Legislature(2013 - 2014)BUTROVICH 205
02/02/2013 10:30 AM Senate RESOURCES
| Audio | Topic |
|---|---|
| Start | |
| SB26|| SB27 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 26 | TELECONFERENCED | |
| *+ | SB 27 | TELECONFERENCED | |
SB 26-LAND DISPOSALS/EXCHANGES; WATER RIGHTS
SB 27-REGULATION OF DREDGE AND FILL ACTIVITIES
10:30:42 AM
CHAIR GIESSEL announced SB 26 and SB 27 to be up for
consideration.
DAN SULLIVAN, Commissioner, Department of Natural Resources
(DNR), said he would present a strategic overview and a sense of
the context where these bills [SB 26 and SB 27] fit into what is
happening in the state in terms of modernization and reform.
The state is in its second year of permitting reform and
modernization that has been a national bi-partisan trend over
the last several years, primarily because the recession made
many policy leaders realize that getting people back to work and
permitting timelines have had a bit of a disconnect.
He cited an article from last year by an economist entitled
"Overregulated America" that said, "America needs a smarter
approach to regulation that will mitigate a real danger that
regulation may crush the life out of America's economy." He also
referenced a News Week cover story last year in which President
Clinton laid out the top ways to get people back to work, and it
was through regulatory overhaul and making permitting more
timely, efficient and certain. States as politically diverse as
California, Massachusetts, Kansas, Alaska, and Indiana are
putting it at the tops of their agenda.
SENATOR BISHOP concurred with both his statements and asked if
the over-regulation memo had gotten "down into the departments."
COMMISSIONER SULLIVAN said the Obama administration has made
permitting reform a highlight, but Alaska hadn't seen a lot of
it.
10:36:11 AM
At ease from 10:36 to 10:39 a.m.
10:39:29 AM
COMMISSIONER SULLIVAN said in the broader context it's also a
competitiveness issue. He said an investment bank in Canada does
an annual survey of all the biggest mining jurisdictions in the
world and where they rank; and last year the US, where it takes
an average of 7 to 10 years to permit a mine, was dead last.
This year the US tied with Papa New Guinea for last place.
Alaska has experienced this with the exception of the Kensington
Mine that employs hundreds of Alaskans.
Two days ago, a Wall Street Journal article by Dan McGorty
sounded an alarm bell about how this long timeline not only
affects competitiveness, but it affects green energy and an
entire class of areas that make the US more competitive.
COMMISSIONER SULLIVAN said this country has done big projects
before, like the 1,500-mile Alaska Highway that took only nine
months to build. When the country wants to get big projects done
it can do it.
He said we want to maintain our very high environmental
standards while becoming more efficient. However, permitting
delays are so long in our country that from a global
environmental perspective, you're not protecting the
environment. You can actually undermine environmental protection
because investment starts to leave places like Alaska and the US
and go to places with much lower standards like Russian.
10:43:47 AM
One theme comes across all of these areas and that is that
permitting reform is enormously important in order to make
progress in every other area. That is why the administration is
so focused on it. Their strategy is to start by going through
statutes to look at ways to make them more efficient, more
timely and certain and to make the coordination between state
agencies much better. For the last two years they have been
asking stakeholders all over the state how to make the
permitting system better and getting a lot of good ideas in
return. Improving coordination with the feds is another
important part they are focusing on because almost every big
project here has a fed nexus; for example, working closer with
the Corps at Pt. Thomson. Finally, he said they have been
looking at a lot of areas - for instance the Shale Oil Task
Force - to think through the regulatory aspects of the newer
resource development.
10:46:56 AM
SENATOR DYSON said Shell did something to preclude environmental
lawsuits from stopping a project and asked what that was.
COMMISSIONER SULLIVAN answered he thought they preemptively
filed a suit instead of waiting for one to be filed against
them. He said the feds have sued almost every step of the way in
OCS development, but the state had intervened in a lot of those
and that had been useful. He reported that the department had
sought budgetary support from the legislature and was focusing
on a whole revamping of their unified permit and management
system from an I.T. perspective, and it was all proceeding very
well.
COMMISSIONER SULLIVAN recalled two years ago when a number of
new people came into DNR, they recognized a huge backlog of
about 2500 permits, some of which had been sitting around for a
few years. So they had been focused on trying to bring that
backlog down and were making good progress.
10:49:56 AM
He had been pressing people who know the system to come forth
with ideas about how to make it more efficient and that was how
SB 26 fits in with the broader strategy.
10:52:33 AM
He said that SB 27 fits not only within this broader context of
permitting reform and modernization, but addresses federal
overreach. Two significant concerns involve permitting delay and
the lack of serious input from state officials and experts on a
whole host of permitting matters that go before federal
agencies. One example was the ConocoPhillips CD-5 permit
(Section 404 of the Clean Water Act) over the Coleville River
that took many years of negotiations between the state,
stakeholders and the Corps to come to an agreement, but then the
EPA and the Fish and Wildlife Service vetoed the permitting
decisions, taking a lot of people by surprise; that took another
two years to settle. He was struck by the lack of state input
despite the fact that its citizens were clearly being affected
and the fact that it has so many people with the technical
expertise to understand the issues.
