02/01/2013 01:00 PM House RESOURCES
| Audio | Topic |
|---|---|
| Start | |
| Overview(s): Alaska Stand Alone Gas Pipeline Project Update | |
| HB78 | |
| HB77 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| *+ | HB 78 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| = | HB 77 | ||
ALASKA STATE LEGISLATURE
HOUSE RESOURCES STANDING COMMITTEE
February 1, 2013
1:02 p.m.
MEMBERS PRESENT
Representative Eric Feige, Co-Chair
Representative Dan Saddler, Co-Chair
Representative Peggy Wilson, Vice Chair
Representative Mike Hawker
Representative Craig Johnson
Representative Paul Seaton
MEMBERS ABSENT
Representative Kurt Olson
Representative Geran Tarr
Representative Chris Tuck
OTHER LEGISLATORS PRESENT
Representative Mike Chenault
Representative Andrew Josephson
COMMITTEE CALENDAR
OVERVIEW(S): ALASKA STAND ALONE GAS PIPELINE PROJECT UPDATE
- HEARD
HOUSE BILL NO. 78
"An Act establishing authority for the state to evaluate and
seek primacy for administering the regulatory program for dredge
and fill activities allowed to individual states under federal
law and relating to the authority; and providing for an
effective date."
- HEARD & HELD
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."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 78
SHORT TITLE: REGULATION OF DREDGE AND FILL ACTIVITIES
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
01/18/13 (H) READ THE FIRST TIME - REFERRALS
01/18/13 (H) RES
01/22/13 (H) FIN REFERRAL ADDED AFTER RES
02/01/13 (H) RES AT 1:00 PM BARNES 124
BILL: HB 77
SHORT TITLE: LAND DISPOSALS/EXCHANGES; WATER RIGHTS
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
01/18/13 (H) READ THE FIRST TIME - REFERRALS
01/18/13 (H) RES
01/30/13 (H) RES AT 1:00 PM BARNES 124
01/30/13 (H) Heard & Held
01/30/13 (H) MINUTE(RES)
02/01/13 (H) RES AT 1:00 PM BARNES 124
WITNESS REGISTER
DAN FAUSKE, President
Alaska Gasline Development Corporation (AGDC)
CEO/Executive Director
Alaska Housing Finance Corporation (AHFC)
Department of Revenue (DOR)
Anchorage, Alaska
POSITION STATEMENT: Provided information and answered questions
during the Alaska Stand Alone Gas Pipeline Project Update.
FRANK RICHARDS, Manager
Pipeline Engineering & Government Affairs
Alaska Gasline Development Corporate (AGDC)
Alaska Housing Finance Corporation (AHFC)
Department of Revenue (DOR)
Anchorage, Alaska
POSITION STATEMENT: Provided a PowerPoint presentation for the
Alaska Stand Alone Gas Pipeline Project Update.
DARYL KLEPPIN, Manager
Commercial Team
Alaska Gasline Development Corporation (AGDC)
Alaska Housing Finance Corporation (AHFC)
Department of Revenue (DOR)
Anchorage, Alaska
POSITION STATEMENT: Answered questions related to Alaska Stand
Alone Gas Pipeline Project Update.
LARRY HARTIG, Commissioner
Department of Environmental Conservation (DEC)
Juneau, Alaska
POSITION STATEMENT: On behalf of the governor, co-introduced HB
78 with Dan Sullivan, Commissioner of the Department of Natural
Resources (DNR).
DAN SULLIVAN, Commissioner
Department of Natural Resources (DNR)
Anchorage, Alaska
POSITION STATEMENT: On behalf of the governor, co-introduced HB
78 with Larry Hartig, Commissioner of the Department of
Environmental Conservation (DNR).
WYN MENEFEE, Chief of Operations
Division of Mining, Land & Water (DMLW)
Department of Natural Resources (DNR)
Anchorage, Alaska
POSITION STATEMENT: During hearing of HB 77, continued review
of the briefing paper entitled "HB 77: Land Disposals/
Exchanges; Water Rights Briefing Paper" dated January 30, 2013.
ACTION NARRATIVE
1:02:16 PM
CO-CHAIR DAN SADDLER called the House Resources Standing
Committee meeting to order at 1:02 p.m. Representatives Hawker,
Johnson, Seaton, P. Wilson, Feige, and Saddler were present at
the call to order. Representatives Chenault and Josephson were
also present.
^OVERVIEW(S): Alaska Stand Alone Gas Pipeline Project Update
OVERVIEW(S): Alaska Stand Alone Gas Pipeline Project Update
1:02:40 PM
CO-CHAIR SADDLER announced that the first order of business is
an overview and update of the Alaska Stand Alone Gas Pipeline
Project.
1:03:58 PM
DAN FAUSKE, President, Alaska Gasline Development Corporation
(AGDC), CEO/Executive Director, Alaska Housing Finance
Corporation (AHFC), Department of Revenue (DOR), said some
changes [in the Alaska Stand Alone Gas Pipeline Project] have
occurred and predicted the committee will find the forthcoming
information from Mr. Richards to be exciting and helpful.
1:04:38 PM
FRANK RICHARDS, Manager, Pipeline Engineering & Government
Affairs, Alaska Gasline Development Corporate (AGDC), Alaska
Housing Finance Corporation (AHFC), Department of Revenue (DOR),
began his PowerPoint presentation by stating he will be
providing an update on what AGDC has accomplished since its
creation under House Bill 369, passed by the legislature in 2010
[slide 2]. The bill mandated that the Alaska Housing Finance
Corporation (AHFC) develop a plan for an in-state pipeline
project. The AHFC established a subsidiary, the Alaska Gasline
Development Corporation (AGDC), to take on that project planning
and execution. The project, called the Alaska Stand Alone
Pipeline Project (ASAP), was mandated by the legislature to
bring natural gas from Alaska's North Slope/Prudhoe Bay to Cook
Inlet for distribution to residential and commercial uses at the
lowest possible cost at the earliest possible time. He offered
his appreciation for the legislature's support and related that
in his State of the State address the governor talked about
advancing the project to make sure Alaska's energy needs can be
met in the near-term with a long-term energy source.
1:06:01 PM
MR. RICHARDS said to date AGDC has acquired 604 miles of right-
of-way lease along the pipeline right, including the 37-mile-
long Fairbanks lateral [slide 3]. The lease, issued by the
State Pipeline Coordinator's office, is unconditional, meaning
no additional work effort is necessary. The nearly 4,000-page
Final Environmental Impact Statement (FEIS) was completed in
November [2012] and a Record of Decision on the FEIS is expected
soon from the U.S. Bureau of Land Management (BLM). This
decision will identify the actions that BLM will be taking in
the near-term for providing another 100 miles of federal right-
of-way for the pipeline. That leaves about 100 miles of right-
of-way still to be acquired from Native corporations and other
private landholders. To date, AGDC has advanced its tariff
model, which was built in-house to allow AGDC to see overall
impacts to the project from inputs and modifications. A
facilities design firm was recently hired by AGDC to advance the
gas conditioning facility on the North Slope and AGDC is moving
forward with an aggressive summer field program. Additionally,
the prefiled enabling legislation will be before the committee
on [2/4/13].
