Legislature(2013 - 2014)BARNES 124
02/06/2013 01:00 PM House RESOURCES
Audio | Topic |
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Start | |
HB4 | |
HB77 | |
Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
+ | TELECONFERENCED | ||
+= | HB 4 | TELECONFERENCED | |
+= | HB 77 | TELECONFERENCED | |
HB 77-LAND DISPOSALS/EXCHANGES; WATER RIGHTS 2:21:47 PM CO-CHAIR FEIGE announced that the next order of business is HOUSE BILL NO. 77, "An Act relating to the Alaska Land Act, including certain authorizations, contracts, leases, permits, or other disposals of state land, resources, property, or interests; relating to authorization for the use of state land by general permit; relating to exchange of state land; relating to procedures for certain administrative appeals and requests for reconsideration to the commissioner of natural resources; relating to the Alaska Water Use Act; and providing for an effective date." CO-CHAIR FEIGE opened public testimony. 2:22:31 PM LAURA STATS, paraphrased from the following written statement [original punctuation provided]: I am here to speak against the passage of HB 77. I come to you on behalf of my family and all the people who hunt, fish and gather food from this great land we call Alaska. Most importantly, I come on behalf of my grandson, Huck Daugherty, who is 4 years old and who at his tender age has already gone out with his parents and uncles to harvest salmon taller than he is and prawns bigger than his own hands, for him there is a magic in that; and in that magic lies an honest reality which must be protected in perpetuity. And you have the responsibility to protect our lands, streams and oceans. Please look to our Alaska Constitution when making your decision on voting for HB 77. It states in Article 8 section 3 Titled: Common Use "Wherever occurring in their natural state, fish, wildlife, and waters are reserved to the people for common use." It explains in the Citizen Guide of the Alaska Constitution and 1 quote: "This section enshrines in the Alaska Constitution the common law doctrine that natural resources must be managed by the state as a public trust for the benefit of the people as a whole, rather than for the benefit of the government, corporations, or private persons." Who will HB 77 be protecting and representing, will it be protecting the common use clause of our constitution and the rights of the citizens of Alaska or does it protect a corporation which has it's own special interest not consistent with that of preserving the tender balance of the streams and waterways where our food arises from? Please vote against the passage of this bill. Thank you for hearing me with your open hearts and strong minds. 2:25:27 PM JAMES SULLIVAN, Legislative Organizer, Southeast Alaska Conservation Council (SEACC), paraphrased from the following written remarks [original punctuation provided]: Thank you for the opportunity to testify. There has been much discussion, within this committee and with our organization and with our friends, about the issue of water reservations and revoking personal use reservations. We find this issue problematic and want to make sure that our environment is being protected and that anadromous streams have the highest priority when permits are being issued. We would like to propose that amend this bill so that when any entity applies for a water right on any anadromous body of water that [Department of Natural Resources] DNR issue a water reservation on behalf of the fish. DNR can simply refer to the Anadromous Waters Catalog to see if the waterway is on there, then put in an appropriate reservation. This would align DNR with our state constitution and its public trust responsibility. It would ensure the protection of our salmon. It would enhance sustainable economic development across our state. Salmon is our greatest renewable resource, it is in our legislature's best interest to put in a mechanism, in statute, that protects that resource as other entities apply for water rights. Alaska Constitution Article 8 § 3. Common Use "Wherever occurring in their natural state, fish, wildlife, and waters are reserved to the people for common use." 2:27:39 PM REPRESENTATIVE SEATON highlighted the language in Section 1, which read: "the issuance of a general permit if the commissioner finds that the activity is unlikely to result in significant and irreparable harm to state land or resources." He asked whether SEACC finds the language problematic in that irreparable harm rather than significant harm has to occur before a general permit is issued. MR. SULLIVAN said SEACC has discussed the issue of irreparable harm and having some sort of proving ground to do that, which is why he is recommending amending HB 77 such that DNR would issue a water reservation on behalf of the fish when any entity applies for a water right on any anadromous body of water and that mechanism would limit the type of work that can be done on the stream or waterway. Mentioning the Anadromous Fish Protection Act, he then offered his opinion that there are conflicts with the use of irreparable harm and existing statute. 