Legislature(2013 - 2014)BARNES 124

03/20/2013 01:00 PM House RESOURCES


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Delayed to 1:30 p.m. Today --
+= SB 21 OIL AND GAS PRODUCTION TAX TELECONFERENCED
Scheduled But Not Heard
<Pending Referral>
-- Testimony <Invitation Only> --
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= SB 27 REGULATION OF DREDGE AND FILL ACTIVITIES TELECONFERENCED
Moved Out of Committee
-- Testimony <Invitation Only> --
+= HB 158 DNR HUNTING CONCESSIONS TELECONFERENCED
Heard & Held
-- Testimony <Invitation Only> --
         SB 27-REGULATION OF DREDGE AND FILL ACTIVITIES                                                                     
                                                                                                                                
1:42:36 PM                                                                                                                    
                                                                                                                                
CO-CHAIR FEIGE announced  that the first order  of business would                                                               
be SENATE  BILL NO.  27, "An Act  establishing authority  for the                                                               
state  to  evaluate  and  seek   primacy  for  administering  the                                                               
regulatory  program for  dredge  and fill  activities allowed  to                                                               
individual  states   under  federal  law  and   relating  to  the                                                               
authority; and providing for an effective date."                                                                                
                                                                                                                                
1:43:41 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  TARR  moved to  adopt  Amendment  1, labeled  28-                                                               
GS1750\A.2, Nauman, 3/19/13, which read, as follows:                                                                            
                                                                                                                                
     Page 4, following line 23:                                                                                                 
     Insert a new bill section to read:                                                                                         
        "* Sec. 4.  AS 46.03 is amended by adding a new                                                                     
     section to read:                                                                                                           
          Sec. 46.03.021. Dredge and fill permitting                                                                          
     program  report to  the legislature.  The commissioner,                                                                  
     in  coordination  with   the  commissioner  of  natural                                                                    
     resources,  shall provide  to  the  legislature, on  or                                                                    
     before December 31  of each year,  an annual  report of                                                                    
      the cost of administering the state dredge and fill                                                                       
     permitting program described in AS 46.03.020(14)."                                                                         
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
REPRESENTATIVE JOHNSON objected for the purpose of discussion.                                                                  
                                                                                                                                
1:43:51 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  TARR  understood  concerns  about  the  potential                                                               
costs for  the Section  404 program.   She  stated it  would take                                                               
several years for  the application to be completed.   Amendment 1                                                               
requests the department  provide an update to  the legislature on                                                               
the cost of the program.                                                                                                        
                                                                                                                                
REPRESENTATIVE JOHNSON asked the department to answer questions.                                                                
                                                                                                                                
1:45:17 PM                                                                                                                    
                                                                                                                                
LARRY   HARTIG,   Commissioner,   Department   of   Environmental                                                               
Conservation  (DEC),  stated  he  understood  the  importance  of                                                               
keeping the  legislature apprised of expenditures.   However, the                                                               
administration doesn't see the need for  Amendment 1.  He said he                                                               
has  interpreted the  Amendment 1  differently than  presented by                                                               
Representative  Tarr.   He understood  Amendment 1  would require                                                               
the  department  to provide  an  annual  report  of the  cost  of                                                               
administering  the  state  dredge and  fill  permitting  program.                                                               
However, the department  would not administer the  program for 5-                                                               
10 years.  Prior to  expenditures occurring, the department would                                                               
request  the funding  authority  from the  legislature.   If  the                                                               
intent  of  Amendment 1  is  to  have  the department  provide  a                                                               
progress report,  he responded that  the department  presents its                                                               
budget.   Further, to submit  a report seemed a  little premature                                                               
until   the  information   had  been   gathered,  assessed,   and                                                               
evaluated.   Otherwise,  the legislature  would receive  a report                                                               
with a  lot of  contingencies.  Although  he understood  the need                                                               
for accountability, he felt this was not necessary.                                                                             
                                                                                                                                
1:47:18 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  P. WILSON  inquired whether  the commissioner  is                                                               
saying that  the information  would be  provided anyway,  just to                                                               
the Finance Committee rather than the legislature as a whole.                                                                   
                                                                                                                                
COMMISSIONER HARTIG responded that is  correct if the language is                                                               
read to  report at the beginning  of the next calendar  year.  He                                                               
elaborated that the  program wouldn't be up and  running, but the                                                               
department  reports  details  to  the Finance  committee  on  its                                                               
activities.                                                                                                                     
                                                                                                                                