1:08:03 PM
MR. RICHARDS noted that the original project plan, presented to
the legislature in 2011, was for a natural gas stream enriched
with natural gas liquids (NGLs) [slide 4]. That plan would have
required several substantial facilities on the North Slope for
gas conditioning and deethanizing, additional compressor
stations along the line, and a straddle plant in Fairbanks to
pull out those natural gas liquids to provide utility-grade gas
to Fairbanks, and ultimately delivering it to Cook Inlet with
another NGL extraction facility. In late 2012, that plan was
modified to one of delivering a lean utility-grade gas to
residents, communities, and businesses, along the line so as to
provide for economic opportunities where ever they need be.
This [optimized] plan reduces the amount of compressor stations
needed to flow up to 500 million cubic feet of gas a day, a
limitation on AGDC that is based on the Alaska Gasline
Inducement Act (AGIA). The pipeline diameter was increased from
24 inches to 36 inches, which lowered the pressure from 2,500
pounds per square inch (psi) to 1,480 psi and allows use of
standardized pipe and commonly used pertinences. Additionally,
this allows for more off-takes along the line for Alaskans and
Alaskan businesses.
1:10:03 PM
MR. RICHARDS outlined benefits of the optimized project plan
[slide 5], specifying that it reduces the risks considerably,
including the risks during design, construction, and financing.
Thus, AGDC feels it is meeting the challenge given it by the
legislature to provide a project that will meet Alaskans' energy
needs in the near-term at the lowest possible cost. The
optimized plan also lowers the tariff, which is the cost of
delivery of gas to consumers along the pipeline. The amount of
footprint is also reduced, along with a subsequent reduction of
environmental impacts. The optimized plan improves the
economics for the pipeline as well as for users along the
pipeline. He reiterated that this project is not in competition
with the AGIA project - it is a stand-alone project for in-state
needs with the ability for a large commercial delivery.
1:10:58 PM
MR. RICHARDS said the process being used in delivery of AGDC's
work product is known as the "stage gate process" [slide 6]. He
explained that front-end loading (FEL) [progressively narrows
uncertainty of cost and schedule]. When a project is started
very little is known, but as the project is advanced the scope
and engineering detail are narrowed down, thus providing for
more specifics. Certain gates must be passed through to be able
to advance the project. In the project plan delivered to the
legislature in July 2011 the FEL 1 stage gate was passed
through, taking the project to FEL 2 or the point of open season
and AGDC was looking to the legislature for enabling legislation
and funding. Today, AGDC is again before the legislature to say
it can move and advance this [optimized] project through FEL 2
with the appropriate funding and legislation. The FEL 3 is the
project sanction gate or the go/no go decision on this project
because at that point AGDC would start ordering the steel and
modules for construction and initiating the contracts to let for
the actual construction.
1:12:18 PM
MR. RICHARDS drew attention to the upper chart on slide 7,
noting that it was the schedule mandated to the project by House
Bill 369 in 2010 and which called for completion of the project
by the end of 2015. It was an 800 mile, $8 billion project to
be completed in 5 years, but AGDC did not achieve this very
aggressive schedule due to lack of funding and legislation.
[Drawing attention to the bottom chart on slide 7], he said AGDC
is currently in the FEL 2 phase, looking to advance the
[optimized] project through an open season at the end of 2014
and ultimately through the bridge engineering to a project
sanction at the end of 2015, and then ordering pipe and
constructing the pipeline to provide first gas to Alaskans in
2019, with full gas transmission in 2020.
MR. RICHARDS moved to slide 8, reiterating that the open season,
where shippers commit to providing gas delivery through the
pipeline with contracts, will determine the commercial interest
in the project. Project sanction would be in late 2015,
allowing AGDC to procure the long-lead items in 2016, with
construction starting in 2017 and completing in 2019 and [full]
gas available in 2020.
1:13:45 PM
MR. RICHARDS reviewed impacts to the tariff as a result of
shifting from an enriched gas project to a lean gas project
[slide 9]. The original 20-year tariff was changed to a 30-year
levelized tariff. Cost estimates have been improved, going from
0 percent contingency to 10 percent for the pipeline where AGDC
has advanced engineering. In the facilities portion, where the
least amount of work has been conducted to date, the cost
estimate contingency is 30 percent. The debt/equity ratio has
been changed [from 70/30 to 75/25] and the rate of return on
that debt [has been changed from 12 percent to 11 percent].
Additionally, AGDC has identified and used a 2.5 percent per
year inflation based on the Philadelphia Federal Reserve
published rate. The AGDC commercial team has developed a tariff
model that allows the entering of variable inputs that will
allow AGDC to clearly identify the benefits or negative aspects
of various items.
1:14:53 PM
MR. RICHARDS compared tariffs between the 2011 project plan and
the optimized project plan [slide 10], noting that the lower
tariff of the optimized plan is due to removal of the straddle
plant in Fairbanks which reduced the number of compressor
stations. Under the 2011 plan the tariff to Fairbanks would
have been $6.45 [per million British thermal units (MMBtu)] and
to Anchorage $5.63; under the optimized plan the tariff to
Fairbanks is $4.25-$6.00 and to Anchorage $5.00-$7.25.
Addressing the cost drivers depicted on slide 10, he said if the
capital cost of the project goes up $1 billion the tariff would
increase $.50 [per MMBtu]. If the State of Alaska contributes
$1 billion to the project, the tariff would be reduced by $.45.
Reducing the rate of return would reduce the tariff by $.20 and
increasing the bond length to 10 years would reduce the tariff
by $.75. The cost of a 1-year delay on this $7.7 billion
project would be the annual inflation of about $200 million.
1:16:22 PM
CO-CHAIR SADDLER asked why the cost was broken down for
Fairbanks and Big Lake, but not the other four destinations.
MR. RICHARDS replied that AGDC was looking originally at the
cost to the major population centers - Fairbanks/Fairbanks North
Star Borough and the Cook Inlet basin through the Big Lake gate.
The pipeline will terminate into the "ENSTAR system" and then
the gas can flow to consumers already in that system.
1:16:59 PM
CO-CHAIR SADDLER surmised the effect on the tariff of the
aforementioned changes is the same for both the Big Lake and
Fairbanks destinations.
MR. RICHARDS understood this to be the case, but deferred to Mr.
Daryl Kleppin for more detail.
DARYL KLEPPIN, Manager, Commercial Team, Alaska Gasline
Development Corporation (AGDC), Alaska Housing Finance
Corporation (AHFC), Department of Revenue (DOR), confirmed that
that is correct, his understanding being the question is whether
the return on equity, 11 percent, is for the entire capital
spend on all portions of the pipeline.