2:29:50 PM GUY ARCHIBALD, Mining and Clean Water Coordinator, Southeast Alaska Conservation Council (SEACC), in response to Representative Seaton's question, informed the committee that irreparable harm is not well defined. He noted that he mainly deals with federal lands. For instance, the Greens Creek Mine has a draft environmental impact study (EIS) that requires the filling in of a major portion of an anadromous salmon stream. The mine is located within the Admiralty Island National Monument where it is mandated by Congress not to produce any harm to the salmon. The U.S. Forest Service does not consider filling in that salmon stream with toxic tailings to be irreparable harm to the monument values. MR. ARCHIBALD then related his confusion with Commissioner Sullivan's testimony that Alaska ranks second to last in the world in terms of producing permits for large projects, especially when [Glenn] Haight, Development Manager, Development Section, Division of Economic Development, Department of Commerce, Community & Economic Development (DCCED), stated [on January 31, 2013] that "Alaska has a very favorable environment in the mining industry." There is evidence that answers the question, which comes from the Fraser Institute's Annual survey to over 5,000 international mining companies. This last year over 800 companies, which were responsible for $6.3 billion of exploration funding in 2011, responded to that survey. The results from that survey ranked Alaska number four in the world in combined policy and mineral potential. The survey compared Alaska to over 90 separate mining districts in the world. The survey also found that only 1 percent of respondents cited environmental regulations as being a mild or strong deterrent in Alaska. Furthermore, only 1 percent of the respondents thought the tax regime, both the rate of the tax and the complexity of the code, was either a mild or strong deterrent to permitting in Alaska. Part of the backlogging and permits is that there is no trigger for evaluation of a permit; once a permit is applied for DNR must process it. He noted that mining is highly speculative and many of the companies are junior companies and almost all of them apply for permits when they do not have a proven ore reserve. The ore reserves are certified as an implied ore body, which by definition means they have zero certainty of an economic ore. They apply for permits, he opined, because it adds to the value to the project they are trying to sell and basically fuels speculation. Therefore, Mr. Archibald requested that DNR institute a trigger such that an application will be reviewed when certification of a proven ore body is submitted. With such a trigger, those resources used on mines that will never enter into production, can be transferred and used for larger projects. He suggested that the aforementioned would reduce the backlog of permits. Mr. Archibald highlighted that the state did attempt a streamlined permitting process with the Rock Creek Mine north of Nome, which was permitted in less than two years. The Rock Creek Mine was located entirely on state land, so did not require a National Environmental Policy Act of 1969 (NEPA) process. The Rock Creek Mine operated for six months, after which it shut down, the company walked away, and the tailings pond immediately filled with water. The Department of Environmental Conservation (DEC) had to remedy the situation for which the estimated cost of cleanup is $20-$30 million. Since the Rock Creek Mine was only bonded for $9.6 million, the difference between the bonded amount and the actual cleanup costs will be borne by Alaska's taxpayers. In conclusion, Mr. Archibald requested that HB 77 not move forward or if it does, that it moves forward with significant amendments. 2:34:51 PM REPRESENTATIVE TARR asked if Mr. Archibald had specific amendments. MR. ARCHIBALD reiterated his suggestion to include an amendment that creates a trigger for review. In the anti-degradation of water quality there is a trigger level to review an application, which he would suggest using for any project [in order to determine] how legitimate is it that a project will enter into production before the state spends many state resources. He pointed out that the Greens Creek Mine EIS cost the U.S. Forest Service over $1 million to produce. 2:35:52 PM REPRESENTATIVE TUCK surmised then that the intent of Mr. Archibald's suggestion is to have a filter to eliminate the projects for which there is no intention for them to make it to fruition and actually focus on the ones that are intended to [produce]. MR. ARCHIBALD agreed, adding that many of the speculative mines will produce a preliminary economic assessment for their investors long before there is any certainty with their ore body. There is a 401 certification process in which a third party evaluates whether there is a legitimate, profitable, economical ore body. 2:36:42 PM REPRESENTATIVE P. WILSON related her understanding that the state does not allow people to just go out and mine, but rather requires they obtain permits and core drillings. She emphasized that there is no way to determine whether a site is profitable until a lot of research is performed, research that requires permits. Therefore, she questioned how to utilize Mr. Archibald's suggestion, noting that often companies only need three to four permits to determine whether the site is economical. Still, it takes a lot of work and time to reach the point of determining whether a site is economical. MR. ARCHIBALD said that is true, but pointed out that these exploration permits fall under a categorical exclusion. A categorical exclusion is used because the land manager estimates that the drilling impacts to the human health environment are so small that it is not worth the time or effort to assess it, and thus the company is given a categorical exclusion from further analysis and the permits, which are two to three pages long, allow companies to drill. He mentioned that he has observed up to 70 drill holes in a year. This permit is a conditional use permit that is valid for a year. However, the companies apply for such a permit year after year. When the companies reach the point of building a mill and a tailings dam and needs a solid waste permit, an air quality permit, and wastewater discharge permit, the project would then reach the level of review of DNR's large mine permitting program. At that point, the EIS then requires review of the human health effects as well as environmental effects, which is when the costs arise. At the point of the EIS is when the trigger should come into play, he clarified. Given the current price of gold, it will not take much to reach the [economical] threshold for gold mining, he opined. The threshold/trigger, he reiterated, would winnow out the legitimate projects versus those speculative projects. 