Legislature(2001 - 2002)
04/04/2001 03:40 PM Senate RES
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SB 139-STATE WATER USE
CHAIRMAN TORGERSON announced SB 139 to be up for consideration.
MR. BOB LOEFFLER, Director, Division of Mining, Land and Water,
Department of Natural Resources (DNR), said he wanted to first
describe the problem this bill solves and then go through what the
bill does and explain how it's one part of the solution. He told
members:
In order to withdraw a significant amount of water from
the state, you need a water right if it's a permanent
withdrawal and a temporary water use authorization if
it's temporary for five years.
The basic problem we have is right now the system is
broken. We cannot issue the water rights that people
request. We don't provide the services that Alaskans
need. At the peak, this program had $1.6 million in the
program and 39 full-time people. Two years ago it was
down to $325,000 and four people and quite frankly that's
not enough to run the program that we have now - a
program that maintains 21,000 water rights files,
receives 250 applications for water rights and 150
applications for temporary water use permits.
The consequences of those four people not being able to
run the system is a backlog. We now have a backlog of 600
- 700 water right applications and a total of 3,000
actions - transfer, extensions and things like that. The
consequences of that backlog are threefold: people call
me up and say, 'When am I going to get my water right?'
and I have to say, 'Well, given our back log, it's going
to be two to three years.' And then they say, 'I can't do
my development for two to three years? If I withdraw
water, I'm going to break the law for two to three
years?'
That's not the way government should be run and that's
not a service that I'm proud to provide.
The second consequence is because of a staff that's
trying to do things with shortcuts, we're targeted for
litigation and we almost lost a year of exploration at
NorthStar.
The third consequence, of course, is that people go ahead
and withdraw water without a permit. Often, that probably
does very little harm to the resource. Occasionally, it
does risk a resource. That's the problem we need to
solve. It's a problem of a group that cannot run the
program that we have today. It's not a problem created by
a particular legislature or administration. We have had
declining budgets for 20 years. This bill is one part of
a three-part solution. I would like to describe again
those three parts so you can see how the bill fits in and
then I would like to go to what the bill does.
The three parts of the solution we envision are first, we
cannot continue to administer a program designed in the
early 80s with budgets for this millennium. So we need to
find a way to do more with less and perhaps to provide
less service for less money, which will run the program
on a smaller budget. To that end we're proposing
regulations in the next two to three weeks that should
significantly streamline the program and allow those
water withdrawals that are least likely to affect the
environment or other users go much quicker. We think 65
percent of our caseload will fall into that category.
The second is even a streamlined program needs more than
four people to run it. So to that end there is an
increment in this year's budget for an additional
$300,000 to both run the program and in four or five
years rid us of the backlog. The performance measures I
put down for that increment was that we would do a
typical water right within 60 days and a typical
temporary water use permit within about 15 days.
The third part - streamline program - more money, is this
bill does two things. The first thing it does is try to
provide a long term income source to fund the program.
I'm easy. Any way we get the money, we'll take it to run
the program to provide the services that I think Alaskans
need. But this bill tries to provide a long-term income
source to do that and it does that through recommending
water use fees. When you get a water right, it's a right
forever. You never need to touch it again. This scale
would assess a sliding scale water use fee. I've been
shopping that around and I'd like to tell you the
reactions I get from people about that. But first let me
tell you what the second part of the bill does. Our
temporary water use program, which we use for temporary
water uses, has been the subject of a significant amount
of litigation on the North Slope. It is a program that
was implied by statute, but created in regulations. This
bill would, in fact, provide explicit legislative
authority for how the program has been working for 20
years. Some validated permits have been called into
question by some of the North Slope rulings. So that's
what the bill does. It does two things, a long-term
income source for the program and explicit legislative
authorization for a temporary water use fee program. It
does not change how we run the water use program.
Number 1500
MR. LOEFFLER said he produced a proposed amendment as the result of
the reactions he received after showing this around in the mining
community, the agriculture community, the Alaska Water Resources
Association, the Resource Development Council and environmental
groups. The groups came to the consensus that this is a problem.