1:17:40 PM
MR. KLEPPIN, responding to Representative Seaton, said a 30-year
bond life is the current assumption, so adding 10 years would
make it 40 years. In other words, if the pipeline had a useful
life of 40 years, and AGDC was able to bond to that, the impact
on the tariff [would be a decrease of $.75 per MMBtu].
1:18:27 PM
MR. RICHARDS, returning to his presentation, addressed the costs
of ASAP [slide 11], reiterating that the overall cost of the
project to the state is $400 million for advancing the
engineering, the right-of-way, and the environmental process
through the point of project sanction. That $400 million has
not been accounted for in the tariff because under House Bill
369 it was considered a state contribution to advance the
project through to a point of looking for a builder, owner
operator, or other entity to construct the project. The benefit
of this project is long term natural gas supplies for Alaskans.
It would allow for home heating, power generation, and economic
opportunity for the state. Project costs in 2012 dollars are
approximately $7.7 billion for the lean gas case, compared to
approximately $7.7 billion and an inflated rate for the rich gas
case. At AGDC's current level of engineering, it is plus or
minus 30 percent given the engineering has only been advanced to
approximately 10 percent. The current cost to consumers for
ENSTAR gas is about $9.30 [per MMBtu]. The tariffs and costs
that AGDC anticipates charging to Anchorage and Fairbanks
residents are between $9-$11 for Anchorage in 2012 dollars and
$8.25-$10 in Fairbanks in 2012 dollars, which are very good
numbers for building a $7.7 billion project and delivering gas
to a considerable population of the state at a reasonable rate.
Each one-year delay of the project increases the cost by
approximately $200 million a year, based on a 2.5 percent
inflation rate.
1:20:44 PM
MR. RICHARDS said the amount of funding needed to move the
project through sanction is approximately $328 million [slide
12]. If granted this funding, AGDC will be able to: keep the
project on schedule, advance the engineering for both pipeline
and facilities, conduct the regulatory permitting and agency
engagement, and conduct the field investigations necessary for
onsite information. Lower amounts or partial funding will mean
a limit on those actions and delay of the project.
MR. RICHARDS reviewed the enabling legislation that AGDC has
asked for throughout the project plan development [slide 13].
He said critical components of this legislation include:
ability to enter into confidential agreements, allowing AGDC to
have contract carrier status, and allowing AGDC the ability to
determine ownership to be able to attract shippers, buyers, and
the financing necessary for the project. Enabling legislation
would allow AGDC to meet the intent of the original legislation,
which is to deliver gas at the lowest possible rate at the
earliest possible time.
1:22:14 PM
MR. FAUSKE added that this optimized plan has been tremendously
well received by the governor's office and the general public.
He related that people in Fairbanks were very excited about this
tariff as the [previously proposed] straddle plant caused a
great deal of confusion when trying to factor those costs
through the project. Additionally, a lean gas scenario provides
the enhancement that more people can join in the process.
1:23:25 PM
CO-CHAIR FEIGE, referring to the optimized project plan benefits
on slide 5, inquired where the planned propane extraction plant
would be located.
MR. RICHARDS replied the gas stream in this lean gas scenario
would have a small amount of propane available for a developer
wanting to pull out propane. However, it was not under AGDC's
charter to provide for a propane extraction facility. In
further response, he confirmed that the location for propane
extraction could be anywhere.
1:24:25 PM
CO-CHAIR FEIGE asked whether AGDC has figured the cost of gas
exported from a West Coast terminal in the U.S. that AGDC could
be competing against in price.
MR. RICHARDS deferred to Mr. Kleppin.
MR. KLEPPIN responded that AGDC's July 2011 report included an
analysis of whether the cost of gas piped from the North Slope
would be competitive with imported liquefied natural gas (LNG).
That analysis suggested the price of imported LNG would be
around $16-$21 per MMBtu. So, yes, as seen by Mr. Richards'
presentation, AGDC believes it could deliver the gas for a lower
cost than imported LNG.
1:25:47 PM
CO-CHAIR FEIGE commented that that seems a little high, based on
discussions about what Alaska could get for North Slope gas in
other parts of the world. He inquired how AGDC arrived at that
price to compete against.
MR. KLEPPIN reiterated that AGDC's analysis of LNG is included
in its July 2011 report. He said that that LNG study looked at
where LNG could be acquired as well as that the Alaska market is
pretty small. The closest and cheapest place from which to
bring LNG would be Sakhalin [Russia], so AGDC looked at the cost
of gas and shipping rates from there. He allowed that the
market has changed a bit over the two years since the study and
said another look would be needed to determine whether that
exact number is still valid.
1:27:10 PM
REPRESENTATIVE SEATON, referring to the first bullet on slide
11, requested clarification as to whether the tariff would
recover for the state treasury the $400 million or would the
$400 million be a state contribution to the project.
MR. RICHARDS answered that the gas royalty and taxes would be as
the gas is purchased and the state receives those royalty and/or
tax payments. This was something that AGDC felt would "be a
future benefit to the state and it was not going to be included
as a direct comparison between the $400 million initial spend".
1:28:12 PM
REPRESENTATIVE SEATON said he is not indicating which way it
should be, but rather that he would like to be clear on whether
the $400 million is going to be recovered or is a state
contribution.
MR. FAUSKE pointed out that since the beginning of this project
the $400 million has always been monies that the state must
spend to get the project to an open season and have enough data
and information collected so that companies would be willing to
bid on it. This was not a cost that would be recouped through
tariffs. As this project goes out into the future, royalties
collected by the state would be the royalties that already exist
for what the state's position on these gas sales would be. So,
the $400 million is an upfront number to design and get a
project creditworthy/construction worthy, as well as prepare it
for the governor and the legislature to be able to make a
decision at sanctioning time with a great deal of comfort.
REPRESENTATIVE SEATON said that is what he had assumed and
therefore urged that slide 11 be changed because it might cause
confusion that the $400 million will be recovered.
1:30:37 PM
REPRESENTATIVE SEATON, referring to slide [13], inquired how
long the confidentiality of the confidential agreements would
last before that information is available to the public.
MR. RICHARDS replied commercial entities wanting to work on a
project are hopeful the information they share will be kept
confidential. If AGDC is entering into a long-term contractual
obligation with a shipper there may be competitive advantages in
the shipper's work efforts, so the shipper will likely want AGDC
to hold that information confidential.
REPRESENTATIVE SEATON requested that at some point in the future
the committee have further discussion on the duration [of
confidentiality] after a project goes through.
1:32:27 PM
CO-CHAIR SADDLER asked about AGDC's current funding status.
MR. RICHARDS responded that in fiscal year 2013, AGDC received a
capital appropriation of approximately $21 million. Throughout
the genesis of this project a total of $72 million has been
appropriated.
1:36:19 PM
The committee took an at-ease from 1:36 p.m. to 1:37 p.m.