REPRESENTATIVE  JOHNSON offered  his  belief  this would  require                                                               
reporting for  the previous  year, which  he understood  would be                                                               
presented at  the time the  department requested funding  for the                                                               
future year.   He did not  see the necessity of  the requirements                                                               
in Amendment 1.                                                                                                                 
                                                                                                                                
1:49:05 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON expressed his  concern that the fiscal note                                                               
spans five years.  He  further expressed concerned that a process                                                               
is being set  up which would require $2.5 million  each year over                                                               
the  next four  years.   He suggested  a report  on the  progress                                                               
could be  helpful and  perhaps Amendment 1  should be  changed to                                                               
"progress on  the analysis of  the Section 404  primacy process."                                                               
Otherwise, an open-ended $2.5 million commitment exists.                                                                        
                                                                                                                                
1:50:08 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON  moved to  adopt Conceptual Amendment  1 to                                                               
Amendment 1,  which would require  the annual report  to indicate                                                               
any  progress that  has been  made on  implementing or  analyzing                                                               
implementation of the 404 permit.                                                                                               
                                                                                                                                
1:50:47 PM                                                                                                                    
                                                                                                                                
CO-CHAIR FEIGE objected  for the purpose of discussion.   He said                                                               
he is  unsure of  the sponsor's intent;  however, the  bill would                                                               
authorize the department to investigate  whether or not the state                                                               
should  assume primacy  of  the  404 program.    He didn't  think                                                               
requesting  an annual  report about  the cost  to administer  the                                                               
state dredge and fill permitting program seemed to correspond.                                                                  
                                                                                                                                
REPRESENTATIVE  TARR  stated  that  Amendment 1  is  intended  to                                                               
provide a  progress report, as  stated by  Representative Seaton.                                                               
She said  the committee has  been reviewing the fiscal  notes for                                                               
the  next  four years,  without  knowing  the costs  to  actually                                                               
administer  the program.   She  also said  the legislature  could                                                               
consider  authorization of  funding  for  positions necessary  to                                                               
prepare the application;  however, if primacy of  the 404 program                                                               
will mean hiring  40 new staff members, given  the current budget                                                               
situation, the  legislature might decide  now is not the  time to                                                               
do so.   Therefore, it might  not be wise to  consider continuing                                                               
with the applications.  The purpose  of Amendment 1 is to receive                                                               
a progress  report.   In fact, looking  back at  the department's                                                               
work on  primacy for  402, at  some point  the department  had to                                                               
submit  the   number  of  positions.     Besides   preparing  the                                                               
application, the  department will need to  administer the program                                                               
and she  could see the value  to also obtain a  fiscal impact for                                                               
administering a program.                                                                                                        
                                                                                                                                
1:53:52 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE TARR agreed with the  Conceptual Amendment 1.  She                                                               
also said  on line 7  to add "projected  cost" so it  would read,                                                               
"...annual  report of  the projected  cost  of administering  the                                                               
state dredge  and fill  permitting program ...  ", which  is what                                                               
she was  intending.   This would provide  the legislature  with a                                                               
full picture of the 404 process.                                                                                                
                                                                                                                                
1:54:11 PM                                                                                                                    
                                                                                                                                
CO-CHAIR FEIGE  suggested Representative Tarr  and Representative                                                               
Seaton work on the conceptual Amendment.                                                                                        
                                                                                                                                
1:54:28 PM                                                                                                                    
                                                                                                                                
The committee took an at-ease from 1:54 p.m. to 2:00 p.m.                                                                       
                                                                                                                                
2:00:44 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON referred  to Amendment 1, line 7.   He made                                                               
a  motion to  revise Conceptual  Amendment 1,  which would  read,                                                               
"Annual report  of the  progress in  the development  of assuming                                                               
the  state dredge  and fill  permitting program  described in  AS                                                               
46.03.020 (14)  and the estimated  cost of administration  of the                                                               
program."                                                                                                                       
                                                                                                                                
2:01:34 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHNSON  asked whether a  motion was on  the floor                                                               
for a previous Conceptual Amendment  1 that needs to be withdrawn                                                               
prior to proceeding.                                                                                                            
                                                                                                                                
REPRESENTATIVE SEATON  suggested he merely wished  to clarify the                                                               
language for Conceptual Amendment 1 to Amendment 1.                                                                             
                                                                                                                                
