Legislature(2017 - 2018)BUTROVICH 205
02/22/2017 03:30 PM Senate RESOURCES
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| Overview on Wetlands Bank Mitigation Projects | |
| Adjourn |
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ALASKA STATE LEGISLATURE
SENATE RESOURCES STANDING COMMITTEE
February 22, 2017
3:30 p.m.
MEMBERS PRESENT
Senator Cathy Giessel, Chair
Senator John Coghill, Vice Chair
Senator Natasha von Imhof
Senator Bert Stedman
Senator Shelley Hughes
Senator Kevin Meyer
MEMBERS ABSENT
Senator Bill Wielechowski
COMMITTEE CALENDAR
OVERVIEW ON WETLANDS BANK MITIGATION PROJECTS
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
ANDY MACK, Commissioner
Department of Natural Resources (DNR)
Anchorage, Alaska
POSITION STATEMENT: Participated in overview of wetland bank
mitigation projects.
JEFF BRUNO, Acting Executive Director
Office of Project Management and Permitting (OPMP)
Department of Natural Resources (DNR)
Juneau, Alaska
POSITION STATEMENT: Provided an overview of wetland bank
mitigation projects.
ACTION NARRATIVE
3:30:49 PM
CHAIR CATHY GIESSEL called the Senate Resources Standing
Committee meeting to order at 3:30 p.m. Present at the call to
order were Senators Coghill, Von Imhof, Stedman, Hughes, Meyer,
and Chair Giessel.
^Overview on Wetlands Bank Mitigation Projects
Overview on Wetlands Bank Mitigation Projects
CHAIR GIESSEL announced that today the committee would hear a
presentation from the Office of Project Management and
Permitting (OPMP) on an overview of wetlands bank mitigation
projects. Nearly half the state is composed of wetlands and in
fact, if the Environmental Protection Agency (EPA) Waters of the
U.S. rule were to go into effect, virtually the whole state
would come under the Clean Water Act (CWA). That being said,
they know all of Alaska's land is ecologically important and
that it has the best regulatory regime of any of the states.
Constructing anything of importance in the state - a road, a
port, a pipeline, a mine, a school - inevitably comes into
contact with wetlands. The state has been subjected to the cost
of replacing those wetland acreages, which has led to costs for
wetlands mitigation anywhere from $10,000 an acre to several
hundred thousand dollars an acre. This prohibitive expense
causes them to search for innovative ways to leverage the sheer
size of the state's wetlands with getting the cost of public and
private projects down. She said the Department of Natural
Resources (DNR), and particularly OPMP, has been working for
years to get those costs down and keep Alaskans working.
3:32:38 PM
ANDY MACK, Commissioner, Department of Natural Resources (DNR),
Anchorage, Alaska, said the compensatory mitigation topic not
only hits the largest projects in the State of Alaska, but also
local projects all across the state. Alaska is a state full of
wonderful wetlands, which puts it in front of a series of
federal agencies led by the United States Army Corps of
Engineers (USACE), and Mr. Bruno would provide the main
presentation on compensatory mitigation.
3:33:48 PM
JEFF BRUNO, Acting Executive Director, Office of Project
Management and Permitting (OPMP), Department of Natural
Resources (DNR), Juneau, Alaska, said he would talk about
compensatory mitigation as it falls under Section 404. He would
also touch on some of the other mitigation requirements that
have popped up recently.
3:34:16 PM
Why is compensatory mitigation required? Mr. Bruno said the
answer can be found in 33 C.F.R. Part 332.3 (a) (1). Ultimately,
the idea of compensatory mitigation projects is to offset
unavoidable environmental impacts that the Corps permits in what
is called a "no-net-loss" policy. It is very problematic in
Alaska and efforts are being made to make the federal agencies
aware of the issues.
3:35:29 PM
The USACE is responsible for administering the wetlands
compensatory mitigation requirements as described in Sect. 404
of the Clean Water Act. This is usually done through the
National Environmental Policy Act (NEPA) process or through a
general permit (mainly for the large projects). The EPA has a
large role in that it helped develop the regulations. It has
oversight authority and can elevate a specific project if it has
an issue with the way it is being managed. This results in
project timeline delays. The tool that gets used most throughout
the process is the Acquatic Site Assessments (ASA), a document
that determines the amount of wetland impacts and sets
mitigation ratios.