COMMISSIONER SULLIVAN stated starting to get primacy over Clean
Water Act (CWA) decisions will help the state control its own
destiny on a lot of federal projects that have huge impacts on
it. One of the frustrations is that a state agency almost always
requests to be a cooperating agency in deliberations and while
it is typically granted that status, it isn't a part of the
actual decision-making process. Assuming primacy over those
kinds of decisions will take a long time, but will definitely be
worth it. Two states have already done it; meeting federal
standards is the key and getting started is important.
10:58:36 AM
SENATOR MICCICHE said a lot of projects have dual parts for both
state and federal agencies to play and asked if a segment of his
strategy has a specific procedure to legally provide counter
support for projects that are specifically on state lands and
waters.
COMMISSIONER SULLIVAN said laid out a number of things they had
been trying to do on that question on slide 8 and said the
Attorney General had been very proactive on the EPA preemptively
removing whole areas of the state under the CWA with regard to
the broader Pebble Mine issue. He said Pt. Thomson's 404 permit
was also delayed on state land, but the department ended up
spending many hours with the Crops of Engineers in getting a
relatively expeditious permitting.
11:01:45 AM
SENATOR DYSON asked if there is ever a case when a government
keeps an owner from doing what is within his rights to do on his
property - similar to what the feds do with the state.
COMMISSIONER SULLIVAN said he would have to get back to him on
that.
11:04:45 AM
CHAIR GIESSEL said they would look at SB 26 now.
ED FOGELS, Deputy Commissioner, Department of Natural Resources
(DNR), Juneau, AK, said Commissioner Sullivan laid out the broad
strategy on the permitting initiative and the second part of the
housekeeping exercise is to go through the statutes. A
successful bill last year had a lot of small but cumulatively
significant changes and this is the second version of that.
11:05:45 AM
WYN MENEFEE, Chief of Operations, Division of Mining, Land and
Water, Department of Natural Resources (DNR), Juneau, AK,
followed up referencing the briefing paper for SB 26. He said
that point 1 clarified language to show that they can do
"general permitting," which they can do now, but it's not called
that specifically.
He explained that general permitting is when someone applies to
do something on state land; the department considers it by doing
public outreach and agency review and then makes a decision on
whether or not it can be done. A general permit permits activity
types that get a lot of applicants and once the department
decides it will issue a general permit, the next time someone
comes in and asks to do something that fits within that permit's
parameters, they get that permit without going through the whole
process - the idea being that they can expedite things for the
public; for example: commercial recreation permits, commercial
filming, certain buoys in certain areas, personal use cabin
permit renewals and float homes. They save hundreds of separate
decisions by doing that; it saves the applicant and the state
time and money, because they don't have to do the advertising
notice.
11:08:57 AM
MR. MENEFEE said point 2 of the briefing paper dealt with land
exchanges. He explained that two different statutes deal with
land exchanges; one is in Title 9 and the other is in Title 38.
The department right now does disposal of interest decisions for
land sales, leases and material sales as prescribed in AS
38.05.035(e): they notify the public and agencies and give
opportunity to comment that is appealable. But they also want to
do the same process for land exchanges and that is not spelled
out in statute. So, this will help them expedite some land
exchanges, although appraisals and surveys will still have to be
done to make sure the exchange is fair. This change will make it
easier and faster to go through the process for everyone's
benefit.
11:10:57 AM
He said that point 3 was about reducing a possible litigation
challenge. Currently the statute reads that when the state sells
land, a person can either pay it off right away or pay if off in
installments. Since the department also sells lands outside of
auction, they want installment payments for all land sales.
Right now the law only mentions land sold under auction.
11:11:54 AM
MR. MENEFEE said last year they addressed leasing renewals
allowing a one-time renewal for a period not to exceed the
initial period. Now, this change deals with two instances that
aren't a renewal, but have to be re-adjudicated; one is a
preference right. He explained that AS 38.05.102 has a
preference right for long term lessees; it gives them the
capability without competition to apply for the sale of that
land for lease hold location (they can buy the land instead of
leasing it again).
The other situation is when a business is doing great but they
have added more things than they started out with and had gotten
public approval for. But now they have changed what they are
doing. The department has to actually go through a decision
process saying that it is still okay. In either case, when they
get to the end of their lease, the people need to keep a long-
term interest (for a two-year period) while the department makes
a decision. Right now they cover that gap by permitting, but a
land use permit is a revocable authorization and doesn't give a
long term interest right. That can cause financing problems in
the interim two years. So, the lessees have said they want
something that keeps the lease going while the department is
making the decision on whether they can continue or not.
SENATOR BISHOP asked if this change would actually strengthen
the lessee's position in getting financing in that interim
period.
MR. MENEFEE replied yes.
SENATOR DYSON said three districts have set netters that lease
sites, some have been in the families for over 50 years and he
wanted to know if they would be limited to one ten-year lease
extension. He also said they had heard from some in-holders that
had built very expensive lodges on long term leases who claim
that at the end of that period, instead of them getting first in
line that it's up for bid of some sort; he wanted him to comment
on that, too.
