Legislature(1993 - 1994)
03/29/1993 08:00 AM House RES
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 132: EXTEND RESOURCE EXTRACTION PERMIT/LEASE Number 380 REPRESENTATIVE TOM BRICE, PRIME SPONSOR of HB 132, explained that the bill helps the so-called moms and pops with timber interests where the title is unclear. He said the bill would allow permits enjoined in court and found to be issued properly, to have time elapsed in the court case not be taken from the permit time period. He saw it as a question of equity, if the developer had been working within the letter of the law. The bill was initiated by concerns by the Alaska Minerals Commission, he explained. The Governor's Task Force on Regulations came up with the same proposal, he added. Number 415 REPRESENTATIVE BUNDE asked Representative Brice to address the position paper by the Department of Commerce and Economic Development (DCED) in members' packets, and specifically, the improvements proposed there. REPRESENTATIVE BRICE replied that he had amendments drawn up to address the first and second of those recommendations. Number 425 CHAIRMAN WILLIAMS noted that Representative Carl Moses had joined the meeting. REPRESENTATIVE DAVIES asked to see copies of the amendments. REPRESENTATIVE BRICE distributed copies of one amendment to HB 132, which defines the permit, and said that the second one was being drawn up, which relates to expansion of the application beyond resource extraction and removal. He noted that the language was being clarified with the DCED. Number 454 REPRESENTATIVE BRICE described the amendment to page 2, following line 17, adding a new subsection, "in this section, permit means the permit, lease, authorization, license, or any other determination necessary for or related to resource extraction or removal for the expansion of a permit." On page 2, line 18, following "applicability," insert (a). On page 2, following line 21, he said a new subsection would be inserted, to read, "(b) in this section permit has meaning given in AS 46.35.300(D), added by section 1 in this act." Number 473 REPRESENTATIVE JAMES asked whether the sponsor would prepare a committee substitute reflecting the amendments. REPRESENTATIVE BRICE said he had a CS drawn up, which included recommendations of the Alaska Miners Association, which would include language relating to when an agency has a suit brought against it, and when permittees are not able to use a permit. Number 488 REPRESENTATIVE CARNEY suggested that if a CS had been prepared, the committee should work off that. Number 500 REPRESENTATIVE FINKELSTEIN commented that he had a hard time understanding HB 132 because of the complexity of the situation and the variety of permits it appeared to apply to. He suggested it could invite abuse of the provisions, if a permittee intentionally enlisted someone to file a suit against him for the purpose of prolonging the permit period. Number 523 REPRESENTATIVE BRICE replied that there was nothing in law to prevent that now. RAGA ELIM, SPECIAL ASSISTANT TO THE COMMISSIONER OF NATURAL RESOURCES, interjected that a lawsuit would be dismissed if the court deemed it frivolous. Number 534 REPRESENTATIVE FINKELSTEIN suggested that it was conceivable the parties could make the case so factually complex that it would not be dismissed as frivolous. CHAIRMAN WILLIAMS agreed that frivolous lawsuits are wasteful and commented that he saw HB 132 as helping to alleviate the harm they cause. REPRESENTATIVE FINKELSTEIN said that loopholes in the law could be used for the advantage of the permittee, with the company getting into a lawsuit as a delaying tactic. He referred to section 2 at the top of page 2, addressing activity being prevented from occurring. He asked what degree of activity would have to be impaired if there is a big operation and one small portion is the subject of the suit. He wanted to know if the entire operation would be subject to the provisions of HB 132. REPRESENTATIVE BRICE asked whether the committee had suggestions to resolve that potential problem. Number 562 MR. ELIM suggested that HB 132 could be fashioned so the permittee's activities on the larger portion (not subject to a suit), could continue while the smaller portion would be on hold. The extension of rights with respect to the permit would be extended only in connection with that smaller percent, he explained. That activity would be held in abeyance pending the outcome of the litigation, and they would then have that period of time extended after the litigation was settled to complete the permitted activity. MR. ELIM noted that this could change the whole economics of the project because the company would have its infrastructure in place to complete a project as a whole, and it might not be economical to complete that small percentage when the rest has been completed. MR. ELIM added