Legislature(2011 - 2012)BARNES 124

03/14/2011 01:00 PM RESOURCES

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Moved CSHJR 19(RES) Out of Committee
Heard & Held
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
Heard & Held
                HB 174-EXTENDING STAYED PERMITS                                                                             
1:46:25 PM                                                                                                                    
CO-CHAIR  SEATON announced  that the  next order  of business  is                                                               
HOUSE BILL  NO. 174, "An  Act relating to  the period in  which a                                                               
permit  authorizing activities  in the  state related  to mineral                                                               
resources, oil or  gas, or transportation projects  is valid when                                                               
activities authorized by  the permit have been stayed  by a court                                                               
or administrative order."                                                                                                       
1:46:35 PM                                                                                                                    
CO-CHAIR FEIGE,  speaking as the  sponsor HB 174,  explained that                                                               
HB 174  seeks to limit  the tactic that has  been used to  try to                                                               
discourage development in the state.   Alaska's permitting system                                                               
is used by  various departments and resource  managers to oversee                                                               
the myriad  of projects throughout  the state.   He characterized                                                               
Alaska's permitting  system as one  of the most  comprehensive in                                                               
the world  that is  used as  a checklist to  ensure that  all the                                                               
municipal, state, and  federal laws are followed.   However, over                                                               
the years there have been many  cases in which the development of                                                               
a  project has  resulted  in a  lawsuit in  which  the judge  has                                                               
issued  a stay.   Therefore,  the project  is essentially  put on                                                               
1:48:13 PM                                                                                                                    
CO-CHAIR FEIGE explained  that HB 174 allows  any permits already                                                               
issued  for the  activity, prior  to the  stay, to  be placed  on                                                               
hold.  Most  permits have a time period associated  with them and                                                               
one tactic has been to obtain a  stay on the permit and force the                                                               
company  to continue  to update  the permit  even while  it can't                                                               
engage in  the activity.  He  informed the committee that  in the                                                               
process of review  of HB 174 by applicable  departments, a number                                                               
of  issues/comments  were raised  and  may  require some  tweaks.                                                               
However,  all [the  applicable]  departments  have indicated  the                                                               
legislation is something  they would like.   Therefore, he hasn't                                                               
requested public testimony from  the departments.  Co-Chair Feige                                                               
announced  that it  will take  a while  for HB  174 to  reach its                                                               
final form.                                                                                                                     
1:49:54 PM                                                                                                                    
REPRESENTATIVE GARDNER  inquired as to  how much of a  problem is                                                               
permitting at the  state level as compared to  the federal level,                                                               
for which  there have  been many  delays.   She then  related her                                                               
understanding that  if there is  a lawsuit  and a court  issues a                                                               
stay, under HB  174 the time line remains valid.   However, there                                                               
could still be revocations if the lawsuit is successful.                                                                        
CO-CHAIR  FEIGE  replied that  would  be  correct.   For  further                                                               
clarity, he pointed  out that the permit is up  to the permitting                                                               
agency to grant or not.   If a state-issued permit is granted for                                                               
four years and only one year  has passed when the stay is issued,                                                               
then three years would remain whenever the stay is lifted.                                                                      
1:51:25 PM                                                                                                                    
REPRESENTATIVE  GARDNER  inquired  as   to  how  problematic  are                                                               
lawsuits  and  appeals  at  the   state  level.    In  discussing                                                               
challenges with permits and time  delays with permits, she opined                                                               
that  everyone  is likely  familiar  with  cases that  deal  with                                                               
federal  permits.   However, she  inquired as  to how  much of  a                                                               
problem it is at the state level.                                                                                               
1:52:18 PM                                                                                                                    
WYN  MENEFEE,  Acting  Director,  Division of  Mining,  Land  and                                                               
Water, Department  of Natural Resources, answered  that there are                                                               
