01/30/2013 01:00 PM House RESOURCES
| Audio | Topic |
|---|---|
| Start | |
| HB80 | |
| HB77 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 77 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 80 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE RESOURCES STANDING COMMITTEE
January 30, 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 Kurt Olson
Representative Paul Seaton
Representative Geran Tarr
Representative Chris Tuck
MEMBERS ABSENT
All members present
OTHER LEGISLATORS PRESENT
Representative Andrew Josephson
COMMITTEE CALENDAR
HOUSE BILL NO. 80
"An Act relating to the regulation of wastewater discharge from
commercial passenger vessels in state waters; and providing for
an effective date."
- MOVED HB 80 OUT OF COMMITTEE
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 80
SHORT TITLE: CRUISE SHIP WASTEWATER DISCHARGE PERMITS
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
01/18/13 (H) READ THE FIRST TIME - REFERRALS
01/18/13 (H) RES
01/25/13 (H) RES AT 1:00 PM BARNES 124
01/25/13 (H) Heard & Held
01/25/13 (H) MINUTE(RES)
01/28/13 (H) RES AT 1:00 PM BARNES 124
01/28/13 (H) Heard & Held
01/28/13 (H) MINUTE(RES)
01/30/13 (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
WITNESS REGISTER
LYNN TOMICH KENT, Deputy Commissioner
Office of the Commissioner
Department of Environmental Conservation (DEC)
Juneau, Alaska
POSITION STATEMENT: Answered questions regarding HB 80.
DAN SULLIVAN, Commissioner
Department of Natural Resources (DNR)
Anchorage, Alaska
POSITION STATEMENT: Introduced HB 77 on behalf of the governor.
BRENT GOODRUM, Director
Division of Mining, Land and Water (DMLW)
Department of Natural Resources (DNR)
Anchorage, Alaska
POSITION STATEMENT: Answered questions related to HB 77.
WYN MENEFEE, Chief of Operations
Division of Mining, Land and Water (DMLW)
Department of Natural Resources (DNR)
Anchorage, Alaska
POSITION STATEMENT: Provided a PowerPoint presentation about
the provisions of HB 77.
ASHLEY BROWN, Assistant Attorney General
Oil, Gas & Mining Section
Natural Resources Section
Department of Law (DOL)
Anchorage, Alaska
POSITION STATEMENT: Answered questions related to HB 77.
ACTION NARRATIVE
1:02:31 PM
CO-CHAIR DAN SADDLER called the House Resources Standing
Committee meeting to order at 1:02 p.m. Representatives
Johnson, Tuck, P. Wilson, Olson, Tarr, Seaton, Hawker, Feige,
and Saddler were present at the call to order. Representative
Josephson was also present.
HB 80-CRUISE SHIP WASTEWATER DISCHARGE PERMITS
1:02:51 PM
CO-CHAIR SADDLER announced that the first order of business is
HOUSE BILL NO. 80, "An Act relating to the regulation of
wastewater discharge from commercial passenger vessels in state
waters; and providing for an effective date."
CO-CHAIR SADDLER noted that Amendments 6 and 7, distributed at
the committee's 1/28/13 meeting, have been replaced by
amendments 6.1 and 7.1. He requested Representative Tarr to
continue her discussion of Amendment 5, labeled 28-GH1987\A.6,
Nauman, 1/26/13, which she had moved for adoption on 1/28/13 and
to which Representatives Johnson and Hawker, and Co-Chair Feige
had objected.
1:03:42 PM
REPRESENTATIVE TARR resumed her discussion of Amendment 5, which
read:
Page 3, following line 22:
Insert new bill sections to read:
"* Sec. 5. AS 46.03.463(h) is amended to read:
(h) The provisions of (a) - (f), and (i) of this
section do not apply to discharges made for the
purpose of securing the safety of the commercial
passenger vessel or saving life at sea if all
reasonable precautions have been taken for the purpose
of preventing or minimizing the discharge.
* Sec. 6. AS 46.03.463 is amended by adding a new
subsection to read:
(i) Except as provided in (h) of this section or
AS 46.03.462(c), a person may not discharge sewage,
graywater, or other wastewater from a commercial
passenger vessel into the marine waters of the state
that has a copper concentration of more than two parts
per billion for more than 10 minutes with a dilution
factor not greater than 50,000."
Renumber the following bill sections accordingly.
REPRESENTATIVE TARR said that given the scientific research and
concern about copper levels, Amendment 5 would be appropriate
because it would set in statute a copper level of two parts per
billion (ppb) rather than the current level of three ppb. While
appreciating the Department of Environmental Conservation (DEC)
might prefer doing this in regulation, she said Amendment 5
would give the public peace of mind that the state is doing what
it can to protect its salmon.
1:04:43 PM
LYNN TOMICH KENT, Deputy Commissioner, Office of the
Commissioner, Department of Environmental Conservation (DEC),
stated DEC has concerns about Amendment 5 because it gets into
the types of very specific permitting conditions and standards
that the department does by regulation and permits. It is not
based on science; DEC's current water quality criteria for
protection of marine aquatic life are based on the most current
science regarding the effects of copper on marine life. She
said the two ppb limit in the amendment is likely based on some
fairly recent studies that identified a two microgram per liter
level that was discussed in studies on salmonids in fresh water
and the behavioral impacts of low levels of copper on the
behavior of the fish. She said the researchers in that study
have indicated that their work is not applicable to the marine
environment, for which there are not yet any studies, because of
the differing buffering capabilities in marine waters and
because researchers have not looked at how the physiological
changes that take place in fish when they move from saltwater to
freshwater. More research is being done in this area, she
continued, and DEC will be look at the latest research again
next year when more information is available. She said DEC does
update its water quality standards when new and better research
drives a change in those standards. Ms. Kent added that
Amendment 5 would essentially prohibit discharges when a vessel
is stationary, and last year only seven vessels were permitted
to discharge while they were stationary. Implementing the
amendment would be difficult because the vessels do not have the
ability to continuously monitor for copper. It is done in a
laboratory setting, so a ship would not know precisely when its
levels dipped below the two ppb. Also, the 10 minute limitation
would be difficult to figure out because the amendment does not
describe how often a vessel could have that 10 minute window to
discharge.
1:07:24 PM
CO-CHAIR FEIGE recalled Commissioner Hartig stating during his
original presentation that the limits are set by the U.S.
Environmental Protection Agency (EPA).
MS. KENT confirmed this as correct, adding that for most of its
standards DEC adopts federal developed criteria. In further
response, she confirmed there is an extensive process for
setting those particular limits that includes quite a bit of
review, oversight, and opportunities for entities to weigh in.