HB 78-REGULATION OF DREDGE AND FILL ACTIVITIES
1:37:50 PM
CO-CHAIR FEIGE announced that the next order of business is
HOUSE BILL NO. 78, "An Act establishing authority for the state
to evaluate and seek primacy for administering the regulatory
program for dredge and fill activities allowed to individual
states under federal law and relating to the authority; and
providing for an effective date."
1:38:07 PM
LARRY HARTIG, Commissioner, Department of Environmental
Conservation (DEC), on behalf of the governor, co-introduced HB
78 with Dan Sullivan, Commissioner of the Department of Natural
Resources (DNR). Mr. Hartig said HB 78 would allow DEC and DNR
to explore and assess the pros and cons of the state pursuing
primacy of the Section 404, [Clean Water Act], dredge and fill
program. The bill would provide a two-step process: first, an
evaluation phase and, then, authority to the two agencies to
pursue primacy. He clarified, however, that the legislature
would still be the gatekeepers because after the assessment
period the agencies would be back to the legislature at least
once, which would be to get the budget for a program should that
assessment say the state should pursue this. The agencies may
also be back to the legislature prior to that for additional
authorities because, as the assessment explores the pros and
cons of taking on the program, the state would be building its
application - building the state capacity - by identifying any
gaps with existing state law that would have to be filled for
the state to have a complete application.
1:39:36 PM
COMMISSIONER HARTIG said his presentation today will define the
Section 404 program, outline the process for putting together
and filing an application with the Environmental Protection
Agency (EPA), and discuss the anticipated pros and cons of
acquiring primacy of this program. Commissioner Sullivan will
talk about how the administration views primacy in the bigger
context - how it fits in with some of the other objectives that
the state administration and legislature are pursuing - and will
give examples of what happened recently on some 404 permits and
how things might have happened differently had some of the
decision making been made at a local level.
1:40:48 PM
COMMISSIONER HARTIG explained there are two large permitting
programs in the federal Clean Water Act: Section 402, the
wastewater discharge permitting program, and Section 404, the
dredge and fill program. The state received primacy for the 402
program in 2008 and received final authority to run the last
phase of that program in November [2012]. For the 404 program,
the U.S. Army Corps of Engineers issues permits for projects
that want to place fill material into surface waters of the
U.S., which includes lakes, ponds, shorelines, and wetlands. He
pointed out that Alaska has 65 percent of the nation's wetlands,
which partially explains why the state should be one of the
first in line to pursue primacy. Types of projects that would
need 404 permits include large mine or oil and gas projects, as
well as small projects such as home or school foundations.
Anytime construction occurs on a wetland or fill material placed
in surface waters, chances are that a 404 authorization will be
necessary.
1:42:49 PM
COMMISSIONER HARTIG explained that the 404 program is not there
just to issue permits because wetlands have a lot of value.
Therefore, the state should be interested in pursuing primacy on
this program to ensure that those values are protected and
realized in the state. Wetlands provide runoff control, settle
and filter potential contaminants in runoff, and provide
valuable habitat for certain species. Alaska is fortunate in
that it has only lost about 1 percent of its wetlands as
compared to other states that have lost 50 percent or greater.
It is important to protect these wetlands and manage them at a
local level so as to have some decision-making control over this
program.
1:43:35 PM
COMMISSIONER HARTIG also pointed out that the 404 program is a
detailed, science-based program. Some of the analyses that are
performed to determine whether to issue a permit and what terms
under which it might be issued require identifying the least
environmentally damaging practicable alternative (LEDPA), which
he likened to a mini National Environmental Policy Act of 1969
(NEPA) analysis. Under the program a 404(b)(1) analysis is
performed that considers the potential long- and short-term
effects that a proposed discharge or fill material might have in
both the disposal areas and around it. Again, the goal of the
404 permitting program is to review how to avoid or minimize
impacts to these valuable aquatic resources, including wetlands.
Under the existing 404 program in the federal government, the
U.S. Army Corps of Engineers issues the permits with the
aforementioned analysis but the EPA retains oversight and
actually has veto authority over the U.S. Army Corps of
Engineers. The EPA would maintain oversight and have veto
authority with 404 permits that DEC/DNR would issue even with
primacy, which is the same with the permits DEC issues for
wastewater discharge.
1:45:31 PM
COMMISSIONER HARTIG explained that it is a two-stage process
with HB 78. First, there would be review of what a state
program would look like, cost, and take to staff the program and
then evaluate the potential benefits of the program before
seeking additional resources from the legislature to implement
the program. He then turned attention to some of the
requirements that would have to be part of the application,
which is analogous to the application done for the 402 program.
The application is lengthy as it includes a formal request by
the governor, a detailed description of the program as the state
will run it, a statement by the attorney that the state program
as proposed is consistent with the federal program, a negotiated
memorandum of agreement with both the EPA and U.S. Army Corps of
Engineers in terms of how everyone will work together, a
description of staffing and the budget, and copies of all
applicable statutes, regulations, and guidance documents.
Therefore, the entire program has to be built prior to
submitting the application, which means the legislature would
have a clear picture of the entire program including the budget,
personnel, and program details. He anticipated that there would
be a component of permit fees and all the interested parties
would be able to review the program and comment on it prior to
hiring personnel and forwarding the application. Commissioner
Hartig acknowledged the rumors in the capitol building that
HB 77 is Pebble Mine legislation, but refuted those rumors.
1:49:34 PM
REPRESENTATIVE HAWKER surmised then that this is a two-stage
process under which DEC would have the authority to build the
resources within the state in order to administer and operate a
primacy program and then return to the legislature seeking
resources to implement and pursue the official primacy
designation.
COMMISSIONER HARTIG responded that is partially correct. The
fiscal note starts out with five positions at DEC in fiscal year
2014 (FY14) that would perform the study and build the
application. The number of personnel would increase [the next
year] to a total of eight people, which would not be enough
people to run the program. He noted that at DNR the number of
positions would start at three and increase to five. He
predicted that in 2016, DEC would return to the legislature with
the number of people necessary to run the program at which time
DEC would make a fiscal note request and the position control
numbers (PCNs).
REPRESENTATIVE HAWKER remarked that this is just the tip of the
iceberg in terms of growing government and it is a policy call
as to whether it is worth it. He then reviewed his
understanding that for this proposal in DEC there would be five
personnel in FY14 that would increase to eight in FY15 and in
DNR there would be two personnel in FY14 that would increase to
four in FY15.
1:52:11 PM
COMMISSIONER HARTIG informed the committee that during this
assessment period, DEC would review another aspect of primacy.
With regard to taking the entire authority to issue 404 permits
from the U.S. Army Corps of Engineers, there are geographical
limitations such that the U.S. Army Corps of Engineers under the
federal Clean Water Act has to retain authority on certain
wetlands. Those wetlands would be the tidal influenced areas
and the adjacent wetlands as well as interior waterways that are
or may be used in interstate or international commerce.
Therefore, one cannot review the federal government's costs for
the program in Alaska today and equate that to what the state
might pay.