MR. MENEFEE answered the second question first. If the person
was not the lessee - for instance if it's a family member that
was not on the lease - that doesn't give them any preferential
right. On the first question, he would have to research the
issue about whether a set net site could be renewed only one
time. However, the issue is that the department includes sites
to certain things on the renewal revision they made last year in
HB 361, but he wasn't positive that set nets were included.
Upland and tidelands leases yes, but set net sites have their
own separate statute.
11:17:20 AM
JOHN BAKER, Attorney, Civil-Resources, Department of Law,
Anchorage, AK, said he had to check and would have an answer by
Monday.
SENATOR DYSON said his second question about a lease holder who
built a big lodge in a remote location represented to him that
it's up for bid and they are worried that they will lose their
capital investment.
MR. MENEFEE replied that the renewal provision that was passed
last year is not mandatory. If someone has a 30-year lease, the
department always has the option to go competitive with it. But
some investment has been made and even if the department decides
to go competitive on it, a new person would have to pay the
previous lessee for all the improvements they made as part of
their bidding. They wouldn't be able to just inherent all that
development. In general that discourages people from trying to
take over someone else's lease and they don't run into that
problem a lot. If the lessee was in good standing, the
department would have the opportunity to renew that lease. But
at the end of their second lease (if it was a 30-year lease and
got to the end of 60 years) at that point the department would
be required to open it up for competitive leasing, but they
would have to be recompensed for the value of what they put in
if someone else beat them out on the land.
11:20:30 AM
SENATOR FAIRCLOUGH said the property she was approached about
was part of the Alaska Native Claims Settlement Act (ANCSA). So
the property is leased right now and has improvements and she
wanted to know if there was a specific provision for all assets
to be paid for by whoever takes the property following an
expiration of a lease.
MR. MENEFEE answered yes, but that is not in the lease; it would
be in their bidding notification. However, the department
doesn't lease ANCSA lands.
SENATOR FAIRCLOUGH clarified that it predated ANSCA and it was a
selected piece of property, so when the lease expires a
corporation is ready to take it. The current lease holder is
indicating there may not be reimbursement for the building
assets that are now on the property. So, he feels like he has
been put at a disadvantage and the Native Corporation wants the
property to come to them as soon as possible. Money is on the
table and it appears that it could be in question.
MR. FOGELS pointed out if it was an ANCSA selection it wouldn't
have been a state lease. But there are situations where maybe a
municipal government had gotten land from the state.
11:23:32 AM
SENATOR FAIRCLOUGH said she didn't want to take up any more of
the committee's time and they could meet after about this
specific case. She had another question from a constituent that
has to do with leases and cabins and whether your name is on the
lease and the transfer of that lease when it falls back into
state land and the state is eliminating cabins and safe places
for people to go if they are in the wilderness.
MR. MENEFEE clarified that the state doesn't "take land back;"
when the lease expires the interest they provided to someone
expires and goes away. In those situations, all the leases say
the lessee has to remove everything at the end of the lease that
they put on the land to DNR's satisfaction. They could decide
it's in the state's best interest to leave something on the
land, but they have to consider the multiple use interests state
land has and the issue of whether an occupied piece of land is
available for all other uses and that a cabin could be an
encumbrance that could prevent some other future use. He said
the issue of selecting state lands and whether the trespass
cabins could be kept out there goes back a long time and the
state does not have a cabin program to go out and administer all
the cabins. They are encumbrances and they do affect other
things that could be done on the land and those decisions are
made on a regular basis.
SENATOR MICCICHE asked who determines the value of the remaining
property when a previous lessee is compensated.
MR. MENEFEE replied that it goes through an appraisal process.
11:27:49 AM
SENATOR BISHOP commented that numerous people have had to
bivouac out in the wilderness for numerous days at -50 degrees
and he asked them to keep that in mind when they consider these
cabins.
MR. FOGELS explained that trespass on state lands is an issue
that is part of their management duty, but they are not actively
out there burning down cabins in remote areas. The only time
they really have to deal with trespass issues is when there are
conflicting uses.
11:29:03 AM
MR. MENEFEE went to point 5 on the briefing paper and the issue
of renewing aquatic farm leases that already had renewal
language. It wasn't included in last year's revision and then
they realized they should be consistent. So, if an aquatic farm
lease is in good standing, it can be renewed once for the same
period of time. After that it goes out for competitive bid, but
that doesn't mean they can't be the same operator after that.
11:30:03 AM
He said point 6 was about temporary water use authorizations.
Those authorizations are temporary, revocable and modifiable and
can be withdrawn at any time. A water right does not give them
that liberty. Once a water right is perfected, everything else
is subservient to that and forever. It's important because
throughout Alaska, 90 percent of development projects need a
temporary use authorization - because whether you are
maintaining the state highway system or building renewable
energy, water gets used. They follow the statute that says you
can issue a temporary water use authorization going through a
review process and meeting with ADF&G to make sure there aren't
habitat issues, and issue a temporary use water authorization.
It can't be issued for more than five years. So a 10-year
project that needs water gets one for the first five years and
at the end of that period it gets reevaluated and a decision is
made to extend it for another five years or not. It could be in
the same location to the same company, because their project
lasts longer than five years. They just want to clarify in
statute that temporary water uses can be reissued on the same
site every five years. A person doesn't get a water right until
they perfect their whole project, and that is based off of
temporary water use authorizations.