3:37:32 PM
Once the Corps assesses the unavoidable impacts for a project,
the project applicant is required to purchase what is known as
mitigation credits. These can be obtained from three different
places:
1. Mitigation bank, which is projects that are already
developed,
2. In-lieu fee (ILF) program credits, which means you give money
to somebody and they have in general three years to find
acceptable projects, or
3. Permittee-responsible mitigation, which means they are the
ones that are responsible for developing the project and
carrying forward the long term management goals of those
projects. That can vary in length of time and often the
mitigation will outlive the project.
SENATOR STEDMAN asked if wetland mitigation applies to a
contractor building a house or three houses, or to a company
building another pipeline in the state.
MR. BRUNO said the bigger the project the more likely
compensatory mitigation will be required, but because of the
vast nature of our Alaska's wetlands, especially in certain
regions, it's hard to figure out what a functional loss and gain
ratio is. Maybe it's for projects of 10 acres or more, but
generally any large project - transportation or utility, or
community improvement - is going to require compensatory
mitigation of some sort.
SENATOR STEDMAN recalled that some contractors in his district
who are in the 2 and 3 acre range run into these situations.
COMMISSIONER MACK answered the truth is that EPA has given
primacy to the USACE to write the permits and enforce the terms
of the Clean Water Act, and they can exempt some projects, but
they still have to deal with their sister agency, which is the
EPA.
3:40:36 PM
For large-scale projects, like CD-5, the EPA is really
threatening to elevate the permit to headquarter level in
Washington, D.C., where agencies will try to hash out the
differences between themselves. The Alaska District Corps has
the discretion to exempt some projects, but they have to meet
certain criteria, and therefore, sometimes very small projects
will be required to have compensatory mitigation.
3:41:31 PM
SENATOR STEDMAN said his district has pretty much small
contractors and small parcels and they are continually running
into extremely expensive EPA requirements.
3:42:03 PM
SENATOR VON IMHOF said sometimes a single body of water goes
through a parcel that is not necessarily a wetland, like a
marsh, and asked if those are handled differently and if there
are setbacks or things of that nature.
MR. BRUNO replied that those are all treated the same. Wetlands
relates to aquatic resources: lakes, streams, creeks, wetlands,
and anything with some kind of water resource on it.
3:43:10 PM
MR. BRUNO next touched on the kinds of mitigation types that the
Corps generally accept in order of preference: ultimately it
prefers restoration of wetlands or aquatic resources, then comes
enhancement or creation of one. The one they like least, and
that is most prominent in Alaska, is preservation.
3:44:17 PM
He explained that a mitigation bank is an actual project that
has already been approved by the Corps. It has to have restored,
established, or enhanced some kind of wetland, and bank sponsors
have put up the upfront capital to do that project hoping that
somebody will need to purchase it as a mitigation credit. Long
term management of those projects is also required for things
like: annual reports, inspections, and making sure performance
standards are met.
3:45:08 PM
MR. BRUNO explained that an in lieu fee program (ILF) is a
different type of program. This is where a permittee provides
the funds to an in-lieu fee provider - generally a non-profit or
public agency - that uses them to develop a project. This type
of project is usually developed and approved after the permitted
impact occurs. So, a large diameter pipeline, for instance,
could give an in-lieu fee provider money and within three years
they would have to develop a project that is approved by the
Corps that offsets the impacts from the pipeline. It's more of a
money transaction that happens on the back end of a project.
The last, and least preferred by the Corps and a lot of people,
is one where the applicant is responsible for the development
and long term management of these projects that are site-
specific. It doesn't combine projects for mitigation efforts.
That is why these applicants generally are in the business of
resource development or managing a city, not in managing long
term requirements of a compensatory mitigation project.
3:46:42 PM
MR. BRUNO explained that the CWA no net loss policy was
developed to respond to Lower 48 resource situations that have
intense pressure and were rapidly declining. Fortunately, Alaska
doesn't have that issue, because much of its wetlands are still
pristine or ubiquitous and don't really have a functional loss
or gain depending upon a small impact to them. That is the
problem; it means there are limited opportunities in Alaska for
compensatory mitigation.
