                                                               
water use program additional funds  so that DNR could finally get                                                               
to the  water rights of  individual Alaskans.  He  explained that                                                               
because of a  couple of lawsuits and concentrating  on the issues                                                               
of  water rights,  state  income, and  employment,  DNR had  only                                                               
finished its hiring  and training around late December.   He said                                                               
he  suspects that  there will  be a  substantial number  of water                                                               
rights administered  so that "you"  can see how the  system works                                                               
in about  a month  to six weeks.   He commented  that he  did not                                                               
have a lot of progress to report at this time.                                                                                  
                                                                                                                                
REPRESENTATIVE KERTTULA  remarked that  HB 420 is  pretty simple;                                                               
however the bill  [HB 185] that HB 420 is  extending was actually                                                               
fairly complicated.   She  asked if any  public notices  had been                                                               
issued on the large permits.                                                                                                    
                                                                                                                                
MR.  LOEFFLER replied  that DNR  issued  approximately 20  public                                                               
notices on the large water permits on the North Slope this year.                                                                
                                                                                                                                
REPRESENTATIVE  KERTTULA asked  how many  small permits  had been                                                               
put through in the same time as the 20 [public notices].                                                                        
                                                                                                                                
MR.  LOEFFLER commented  that DNR  typically does  about 100  per                                                               
year.   He said  he suspects  that DNR has  done some  portion of                                                               
about 40  or 50, but  he couldn't say  exactly how many  had been                                                               
done  and he  doubted public  notice had  been issued  on any  of                                                               
those.  He  added that most of  those would not have  been on the                                                               
North Slope.                                                                                                                    
                                                                                                                                
REPRESENTATIVE KERTTULA asked what  kind of response DNR received                                                               
on the public notice for those that were on the North Slope.                                                                    
                                                                                                                                
MR.  LOEFFLER  answered  that  DNR  received  comments  from  the                                                               
Northern Alaska Environmental Center and Greenpeace.                                                                            
                                                                                                                                
REPRESENTATIVE KERTTULA asked  for an update on  the court action                                                               
from last year involving the permits.                                                                                           
                                                                                                                                
MR.  LOEFFLER  answered that  there  were  two court  actions  in                                                               
particular.    First,  in  October  a  judge  ruled  on  how  DNR                                                               
interpreted  the state  provisions in  its appeal  language.   He                                                               
explained that  the subject of  the appeal was a  temporary water                                                               
use permit; however,  the judge ruled on how  DNR interpreted its                                                               
appeal regulations and  not the [actual] permit.  He  said at the                                                               
time of the  [ruling] DNR's appeal regulations  had been repealed                                                               
in a  new section, so the  judge ruled on an  appeal program that                                                               
had  since been  repealed and  replaced  by new  procedures.   He                                                               
remarked that  the substantive  aspect that  the judge  ruled on,                                                               
how he  determined a  stay, didn't  really have  any effect.   He                                                               
said "we" think  the language and background of  his judgment was                                                               
in serious  error, so  it's being appealed  by the  Department of                                                               
Law.   He said  the second  [lawsuit resulted  in] a  remand last                                                               
spring for work  on two issues involving water rights.   He added                                                               
that DNR has finished that remand.                                                                                              
                                                                                                                                
Number 0795                                                                                                                     
                                                                                                                                
REPRESENTATIVE KERTTULA asked what the ruling was.                                                                              
                                                                                                                                
MR. LOEFFLER said DNR issued  a temporary water use permit, which                                                               
was appealed.   He said at that time there  was an automatic stay                                                               
provision,  unless DNR  took it  off; Greenpeace  asked that  the                                                               
stay be  retained.  He said  DNR went to the  applicant and asked                                                               
for  the  applicant's side  of  the  story.    He said  DNR  told                                                               
Greenpeace a day  in advance that it was going  to lift the stay,                                                               
which it  did.   He said  the judge  ruled that  DNR had  to give                                                               
Greenpeace a  due-process right  to respond,  and to  provide the                                                               
applicant's response and DNR's decision to lift the stay.                                                                       
                                                                                                                                