The state is not providing services that people demand and the
problem needs to be fixed. He said:
With respect to charging it through temporary water use
fees, although there was some agreement, that is, an
annual fee on your property right, the reaction ranged
from reluctant approval to disgust to outright hostility.
In a sense, people were saying, 'You have a problem, but
this is a silly way to fix it.'
What they were suggesting was a number of things: one,
that an annual fee on a property that you own was
inappropriate and no other state works that way and
second, they were concerned, quite frankly, that there
were no bounds to how much I could charge in the bill nor
did existing permitees want to fund the 20-year backlog.
So what was suggested instead is that they said you
should charge people for the services you provide. You
should charge people the reasonable direct cost of the
permit application and that suggestion was pioneered by
the legislature in HB 361 last year, commonly called the
DEC fees bill.
MR. LOEFFLER said the proposed amendment is the DEC fees bill. It
puts into statute a framework that directs DNR to charge the
reasonable direct costs of processing those applications and that's
the long-term income source.
MR.STAN FOO, Alaska Miners Association (AMA), stated support for SB
139. He said the AMA appreciates the department's efforts to
address this issue that involves all water users. The AMA also
supports the technical amendments and is encouraged by the effort
to use the DEC fees bill in the framework for this effort. However,
he expressed concern that water fees should not be necessary for
uses such as suction dredges or water that's collected and released
back into a stream.
MR. BOB STILES, President, DRven Corporation, said he was
testifying on behalf of the DRven Corporation. Drven supports the
technical amendments to this bill and recognizes the problems that
DNR faces. DNR is charged with managing a resource that often has
no constituency. One of the main reasons he is present today is to
illustrate that water rights, while they are not flashy, do have a
constituency.
MR. TADD OWENS, Executive Director, Resource Development Council
(RDC), said the RDC worked for about 2 1/2 years with a diverse
group of industry representatives, the legislature and DEC to pass
HB 361 and they support the department's recommendation that this
program be added into that structure for fees. It distributes the
burden of the program's costs fairly between the private sector, in
terms of industry applying for these permits, and the public at
large. He stated, "Another critical issue this bill solves is DNR's
backlog. There are a lot of folks out there who are operating
essentially without their authorization and we do support DNR's
request for funding to take care of that backlog."
MS. PAM MILLER, an Anchorage resident, said she is concerned about
SB 139 as Alaska has the best water statutes in the nation that
were set up to protect Alaska's clean water, fish and wildlife.
MR. BILL WARD, Ward Farms, opposed SB 139, and said he came from
states where water was a very valuable commodity and water rights
were sought after. They were handled with very little bureaucracy
and overhead. He said the bureaucracy in Alaska is quite large; to
get water rights he had to go through ADF&G, the Department of
Environmental Conservation and Coastal Zone Management. He is
concerned that "reasonable fees" is more for government than it
would be for the private sector. He said he uses half the amount of
water exempted from a residential household, or about 800 gallons.
He is stuck between the big commercial rigs and the residential
users. He warned, "If you want to make money for the general fund,
that's okay, but please don't set up a level of bureaucracy over
nothing more than people to shuffle papers."
MR. GARY SONNICHSEN, a Big Delta resident, supported Mr. Ward's
testimony and opposed SB 139. He said the department's plan is to
charge more fees to add a lot more government and a lot more
paperwork, which will create more problems.
MR. BILL MICHEL, a Delta Junction resident, said he didn't think
the state had any surface or subsurface rights to the water.
Therefore, they have no business to tax it.
MR. KEITH WARREN, a Delta Junction resident, said in the private
sector, if you can't make your budgets for whatever reason, you've
got to dole it out. He thought the government should take this
lesson from the private sector. He opposed SB 139.
MR. JOHN WENGER, a Copper Center resident, supported Mr. Ward's
testimony 100 percent and said what really concerns him is that the
next largest user group is the public water supply. If Copper
Center's water supply falls under the department's over 15,000
gallon a day category and the people have to start paying fees, it
would put a lot of people back financially.
