Legislature(2011 - 2012)BELTZ 105 (TSBldg)

03/13/2012 04:00 PM COMMUNITY & REGIONAL AFFAIRS


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Bills Previously Heard/Scheduled TELECONFERENCED
= SB 204 LOANS TO COMMUNITY QUOTA ENTITIES/PERMITS
Moved SB 204 Out of Committee
= SB 152 LEG. APPROVAL OF BRISTOL BAY SULFIDE MINE
Heard & Held
= SB 157 CANCEL INSUR. ON CERTAIN VACANT PROPERTY
Heard & Held
        SB 152-LEG. APPROVAL OF BRISTOL BAY SULFIDE MINE                                                                    
                                                                                                                                
4:20:32 PM                                                                                                                    
CHAIR OLSON announced the consideration of SB 152.                                                                              
                                                                                                                                
4:21:23 PM                                                                                                                    
DONALD  M.   BULLOCK,  Legislative  Counsel,   Legislative  Legal                                                               
Services, Legislative  Affairs Agency, said he  looked at whether                                                               
SB 152 conflicted  with either Article I, sec. 15  or Article II,                                                               
sec. 19 of the Constitution of the State of Alaska.                                                                             
                                                                                                                                
Article I,  sec. 15 has  to do  with prohibited state  action. In                                                               
part, it says:                                                                                                                  
                                                                                                                                
      No law impairing the obligation of contracts, and no                                                                      
     law making any irrevocable grant of special privileges                                                                     
     or immunities shall be passed.                                                                                             
                                                                                                                                
The issue is that there is  no information on whether there would                                                               
be any  contracts in place that  would be voided or  could not be                                                               
carried out as a result of this legislation.                                                                                    
                                                                                                                                
Article II,  sec. 19  has to  do with local  or special  acts. In                                                               
part, it says:                                                                                                                  
                                                                                                                                
     The legislature shall pass no local or special act if                                                                      
     a general act can be made applicable.                                                                                      
                                                                                                                                
Although  the bill  only identifies  the  specific headwaters  of                                                               
Bristol  Bay, it  would probably  survive a  challenge under  the                                                               
local and  special prohibition because of  the statewide interest                                                               
in the Bristol Bay fishery.                                                                                                     
                                                                                                                                
MR.  BULLOCK  said the  requirement  of  legislative approval  is                                                               
probably  the most  significant provision  in the  bill. It  is a                                                               
separation of powers issue. The  legislature has enacted laws and                                                               
same with the federal government  that relate to permits and what                                                               
has to  be done to  receive a permit, license,  authorization, or                                                               
the  approval  of  a  plan of  operation.  The  executive  branch                                                               
carries out  that function, and  the bill would  effectively give                                                               
the  legislature  the opportunity  to  veto  an executive  branch                                                               
decision that  presumably was made within  the authority received                                                               
from the legislature. Article II, sec.  1 and Article III, sec. 1                                                               
describes  the powers  that the  legislature has  and the  powers                                                               
that the executive has.                                                                                                         
                                                                                                                                
4:23:57 PM                                                                                                                    
SENATOR  MENARD   questioned  whether   he  was   cautioning  the                                                               
committee about going forward with the bill.                                                                                    
                                                                                                                                
MR. BULLOCK  said he  couldn't talk about  the outcome;  he could                                                               
talk about the constitutional issues.                                                                                           
                                                                                                                                
The other  issue raised by  the bill relates  to the risk  to the                                                               
state if there  was legislation or a  regulation that effectively                                                               
prohibited the  development of vested  mineral rights. This  is a                                                               
property interest that  is protected by the  takings clause under                                                               
both the  Alaska and U.S. Constitution.  If there is a  taking by                                                               
the government, there may be a  risk that the state would have to                                                               
compensate the company or person  that can no longer economically                                                               
develop their claim.                                                                                                            
                                                                                                                                
If SB 152 were to pass  and the legislature vetoed something that                                                               
DNR had  approved, a  challenge from  the mineral  interest owner                                                               
could be  expected under the  separation of powers.  Even without                                                               
this legislation,  if there was  a change in the  regulation that                                                               
related to  a vested mining  interest, there  is a risk  that the                                                               
state may  have to compensate  the owner of the  mineral interest                                                               
if  the  economic value  has  been  effectively taken.  It  would                                                               
probably be  a question  for a  jury or other  fact finder  as to                                                               
what the value would be.                                                                                                        
                                                                                                                                
4:27:57 PM                                                                                                                    
CHAIR OLSON asked  if other states have  similar legislation with                                                               
regard to legislative approval.                                                                                                 
                                                                                                                                