She said the standards are set through a significant effort
looking at the toxic effects on a multitude of different types
of organisms and plants. The EPA generally does those studies
or relies on studies done by others and adopts criteria that are
suitable for the country. Alaska normally adopts the criteria
developed by EPA because it does not have the resources to do
that kind of independent study work. Changing Alaska's water
quality criteria is an extensive process that starts with a
public notice asking people to come forward with any new studies
or research that would affect the state's water quality
standards. The department then sifts through that information
to determine whether there is sufficient science to change
criteria and, if so, that is proposed as a regulation change
which also undergoes a public review process. Once that process
is done, and assuming DEC adopts the revised criteria, it must
be approved by EPA before the department can use it.
1:09:25 PM
REPRESENTATIVE SEATON, noting that HB 80 would do away with the
Cruise Ship Wastewater Science Advisory Panel ("Science Advisory
Panel"), inquired how much data and what process would be
necessary for changing the EPA standard, which is set country-
wide for a multitude of plants and animals, to make the state's
regulatory process override for salmon.
MS. KENT answered that the Science Advisory Panel did not look
at the water quality standards to determine whether it thought
them appropriate or protective due to the process required for
revising the standards. However, what DEC would look for
through that public process is peer reviewed scientific research
that is applicable to the standards. So, if the standards look
at chronic effects and acute effects, and if there was research
applicable to marine waters that demonstrated an olfactory
behavioral problem with salmon that could affect their
survivability and reproductive ability, then DEC would rely on
that standard to propose a new water quality criterion. This
new criteria would then go to public review and notice, and then
it would go to EPA for final approval.
1:11:37 PM
REPRESENTATIVE TUCK asked how tests are currently conducted for
determining copper levels.
MS. KENT replied DEC requires the cruise companies to test for
copper and the other metals, but it is a sample that is taken
and then transferred to a laboratory for analysis. Over 800
monitoring samples from cruise ships have been taken over the
last 5 years.
REPRESENTATIVE TUCK inquired what would have to be done
differently if the standard was changed.
MS. KENT responded the monitoring and analytical requirements
for how a sample is tested would remain the same. If the water
quality standard changed or a permit standard changed - an
effluent limit changed - DEC would compare the results from the
analysis at the laboratory to the permitted amount.
1:12:51 PM
REPRESENTATIVE SEATON said he did not understand how copper
levels could be measured if the standard is changed from end of
pipe to a mixing zone while underway, given that the edge of
such a mixing zone cannot be determined.
MS. KENT answered that for any permitted discharge with a mixing
zone, modeling is done to calculate the size of the mixing zone.
This is done in addition to all the other criteria that are
required for DEC to approve a mixing zone. The department looks
at the past data and the concentrations of the contaminant and
employs the same models that are used throughout the country to
look at dispersion of that contaminant in a water body with
certain characteristics. Mixing in the water body, freshwater
lenses, other inputs, currents, and incoming and outgoing tides
are looked at to calculate how big that area might be where the
quality standard would be exceeded based on the level that is
being discharged. Many of DEC's permits with a stationary
component require the permittee to monitor the edge of the
mixing zone to verify those models and, in most cases, the
models are pretty good at predicting the distance needed from
the discharge to meet the water quality standard. For a cruise
ship that is underway with a 50,000:1 dilution, measurements in
the water body would be unable to identify concentrations that
could be attributed to the vessel because of the vast amount of
dilution in such a short period of time.
1:15:25 PM
REPRESENTATIVE SEATON surmised that what is being said is that
the size of the mixing zone will be expanded to whatever
dilution ratio the model indicates is needed for meeting the
water quality standard. So, if science said that copper is
affecting the olfactory sense of salmon, the model would be
changed to double the dilution factor to half the concentration
and therefore the problem has been taken care of.
MS. KENT replied that the requirements for a mixing zone must be
met with every renewal of a permit, most permits being on a
five-year cycle. If a DEC standard changed during the life of a
permit, the permittee would have to demonstrate again all of the
requirements in order to be authorized for a mixing zone; one of
those requirements is that DEC can only authorize a mixing zone
that is as small as practicable. At that permit renewal cycle
DEC would again look at whether a vessel is using the best
technology that it can. So, if a standard changes and becomes
more stringent, that does not automatically mean the vessels
will get a bigger mixing zone.
1:17:26 PM
REPRESENTATIVE TUCK understood the test uses a dye that is
tracked; however, a concern is that metals may not have the same
floating or mixing properties as dye. He inquired whether
modeling has been done to determine similarity.
MS. KENT qualified she is not a modeling guru, but responded
that DEC generally uses computer models to calculate the mixing
and the dilution of a contaminant in a surface water body. She
suggested that the aforementioned reference is to dye studies
that DEC worked on with EPA, where EPA used a dye to verify that
the dilution was as predicted by the models. She offered her
belief that there was a very close correlation between what was
modeled and what was actually found by those dye studies.
1:18:52 PM
CO-CHAIR SADDLER noted that the standards proposed in the
amendment of 2 ppb in 10 minutes and [a dilution factor not
greater than] 50,000 are pretty precise. He asked the maker of
the amendment how those numbers were arrived at.
REPRESENTATIVE TARR answered that when she looked through the
Science Advisory Panel's preliminary report, this was an
evidence-based standard that was suggested would be appropriate.
1:19:29 PM
REPRESENTATIVE TUCK inquired how deep below the water's surface
the modeling goes for a "surface water body."
MS. KENT replied "surface water" is the jargon used for oceans,
rivers, streams - anything that is not ground water. Some of
the state's dischargers, not cruise ships, discharge right at
the bottom, some part way in the column, and so forth. The
model looks at where in the water body is the discharge.
1:20:24 PM
REPRESENTATIVE TUCK asked whether "at the bottom" is the bottom
of the water body or the bottom of the ship.
MS. KENT responded a shore-based facility may have its discharge
pipe anchored to the bottom of the water body. A cruise
vessel's discharge port is approximately a couple meters below
the water surface.
1:20:50 PM
REPRESENTATIVE TARR read the following from a scientific article
[Environmental Toxicology and Chemistry, Vol. 22, No. 10, 2003,
"Sublethal Effects of Copper on Coho Salmon: Impacts on
Nonoverlapping Receptor Pathways in the Peripheral Olfactory
Nervous System"][original punctuation provided]:
Collectively, examination of these data indicates that
copper is broadly toxic to the salmon olfactory
nervous system. Consequently, short-term influxes of
copper to surface waters may interfere with olfactory-
mediated behaviors that are critical for the survival
and migratory success of wild salmonids.
REPRESENTATIVE TARR further noted that 49 wastewater violations
occurred between 1999 and 2009 involving discharges of ammonia,
copper, zinc, and a variety of others. To provide a sense of
scale she pointed out that one cruise ship per day generates
21,000 gallons of sewage and 170,000 gallons of wastewater from
sinks, showers, and laundry. So, the volume for 5 ships daily
in Juneau's port is 100,000 gallons of sewage daily and 850,000
gallons daily of wastewater, which is something to be concerned
and careful about.
