Legislature(2011 - 2012)BARNES 124
03/14/2011 01:00 PM House RESOURCES
| Audio | Topic |
|---|---|
| Start | |
| HJR19 | |
| HB174 | |
| HB89 | |
| HJR8 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HJR 19 | TELECONFERENCED | |
| *+ | HB 174 | TELECONFERENCED | |
| *+ | HB 89 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HJR 8 | TELECONFERENCED | |
HB 174-EXTENDING STAYED PERMITS
1:46:25 PM
CO-CHAIR SEATON announced that the next order of business is
HOUSE BILL NO. 174, "An Act relating to the period in which a
permit authorizing activities in the state related to mineral
resources, oil or gas, or transportation projects is valid when
activities authorized by the permit have been stayed by a court
or administrative order."
1:46:35 PM
CO-CHAIR FEIGE, speaking as the sponsor HB 174, explained that
HB 174 seeks to limit the tactic that has been used to try to
discourage development in the state. Alaska's permitting system
is used by various departments and resource managers to oversee
the myriad of projects throughout the state. He characterized
Alaska's permitting system as one of the most comprehensive in
the world that is used as a checklist to ensure that all the
municipal, state, and federal laws are followed. However, over
the years there have been many cases in which the development of
a project has resulted in a lawsuit in which the judge has
issued a stay. Therefore, the project is essentially put on
hold.
1:48:13 PM
CO-CHAIR FEIGE explained that HB 174 allows any permits already
issued for the activity, prior to the stay, to be placed on
hold. Most permits have a time period associated with them and
one tactic has been to obtain a stay on the permit and force the
company to continue to update the permit even while it can't
engage in the activity. He informed the committee that in the
process of review of HB 174 by applicable departments, a number
of issues/comments were raised and may require some tweaks.
However, all [the applicable] departments have indicated the
legislation is something they would like. Therefore, he hasn't
requested public testimony from the departments. Co-Chair Feige
announced that it will take a while for HB 174 to reach its
final form.
1:49:54 PM
REPRESENTATIVE GARDNER inquired as to how much of a problem is
permitting at the state level as compared to the federal level,
for which there have been many delays. She then related her
understanding that if there is a lawsuit and a court issues a
stay, under HB 174 the time line remains valid. However, there
could still be revocations if the lawsuit is successful.
CO-CHAIR FEIGE replied that would be correct. For further
clarity, he pointed out that the permit is up to the permitting
agency to grant or not. If a state-issued permit is granted for
four years and only one year has passed when the stay is issued,
then three years would remain whenever the stay is lifted.
1:51:25 PM
REPRESENTATIVE GARDNER inquired as to how problematic are
lawsuits and appeals at the state level. In discussing
challenges with permits and time delays with permits, she opined
that everyone is likely familiar with cases that deal with
federal permits. However, she inquired as to how much of a
problem it is at the state level.
1:52:18 PM
WYN MENEFEE, Acting Director, Division of Mining, Land and
Water, Department of Natural Resources, answered that there are
occasionally situations in which people are sued and it creates
delays. Depending upon the type of authorization given, the
permit or authorization may or may not be issued at the point of
the stay being issued. Typically, as the end of the stay is
reached, the department will extend the permits as the
department has the authority to do so. Under a disposal of
interest decision, the department wouldn't have issued the
authorization at the point of appeal, but by the time it reached
the conclusion court hearings, the department would [likely] be
at the point at which it could issue 25 years from that point
forward. With regard to delays, Mr. Menefee confirmed that
there are delays and there are delays because of lawsuits and
appeals.
1:53:51 PM
REPRESENTATIVE GARDNER inquired as to the reasoning behind a
time limit on the permit.
1:54:04 PM
MR. MENEFEE said that there are limits on all the department's
authorizations. For instance, permits issued under AS 38.05.850
have a maximum limit of five years since the permits are
supposed to be short-term in nature. However, long-term
disposal of interest, such as material sales and leases, can be
issued for longer periods of time. He attributed those longer
periods of time to the need for individuals seeking loans or
investments to make the project viable to have control of the
state land or the right of interest in order to ensure that any
investment can be amortized out.
1:55:09 PM
REPRESENTATIVE KAWASAKI acknowledged that the department already
does this administratively, and then questioned whether it needs
to be written in statute. Therefore, he questioned whether
there has ever been a time when HB 174 would've been of value to
the department as a permitting agency.
MR. MENEFEE clarified that he isn't going to say it doesn't need
to be done. However, he did point out that the department does
have situations in which the department has the authority to
adjust. There are cases, such as the Kensington Mine, in which
there is an existing authorization, the court implements a stay,
and a deadline is reached. He related a recent situation in the
North Slope in which the department extended the authorization
to deal with a deadline that arose. Mr. Menefee related his
understanding that HB 174, placing in statute [the department's
ability to deem valid activities authorized by a permit that
have been stayed by a court or administrative order], provide
surety that the extension would be granted versus the
possibility that the department would extend it. Furthermore,
placing this in statute sends those who might be suing for the
purposes of delay that there will be an extension granted.