MR. BULLOCK answered that virtually  every state has a separation                                                               
of  powers  issue,  and  the   legislature  can  deal  with  this                                                               
situation in other ways, such  as appropriation. He explained the                                                               
administrative process  for classifying land  that is and  is not                                                               
open to mining. If an area is  open to mining, a company can come                                                               
in and discover  the mineral, locate and set  the boundaries, and                                                               
record it.  That company has acquired  a right to mine,  and that                                                               
is similar to the federal mining  laws that date back to the 19th                                                               
century. He said the concept of  regulatory taking has come up in                                                               
other  states  so there  would  be  that  issue  as well  as  the                                                               
separation  of powers  regarding  who makes  the  decision as  to                                                               
whether something can go forward.                                                                                               
                                                                                                                                
He noted  that a bill currently  in the legislature would  in the                                                               
future close some  land in the Alyeska area to  mining. That does                                                               
not present  a problem when it's  done ahead of time;  it's after                                                               
the rights have been vested that the risks and problems arise.                                                                  
                                                                                                                                
CHAIR OLSON asked if the  bill would conflict with either federal                                                               
law or the U.S. Constitution.                                                                                                   
                                                                                                                                
MR. BULLOCK said this would  probably be limited to state action;                                                               
the state  does not have  any power  over any agency  decision of                                                               
the federal government.                                                                                                         
                                                                                                                                
4:30:29 PM                                                                                                                    
SENATOR MENARD  asked what  mine project  since the  19th century                                                               
was held up the longest due to regulatory requirements.                                                                         
                                                                                                                                
MR.  BULLOCK said  the Kennecott  project in  Juneau was  delayed                                                               
because  of environmental  concerns about  the drainage  from the                                                               
mine tailings. The matter went  to the U.S. Supreme Court because                                                               
there was a  conflict in the interpretation  of laws administered                                                               
by the  Corps of  Engineers and  the Department  of Environmental                                                               
Conservation. He  noted that environmental  litigation has  to be                                                               
anticipated in any mining project.                                                                                              
                                                                                                                                
4:33:19 PM                                                                                                                    
SENATOR  HOLLIS   FRENCH,  sponsor   of  SB  152,   Alaska  State                                                               
Legislature, said  he would first  like to address the  idea that                                                               
the legislature's  action could constitute  a taking of  a vested                                                               
right. He said  he would like Mr. Bullock to  explain further how                                                               
the agency's action  is any different from  the legislature's. He                                                               
asked if it  would be a taking if DNR  ultimately denies a permit                                                               
to Pebble because  the legislature's action would  be exactly the                                                               
same.                                                                                                                           
                                                                                                                                
He said it is possible that  the action is an encroachment on the                                                               
executive function,  but the legislature already  exercises power                                                               
in   many   blended   areas.  The   governor's   nominations   of                                                               
commissioners and  attorney general is  a blended area  where the                                                               
legislature exercises a check on  his authority. The governor has                                                               
some  blended legislative  authority  as well.  He  can veto  the                                                               
legislature's capital appropriations.                                                                                           
                                                                                                                                
CHAIR OLSON opined that those  were different than the separation                                                               
of powers in the specific action that Mr. Bullock addressed.                                                                    
                                                                                                                                
SENATOR  FRENCH pointed  out that  there has  been a  law on  the                                                               
books since  the mid-70s on  the same  topic with respect  to oil                                                               
and gas  in Bristol Bay.  Although the constitutionality  of that                                                               
statute has not been challenged, it has some precedential value.                                                                
                                                                                                                                
4:35:35 PM                                                                                                                    
SENATOR WAGONER asked who provided the maps.                                                                                    
                                                                                                                                
SENATOR FRENCH answered he got them from Rick Halford.                                                                          
                                                                                                                                
SENATOR  WAGONER said  the exploration  license area  depicted on                                                               
the maps  was between 125  and 150  miles away from  the proposed                                                               
site of the Pebble Mine.                                                                                                        
                                                                                                                                
SENATOR FRENCH reviewed  the map and thanked  Senator Wagoner for                                                               
the correction; he agreed completely.                                                                                           
                                                                                                                                
CHAIR OLSON asked  for a corrected map and  Senator French agreed                                                               
to provide one accurate map to all committee members.                                                                           
                                                                                                                                
CHAIR OLSON asked what kind of support the bill had elicited.                                                                   
                                                                                                                                
4:38:15 PM                                                                                                                    
KRISTEN PETERSON, Staff  for Senator French, said  the office had                                                               
received a fair number of letters  of support from members of the                                                               
Renewable Resources Coalition.                                                                                                  
                                                                                                                                
CHAIR OLSON held SB 152 in committee.                                                                                           
                                                                                                                                

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