11:33:44 AM
SENATOR DYSON asked if aquatic farms include some right to the
shore site with a dock and cabin.
MR. MENEFEE answered it could, but it would have to be
explicitly stated in the lease. The aquatic farm leases are
typically just for the submerged lands and have a separate lease
authorization for the upland.
SENATOR BISHOP asked if this temporary water use permit would
help ice road construction permitting on three-year exploration
projects. If they know they are going to be doing the same ice
road out of the same lake for three years, will they have to
reapply every winter for it?
MR. MENEFEE answered since the department can issue a temporary
water use permit for up to five years, they would issue it one
time for the full three years.
He continued on to point 7 about water reservations that are
used for four things: to preserve habitat, navigability, and
recreation and water quality. For instance, if you have a river
with 100 cubic feet per second (cfs) of volume, 50 cfs need to
be in the river at all times to preserve the habitat. Any
subsequent applications for rights are subservient to that
unless there is a substantial change like the stream gets
rerouted. The other 50 cfs can be appropriated for other rights.
11:37:53 AM
MR. MENEFEE said Alaska is the only state in the nation where
persons can hold a water reservation. The mining industry asked
for that change in statute to make sure that they get water
reservations for their operations, but in reality they never
used it, instead using temporary water use authorizations and
water rights. The Alaska Miners Association supports this
change.
The department would like to see water reservations that are
very complex applications (requiring years of monitoring showing
the affected resource and the relationship of the water to the
resource) get vetted through the appropriate agency. This change
is so that a person will no longer be able to hold a water
reservation, but it would allow federal and state agencies and
political subdivisions of the state.
11:39:36 AM
SENATOR FAIRCLOUGH asked as of January 1, 2013, if a person had
applied for a water right by that would be affected by this
change.
MR. MENEFEE answered yes, 35 current of their applications are
in by person that could not hold a water right if this is
passed.
SENATOR FAIRCLOUGH asked if this is being used as a political
tool.
MR. MENEFEE answered no; they really believe that to support
development throughout Alaska on all projects that appropriate
decisioning on water reservations needs to be addressed.
11:41:16 AM
Point 8 was a small technicality and explained that the USGS has
divided the state into six hydrologic units - massive watersheds
with boundaries such that technically, if you fill up a water
bottle on one side of the line and empty it on the other side of
the line without getting a permit, you are guilty of a
misdemeanor. However, the department wants to deal with
significant amounts of water, the idea being that the state
already permits these things and "significant amounts of water"
has been defined in regulation already. So, they want the bar on
this one issue about moving water from one hydrologic unit to
the other to come up to the significant water threshold.
SENATOR DYSON asked if he was talking about just fresh water.
MR. MENEFEE answered yes.
SENATOR DYSON asked if small water turbines in rivers that
generate electricity have to be permitted and/or what size.
MR. MENEFEE answered renewable energy with hydrokinetic devices
(inflow turbines) technically need a temporary water use
authorization or a water right (not a water reservation). The
reason is because the definition is when you put water to a
beneficial use. They would authorize under two different venues;
one is a land use permit for the anchoring in a river or however
it is attached to the land and the other is a temporary water
use authorization.
11:44:40 AM
He went to point 9 that revised the appeals section. He said
essentially they are trying to accomplish two different things
in this group; first, standing, and the second, burden of proof.
The first issue about standing is that the department wants the
public to participate (they encourage it), but they don't want
people after the final decision is made to appeal without ever
having participated, basically because the department hasn't had
an opportunity to address their concerns. This change clarifies
if the department has offered a public notice period of at least
30 days and informed the public that in order to appeal you need
to have participated in this process (by commenting), then they
have the standing and the department can try to address their
issue. Then they have the right to appeal if they don't like how
the decision turned out. The department wants public
participation but in the appropriate place, which is during the
decision-making process.
The second stage of that is the burden of proof issue.
Currently, statutes say that appeals must show you are
"aggrieved." That typically comes across to the public as a very
emotional type of thing; they get appeals on things that say
well I don't like this; and then they have to go through a full
process on it. Not liking it doesn't give them a lot to go on.
So, they are raising the threshold to require stating how it is
substantially and adversely affecting the appealing party.
11:47:37 AM
SENATOR DYSON asked about noticing practices.
MR. MENEFEE replied that they have a broad notification system
that includes the online public notice page, posting it in local
areas - a post office or a local lodge - because not everybody
has a post office, statewide newspapers and a local newspaper;
they also reach out to interest groups and landowners.
SENATOR MICCICHE asked if "aggrieved" versus "substantially and
adversely affected" are legal terms and if that definition can
be used to limit participation from people who feel they have a
substantial and adverse effect due to the act that is occurring.
MR. MENEFEE replied that it wouldn't preclude them, because that
fits the definition, but the department would have to decide if
they are correct or if the issue had been addressed. They are
clarifying that what the court uses as a standard is not what
the administrative appeals uses.
SENATOR MICCICHE asked what the level of proof for
"substantially and adversely affected" is.
MR. MENEFEE replied that it's more about how it's treated in
connotation rather than an absolute legal sense.