CO-CHAIR   SADDLER  objected   for  discussion   purposes.     He                                                               
understood  the intent  is to  allow the  department to  indicate                                                               
progress on the 404 primacy.  He  did not want to use an estimate                                                               
for the  one-year process  as the basis  for not  proceeding with                                                               
further evaluation.   He  clarified he understood  it would  be a                                                               
progress report  and not  a final decision  point.   Further, how                                                               
accurate an estimate needs to  be, he suggested leeway given that                                                               
it's a new process.                                                                                                             
                                                                                                                                
2:02:52 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON responding  to Co-Chair  Saddler, answered                                                               
yes, this would  be a written progress report  on the development                                                               
of the  404 permitting  process to the  legislature.   He assured                                                               
members  it  is  not  his  intention  that  the  report  must  be                                                               
complete; rather,  the department would submit  a progress report                                                               
that includes any known estimates.                                                                                              
                                                                                                                                
REPRESENTATIVE  TARR  echoed  that   Conceptual  Amendment  1  to                                                               
Amendment  1 is  not  intended to  prevent  the application  from                                                               
going  forward,  but  would  provide  an  opportunity  to  obtain                                                               
additional information for the decision-making process.                                                                         
                                                                                                                                
2:03:55 PM                                                                                                                    
                                                                                                                                
COMMISSIONER HARTIG  allowed this body  can ask DEC to  come back                                                               
before it at  any point.  He expressed several  concerns.  First,                                                               
that any amendment will require the  bill to go back to the other                                                               
body, yet the information is  available to the legislature at any                                                               
time.   Second, the DEC anticipates  by 2015 it will  have a good                                                               
idea of what  primacy would entail and any costs  and benefits so                                                               
essentially  the  effect  of  the amendment  is  to  provide  one                                                               
additional   report  prior   to   the  DEC   coming  before   the                                                               
legislature.   Basically, the DEC  would receive funding  on July                                                               
1,  but will  report at  the end  of the  calendar year  on five-                                                               
months of activity.  Realistically,  the legislature will receive                                                               
a  solid  report  on  the  costs  and  benefits  two  years  out.                                                               
However,   if   the    legislature   really   wanted   additional                                                               
information, the DEC  could present the committee  with an update                                                               
at any time it  so desires.  Finally, while he  did not think the                                                               
reporting  concept   is  wrong,   his  concerns  stem   from  the                                                               
practicality.                                                                                                                   
                                                                                                                                
2:05:36 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON  said he did  not see any provision  in the                                                               
bill that  would requires  a final report  to the  legislature in                                                               
2015.  In fact,  he noted the fiscal note extends  to 2019.  Even                                                               
though  it's  true  that  the  department  can  come  before  the                                                               
committee, it's  quite different  to have  a presentation  than a                                                               
written report that  details what has been  accomplished to date.                                                               
Anyway,  as often  happens, projects  are delayed  and Conceptual                                                               
Amendment  1 would  be in  place  to require  an annual  progress                                                               
report.   Nothing in  the amendment affects  the program,  but it                                                               
assumes the fiscal  note is "real" and the process  is planned to                                                               
extend through FY 2019.  In  conclusion, once the final report is                                                               
complete, the  reporting would discontinue  since the  state will                                                               
have assumed primacy.                                                                                                           
                                                                                                                                
2:06:59 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  TUCK remarked  that he  did not  think it  is too                                                               
much of a burden to ask for  a written report given the amount of                                                               
funding involved.  Further, the  justification to seek primacy is                                                               
absent;  instead, the  arguments are  anecdotal.   Further, given                                                               
the  fiscal  constraints,  the 404  permitting  primacy  may  not                                                               
always be  a priority [for the  department].  Thus it  would help                                                               
to have  accurate information to  study to ensure that  the state                                                               
is making  a good investment  and moving in the  right direction.                                                               
He offered  his support for  Conceptual Amendment 1  to Amendment                                                               
1.                                                                                                                              
                                                                                                                                
CO-CHAIR  FEIGE,  in  response   to  a  question,  clarified  the                                                               
committee is on [Conceptual] Amendment 1 to Amendment 1.                                                                        
                                                                                                                                
2:08:00 PM                                                                                                                    
                                                                                                                                
CO-CHAIR SADDLER maintained his objection.                                                                                      
                                                                                                                                
2:08:07 PM                                                                                                                    
                                                                                                                                
A roll call  vote was taken.  Representatives  Seaton, P. Wilson,                                                               
Tarr, Tuck, Johnson, Olson, Saddler,  and Feige voted in favor of                                                               
Conceptual  Amendment 1  to  Amendment  1. Therefore,  Conceptual                                                               
Amendment 1 to Amendment 1 was adopted by a vote of 8-0.                                                                        
                                                                                                                                