1:56:58 PM
REPRESENTATIVE KAWASAKI surmised then that the department
extended the North Slope permit administratively through
regulations.
MR. MENEFEE responded yes, according to the department's
authority under AS 38.05.850. That North Slope permit was a
temporary authorization that went year to year. While under
delay, the department has the right to redo the terms. He
explained that the idea was trying to lease the parcels,
therefore the stay came due to the lease. However, the permit
was still valid and the department extended it to keep them
operating until a decision was made regarding the leases.
1:57:50 PM
REPRESENTATIVE KAWASAKI surmised that for large projects there
would be multiple permits from multiple agencies. How does the
division currently track all of these permits, he asked. He
further asked how the division would track each of the permits
it extends when there is a stay.
MR. MENEFEE answered that under a stay, the extensions would be
handled by each authorizing agency responsible for a particular
permit, which he understood the legislation to do as well. For
a large project that used the state's large project team under
the Office of Project Management and Permitting, then there
would be a project manager who would review it and coordinate
it. For those projects that don't use the division's
coordinating services, each individual entity it authorizes
would be responsible.
1:59:50 PM
REPRESENTATIVE P. WILSON asked whether there is anyone else in
the state, other than those listed in HB 174, which authorizes
permits that should be added.
MR. MENEFEE pointed out that the location of the various
citations in HB 174 fall under different statutes that are used
by specific agencies. For instance, an oil and gas [permit]
falls under the jurisdiction of the Oil and Gas Conservation
Commission for an authorization for drilling. However, theirs
may not be the only authorization. There could be many
different authorizations required from different agencies. Mr.
Menefee clarified that it takes into account more agencies than
are listed in the proposed HB 174. Due to the definition of
"permit" outlined in the proposed statute, it does cast a broad
net that would apply to any entity that authorizes or provides a
certificate for those operations.
2:02:12 PM
REPRESENTATIVE P. WILSON asked then if the use of the term
"permit" allows other agencies to take responsibility. Since
each section of the legislation addresses a different agency,
she questioned whether additional language is necessary. She
said she really likes HB 174, but asked if it should be
broadened to cover other areas.
CO-CHAIR SEATON reminded the committee that the sponsor has said
he will work on this legislation for some time.
2:03:08 PM
CO-CHAIR SEATON then questioned whether this legislation would
also apply to municipalities that have [authorized] a permit.
MR. MENEFEE read the bill such that it would affect
municipalities and would have to adhere to the automatic
extensions as well.
2:04:27 PM
CO-CHAIR SEATON asked whether HB 174 includes leases, such as
oil leases. He further asked if this legislation would lengthen
the term of an oil lease also or is the legislation speaking
strictly to an authorizing permit.
MR. MENEFEE, directing attention to the definition of "permit"
in Section 3, opined that it sets a very broad net. Therefore,
the legislation requires anything that needs to be obtained from
any state agency or municipality. The aforementioned means that
[this legislation would apply to] any authorization or
certificate that's required, and thus would include leases,
rights-of-way, material sales, and permits.
2:05:48 PM
CO-CHAIR SEATON posed a scenario in which someone has an
expiring oil and gas lease, and asked if one of the partners of
the lease could file a suit and thus automatically extend the
lease if a stay was issued. Therefore, the lease wouldn't
return to the state, he surmised.
2:06:44 PM
CAMERON LEONARD, Senior Assistant Attorney General, Natural
Resources Section, Civil Division (Fairbanks), Department of
Law, confirmed that could be a possible interpretation of the
legislation since the term "authorization" is very broad.
2:07:28 PM
CO-CHAIR FEIGE interjected that there would still have be a stay
from the court or an administrative order in order to cease work
on the project. He asked if Co-Chair Seaton is talking about
the possibility of artificially extending a lease.
CO-CHAIR SEATON clarified that he is just considering other
implications in terms of oil and gas leases that are issued over
a specified term under a specified plan and term of development.
He said that he's in favor of the concept of HB 174, but he
wanted to be sure there aren't unintended consequences.
2:08:43 PM
REPRESENTATIVE MUNOZ asked whether HB 174 could also apply to
federal projects within the state.
MR. LEONARD answered that he didn't believe so because the
definition of "permit" doesn't reach that broadly. Furthermore,
the state doesn't have jurisdiction to effect the duration of a
federal permit.
2:09:18 PM
REPRESENTATIVE GARDNER requested examples of when the lack of
the provision proposed in HB 174 has adversely impacted a
leaseholder or permittee.
2:09:54 PM
CO-CHAIR SEATON announced that HB 174 would be held over.
2:10:23 PM
The committee took an at-ease from 2:10 p.m. to 2:12 p.m.