11:51:15 AM
ASHLEY BROWN, Attorney, Department of Law (DOL), Anchorage,
Alaska, answered that the level of proof would be on a case by
case basis. It would have to be enough to show the commissioner
that a person was substantially and adversely affected. Section
33 of SB 26 has a definition, which would assist a person in
determining whether or not they are adversely affected.
SENATOR MICCICHE said the definition said they must be affected
by a department decision to the person's physical or financial
detriment. Would an NGO that has participated in the process
still have the right to feel an action was detrimental to the
organization's mission?
MS. BROWN apologized that she couldn't give him a specific
answer, but if it was able to show that it was substantially and
adversely affected, then yes, they would still be able to
appeal.
11:53:21 AM
CHAIR GIESSEL clarified that was section 39 on page 21 of SB 26.
SENATOR FAIRCLOUGH asked how the courts interpret "physical" if
she is on Egan Drive that is a dirt road and she has asthma.
That dirt would adversely affect her asthma. Would that stop
Egan Drive from being able to be driven on? Could traffic be
diverted or stopped because she has asthma?
MR. MENEFEE replied in dealing with appeals the commissioner can
agree or disagree, disagree in part, or remand it back to the
division with instructions to address the issue. In her example,
there might be some way to address the concern by spraying or
putting down calcium chloride, but that wouldn't stop a person
from being able to appeal, and the department would have to
figure out a way to address it.
SENATOR FAIRCLOUGH asked how "physical" would be determined.
MR. MENEFEE replied when this was written, they were thinking
along the lines of a personal physical thing; but at the same
time, a person could argue that it affects their ability to live
in health on their property. Let's say the road causes enough
vibration that it would cause the land to slide into the river;
that could be construed as a physical effect.
SENATOR FAIRCLOUGH said she hoped they would define what that
means, because geographical proximity is of interest if you are
adversely affected. She knew of another road that was being
reconstructed now and a constituent was very concerned that it
would collapse his well. She thought people located physically
next to activities should be able to comment and be considered
adversely affected.
11:59:30 AM
MR. MENEFEE went to point 10 that dealt with notification of
mineral closing orders and explained that through the years they
have used different terminology, but they all affect mineral
entry (the ability to file claims and get the exclusive right to
the locatable minerals), which is a big deal in the state. Right
now they are only required to do it for closing orders and the
department wants to make sure the public knows any time they are
going to affect the mineral estate.
MR. MENEFEE said point 11 eliminates public notice for
alterations of platted boundaries if owners approve and no
public easements or rights of way are affected. He explained
that the department is the platting authority for the
unorganized borough. That means that anybody that subdivides
lands has to come to DNR and get a subdivision approval. Through
the history of doing that, they have found people come in and
ask for the ability to subdivide their parcel. There are no
easements involved, so there is no other public interest in that
land, but they are still required to go out for 30 days and post
that notification, charge the applicant for it and wait 30 days
for the comments to come back - and nobody ever comments on that
type of thing. So, because nobody has any other interest in just
your parcel, they are saying to skip the 30-day notice and the
public review.
12:02:04 PM
Point 12 clarifies the definition of "public auction" to include
online public auctions with public outcry auctions.
Point 13 clarifies that they do a preliminary and a final
finding for non-oil and gas related decisions, in order to have
consistency with several other statutes.
12:03:28 PM
Point 14 had a bunch of miscellaneous wording changes that make
statutes more readable and understandable and provide
clarification of statutory intent.
CHAIR GIESSEL thanked Mr. Menefee for the great overview saying
the committee wanted him back on Monday to do the sectional
analysis and connect them to bill sections.
SENATOR FAIRCLOUGH said section 6 on page 7, lines 17-26,
mentioned the court system, but she didn't see a fiscal note.
MR. MENEFEE replied that it doesn't change any of the court
laws, responsibilities or how they do business.
SENATOR FAIRCLOUGH asked why he chose $5 million on page 15,
line 23.
MR. MENEFEE replied that came from existing language that has a
$5 million limit before coming back to the legislature.
Finding no further questions, Chair Giessel held SB 26.
12:07:12 PM
CHAIR GIESSEL announced that the committee would now focus on SB
27 .
12:07:55 PM
LARRY HARTIG, Commissioner, Department of Environmental
Conservation (DEC), Anchorage, Alaska, said SB 27 would
authorize the Department of Natural Resources (DNR) and the
Department of Environmental Conservation (DEC) to do a
study/evaluation of the state taking primacy of the 404
permitting program under the Clean Water Act (CWA). It would
authorize them to go forward with preparing an application and
start planning to take over that program. They would be back to
the legislature several times before actually going forward with
it. He anticipated identifying gaps in state statute to be able
apply and get that program from the federal government. The
fiscal note provides for additional positions in FY 2014, but
they don't know yet what it would take to run the program.
12:10:37 PM
SENATOR MICCICHE asked if the federal government would provide
funding relief when the state assumes primacy.
COMMISSIONER HARTIG replied no; there would be some opportunity
for small grants for preparing the application and gearing up a
program, but not for running it.
He said the 404 program is a section in the federal Clean Water
Act (CWA). Two primary programs are under the 400 series; the
402 program is the waste water permitting program that DEC got
primacy to administer from the Environmental Protection Agency
(EPA) in 2008; the final phase of implementation was completed
in November 2012.