Number 0926                                                                                                                     
                                                                                                                                
CARL ROSIER,  President, Alaska  Outdoor Council  (AOC), informed                                                               
the  committee  the  AOC  is a  federation  of  approximately  50                                                               
outdoor recreation  groups statewide; they have  strong interests                                                               
in matters  pertaining to fish  and wildlife.  He  commented that                                                               
the appropriation of water is  one of AOC's major interest areas.                                                               
He said  AOC's concern  in this  case is  the protection  for the                                                               
multiple fishery resources  of the state; there  must be instream                                                               
flow  reservations if  they  are  to survive.    He  said AOC  is                                                               
concerned that  the simple  deletion of  the sunset  provision is                                                               
little more than  a "Band-aid" approach to a  system adopted last                                                               
year that needs to be thoroughly  reviewed.  He said AOC believes                                                               
that the legislature had some  misgivings about the final version                                                               
passed  last  year  with  the  inclusion  of  a  one-year  sunset                                                               
provision.   He remarked that there  seems to be less  than total                                                               
agreement  and   less  than   togetherness  between   the  Alaska                                                               
Department of Fish and Game (ADF&G)  and DNR over the priority of                                                               
protecting fish and  wildlife within DNR's "lack  of priority for                                                               
instream  flow adjudication  to  reservation  applications."   He                                                               
said he thinks many questions need  to be answered at the present                                                               
time, in view  of [the past] year, to look  at the administration                                                               
of  this  particular  Act.    He asked  how  much  water  can  be                                                               
authorized under the temporary water use permit.                                                                                
                                                                                                                                
MR. ROSIER  asked what  procedures and  criteria DNR  utilizes in                                                               
making a temporary water use  permit decision of where, when, and                                                               
how much;  what the examples  are of present temporary  water use                                                               
permit applications;  and how many  are out there presently.   He                                                               
asked  what   the  working  relationship  is   among  ADF&G,  the                                                               
Department  of Environmental  Conservation  (DEC), and  DNR.   He                                                               
said ADF&G  and DEC objected  to issuance of temporary  water use                                                               
permits.   He  suggested that  there  have been  efforts made  by                                                               
ADF&G  to  raise  various  issues  regarding  instream  flow  and                                                               
adjudication.    He added  that  AOC  does  not know  what  DNR's                                                               
response has  been.  He  said DNR  has determined how  much water                                                               
has been applied  for or appropriated from  any specific drainage                                                               
before a temporary water use permit is issued.                                                                                  
                                                                                                                                
MR. ROSIER asked what had been  done to clean up the water rights                                                               
applications now  on the  books.   He said it  was an  issue back                                                               
when  he worked  for the  Hickel Administration,  and it  doesn't                                                               
seem to be  any further along today.   He said it  doesn't make a                                                               
lot of sense to be dealing  with this issue on a temporary basis,                                                               
adding  appropriations   of  water  on   top  of  a   backlog  of                                                               
appropriation  applications that  have been  lying around  [for a                                                               
long period  of time].   He  remarked that there  has to  be some                                                               
logical basis  for doing  what is [being  proposed] in  regard to                                                               
the more  formal applications  for appropriations.   He  said AOC                                                               
doesn't necessarily  have a  problem with  a temporary  water use                                                               
permit,  but there  definitely  should be  standards  as well  as                                                               
oversight  by all  three agencies  before  [the committee]  moves                                                               
ahead on the bill.                                                                                                              
                                                                                                                                
Number 1186                                                                                                                     
                                                                                                                                
CO-CHAIR SCALZI asked  Mr. Rosier if he was  concerned about "due                                                               
deference" in regard to ADF&G.                                                                                                  
                                                                                                                                
MR.  ROSIER  said  it  would  be an  improvement  over  what  AOC                                                               
currently has on this issue.   He mentioned that AOC went through                                                               
a similar  process with the  Forest Practices Act  [Alaska Forest                                                               
Resources and Practices Act]; AOC  feels very strongly that there                                                               
has to be "equal footing" as far as the agencies are concerned.                                                                 
                                                                                                                                
Number 1235                                                                                                                     
                                                                                                                                
CO-CHAIR SCALZI  agreed, as  long as  the timeframe  the agencies                                                               
act upon is short enough.                                                                                                       
                                                                                                                                
MR. ROSIER said, "That's right."                                                                                                
                                                                                                                                
Number 1306                                                                                                                     
                                                                                                                                
REPRESENTATIVE  KERTTULA asked  Mr.  Rosier what  level of  water                                                               
usage would  be appropriate  and whether it  is too  difficult to                                                               
tell because of the effect it  might have on a stream or spawning                                                               
area.                                                                                                                           
                                                                                                                                
MR. ROSIER said it was difficult to  answer.  He said his view is                                                               
that it is going  to change in areas of the  state where the work                                                               
is performed.   He suggested that the requirements  for water for                                                               
an ice  road on the  North Slope would probably  be substantially                                                               
different from what temporary water  use might be in Southeastern                                                               
Alaska.   He said  he foresees  that the level  will be  based on                                                               
individual projects.                                                                                                            
                                                                                                                                
REPRESENTATIVE KERTTULA  asked if it  would be helpful to  have a                                                               
system  in  which other  agencies  were  given notice  and  their                                                               
expertise had to be relied on.                                                                                                  
                                                                                                                                