2:09:25 PM                                                                                                                    
                                                                                                                                
CO-CHAIR FEIGE  stated that  Amendment 1,  as amended,  is before                                                               
the committee.                                                                                                                  
                                                                                                                                
REPRESENTATIVE JOHNSON maintained his objection.                                                                                
                                                                                                                                
REPRESENTATIVE   JOHNSON  explained   that  he   voted  for   the                                                               
Conceptual  Amendment to  Amendment 1  since it  would give  more                                                               
guidance than the original amendment.   However, he characterized                                                               
the whole  bill as  a report.   To begin with,  it seemed  to him                                                               
that  Amendment 1  asks the  department to  do the  legislature's                                                               
job.   When  the department  comes  before the  legislature in  a                                                               
[Finance]  subcommittee,  this is  the  type  of information  the                                                               
committee needs  to consider.   The subcommittee can  always make                                                               
recommendations  to   the  finance  committee  with   respect  to                                                               
funding.   Additionally,  the department  could better  spend its                                                               
time  evaluating   the  process  rather  than   writing  reports.                                                               
Further, it doesn't make any sense  to him to obtain a five-month                                                               
report.  In  conclusion, the committee just needs to  do its job,                                                               
he said.                                                                                                                        
                                                                                                                                
2:10:47 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON offered  his support  for Amendment  1, as                                                               
amended, stating it's important  to obtain sufficient information                                                               
in order to do the job.   Moreover, to defer to the subcommittee,                                                               
which  is  a  much  smaller  group not  focused  on  the  natural                                                               
resources  aspects would  mean the  focus will  be on  the fiscal                                                               
implications,   not  on   the  resource   policy  decision-making                                                               
process.  Also, the committee  would need to specifically request                                                               
updates on the 404 permitting.   Amendment 1 would ensure that in                                                               
future years  no matter what  the committee membership,  a report                                                               
will  come  back to  the  committee,  which  is why  he  supports                                                               
Amendment 1.                                                                                                                    
                                                                                                                                
2:12:14 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  TUCK stated  that unlike  the 402  permit process                                                               
which was  phased in, the  404 permit  would be a  "hard decision                                                               
all at  once," which is why  it's prudent for the  legislature to                                                               
have ongoing information to make  a solid decision.  Also, having                                                               
the report  would allow the  legislature a better  opportunity to                                                               
evaluate  the 404  permitting primacy  process.   He offered  his                                                               
support for Amendment 1.                                                                                                        
                                                                                                                                
2:12:41 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  SADDLER said  Amendment  1 seems  to short-circuit  the                                                               
process.   Again, the whole purpose  of the bill is  to authorize                                                               
the   departments   to   evaluate  and   formulate   information.                                                               
Certainly, the commissioners can  provide progress reports at any                                                               
time.  Previously, the committee  heard testimony on another bill                                                               
that good  project management entails  planning only once  and it                                                               
is a costly process to revisit  planning.  He recalled from water                                                               
and  air  quality  permitting  processes that  the  DEC  has  the                                                               
expertise  to move  forward  with  the 404  permitting.   In  the                                                               
meantime, the  legislature has the  opportunity at this  point as                                                               
well as for  the final sanction of  the 404 primacy.   He said he                                                               
was not likely to support Amendment 1.                                                                                          
                                                                                                                                
COMMISSIONER HARTIG clarified  that the DEC's fiscal  note is for                                                               
$1.4 million, which  includes the DNR costs  via the reimbursable                                                               
services agreement (RSA).  He  pointed out he heard other figures                                                               
being used.                                                                                                                     
                                                                                                                                
EDMUND FOGELS,  Deputy Commissioner, Office of  the Commissioner,                                                               
Department  of Natural  Resources  (DNR), said  he  did not  have                                                               
anything more  to add  in terms of  the department's  position on                                                               
Amendment 1.                                                                                                                    
                                                                                                                                
2:14:23 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON read  from the  fiscal notes  [DEC, fiscal                                                               
note 1,  Water Quality dated  1/11/2013], for FY 15,  at $1,854.3                                                               
for eight  new employees; DNR,  Administration &  Support [fiscal                                                               
note  2, dated  1/14/2013], for  FY 15  at $566.7  with four  new                                                               
employees.  He said that combined,  the fiscal impact is close to                                                               
$2.5 million.  He asked for further clarification.                                                                              
                                                                                                                                
