Legislature(1999 - 2000)
02/18/2000 03:08 PM Senate RES
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SB 255-PUB.LAND PERMITS/HEALY-FAIRBANKS INTERTIE
CHAIRMAN HALFORD announced SB 255 to be up for consideration.
SENATOR PETE KELLY, sponsor of SB 255, explained that a recent
court decision puts in jeopardy the way DNR permits for certain
land uses. This court decision will have an immediate impact on
a power project in his area, which might result in higher rates
and power outages in the near future. Beyond that, this court
decision isn't just a regional issue; it will negatively impact
DNR and may cause long delays in the permitting process.
According to Division of Land officials, the delay could be as
long as two years for some projects. The decision could also put
past permits for oil and gas projects into jeopardy.
Number 434
SENATOR KELLY explained that SB 255 will reverse the court
decision and specify that the legislative intent is that best
interest findings are not required for all permits.
SENATOR MACKIE asked for an explanation of the problem regarding
the best interest findings.
SENATOR KELLY explained that the process used for this Intertie
was the same process used for all other Interties. It has been a
very, very public process. DNR concluded it was not necessary
to do a best interest finding for the Intertie because it felt
the statute was specific in that area. Since 1981, most everyone
has agreed that the statute does not require a best interest
finding. If DNR has to do a best interest finding, there will be
other challenges and other delays - probably up to one year for
this particular project. In that year's delay, the power company
says it will have to do load shifting. One danger of load
shifting is that the Fort Knox Mine is a low priority operation
and residential and commercial projects must be first served,
even though the Fort Knox Mine has undergone an exhaustive public
process.
SENATOR MACKIE asked if this process is adequate enough to take
into consideration fish and game and other concerns.
SENATOR KELLY answered that it is. He added that this bill
doesn't mandate that anything be done differently, it merely
clarifies the legislative intent to allow DNR to continue to do
business as it has done in the past. He pointed out that DNR
staff and people from the power company were available to answer
questions about the specific problems via teleconference.
SENATOR GREEN asked if Senator Kelly's main concern is the court
decision.
SENATOR KELLY said it is. He explained that the case was lost on
appeal to the Alaska Supreme Court.
CHAIRMAN HALFORD asked who the parties were in that case.
MS. MARY LUNDQUIST, Assistant Attorney General, informed
committee members that the Supreme Court case involved the
Northern Alaska Environmental Center, the Sierra Club, Golden
Valley Electric Association (GVEA) and the Department of Natural
Resources. She explained that the Northern Alaska Environmental
Center and the Sierra Club appealed DNR's decision.
CHAIRMAN HALFORD asked what other permits this bill would apply
to and how the Supreme Court decision would be retroactively
applied.
MR. LOEFFLER, DNR, explained that AS 38.05.850 is the statutory
section that DNR does most of its permitting under, whether the
permits be for rights-of-way, sewage outfall, seismic
exploration, or transfer storage. The court said that those
things, which the court does not believe to be functionally
revokable, even if they legally are, should be done with a best
interest finding. DNR does not typically go through that process
for projects it considers to be revokable or minor. As a result,
the Court ruling would require DNR to increase the processes it
uses in the future. Senator Kelly identified the second effect
on GVEA. The third effect is that projects that DNR did in the
past, which didn't undergo this procedure, would be open to
challenge.
CHAIRMAN HALFORD asked how the Supreme Court defined
"functionally revokable."
MS. LUNDQUIST explained that the court issued an opinion on
remand so that it could expand upon that when the final opinion
was issued. The court looked at the probability that DNR would
revoke the Intertie in its entirety. It also cited the
Wilderness Society v. Morgan case. That case looked at two tests
to determine whether the project was revokable.
She stated, "It could be that the court would apply one of those
tests specifically when they dealt with the likelihood of whether
it would be revokable, whether the project would be in
perpetuity, what the application said, damage to the property,
and whether the damage was permanent - and I mean the other test,
the subsequent test - the Wilderness Society [indisc.] whether
the permit was revokable by its terms and whether the structures
were deemed capable of being moved and whether the land would be
left in usable condition."
CHAIRMAN HALFORD asked if there has been a Supreme Court remand
without a written ruling.
MS. LUNDQUIST answered that the court's final ruling reversed
DNR's decision and remanded it to the agency for best interest
findings. It has not yet issued the formal opinion that will go
into the official report.
CHAIRMAN HALFORD commented that "reversed and remanded" is
straightforward enough. He asked whether the court would include
some discussion about the solutions.
MS. LUNDQUIST said she thought the basis for the decision is in
the opinion that has already been issued and she doesn't see how
they could learn much more than they already have from the
court's opinion on the Wilderness Society case.
SENATOR MACKIE asked if it was remanded for a best interest
finding.
MR. LOEFFLER answered yes.