1:22:12 PM
REPRESENTATIVE JOHNSON maintained his objection to Amendment 5.
A roll call vote was taken. Representatives Tarr and Tuck voted
in favor of Amendment 5. Representatives Seaton, P. Wilson,
Hawker, Johnson, Olson, Feige, and Saddler voted against it.
Therefore, Amendment 5 failed by a vote of 2-7.
1:23:01 PM
REPRESENTATIVE TARR moved to adopt Amendment 6.1, labeled 28-
GH1987\A.8, Nauman, 1/28/13, which read:
Page 1, line 4, through page 2, line 9:
Delete all material.
Page 2, line 10:
Delete "Sec. 2"
Insert "Section 1"
Renumber the following bill sections accordingly.
Page 2, line 25, through page 3, line 5:
Delete all material and insert:
* Sec. 2. AS 46.03.462(e) is amended to read:
(e) When issuing, reissuing, renewing, or
modifying a permit required under (a)(1) of this
section, the department may include effluent limits or
standards less stringent than those required under
(b)(1) of this section [FOR NOT MORE THAN THREE YEARS
DURATION] if the department finds that a permittee is
using economically feasible methods of pollution
prevention, control, and treatment the department
considers to be the most technologically effective in
controlling all wastes and other substances in the
discharge but is unable to achieve compliance with
Alaska Water Quality Standards at the point of
discharge. A permit under this subsection may not
extend beyond December 31, 2020.
Page 3, line 6:
Delete "new subsections"
Insert "a new subsection"
Page 3, lines 13 - 22:
Delete all material.
Page 3, line 23:
Delete "46.03.462(f),"
Objection was voiced by Representatives Johnson and Hawker.
REPRESENTATIVE TARR stated she has been trying to find a way to
strike a balance between the cruise ship industry and protecting
Alaska's coastal waters and the coastal economies and fishing
industry that rely on those waters. She said she has offered a
number of amendments in the hope of meeting her comfort level,
which has not happened. She said Amendment 6.1 would allow the
cruise ship industry to continue working on meeting the water
quality standards set in the 2006 Alaska Cruise Ship Initiative
("2006 Initiative"). Amendment 6.1 would extend the compliance
period to December 31, 2020, allowing DEC to issue a 5-year
permit and extend it all the way through 2020, allowing the
copper issue to be revisited.
1:24:32 PM
REPRESENTATIVE HAWKER maintained his objection to Amendment 6.1.
A roll call vote was taken. Representatives Seaton, Tarr, and
Tuck voted in favor of Amendment 6.1. Representatives Hawker,
Johnson, Olson, P. Wilson, Feige, and Saddler voted against it.
Therefore, Amendment 6.1 failed by a vote of 3-6.
1:25:24 PM
REPRESENTATIVE TUCK moved to adopt Amendment 7.1, labeled 28-
GH1987\A.9, Nauman, 1/28/13, which read:
Page 2, line 25, through page 3, line 5:
Delete all material and insert:
* Sec. 3. AS 46.03.462(e) is repealed and reenacted
to read:
"(e) When issuing, reissuing, renewing, or
modifying a permit required under (a)(1) of this
section, the department may only include the
authorization of a mixing zone for a commercial
passenger vessel if
(1) that vessel employs an advanced
wastewater treatment system that falls within the
class of systems identified by the department under
(k) of this section or employs other means of
pollution prevention, control, and treatment that the
department finds can achieve a quality of effluent
that is comparable to that of one or more vessels
employing an advanced wastewater treatment system; and
(2) the permit prohibits the discharge of
untreated sewage, treated sewage, graywater, or other
wastewater within three geographical miles of the
coastline of the state unless a discharge is made for
the purpose of securing the safety of the commercial
passenger vessel or saving life at sea and all
reasonable precautions have been taken for the purpose
of preventing or minimizing the discharge; in this
paragraph, "coastline" has the meaning given to "coast
line" in 43. U.S.C. 1301."
Page 3, following line 6:
Insert a new subsection to read:
"(i) Under (e)(1) of this section, if a
commercial passenger vessel employs an advanced
wastewater treatment system that satisfies the
requirements of (e)(1) of this section, the department
shall find the commercial passenger vessel satisfies
all state technology-based treatment requirements for
authorization of a mixing zone."
Reletter the following subsections accordingly.
Page 3, line 15:
Delete "(e)"
Insert "(e)(1)"
Objection was voiced by Representatives Johnson, Hawker, and
Olson.
1:26:05 PM
REPRESENTATIVE TUCK explained that if mixing zones are going to
be allowed he would like to ensure that those zones are three
geographical miles away from the coastline where a lot of human,
plant, and mammal activity occurs. He said he did not propose a
farther distance because that would eliminate any discharge
within waters controlled by the State of Alaska. He shared that
California has implemented no mixing zones within three miles of
its entire coastline, a standard he thinks Alaska should have.
However, he did not want to jump into that standard right away
because the ships might not have holding tanks that would allow
them to go out that far.
REPRESENTATIVE TUCK pointed out that because of the shape of
Alaska's coastline, three miles might create a "donut hole," or
gap, where ships would go to dump, creating excessive dumping in
one spot. Therefore, he moved to amend line 13 of Amendment 7.1
by deleting "three" and inserting "two" geographical miles.
There being no objection, the amendment to the amendment was
adopted.
1:28:41 PM
REPRESENTATIVE SEATON understood that Amendment 7.1, as amended,
would permit the discharge of wastewater that did not meet water
quality standards.
REPRESENTATIVE TUCK confirmed that this is correct.
1:28:53 PM
REPRESENTATIVE P. WILSON asked how big the holding tanks are and
how far from the coastline do these tanks allow the ships to go.
CO-CHAIR SADDLER requested Ms. Kent to address the practical
effects of Amendment 7.1, as amended.
MS. KENT replied she does not have that data with her, but of
the 28 or so large cruise ships that register to come to Alaska,
10 do not discharge in Alaska waters. These 10 ships either go
outside [state waters] or discharge in a port facility. The
rest have the holding capacity to go into outside waters. In
further response, she confirmed that shore-based facilities have
less stringent discharge requirements than do the cruise ships;
therefore any cruise ship wastewater going through a shore-based
facility would not be treated to as high a degree and would not
be as clean in terms of the effluent.
1:30:27 PM
REPRESENTATIVE P. WILSON inquired why, then, would cruise ships
be allowed to discharge into municipal facilities. She surmised
it would be better to allow the ships to discharge where they
are at.
MS. KENT responded DEC regulates the discharge from facilities,
not who can discharge into a facility. Right now, DEC does not
prohibit a cruise ship from discharging to a municipal
wastewater treatment system.
REPRESENTATIVE TARR pointed out that the ship's wastewater would
be treated in the municipal wastewater treatment system instead
of untreated wastewater from the ship being discharged [into the
ocean].