2:39:52 PM REPRESENTATIVE P. WILSON begged to differ, saying that it depends on the price of metals and various other aspects. Therefore, what one may refer to as speculative may be considered in the running economically one year but not the next due to price fluctuations. MR. ARCHIBALD noted his agreement, acknowledging that there will be some agency discretion. However, he maintained that there are many examples of mine projects that were "beyond the pale of speculation." For instance, less than two years ago a company from Oklahoma staked 92 square miles of the Yakutat forelands and announced that there was $34.5 billion worth of gold there, more gold than has been mined in the history of the state. The company did note that there were issues with the chain of custody on the assay samples, which no one took with any credibility and in the meantime the company's stock rose and the principals made money from selling their allocated 20,000 shares a quarter. He characterized the aforementioned as an egregious example of pure speculation. 2:41:48 PM REBECCA SEGAL, Alaskans for Responsible Mining (ARM), began by informing the committee that ARM is a statewide coalition of communities and conservation organizations. She said that upon thorough review, ARM opposes the passage of HB 77. 2:42:31 PM RICK ROGERS, Executive Director, Resource Development Council for Alaska, Inc. (RDC), paraphrased from the following written testimony [original punctuation provided]: RDC is a statewide business association representing forestry, oil and gas, mining, tourism, and fishing industries. Our mission is to grow Alaska through responsible resource development. A top legislative priority of RDC is to encourage the state to promote and defend the integrity of Alaska's permitting processes and advocate for predictable, timely, and efficient state and federal permitting processes based on sound science and economic feasibility. RDC supports HB 77. The Alaska Legislature, to its credit, provided DNR with additional resources to address what had become an untenable backlog of permits and authorizations. Such backlogs negatively affect our resource industries as well as individual Alaskans seeking required state authorizations. We understand that while a backlog still exists, DNR has made real progress in catching up on that work. Ramping up staff to adjudicate a backlog is addressing the symptom, however systematic improvements to what has become a very complex set of statutes authorizing DNR's work is also needed to help prevent future backlog and delays. The Governor, with the support from DNR Commissioner Sullivan and his staff, has identified specific means of improving the efficiency of our complex permitting system. The administration should be applauded for proposing numerous changes to the DNR enabling statutes in order to make their processes more timely and efficient. Adapting our key DNR statutes to ensure we are adjudicating our land and resource authorizations in a more timely and efficient manner is overdue. We encourage this committee to support the administration's efforts to more efficiently manage DNR's tremendous workload as the reach of the department affects a broad cross section of Alaska businesses, resource industries and individuals. Thank you for the opportunity to comment. 2:45:20 PM REPRESENTATIVE SEATON noted that Section 1 of HB 77 allows granting of a general permit, which seems to increase the efficiencies of certain activities. However, he asked whether the standard for a general permit should be significant and irreparable harm. MR. ROGERS replied that his reading of the language is that it "is unlikely to result in significant or irreparable harm", which he characterized as a fairly reasonable standard. From his experience, the department does not issue general permits except for the most innocuous activity. Typically, general permits are the type of activity that is not benefitting industry as much as individual Alaskans who are attempting to accomplish more de minimis activities. However, he deferred to Commissioner Sullivan. Mr. Rogers opined that general permits have not been overused and characterized them as a far more efficient tool. He said he did not believe there is the desire to create a situation in which Alaskans have to obtain permits for activities for which a general permit would adequately protect the public interest. 2:48:09 PM REPRESENTATIVE SEATON noted his agreement with Mr. Rogers regarding the ability to have general permits. He then related his understanding that Mr. Rogers is saying that a general permit can be issued if the activity is unlikely to cause significant or irreparable harm, not a combination of the two. 2:48:53 PM CO-CHAIR SADDLER recalled testimony from SEACC regarding the impact of Alaska's existing permitting process and its standing in terms of mineral development. He then inquired as to whether RDC views Alaska's permitting process as helpful or harmful to the mineral industry in the state. MR. ROGERS stated that the permitting process is absolutely necessary for the state's mineral industry, but clearly Alaska ranks near the bottom in terms of the timeframes to permit large projects. He characterized the argument that the permitting system is fine and needs no improvements as somewhat outrageous. Aside for the impact on industry, Mr. Rogers expressed the need to consider the impact on the state. While the mineral industry is one of the impacted entities with respect to DNR permits, Mr. Rogers stressed how far DNR reaches into the everyday lives of Alaskans. There are so many activities that require a DNR authorization irrespective of the mining industry that he cautioned focusing solely on the mining industry. Still, he maintained that improvements can be made [to the permitting process]. 