MR. ROSIER said, "Yes."                                                                                                         
                                                                                                                                
Number 1365                                                                                                                     
                                                                                                                                
TADD  OWENS,  Executive  Director, Resource  Development  Council                                                               
(RDC), testified  via teleconference.  He  informed the committee                                                               
that  RDC is  an Alaskan-based  nonprofit trade  association that                                                               
represents   companies  from   the  mining,   timber,  fisheries,                                                               
tourism, and oil  and gas industries.  He explained  that RDC has                                                               
been working with DNR and the  legislature for the past few years                                                               
on issues  related to the water  program.  He stated  that RDC is                                                               
strongly supportive  of HB  420.  He  said DNR's  current process                                                               
for  handling  temporary  water  use  authorizations  is  a  good                                                               
process   that  provides   the  necessary   protections  to   the                                                               
environment  and  the  fish and  wildlife  resources  around  the                                                               
state.  He explained that  the temporary water use authorizations                                                               
are   very  important   to  RDC's   membership  for   development                                                               
activities  around  the  state.     He  reiterated  that  RDC  is                                                               
supportive  of HB  420 and  he urged  the committee  to pass  the                                                               
bill.                                                                                                                           
                                                                                                                                
REPRESENTATIVE  KERTTULA   asked  Mr.   Owens  to   describe  the                                                               
protection that the current program offers.                                                                                     
                                                                                                                                
MR. OWENS  suggested that  it would be  more appropriate  for Mr.                                                               
Loeffler to give the details of the program.                                                                                    
                                                                                                                                
REPRESENTATIVE KERTTULA asked Mr. Owens to proceed.                                                                             
                                                                                                                                
MR.   OWENS   explained    that   current   regulation   requires                                                               
consultation  with  ADF&G and  DEC  in  processing the  temporary                                                               
water use authorizations.   He said the  authorizations, unlike a                                                               
formerly  adjudicated  water   right,  are  temporary,  revocable                                                               
permits.     He  suggested  if   there  were   some  demonstrated                                                               
environmental impact, DNR would have  the authority to revoke the                                                               
authorization  at  any time;  having  the  distinction between  a                                                               
temporary  water  use  authorization  and  a  property  right  is                                                               
important.   He said  the temporary  water use  authorizations do                                                               
not grant  or imply  a priority  for a  property right  for water                                                               
use.   He suggested this  would allow water use  for construction                                                               
projects around the state to go  forward in a timely manner, with                                                               
adequate safeguards to ensure that water is used appropriately.                                                                 
                                                                                                                                
Number 1620                                                                                                                     
                                                                                                                                
SUSAN  SCHRADER,   Representative,  Alaska   Conservation  Voters                                                               
(ACV), explained that ACV is  a nonprofit organization consisting                                                               
of   approximately   34   member  organizations;   the   combined                                                               
membership  in Alaska  is about  35,000 registered  voters.   She                                                               
said  last year  she spoke  to the  committee about  the concerns                                                               
that  ACV  had  with  HB   185;  HB  420  eliminates  the  sunset                                                               
provision.  She reiterated ACV's concerns  with HB 185.  She said                                                               
ACV supported  the provisions  in HB  185 that set  up a  new fee                                                               
system for DNR  to manage its water program;  however, there were                                                               
concerns  with two  of the  provisions,  including the  exemption                                                               
from public  notice and  comment.   She said  in addition  to the                                                               
Northern Alaska  Environmental Center, a number  of Native groups                                                               
have commented on  temporary water use permit  applications.  The                                                               
Native groups' concerns typically  involve subsistence use on the                                                               
North  Slope and  the need  to maintain  and protect  those uses.                                                               
She  said the  rights of  Alaskans should  not be  compromised by                                                               
prohibiting  the opportunity  to publicly  notice and  comment on                                                               
the temporary water use permits.                                                                                                
                                                                                                                                
Number 1716                                                                                                                     
                                                                                                                                
MS.  SCHRADER turned  attention to  AS 46.15.080.   She  said the                                                               
criteria  in  this  section  deal  with  a  number  of  different                                                               
concerns,  from  the effects  water  withdrawal  has on  economic                                                               
activity to impacts  on fish and other resources.   She indicated                                                               
that she  thought DNR should  be required to perform  an analysis                                                               
of  those impacts.    She  explained that  under  current law,  a                                                               
temporary water use  permit is good for five  years; depending on                                                               
some  determinations  made by  the  legislature  on some  current                                                               
bills, it  may be extended  back to the original  ten-year length                                                               
of time.  "It is hardly  temporary," she remarked.  She suggested                                                               
that the  North Slope is  a "desert" that gets  4 to 7  inches of                                                               
rain per  year.  She  said the oil and  gas industry uses  a huge                                                               
amount of water  on the North Slope.  There  are other interests,                                                               
resources, and concerns that need to be protected, she said.                                                                    
                                                                                                                                