MS. KENT added that the wastewater is treated at the municipal
system, but the level of treatment it receives at the municipal
treatment system is not as good as it would be if it were
treated through the advanced wastewater treatment system onboard
the cruise ship.
1:32:39 PM
REPRESENTATIVE TARR noted that California has no mixing zones as
well as no discharge in its coastal waters. She related that
even treated sewage can contain pathogens, nutrients, and other
contaminants that affect human and environmental health and
economic productivity.
REPRESENTATIVE TUCK stated that Amendment 7.1, as amended, is an
attempt to work with the industry. He wants the cruise ships to
be efficient with their cruises and does not want them to have
to skip port facilities, so he is trying to ease into having no
mixing zones close to shore. He added that with stationary port
facilities the location is known, measurements can be taken, and
location of the edges is known, whereas testing is not accurate
for moving ships. He said there is a big difference between a
traveling city and a stationary city; salmon can navigate around
a stationary area. An easy solution would be allowing cruise
ships to dump into municipal facilities where there is control.
1:34:24 PM
REPRESENTATIVE JOHNSON maintained his objection.
A roll call vote was taken. Representatives Tarr and Tuck voted
in favor of Amendment 7.1, as amended. Representatives Johnson,
Olson, Seaton, P. Wilson, Hawker, Feige, and Saddler voted
against it. Therefore, Amendment 7.1 failed by a vote of 2-7.
1:35:25 PM
CO-CHAIR SADDLER announced the bill is now before the committee.
REPRESENTATIVE SEATON said HB 80 concerns him for several
reasons, one being overlapping mixing zones from numerous ships
using the same area for mixing zones. He said the 2006
Initiative stimulated DEC and the industry to go through a
process of reducing toxins being put into Alaska's waters. The
mixing zones will not be monitored and individual vessels will
again be able to be lax like they were in the past, resulting in
more toxic discharge and cumulative discharge in Alaska's
waters. Amendment 2 [labeled 28-GH1987\A.3, Nauman, 1/26/13],
which he put forward [on 1/28/13] and which did not pass, was
significant in that it would have disallowed mixing zone cruise
ship discharges in legislatively designated state critical
habitat areas. While DEC has said it wants the ability to make
that decision on its own, the decision is not the question. The
question is whether the legislature is going to give its
authority over to the administration to administratively make
the decision to allow cruise ship mixing zone discharges into
critical habitat. While he will not vote against moving the
bill from committee, he said the bill does not have his support
at this time for the aforementioned reasons. Additionally,
extension of the current permit to allow science to catch up may
have accomplished the stringent control of pollutants in state
waters that was expressed in the 2006 Initiative.
1:38:44 PM
REPRESENTATIVE P. WILSON asked whether HB 80 would lower the
state's standards.
MS. KENT replied, "No."
1:39:31 PM
CO-CHAIR FEIGE said the cruise ship industry has been operating
for about three years under a general permit that allows ships
to discharge, but never once during discussion of the bill were
any instances brought up as to actual problems with discharges
while operating under this general permit. Arguments against
the bill were not, in his opinion, convincing-enough scientific
evidence to warrant any changes in the bill as presented.
Regarding overall philosophy, he recounted that while he was
training to be a military officer, the mantra was to never make
a rule that cannot be enforced. The corollary here is to never
make a rule that cannot be achieved. The scientific panel
appointed by the legislature delivered a report saying that the
advanced wastewater treatment systems are the best economically
feasible technology available today and, more than likely, in
the near future. The DEC is capable of tracking emerging
technology, and for the time being the advanced wastewater
treatment systems will satisfy the legislature's requirement
that the state's waters stay as pristine as possible yet still
allow commerce and tourism activity to continue. He said he
will therefore be voting in favor of the bill.
1:41:47 PM
REPRESENTATIVE HAWKER stated that passage of HB 80 will free up
resources, therefore the bill should have a negative, rather
than a zero, fiscal note. He asked for there to be truth in
budgeting when resources are freed up; for example, DEC
indicated earlier that the freed-up resources will be put to
work doing something else. He requested that the department ask
for resources when it needs to accomplish something else and
that its fiscal notes reflect relinquished resources.
1:43:04 PM
REPRESENTATIVE TUCK said he is concerned about backsliding on
what the public put forth [in the 2006 Initiative]. A balance
can be achieved between the cruise industry and keeping Alaska's
waters pristine and good for coastal economies, recreation, and
public health. Fifteen violations occurred in 2011 and he wants
to ensure the state helps the industry reach the standards so
there are no violations. Because this was the goal of the
Science Advisory Panel, he is disheartened to see it go away.
While the state does not want to have a rule that cannot be
achieved, the state must also have a vision and must also set
goals. He recalled reading about a patent officer who, in the
late 1800s or early 1900s, stated that the patent office might
as well be closed because everything that can be invented is
already invented. Engineering is only getting better and today
miniaturization is driving economies, and this applies to the
cruise ship wastewater treatment systems and their wastewater
holding tanks. Some of the amendments were achievable, he said,
and he is concerned about giving DEC the flexibility to allow
mixing zones in critical habitat areas. No dumping at all is
allowed in Glacier Bay National Park and Preserve, yet the
newspaper reported that the [water from] four swimming pools was
dumped into Glacier Bay. He said he will not be supporting the
bill because it does not set goals and work with the industry to
get there, and is a step backwards.
1:46:12 PM
REPRESENTATIVE TARR stated she will not be supporting the bill
at this time. As someone with a science background it is
disappointing to her. She recalled that things used to be
regulated under the saying that the solution to pollution is
dilution. Regulation has long since moved on from that, so this
is a terrible step backwards. In addition to the violations in
2011, there were 32 wastewater violations in 2009. Alaska
should be encouraging new developments, but now it will not keep
its status as a leader. In five years Alaska will have missed
the boat for protecting salmon. She offered her hope that the
legislature will not be looking back on this and regretting its
move today. Steps should have been taken to at least extend the
compliance period to continue working on this.
1:47:44 PM
REPRESENTATIVE P. WILSON said nothing more can be done than what
is currently being done. Additionally, the annual cost of about
$100,000 for the Science Advisory Panel would continue for an
undetermined amount of time. She said she feels justified in
voting yes because the standards are not being lowered, nothing
more can be done at this point in time, and general fund monies
could be used for something else, especially given that the
state is $400 million short.
1:49:17 PM
REPRESENTATIVE JOHNSON stated that California's solution to a
problem with permitting is to just say no rather than working
through it and allowing industry to find a solution. He does
not want to be compared to California and he does not want
Alaska to be a state that just says no. He wants Alaska to be a
state that continues to work with industry so that maybe the
state can turn off the "not open for business" sign that seems
to have been placed at its borders.
1:50:14 PM
CO-CHAIR FEIGE moved to report HB 80 out of committee with
individual recommendations and the accompanying [zero] fiscal
notes.
REPRESENTATIVE TUCK objected.