that in that scenario, the parcel that was frozen for the period of litigation would be extended. Number 583 REPRESENTATIVE FINKELSTEIN suggested that HB 132 was not written to allow that. Another problem, he added, was that in the permitting process, there could be several issues within one permit, and the language in the bill needs to address that. Number 593 VICE CHAIRMAN HUDSON raised an issue which he said could present a bigger challenge. He explained that currently, if a party applied for a permit to do resource extraction or other activity, they could be sued by a person other than the state and they could be prevented from going ahead with whatever the project was. Meanwhile, the time clock has been running on the permit period. He said this presents a policy question of whether the permit time should be stopped by the suit. If a suit is filed, he said, the clock is stopped. If the suit is not successful, the clock starts running again. VICE CHAIRMAN HUDSON suggested this was a question of fairness, as to which way it should apply. The legislature had to make a policy call on this matter, he stated. Number 622 REPRESENTATIVE DAVIES commented that at first the issue seems simple, but that it opens arcane issues of resource extraction. He also noted ambiguity in the distinction between the applicant for a permit and the holder of a permit. He recommended that a distinction be made in HB 132. Number 630 REPRESENTATIVE CARNEY commented that HB 132 was trying to correct a potential problem, and that it would be preferable to take care of the honest people through this bill, and to worry about the crooks later. REPRESENTATIVE FINKELSTEIN agreed with the intent of HB 132, but thought it was possible to find a solution to the questions raised. He discussed the permitting process, and said when someone applies for a permit, and then someone sues, there would be a temporary restraining order on the issuance of the permit. MR. ELIM clarified that usually there would be an injunction on the activity itself if the permit had been issued. REPRESENTATIVE FINKELSTEIN asked if the case of the temporary restraining order would not apply if the permit had not begun. So, he added, the permit would have had to be issued for the activity to begin, and if a suit is then filed, it seemed to him that HB 132 was trying to get at a suit that tries to undo the purposes of the permit. REPRESENTATIVE FINKELSTEIN suggested an amendment to deal with that situation where an insignificant portion of an activity is all that is stopped, allowing the rest of the permitted activity to go on. This would be on page 2, line 2, adding language to say "completely prevented" or "substantially prevented." This, he explained, would address the potential for a small portion of an operation holding up the whole project. REPRESENTATIVE CARNEY suggested that since a committee substitute had not been adopted, perhaps the suggestions could be considered in a work session. Number 680 REPRESENTATIVE JAMES addressed the suggestion made by the Alaska Miners Association, on page 2, line 24 of the proposed committee substitute to HB 132, to include "that related to resource extraction are removable as defined by AS 46.35.204." TAPE 93-39, SIDE A Number 000 REPRESENTATIVE BRICE noted that he was looking into the questions regarding conflicting permits. He believed the miners' suggestions were intended to address that, but he was concerned that their suggested language referred to an old section of law that had not been updated since 1977. This was something he said he planned to look into. He suggested HB 132 be moved on with the commitment to make sure the questions were addressed in the next committee. Number 026 VICE CHAIRMAN HUDSON made a MOTION to adopt the committee substitute for HB 132. CHAIRMAN WILLIAMS asked for objections to the motion and, hearing none, CSHB 132 (RES) was ADOPTED. Number 033 REPRESENTATIVE FINKELSTEIN MOVED to make a conceptual amendment to page 2, line 2, relating to the degree of work. He recommended inserting the word "substantially." REPRESENTATIVE BRICE said he was amenable to the change. REPRESENTATIVE BUNDE agreed that "substantially prevented" would address the problem. CHAIRMAN WILLIAMS asked if there were any objections to the motion. Hearing none, the AMENDMENT was ADOPTED. REPRESENTATIVE JAMES MOVED to amend page 2, line 24, to add the language suggested by the Miner's Association, "as defined by AS 46.35.204." CHAIRMAN WILLIAMS asked if there were objections. Hearing none, the AMENDMENT was ADOPTED. VICE CHAIRMAN HUDSON MOVED to pass CSHB 132 (RES) as amended with zero fiscal note with individual recommendations. He asked unanimous consent. Number 119 CHAIRMAN WILLIAMS asked if there were any objections to the motion. Hearing none, the MOTION PASSED.
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