occasionally situations in  which people are sued  and it creates                                                               
delays.   Depending  upon the  type of  authorization given,  the                                                               
permit or authorization may or may  not be issued at the point of                                                               
the stay  being issued.   Typically,  as the end  of the  stay is                                                               
reached,  the   department  will   extend  the  permits   as  the                                                               
department  has the  authority to  do so.   Under  a disposal  of                                                               
interest  decision,  the  department  wouldn't  have  issued  the                                                               
authorization at the point of appeal,  but by the time it reached                                                               
the conclusion  court hearings, the department  would [likely] be                                                               
at the  point at which  it could issue  25 years from  that point                                                               
forward.   With  regard  to delays,  Mr.  Menefee confirmed  that                                                               
there are  delays and  there are delays  because of  lawsuits and                                                               
1:53:51 PM                                                                                                                    
REPRESENTATIVE  GARDNER inquired  as  to the  reasoning behind  a                                                               
time limit on the permit.                                                                                                       
1:54:04 PM                                                                                                                    
MR. MENEFEE  said that there  are limits on all  the department's                                                               
authorizations.  For instance, permits  issued under AS 38.05.850                                                               
have  a  maximum  limit  of  five years  since  the  permits  are                                                               
supposed  to  be  short-term  in   nature.    However,  long-term                                                               
disposal of interest,  such as material sales and  leases, can be                                                               
issued for  longer periods of  time.  He attributed  those longer                                                               
periods  of time  to the  need for  individuals seeking  loans or                                                               
investments to  make the  project viable to  have control  of the                                                               
state land or  the right of interest in order  to ensure that any                                                               
investment can be amortized out.                                                                                                
1:55:09 PM                                                                                                                    
REPRESENTATIVE KAWASAKI acknowledged  that the department already                                                               
does this administratively, and  then questioned whether it needs                                                               
to  be written  in  statute.   Therefore,  he questioned  whether                                                               
there has ever been a time when  HB 174 would've been of value to                                                               
the department as a permitting agency.                                                                                          
MR. MENEFEE clarified that he isn't  going to say it doesn't need                                                               
to be done.   However, he did point out  that the department does                                                               
have  situations in  which the  department has  the authority  to                                                               
adjust.  There  are cases, such as the Kensington  Mine, in which                                                               
there is an existing authorization,  the court implements a stay,                                                               
and a deadline is reached.   He related a recent situation in the                                                               
North Slope  in which the  department extended  the authorization                                                               
to deal  with a  deadline that  arose.   Mr. Menefee  related his                                                               
understanding that  HB 174, placing in  statute [the department's                                                               
ability  to deem  valid activities  authorized by  a permit  that                                                               
have been  stayed by  a court  or administrative  order], provide                                                               
surety   that  the   extension  would   be  granted   versus  the                                                               
possibility that  the department  would extend it.   Furthermore,                                                               
placing this  in statute sends those  who might be suing  for the                                                               
purposes of delay that there will be an extension granted.                                                                      
1:56:58 PM                                                                                                                    
REPRESENTATIVE  KAWASAKI   surmised  then  that   the  department                                                               
extended   the  North   Slope  permit   administratively  through                                                               
MR.  MENEFEE   responded  yes,  according  to   the  department's                                                               
authority  under AS  38.05.850.   That North  Slope permit  was a                                                               
temporary  authorization that  went year  to year.   While  under                                                               
delay,  the department  has  the right  to redo  the  terms.   He                                                               
explained  that  the  idea  was  trying  to  lease  the  parcels,                                                               
therefore the  stay came due to  the lease.  However,  the permit                                                               
was  still valid  and the  department  extended it  to keep  them                                                               
operating until a decision was made regarding the leases.                                                                       