COMMISSIONER HARTIG said  he believes the fiscal  notes are being                                                               
wrongly interpreted.  He clarified  the intent of the fiscal note                                                               
is to  begin in  FY 14  with $1.434.7.   He explained  the fiscal                                                               
note such that  DEC would have add five fulltime  positions in FY                                                               
14 and add three  more in FY 15.  In FY  14 the personal services                                                               
line is  for $495.4 which is  in the form  of an RSA to  DNR, and                                                               
the amount increases to  $883.5 in FY 15.  The  DNR would add two                                                               
new positions  in FY  14 and two  more positions in  FY 15  for a                                                               
total of four new positions.                                                                                                    
                                                                                                                                
2:16:30 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON read from the  DNR fiscal note, which in FY                                                               
15, indicates personal services at  $425.6 and a total of $566.7.                                                               
He said  he was unsure of  how this corresponds.   Once more, the                                                               
overall  fiscal  impact  represents  a  lot  of  money  when  the                                                               
legislature  is  struggling  to   avoid  adding  to  the  state's                                                               
operating  budget  base.   He  anticipated  a  report on  the  $2                                                               
million to determine if the [404 primacy] makes sense.                                                                          
                                                                                                                                
2:17:59 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  P. WILSON  understood that  as DEC  proceeds, any                                                               
additional funding  requests and authorization will  have to come                                                               
before the legislature.                                                                                                         
                                                                                                                                
COMMISSIONER HARTIG said  the short answer is yes,  that it would                                                               
come  before  the legislature  in  terms  of budget  request  for                                                               
personnel  costs.     Additionally,  he   anticipated  requesting                                                               
statutory changes as  the DEC continues to work  with the federal                                                               
agencies.   On the 402 primacy,  the DEC requested two  bills, in                                                               
addition  to budget  requests.   Again,  he  anticipated the  404                                                               
process would be similar.                                                                                                       
                                                                                                                                
2:19:21 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE P. WILSON  said she does not think  Amendment 1 is                                                               
necessary.    She  anticipated  the   DEC  would  be  before  the                                                               
legislature and viewed additional reporting as onerous.                                                                         
                                                                                                                                
REPRESENTATIVE JOHNSON maintained his objection.                                                                                
                                                                                                                                
2:19:55 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE TARR pointed out  that statutory changes might not                                                               
have fiscal  implications.  She recalled  the budget subcommittee                                                               
process  as not  allowing for  significant detail.   She  did not                                                               
expect the report  required under Amendment 1 would  be a lengthy                                                               
report that  would require  a significant  amount of  staff time,                                                               
but rather would consist of  an executive summary progress report                                                               
that  would be  informative,  perhaps prepared  in an  afternoon.                                                               
She  identified her  frustration  with  the bill  is  due to  the                                                               
missing information.   She wished she had  some overall estimates                                                               
today to  help determine whether  the [404 primacy] is  the right                                                               
move.   Certainly, given some  of the conversations  with respect                                                               
to fiscal constraints means the  legislature will have some tough                                                               
decisions   to  make.     This   information  would   assist  the                                                               
legislature in its decision-making process.                                                                                     
                                                                                                                                
2:21:28 PM                                                                                                                    
                                                                                                                                
CO-CHAIR FEIGE  stated the  question is  whether Amendment  1, as                                                               
amended, should be adopted.                                                                                                     
                                                                                                                                
2:21:58 PM                                                                                                                    
                                                                                                                                
A roll call vote was  taken.  Representatives Tarr, Tuck, Seaton,                                                               
and  Feige   voted  in   favor  of   Amendment  1,   as  amended.                                                               
Representatives Johnson,  Olson, Hawker,  P. Wilson,  and Saddler                                                               
voted against it.  Therefore,  Amendment 1, as amended, failed by                                                               
a vote of 4-5.                                                                                                                  
                                                                                                                                
2:23:00 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  SADDLER moved  to report  SB 27  out of  committee with                                                               
individual recommendations and the accompanying fiscal notes.                                                                   
                                                                                                                                