A roll call vote was taken. Representatives Johnson, Olson,
Seaton, P. Wilson, Hawker, Feige, and Saddler voted in favor of
HB 80. Representatives Tarr and Tuck voted against it.
Therefore, HB 80 was reported out of the House Resources
Standing Committee by a vote of 7-2.
1:51:17 PM
The committee took an at-ease from 1:51 p.m. to 1:55 p.m.
HB 77-LAND DISPOSALS/EXCHANGES; WATER RIGHTS
1:55:11 PM
CO-CHAIR FEIGE announced that the next order of business is
HOUSE BILL NO. 77, "An Act relating to the Alaska Land Act,
including certain authorizations, contracts, leases, permits, or
other disposals of state land, resources, property, or
interests; relating to authorization for the use of state land
by general permit; relating to exchange of state land; relating
to procedures for certain administrative appeals and requests
for reconsideration to the commissioner of natural resources;
relating to the Alaska Water Use Act; and providing for an
effective date."
1:55:24 PM
DAN SULLIVAN, Commissioner, Department of Natural Resources
(DNR), introduced HB 77 on behalf of the governor by way of a
PowerPoint presentation entitled "Statewide Permitting Reform."
He acknowledged that there has been a lot of focus on oil and
gas and a gas line, but HB 77 illustrates that [permitting
reform] is an important issue in terms of the state's future.
Work has been occurring on permitting reform for the past few
years, and it is an area that has received very strong
bipartisan support that he hopes to continue [slide 2].
Permitting reform is also a big issue nationally that is also a
bipartisan effort to modernize and gain efficiencies with
permitting. He then highlighted an Economist article entitled
"Over-regulated America" that concludes "America needs a smarter
approach to regulation that will mitigate a real danger that
regulation may crush the life out of America's economy."
Furthermore, there was a Newsweek article in which former
President Clinton laid out what he viewed as the top ways in
which to get the economy moving, and number one was regulatory
reform and [granting waivers on environmental rules] to hasten
start times of construction projects. Alaska is trying to lead
in the area of permitting reform, which is a multi-year process.
With regard to competitiveness for the U.S., he pointed out the
Behre Dolbear Group, an investment bank in Canada, performs an
annual survey of mineral sector investment [slide 3]. In terms
of regulatory permitting, last year the U.S. ranked last and
this year tied for last with Papua New Guinea. He then pointed
out that federal rules negatively impact states and result in a
7- to 10-year waiting period before mine development can begin
In other industrialized countries, the time to reach mine
development is a lot less, particularly in Australia where the
timeframe is three to four years. The Kensington Mine as an
example of lengthy waiting periods, and might not be producing
had there not been the Supreme Court decision. In contrast,
construction of the 1,500-mile Alcan Highway, which has been
characterized as a big moment in history, took only nine months.
Places with high environmental standards, such as Alaska, can
have lengthy [permitting] delays that result in investment going
to places that have much less stringent standards, such as
Russia [slide 4]. Commissioner Sullivan maintained the
commitment to high environmental standards, but opined that
permitting reform helps maintain global environmental protection
because it keeps projects in locations with high environmental
standards, which is important.
2:02:28 PM
COMMISSIONER SULLIVAN mentioned the strategies the department is
undertaking with regard to Trans-Alaska Pipeline System (TAPS)
throughput decline [slide 5] with regard to strategic and
critical minerals. Permitting reform, he emphasized, cuts
across a number of different issues, including jobs, economic
growth, and responsible resource development. Therefore,
permitting reform is part of a broader strategy in which the
department recognizes the need to enhance coordination among the
state agencies [slide 6]. To that end, DNR has sought input
from various communities and groups regarding ways to make the
permitting system more efficient, timely, and certain. The
department has also worked on trying to improve coordination
between the state and federal government. Federal permitting
impacts almost every project in Alaska, whether it is on state
or federal land, a prime example being Point Thomson which is
located on state land. The department has also tried to get in
front of issues that it believes will be important to the state
in order to be prepared when they arise, an example being the
Shale Oil Task Force. He then related that the next couple of
slides highlight the strong bipartisan legislative progress
support the department has experienced. The legislative support
has been in the form of statutory changes as well as budget
increments [slide 7]. For example there was a significant
increment to Division of Mining, Land and Water for personnel,
revamping and modernizing the permitting system, which has had a
positive effect. Commissioner Sullivan then directed attention
to slide 8 regarding backlogged permits. Although there is a
host of reasons for the backlog, having 2,600 backlogged permits
is not good for jobs, economic growth, or the private sector.
Therefore, with this committee and the legislature's assistance
DNR has been very focused on decreasing the backlog to zero
within three years. Since the beginning of fiscal year (FY)
2012, the backlog has been reduced by 38 percent for which he
complimented the efforts of Mr. Goodrum and Mr. Menefee. While
the backlog reduction and modernization efforts are occurring,
the department continues to receive a lot of new permits.
Commissioner Sullivan said he believes the backlog reduction
effort is on track.
2:08:33 PM
COMMISSIONER SULLIVAN reminded the committee that last year the
governor introduced House Bill 361, which the legislature passed
with strong bipartisan support [slide 9]. The department
realizes that there is no panacea, and therefore it has focused
on statutory changes that create efficiencies. Although some of
those changes are not that large, taken together there becomes a
system that is more rational and brings the timeliness and
certainty. Addressing the backlog is a combination of ideas,
some of which have come through the ranks. The department has
also reached out to entities involved in the permitting process
and system and some of the changes were the result of
constituent suggestions to legislators.
2:11:02 PM
REPRESENTATIVE JOHNSON asked what constitutes a backlog.
COMMISSIONER SULLIVAN deferred to the team, but added that the
department has attempted to define that.
2:12:01 PM
REPRESENTATIVE SEATON, referring to slide 6 and the Shale Oil
Task Force, requested an update on the progress the agency is
making [in terms of anticipating and planning for permitting the
next phases of resource development].
COMMISSIONER SULLIVAN agreed to provide such an update.
2:12:47 PM
CO-CHAIR FEIGE passed the gavel to Co-Chair Saddler.
2:13:03 PM
REPRESENTATIVE TUCK inquired whether the same standard is used
year-to-year.
COMMISISONER SULLIVAN believed so, but deferred to Mr. Goodrum.
REPRESENTATIVE TUCK commented that it looks like the division
has gotten off to a really good start by addressing over 1,000
of the backlogged permits. He imagined that it would only
continue to get better.
2:13:48 PM
CO-CHAIR SADDLER inquired as to the anecdotal comments regarding
Alaska's permitting regime that Commissioner Sullivan has heard
during his travels advocating Alaska as a resource state.