1:53:08 PM
COMMISSIONER HARTIG then related that DEC would pursue at the
same time another aspect of authority that is less than primacy.
There are state programmatic general permits that may be issued
for activities that would happen with enough regularity to issue
a statewide general permit covering multiple parties rather than
individual permits for individual parties. The impact of such
projects would be relatively minimal and the state could take
over the authority to implement and enforce those permits from
the federal government. The assessment phase would include
which types of permits might benefit projects, such as a shale
gas project, that would have multiple projects in the state that
would need 404 permits. Whether the state could work with the
U.S. Army Corps of Engineers jointly to issue those permits and
then take over the management and enforcement of those permits,
which could be accomplished with or without full primacy, is
something the department would assess during the same time as
primacy.
1:54:29 PM
CO-CHAIR FEIGE related his understanding that the U.S. Army
Corps of Engineers, given its 404 authority, already issues
general permits.
COMMISSIONER HARTIG clarified that there are a number of
different types of general permits and these [404 permits] would
be fairly low impact type projects. He noted that [404 permits]
have not been issued in Alaska for the types of projects he just
described. The assessment phase could consider whether more
could be done with general permits, which would save the U.S.
Army Corps of Engineers, the state, and the project proponent
money and time because it is much easier to go through the
general permit process than the entire permitting process for an
individual permit.
1:55:25 PM
REPRESENTATIVE SEATON related that as Homer has worked on
building the natural gas line distribution system it has been
working with the U.S. Army Corps of Engineers on a regional
general permit. Therefore, he opined that the benefit being
discussed is already available when working with the U.S. Army
Corps of Engineers for regional general permits. He asked if
there is any reason why those general permits have not or cannot
be pursued similar to what is occurring in Homer on the
wetlands. He asked whether that can be pursued currently.
COMMISSIONER HARTIG replied no. There is authority for DEC to
work with the U.S. Army Corps of Engineers and others to
determine where there are opportunities in the state to do
general permits like this under federal law. He clarified that
as part of this work, DEC would perform a targeted assessment to
determine what other opportunities there are. He said that the
term permit reform evokes thoughts of efficiencies and
priorities, which he believes will be discussed with [HB 78].
He predicted there will be discussions determining the
priorities for the state in terms of resource development and
how to use the 404 program more efficiently while saving state
and federal funds. Although the department has the authority,
the department has not performed a complete assessment.
Perhaps, a complete assessment should be done, he remarked.
1:57:40 PM
COMMISSIONER HARTIG pointed out that this idea of 404 primacy is
not new and goes back about 15 years. About 10 years ago, 404
primacy was considered, but the decision was to pursue 402
primacy first. It took about five years to put together the
application and about five more years of phase-in to get the
program. That experience will be helpful with the 404 primacy.
Furthermore, the federal government budget is declining and
Alaska has a hard time competing for the available federal
dollars. He emphasized the need to make set priorities and be
timely with the permitting program in Alaska.
1:59:11 PM
COMMISSIONER HARTIG turned to HB 78, stating it will perform an
assessment/evaluation that will provide a very clear picture of
the program. At the same time, the department will evaluate the
programmatic general permits and capacity building. The
advantage of capacity building is that DEC will work with the
U.S. Army Corps of Engineers to write the permits. Even if the
department ultimately does not take the program, it will learn
more about the 404 program. In Alaska, when a project results
in the destruction of wetlands, mitigation has to occur.
Typical mitigation means that wetlands lost are restored or
impacted wetlands are enhanced. That has not really occurred
very much in Alaska, rather there has been preservation of
existing wetlands that might otherwise been developed. Since
there is little private land in Alaska, there is not much
opportunity for mitigation. Therefore, perhaps the department
could work with the U.S. Army Corps of Engineers regarding
mitigation options that make more sense in Alaska. Commissioner
Hartig reiterated that [HB 78] will provide the opportunity to
learn more about the 404 program, inform others about Alaska's
needs, and spotlight the U.S. Army Corps of Engineers program.
2:01:51 PM
DAN SULLIVAN, Commissioner, Department of Natural Resources
(DNR), provided the committee with a copy of his 1/22/13
PowerPoint presentation to the Senate State Affairs Standing
Committee regarding federal overreach into resource development
in Alaska. One of the significant concerns with the state's
relationship with the federal government involves regulatory
activities. For large projects, he highlighted the following
trends related to primacy: delay on significant projects with
regard to federal regulatory activities and permits; a lack of
input from the state despite the fact that the state is the
other sovereign entity [and has some of the best experts in the
world] with respect to these issues. The permitting issues the
federal government takes in Alaska have an enormous impact for
the future of the state's citizens. Referring to slide 8 of the
PowerPoint entitled, "Federal Overreach into Resource
Development in Alaska," he highlighted the mention of primacy as
an approach to address federal overreach. This fits within the
idea of broad-based regulatory reform and modernization for more
timely, efficient, and certain permitting as well as a way in
which to address some of DNR's significant concerns with the
state's relationship with the federal government. As mentioned
by Commissioner Hartig, the CD-5 permit by ConocoPhillips
Alaska, Inc. (ConocoPhillips) was a 404 permit through the U.S.
Army Corps of Engineers to enable ConocoPhillips to move into
National Petroleum Reserve-Alaska (NPR-A) to expand its oil and
gas operations. The aforementioned would be an important and
strategic development for the state and ConocoPhillips. State
agencies, the North Slope Borough, the U.S. Army Corps of
Engineers, and various other stakeholders spent many years
coming together, so almost everyone in Alaska was surprised when
that permit was denied because of a veto by the EPA and the U.S.
Fish & Wildlife Service. Although many, including legislators,
federal agencies, the state, and the governor worked to reverse
the decision, it was time wasted, he said.
2:06:16 PM
CO-CHAIR FEIGE inquired as to how many years that particular
development was delayed.
COMMISSIONER SULLIVAN replied it took two years to get it
reversed, and thus he would say the delay was two years.
CO-CHAIR FEIGE asked whether there is any way to estimate how
much money that has potentially cost the state or deferred to a
later date.
COMMISSIONER SULLIVAN opined that once the project is online the
amount of oil it produces will be known, although he
acknowledged that some of the oil will come from federal lands.
Strategically, this development is important because it is the
first development focused on production in the NPR-A. Although
he could not provide an estimate at this point, he stressed that
a two-year delay on that project was not in the state's best
interest.
2:07:21 PM
REPRESENTATIVE JOHNSON asked whether primacy would have stopped
the EPA and the U.S. Fish & Wildlife Service from vetoing the
permit.
COMMISSIONER SULLIVAN said he could not say, adding that there
is still federal oversight on these even when the state assumes
primacy. However, he emphasized that by assuming primacy the
state has a much better chance of controlling its destiny on
some of these permitting issues while maintaining [the state's]
high standards.
