Legislature(2017 - 2018)BUTROVICH 205

01/31/2017 01:30 PM TRANSPORTATION

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Audio Topic
01:31:43 PM Start
01:32:29 PM Presentation: Nepa Permitting Process
02:51:31 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ NEPA / Permitting Process TELECONFERENCED
Presentation by DOT - Commissioner Luiken
and Assistant Commissioner Lance Mearig
Presentation by DNR - Jeff Bruno, Associate
Director OPM
                    ALASKA STATE LEGISLATURE                                                                                  
            SENATE TRANSPORTATION STANDING COMMITTEE                                                                          
                        January 31, 2017                                                                                        
                           1:31 p.m.                                                                                            
MEMBERS PRESENT                                                                                                               
Senator Bert Stedman, Chair                                                                                                     
Senator Anna MacKinnon                                                                                                          
Senator Click Bishop                                                                                                            
Senator David Wilson                                                                                                            
Senator Dennis Egan                                                                                                             
MEMBERS ABSENT                                                                                                                
All members present                                                                                                             
COMMITTEE CALENDAR                                                                                                            
PRESENTATION: NEPA PERMITTING PROCESS                                                                                           
     - HEARD                                                                                                                    
PREVIOUS COMMITTEE ACTION                                                                                                     
No previous action to record                                                                                                    
WITNESS REGISTER                                                                                                              
LANCE MEARIG, Chief Engineer                                                                                                    
Design & Engineering Services                                                                                                   
Department of Transportation and Public Facilities (DOTPF)                                                                      
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Presented information on the NEPA permitting                                                              
TAYLOR HORNE, Environmental Program Manager                                                                                     
Department of Transportation and Public Facilities (DOTPF)                                                                      
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Presented information on the NEPA permitting                                                              
JEFF BRUNO, Acting Executive Director                                                                                           
Office of Project Management and Permitting (OPMP)                                                                              
Department of Natural Resources                                                                                                 
Anchorage, Alaska                                                                                                               
POSITION  STATEMENT: Presented  information  on permitting  large                                                             
projects in Alaska.                                                                                                             
ACTION NARRATIVE                                                                                                              
1:31:43 PM                                                                                                                    
CHAIR  BERT STEDMAN  called  the  Senate Transportation  Standing                                                             
Committee meeting  to order at 1:31  p.m. Present at the  call to                                                               
order were  Senators Wilson, MacKinnon, Egan,  and Chair Stedman.                                                               
Senator Bishop arrived shortly thereafter.                                                                                      
             ^PRESENTATION: NEPA PERMITTING PROCESS                                                                         
1:32:29 PM                                                                                                                    
CHAIR STEDMAN announced that the  only order of business would be                                                               
a presentation  on the National  Environmental Policy  Act (NEPA)                                                               
permitting  process  and  its  effects   on  development  by  the                                                               
Department  of  Transportation  and  Public  Facilities  and  the                                                               
Department   of  Natural   Resources.  He   requested  that   the                                                               
departments provide  ideas for shortening and  reforming the NEPA                                                               
permitting process. He announced the arrival of Senator Bishop.                                                                 
1:33:19 PM                                                                                                                    
LANCE  MEARIG, Chief  Engineer,  Design  & Engineering  Services,                                                               
Department  of  Transportation  and  Public  Facilities  (DOTPF),                                                               
presented information  on the NEPA  permitting process.  He began                                                               
by highlighting  Brett Nelson, an  employee of DOTPF.  Mr. Nelson                                                               
works  as a  Northern  Region Environmental  Manager and  handles                                                               
some of the NEPA process work.                                                                                                  
MR. MEARIG  said his  presentation will  review DOT's  mission to                                                               
"Keep Alaska moving through service  and infrastructure." He said                                                               
he will address DOT's statutory  responsibilities and explain its                                                               
relationship with  the federal government and  its core services.                                                               
He pointed  out that most of  the capital funding comes  from the                                                               
Federal  Highway Administration  (FHA) and  the Federal  Aviation                                                               
Administration (FAA)  with some from the  Transit Administration.                                                               
The  total dollar  amount  coming  to Alaska  each  year is  $750                                                               
million.  He  said  he  would  describe  Alaska's  transportation                                                               
1:36:11 PM                                                                                                                    
He related that  he will discuss the NEPA process  and flow chart                                                               
and some  of the  causes for permitting  delays. He  will address                                                               
ideas for streamlining the permitting  process and an overview of                                                               
the project development process.                                                                                                