Additionally, these resources to be eligible or at least
economically feasible, must be under imminent threat, and Alaska
doesn't have the same threat the Lower 48 states have. However,
sometimes the same criteria is applied to address a threat. The
big statistic that makes Alaska so unique is its population
density; nobody is close. One of the biggest threats in the
Lower 48 is urban sprawl and population growth. So, one of the
things that could make the program better is to work on what
"threat" means in Alaska.
3:48:56 PM
MR. BRUNO said he was not so sure that Alaska should wait to
have a policy in place until its resources are threatened. It
has a unique opportunity to have more of a proactive program in
which high value resources could be used by the state for
compensatory mitigation while development was allowed to happen
around them.
A flexible program addressing part of the problems and
strategies to get this program up and running for Alaska is
outlined in the "1994 Memo" written by several federal agencies
to the national decision-makers. It talks about how restoring,
enhancing, or creating wetlands through compensatory mitigation
may not be practical in Alaska due to the limited availability
of sites, as well as technical and logistical limitations. The
memo went as far as saying there may be certain regions of the
state, like the North Slope, where mitigation sites are not
available due to the abundance of wetlands, and that in those
cases, compensatory mitigation should not be required. The memo
was accompanied by a report called "The Alaska Wetlands
Initiative" that details more examples of what is needed to the
get the program up and running.
3:51:14 PM
SENATOR STEDMAN asked if the 1994 Alaska Initiative Memo was
changed in 2008.
MR. BRUNO answered the 1994 Memo was written based on the policy
in effect at the time, which was the Clean Water Act (CWA). The
mitigation rule was updated in 2008, but the requirements for a
bank were changed to focus more on Lower 48 situations that took
away some potential mitigation options in Alaska. It was also
more definitive about what mitigation could offset certain
impacts and where.
3:52:26 PM
SENATOR STEDMAN said he wasn't clear that Alaska could back any
of this stuff up.
MR. BRUNO responded that Alaska has some potential opportunities
to work with the current rule that gives a lot of flexibility to
the Corps district engineer. It allows him to decide when
mitigation is required, what mitigation can offset impacts, and
where that mitigation needs to be. However, the Corps will say
it is not their job to tell somebody how to mitigate a project.
So it's up to a project proponent to offer these unique
solutions. This is one of the conundrums they fall into: an
applicant is needed who is willing to make a proposal that is
unique.
SENATOR STEDMAN said there are differences all over the state.
He deals with small contractors - mom and pops running their
business on two to four acres. Mitigation issues for them are a
little more complex than they can handle versus people at the
state level doing a big project.
COMMISSIONER MACK said the Clean Water Act policy is "no loss
wetlands," and several attempts have been made over the decades
to figure out precisely what that means. Some folks complained
that the policy was not being implemented, which resulted in a
rule-making process, which is the National 2008 Compensatory
Mitigation Rule. From that came the hierarchy of mitigation
preferences: banks, in-lieu fee programs, and the permittee
responsible option. To be very clear, he doesn't know of any
exemption or any distinction between a sophisticated applicant
and somebody who wants to build a couple of homes, or maybe a
local contractor.
SENATOR STEDMAN said he agreed with that. Several of his
constituents are stressed out to a point where they just want to
quit their business.
SENATOR VON IMHOF asked how much flexibility the Corps has with
interpretation of the rule for a small contractor.
3:57:09 PM
MR. BRUNO answered there is flexibility, but it has to be
proposed by somebody, and it needs to be accepted by the Corps
district engineer.
SENATOR VON IMHOF supposed that that flexibility is in the eye
of the beholder and can change with directors.
MR. BRUNO answered that the Corps is receptive to trying to
understand what flexibility is needed.
3:58:07 PM
COMMISSIONER MACK added that Mr. Bruno is correct about
flexibility being built in, which is one of the difficult
prospects of this particular system. For example, if an
exploration company wants to build some roads and pads, it will
probably be required to pay a couple hundred thousand dollars to
an engineering firm that will go out and do an acquatic
assessment, and based on the types of wetlands that are
impacted, they will calculate the need to mitigate.
3:59:51 PM
SENATOR HUGHES said this isn't a new problem, and asked if the
state has a plan to try to fix the uncertainty and if other
states are experiencing similar things. Is he working with
counterparts, and is there a chance that the new administration
might straighten some of this out?