MR. HARVEY LEONARD, a Copper Center resident, opposed SB 139. He
thought it was another attempt by bureaucracy to make them pay for
something they don't have the money to pay for.
MR. AL ROIG, a Copper Center resident, opposed SB 139. He thought
the bill was poorly written and would do nothing but create a
larger bureaucracy.
MR. ERIC NASHLUND, a Copper Center resident, said that SB 139 is
just a revenue-generating source.
TAPE 01-27, SIDE B
MR. SAM LIGHTWOOD, a Copper Center resident, said the legislature
is requiring fees and other small amounts for services that the
state normally provides for its citizens. Mr. Ward said he had to
apply for four different water rights permits. That is duplicative
and makes the process so complicated. He noted, "It was much better
when we had a little more adequate funding from the legislature
directing to provide these services to people. The answer to that,
of course, is the legislature needs to find better sources of their
funding. They are nickel and diming everyone to death and the
overall plan has to be worked out."
He thought the legislature should reinstate the income tax and
said, "I hope I get out of here alive."
MR. JOHN KUNIK, a Glennallen resident, said the bill would require
water meters, meter readers, installation crews, law enforcement,
etc. He asked what would happen to individuals who live on federal
lands who use water and how all the water would be metered.
MR. MATT KRINKE, a Glennallen resident, opposed SB 139. He said
[he] can't afford the money to pay for the bureaucracy.
CHAIRMAN TORGERSON asked if the bill will affect water rights on
federal land.
MR. LOEFFLER answered that all water is reserved by the state.
There is an implied federal water right that the feds have a right
to for certain federal lands, but it is determined through a joint
process that is very complicated or typically they just come to the
state for a water right.
CHAIRMAN TORGERSON asked if the state could bill them more than it
does Alaskans or whether they are billed at all.
MR. LOEFFLER replied that they are billed an application fee like
everyone else.
MR. DANIEL BOONE, a Chitina resident, said, "I don't think this is
a good bill. One of the main reasons is that a few years ago the
State of Alaska left us millions of dollars in hydro projects for
small communities around the state, like Bradley Lake. By charging
a fee to the electric companies and the small private utilities to
generate cheaper electricity, the rates will immediately increase
probably twofold." He said the other reason he is against the bill
is that too many places in Alaska have "public wells" and this bill
would increase the fees on them.
SENATOR ELTON referenced the language on page 5, line 24, and asked
if AS 46.15.080 applies to the issuance or extension under this
section of an authorization for temporary use of water. He said
"Temporary" is defined as five years and possibly 10 years under
the extension according to a conversation he had with Mr. Loeffler.
He did not understand why Mr. Loeffler didn't want the provisions
of that to apply when the provisions say that the commissioner has
to consider the effect on fish and game resources, public health
and economic activity resulting from the activity.
MR. LOEFFLER responded that they consider the effect on fish
resources and public health before they prioritize water users,
"but a temporary water use does not convey a property right. OAO
gives us a best interest criterion before we convey a property
right. This is part of making clear that a temporary water use
authorization is, in fact, a revocable authorization - does not
convey a property right or anything like a property right. But
certainly we work very closely with Fish and Game to take into
account any affect on fish resources, wildlife, or, for that
matter, prior water right holders."
SENATOR ELTON said, "I understand that you want to make a
distinction between a permit and a temporary water authorization."
He asked where in statute it compels Mr. Loeffler to consider the
effect on fish and game resources or public health or other
economic activities for a temporary authorization if he is
exempting himself from those provisions.
MR. LOEFFLER answered that he is required to consult with ADF&G.
Under subsection (f), he is expected to put limitations on
protecting the rights of other people and the public interest. The
methods and regulations he has been dealing with for 20 years also
require him to do that and that's been the department's mode of
operation. He said he would have to get back to him with a complete
answer.
SENATOR ELTON asked, "I took a look at the public notice section
that is repealed under this bill and it seems to me that I know
that public notice can be onerous, but the public notice provisions
here provide that within 15 days of publication of notice, an
interested person may file an objection and that the commissioner
has to consider that objection within 30 days, can extend that to
180 days, if the commissioner thinks there's enough there to have a
hearing - AS 46.15.133, the section that they are exempting
themselves from." He said if NorthStar is exluded, he wondered why
giving notice with 15 days to file an objection and giving the
commissioner 30 days to make a determination has been onerous in
the past.