SENATOR FAIRCLOUGH asked how long it took to acquire that.
COMMISSIONER HARTIG answered that the Murkowski administration
decided to go forward with an application, which took four or
five years to develop and the application process for the 404
program would be the same. It includes a letter from the
governor requesting the program, a statement from the attorney
general that the state's program is comparable to the federal
program, a complete description of the program including the
number of people that would be running it and what they would be
doing, the organization chart and budget, a complete set of
regulations, statutory authorities and guidance documents for
running the program.
He said the application for the 402 program is about a foot and
a half thick and when they turned it in, the EPA had hundreds of
questions about potential deficiencies which took four or five
years to work through. Once the application was approved, an
appeal went to the 9th Circuit where the EPA's decision was
upheld giving the state primacy. The DEC and EPA agreed to a
phased-in approach working cooperatively to share
responsibilities on getting permits out. Because the EPA had a
substantial backlog, the idea also was to whittle it down before
the state got primacy and to use that as a training opportunity
for state people.
COMMISSIONER HARTIG said he hoped the 404 program wouldn't take
that long, but five years would be pretty quick. The importance
of the 404 program is that it covers bridge and fill activities
in surface waters of the United State; that would include such
things as ponds, rivers lakes and wetlands, which under federal
law are considered waters of the US. Sixty-five percent of the
nation's wetlands are in Alaska, which is the reason they think
the state should take primacy of this program. Most of the
development in this state will be on wetlands and needs a 404
permit. And in this time of declining budgets, the question
arises if the EPA will even be able to keep up with the
permitting needs in Alaska that are so critical.
He stated that from a DEC perspective, wetlands provide very
important environmental and ecological functions. It's a special
habitat for a number of different species and provides retention
for filtering sediments and pollutants before they get into a
river, and they must be managed appropriately.
12:18:06 PM
COMMISSIONER HARTIG said it isn't novel for a state to have
primacy for 404 programs; in fact the CWA specifically states
the intent of Congress is that the states will take primacy of
these programs. Alaska was one of the last five states to take
primacy for the 402 program. Two states, Michigan and New
Jersey, have already taken primacy for the 404 program. A
handful of other states, including Oregon, are in the process of
getting it.
12:19:02 PM
SENATOR BISHOP said 90 percent of the state's budget comes from
the North Slope and it has a lot of wetlands.
COMMISSIONER HARTIG said that was correct; the permafrost is
wetlands and they are considered waters of the United States.
With primacy, the state would get authority that is limited
geographically to issue 404 permits. The EPA wouldn't allow the
state to get primacy for all waters of the US and all wetlands
in the state. The Clean Water Act requires that the federal
government retain tidally influenced areas and the adjacent
wetlands and waterways that could be used for interstate and
international commerce. That would be part of this evaluation
phase where they would sit down with the Corps of Engineers and
any other appropriate federal agencies and figure out what those
geographic limitations might be.
He said the state could also take over the Corps of Engineers'
authority for issuing programmatic state general permits. He
explained that currently the Corps can issue general permits
where people get authorized under a general permit for similar
type activities rather than having to get an individual permit.
DEC already has authority to do this in the 402 program, but the
Corps could issue more general permits in Alaska for smaller
projects that have minimal environmental impact. Then the state
could take over administration and enforcement of them. General
permits aren't geographically limited and those areas could be
included that would otherwise be off limits to 404 permits.
12:22:06 PM
CHAIR GIESSEL asked him to clarify the geographic limits of
tidal areas or adjacent wetlands that this would not give the
state primacy over.
COMMISSIONER HARTIG answered that those are the tidally
influenced waters, waters that are/could be used for interstate
and international commerce and wetlands adjacent to those
waters.
CHAIR GIESSEL asked if Turnagain Arm, which is influenced by
tides, would not be given to the state in primacy.
COMMISSIONER HARTIG said that was accurate. He explained that
the 404 authority goes back to the Rivers and Harbors Act of
1899 when the Corps was granted authority by Congress to make
sure the public didn't place obstructions or limitations in
waterways that might impede interstate commerce. Eventually,
that authority expanded beyond docks to pollution (this predates
all our pollution laws). He sees this as being consistent with
the Corps retaining authority where there is a real federal
interest in interstate commerce, so Cook Inlet would stay with
the Corps.
12:24:03 PM
SENATOR MICCICHE said the state would have primacy in very few
areas of Cook Inlet.
COMMISSIONER HARTIG agreed and said that is why the evaluation
phase is so critical. The department could identify wetlands
around the state, like the Kensington Mine, Red Dog Mine, and
the North Slope, that 404 permits were critical for and get
primacy. They also reasoned in estimating the cost of the
program that you can't simply look at the Corps' budget and
assume the state budget would be the same, because it would be
split somehow, and they don't know how yet.
SENATOR BISHOP asked if dredging in the Cook Inlet would remain
with the Corps.
COMMISSIONER HARTIG answered yes; it goes with their other
responsibilities besides permitting, which is dredging and
filling activities and harbors.