1:36:51 PM                                                                                                                    
MR. MEARIG  showed a slide  of federal laws and  executive orders                                                               
affecting DOT projects over a  long period of time. He emphasized                                                               
the complexity involved in project development.                                                                                 
1:37:29 PM                                                                                                                    
SENATOR BISHOP asked  whether asphalt knows how  many permits are                                                               
needed for one lane mile.                                                                                                       
MR. MEARIG said it does not.                                                                                                    
SENATOR BISHOP asked which of  these federal law or agencies does                                                               
not add value to a project. He  provided an example of how much a                                                               
paving project  cost in 1973-4  in Healey  - $1.7 million  for 23                                                               
lane  miles. He  stated, "You  can barely  get one  lane mile  of                                                               
asphalt for  that price today,  and herein lies the  problem." He                                                               
supported getting  rid of  any laws that  are not  applicable and                                                               
contacting the Alaska delegation for some relief.                                                                               
CHAIR  STEDMAN  thought that  would  be  addressed later  in  the                                                               
1:39:04 PM                                                                                                                    
MR.  MEARIG  explained the  NEPA  process  from proposed  federal                                                               
action through the steps needed  to start a project. He discussed                                                               
the process for  highway projects and aviation  projects, as well                                                               
as  the  paths  of environmental  assessments  and  environmental                                                               
impact statements.                                                                                                              
1:42:17 PM                                                                                                                    
MR. MEARIG turned to potential causes  of delay. He said they can                                                               
happen prior  to NEPA  approval, concurrently  with it,  or after                                                               
NEPA  approval.  He showed  a  typical  list of  approval  levels                                                               
required for large projects.                                                                                                    
1:45:52 PM                                                                                                                    
TAYLOR  HORNE,  Environmental   Program  Manager,  Department  of                                                               
Transportation   and   Public   Facilities   (DOTPF),   presented                                                               
information on  the NEPA permitting  process. He  presented ideas                                                               
for  streamlining   environmental  permitting:   NEPA  assignment                                                               
program, Section 404 wetlands  permitting, and Endangered Species                                                               
Act    and   Marine    Mammal    Preservation   Act    (ESA/MMPA)                                                               
1:49:23 PM                                                                                                                    
MR.  HORNE described  more ideas  for streamlining  environmental                                                               
permitting: Section  4 (f)/Section 106: relax  the requirement to                                                               
offer historic bridges for sale before demolition.                                                                              
SENATOR EGAN requested an example. He  recalled  getting  rid  of                                                               
the old  Douglas Bridge and asked  if it complied with  Section 4                                                               
(f)/Section 196.                                                                                                                
MR. HORNE  offered to get back  to Senator Egan. He  said he knew                                                               
of one recent example.                                                                                                          
SENATOR EGAN said there was one in Gustavus.                                                                                    
1:52:00 PM                                                                                                                    
MR.  HORNE spoke  of the  example for  streamlining environmental                                                               
permitting regarding bald eagle permits.                                                                                        
1:52:46 PM                                                                                                                    
MR. HORNE discussed  the 2015 FAST Act, the  most recent national                                                               
transportation bill. It includes many project delivery reforms.                                                                 
1:53:52 PM                                                                                                                    
SENATOR BISHOP  said he  was told that  with 100  percent federal                                                               
funds,  projects  typically took  six  years  to go  through  the                                                               
permitting process. He asked if that is accurate.                                                                               
MR. HORNE said it depends on  location and the NEPA categories of                                                               
exclusion. The vast majority of DOT projects take a year.                                                                       
1:55:01 PM                                                                                                                    
MR. HORNE explained the categorical  exclusions. On average there                                                               
are 190  highway project  starts and  97 percent  are categorical                                                               
exclusions  (CE) and  need environmental  permits.  Of those,  91                                                               
percent are programmatically approved  in the region. The average                                                               
CE  approval time  is 112  days. Environmental  Assessments (EAs)                                                               
and  Environmental Impact  Statements (EISs)  are rare,  but more                                                               
1:57:00 PM                                                                                                                    
MR.  MEARIG  explained  the  bridge  permitting  process.  Bridge                                                               
projects  require  permitting  if  they  are  constructed  across                                                               
navigable waters and are rare. There  was only one such permit in                                                               
the last 5  years. The Federal Highway Administration  is able to                                                               
grant  144(c)  exemptions, so  the  state  does  not have  to  go                                                               
through  the permitting  process. He  said there  have been  some                                                               
delays due to normal project delays, such as scope changes.                                                                     