2:08:12 PM
COMMISSIONER SULLIVAN related that on almost every major 404
environmental impact statement (EIS) permitting process that the
U.S. Army Corps of Engineers and others undertake, some state
agency applies for cooperating agency status that is typically
coordinated through Office of Project Management & Permitting
(OPMP). Despite that notion of cooperating agencies, the state
has not been included in the actual participatory role when
decisions are made, such as was the case in CD-5, the Tanana
River bridge, Point Thomson, and the Izembek EIS. Primacy is
not complete disentanglement with the federal government and
oversight, but it makes the state a decision maker. He noted
that the Clean Water Act contemplates primacy for states and two
have obtained primacy. In the last four years, amorphous
administrative executive branch declarations of policy have been
put forth. There have been instances in which those policies in
Washington, D.C., have influenced [decisions], such as with
wildlands. Although there has been about a 20 percent reduction
in the staff of the U.S. Army Corps of Engineers, the department
is hopeful that there will be a number of resource development
projects throughout the state. The pace of the regulatory and
permitting issue can be frustrating because it is a recipe for
delay when the state increases responsible resource development
projects at the same time the U.S. Army Corps of Engineers makes
significant cuts to its staff. The aforementioned is another
important reason for the state to seek primacy. In conclusion,
Commissioner Sullivan opined that the primacy issue and HB 78
are important in terms of the broader perspective of having more
efficient, timely, and certain permitting, and having another
tool to address federal overreach or federal regulatory delay.
As mentioned by Commissioner Hartig, it is a long process, but
it is well worth starting.
2:12:25 PM
REPRESENTATIVE SEATON requested the departments provide the
committee with maps as this moves forward, particularly since he
understands that even if the state obtains primacy, the U.S.
Army Corps of Engineers retains jurisdiction over all tideland
ebb and flow and anything that could be used in interstate
commerce waters, navigable waters, and adjacent wetlands. He
inquired as to where primacy would provide the state authority
versus what is maintained by the federal government.
COMMISSIONER HARTIG pointed out that identifying those areas
would be part of the discussion with the U.S Army Corps of
Engineers. He then pointed out that there is not a geographic
limitation for the programmatic general permits as they could
apply to the navigable waters and adjacent tidelands.
COMMISSIONER SULLIVAN added that it could also have a positive
impact on the state's ability to control its own destiny, such
as promoting shale oil development. He did not believe it would
cover some of the things Representative Seaton mentioned, but
rather would be the territory of the state.
2:14:59 PM
REPRESENTATIVE SEATON requested the departments to provide the
committee with the number of U.S. Army Corps of Engineers
personnel working on 404 permits in Alaska so as to get a handle
on the number of additional personnel the state would need.
COMMISSIONER HARTIG said that he would have to [determine] what
the state would get with primacy. He mentioned that he has
spoken with the two states that have primacy with regard to how
they staffed up. Again, the amount of staff would be dependent
upon the interpretation as to what the state would get and how
much the state would want to pursue.
2:15:52 PM
REPRESENTATIVE HAWKER requested, if the chair desires, an
extended fiscal note that would explain the ultimate, all-in
costs after 2016 of implementing the 404 program. He further
requested, if the chair desires, that an extended fiscal note
reflect necessary inflation in human services costs.
CO-CHAIR FEIGE requested the commissioners follow up on that.
He further requested, acknowledging that it will require a fair
amount of speculation, the impact on the Alaska economy as a
benefit of [obtaining primacy for 404 permits].
[HB 78 was held over.]
2:17:27 PM
The committee took an at-ease from 2:17 p.m. to 2:19 p.m.
HB 77-LAND DISPOSALS/EXCHANGES; WATER RIGHTS
2:19:26 PM
CO-CHAIR FEIGE announced that the final 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."
2:19:43 PM
WYN MENEFEE, Chief of Operations, Division of Mining, Land &
Water (DMLW), Department of Natural Resources (DNR), began by
addressing the question from the prior hearing regarding whether
mineral estate can be conveyed through exchanges. He specified
that mineral lands cannot be conveyed per Section 6(i) of the
Alaska Statehood Act. If the mineral estate is conveyed to
other entities, the state forfeits the land to the federal
government. However, the mineral estate can be conveyed back to
the federal government. For clarification, Mr. Menefee
explained that a long-term lease for the AS 38.05.102 preference
right would be over 10 years. Two statutes combine to provide
that right, which is not a mandatory preference right, but is an
option after 10 years.
2:21:30 PM
MR. MENEFEE, returning to the briefing paper, directed attention
to point 5, which addresses aquatic farm leases, which are 10-
year leases that can be renewed. Currently, leases can be
renewed when an individual is in good standing for one term, not
to exceed the time of the original lease term. Therefore, this
proposal would include aquatic farm leases such that an
individual with a 10-year aquatic farm lease could obtain
another 10-year lease if that individual is in good standing.
Moving on to point 6, which addresses temporary water use
authorizations, he stressed that temporary water use
authorizations are not a water right. A temporary water use
authorization is temporary, revocable, modifiable, and does not
provide any long-term right to that water. Therefore, temporary
water rights are used for development projects throughout
Alaska, such as for oil and gas, mining, construction, and
Department of Transportation & Public Facilities maintenance of
roads. Current statute specifies that a temporary use
authorization can be issued for up to five years, but the
division has observed that some projects take over five years.
In the case of a project that still needs water at the five-year
mark, DMLW reevaluates and moves through the same process such
that it is vetted through the Department of Fish & Game (ADF&G)
to ensure no other water rights or habitat will be impacted.
Upon completion of that process, another temporary water use
authorization not to exceed five years is issued. Mr. Menefee
informed the committee that there has been discussion regarding
whether to challenge that, and therefore this proposal would
clarify that the division can issue another temporary water use
authorization to the same individual for the same location for
another five years. Basically, it is a new adjudication
process.
2:23:46 PM
CO-CHAIR SADDLER inquired as to whether there is any absolute
cap on the amount of time that leases for aquatic farms or
temporary water use can be extended.
MR. MENEFEE explained that for aquatic farms there is a one-time
renewal for another 10 years, after which it must be a
competitive process. For temporary water use authorizations,
there is no cap on the number of times the authorization can be
reissued. He highlighted that there is a difference between
"reissue" and "renew". Renewal refers to a [lessee] in good
standing for a project that has not changed. However, reissue
is a process by which the division considers [the lease new] and
considers all aspects of it. Basically, the division is
adjudicating from the beginning even though the division knows
the project [and lessee] has been there before. For example,
for a 15-year project three separate water use authorizations
could be issued for that project.
CO-CHAIR SADDLER surmised then that practically speaking there
is no limit on how many times one can renew.
MR. MENEFEE clarified that although there is no limit for
temporary water use authorizations, each time the division
reviews what other needs there are for the water and what other
water rights there are. Furthermore, there is no right inferred
from obtaining multiple temporary water use authorizations in
the past.
2:25:46 PM
REPRESENTATIVE SEATON requested further explanation of the
notation in point 6 that temporary water use authorizations "are
mainly used by exploration projects and construction projects
that are not conducive to permanent water rights".
