Legislature(2013 - 2014)BARNES 124
02/06/2013 01:00 PM House RESOURCES
| Audio | Topic |
|---|---|
| Start | |
| HB4 | |
| HB77 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| += | HB 4 | TELECONFERENCED | |
| += | HB 77 | TELECONFERENCED | |
HB 77-LAND DISPOSALS/EXCHANGES; WATER RIGHTS
2:21:47 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."
CO-CHAIR FEIGE opened public testimony.
2:22:31 PM
LAURA STATS, paraphrased from the following written statement
[original punctuation provided]:
I am here to speak against the passage of HB 77.
I come to you on behalf of my family and all the
people who hunt, fish and gather food from this great
land we call Alaska. Most importantly, I come on
behalf of my grandson, Huck Daugherty, who is 4 years
old and who at his tender age has already gone out
with his parents and uncles to harvest salmon taller
than he is and prawns bigger than his own hands, for
him there is a magic in that; and in that magic lies
an honest reality which must be protected in
perpetuity. And you have the responsibility to protect
our lands, streams and oceans.
Please look to our Alaska Constitution when making
your decision on voting for HB 77. It states in
Article 8 section 3
Titled: Common Use
"Wherever occurring in their natural state, fish,
wildlife, and waters are reserved to the people for
common use."
It explains in the Citizen Guide of the Alaska
Constitution and 1 quote: "This section enshrines in
the Alaska Constitution the common law doctrine that
natural resources must be managed by the state as a
public trust for the benefit of the people as a whole,
rather than for the benefit of the government,
corporations, or private persons."
Who will HB 77 be protecting and representing, will it
be protecting the common use clause of our
constitution and the rights of the citizens of Alaska
or does it protect a corporation which has it's own
special interest not consistent with that of
preserving the tender balance of the streams and
waterways where our food arises from?
Please vote against the passage of this bill.
Thank you for hearing me with your open hearts and
strong minds.
2:25:27 PM
JAMES SULLIVAN, Legislative Organizer, Southeast Alaska
Conservation Council (SEACC), paraphrased from the following
written remarks [original punctuation provided]:
Thank you for the opportunity to testify.
There has been much discussion, within this committee
and with our organization and with our friends, about
the issue of water reservations and revoking personal
use reservations. We find this issue problematic and
want to make sure that our environment is being
protected and that anadromous streams have the highest
priority when permits are being issued.
We would like to propose that amend this bill so that
when any entity applies for a water right on any
anadromous body of water that [Department of Natural
Resources] DNR issue a water reservation on behalf of
the fish. DNR can simply refer to the Anadromous
Waters Catalog to see if the waterway is on there,
then put in an appropriate reservation.
This would align DNR with our state constitution and
its public trust responsibility. It would ensure the
protection of our salmon. It would enhance sustainable
economic development across our state.
Salmon is our greatest renewable resource, it is in
our legislature's best interest to put in a mechanism,
in statute, that protects that resource as other
entities apply for water rights.
Alaska Constitution Article 8 § 3. Common Use
"Wherever occurring in their natural state, fish,
wildlife, and waters are reserved to the people for
common use."
2:27:39 PM
REPRESENTATIVE SEATON highlighted the language in Section 1,
which read: "the issuance of a general permit if the
commissioner finds that the activity is unlikely to result in
significant and irreparable harm to state land or resources."
He asked whether SEACC finds the language problematic in that
irreparable harm rather than significant harm has to occur
before a general permit is issued.
MR. SULLIVAN said SEACC has discussed the issue of irreparable
harm and having some sort of proving ground to do that, which is
why he is recommending amending HB 77 such that DNR would issue
a water reservation on behalf of the fish when any entity
applies for a water right on any anadromous body of water and
that mechanism would limit the type of work that can be done on
the stream or waterway. Mentioning the Anadromous Fish
Protection Act, he then offered his opinion that there are
conflicts with the use of irreparable harm and existing statute.