1:59:25 PM                                                                                                                    
MR. MEARIG  discussed airport permitting.  He said the  FAA leads                                                               
all  the  agency  coordination  and  approves  all  environmental                                                               
documents,   although  DOT   prepares  some   documents.  Airport                                                               
permitting  is  similar to  highway  permitting.  The FAA  cannot                                                               
delegate NEPA  responsibilities to a state  because most airports                                                               
in the Lower 48 have individual  owners. Alaska is the only state                                                               
that operates over 200 airports.                                                                                                
2:00:54 PM                                                                                                                    
SENATOR  EGAN asked  noted Juneau  has a  municipal-owned airport                                                               
and asked how it fits into the process.                                                                                         
MR.  MEARIG  said  the  environmental  process  for  airports  is                                                               
similar to the highway permitting process.                                                                                      
SENATOR EGAN said Juneau does  their own environmental processing                                                               
through the FAA.                                                                                                                
2:02:19 PM                                                                                                                    
SENATOR MACKINNON  asked whether the department  has requested an                                                               
exclusion because of all of Alaska's state-supported airports.                                                                  
MR. MEARIG did not think so.                                                                                                    
SENATOR MACKINNON suggested the  Transportation Committee and DOT                                                               
ask Alaska's  delegation if DOT  could divert and  handle smaller                                                               
projects for permitting for cost  savings, considering Alaska has                                                               
unique numbers  and geography. She  requested Chair  Stedman make                                                               
the request.                                                                                                                    
2:03:54 PM                                                                                                                    
CHAIR STEDMAN asked why DOT has not considered this already.                                                                    
MR. MEARIG agreed to provide that information.                                                                                  
2:04:37 PM                                                                                                                    
MR.  HORNE  explained  wetlands permitting  and  mitigation.  The                                                               
United  States  Army  Corps   of  Engineers  (USACE)  regulations                                                               
requires DOT  to avoid, minimize,  and mitigate  project impacts.                                                               
Sometimes no mitigation  is required. He listed  the options when                                                               
mitigation is required: mitigation  banks, in-lieu fee providers,                                                               
or permittee responsible mitigation.  He explained the process of                                                               
each option.  He provided  an example  of the  mitigation process                                                               
regarding  failing  culverts. He  noted  the  cost of  mitigation                                                               
varies based  on the  number of acres  impacted, the  quality and                                                               
function of  wetlands, the price  per mitigation credit,  and the                                                               
location. He  said it is  $2,000 to  $10,000 per credit  in rural                                                               
areas and $20,000 to over $100,000 per credit in urban areas.                                                                   
2:08:03 PM                                                                                                                    
CHAIR STEDMAN stated that it  seems problematic from many angles,                                                               
and he called it virtual extortion.                                                                                             
SENATOR EGAN  agreed. He asked  if the mitigation  parameters are                                                               
different for  a state constructing  an airport in  Angoon versus                                                               
in Juneau.                                                                                                                      
2:09:18 PM                                                                                                                    
MR.  HORNE  asked if  Senator  Egan  is referring  to  mitigation                                                               
SENATOR EGAN said yes.                                                                                                          
MR.  HORNE explained  that  in the  ASACE  regulations there  are                                                               
preferences  for wetlands  permitting.  First,  the builder  must                                                               
look to see  if there is a  mitigation bank in the  area that can                                                               
sell credits.                                                                                                                   
SENATOR EGAN asked who does it.                                                                                                 
MR. HORNE said the applicant does.                                                                                              
SENATOR EGAN asked whether the FAA determines the dollar amount.                                                                
MR. HORNE  explained that the  price per credit is  determined by                                                               
the mitigation provider - a third  party entity - and is based on                                                               
the market. In  the Anchorage area there  are multiple providers;                                                               
in large  portions of Alaska  there is  only one provider  in the                                                               
2:11:34 PM                                                                                                                    
SENATOR MACKINNON asked if it is  fair to say that the mitigation                                                               
dollars are  different, but the  parameters for applying  for the                                                               
permitting  are somewhat  the same.  For example,  if mitigations                                                               
are required in  different areas, they would  be applying similar                                                               
criteria,  but depending  on  the sensitivity  of  the land,  the                                                               
dollars could be higher.                                                                                                        
MR. HORNE  clarified that the  regulations are the same,  but the                                                               
cost can change depending on location.                                                                                          
2:12:25 PM                                                                                                                    