Number 1806                                                                                                                     
                                                                                                                                
MS. SCHRADER suggested that having  DNR go through an analysis of                                                               
the criteria would  better protect this resource.   She suggested                                                               
that with  the introduction  of HB 420  and other  related bills,                                                               
the  legislature has  taken  quite an  interest  in the  [Alaska]                                                               
Water Use Act.   She said ACV does not have  a problem with that;                                                               
however, they  would suggest  that a better  way of  dealing with                                                               
potential  changes to  the Alaska  Water Use  Act is  to get  the                                                               
interested  parties together.   She  suggested a  way to  do this                                                               
would  be  to  reactivate,  refund,   and  reenergize  the  water                                                               
resources board;  to have  them hold  hearings around  the state;                                                               
and  to get  the oil  and gas  industry to  work with  the Native                                                               
groups on the North Slope and  the agencies - DEC, DNR, and ADF&G                                                               
- and  look into what changes,  if any, are needed  in the Alaska                                                               
Water Use Act.   She remarked, "Simply sitting here  and having a                                                               
bill written by  the oil and gas industry, passed  down without a                                                               
lot of  opportunity for other  people to effectively weigh  in, I                                                               
don't think  is doing  the protection  of this  critical resource                                                               
very much good."  She  said ACV would recommend those suggestions                                                               
as an alternative to extending the sunset provision in HB 185.                                                                  
                                                                                                                                
Number 1860                                                                                                                     
                                                                                                                                
CO-CHAIR  SCALZI  asked  Ms.  Schrader   which  resource  she  is                                                               
concerned  with.                                                                                                                
                                                                                                                                
MS.  SCHRADER answered  that she  is  concerned with  all of  the                                                               
resources on  the North  Slope:  the  water resources,  fish, and                                                               
wildlife that  depend so critically  on it.   She said  the lakes                                                               
and streams on  the North Slope are tapped  heavily under current                                                               
temporary water permits to build the ice roads.                                                                                 
                                                                                                                                
CO-CHAIR  SCALZI  stated   that  he  is  unaware   of  any  other                                                               
provisions that  may help the oil  and gas industry in  regard to                                                               
accessing  those areas  that [Ms.  Schrader] finds  so sensitive.                                                               
He remarked that those ice roads seem  to be a good solution.  He                                                               
asked if  there was  anything else  available that  would augment                                                               
the use of ice roads.                                                                                                           
                                                                                                                                
MS. SCHRADER said she is not  aware of the oil and gas industry's                                                               
having any  problems with  getting ice roads  built.   She agreed                                                               
with   Mr.   Rosier's   suggestion  that   some   instream   flow                                                               
reservations should  be examined,  in addition  to the  amount of                                                               
water in  the multitude of  lakes on  the [North Slope]  that are                                                               
potentially going to be used.   She stated that AOC didn't have a                                                               
problem with ice-road  development; she agreed that  it is better                                                               
than gravel  roads.  She stated  that simply letting the  oil and                                                               
gas industry  have total, unfettered  access to the water  on the                                                               
[North Slope] is not in the best interest of anyone.                                                                            
                                                                                                                                
CO-CHAIR MASEK  offered her opinion  that there is no  problem on                                                               
the  North  Slope with  regulatory  provisions;  the industry  is                                                               
continuously being sued by conservation  organizations.  She said                                                               
HB 420 will  take care of the sunset provision;  there are also a                                                               
couple of water  bills [coming before the committee.]   She asked                                                               
that comments be kept to HB 420.                                                                                                
                                                                                                                                
Number 2024                                                                                                                     
                                                                                                                                
REPRESENTATIVE  GREEN  recalled that  when  he  was building  ice                                                               
roads [on  the North  Slope], streams  weren't used.   Mentioning                                                               
concern that the  fish might be impacted, he said  the lakes used                                                               
for water  are sterile; in  addition, there are  numerous shallow                                                               
lakes [on the North Slope].                                                                                                     
                                                                                                                                
REPRESENTATIVE  KERTTULA  asked Ms.  Schrader  if  she knew  what                                                               
DNR's regulations  were and if  they provided any process  for an                                                               
impact analysis.                                                                                                                
                                                                                                                                
MS.  SCHRADER  suggested that  Mr.  Loeffler  would be  the  best                                                               
person to answer that question.   She said she'd checked with Mr.                                                               
Loeffler last  fall, and DNR  had not yet drafted  regulations to                                                               
address  HB  185.    She   said  this  summer  there  were  draft                                                               
regulations about  the water use  program circulating  for public                                                               
comment; however, they were not  the ones to be promulgated under                                                               
HB 185.                                                                                                                         
                                                                                                                                