COMMISSIONER MACK said a couple of big distinctions are always
in the background for Alaska: one being that it just doesn't fit
well into the national model. For instance in Wyoming, one can
go to a rancher and buy an easement on his property that will
protect the acquatic functions and share in the sale of those
easements to provide mitigation for a pipeline project, and a
lot of private land owners are willing to take you up on it. But
the amount of non-ANCSA (Alaska Native Claims Settlement Act),
privately-owned land in Alaska is not only consolidated in
certain areas but is not a very large chunk of the overall land
mass. This huge distinction between the amount of privately held
land in Alaska and in other states is a barrier to people
setting up banks, and buying credits out of a bank is the most
preferred method to mitigate.
SENATOR HUGHES asked if the Alaska could use its state lands for
a mitigation bank since it has a shortage of private lands.
MR. BRUNO answered yes, and that is one of the best solutions
that they actually have control over. An in lieu fee program
would allow the state to use its lands for compensatory
mitigation. One reason it's important that either the state or
the feds have a mitigation program at this point is that private
non-ANCSA lands are not only limited but also consolidated, and
most of the time resource rights have been retained with the
state and federal agencies. Additionally, if you're talking
about homestead lands, not many people are homesteading
wetlands.
SENATOR HUGHES said she hopes if the state does that that it is
nice to the small contractors.
4:03:49 PM
SENATOR STEDMAN said he thought the state should take over the
current banks and hold the property in perpetuity, because at
some point policies will change, then our descendants can
dispose of it according to those policies. He wanted to know if
that is the direction in which the state is heading.
CHAIR GIESSEL responded that this morning a Washington Post
article said that President Trump is planning to repeal the
Waters of the U.S. policy, and that could possibly impact the
Tier 3 water situation that the committee dealt with last year.
But it would be prudent for them to plan something like a state
mitigation bank regardless of what happens.
4:06:10 PM
MR. BRUNO said the 1994 Memo was accompanied by a detailed
report called the Alaska Wetlands Initiative. It acknowledged
that the no-net-loss policy is probably unrealistic on a permit
to permit basis. This is where the problem is with putting the
small mom and pop businesses in the same box as large
developments.
4:07:45 PM
A map illustrated the wetlands in Alaska, but the new Waters of
the U.S. rule turns the whole map green, Mr. Bruno said. Alaska
has 174 million acres that cover about 43 percent of the state.
Much of the 1994 Memo and the Wetlands Initiative discuss the
problems of running the compensatory mitigation program when the
project is right in the middle of one of these vast areas of
wetlands and the lack of ability to judge what the functional
loss and gain is. Most wetlands are in regions that aren't very
populated or have a lot of infrastructure. Also, a lot of
Alaska's wetlands are pristine and don't need restoration or
enhancement, nor are they under threat as the definition works
in the Lower 48.
4:08:42 PM
SENATOR STEDMAN said most of Southeast is dark on the map and
that they seem to go through and designate skunk cabbage patches
as wetlands. When you're in a rain forest - and no one argues
that it is dry - how do you not include the entire Southeast as
wetlands!?
MR. BRUNO said they should definitely see what could be done and
that some new national wetland inventory information needs
updating.
SENATOR STEDMAN quipped that he didn't have a problem with being
excluded.
4:10:36 PM
MR. BRUNO said Alaska has only one federally approved provider
for the in lieu fee program, specifically the North Slope. But
the Department of Natural Resources (DNR) is proposing a
statewide in lieu fee program that breaks the state up into
seven different regions and several marine service areas.
Additionally, in lieu fee instruments have estimated the cost on
the North Slope could be anywhere from $44,000 - $125,000 per
acre. A mitigation ratio is used which means that impacting one
acre in a valuable area might require five acres of mitigation.
That is what you would buy from the bank. It can also be
translated into an in lieu fee cost when you don't know where
you're going to buy your credits. The money is given to the in
lieu fee program and their job is to find the projects.
SENATOR STEDMAN commented that $44,000 - $125,000 per acre is
"appalling," to say the least and that is even higher than what
a farmer gets for his subsurface estate in the North Dakota oil
fields. If one has to pick what is more valuable for mitigation
- acreage in the Permian Basin or North Dakota or wilderness in
Alaska - he wasn't sure that the wilderness and wetlands weren't
more valuable than the oil fields.