CHAIR  STEDMAN  suggested  the committee  revisit  the  topic  of                                                               
mitigation because  of concern by  the public over  unfair market                                                               
price.  It  has  been  termed  "legal  extortion."  He  said  the                                                               
committee will hear this topic as a separate subject.                                                                           
SENATOR MACKINNON  appreciated that  the mitigation bank  and in-                                                               
lieu  fee provider  are easy  to  manage, however,  she said  the                                                               
qualified  fees   charged  are  federally  reimburse   making  it                                                               
uneconomical because the federal  government is driving costs up.                                                               
It is especially onerous for private citizens.                                                                                  
2:14:08 PM                                                                                                                    
SENATOR  BISHOP  gave  an  example  of an  acre  in  Prudhoe  Bay                                                               
(Deadhorse)   where  people   have  been   charged  $40,000.   He                                                               
appreciated Chair  Stedman's willingness  to return to  the topic                                                               
for a deeper discussion.                                                                                                        
CHAIR STEDMAN  added that  it is  a real  point of  agitation for                                                               
small  developers.  There  is  concern   over  who  controls  the                                                               
mitigation banks and what will happen in the future.                                                                            
SENATOR MACKINNON wondered if the  courts are involved in some of                                                               
the awards and may be driving costs up.                                                                                         
2:15:26 PM                                                                                                                    
MR.  MEARIG   thanked  the  committee   and  offered   to  answer                                                               
2:15:42 PM                                                                                                                    
SENATOR BISHOP brought  up a pet peeve:  the Stormwater Pollution                                                               
Prevention Plan (SWPPP) permitting under  the Clean Water Act. He                                                               
maintained  that it  should not  be a  blanket approach  on every                                                               
project and is a waste of dollars.                                                                                              
2:17:01 PM                                                                                                                    
SENATOR MACKINNON  asked if  all agriculture in  the Lower  48 is                                                               
exempt from SWPPP.                                                                                                              
MR. HORNE offered to find out.                                                                                                  
CHAIR  STEDMAN  thanked the  presenters.  He  said the  topic  of                                                               
mitigation will be addressed further.                                                                                           
2:18:13 PM                                                                                                                    
JEFF  BRUNO,   Acting  Executive  Director,  Office   of  Project                                                               
Management   and  Permitting   (OPMP),   Department  of   Natural                                                               
Resources, presented information on  permitting large projects in                                                               
2:19:27 PM                                                                                                                    
At ease                                                                                                                         
2:21:53 PM                                                                                                                    
CHAIR STEDMAN noted technical difficulties.                                                                                     
MR.   BRUNO  reported   that  his   office  is   responsible  for                                                               
coordinating   large-scale  projects   through   all  phases   of                                                               
development.  It coordinates  state permits  and also  represents                                                               
the state  within the cooperating  agency status of  the National                                                               
Environmental  Policy Act  (NEPA). He  said he  will discuss  the                                                               
permitting process, as well as  some of the potential hurdles and                                                               
pitfalls that  exist along  the way. He  noted that  DNR projects                                                               
are very different than DOT projects.                                                                                           
2:24:13 PM                                                                                                                    
He showed a graph of the  potential timeline for a mining project                                                               
where nine years  are spent collecting data or  in the permitting                                                               
process. He stressed that  collecting environmental baseline data                                                               
is the foundation of a good  project and often mistakes are made,                                                               
sometimes because  there are not  clear expectations or  too many                                                               
changes are  made. He  suggested efficiencies  can be  created by                                                               
first  communicating with  the Office  of Project  Management and                                                               
Permitting (OPMP).                                                                                                              
2:26:20 PM                                                                                                                    
MR.  BRUNO explained  how OPMP  works during  every phase  of the                                                               
project  to integrate  the federal,  state, and  local permitting                                                               
processes so they  run concurrently. His slide  showed a parallel                                                               
process   when  everyone   works  together   on  permitting.   He                                                               
emphasized that  later in the  process if the design  is changed,                                                               
problems occur and it can be  more expensive. He pointed out that                                                               
the state and  federal governments can issue permits  at the same                                                               
time. He said  it is important for the  public's understanding if                                                               
the permits are coordinated first and then communicated.                                                                        
2:29:09 PM                                                                                                                    
MR. BRUNO showed a collection  of the main permitting authorities                                                               
of  state and  federal agencies.  The NEPA  process is  triggered                                                               
when the project requires federal agency involvement.                                                                           