COMMISSIONER SULLIVAN responded that often there are positive
comments, particularly with regard to the North Slope as having
a great resource potential and a basin that has potential with
various types of oil fields. There are also comments with
regard to costs, which relate to tax issues, competitiveness,
remoteness, and permitting and litigation delays. A lot of
focus has been on Shell's drilling problems; however, from DNR's
perspective there have been real problems with the federal
government delaying permitting for the drilling of exploration
wells in that area of Alaska. Broadly, there is a sense that
there is a lot of delay in Alaska, which is why the department
wants to address [permitting reform].
CO-CHAIR SADDLER noted the House just passed HR 5, which calls
the federal government to coordinate with the state and state
agencies as they consider Outer Continental Shelf (OCS) work.
2:16:42 PM
REPRESENTATIVE TARR, referring to the slides specifying the
operating budget increases, directed attention to the FY12
appropriation for approximately $2.7 million in operating funds
to the Division of Mining, Land and Water to create efficiency,
timeliness, and certainty in the permitting process and in FY13
an additional $950,000 to cover increased personnel costs and
fill vacant positions focused on permitting. She then recalled
that in the mid 1990s the legislature went through $250 million
worth of budget cutting that is cuts of $50 million from the
budget each year. The aforementioned was largely accomplished
by eliminating staff of some of the departments. Some at the
time felt those cuts were penny wise and pound foolish because
it would limit DNR's and DEC's ability in terms of being
efficient with the permitting process. Therefore, she
questioned whether the legislature now has to make up for those
budget cuts. She further questioned how the legislature can do
a better job to achieve a stable level of funding.
COMMISSIONER SULLIVAN said he does not have the historical
context to comment on the past. However, some of the backlog
and permitting efficiency issues are related to personnel issues
and some are related to modernizing the systems and making them
more efficient. Therefore, it was a combination of things and
the current desire is to continue to address permitting reform.
2:19:21 PM
REPRESENTATIVE TARR acknowledged the bill has a zero fiscal note
and asked whether the legislature will entertain any operating
budget increases for additional permitting staff.
COMMISSIONER SULLIVAN believed the answer is no, but offered to
get back to the committee on that.
2:20:01 PM
REPRESENTATIVE HAWKER clarified that budget cuts in the mid-
1990s were not so much a budget reduction as the creation of
off-budget accounting so that they were treated as (indisc.)
receipt supported services. He further clarified that it was
more of a matter of changing it from general fund appropriations
to other categories of appropriations.
2:21:37 PM
BRENT GOODRUM, Director, Division of Mining, Land and Water
(DMLW), Department of Natural Resources (DNR), in response to
Representative Johnson's earlier question, explained what
constitutes the "backlog" are those [permit] applications that
are deemed complete and considered an authorization that need to
be adjudicated that are at the point of issuance, whether it be
approved or denied. In further response to Representative
Tuck's earlier question, Mr. Goodrum confirmed that the division
is considering "apples to apples" in the chart [on slide 8]. As
the Unified Permit Project continues, he opined that there will
be far greater granularity and transparency into the system.
Therefore, the division will be able to talk in different
metrics and specify the amount of time that it takes an
authorization at a specific time of year and determine when it
will be adjudicated and communicate that with the applicant.
The system the division is moving to with the Unified Permit
Projects will provide greater visibility into the division's
process. In response to Co-Chair Saddler, Mr. Goodrum confirmed
that he is using the term "granularity" to mean precision and
detail.
2:23:49 PM
REPRESENTATIVE JOHNSON remarked he believes DNR is doing a good
job, but said he wants to get a benchmark for the backlog to
ensure that not just the easy permits are being addressed.
MR. GOODRUM agreed that not all permits are equal as some have
greater significance to the state and various industries, which
is weighted when the application is considered. The division
works to expedite those projects of great significance and is
not just addressing the easy permits.
2:25:22 PM
REPRESENTATIVE TUCK commented that it would be nice to know how
many new permits were applied for in 2012, particularly since it
does not seem that the division will ever reach zero permits.
He then expressed interest in having data that specifies the
number of years a permit application has been in the system
before being closed.
2:26:08 PM
MR. GOODRUM, responding to Co-Chair Saddler, informed the
committee that he served 20 years of active duty service as a
marine infantry officer/reconnaissance officer. During that
time, he pursued a post graduate education and earned a Masters
in operations research, which is about how to look at systems of
systems and improve efficiencies, and his work in this area for
the U.S. Marine Corps is what brought him to Alaska. He told
the committee that Mr. Menefee has been a public servant of the
state with DNR for over 20 years, and that as the chief
operations officer Mr. Menefee has a broad knowledge of the
statutes that impact many of the authorizations.
2:27:13 PM
WYN MENEFEE, Chief of Operations, Division of Mining, Land and
Water (DMLW), Department of Natural Resources (DNR), informed
the committee that he began his career as a park ranger and
worked his way up through the department. He said he has been
in his current position about eight years. He then directed the
committee's attention to the briefing document entitled "HB 77:
Land Disposals/Exchanges; Water Rights Briefing Paper" dated
January 30, 2013. He explained the division already has the
authority to perform general permits, but there is no explicit
statutory language that specifies general permitting is allowed.
Because the division will be doing more general permits, HB 77
will explicitly clarify in statute that the division can perform
general permits. Currently, there is an application for state
land use, the division then puts it out for public notice, and
then makes a decision whether it is appropriate or not. With a
general permit, there is the knowledge that there will be a
certain amount of applications for a certain activity and the
division prescribes the parameters in which those applications
should fit in order to obtain a permit. The notion is that the
aforementioned will reduce costs and time for the applicant
because, after a full public notice and review is completed of
setting up a general permit, the subsequent authorizations from
the general permit do not go through the full decision and
public notice process.
2:29:57 PM
REPRESENTATIVE SEATON inquired how to constrain a general permit
so that it will be most applicable to particular regions or land
types.
MR. MENEFEE responded there has to be the ability to define the
[parameters] and most often, general permits will be specific to
a region/area or activity. However, there may be some general
permits for which the parameters can be defined well enough to
apply statewide. For example, the division has a general permit
for non-timber forest product sales, which is the result of a
full-blown process regarding how the harvest has to occur,
including quantities and harvest methodologies, and those
statewide general permits can be applied for and purchased
online. An example of a regional general permit is the boat
storage in Cook Inlet that went through a process that resulted
in specific parameters that if met by the applicant results in
the awarding of a permit.
2:32:18 PM
REPRESENTATIVE SEATON, referring to the inability of the
legislature to implement statutes of statewide applicability,
asked whether there are any identified legal problems with
passing the authority for those general permits that could be
restricted and not be statewide.
MR. MENEFEE said the Department of Law is available to answer
any specific legal questions. He reiterated that the division
already has this authority; it is just not explicitly stated for
general permits. In the past, the division has issued statewide
and regional general permits that were vetted by the Department
of Law and accomplished without any legal ramifications.
2:33:32 PM
CO-CHAIR FEIGE asked whether there are precedents for this type
of general permit in other agencies besides state agencies.