MR. LOEFFLER answered:
Most of the temporary water use permits are for things
like construction camps and when the agencies determine
there is no environmental harm, a 15 to 40 day wait to
halt construction in mid-summer is a problem. In areas
where we think there is likely to be harm, we can public
notice it and we are not prohibited from doing it. The
practice for the last 20 years has been not to [indisc.]
things and everyone imagines a 5-year or 10-year
facility, but often we used them for DOT, which is one of
our major consumers. In the middle of summer
construction, yes Senator and Mr. Chairman, a 15 - 30 day
delay is a problem.
When we are giving a state resource away forever, which
is a water right, we're constitutionally required to do
public notice. But for something that we believe that we,
the agencies, determine won't harm the environment or
other water users and is temporary and is revocable if
there is a problem that delay often will cause a problem.
SENATOR ELTON responded:
When you get to be my age, 10 years can seem like forever
and the second comment would be that I understand that
you may have a problem with DOT or someone wanting water
rights for two days to make concrete or cement, but
that's already covered in AS 46.15.133, because it says,
the Commissioner may designate types of water
appropriations that are exempt from this section. So, the
commissioner isn't precluded from making a quick
decision, because there is a provision that allows him to
do that.
Number 1900
SENATOR LINCOLN asked Mr. Loeffler to expand on the fact that DNR
expects to discount fees for non-consumptive use. She also asked
what the impact of these fees would be on the previous speaker who
was a farmer and, therefore, had the 800-gallon exemption per acre
for 6,000 acres.
MR. LOEFFLER said:
Let me answer the second one first - what are the impacts
of the fees. Under the bill as written, the fees would
range from $50 to $500 for a water right. So if you had a
water right, if you had a number of water rights, you
could have multiples of $500 each year. Although,
typically we try to consolidate them for that reason. I
will say that under the amendments that I suggested that
you would pay the reasonable cost of adjudicating the
water right and then there would be no more fees. So, for
the person in Delta who has a farm, the bill as written
would provide an annual fee that is a sliding scale based
on the amount of water right. For the amendment, we
suggested a one-time application fee that would be
related to the cost of adjudicating. In an area where
there's not a lot of people and not much problem with
adjudication, you would expect to have a reasonably small
fee.
SENATOR LINCOLN asked if that would be less than $1,000.
MR. LOEFFLER said he didn't know, but he thought most small water
right holders would be less than $1,000. He said he would get an
estimate.
CHAIRMAN TORGERSON said they had heard the fear out there that
people just don't trust government to do a reasonable fee, "and I
sort of agree with that…I'd like to see what your intent is."
SENATOR LINCOLN asked him to get back to them on fees for a miner
replenishing the water source that goes right back into the stream.
CHAIRMAN TORGERSON said he thought that was a suggested amendment
instead of just being mentioned in a fiscal note.
SENATOR TAYLOR said: "If we're going to set any fees at all, I have
voted for my last fee bill in this legislature after the blood,
sweat and tears that you, Mr. Chairman, and I have put into DEC
just trying to get a handle on how they were going to charge every
hotdog cart out there to go inspect them and never did get a
straight answer in two years. I'm not about to start increasing
fees so as to support your agency."
CHAIRMAN TORGERSON noted that they had exempted the hotdog carts.
He said he intended to work more on the bill starting with the
North Slope.
SENATOR ELTON said he thought part of the problem was that there
aren't as many people doing permits now as there used to be. One of
the sad things about the testimony is that people have said they
are willing to pay just to speed the process up, because waiting
for two years or longer is a significant economic drain. He stated,
"This is one approach. Another would be to restore funding closer
to a level we had 15 or 16 years ago."
CHAIRMAN TORGERSON added, "Or exempt the users and widen the
brackets a little bit more instead of worrying about the guy that
carries the canteen from Anchorage to Mat-Su.
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