Number 2119                                                                                                                     
                                                                                                                                
REPRESENTATIVE KERTTULA  asked what  kind of impact  analysis was                                                               
presently being  done on the  temporary water permits  before the                                                               
permits are issued.                                                                                                             
                                                                                                                                
MS.  SCHRADER reiterated  that Mr.  Loeffler should  answer that.                                                               
She said  one of the contentions  of some of the  groups that she                                                               
represents is just how much of that is being done.                                                                              
                                                                                                                                
REPRESENTATIVE  FATE indicated  that a  limit on  temporary water                                                               
use  permits  could have  an  effect  on  Alaska's economy.    He                                                               
remarked that if  HB 185 needs to  be fixed, it could  be done at                                                               
another time.                                                                                                                   
                                                                                                                                
Number 2215                                                                                                                     
                                                                                                                                
JAN KONIGSBERG, Trout Unlimited,  testified via teleconference on                                                               
behalf   of  the   Alaska  Public   Water   Coalition,  a   group                                                               
representing  sport-fishing interests  and organizations,  former                                                               
members of  the Alaska water  board, and other  individuals who'd                                                               
decided to work  together after HB 185 was passed  last year over                                                               
the objections  of a  number of  individuals.   He said  they are                                                               
concerned  about executive  actions, legislation,  and regulatory                                                               
initiatives  that  affect  water resources  but  further  special                                                               
interests at  the expense  of the public's  interest.   He stated                                                               
that  the group  is particularly  dismayed by  DNR's demonstrated                                                               
inability to  manage Alaska's freshwater resources  over the last                                                               
several years.  He said the  group is opposed to HB 420; however,                                                               
the group does support the  temporary water use permit for actual                                                               
temporary uses.                                                                                                                 
                                                                                                                                
MR.  KONIGSBERG  suggested  that   such  authorizations  must  be                                                               
limited  to  one-year  terms,  preceded   by  public  notice  and                                                               
accompanied  by  working  public-interest "determinations."    He                                                               
suggested  that current  regulations exempt  the use  of seawater                                                               
and the emergency  use of water to protect life  or property from                                                               
any  authorization; the  group does  not believe  that any  other                                                               
exemptions  are needed  for temporary  water uses.   He  said the                                                               
group  is most  concerned  about the  impact  on the  environment                                                               
resulting from temporary water use permits.                                                                                     
                                                                                                                                
Number 2315                                                                                                                     
                                                                                                                                
MR. KONIGSBERG  reminded the  committee of  Article VIII  [of the                                                               
state  constitution],  regarding  the  sustained-yield  principle                                                               
applied to  the replenishable resources  of Alaska.  He  said the                                                               
group  believes  that  the sustained-yield  mandate  forbids  any                                                               
action that  would reduce  the sustained  yield of  any renewable                                                               
resource.    He  said  in  regard  to  the  replenishable  salmon                                                               
resources, it is obvious that salmon  need water.  He stated that                                                               
it  is  the  responsibility  of the  government  to  ensure  that                                                               
habitat  conditions   which  maximize  the  yield   of  fish  are                                                               
maintained, not degraded.                                                                                                       
                                                                                                                                
MR. KONIGSBERG said the group  believes that under the provisions                                                               
of  temporary water  use permits  under  HB 185,  removal of  the                                                               
sunset provision  is jeopardizing  the salmon  habitat throughout                                                               
the  state.   He reaffirmed  that the  responsibility to  protect                                                               
habitat  is not  discretionary, optional,  or conditional  on any                                                               
factors - whether  they're cultural, political, or  economic.  He                                                               
said, "It's  pretty simple:   we shouldn't  be harming  the goose                                                               
that  laid  the  golden  egg,  ...  and  removal  of  the  sunset                                                               
provision is  going to drown, if  not cook, the goose."   He said                                                               
the group believes  that if the people's  representatives are not                                                               
willing to  fund the  actual cost  of properly  and appropriately                                                               
administrating the Alaska  Water Use Act through  devices such as                                                               
HB  185, private  uses will  have  to wait  until adequate  self-                                                               
funding is  available.   He remarked  that amending  the [Alaska]                                                               
Water  Use  Act to  reduce  the  cost  of  giving away  a  public                                                               
resource is simply not acceptable.                                                                                              
                                                                                                                                
MR.  KONIGSBERG said  the bottom  line  regarding Alaska's  water                                                               
resources is that water is  needed to sustain fish, wildlife, and                                                               
the public  health; therefore, the only  significant amendment to                                                               
the [Alaska]  Water Use Act that  the group would support  is the                                                               
automatic protection of instream  flow for fish, wildlife, public                                                               
safety, and human health.                                                                                                       
                                                                                                                                