2:51:04 PM REPRESENTATIVE TARR recalled that the testimony mentioning non- commercial forest products should have referred to non-timber forest products because those permits are actually generally for commercial application. She then inquired as to what Mr. Rogers considers to be sound science and whether he had examples of projects that are being held up under the existing permitting process that would move forward under the proposal in HB 77. MR. ROGERS, regarding sound science, related RDC believes it is important that these decisions are made on the true costs, benefits, and impacts to the environment. Therefore, standards and permitting decisions should be made on empirical evidence and the best available technology and understanding how best to develop the resources. In further response to Representative Tarr, Mr. Rogers said he could not point to a specific project, rather he viewed [HB 77] as an incremental tweak to the DNR statute. Although he didn't believe HB 77 to be changes that would suddenly make it a lot simpler for businesses to obtain authorizations, it is worth supporting. Some of the changes embodied in HB 77 will not impact the resource industries that RDC represents. For instance, not requiring a public notice for a short plat of property in an unorganized borough where there are no easements is not earth-shattering for the mining and oil and gas industries. However, it makes sense for all industries if it frees up DNR staff hours to focus on something that is far more important to the state, makes it easier for the public to get things done, and relieves some fiscal pressure on the limited resources of the state. Ultimately, Mr. Rogers gave deference to DNR. 2:55:42 PM REPRESENTATIVE TUCK asked Mr. Rogers to provide any statistics regarding where Alaska ranks in terms of permitting that differ from those presented thus far. MR. ROGERS agreed to do so. 2:56:14 PM RACHAEL PETRO, President/CEO, Alaska State Chamber of Commerce, paraphrased from the following written testimony [original punctuation provided]: The Alaska Chamber is a statewide membership organization made up of all sizes and types of businesses from across Alaska. The Alaska Chamber's primary mission is to advocate for policies that improve Alaska's business climate. Efficient, predictable and common sense regulations and permitting processes are integral to creating an environment in which businesses, new and old, can succeed. Each Fall Alaska Chamber members gather to set its legislative agenda for the following year. For the past several years in a row, including this year, Alaska Chamber members have expressed strong support for Alaska's policies and regulations that guide development of Alaska's natural resources while protecting Alaska's environment. At the same time, we have also advocated for streamlining those same regulations and policies where bureaucratic and business efficiencies can be gained. In regard to the Fraser Institute's study, referenced earlier today in testimony, internationally, Alaska ranks just below Kazakhstan and just above Columbia in regard to uncertainty concerning environmental regulations. In regard to regulatory duplication and inconsistencies Alaska ranks below Honduras and just above Niger. Alaska Chamber members believe Alaska can do better! The Alaska Chamber supports the provisions within HB 77/SB26 because they provide clarity, eliminate unnecessary processes, and modernize statutes based on the experience gained over many years from the professional staff within the Department of Natural Resources. It is our belief that HB 77 is a common sense piece of legislation that should receive broad bipartisan support. Thank you for the opportunity to testify this afternoon. 2:58:47 PM CO-CHAIR SADDLER inquired as to where in the Alaska State Chamber's priority list was permitting ranked. MS. PETRO answered that permitting was ranked number 2 in over 25 priorities. She noted that permitting has long been one of the Alaska State Chamber's priorities. In further response to Co-Chair Saddler, Ms. Petro confirmed that membership of the Alaska State Chamber of Commerce is not just the resource industry but all aspects of state business and economic activity, that is all sectors of the economy. 2:59:39 PM REPRESENTATIVE TUCK asked whether there is a separate statistic for permitting from the Fraser Institute's study. MS. PETRO said she could not answer that question, but noted that the Fraser Institute study has multiple sub-rankings, of which she referred to two. She informed the committee that the Fraser Institute study is on-line and there is a link to it on the Alaska State Chamber's web site or she could forward interested members a copy. 3:00:33 PM CO-CHAIR FEIGE kept public testimony open and held over HB 77.
Document Name | Date/Time | Subjects |
---|---|---|
HB04 AMA Letter.pdf |
HRES 2/6/2013 1:00:00 PM |
HB 4 |
HB04 Leg Audit ANGDA Summary.pdf |
HRES 2/6/2013 1:00:00 PM |
HB 4 |
HB04 Leg Audit ANGDA.pdf |
HRES 2/6/2013 1:00:00 PM |
HB 4 |
HB 77 AK State Chamber.pdf |
HRES 2/6/2013 1:00:00 PM |
HB 77 |
HB77 Archibald-SEACC.PDF |
HRES 2/6/2013 1:00:00 PM |
HB 77 |
HB77 Laura Stats.PDF |
HRES 2/6/2013 1:00:00 PM |
HB 77 |
HB77 RDC.pdf |
HRES 2/6/2013 1:00:00 PM |
HB 77 |
HB77 Sullivan - SEACC.PDF |
HRES 2/6/2013 1:00:00 PM |
HB 77 |