1:57:50 PM                                                                                                                    
REPRESENTATIVE KAWASAKI  surmised that  for large  projects there                                                               
would be multiple  permits from multiple agencies.   How does the                                                               
division  currently track  all of  these permits,  he asked.   He                                                               
further asked  how the division  would track each of  the permits                                                               
it extends when there is a stay.                                                                                                
MR. MENEFEE answered  that under a stay, the  extensions would be                                                               
handled by  each authorizing agency responsible  for a particular                                                               
permit, which he  understood the legislation to do as  well.  For                                                               
a large  project that used  the state's large project  team under                                                               
the  Office  of Project  Management  and  Permitting, then  there                                                               
would be  a project  manager who would  review it  and coordinate                                                               
it.     For  those  projects   that  don't  use   the  division's                                                               
coordinating  services,  each  individual  entity  it  authorizes                                                               
would be responsible.                                                                                                           
1:59:50 PM                                                                                                                    
REPRESENTATIVE P.  WILSON asked whether  there is anyone  else in                                                               
the state,  other than those  listed in HB 174,  which authorizes                                                               
permits that should be added.                                                                                                   
MR.  MENEFEE  pointed  out  that  the  location  of  the  various                                                               
citations in HB  174 fall under different statutes  that are used                                                               
by  specific agencies.   For  instance, an  oil and  gas [permit]                                                               
falls  under the  jurisdiction of  the Oil  and Gas  Conservation                                                               
Commission for  an authorization  for drilling.   However, theirs                                                               
may  not  be  the  only  authorization.    There  could  be  many                                                               
different authorizations  required from different agencies.   Mr.                                                               
Menefee clarified that  it takes into account  more agencies than                                                               
are listed  in the  proposed HB  174.  Due  to the  definition of                                                               
"permit" outlined in  the proposed statute, it does  cast a broad                                                               
net that would apply to any  entity that authorizes or provides a                                                               
certificate for those operations.                                                                                               
2:02:12 PM                                                                                                                    
REPRESENTATIVE  P. WILSON  asked  then  if the  use  of the  term                                                               
"permit"  allows other  agencies to  take responsibility.   Since                                                               
each  section of  the legislation  addresses a  different agency,                                                               
she  questioned whether  additional language  is necessary.   She                                                               
said  she  really  likes  HB  174, but  asked  if  it  should  be                                                               
broadened to cover other areas.                                                                                                 
CO-CHAIR SEATON reminded the committee  that the sponsor has said                                                               
he will work on this legislation for some time.                                                                                 
2:03:08 PM                                                                                                                    
CO-CHAIR SEATON  then questioned  whether this  legislation would                                                               
also apply to municipalities that have [authorized] a permit.                                                                   
MR.   MENEFEE  read   the  bill   such  that   it  would   affect                                                               
municipalities  and  would  have   to  adhere  to  the  automatic                                                               
extensions as well.                                                                                                             
2:04:27 PM                                                                                                                    
CO-CHAIR SEATON  asked whether  HB 174  includes leases,  such as                                                               
oil leases.  He further  asked if this legislation would lengthen                                                               
the term  of an  oil lease  also or  is the  legislation speaking                                                               
strictly to an authorizing permit.                                                                                              
MR. MENEFEE,  directing attention  to the definition  of "permit"                                                               
in Section 3,  opined that it sets a very  broad net.  Therefore,                                                               
the legislation requires anything that  needs to be obtained from                                                               
any state agency or municipality.   The aforementioned means that                                                               
[this   legislation  would   apply  to]   any  authorization   or                                                               
certificate  that's  required,  and thus  would  include  leases,                                                               
rights-of-way, material sales, and permits.                                                                                     