SENATOR MACKIE wanted to know what a best interest finding
consists of and who has to do one.
MS. LUNDQUIST responded that a best interest finding is an
official document by DNR that is issued under AS 38.05.035(e).
It's required for disposals of interests in state lands. In that
document DNR includes all data, salient facts and issues that
have been raised during the public comment period. For oil and
gas lease sale contracts there are specific requirements, but for
this permitting issue there aren't any requirements regarding
what must be in that document.
SENATOR MACKIE asked how long the process takes.
MS. NANCY WELCH, Northern Region Office, DNR, answered that they
typically take from six months to a year and a half depending on
how contentious they are with the public.
Number 1200
SENATOR MACKIE asked if it is costly to DNR to have to assign
people to do a best interest finding when DNR already has the end
result.
MS. WELCH said that the GVEA issue has taken one of her resource
managers two months, including the time involved with Ms.
Lundquist from the Attorney General's office. Staff will have to
conduct public hearings. Additionally, DNR has already received
more than 1,000 responses from the public, which will take at
least six months to synthesize.
SENATOR MACKIE asked if any new information will come out of the
public hearings and whether DNR might come to a different
conclusion.
MR. LOEFFLER inserted that DNR cannot claim what the conclusion
will be until all of the public comments have been read.
SENATOR MACKIE asked if it is safe to assume that DNR wouldn't
have issued the permit if it hadn't listened to the people in the
beginning.
MR. LOEFFLER responded that DNR went through a public process and
thought it made the best decision at the time. DNR then
rethought the decision and issued a preliminary best interest
finding and still believes it made the best decision but it has
not gone through all of the comments.
SENATOR KELLY asked if DNR finds that it isn't in the best
interest to grant the right-of-way, whether the finding can be
challenged in court.
MR. LOEFFLER answered it can.
SENATOR KELLY asked if DNR will complete the best interest
finding some time this summer and after that the court challenges
will happen.
MR. LOEFFLER agreed but said he hopes DNR can complete the best
interest finding sooner than that.
SENATOR MACKIE asked if this criteria is removed, as the bill
proposes to do, whether the public will still have the
opportunity to challenge the actual permit decision in court, but
it will be dealt with more expeditiously.
MS. WELCH answered that typically, if DNR believes the public
would respond to a notice because a permit is not routine, DNR
would go back out for public comment anyway. It's not that DNR
is precluding public involvement in the process but it will give
DNR the discretion to. Second, when DNR actually issues a
permit, it contains a 30-day appeal clause.
SENATOR MACKIE stated he just wanted to make sure this will not
take away the public's ability to appeal the decision.
MS. WELCH said it will not.
Number 1360
SENATOR LINCOLN asked why SB 255 is retroactive to July 27, 1981.
She stated that she understood the Supreme Court decision does
not call the existing permits into question and that there was a
30 day appeal period.
MR. LOEFFLER answered that prior to a court case in 1993, DNR did
not put all of the appeals language in its decisions, which the
court now requires DNR to do. The court has in the past held
that, without that language, some of those cases can be appealed.
Since the current Supreme Court decision sets new rules that DNR
hasn't followed, the pre-1993 permits were "appealable." SB 255
prevents previously settled decisions from being appealed under
the court decision.
MS. WELCH added that this statute was amended in 1981 to exclude
permits (under AS 38.05.850) from a written finding. SB 255
reiterates the legislative intent of that amendment.
Number 1469
SENATOR LINCOLN asked why the director wouldn't want the consent
of the commissioner for a best interest finding before issuing a
permit that goes far beyond simple electric transmission rights-
of-way.
MS. WELCH answered that is how the existing statute reads.
SENATOR LINCOLN asked if best interest findings can be done
without the commissioner's consent.
MR. LOEFFLER replied that some of the statutes refer to the
commissioner and some refer to the director of the Division of
Lands. Functionally, however, the commissioner delegates that
responsibility to the director. The director delegates some jobs
to staff because it's more efficient. When controversial issues
arise, the commissioner is kept informed. For the most part, the
process used by either is identical - no matter who the statute
refers to.
Number 1601
SENATOR PARNELL asked, regarding the public's right to appeal,
what kind of public process would occur in the GVEA situation
without the best interest finding.
MR. MIKE KELLY said the GVEA project, which was approved by the
legislature in 1993 (with a grant of just under $50 million),
went through a full-blown environmental impact statement. DNR
and BLM cooperated in the process. The agencies have material
from about four-years' worth of hearings in Fairbanks, Anderson,
Nenana, and Healy, massive written documents, scores of studies
on the impacts, and a decision on the federal level to issue the
portion of the right-of-way on federal land. The military has
also given its permission for the permit. SB 255 addresses the
state's portion. After the permit survived the normal AS
38.05.850 process, it was overturned by the court at the eleventh
hour.