2:29:50 PM
GUY ARCHIBALD, Mining and Clean Water Coordinator, Southeast
Alaska Conservation Council (SEACC), in response to
Representative Seaton's question, informed the committee that
irreparable harm is not well defined. He noted that he mainly
deals with federal lands. For instance, the Greens Creek Mine
has a draft environmental impact study (EIS) that requires the
filling in of a major portion of an anadromous salmon stream.
The mine is located within the Admiralty Island National
Monument where it is mandated by Congress not to produce any
harm to the salmon. The U.S. Forest Service does not consider
filling in that salmon stream with toxic tailings to be
irreparable harm to the monument values.
MR. ARCHIBALD then related his confusion with Commissioner
Sullivan's testimony that Alaska ranks second to last in the
world in terms of producing permits for large projects,
especially when [Glenn] Haight, Development Manager, Development
Section, Division of Economic Development, Department of
Commerce, Community & Economic Development (DCCED), stated [on
January 31, 2013] that "Alaska has a very favorable environment
in the mining industry." There is evidence that answers the
question, which comes from the Fraser Institute's Annual survey
to over 5,000 international mining companies. This last year
over 800 companies, which were responsible for $6.3 billion of
exploration funding in 2011, responded to that survey. The
results from that survey ranked Alaska number four in the world
in combined policy and mineral potential. The survey compared
Alaska to over 90 separate mining districts in the world. The
survey also found that only 1 percent of respondents cited
environmental regulations as being a mild or strong deterrent in
Alaska. Furthermore, only 1 percent of the respondents thought
the tax regime, both the rate of the tax and the complexity of
the code, was either a mild or strong deterrent to permitting in
Alaska. Part of the backlogging and permits is that there is no
trigger for evaluation of a permit; once a permit is applied for
DNR must process it. He noted that mining is highly speculative
and many of the companies are junior companies and almost all of
them apply for permits when they do not have a proven ore
reserve. The ore reserves are certified as an implied ore body,
which by definition means they have zero certainty of an
economic ore. They apply for permits, he opined, because it
adds to the value to the project they are trying to sell and
basically fuels speculation. Therefore, Mr. Archibald requested
that DNR institute a trigger such that an application will be
reviewed when certification of a proven ore body is submitted.
With such a trigger, those resources used on mines that will
never enter into production, can be transferred and used for
larger projects. He suggested that the aforementioned would
reduce the backlog of permits. Mr. Archibald highlighted that
the state did attempt a streamlined permitting process with the
Rock Creek Mine north of Nome, which was permitted in less than
two years. The Rock Creek Mine was located entirely on state
land, so did not require a National Environmental Policy Act of
1969 (NEPA) process. The Rock Creek Mine operated for six
months, after which it shut down, the company walked away, and
the tailings pond immediately filled with water. The Department
of Environmental Conservation (DEC) had to remedy the situation
for which the estimated cost of cleanup is $20-$30 million.
Since the Rock Creek Mine was only bonded for $9.6 million, the
difference between the bonded amount and the actual cleanup
costs will be borne by Alaska's taxpayers. In conclusion, Mr.
Archibald requested that HB 77 not move forward or if it does,
that it moves forward with significant amendments.
2:34:51 PM
REPRESENTATIVE TARR asked if Mr. Archibald had specific
amendments.
MR. ARCHIBALD reiterated his suggestion to include an amendment
that creates a trigger for review. In the anti-degradation of
water quality there is a trigger level to review an application,
which he would suggest using for any project [in order to
determine] how legitimate is it that a project will enter into
production before the state spends many state resources. He
pointed out that the Greens Creek Mine EIS cost the U.S. Forest
Service over $1 million to produce.
2:35:52 PM
REPRESENTATIVE TUCK surmised then that the intent of Mr.
Archibald's suggestion is to have a filter to eliminate the
projects for which there is no intention for them to make it to
fruition and actually focus on the ones that are intended to
[produce].