MR. BRUNO agreed that wetlands resources are becoming more
valuable based on federal policy and laws, even though it's a
subjective valuation.
SENATOR HUGHES asked if mitigation credits can be purchased
across state lines and if other states could look to Alaska for
mitigation acreage.
COMMISSIONER MACK answered no. In fact, the Corps and the EPA
prefer that the mitigation be provided in the same watershed and
certainly in the same service area - the North Slope, for
example, is a service area.
4:14:30 PM
He added that the 2008 rule was designed to set up a private
industry that would create these instruments, get them certified
by the federal agencies, then go to the marketplace and
facilitate development by providing the mitigation on a private
contract basis for somebody that was seeking a CWA permit.
This has worked fairly well in the other contiguous states where
banks will loan money to and private funds are invested in
wetland mitigation banks. This is just another example of where
it just doesn't work that way in Alaska. He wasn't aware of a
single example of a high net worth individual who has invested
in the wetland mitigation bank in Alaska, but it happens all the
time in the Lower 48.
MR. BRUNO said the state retains a lot of the resources that
this program would use for mitigation, and without a state or
federal program, there are limited options. A recent project in
the NPR-A had an 11-acre pad and a 7-mile road. That company had
a mitigation ratio that required it to purchase a deed
restriction that covered 350 acres of land, which is a huge
discrepancy.
Other projects on the North Slope have historically paid into an
in lieu fee program. But things like Polar bear habitat have
escalated prices and mitigation ratios making it very expensive
to do mitigation on the North Slope. Additionally, because
Alaska has only one in lieu fee provider and a limited amount of
banks, it's quite possible that a mitigation provider might not
be in the area of a project. And even if a provider exists, a
limited amount of resources are available for compensatory
mitigation.
The last hurdle the state has is to loosen up the Corps'
definition of "threat" in Alaska, because even if a provider is
found and the mitigation resources are set aside, the definition
of "threat" has to be met. This is where Alaska needs more
clarification and flexibility.
4:19:49 PM
SENATOR STEDMAN asked the department to provide some basic
information about banks including a list of existing banks in
Alaska and their status, what kind of costs are incurred, and
areas that don't have banks.
MR. BRUNO said he would do that.
SENATOR VON IMHOF asked what the entity did with the money in
the earlier example of the 7-mile road and 350 acres of
mitigation.
COMMISSIONER MACK answered that he was talking about Greater
Mooses Tooth 1 (GMT-1), an extremely important project to the
State of Alaska for a number of reasons. It's the second project
in the NPR-A. The Bureau of Land Management (BLM) was leading
permitting agency and provided the NEPA process planning
documents on behalf of various federal agencies. ConocoPhillips
was required to get a Clean Water permit to place gravel on the
tundra and it eventually paid for a deed restriction of 350
acres to a private land owner. He preferred to not talk about
particular parties, but it's a difficult situation, because
folks have thought about development options all over the North
Slope. So, the question has to be asked whether the private land
owner really wanted to do this or whether they wanted to see the
GMT-1 project move forward and felt they needed to do it.
COMMISSIONER MACK noted that GMT-1 started out with ARCO and had
been around a minimum of six or seven years and was finally
permitted and sanctioned in 2015 by ConocoPhillips. It had two
outstanding issues that were not solved until a few weeks ago:
one was metering and the second was compensatory mitigation. The
compensatory mitigation element was the last item to be resolved
and it was a struggle for ConocoPhillips that is an extremely
sophisticated organization that understands how all this works.
SENATOR VON IMHOF asked if the private landowner is "one and
done" or can your land continue to be used as mitigate over and
over again.
COMMISSIONER MACK answered one and done; the deed restriction
document lists activities that cannot occur on this land. He
said GMT-2 is now in the permitting process, and would also have
to find additional acres and have difficult negotiations with
the private land owner.
4:24:42 PM
SENATOR STEDMAN asked if a deed restriction on swamp land
projects into the subsurface, but then then directional drilling
could still be used to extract the underlying resources. Most
folks in the state don't own subsurface, so how does that work
out?