SENATOR LINCOLN asked if Mr. Kelly is any relation to Senator
Pete Kelly.
MR. KELLY responded that Senator Kelly is his older brother.
MS. IRENE ALEXAKOS said she was a member of both groups who were
the plaintiffs in the appeal. She thought this bill was full of
false tactics and suggests that best interest findings are needed
for all right-of-way permits, which is not true. Under the
Supreme Court decision, a best interest finding is needed only if
the conveyance is non-revokable.
MS. ALEXAKOS pointed out the northern Intertie right-of-way is
the largest ever issued by DNR, which is why the court held that
it was functionally non-revokable. Nearly 90 percent of all
utility right-of-way permits issued by DNR are less than 1/100
the size of the northern Intertie and do not raise any questions
at all about revocability. The huge majority of right-of-way
permits do not require a best interest finding under the Supreme
Court decision. The decision does not call into question existing
permits because the 30-day appeal period for past permits has
long-since passed.
MS. ALEXAKOS stated SB 255 goes well beyond the narrow issue
discussed in the Supreme Court decision. It creates an exemption
not only for revokable permits, but for all permits issued under
AS 38.05.850. In theory, under this bill, DNR could convey a
single permanent non-revokable right-of-way permit across all 100
million acres of state land with no best interest findings -
without even giving public notice. Without a best interest
finding, there is no public notice requirement for permits issued
under AS 38.05.850. She emphasized there's a difference between
appealing something and having a public comment period.
MS. ALEXAKOS said SB 255 is unconstitutional as applied to any
right-of-way permits that, like the northern Undertoe, rise to a
level of state land. Article 8, sec. 10 of the Constitution
states that "No disposals or leases of state lands, or interests
therein, shall be made without prior public notice and other
safeguards of the public interest as may be prescribed by law."
This bill repeals all requirements of public notice and other
safeguards of the public interest with regard to permits under
Section .850, which, in some cases, are disposals of state lands.
She concluded that SB 255 is a broad-sweeping, nepotistic,
unconstitutional, knee-jerk reaction to a reasonably narrowly
defined Supreme Court decision.
SENATOR MACKIE asked her to explain why SB 255 is
unconstitutional if the legislature has the ability to write the
law.
MS. ALEXAKOS said SB 255 makes it so that there is no public
comment period. One would be able to appeal a decision after the
decision has been made, but not before.
Number 1909
SENATOR MACKIE asked how that would make it unconstitutional when
it says "the public process prescribed by law."
MS. ALEXAKOS reiterated, "No disposals or leases of state land
shall be made without prior public notice and other safeguards of
public interest."
CHAIRMAN HALFORD noted they are referring to two independent
phrases that refer to public notice and then other state
interests.
SENATOR KELLY asked Ms. Lundquist and Mr. Loeffler to comment on
that issue.
SENATOR MACKIE asked that they specifically respond to the
question about doing this without any public process or notice or
anything else. He asked if Ms. Alexakos's statement is accurate.
MR. LOEFFLER answered that, while AS 38.05.850 does not require
it, DNR always gives public notice when it believes a disposal to
be of interest to the public or controversial.
CHAIRMAN HALFORD asked if DNR can dispose of anything,
constitutionally, without public notice.
MR. LOEFFLER answered that is correct.
MS. LUNDQUIST added she believes that under art. 8, sec. 10, the
legislature has the power to prescribe the extent to which public
notice is required.
CHAIRMAN HALFORD said he agrees, but the statement had been made
that no public notice is required. He asked if anything else in
the law requires public notice or if Ms. Lundquist was going back
to the constitutional provision, which is not self-enforcing.
MS. LUNDQUIST said with respect to the application of AS
38.05.850, there is no requirement in the statutes for public
notice. Public notice is given based on the importance of the
project itself. The legislature has provided for public notice
for disposals of state land in AS 38.05.945.
CHAIRMAN HALFORD asked if the Constitution is more expansive than
that because it refers to an interest in land without specifying
any amount. He asked if the State ever lost a constitutional
case, not a statutory case, regarding public notice for disposal
of an interest.
MS. LUNDQUIST and MR. LOEFFLER indicated they didn't know the
answer.
SENATOR MACKIE said he is confused because earlier he was assured
of a public process and he is no longer convinced that Ms.
Alexakos's concern was addressed. He stated he understands the
rationale for not doing a best interest finding if a public
process is available but to do a major project like the GVEA
Undertoe with no public notice concerns him. He asked if
something was overlooked and said he needs to be convinced that
is not a problem.
SENATOR GREEN responded that, to give an example, an offer to buy
5 or 10 acres of state land associated with the meat plant in
Palmer was made during the summer. The Division is now going out
for public comment; after that it will institute the bid process.