MR. MENEFEE replied yes, and cited the U.S. Army Corps of
Engineers nationwide general permits. Other federal agencies
process general permits for various authorizations under
regulatory schemes, and the Department of Environmental
Conservation (DEC) issues general permits. General permits are
also used in Western states as a way to help get more done while
doing so in an effective manner.
2:34:30 PM
REPRESENTATIVE TARR remarked that the non-timber forest product
sales and boats [general permits] seem noncontroversial. She
asked what other types of activities, including resource
development activities, would fall under a general permit.
MR. MENEFEE said that general permits could be used for
commercial filming on state land, personal use cabin permits,
float home renewals, commercial recreation permits, and
installation of heat pumps for renewable energy. In further
response, Mr. Menefee confirmed that general permits could be
used for resource extraction activities. Although there is no
prohibition for using a general permit for resource extraction,
the challenge is accurately prescribing the parameters of the
activity in which the operator has to fit such that it is common
to whoever applies. He noted that the public has the
opportunity to participate and appeal a decision prior to
issuing a general permit.
2:36:21 PM
REPRESENTATIVE SEATON asked then whether is it possible to
statutorily give the division authority to establish best
practices for mines. He posed a scenario in which there is an
open pit mine in the state for which the division establishes
six criteria. In such a case, would the DNR permit already be
granted under a general permit for a mine that says it will
follow those criteria, he asked.
MR. MENEFEE opined that it would be very difficult to cover
everything that would be necessary. He pointed out that the
suggestions he put forth are very limited in scope, which is how
general permits can work. Regarding resource extraction, there
may be a certain aspect [that would fit into a general permit].
However, it is hard to envision that a general permit could be
developed to encompass everything necessary for a large mine.
Mr. Menefee said he does not believe that is the intention with
the general permit. Again, this authority already exists under
AS 38.05.0202(a)(1) and HB 77 merely specifies [the action] as a
general permit in order to clarify to the public that this
authority exists.
2:38:26 PM
REPRESENTATIVE TUCK questioned what a general permit is
currently titled.
MR. MENEFEE clarified that currently there are general permits,
but they are not referred to that in statute. He offered to
read the committee the statute from which the division believes
it has the authority to issue general permits. Most of the
challenges against the division are related to procedure, and
therefore the division can eliminate a legal risk if it can
provide absolute clarity that general permits are allowed. The
aforementioned is what is targeted with HB 77.
REPRESENTATIVE TUCK stated that it would be helpful for Mr.
Menefee to point out, when he reaches that section in HB 77,
where the language specifying general permits is being added in
statute.
2:39:52 PM
MR. MENEFEE, moving on to point 2 of the briefing paper,
explained that currently DMLW has the authority to exchange
lands. That authority is specified in Titles 29 and 38. When
DMLW does exchanges for state land, they are disposals of
interest. Currently, Title 38 land exchange language makes it
difficult to fulfill all the requirements in statute to perform
a land exchange. As municipal entitlements are completed, there
will be more complicated land exchanges. There is a mixed
ownership pattern, and therefore development projects or
municipalities may need to consolidate land or exchange land.
Under the proposed change in HB 77, Title 38 exchange statutes
would be modified such that the exchange would go through a
normal AS 38.05.035(e) decision process, which is a disposal of
interest decision process. The process utilizes public and
agency review and a formal decision that is in the state's best
interest is being made. The aforementioned is already utilized
for many disposals of state land and DMLW does not view
exchanges of state land as any different. Therefore, the
division wants to ensure that it can perform its duties
efficiently and the same way that other decisions are made.
However, currently there is a higher burden on the exchanges
that make it difficult to complete; for example, the False Creek
land exchange took 25 years to complete. The change proposed in
HB 77 would reduce the time and cost to the applicant.
2:42:30 PM
REPRESENTATIVE TUCK inquired as to why the False Creek land
exchange took so long to complete and whether that would be
fixed by HB 77.
MR. MENEFEE explained that in general there was a situation in
which appraisals were performed, but they would become stale due
to the requirements of the process. Therefore, a re-appraisal
and further negotiations would occur, which took more time. The
idea came from his discussions with the land exchange staff,
which revealed that very few exchanges have occurred since
enactment of the [existing] statute. The suggestion was that
performing land exchanges with a disposal of interest decision
would speed the process.
2:43:59 PM
MR. MENEFEE, returning to his briefing paper, related that point
3 addresses reducing the risk of litigation, which could have
some adverse ramifications. Currently, part of the statute
addresses the types of payments, all upfront or over time per a
contract, that can be utilized with land sales. Existing law
only speaks to land sold by auction, although land is sold in
situations other than by auction. The desire for all land sales
is to be able to enter into a contract to pay over time. If
there was a challenge and the challenger prevailed, there would
be the risk of losing millions of dollars in land sales each
year. Therefore, the division wants to able to continue the
practice of entering into contracts that allow payment over time
and the individual eventually obtains their patent.
2:45:28 PM
REPRESENTATIVE HAWKER, referring to Section 7 of HB 77, asked
why "or property" is being added when the overarching section,
Title 2, is the sale of land.
MR. MENEFEE responded that a development on the land - for
example, a house - is an issue that sometimes occurs.
Therefore, the development has to be sold as well as the land.
2:46:31 PM
REPRESENTATIVE HAWKER related his understanding that DMLW has a
practice of accepting full payment at closing. In a bid
situation, the division would take a 5 percent deposit and
accept cash at closing or offering term payments. The idea, he
surmised, is to make it very clear that term payments may be
made in all instances in which the division disposes of land or
property.
MR. MENEFEE confirmed that to be correct.
2:47:02 PM
REPRESENTATIVE HAWKER asked whether the mandate language of
"shall" potentially prohibits the division from offering cash at
closing payments. He suggested consideration of changing the
language to read as follows: "the remainder of the purchase
price to be paid at the time of closing or in monthly ...."
MR. MENEFEE deferred to the Department of Law (DOL), although he
said he believes the division still has the ability to put all
the money down right away.
2:49:45 PM
ASHLEY BROWN, Assistant Attorney General, Oil, Gas & Mining
Section, Natural Resources Section, Department of Law, said she
would get back to the committee with an answer.
2:50:09 PM
REPRESENTATIVE TARR, referring to [Section 22, page 15, line
11], pointed out that the reference to "the mineral estate" does
not appear to have been in the previous statute that is being
eliminated with these changes. She requested Mr. Menefee to
speak to that.
MR. MENEFEE explained that in cases where someone owns both the
surface and mineral estate and is willing to give it to the
state, the value of it would have to be determined in order to
achieve an exchange.
2:51:25 PM
REPRESENTATIVE TUCK inquired as to whether the state could
exchange mineral rights away.
MR. MENEFEE answered that although it is unlikely, technically
the state could do so. In further response, he said the state
would always like to maintain the opportunity for people to
stake mining claims, particularly where it will have no adverse
effect. Typically, the state aggressively tries to protect that
right because it is the dominant estate. Still, there may be
some situation where it may be advantageous to do so.