He  noted  a  complication  because each  federal  agency  has  a                                                               
different set of values and  perspective. How NEPA is interpreted                                                               
is left  up to the  lead federal agency,  which is key  in making                                                               
decisions and preventing delays.  The agencies are getting better                                                               
in cooperating with each other.                                                                                                 
2:30:59 PM                                                                                                                    
MR.  BRUNO  turned  to  a  graph on  the  NEPA  process  for  the                                                               
development of an EIS.                                                                                                          
2:33:01 PM                                                                                                                    
He showed a map  of a proposal track for an  EIS. The EIS process                                                               
can  take  several years  and  be  very  expensive. It  can  cost                                                               
hundreds of millions of dollars  for baseline data collection and                                                               
NEPA,  federal, and  state permitting.  There  are no  guarantees                                                               
that  the  permitting  process will  be  legally  defensible.  He                                                               
pointed out  that OPMP works  with the federal agencies  in order                                                               
to gather information and facilitate a smooth process.                                                                          
2:34:03 PM                                                                                                                    
MR.  BRUNO turned  to the  state permitting  process for  a large                                                               
mine  permit. He  noted the  complexity of  the process.  He said                                                               
OPMP can assist in coordinating the permits.                                                                                    
2:36:03 PM                                                                                                                    
SENATOR  MACKINNON  asked about  the  Health  and Social  Service                                                               
aspect and the Health Impact  Assessment (HIA). She inquired what                                                               
measurable criteria is being used.                                                                                              
2:36:36 PM                                                                                                                    
MR. BRUNO  said OPMP developed HIA  out of the NEPA  process. The                                                               
Department of Health and Social  Services (DHSS) developed a team                                                               
to  analyze health  impacts  of a  project and  how  they can  be                                                               
mitigated.  He  noted  DHSS  has  a tool  kit  on  their  website                                                               
regarding health impacts on projects.                                                                                           
2:37:52 PM                                                                                                                    
MR. BRUNO  explained that the  NEPA process and permits  have the                                                               
longest lead time.  There must be a development of  an EIS, which                                                               
can take up to ten years.  Defined steps are required for an EIS,                                                               
but the processes  are not defined and  are inconsistent. Federal                                                               
agencies  have different  methodologies.  He gave  an example  of                                                               
federal agency inconsistencies related to ConocoPhillips.                                                                       
2:40:17 PM                                                                                                                    
MR.   BRUNO  said   OPMP  recommends   early  consultation   with                                                               
regulating agencies  to help assure correct  baseline information                                                               
is collected.  He encouraged applicants  to talk to OPMP  to meet                                                               
with regulators for clarification.                                                                                              
2:43:16 PM                                                                                                                    
He addressed  litigation, which can  cause severe time  delays in                                                               
many  ways. He  used  Kensington Mine  as  an example.  Sometimes                                                               
litigation can make future decisions  or processes more efficient                                                               
or transparent, depending on the  situation and outcome. The fear                                                               
of litigation can also add to timelines.                                                                                        
2:45:51 PM                                                                                                                    
MR. BRUNO stressed the importance  of early coordination. Project                                                               
proponents should start  a dialog with state,  federal, and local                                                               
entities  early in  the  process to  set  clear expectations.  He                                                               
listed  some of  the  suggestions for  avoiding  the pitfalls  of                                                               
permitting. He  said general permits can  streamline the process.                                                               
Presidential,  executive, and  administrative orders  can provide                                                               
efficiencies and "fast track" can also reduce timelines.                                                                        
He  noted  that the  Council  for  Environmental Quality  is  the                                                               
federal regulator  that is in  charge of NEPA and  is responsible                                                               
for providing  guidance. Right now,  there is  a lot of  room for                                                               
interpretation. He brought up the  cost of mitigation for wetland                                                               
permitting. He  said that DNR is  in the process of  developing a                                                               
litigation bank that  allows state resources to  be available for                                                               
purposes of mitigation.                                                                                                         
2:50:55 PM                                                                                                                    
CHAIR STEDMAN  said the committee would  address mitigation again                                                               
at a future date.                                                                                                               
2:51:31 PM                                                                                                                    
There being  no further  business to  come before  the committee,                                                               
Chair  Stedman  adjourned   the  Senate  Transportation  Standing                                                               
Committee at 2:51 p.m.                                                                                                          

Document Name Date/Time Subjects
NEPA presentation.pdf STRA 1/31/2017 1:30:00 PM
Permitting large project in AK.pptx STRA 1/31/2017 1:30:00 PM