SENATOR DYSON said the MatSu River is meandering and asked the
process for returning the river to a course that was there when
the private property owners developed their interest so it
doesn't jeopardize property. And would that end at the edge of
where it becomes tidal?
COMMISSIONER HARTIG replied that was beyond the DEC's
jurisdiction and that the Corps would be responsible for those
activities. His agency would just look at water quality issues.
MR. FOGELS added for a large river such as the Matanuska, it's
probable that the State of Alaska owns the bed of the river, so
any kind of work in that river would need DNR authorization, as
well.
COMMISSIONER HARTIG said the general permits are not mutually
exclusive. So, if they decided not to pursue 404 primacy for
whatever reason, it wouldn't preclude them from also pursuing a
more extensive general permit program with state oversight.
12:28:06 PM
COMMISSIONER HARTIG summarized why assumption of the 404 program
is important: Alaska has 65 percent of the nation's wetlands and
they will affect most projects in the state of any significant
size. The Corps has a declining budget that raises concerns
about them being able to keep up with the state's timely
permitting needs. Also, there is a certain advantage to having
local permit writers in terms of accountability to the public
that they serve and to the political leadership. Local expertise
is also needed to make good decisions like routing of pipelines.
He recalled an incident when an NPRA pipeline oil was built
under the Coleville River Delta according to what the EPA and
Fish and Wildlife Service wanted instead of by bridge, which is
what the DEC wanted, because leaks do occur regularly. From
their experience on the North Slope, the DEC knows they get
discovered when someone "steps in it" not because some alarm
goes off. A buried line that is leaking into permafrost
undetected can cause significant ecological damage by the time
it is discovered. That happened during the midst of this whole
debate. Alyeska found an underground pipe leaking into the
cellar of Pump Station 1 in the middle of winter. DEC decided to
keep the pipeline going, because it was all being contained, the
ground was frozen and they couldn't get to it. It was really
upsetting to EPA to keep a leaking pipeline going, but if it
didn't, everything would freeze up and wax and ice would form in
the line making a much bigger disaster. "This is why you don't
bury lines on the North Slope," is what he told the senior EPA
person, who said he got it. Commissioner Hartig didn't know what
it cost ConocoPhillips, but there were two years of delay.
COMMISSIONER HARTIG said other benefits to the state's having
the program would be continued permitting reform focused on
finding efficiencies and the right priorities and making sure
the state is responsive and prioritizes projects appropriately.
Also, once a permit gets appealed, that appeal would to go to
the state court instead of the federal court allowing these
decisions to be made locally where people could more easily
participate in the legal process and not have to go out of
state.
12:34:28 PM
He also mentioned that the fiscal note indicated five positions
for DEC and two for DNR would be needed for this review; some of
the DEC's FY14 $1.4 million would be moved over to DNR and the
Department of Law.
CHAIR GIESSEL asked if the personal services section of the
fiscal note saying "to manage a work group of permittees that
will assist in the analysis of 404 primacy" meant creating a
task force and if stakeholders be working with the DEC.
COMMISSIONER HARTIG answered yes, because when they worked on
the 402 primacy they found that the folks getting the permits
need to buy into it. Involving the stakeholders in the program's
design would also be an opportunity to educate the public.
12:37:41 PM
SENATOR BISHOP said this could have some good cost benefits to
the State of Alaska.
COMMISSIONER HARTIG said they wouldn't go forward with this
without seeing some cost benefits, but the proof will come at
the end.
SENATOR FAIRCLOUGH said the application requests 12 people and
over $2 million/yr. and asked if that was similar to the 402
ramp up.
COMMISSIONER HARTIG replied that they are using their experience
with the 402 program to lay out this budget. They don't want to
undercut themselves and this is what it would take to do a good
application. Even if the state doesn't get primacy, the ramp up
will still have value in terms of working better with the Corps.
SENATOR FAIRCLOUGH said she wanted to see what Governor
Murkowski proposal's costs were.
COMMISSIONER HARTIG said he would get that for her and added
that by FY 2016 they would know what the program would be. But
beyond that they wouldn't really know and he would expect the
transition to happen earlier than the full five years.
12:41:57 PM
SENATOR MICCICHE asked if the state was using expertise from
other states that were successful with primacy on how to
streamline our investigation.
COMMISSIONER HARTIG replied yes; they are talking to other
states and the Corps. They also hope to get some senior people
here in Alaska who just left the Corps.
12:42:59 PM
MR. FOGELS said that Commissioner Sullivan laid out the broad
strategic reasons they are undertaking this review and part of
the bill's fiscal note allows them to look at more immediate
benefits such as looking at regional general permits and better
engagement with the Corps in terms of wetlands permitting. They
will get a better idea in the next year or two of the scope of
the program and what the benefits would be.
CHAIR GIESSEL asked him for a quick look at the sections in the
bill.
12:45:41 PM
COMMISSIONER HARTIG said the purpose is to provide authority for
the state to evaluate and develop a program for regulation of
dredge and fill activities in waters and wetlands in the state.
Section 1 provides the legislative findings, recognizing the
millions of acres of wetlands the state has. It mentions that
two other states have received primacy and recognizes that
Congress intends for states to assume these rights and
responsibilities. It talks about the experience that DEC and DNR
have in these areas. DEC has the 402 program, but under the
Clean Water Act, 404 permits that are issued by the Corp and
have to be certified consistent with Alaska law by the DEC
(under section 401 of the CWA).