COMMISSIONER MACK answered the subsurface is predominantly owned
by the state, and one can't unnecessarily restrict access to the
subsurface. So, an agreement with the subsurface owner is
needed. This comes into play in rural Alaska where a village
corporation owns surface estate, and they may want to sell some
credits. But typically speaking, the subsurface is owned by the
regional corporation, and they have an obligation to their
shareholders (which are mostly the same as the village
corporation shareholders), a "ticklish" situation. The truth of
the matter is that in particular cases on the North Slope one
doesn't want to put together such a large menagerie of deed
restrictions that at some point you can't access the subsurface.
This kind of tickles up against all of the new technology that
is being deployed in the Fjords West project and others. He
emphasized that this deed restriction is permanent, so one has
to think in terms of generations.
4:27:09 PM
MR. BRUNO said in addition to the 350 acres for GMT-1, the Corps
required a $9 million compensatory mitigation cost for their
impacts on subsistence activities.
CHAIR GIESSEL asked who defines "threat."
MR. BRUNO answered the federal district engineer for the State
of Alaska.
CHAIR GIESSEL clarified that it is a federal person, not a state
person.
MR. BRUNO said it is incumbent on someone to offer a new
definition of "threat" to the district engineer.
SENATOR COGHILL asked if the state decides to be a mitigation
bank could it be more in charge of the definition.
MR. BRUNO said that was a good point. If the state took over the
in-lieu fee program, it would be incumbent on the state to
define threat, and if there were disputes, it would be left up
to the court to determine who was right.
4:29:31 PM
MR. BRUNO said the 2008 rule is much more detailed in terms of
what is needed for submittal of a project, performance measures,
reporting protocols, and how a property is to be managed long
term. It also defines the hierarchy for mitigation providers and
known proven projects, because they get money from the in lieu
fee programs and have to develop the projects.
If the state were to develop an in lieu fee program, it wouldn't
be in direct competition with the banks, because the banks are
informally given preference over the state. It is an opportunity
for the state to play a larger role if it is the only mitigation
bank available. The only requirement is to get approval and
operate as a non-profit.
Lastly, Mr. Bruno said, the district engineer can decide when
mitigation is required, what mitigation is acceptable, and the
location and type of mitigation. They have to live within
certain standards, but they get to decide things that are in the
grey area.
4:31:47 PM
MR. BRUNO said they had done some informal reviews of the draft
in lieu provider prospectus and the formal prospectus was
submitted to the court on Friday. One of the goals of that
program is to fill the gaps where mitigation options aren't
available by offering a new suite of aquatic resources and other
lakes, rivers, and creeks for compensatory mitigation, reducing
the need to encumber private lands with federally required
conservation easements. Not that somebody can't use their
private lands if they want to, but it wouldn't be the only
option of resort. They also want to assure that current and
future development is not jeopardized by the lack of available
compensatory mitigation options.
CHAIR GIESSEL asked what if a he offered a piece of wetland
property and then later some kind of resource is found on that
land. Is it off the table?
MR. BRUNO answered probably not, but first one needs to replace
the mitigation and then new additional mitigation has to be
applied, what he called a form of "double mitigation." It is
economically very difficult to justify depending on the project.
He said Alaska would be the 32nd or 33rd state to create a
compensatory mitigation program. The Lower 48 has 25 mitigation
banks, 12 in lieu fee programs, and some states have both. Most
programs are administered by the DNR and the Department of
Transportation.
SENATOR COGHILL said the in lieu fee program would be Alaska's
best option, because it has so much pristine land. He asked him
to go through the mechanics of an in lieu fee program so he can
understand how the transfer works.
4:35:37 PM
COMMISSIONER MACK responded that a project applicant would get a
404 permit (CWA) from the Corps (basically to put gravel in
wetlands). A question in the questionnaire is how the applicant
intends to fulfill the policy under the final rule. Then the
applicant would eventually have to show that it was more than
offsetting the impacts to the wetlands. If the state were to
have an in lieu fee program, it would have identified and
already evaluated state-owned land that qualifies as wetlands,
which could be placed in protected status in perpetuity. It
would take a project applicant's money and make sure that a deed
restriction (easement) is placed on the land to the satisfaction
of the Corps of Engineers. Administration of that project would
be paid for the through the proceeds of the project applicants.