2:05:48 PM                                                                                                                    
CO-CHAIR  SEATON  posed  a  scenario  in  which  someone  has  an                                                               
expiring oil and  gas lease, and asked if one  of the partners of                                                               
the lease  could file  a suit and  thus automatically  extend the                                                               
lease  if a  stay  was  issued.   Therefore,  the lease  wouldn't                                                               
return to the state, he surmised.                                                                                               
2:06:44 PM                                                                                                                    
CAMERON  LEONARD,  Senior  Assistant  Attorney  General,  Natural                                                               
Resources  Section,  Civil  Division (Fairbanks),  Department  of                                                               
Law, confirmed  that could  be a  possible interpretation  of the                                                               
legislation since the term "authorization" is very broad.                                                                       
2:07:28 PM                                                                                                                    
CO-CHAIR FEIGE interjected that there  would still have be a stay                                                               
from the court or an administrative  order in order to cease work                                                               
on the  project.  He  asked if  Co-Chair Seaton is  talking about                                                               
the possibility of artificially extending a lease.                                                                              
CO-CHAIR  SEATON  clarified that  he  is  just considering  other                                                               
implications in terms of oil and  gas leases that are issued over                                                               
a specified term under a  specified plan and term of development.                                                               
He said  that he's  in favor  of the  concept of  HB 174,  but he                                                               
wanted to be sure there aren't unintended consequences.                                                                         
2:08:43 PM                                                                                                                    
REPRESENTATIVE MUNOZ  asked whether  HB 174  could also  apply to                                                               
federal projects within the state.                                                                                              
MR.  LEONARD  answered that  he  didn't  believe so  because  the                                                               
definition of "permit" doesn't reach  that broadly.  Furthermore,                                                               
the state doesn't  have jurisdiction to effect the  duration of a                                                               
federal permit.                                                                                                                 
2:09:18 PM                                                                                                                    
REPRESENTATIVE  GARDNER requested  examples of  when the  lack of                                                               
the  provision  proposed  in  HB 174  has  adversely  impacted  a                                                               
leaseholder or permittee.                                                                                                       
2:09:54 PM                                                                                                                    
CO-CHAIR SEATON announced that HB 174 would be held over.                                                                       
2:10:23 PM                                                                                                                    
The committee took an at-ease from 2:10 p.m. to 2:12 p.m.                                                                       

Document Name Date/Time Subjects
HB0089A.PDF HRES 3/14/2011 1:00:00 PM
HB 174 Resources Hearing Request.PDF HRES 3/14/2011 1:00:00 PM
HB0174A.pdf HRES 3/14/2011 1:00:00 PM
HB 174 Sectional Analysis - Leg. Legal.PDF HRES 3/14/2011 1:00:00 PM
HJR 19 - Resources Hearing Request (3.8.11).pdf HRES 3/14/2011 1:00:00 PM
HJR 19 - 06_08_08_arcticboundaries.pdf HRES 3/14/2011 1:00:00 PM
HJR 19 - Admiral Colvin Testimony.pdf HRES 3/14/2011 1:00:00 PM
HJR 19 - EDT CS version (B)ravo.pdf HRES 3/14/2011 1:00:00 PM
HJR 19 - Empire Story on Coast Guard UNCLOS Support.pdf HRES 3/14/2011 1:00:00 PM
HJR 19 - Projected U.S.continental shelf.doc HRES 3/14/2011 1:00:00 PM
HJR 19 - UNCLOS-Eight Nat'l Security Myths.pdf HRES 3/14/2011 1:00:00 PM
HJR19 - Zero Fiscal Note.pdf HRES 3/14/2011 1:00:00 PM
HJR 19 - Polar Law Textbook (Law of the Sea Chapter).pdf HRES 3/14/2011 1:00:00 PM
HB 174 Sponsor Statement.PDF HRES 3/14/2011 1:00:00 PM
HB 174
Letter_Mayor_HB89.pdf HRES 3/14/2011 1:00:00 PM
KPB Resolution 2011 - 010.pdf HRES 3/14/2011 1:00:00 PM
Weather-related Disasters 1978 - 2008.doc HRES 3/14/2011 1:00:00 PM
HB 89 Sponsor Statement.pdf HRES 3/14/2011 1:00:00 PM
HJR 19 CS Version (I)ndigo.pdf HRES 3/14/2011 1:00:00 PM
HJR 19 Sponsor Statement (revised).pdf HRES 3/14/2011 1:00:00 PM
HJR 19 - Pros and Cons of Ratification (revised).pdf HRES 3/14/2011 1:00:00 PM
HJR 19 - Legislative Research Report (revised 3.11.11).pdf HRES 3/14/2011 1:00:00 PM
HJR 19 - Admiral Colvin Slides.pdf HRES 3/14/2011 1:00:00 PM
HJR8-TroutUnltd.pdf HRES 3/14/2011 1:00:00 PM
HJR8-ConstituantLtrs.pdf HRES 3/14/2011 1:00:00 PM
HJR8-Bill.Larry.GMO.LTR.PDF HRES 3/14/2011 1:00:00 PM
HJR8-Interior.Del.Ltr.PDF HRES 3/14/2011 1:00:00 PM
HJR8-FDA.Health&HumanSvc.response.PDF HRES 3/14/2011 1:00:00 PM
HJR8-NOAA opinion.PDF HRES 3/14/2011 1:00:00 PM
Washington Post Article.PDF HRES 3/14/2011 1:00:00 PM
Bloomberg Article.PDF HRES 3/14/2011 1:00:00 PM
HJR8-Frankenfish.top50.PDF HRES 3/14/2011 1:00:00 PM
Begich-Time Response.PDF HRES 3/14/2011 1:00:00 PM
HJR8 Resources Request.doc HRES 3/14/2011 1:00:00 PM
Sponsor Statement HJR8.doc HRES 3/14/2011 1:00:00 PM
HJR 8 - Fiscal Note.pdf HRES 3/14/2011 1:00:00 PM
HJR 8 - Congressional Delegation Letter of Support - All Members.pdf HRES 3/14/2011 1:00:00 PM
HJR8-UFA Support.PDF HRES 3/14/2011 1:00:00 PM
HJR8-ATA.Ltr.pdf HRES 3/14/2011 1:00:00 PM
HJR8-SAFA.Ltr.pdf HRES 3/14/2011 1:00:00 PM
HJR8-CenterFoodSafety.pdf HRES 3/14/2011 1:00:00 PM
Resolution 2010-10-08 Genetically Engineered Salmon.pdf HRES 3/14/2011 1:00:00 PM
Scan001.PDF HRES 3/14/2011 1:00:00 PM
UNCLOS Hearing.pdf HRES 3/14/2011 1:00:00 PM
HB174-DEC-CO-03-10-11.pdf HRES 3/14/2011 1:00:00 PM
HB 174
HB174-DNR-MLD-03-14-11.pdf HRES 3/14/2011 1:00:00 PM
HB 174
HB174-DOT-SWDES-3-11-11.pdf HRES 3/14/2011 1:00:00 PM
HB 174