Number 2428                                                                                                                     
                                                                                                                                
BILL  TEGOSEAK,  Executive  Director, Inupiat  Community  of  the                                                               
Arctic Slope (ICAS),  testified via teleconference.   He told the                                                               
committee that last  year he had provided comment on  HB 185.  He                                                               
remarked  that ICAS  opposed giving  away natural  resources that                                                               
belong  not to  the  state, but  to  the people  of  Alaska.   He                                                               
suggested  that HB  185  had authorized  billions  of gallons  of                                                               
water to  be given away to  special interests, in this  case, the                                                               
oil industry  in the  [Arctic Slope]  region.   He said  [HB 185]                                                               
permitted  the extraction  of [large]  amounts of  water from  90                                                               
lakes; this  was done without an  environmental assessment, which                                                               
would determine  the impacts to  other natural resources  and the                                                               
ecosystem on the North Slope.                                                                                                   
                                                                                                                                
MR.  TEGOSEAK reiterated  that  he felt  that  a temporary  water                                                               
bill, in this  case, is only a special-interest  bill intended to                                                               
satisfy the needs of special  interests such as the oil industry.                                                               
He remarked that  the bills don't agree with  what ICAS considers                                                               
to be  temporary; the bill  [would extend the provision  for five                                                               
years].  He  reiterated that the bill would  allow a continuation                                                               
of giving  away natural resources that  belong to the state.   He                                                               
said,  "The  giving  away  of  water, in  our  region,  gives  an                                                               
appearance    of    geographic   discrimination    of    cultural                                                               
incompetence."  He reiterated that  there has been no request for                                                               
an environmental  assessment regarding  the extraction  of water.                                                               
He  indicated  legislative  representatives  from  Fairbanks  and                                                               
Anchorage would  have to answer  to their constituents  in regard                                                               
to  the extraction  of billions  of gallons  of water  in the  90                                                               
lakes through  the use of temporary  water use permits.   He said                                                               
he wants  to be sure  the committee understands  "our" dependence                                                               
on  the natural  resources.    He suggested  that  there were  no                                                               
public  hearings  on  HB  185  as it  went  through  last  year's                                                               
session.   He said he thought  the people that are  most affected                                                               
need  to provide  comment;  however, the  people  don't have  the                                                               
means to do that in small villages.   He added that there is only                                                               
one  Legislative  Information  Office  (LIO) [in  the  area],  in                                                               
Barrow.                                                                                                                         
                                                                                                                                
Number 2612                                                                                                                     
                                                                                                                                
REPRESENTATIVE McGUIRE stated  that by supporting HB  420, she is                                                               
not   supporting  any   special  interests;   she  resents   that                                                               
allegation.    She  said  as  a member  of  the  House  Resources                                                               
Standing Committee she  is there to look at  the delicate balance                                                               
between  conservation and  developing resources,  as a  resource-                                                               
based state, to  support the economy; it is a  job that she takes                                                               
very  seriously.   She said  she  believes that  the program  has                                                               
worked in the past.  She said  as she understands it, there are a                                                               
lot  of requirements  that the  commissioner has  to consider  in                                                               
effectuating  any regulations,  including  coordination with  DEC                                                               
and ADF&G and  with local, state, and federal  agencies that look                                                               
at local soil and water  conservation districts.  She stated that                                                               
DNR takes its  job seriously, and that she trusts  DNR to balance                                                               
these things out when it issues the temporary water permits.                                                                    
                                                                                                                                
Number 2719                                                                                                                     
                                                                                                                                
REPRESENTATIVE  KERTTULA  asked  Mr.   Loeffler  to  explain  the                                                               
progress  of  the  regulations  that  were  to  be  developed  to                                                               
implement HB  185, as well  as the effects of  those regulations.                                                               
She  also asked  Mr. Loeffler  what  type of  impact analysis  is                                                               
performed by DNR  and what amount of water would  have to be used                                                               
before an impact analysis would be performed.                                                                                   
                                                                                                                                
MR.  LOEFFLER  said  the temporary  water  use  program  operated                                                               
successfully  for 20  years;  as a  result,  no regulations  were                                                               
needed to  implement temporary water  use permits.   He indicated                                                               
DNR has regulations  available that were authorized  by the bill.                                                               
He said regulations  in regard to fee provisions  are expected to                                                               
be implemented by spring; therefore,  fees will be increased.  He                                                               
explained   that   last   fall,   DNR   implemented   streamlined                                                               
regulations  for  the  water rights  program;  these  regulations                                                               
allowed a 60-day comment period,  which closed in October; DNR is                                                               
still reviewing the comments.                                                                                                   
                                                                                                                                