MR. ARCHIBALD agreed, adding that many of the speculative mines
will produce a preliminary economic assessment for their
investors long before there is any certainty with their ore
body. There is a 401 certification process in which a third
party evaluates whether there is a legitimate, profitable,
economical ore body.
2:36:42 PM
REPRESENTATIVE P. WILSON related her understanding that the
state does not allow people to just go out and mine, but rather
requires they obtain permits and core drillings. She emphasized
that there is no way to determine whether a site is profitable
until a lot of research is performed, research that requires
permits. Therefore, she questioned how to utilize Mr.
Archibald's suggestion, noting that often companies only need
three to four permits to determine whether the site is
economical. Still, it takes a lot of work and time to reach the
point of determining whether a site is economical.
MR. ARCHIBALD said that is true, but pointed out that these
exploration permits fall under a categorical exclusion. A
categorical exclusion is used because the land manager estimates
that the drilling impacts to the human health environment are so
small that it is not worth the time or effort to assess it, and
thus the company is given a categorical exclusion from further
analysis and the permits, which are two to three pages long,
allow companies to drill. He mentioned that he has observed up
to 70 drill holes in a year. This permit is a conditional use
permit that is valid for a year. However, the companies apply
for such a permit year after year. When the companies reach the
point of building a mill and a tailings dam and needs a solid
waste permit, an air quality permit, and wastewater discharge
permit, the project would then reach the level of review of
DNR's large mine permitting program. At that point, the EIS
then requires review of the human health effects as well as
environmental effects, which is when the costs arise. At the
point of the EIS is when the trigger should come into play, he
clarified. Given the current price of gold, it will not take
much to reach the [economical] threshold for gold mining, he
opined. The threshold/trigger, he reiterated, would winnow out
the legitimate projects versus those speculative projects.
2:39:52 PM
REPRESENTATIVE P. WILSON begged to differ, saying that it
depends on the price of metals and various other aspects.
Therefore, what one may refer to as speculative may be
considered in the running economically one year but not the next
due to price fluctuations.
MR. ARCHIBALD noted his agreement, acknowledging that there will
be some agency discretion. However, he maintained that there
are many examples of mine projects that were "beyond the pale of
speculation." For instance, less than two years ago a company
from Oklahoma staked 92 square miles of the Yakutat forelands
and announced that there was $34.5 billion worth of gold there,
more gold than has been mined in the history of the state. The
company did note that there were issues with the chain of
custody on the assay samples, which no one took with any
credibility and in the meantime the company's stock rose and the
principals made money from selling their allocated 20,000 shares
a quarter. He characterized the aforementioned as an egregious
example of pure speculation.
2:41:48 PM
REBECCA SEGAL, Alaskans for Responsible Mining (ARM), began by
informing the committee that ARM is a statewide coalition of
communities and conservation organizations. She said that upon
thorough review, ARM opposes the passage of HB 77.
2:42:31 PM
RICK ROGERS, Executive Director, Resource Development Council
for Alaska, Inc. (RDC), paraphrased from the following written
testimony [original punctuation provided]:
RDC is a statewide business association representing
forestry, oil and gas, mining, tourism, and fishing
industries. Our mission is to grow Alaska through
responsible resource development.
A top legislative priority of RDC is to encourage the
state to promote and defend the integrity of Alaska's
permitting processes and advocate for predictable,
timely, and efficient state and federal permitting
processes based on sound science and economic
feasibility.
RDC supports HB 77. The Alaska Legislature, to its
credit, provided DNR with additional resources to
address what had become an untenable backlog of
permits and authorizations. Such backlogs negatively
affect our resource industries as well as individual
Alaskans seeking required state authorizations. We
understand that while a backlog still exists, DNR has
made real progress in catching up on that work.
Ramping up staff to adjudicate a backlog is addressing
the symptom, however systematic improvements to what
has become a very complex set of statutes authorizing
DNR's work is also needed to help prevent future
backlog and delays.