REPRESENTATIVE  SEATON objected  for the  purpose of  discussion.                                                               
He stated that  only two other states have  undergone Section 404                                                               
primacy.  In  fact, every other state has rejected  it.  Virginia                                                               
studied the 404 primacy and reported  on it in December 2012.  He                                                               
recalled that their  stakeholders had objected based  on the cost                                                               
benefit analysis.  Equally important,  the cost to industry would                                                               
be  less under  the federal  program than  anticipated under  the                                                               
state  program.   Further, the  applicants must  bear the  costs;                                                               
however,  the  state  must  also  acquire  substantial  staff  to                                                               
process permits, which is the  reason Virginia's stakeholders did                                                               
not support it.  In  any case, the statewide programmatic general                                                               
permits were  found to  provide almost  all the  benefits without                                                               
the  costs associated  with the  assumption of  the 404  primacy.                                                               
Finally,  in Alaska,  the DEC  already has  the ability  to issue                                                               
statewide programmatic general permits.   He preferred the agency                                                               
do so rather  than go down this "rabbit trail"  that could result                                                               
in hiring  49 new state  employees and spending  substantial time                                                               
and costs to obtain the 404  primacy for dredge and fill permits.                                                               
He  suggested that  effort  could better  be  spent on  statewide                                                               
programmatic  permits,  which  will  allow  for  coordination  on                                                               
federal waters.   This bill  will not  move the state  forward or                                                               
allow input on  the dredge and fill permits.   For these reasons,                                                               
he opposes passage of SB 27.                                                                                                    
                                                                                                                                
2:27:00 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOHNSON  offered  his  belief that  Alaska  is  a                                                               
resource  development state  and its  future rests  with resource                                                               
development.   He stated his biggest  concern is a fear  that the                                                               
federal government  may grind  to a halt.   Granted,  some people                                                               
don't  want to  see any  development  in Alaska.   Further,  it's                                                               
difficult to obtain permitting due  to staff and costs.  However,                                                               
Alaska must  be prepared  to "step into  the breach"  or resource                                                               
development will  not happen.   He thought  that this may  be the                                                               
first "arrow" the state will  be absorbing, but the further along                                                               
the path  the state is  the better it will  be.  He  surmised the                                                               
legislature will  view the $4  million as the best  investment it                                                               
has  made.   In  any case,  he predicted  it  wouldn't take  much                                                               
resource development to  make up the cost.  For  these reasons he                                                               
offered  his  support for  SB  27,  stating  the state  needs  to                                                               
control its  own destiny every  chance it  can.  He  concluded by                                                               
offering his wholehearted  support for the state  to take control                                                               
of its destiny.                                                                                                                 
                                                                                                                                
2:28:54 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HAWKER  echoed Representative  Johnson's comments.                                                               
He said the language in the  bill is permissive.  This bill would                                                               
permit the  executive branch  of state  government to  pursue the                                                               
404 primacy,  to review and study  it to determine whether  it is                                                               
the best  course of  action for  the state.   In fact,  this bill                                                               
does not  establish a 404  permit program.   It does  not mandate                                                               
that  the   state  adopt  a   program.    For  all   the  reasons                                                               
Representative Johnson  mentioned, this appropriating  body ought                                                               
to investigate  this avenue  or the  legislature will  never know                                                               
[if it  should have  pursued the  404 primacy].   He  offered his                                                               
support for  SB 27  because he agrees  the legislature  should be                                                               
considering its  future.  He  emphasized that once a  decision is                                                               
made to  implement a  program -  if it  is made  - it  will still                                                               
require an  appropriation and funding.   At  the end of  the day,                                                               
the legislature  still holds the purse  strings.  It is  not "our                                                               
last bite  at the  apple" but  will move  a very  important, very                                                               
sound, and very wise process forward.                                                                                           
                                                                                                                                
2:30:25 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE TUCK offered his belief  that some of the comments                                                               
made would  also be good  arguments for Coastal  Zone Management,                                                               
which the state did have control over  at one time.  In fact, the                                                               
state  was able  to  make  decisions "in  our  own backyards"  on                                                               
projects that  were moving  forward.  He  worried that  the trend                                                               
has been  going the other  way instead  of taking control  of the                                                               
state.   While he isn't opposed  to taking control, right  now he                                                               
doesn't  feel  like  the  committee  has  enough  information  to                                                               
justify spending  so much money  [on the 404 primacy].   Besides,                                                               
the state  doesn't have  information on  the federal  backlog and                                                               
how  much of  the  federal  backlog the  state  could control  or                                                               
reduce even  if the state does  have the 404 primacy.   Moreover,                                                               
the U.S. Army Corps of Engineers  still has the authority it will                                                               
continue to retain so it can override  the state at any time.  At                                                               
this time,  he couldn't  support the bill  because he  needs more                                                               
information.   Finally,  the state  is  not exercising  statewide                                                               
programmatic  general permits,  which  could reduce  part of  the                                                               
backlog,  and is  the  first step  the state  should  take.   The                                                               
department  has the  authority  to  issue statewide  programmatic                                                               
general permits  and it should  do so.   "Taking such a  big bite                                                               
into growing  state government" and  doing something  the federal                                                               
government is already doing doesn't make sense, he said.                                                                        
                                                                                                                                