MR. MENEFEE explained that companies can apply for a water right
from the outset [of a project]. With a full water right
companies have to apply and then they have two years to perfect
that water right at which point "it stays with it". For
example, a project that needs water rights at various periods
throughout the project and does not need a long-term water
right. He clarified that water is needed temporarily at one
location and then another location. Water rights, on the other
hand, are typically used when water is needed from a location
continuously.
2:27:20 PM
REPRESENTATIVE P. WILSON informed the committee that the Sitka
Sound Science Center has [had a temporary water use
authorization] for some time. However, now the U.S. Forest
Service has expressed the need for the water. She then asked
whether the U.S. Forest Service has priority for the stream.
MR. MENEFEE answered that in Alaska water rights are on a first
come first served basis, and thus a priority right is based on
the date of the application. Temporary water use authorizations
have nothing to do with that, he said. For instance, in a
situation in which an entity has a temporary water use
authorization and another entity applies for the water right,
the entity applying for the water right would be first in line.
Usually those companies that believe they might have to compete
for the water or they believe they need to protect the water may
apply for a water right. Again, whoever applies for the water
right first is considered first.
2:29:08 PM
CO-CHAIR FEIGE asked whether a water right is revocable.
MR. MENEFEE explained that after one first applies for a water
right permit that applicant must prove and perfect the use of it
prior to certification of that water right. With regard to
whether the water right can be revoked after certification, Mr.
Menefee said he would have to provide that answer later.
2:30:15 PM
CO-CHAIR SADDLER asked whether a temporary water use permit has
been superseded or boxed out by an application for a water
right.
MR. MENEFEE said that he did not know, but offered to find out.
2:30:36 PM
MR. MENEFEE, returning to the review of his briefing paper,
directed the committee's attention to point 7, which addresses
water reservations. A water reservation specifies the amount of
water flow to protect and the remaining amount of water flow can
be used to appropriate through temporary water use
authorizations or water rights, but the amount of protected
water flow cannot be used. One can apply for a water
reservation for navigation, habitat, recreation, and water
quality. Currently, anyone can apply for a water reservation
after fulfilling all the obligations an agency would, including
the data necessary to prove the need for a water reservation.
Unlike a water right for which an application is the priority,
the priority for a water reservation is not established until
the in-stream flow reservation is proven by the state as needed
and granted, and then it returns to the priority right. Alaska
is the only state in the nation that allows a person to apply
for and hold a water reservation, which this proposal changes.
The change is being requested so that when there is an
application for a water reservation, it is based in sound
science and good information, routed to the applicable agencies,
and would not allow an individual to apply and hold a water
reservation.
2:33:36 PM
CO-CHAIR FEIGE pointed out that flow rates can fluctuate, and
therefore he inquired as to who gets priority if the flow
decreases to the point that there is no surplus after all the
water reservations and rights are utilized.
MR. MENEFEE clarified that a granted water reservation is
protected over other rights and the other rights must defer to
the water reservation. The water reservation is a priority
right, which is why it is important to have good data to support
why a water reservation is a priority.
2:34:54 PM
REPRESENTATIVE SEATON asked whether the legislation allows a
person to petition the agency to apply for a water reservation,
such as is the case in Idaho.
MR. MENEFEE replied that is correct. A person can [petition] a
water reservation by approaching an agency and mixing the data
from the person with that of the agency. If the agency believes
protection of the water is a priority, then it will submit an
application.
REPRESENTATIVE SEATON surmised then that as the legislation is
structured there is an obligation to the agency to consider such
a petition.
MR. MENEFEE confirmed that the agency has an obligation to
consider a petition, but not to submit an application.
2:36:04 PM
CO-CHAIR SADDLER related his understanding that temporary water
use permits and water reservations are not percentages of flow
but rather raw numbers of gallons per second.
MR. MENEFEE said that is correct.
2:36:18 PM
MR. MENEFEE, returning to his briefing paper review, directed
the committee's attention to point 8. He explained that there
are six hydrologic units in the state, which were established by
the U.S. Geological Survey (USGS). Existing statute specifies
that one who takes water from one hydrologic unit to another
hydrologic unit, including filling a water bottle from one unit
to the next, is guilty of a misdemeanor. However, the division
only wants to address [the transfer/removal] of significant
amounts of water. The definition of a "significant amount of
water" is specified in regulation and is what is currently
permitted. Therefore, the proposal in HB 77 is to specify that
it will address moving significant amounts of water between
hydrologic units by permitting it. In response to Co-Chair
Feige, Mr. Menefee informed the committee that the definition of
"significant amount of water" can be found in the 11 AAC 93.035
(b)(1)-(4), Requirement to apply for the use of a significant
amount of water, which read:
(b) A person shall file an application for a water
right under 11 AAC 93.040 or for a temporary water use
authorization under 11 AAC 93.220 before
(1) the consumptive use of more than 5,000 gallons of
water from a single source in a single day;
(2) the regular daily or recurring consumptive use of
more than 500 gpd from a single source for more than
10 days per calendar year;
(3) the non-consumptive use of more than 30,000 gpd
(0.05 cubic feet per second) from a single source; or
(4) any water use that may adversely affect the water
rights of other appropriators or the public interest.
2:38:26 PM
MR. MENEFEE, returning to the briefing, moved on to point 9 that
addresses appeals. The suggested change is to affect standing
and burden of proof in appeals. Currently, some people will
await an appeal on certain types of authorization decisions and
not participate in the process. The goal is encourage public
participation and do so during the process. The change is such
that if the division has provided at least 30 days of public
notice and the public has been informed that it needs to
participate, one must participate in order to appeal at the end.
The aforementioned allows the division to address and mitigate
an individual's concerns and issues during the process while
still maintaining the right to appeal if the individual
continues to disagree with the division's decision. Mr. Menefee
emphasized that the aforementioned is the standing aspect. With
regard to the burden of proof aspect, existing statute allows an
individual who is aggrieved [to file an appeal], which he opined
provides an emotional connotation that an individual just does
not like a project. The goal with the proposed change in HB 77
is for the individual to show that he/she is substantially and
adversely affected [by a decision].
2:40:19 PM
REPRESENTATIVE SEATON posed an example of a fisherman who in the
past harvested fish in Cook Inlet. If a project was proposed
that would significantly impact a watershed, would the fisherman
have to genetically illustrate that a certain portion of the
fish he caught came from the impacted watershed in order to meet
the suggested standard, he asked.
MR. MENEFEE said he could not provide a definitive answer for
every situation as that would be pre-determining the appeals.
However, he offered that the division would expect the fisherman
to relate how the fisherman is impacted, which could be as
simple as pointing to fish documentation that fish cycle around
Cook Inlet and come from the various streams. Most likely, the
division will not move into the scientific burden of proof of
genetic sampling. Still, he opined that there would be the
desire to be presented with evidence as to why the individual
believes he/she is substantially and adversely impacted.