The Governor, with the support from DNR Commissioner
Sullivan and his staff, has identified specific means
of improving the efficiency of our complex permitting
system. The administration should be applauded for
proposing numerous changes to the DNR enabling
statutes in order to make their processes more timely
and efficient. Adapting our key DNR statutes to
ensure we are adjudicating our land and resource
authorizations in a more timely and efficient manner
is overdue.
We encourage this committee to support the
administration's efforts to more efficiently manage
DNR's tremendous workload as the reach of the
department affects a broad cross section of Alaska
businesses, resource industries and individuals.
Thank you for the opportunity to comment.
2:45:20 PM
REPRESENTATIVE SEATON noted that Section 1 of HB 77 allows
granting of a general permit, which seems to increase the
efficiencies of certain activities. However, he asked whether
the standard for a general permit should be significant and
irreparable harm.
MR. ROGERS replied that his reading of the language is that it
"is unlikely to result in significant or irreparable harm",
which he characterized as a fairly reasonable standard. From
his experience, the department does not issue general permits
except for the most innocuous activity. Typically, general
permits are the type of activity that is not benefitting
industry as much as individual Alaskans who are attempting to
accomplish more de minimis activities. However, he deferred to
Commissioner Sullivan. Mr. Rogers opined that general permits
have not been overused and characterized them as a far more
efficient tool. He said he did not believe there is the desire
to create a situation in which Alaskans have to obtain permits
for activities for which a general permit would adequately
protect the public interest.
2:48:09 PM
REPRESENTATIVE SEATON noted his agreement with Mr. Rogers
regarding the ability to have general permits. He then related
his understanding that Mr. Rogers is saying that a general
permit can be issued if the activity is unlikely to cause
significant or irreparable harm, not a combination of the two.
2:48:53 PM
CO-CHAIR SADDLER recalled testimony from SEACC regarding the
impact of Alaska's existing permitting process and its standing
in terms of mineral development. He then inquired as to whether
RDC views Alaska's permitting process as helpful or harmful to
the mineral industry in the state.
MR. ROGERS stated that the permitting process is absolutely
necessary for the state's mineral industry, but clearly Alaska
ranks near the bottom in terms of the timeframes to permit large
projects. He characterized the argument that the permitting
system is fine and needs no improvements as somewhat outrageous.
Aside for the impact on industry, Mr. Rogers expressed the need
to consider the impact on the state. While the mineral industry
is one of the impacted entities with respect to DNR permits, Mr.
Rogers stressed how far DNR reaches into the everyday lives of
Alaskans. There are so many activities that require a DNR
authorization irrespective of the mining industry that he
cautioned focusing solely on the mining industry. Still, he
maintained that improvements can be made [to the permitting
process].
2:51:04 PM
REPRESENTATIVE TARR recalled that the testimony mentioning non-
commercial forest products should have referred to non-timber
forest products because those permits are actually generally for
commercial application. She then inquired as to what Mr. Rogers
considers to be sound science and whether he had examples of
projects that are being held up under the existing permitting
process that would move forward under the proposal in HB 77.
MR. ROGERS, regarding sound science, related RDC believes it is
important that these decisions are made on the true costs,
benefits, and impacts to the environment. Therefore, standards
and permitting decisions should be made on empirical evidence
and the best available technology and understanding how best to
develop the resources. In further response to Representative
Tarr, Mr. Rogers said he could not point to a specific project,
rather he viewed [HB 77] as an incremental tweak to the DNR
statute. Although he didn't believe HB 77 to be changes that
would suddenly make it a lot simpler for businesses to obtain
authorizations, it is worth supporting. Some of the changes
embodied in HB 77 will not impact the resource industries that
RDC represents. For instance, not requiring a public notice for
a short plat of property in an unorganized borough where there
are no easements is not earth-shattering for the mining and oil
and gas industries. However, it makes sense for all industries
if it frees up DNR staff hours to focus on something that is far
more important to the state, makes it easier for the public to
get things done, and relieves some fiscal pressure on the
limited resources of the state. Ultimately, Mr. Rogers gave
deference to DNR.