2:32:03 PM                                                                                                                    
                                                                                                                                
CO-CHAIR SADDLER commented he wondered  what the state's founding                                                               
fathers  would have  thought  if it  had been  said  it would  be                                                               
cheaper to  let them manage  the fish traps.   Specifically, with                                                               
the amount of  wetlands the state has, Alaska is  a special case.                                                               
With the critical  nature of permitting wetlands  dredge and fill                                                               
activities in  Alaska, as  well as  the importance  it is  to the                                                               
primary  revenue generator,  it  seems prudent  to  "give a  hard                                                               
look"  at the  benefits and  costs of  assuming wetlands  primacy                                                               
under Section 404.   First, the state has  undergone this process                                                               
successfully  for water  quality  and air  quality.   Second,  it                                                               
would  result in  fewer  departments  for coordination  purposes.                                                               
Third,  it would  result in  Alaska-based decisions,  which would                                                               
not be  less strict than  the federal standards.   Fourth, Alaska                                                               
courts  would adjudicate  disputes, and  finally, the  mitigation                                                               
measures would  be Alaska-designed measures.   Granted, the state                                                               
will be giving  the departments significant funding  to perform a                                                               
difficult job,  but the  [departments] anticipate  "good answers"                                                               
and  "good information"  to inform  the legislature  as it  moves                                                               
forward.  For these reasons, he offered his support for SB 27.                                                                  
                                                                                                                                
2:33:21 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  TARR remarked  that  unfortunately the  committee                                                               
did not hear  from the [U.S. Army Corps of  Engineers] but nearly                                                               
80 percent  of the Corps'  individual permits are  granted within                                                               
120  days and  less  than "one  percent of  one  percent" of  all                                                               
permits has  been denied.   Therefore, the  idea that  the Corps'                                                               
program is not working is  questionable.  She recalled the Alaska                                                               
Oil and  Gas Association letter  [dated February 4,  2013], which                                                               
read,  "And while  a  majority  of the  nation's  wetland are  in                                                               
Alaska, many  of these  may be non-assumable  by the  State under                                                               
the Clean  Water Act's geographical limitations  and would remain                                                               
subject   to   federal   jurisdiction   and   duplicative   Corps                                                               
permitting."    Furthermore,  the  legislature  did  not  receive                                                               
answers  about where  this  process would  apply.   Although  she                                                               
spent time  on their website,  she couldn't find many  areas this                                                               
bill  would apply.   Even  the  CD-5 example  brought up  several                                                               
times would  not have been impacted  by this bill since  it would                                                               
still be under federal jurisdiction.   Generally, she wished that                                                               
the committee  had more  information on  where this  would apply.                                                               
She pointed out the individuals in  the Alaska U.S. Army Corps of                                                               
Engineers  office  making  these  decisions  are  Alaskans,  they                                                               
understand  Alaska's issues  and  development, which  is why  she                                                               
surmised the success rate is so  high.  Besides, she didn't think                                                               
the system  is broken.  While  she could have supported  the bill                                                               
with  the amendment  since  it would  give  the legislature  more                                                               
information  as the  state moves  forward,  she said  she is  not                                                               
comfortable with  the expenditure with so  much uncertainty about                                                               
the commitment.                                                                                                                 
                                                                                                                                
2:35:23 PM                                                                                                                    
                                                                                                                                
COMMISSIONER  FOGELS  asked to  respond  to  some of  the  points                                                               
raised.   First, whether a problem  exists:  yes there  is a huge                                                               
problem, such  that a federal  agency controls permitting  on one                                                               
of the most important sectors of  our lands.  On the contrary, it                                                               
is not about  the Corps' backlog.   Even if the Corps  had a zero                                                               
backlog, the  state should be  looking at the costs  and benefits                                                               
of assuming  the 404 primacy.   In  fact, this is  about Alaskans                                                               
having  control,  with  Alaska's  agencies  having  control  over                                                               
permitting of natural resource development  in Alaska, and having                                                               
those challenges  resolved in Alaska  and not in  Washington D.C.                                                               
In terms of the concerns  about limited wetland exclusions, it is                                                               
a big issue, he said.                                                                                                           
                                                                                                                                