When she asked why the long delay, the Division said it was
taking the issue to the public and always does. She believes
this particular asset would be good to privatize.
SENATOR KELLY responded that DNR has a history of providing for a
public process for land of a far lower level than the GVEA
Undertoe. He asked what public process DNR would be forced to go
through if SB 255 passes.
MR. LOEFFLER answered that, as a matter of policy, DNR provides
public notice anytime it believes a disposal of land to be
significant or controversial to a group of citizens.
SENATOR KELLY asked if anything in regulation forces DNR to do
that.
MR. LOEFFLER answered it is a requirement for disposals under AS
38.05.035(e).
SENATOR KELLY asked if this falls under .035(e).
MR. LOEFFLER answered that it does, but SB 255 would exempt it
from the best interest finding requirement of .035(e). Even
though he doesn't believe public notice would be required, he
would do it anyway to avoid being stupid.
CHAIRMAN HALFORD stated "to avoid being unconstitutional."
MR. LOEFFLER answered that is correct.
MS. LUNDQUIST added for a permit under AS 38.05.850 there is no
requirement under the Constitution or in statute for public
notice. It's a discretionary function of DNR as to the amount
and extent of public notice that is required for any permit
issued under .850, which includes electric transmission lines,
log storage areas, roads, trails, ditches, fields, gathering
lines, and transmission and distribution lines. Article 8, sec.
10 refers only to disposals of interest in state lands. It says
no disposals or leases of state land shall be made without prior
public notice. This part of the Constitution applies only to
disposals in .035. The legislature, under this provision, may
prescribe the amount of notice that is required and it has done
exactly that in AS 38.05.945.
CHAIRMAN HALFORD asked if the Supreme Court considers a permit to
be functionally irrevocable, regardless of its size, it would be
unconstitutional without public notice.
MS. LUNDQUIST said that is correct and that under the court's
recent decision, if the permit issued is not functionally
revokable, it is a disposal subject to Section .035(e). Since it
is subject to that, public notice would be required under Section
.945.
SENATOR LINCOLN asked, regarding a statement made earlier by Mr.
Loeffler, how "significant" is determined by DNR.
TAPE 02, SIDE B
Number 2350
MR. LOEFFLER stated that any disposal of land requires public
notice. Permits for things other than the disposal of land,
include cross country travel, overnight camps, scientific
operations and other short-term uses of land, do not require
public notice unless they could create a significant issue with
the public. With disposal of land, public notice is always given
and, if it is not, a disposal notice is given in case the public
wants a chance to comment.
SENATOR PARNELL asked if that policy is in regulation or at DNR's
discretion.
MR. LOEFFLER answered it is done at the discretion of the
regional manager, director or commissioner.
CHAIRMAN HALFORD asked whether the term "functionally revocable"
has a history or was created by the Supreme Court as a standard.
Number 2319
MS. LUNDQUIST stated the language "functionally revocable" was
adopted by the Supreme Court in the Wilderness Society case. In
that case, the functionally revocable standard was determined by
the extent a project impacts the land. It will be hard to
distinguish what is functionally revocable and what is not based
on reading the Wilderness Society case. If a right-of-way has a
gravel pad attached to it, under the Wilderness case, removal of
that pad will cause more damage than leaving it in place. On the
other hand, an electric transmission line could have a minimal
impact on state land but be considered functionally revocable by
the Supreme Court. It is an arbitrary decision by the Supreme
Court and DNR will have to guess what is disposable or not.
CHAIRMAN HALFORD stated that the legislature should fix DNR's
problem with a best interest finding, but it should also fix, on
a policy basis, what functionally revocable means with regard to
public notice. Otherwise, the Constitution will only be enforced
by the courts and not backed up by statute.
SENATOR MACKIE agreed this needs to be clarified. He said he
thought he heard one of the Division people say that DNR is
required by statute, maybe Title 39, as well as by policy and
regulation to give public notice on any of these kinds of
projects.
MR. LOEFFLER interjected that, by statute, public notice is
required for a disposal but if it is not a disposal, it is
required by policy.
Number 2187
CHAIRMAN HALFORD asked Mr. Loeffler to draft a simple public
requirement to fix this problem.
MR. LOEFFLER stated he would be happy to do that.
CHAIRMAN HALFORD asked Mr. Loeffler to give the draft to Senator
Kelly by the middle of next week.
MS. ALEXAKOS asked what the Chairman meant by the Golden Valley
Electric "problem."
CHAIRMAN HALFORD said he made that comment in regard to the
sponsor's intention and that it was relative to the best interest
finding.
MS. ALEXAKOS stated, "One other point, too. When they say that
it had to go through an EIS process, it was only because it also
crosses federal land. If it didn't cross state land, it wouldn't
have gone through that process."
CHAIRMAN HALFORD announced that the committee would revisit the
bill on Wednesday.
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