2:55:42 PM
REPRESENTATIVE TUCK asked Mr. Rogers to provide any statistics
regarding where Alaska ranks in terms of permitting that differ
from those presented thus far.
MR. ROGERS agreed to do so.
2:56:14 PM
RACHAEL PETRO, President/CEO, Alaska State Chamber of Commerce,
paraphrased from the following written testimony [original
punctuation provided]:
The Alaska Chamber is a statewide membership
organization made up of all sizes and types of
businesses from across Alaska.
The Alaska Chamber's primary mission is to advocate
for policies that improve Alaska's business climate.
Efficient, predictable and common sense regulations
and permitting processes are integral to creating an
environment in which businesses, new and old, can
succeed. Each Fall Alaska Chamber members gather to
set its legislative agenda for the following year.
For the past several years in a row, including this
year, Alaska Chamber members have expressed strong
support for Alaska's policies and regulations that
guide development of Alaska's natural resources while
protecting Alaska's environment. At the same time, we
have also advocated for streamlining those same
regulations and policies where bureaucratic and
business efficiencies can be gained.
In regard to the Fraser Institute's study, referenced
earlier today in testimony, internationally, Alaska
ranks just below Kazakhstan and just above Columbia in
regard to uncertainty concerning environmental
regulations. In regard to regulatory duplication and
inconsistencies Alaska ranks below Honduras and just
above Niger. Alaska Chamber members believe Alaska can
do better!
The Alaska Chamber supports the provisions within HB
77/SB26 because they provide clarity, eliminate
unnecessary processes, and modernize statutes based on
the experience gained over many years from the
professional staff within the Department of Natural
Resources.
It is our belief that HB 77 is a common sense piece of
legislation that should receive broad bipartisan
support. Thank you for the opportunity to testify this
afternoon.
2:58:47 PM
CO-CHAIR SADDLER inquired as to where in the Alaska State
Chamber's priority list was permitting ranked.
MS. PETRO answered that permitting was ranked number 2 in over
25 priorities. She noted that permitting has long been one of
the Alaska State Chamber's priorities. In further response to
Co-Chair Saddler, Ms. Petro confirmed that membership of the
Alaska State Chamber of Commerce is not just the resource
industry but all aspects of state business and economic
activity, that is all sectors of the economy.
2:59:39 PM
REPRESENTATIVE TUCK asked whether there is a separate statistic
for permitting from the Fraser Institute's study.
MS. PETRO said she could not answer that question, but noted
that the Fraser Institute study has multiple sub-rankings, of
which she referred to two. She informed the committee that the
Fraser Institute study is on-line and there is a link to it on
the Alaska State Chamber's web site or she could forward
interested members a copy.
3:00:33 PM
CO-CHAIR FEIGE kept public testimony open and held over HB 77.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB04 AMA Letter.pdf |
HRES 2/6/2013 1:00:00 PM |
HB 4 |
| HB04 Leg Audit ANGDA Summary.pdf |
HRES 2/6/2013 1:00:00 PM |
HB 4 |
| HB04 Leg Audit ANGDA.pdf |
HRES 2/6/2013 1:00:00 PM |
HB 4 |
| HB 77 AK State Chamber.pdf |
HRES 2/6/2013 1:00:00 PM |
HB 77 |
| HB77 Archibald-SEACC.PDF |
HRES 2/6/2013 1:00:00 PM |
HB 77 |
| HB77 Laura Stats.PDF |
HRES 2/6/2013 1:00:00 PM |
HB 77 |
| HB77 RDC.pdf |
HRES 2/6/2013 1:00:00 PM |
HB 77 |
| HB77 Sullivan - SEACC.PDF |
HRES 2/6/2013 1:00:00 PM |
HB 77 |