Number 2793                                                                                                                     
                                                                                                                                
MR.  LOEFFLER  remarked that  he  feels  DNR  and ADF&G  have  an                                                               
extremely close working relationship,  especially in the northern                                                               
region.  He  said the type of [impact] analysis  performed by DNR                                                               
reviews  the  potential  effects  on   fish  and  wildlife.    He                                                               
explained that DNR  has a couple of policies  that are reasonably                                                               
standard; DNR  has not authorized  a withdrawal from a  stream or                                                               
river on  the North  Slope since  1976.   The water  either comes                                                               
from lakes  or reservoirs that  are constructed  specifically for                                                               
that purpose.                                                                                                                   
                                                                                                                                
MR. LOEFFLER said the only  connection to the river doesn't occur                                                               
in the winter  when flows are critical; it occurs  in the "spring                                                               
flood  flows."   This  year,  DNR  reviewed temporary  water  use                                                               
permits for  the cumulative impact of  authorizations applied for                                                               
or authorized before issuing them;  DNR worked closely with ADF&G                                                               
and asked  for its  review.   He explained that  DNR does  a more                                                               
streamlined  version  of  this   with  all  temporary  water  use                                                               
permits, looking at other authorizations  from that source before                                                               
the permits  are issued.  He  said the backlog for  instream flow                                                               
is  a critical  problem; however,  DNR looks  at [instream]  flow                                                               
applications  to ensure  that  an  authorization wouldn't  impact                                                               
that application before it is issued.                                                                                           
                                                                                                                                
CO-CHAIR MASEK  asked Mr.  Loeffler to  comment on  the testimony                                                               
given by Mr. Konigsberg in regard to the fishing issue.                                                                         
                                                                                                                                
MR. LOEFFLER  said that he  was not in the  room at the  time and                                                               
therefore  couldn't  comment  specifically  on  Mr.  Konigsberg's                                                               
testimony.   He indicated  that temporary  water use  permits are                                                               
compared to  instream flow reservations  before they  are issued.                                                               
He  said he  believes the  "critical mission"  is to  protect the                                                               
fish; he  is proud  that has  been done;  he believes  that ADF&G                                                               
would testify that DNR had [protected  the fish].  He said in the                                                               
event  of  a  problem,  the   temporary  water  use  permits  are                                                               
revocable; they have  been revoked and modified in the  past.  He                                                               
indicated that  [temporary water  use permits] are  compared with                                                               
instream flow applications before DNR issues them.                                                                              
                                                                                                                                
Number 2922                                                                                                                     
                                                                                                                                
REPRESENTATIVE  McGUIRE  brought  attention  to  subsection  (i),                                                               
beginning at  page 5,  line 31 [of  CSHB 185(FIN)],  which reads,                                                               
"The   commissioner   may   modify,   suspend,   or   revoke   an                                                               
authorization  issued  under  this section  if  the  commissioner                                                               
determines it  necessary to protect  the rights of  other persons                                                               
or  the public  interest".   She expressed  her belief  that this                                                               
[provision]  is something  that  the department  would take  into                                                               
consideration if necessary.                                                                                                     
                                                                                                                                
MR.  LOEFFLER  said   "correct";  it  is  a   mandate  DNR  takes                                                               
seriously.                                                                                                                      
                                                                                                                                
Number 2976                                                                                                                     
                                                                                                                                
CO-CHAIR MASEK brought  attention to page 5,  line 20, subsection                                                               
(e) [of CSHB 185(FIN)].                                                                                                         
                                                                                                                                
TAPE 02-8, SIDE B                                                                                                               
Number 2980                                                                                                                     
                                                                                                                                
MR. LOEFFLER explained that the  [subsection] is included because                                                               
the public  notice criteria  are [related] to  AS 46.15.080.   He                                                               
said  DNR wants  to ensure  through the  courts that  there is  a                                                               
dividing  line  between  water rights  and  temporary  water  use                                                               
permits.   He  explained  that water  rights  are an  irrevocable                                                               
property right.   They  go through  AS 46.15.080,  require public                                                               
notice, and  are recorded; however,  temporary water  use permits                                                               
are revocable,  are not a  property right, and are  not recorded.                                                               
He said AS 46.15.080 is a  link; DNR wanted to ensure that [water                                                               
rights and temporary  water use permits] are separate  so that it                                                               
has [the option] of revoking them.   He offered an example:  if a                                                               
small amount of  water is needed for a  road construction project                                                               
for making  concrete, DNR  is not  required by  the courts  to go                                                               
through public  notice in a 30-45  day period.  He  added that he                                                               
thought  that  a  [public  notice  requirement]  would  devastate                                                               
Alaska's short construction season.                                                                                             
                                                                                                                                