REPRESENTATIVE SEATON opined that this matter will require more
review as HB 77 would seem to shift the burden of proof of
impact to the individual, which is of concern.
2:42:51 PM
CO-CHAIR SADDLER inquired as to the degree of participation an
individual would have to put forth during the public review
process to be eligible to appeal.
MR. MENEFEE clarified that the division would merely require
that those who want to appeal at the end to have brought up the
concern earlier, even just once. Furthermore, the requirement
requires that the division tell the public that it has this
opportunity and must take advantage of the opportunity in order
to file an appeal and the notice has to be at least 30 days.
Those authorizations that do not require 30 days' notice would
not be included in this.
2:43:51 PM
MR. MENEFEE, continuing review of his briefing paper, directed
attention to point 10. He explained that existing law specifies
that only mineral closing orders are subject to public notice
requirements. However, the goal is to ensure that the public is
aware of any changes to the mineral entry, and thus HB 77
proposes to include mineral orders and leasehold location orders
not just mineral closing orders to the actions that limit the
use of the mineral estate on state lands of which the public
should be made aware. Moving on to point 11, Mr. Menefee
informed the committee that in the unorganized borough of the
state DNR is the platting authority. Therefore, DNR has to make
decisions regarding subdivision of land. This legislation would
allow DNR to make decisions without public notice for
alterations of platted boundaries when [the owners approve] and
no public easements or rights-of-way are impacted. Currently,
public notice has to be advertised for which the owner is
required to pay. Furthermore, the owner has to wait 30 days.
Historically, the division has found that no one comments on
such matters as there is no public interest impacted, just the
individual's land.
2:45:45 PM
REPRESENTATIVE SEATON inquired as to how these public easements
impact stream rights-of-way. He further inquired as to whether
any land with a stream or lake automatically has a public
easement or does this mean the subdivision cannot restrict the
public right-of-way.
MR. MENEFEE clarified that there are not easements on all
streams and lakes; the [AS] .125 "to and along" easement is only
in place when state lands are disposed. On the general stream
located on federal land or that went from the federal government
to a private individual that homesteaded, the state does not
have a reservation as an easement along those water bodies.
Since the state does not have any ownership interest, the
department cannot place a "to and along" easement on the land.
As that unorganized borough, the department could say an
easement is necessary. The aforementioned, however, only comes
into play when state land is disposed.
REPRESENTATIVE SEATON recalled that under that statute, any time
there was an action by the state, an easement had to be placed
along any streams or rivers. He asked whether the platting or
subdivision would create that because platting and subdividing
seems to be a state action.
MR. MENEFEE agreed to provide the committee an answer.
2:47:57 PM
CO-CHAIR FEIGE highlighted that there is a difference between a
stream and a navigable waterway. He asked if ownership crosses
navigable waterways or are areas platted such that the edge of
the plat is the edge of the assumed right-of-way due to the
navigability of the waterway.
MR. MENEFEE pointed out that there are two different types of
navigability. First, state navigability in Title 38 is used to
determine action when the state disposes of something. This
navigability is a fairly low navigability standard. He pointed
out that the state owns all the public water, whether navigable
or not. There is public trust doctrine that allows the public
to have rights to be able to use the water. Second, under
federal navigability, the state owns the beds of the water. If
the state already owns the beds of the water, when it is
subdivided it would already be subdivided because [the state
owns the bed of the water]. Therefore, that would not be an
issue. The issue would arise when the owner owns the land [and
the beds of the water].
2:49:48 PM
MR. MENEFEE, returning to the briefing document, continued with
point 12 that re-defines public auction to include the online
auctions. Point 13 relates the proposal of HB 77 to allow the
division the option to perform preliminary decisions for non-oil
and gas related decisions. The proposal would clarify AS
38.05.035, which merely specifies that for non-oil and gas
decisions the division is required to perform a written
decision. The change would also address the fact that the
division performs preliminary findings and then final findings
and sometimes only performs one finding and avoid charges that
the division is not following the process. He noted that
performing preliminary findings are actually more inclusive of
the public. Point 14 encompasses miscellaneous minor statutory
revisions that provide minor working revisions to make statutes
more readable and understandable while also clarifying statutory
intent.
2:51:58 PM
REPRESENTATIVE SEATON, referring to Section 44, asked if the
change retroactively cancels actions that have been in the
adjudicatory process or on appeal, which may include those who
are in the aggrieved status. He inquired as to how Section 44
will work without retroactively dismissing actions that are
being appealed.
MR. MENEFEE explained that current water reservations statute
specifies that a person may hold a water reservation, but the
proposed change would mean that no person can hold a water
reservation. He then informed the committee that 438 water
reservations have been applied for, of which 35 are from persons
and the remainder are from agencies. Therefore, if this
language is accepted by the legislature, the division would not
be able to issue water reservations to applicants who are
persons. However, those applications would be referred to the
applicable agencies, which would decide whether to apply for the
water reservation or not.
2:55:13 PM
REPRESENTATIVE SEATON opined that this proposal appears to
retroactively and significantly change how things work since the
agency is not required to continue the persons' applications
that have already been submitted. Requiring that the
commissioner convert the existing applications by persons to an
agency application would at least keep the public process
intact.
MR. MENEFEE remarked that the agency may or may not agree that
the applications by persons are worthwhile. To mandatorily
convert these applications without evaluating each of them would
mean the agency supports the application, although it may or may
not.
REPRESENTATIVE SEATON clarified that he was not proposing a
mandate for the agency to grant the application but rather a
mandate to submit and consider the application. Again,
canceling the applications by persons seems to retroactively
change the public process, which he characterized as
problematic.
2:57:31 PM
CO-CHAIR FEIGE requested a list of the names of the persons who
would be impacted by passage of HB 77.
MR. MENEFEE agreed to do so.
2:57:55 PM
CO-CHAIR FEIGE then announced that HB 77 would be held over.
2:58:10 PM
ADJOURNMENT
There being no further business before the committee, the House
Resources Standing Committee meeting was adjourned at 2.58 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 01.17.13 Chenault Wetlands 404 Primacy Transmittal Letter.pdf |
HRES 2/1/2013 1:00:00 PM |
|
| HB 78 (H) RES Hearing Request.pdf |
HRES 2/1/2013 1:00:00 PM |
HB 78 |
| HB 78 Sectional Analysis.pdf |
HRES 2/1/2013 1:00:00 PM |
HB 78 |
| HB0078-1-3-011813-DEC-Y.pdf |
HRES 2/1/2013 1:00:00 PM |
HB 78 |
| HB0078-2-2-011813-DNR-Y.pdf |
HRES 2/1/2013 1:00:00 PM |
HB 78 |
| HB0078-3-2-011813-LAW-N.pdf |
HRES 2/1/2013 1:00:00 PM |
HB 78 |
| HB0078A.pdf |
HRES 2/1/2013 1:00:00 PM |
HB 78 |
| HRES AGDC 2.1.13.pdf |
HRES 2/1/2013 1:00:00 PM |