The first project applicants would probably be the Department of
Transportation and Public Facilities (DOTPF) with a railroad
project or a municipality with building schools or roads. That's
how the money would transfer.
SENATOR COGHILL asked if he had already vetted properties to be
available for project-specific negotiations.
COMMISSIONER MACK answered yes. An aquatic assessment of their
inventory would be made to understand the aquatic values of the
property. A project that needs specific types of mitigation
could be matched up with a particular parcel, which then would
be placed in protected status through an easement or other
instrument. Some pre-work would be required, which is fairly
expensive. Then there would be some work at the time. An in lieu
fee program has a term called "produced credits" that allows a
certain amount of time to make good on the CWA and the Corps on
behalf of an applicant. But with a bank, an applicant literally
goes into an office, sees precisely what the aquatic functions
are for a particular parcel and buys that credit off the shelf.
4:39:25 PM
SENATOR HUGHES asked if he picks the sites out in advance and if
he is looking now. How many acres is he talking about?
MR. BRUNO replied they are starting to do some of the inventory
work using a geographic information system (GIS) screening tool
that displays state land in different layers and valuations.
They are really working with the agencies to figure out what the
proper equation is.
4:41:58 PM
CHAIR GIESSEL asked if a statute change is needed to go forward.
MR. BRUNO answered no; they have most of the tools in-house to
create easements, do construction work, and make improvements to
these resources.
SENATOR STEDMAN thanked the department for clearing up this
murky subject and commented that the irony of today's
conversation is that the original 13 colonies along with Texas
have virtually no federal land; Alaska on the other hand has
virtually no state land. So they are put in the position of deed
restricting the state's very precious private land. He asked if
there is any way to get the federal government to use its land
for mitigation because the state can't get to anyway.
MR. BRUNO answered yes; the BLM is looking at those options, and
the department has discussed with them if there is an
opportunity to actually combine an in lieu fee program with
whatever they want to do. Pilot projects are happening at Jack
Wade Creek.
SENATOR STEDMAN said he thought that having the federal
government be the bank should be pursued, because the state has
such a small amount of land.
COMMISSIONER MACK said the rule requires "functional uplift,"
which is a fancy way to say something is needed that wouldn't
otherwise be done. The federal government deems itself as
protective of wetlands, so they have never considered their
ability under the Clean Water Act to place a benefit in
protected status. "It's an amazing conundrum."
4:45:40 PM
COMMISIONER MACK said everything they are talking about today is
the result of the Clean Water Act, various memorandums, a rule
that was promulgated and finalized in 2008, and its practical
application in Alaska. More recently, the prior administration
in Washington, D.C., decided to shift gears and in addition to
the CWA compensatory mitigation required five different agencies
(DOI, DOD, EPA, NOAA, and DOA) to implement instead of a policy
of no loss wetlands, to know focus on "net gain." He provided a
memo from the president to five different departments that
changed the national policy of no loss wetlands to showing a net
benefit. He said this policy is now taking its turn in Alaska
and the GMT-1 project is being required to both mitigate the
impacts to the aquatic landscape through the CWA and to
negotiate additional fees with the federal government, in this
case the BLM, for impacts not related to the aquatic
environment. His position is that this policy should be totally
withdrawn or significantly amended. Maybe the new administration
will withdraw it.
SENATOR COGHILL asked what the legislature could do to add to
the volume of comment on it.
COMMISSIONER MACK answered that speaking in resolution form on
some of these issues is very important. The Waters of the United
States is another critical issue, because the new definitions
broaden the amount of acres in Alaska that qualify as wetlands
from 50 percent to 80 or 90 percent. "It's very disconcerting."
SENATOR COGHILL remarked that a resolution was worth
entertaining, particularly with the new administration in
Washington, D.C.
CHAIR GIESSEL said she wonders how that will ripple out to the
Tier 3 issue the legislature dealt with last year.
4:51:17 PM
CHAIR GIESSEL adjourned the Senate Resource Standing Committee
meeting at 4:51 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SRES-Wetlands Mitigation Presentation-2-22-17.pdf |
SRES 2/22/2017 3:30:00 PM |
Wetlands Mitigation |
| SRES-Presidential Mitigation Memo-11-3-15.pdf |
SRES 2/22/2017 3:30:00 PM |
Wetlands Mitigation |