He explained that another aspect of the 404 program he hadn't
touched on is that where wetlands are impacted mitigation has to
be done. That is where the land management skills of
^Presentation: DEC
DNR would come in to work something out that would make sense in
terms of replacing those wetland values.
12:48:18 PM
Section 2 clarified DEC and DNR authorities; DEC already has
authority to take over 404 program but it's not that clear and
then it grants DNR those authorities that they don't currently
have to do that in conjunction with DEC.
Section 3 is on similar lines and talks about DEC being able to
take all actions necessary to be ready to receive that authority
and DNR to administer the program.
Section 4 directs DEC in coordination with DNR to do this
evaluation of the benefits, costs and consequences of taking the
program.
12:49:14 PM
SENATOR FAIRCLOUGH asked him why section 3 on line 19, page 3,
explicitly asks for all actions right now, because he said there
will be gates for the legislature to continue to comment on
moving forward.
COMMISSIONER HARTIG explained as a practical consideration, when
you go forward with an application, their experience with EPA on
the 402 is that they want to know you are serious, because it
takes a lot of effort on their side, too. Idaho pulled out half
way through the process and that soured EPA on primacy. He had
to do a lot of convincing them that we are serious. Also, in
terms of the gate, he said before the department can submit the
application they have to have the statutes, the regulations, the
guidance, and all the authorities - and the whole public process
has to be done. Everything gets submitted with the application.
He would be surprised if they didn't have to come back for some
additional authorities in the statutes for DNR and DEC to flesh
out and he knew they would need additional positions and
budgets.
SENATOR FAIRCLOUGH said he led them to believe the state could
pull out if it became cost prohibitive to continue or something
else arose that we might not want to take primacy and asked if
we had lost our right to pull back.
COMMISSIONER HARTIG replied that the application submitted to
the EPA has to be complete before they would give us primacy. It
would not be complete if all the people were not hired to run
the program and we didn't have a budget to run the program. This
fiscal note wouldn't do it; they must come back to the
legislature for more resources. The fiscal note will grow and
more positions will be needed and there will be several chances
to change their mind.
SENATOR FAIRCLOUGH asked if starting the project with the word
"all" was boiler plate language or if the department developed
it.
COMMISSIONER HARTIG replied that it's the department's language;
the federal requirements were the list of things he said had to
be in the application. He offered to provide the actual statute.
12:54:36 PM
Section 4 just talks about DEC in coordination with DNR to
evaluate the potential benefits, costs and consequences to the
state of assuming primacy and to take responsible steps to
assume primacy. It gives authorities to run the program should
they get it and that they may adopt regulations necessary to
obtain federal approval and to implement a state program (all
necessary to put the application together).
12:55:30 PM
CHAIR GIESSEL thanked them for their overview and held SB 27 in
committee.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 026 Briefing Paper.pdf |
SRES 2/2/2013 10:30:00 AM |
SB 26 |
| SB 026 Fiscal Note 1-2 DNR.pdf |
SRES 2/2/2013 10:30:00 AM |
SB 26 |
| SB 026 Fiscal Note 2-2 DFG.pdf |
SRES 2/2/2013 10:30:00 AM |
SB 26 |
| SB 026 Sectional Analysis vs 1.pdf |
SRES 2/2/2013 10:30:00 AM |
SB 26 |
| SB 026 SRES Request for Hearing.Sullivan.pdf |
SRES 2/2/2013 10:30:00 AM |
SB 26 |
| SB 026 Transmittal Letter. Parnell.pdf |
SRES 2/2/2013 10:30:00 AM |
SB 26 |
| SB 026 Water-Related Briefing Points.pdf |
SRES 2/2/2013 10:30:00 AM |
SB 26 |
| SB 026A vs A.pdf |
SRES 2/2/2013 10:30:00 AM |
SB 26 |
| SB 027 Hearing Request.pdf |
SRES 2/2/2013 10:30:00 AM |
SB 27 |
| SB 027 Fiscal Note 1-3 DEC.pdf |
SRES 2/2/2013 10:30:00 AM |
SB 27 |
| SB 027 Fiscal Note 2-3 DNR.pdf |
SRES 2/2/2013 10:30:00 AM |
SB 27 |
| SB 027 Fiscal Note 3-3 LAW.pdf |
SRES 2/2/2013 10:30:00 AM |
SB 27 |
| SB 027 Sectional Analysis vs 1.pdf |
SRES 2/2/2013 10:30:00 AM |
SB 27 |
| SB 027 Transmittal Letter Parnell.pdf |
SRES 2/2/2013 10:30:00 AM |
SB 27 |
| SB 027 vs A.pdf |
SRES 2/2/2013 10:30:00 AM |
SB 27 |
| SB26 DMLW Slidedeck Permitting reform 2013 02 02.pdf |
SRES 2/2/2013 10:30:00 AM |
Permitting Reform SB 26 |
| SB 26 Opp Resolution Norton Bay Inter-Tribal Watershed Council 2013.01.30.pdf |
SRES 2/2/2013 10:30:00 AM |
SB 26 |