2:52:56 PM
REPRESENTATIVE TARR related her understanding that the state
owns the mineral rights/subsurface rights. Therefore, she
questioned who as a private landholder, save the Alaska Native
corporations, would be a private landholder who holds their
mineral rights.
MR. MENEFEE responded that there are quite a few individuals who
do own their own mineral rights, but he could not name them. He
specified that private individuals do hold mineral estates to
their properties, which often are from the federal government.
For instance, someone could have staked a federal mining claim
and that individual could apply and obtain a federal patent to
that mineral claim as the individual owns the mineral estate.
2:53:52 PM
MR. MENEFEE, returning to his briefing paper, directed attention
to point 4, which proposes extending a lease for up to two years
in two specific instances. Per statute, a long-term lessee
allows a preference right to purchase the land, which merely
means that there is an option to sell the land to the long-term
lessee. The aforementioned can be applied for up to the end of
their lease. Therefore, at the end of a lease, the state could
face having to authorize structures that are already improved
for the period while the state decides whether to sell it or
not. The division wants a two-year window in which to perform
that activity, adjudication, or decision. There are also
situations in which a lessee finds the need to expand their
business. If the lessee has substantially changed what they are
doing, [DMLW] has to review it. The aforementioned two-year
extension would keep the business legal with a lease while the
division adjudicates the request.
2:55:59 PM
CO-CHAIR SADDLER inquired as to what a preference right is.
MR. MENEFEE explained that a preference right means that without
having to go to competition, the lessee can apply for something.
Normally, disposal of state land is done competitively.
However, in a case in which a lessee has a long-term lease, the
lessee could apply for a preference right under AS 38.05.102.
Although the statue does not specify the lessee will obtain it,
it allows for the lessee to request it noncompetitively and the
[division] can adjudicate whether it is in the state's best
interest to sell that land to the lessee.
2:57:09 PM
CO-CHAIR FEIGE surmised that being able to grant that preference
right could be considered an incentive for making investments
and to further the settlement of the land.
MR. MENEFEE replied yes, adding that for long-term leases the
division does not dictate how much the lessee invests. Still,
it could be considered an incentive because the lessee would not
lose their investment since they would have the option to
purchase it.
2:57:41 PM
REPRESENTATIVE SEATON clarified his understanding that the
proposed extension in point 4 is only for leases not permits.
MR. MENEFEE confirmed that to be the case.
2:57:57 PM
REPRESENTATIVE TUCK asked whether there is a definition for
long-term lease.
MR. MENEFEE offered to get that information to the committee.
2:58:12 PM
REPRESENTATIVE TUCK surmised that the two-year window is not
just for a preference right for the lessee to purchase the land,
but also to extend the lease.
MR. MENEFEE posed a scenario in which there is a 40-year lease
and explained that to extend the lease [DMLW] must still go
through a decision process. However, last year the legislature
approved a renewal statute that allowed one-time,
noncompetitive, equal-term extensions. In this case, if the
lessee is in good standing, the lessee could obtain another 40-
year lease. Although the aforementioned change encouraged more
development, it did not take into account whether the lessee had
substantially changed their operations. A substantial change in
operations would result in the need for DMLW to perform a new
and full adjudication of that lease. Meanwhile, there would be
unauthorized development on the land. In further response, Mr.
Menefee confirmed that once an individual has a lease and has
made investments in the land, it makes sense to continue it.
3:00:14 PM
REPRESENTATIVE P. WILSON asked whether point 3 would apply to
waterfront leases as well.
MR. MENEFEE said yes, specifying that they are referred to as
upland leases and tideland leases.
[HB 77 was held over.]
3:00:55 PM
ADJOURNMENT
There being no further business before the committee, the House
Resources Standing Committee meeting was adjourned at 3:01 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB80 Amendment 1.pdf |
HRES 1/30/2013 1:00:00 PM |
HB 80 |
| HB80 Amendment 2.pdf |
HRES 1/30/2013 1:00:00 PM |
HB 80 |
| HB80 Amendment 3.pdf |
HRES 1/30/2013 1:00:00 PM |
HB 80 |
| HB80 Amendment 4.pdf |
HRES 1/30/2013 1:00:00 PM |
HB 80 |
| HB80 Amendment 5.pdf |
HRES 1/30/2013 1:00:00 PM |
HB 80 |
| HB80 Amendment 6.pdf |
HRES 1/30/2013 1:00:00 PM |
HB 80 |
| HB80 Amendment 7.pdf |
HRES 1/30/2013 1:00:00 PM |
HB 80 |
| HB36 Clean Water Act Overview.pdf |
HRES 1/30/2013 1:00:00 PM |
HB 36 |
| HB36 DMVA Letter.pdf |
HRES 1/30/2013 1:00:00 PM |
HB 36 |
| HB36 DoD Environmental Region 10 Letter.pdf |
HRES 1/30/2013 1:00:00 PM |
HB 36 |
| HB36 Fiscal Note DEC.pdf |
HRES 1/30/2013 1:00:00 PM |
HB 36 |
| HB36 Sponsor Statement.pdf |
HRES 1/30/2013 1:00:00 PM |
HB 36 |
| HB36 Version A.pdf |
HRES 1/30/2013 1:00:00 PM |
HB 36 |
| HB 77 Briefing Paper 1 29 13.pdf |
HRES 1/30/2013 1:00:00 PM |
HB 77 |
| HB 77 HRES Hearing Request Memo.pdf |
HRES 1/30/2013 1:00:00 PM |
HB 77 |
| HB 77 Permitting Reform Transmittal Letter.pdf |
HRES 1/30/2013 1:00:00 PM |
HB 77 |
| HB 77 Sectional Analysis 1.30.13.pdf |
HRES 1/30/2013 1:00:00 PM |
HB 77 |
| HB0077.pdf |
HRES 1/30/2013 1:00:00 PM |
HB 77 |
| HB0077-1-2-011813-DNR-N.pdf |
HRES 1/30/2013 1:00:00 PM |
HB 77 |
| HB0077-2-2-011813-DFG-N.pdf |
HRES 1/30/2013 1:00:00 PM |
HB 77 |
| HB77 Water briefing points.pdf |
HRES 1/30/2013 1:00:00 PM |
HB 77 |
| HB77 HRES - Overview by Comm. Sullivan.pdf |
HRES 1/30/2013 1:00:00 PM |
HB 77 |
| HB80 Franklin Dock Ent. Letter.pdf |
HRES 1/30/2013 1:00:00 PM |
HB 80 |
| HB80 Village of Kake Letter.pdf |
HRES 1/30/2013 1:00:00 PM |
HB 80 |
| HB 80 DEC Response to CCTHITA 2.6.13.pdf |
HRES 1/30/2013 1:00:00 PM |
HB 80 |