2:36:12 PM                                                                                                                    
                                                                                                                                
COMMISSIONER FOGELS emphasized the  committee must understand the                                                               
DNR/DEC  will go  into this  404 process  with a  strong position                                                               
that the state will receive primacy  over most of the wetlands in                                                               
Alaska.    In  fact,  the  EPA has  in  past  guidance  documents                                                               
basically  agreed.   He read  from a  1980 document  specifically                                                               
addressed to primacy  for states.  He read, "By  assuming the 404                                                               
program,  states will  gain  clear jurisdiction  on  most of  the                                                               
nations'  lakes, small  rivers,  streams,  and inland  wetlands."                                                               
Consequently, the  state believes it will  gain jurisdiction over                                                               
most of the wetlands in Alaska, which is very significant.                                                                      
                                                                                                                                
COMMISSIONER  FOGELS,  with  respect to  the  state  programmatic                                                               
general permits and  the reason to pursue primacy,  the answer is                                                               
simple.    The state  programmatic  general  permits represent  a                                                               
different tool  for a  different purpose;  however, primacy  is a                                                               
different tool.   He stressed that wetlands  permitting in Alaska                                                               
is very  complex and primacy  is only  one tool.   He highlighted                                                               
that this bill's  fiscal note will allow the state  to pursue the                                                               
opportunity to seek the other tools,  as well as primacy.  At the                                                               
end of the day, if the state  decides not to "go for primacy" the                                                               
state will still have hopefully  acquired some of the other tools                                                               
and the state will benefit greatly.                                                                                             
                                                                                                                                
2:38:06 PM                                                                                                                    
                                                                                                                                
COMMISSIONER HARTIG, with  respect to some of  the comparisons to                                                               
Virginia and other states that  have not pursued the 404 primacy,                                                               
related  the   deputy  commissioner  is  currently   attending  a                                                               
conference   underway   in    Washington   D.C.   state   wetland                                                               
administrators and the  U.S. Army Corps of Engineers.   The topic                                                               
of this conference  is how to obtain primacy  and numerous states                                                               
are actively pursuing this.   This isn't something that "everyone                                                               
else" looked  at and rejected.   He pointed out that  states like                                                               
Virginia  have considerably  less wetlands  than in  Alaska.   He                                                               
surmised that fewer permits are  being sought in Virginia than in                                                               
Alaska so  this tool  would have  less value  to Virginia.   This                                                               
bill considers  what Alaska needs,  but not from  the perspective                                                               
of  Virginia or  Oregon.   He  concluded that  Alaska should  not                                                               
compare itself to other states.                                                                                                 
                                                                                                                                
CO-CHAIR FEIGE  said he  does not  care how  other states  do it.                                                               
The legislature's  job is to look  at what's best for  Alaska and                                                               
the  question of  whether or  not to  seek the  404 primacy  is a                                                               
worthy  question  to  consider.   He  acknowledged  a  number  of                                                               
options have been raised in  testimony, which have advantages and                                                               
disadvantages.   However, Alaska is a  resource development state                                                               
and  projects are  part of  Alaska's future.   In  conclusion, he                                                               
said  that the  status of  404  permitting program  will have  an                                                               
impact on those projects.                                                                                                       
                                                                                                                                
2:40:21 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON maintained his objection.                                                                                 
                                                                                                                                
2:40:24 PM                                                                                                                    
                                                                                                                                
A roll  call vote  was taken.   Representatives  Hawker, Johnson,                                                               
Olson, P.  Wilson, and Feige  voted in  favor of reporting  SB 27                                                               
out of  the House Resources Standing  Committee.  Representatives                                                               
Tarr, Tuck,  and Seaton voted against  it.  Therefore, SB  27 was                                                               
reported out of the House  Resources Standing Committee by a vote                                                               
of 5-3.                                                                                                                         

Document Name Date/Time Subjects
SB27 Virginia 404 Feasibility Study 2012.pdf HRES 3/20/2013 1:00:00 PM
SB 27
SB27 USACE-Alaska Legislative Briefing 2.28.pdf HRES 3/20/2013 1:00:00 PM
SB 27
SB27 DEC Response to HRES 3.19.2013.pdf HRES 3/20/2013 1:00:00 PM
SB 27
SB27 Amendment A.2.pdf HRES 3/20/2013 1:00:00 PM
SB 27
HRES HB 158 Amend A.4.pdf HRES 3/20/2013 1:00:00 PM
HB 158
HRES HB158 Letter Packet 9.pdf HRES 3/20/2013 1:00:00 PM
HB 158
HRES CSHB158 3.20.13.pdf HRES 3/20/2013 1:00:00 PM
HB 158