CO-CHAIR MASEK brought  attention to page 5,  line 22, subsection                                                               
(f)  [of  CSHB  185(FIN)],  which reads,  "The  commissioner  may                                                               
impose reasonable  conditions or limitations on  an authorization                                                               
for temporary use  of water to protect the water  rights of other                                                               
persons or  to protect fish  and wildlife habitat,  human health,                                                               
or other public interests".                                                                                                     
                                                                                                                                
MR. LOEFFLER remarked that DNR does this on a regular basis.                                                                    
                                                                                                                                
Number 2901                                                                                                                     
                                                                                                                                
REPRESENTATIVE KERTTULA  asked Mr.  Loeffler if there  is another                                                               
kind of permit that does not  require a public notice for using a                                                               
public resource.                                                                                                                
                                                                                                                                
MR. LOEFFLER  answered yes.   He explained that most  permits for                                                               
the use  of state resources  don't require public  notice because                                                               
they don't involve property rights.   Those include cross-country                                                               
travel,  trapping  cabins,  and   operations  on  a  mining-claim                                                               
reclamation;  the property  right  is the  claim  itself [in  the                                                               
latter example].   By contrast,  the state  constitution requires                                                               
prior  public  notice for  property  rights;  however, if  it  is                                                               
revocable  -  or, according  to  the  words  of the  court,  "not                                                               
functionally  irrevocable" -  then DNR  is not  required to  give                                                               
public notice.                                                                                                                  
                                                                                                                                
REPRESENTATIVE KERTTULA  asked Mr.  Loeffler if DNR  gives notice                                                               
on some of those permits.                                                                                                       
                                                                                                                                
Number 2836                                                                                                                     
                                                                                                                                
MR. LOEFFLER  said that notice  is given when DNR  believes there                                                               
is  a  public-values  question or  public  controversy;  however,                                                               
sometimes it doesn't give notice; it is not required by law.                                                                    
                                                                                                                                
Number 2793                                                                                                                     
                                                                                                                                
REPRESENTATIVE FATE moved to report  HB 420 out of committee with                                                               
individual recommendations and a zero fiscal note.                                                                              
                                                                                                                                
REPRESENTATIVE  KERTTULA  objected  for purposes  of  discussion.                                                               
She explained  that under  the circumstances,  she feels  DNR has                                                               
done a really  good job trying to [meet the  terms] of a one-year                                                               
period; however,  she is troubled  by the bill's moving  so fast.                                                               
She said she  feels that she doesn't have  a good [understanding]                                                               
with only three  minutes' testimony from each  witness on exactly                                                               
how DNR is working the system  presently; she is not clear on how                                                               
far the  backlog is,  or what  the concerns  are.   She expressed                                                               
concern  about the  fiscal situation,  citing last  year's fiscal                                                               
note  that was  implemented  to  [deal with]  the  backlog.   She                                                               
agreed with Mr.  Loeffler's testimony in terms of  his belief and                                                               
DNR's actions  on trying to  provide public notice and  deal with                                                               
the bigger  usage; however, she  expressed uncertainty  about the                                                               
future.   She asked that the  bill be held over  so the committee                                                               
would have more time to review  it.  She added that in comparison                                                               
to  other  bills,   however,  HB  420  seems  to   be  the  least                                                               
problematic.                                                                                                                    
                                                                                                                                
CO-CHAIR  MASEK remarked  that HB  420 is  providing a  statutory                                                               
revision  repealing  the  sunset  provision   in  HB  185.    She                                                               
expressed  concerns about  other, forthcoming  water bills.   She                                                               
added that  she thinks more work  needs to be done  on the issue.                                                               
She said she felt there would be  adequate time to come up with a                                                               
permanent solution if DNR and  the committee worked [together] on                                                               
the  issue during  the  remainder  of the  session  and into  the                                                               
interim.                                                                                                                        
                                                                                                                                
REPRESENTATIVE KERTTULA  responded that she  understands Co-Chair                                                               
Masek's position,  but believes  it would  be better  to consider                                                               
all of the [water bills] together.                                                                                              
                                                                                                                                
Number 2653                                                                                                                     
                                                                                                                                
REPRESENTATIVE KERTTULA removed her objection.                                                                                  
                                                                                                                                
Number 2643                                                                                                                     
                                                                                                                                
CO-CHAIR  MASEK  asked  if  there   was  any  further  objection.                                                               
Hearing none,  she announced  that HB  420 was  moved out  of the                                                               
House    Resources    Standing    Committee    with    individual                                                               
recommendations and the accompanying fiscal notes.                                                                              

Document Name Date/Time Subjects