Legislature(2013 - 2014)BUTROVICH 205

02/04/2013 03:30 PM Senate RESOURCES


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03:30:24 PM Start
03:31:16 PM Presentation: Oil Resources: Economic Challenges and Opportunities
05:15:11 PM SB27
05:27:03 PM SB26
06:32:08 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Oil Resources:Economic Challenges & Opportunities TELECONFERENCED
-- Testimony <Invitation Only> --
5:15 pm - Public Testimony on the Following Bills
+= SB 26 LAND DISPOSALS/EXCHANGES; WATER RIGHTS TELECONFERENCED
Heard & Held
-- Public Testimony <Time Limit May Be Set> --
+= SB 27 REGULATION OF DREDGE AND FILL ACTIVITIES TELECONFERENCED
Heard & Held
-- Public Testimony <Time Limit May Be Set> --
         SB  26-LAND DISPOSALS/EXCHANGES; WATER RIGHTS                                                                      
                                                                                                                                
5:27:03 PM                                                                                                                    
CHAIR GIESSEL announced SB 26 to be up for consideration.                                                                       
                                                                                                                                
WYNN MENEFEE, Chief  of Operations, Division of  Mining, Land and                                                               
Water, Department  of Natural Resources  (DNR), said he  would go                                                               
through a quick  sectional analysis of SB 26. He  noted that some                                                               
language at the back of the  bill takes out sections and that can                                                               
get confusing going through it section by section.                                                                              
                                                                                                                                
Section 1 deals with general  permits. It allows the commissioner                                                               
the  ability to  issue general  permits for  activities that  are                                                               
unlikely to  result in  significant or  irreparable harm.  It has                                                               
exceptions  for fish  and game  habitats (AS  16.20), the  Alaska                                                               
Surface  Coal Reclamation  Act (AS  27.21), forest  resources (AS                                                               
41.17) and parks and recreation facilities (AS 41.21).                                                                          
                                                                                                                                
5:29:17 PM                                                                                                                    
SENATOR  FRENCH  asked  what prompted  the  standard  formula  of                                                               
"significant and irreparable harm" for issuing general permits.                                                                 
                                                                                                                                
MR.  MENEFEE replied  that the  word "significant"  is subjective                                                               
and  decisions  have  to  be  made  on  a  case  by  case  basis.                                                               
"Irreparable  harm"  is  if  you  can't  rehabilitate  or  repair                                                               
something.                                                                                                                      
                                                                                                                                
SENATOR FRENCH said their approach  allowed them in all instances                                                               
except for the four and asked  if they thought about doing it the                                                               
other  way  since  this  is  the  beginning  of  a  fairly  broad                                                               
expansion of the permitting authority.                                                                                          
                                                                                                                                
MR.  MENEFEE  responded   that  this  is  not   an  expansion  of                                                               
authority, but merely  a clarification of it.  Under AS 38.05.020                                                               
(a)(1)  the department  has the  ability  to prescribe  different                                                               
methodologies  for permitting,  which  includes general  permits.                                                               
They  have  already  done general  permits  and  have  "generally                                                               
allowed uses,"  which is  a whole  host of  things people  can do                                                               
without getting  a permit.  So, the  commissioner's discretionary                                                               
authority  has  been used;  this  just  states specifically  that                                                               
general permits are  allowed for clarification, because  a lot of                                                               
them are already being used.                                                                                                    
                                                                                                                                
SENATOR FRENCH  asked how many  general permits have  been issued                                                               
recently.                                                                                                                       
                                                                                                                                
5:32:09 PM                                                                                                                    
MR. MENEFEE replied  at the initial creation of  a general permit                                                               
there  was   very  few;  one   last  year,  but   the  subsequent                                                               
authorizations  coming out  of it  ran from  50 to  100 and  that                                                               
would  build over  time. People  can  purchase non-timber  forest                                                               
products general  permits on  line and he  could get  that figure                                                               
for him,  but he didn't  have a good  number for the  burn barrel                                                               
type of permits.                                                                                                                
                                                                                                                                
SENATOR MICCICHE asked for the  title that specifies the scope of                                                               
general permits.                                                                                                                
                                                                                                                                
MR. MENEFEE said he was  referring to AS 38.05.020(a)(1) and that                                                               
is where  general permits  would be done.  This statute  would be                                                               
specifically sited if this bill was adopted.                                                                                    
                                                                                                                                
Section  2 removes  the reference  to  an additional  requirement                                                               
that  the director  of the  Division  of Mining,  Land and  Water                                                               
shall consult with  other departments. This is where  you have to                                                               
refer  back to  section 43  in the  back of  the bill  that talks                                                               
about  land exchanges.  This provision  also  reinserts the  part                                                               
about  following AS  38.05.035(e) into  section 22.  This section                                                               
talks about  giving notice  of the land  exchanges no  later than                                                               
three months after making the acquisition.                                                                                      
                                                                                                                                
CHAIR GIESSEL asked if it would  be beneficial to jump to section                                                               
22 for continuity of thought.                                                                                                   
                                                                                                                                
MR. MENEFEE said  yes and explained that section  22 (starting on                                                               
page 15)  rolled in the  applicable parts of the  exchange, which                                                               
includes  public and  agency  review  procedures, public  notice,                                                               
legislative  approval for  exchanges over  $5 million,  and equal                                                               
values.                                                                                                                         
                                                                                                                                
Section 23  says the  director shall consider  only the  land and                                                               
other  considerations  the  state  would  convey  to  receive  an                                                               
exchange; and  section 22  (on line  13, page  15) says  that the                                                               
director  can  equalize  the  value  of  the  property  or  other                                                               
considerations conveyed  or received to  the state. There  may be                                                               
other things  besides just strict  land value that could  be used                                                               
in that.                                                                                                                        
                                                                                                                                
5:38:13 PM                                                                                                                    
MR. MENEFEE jumped back to section  3 that allows the director to                                                               
contract for the sale of land  and payments over time. It changes                                                               
the threshold from $5,000 to  over $10,000 and then just mentions                                                               
a  preliminary  finding  if  it's   a  non-oil  and  gas  related                                                               
decision. On page 5, line 10,  the director may make available to                                                               
the public a preliminary written  finding and provide opportunity                                                               
for public comment for a period of 30 days.                                                                                     
                                                                                                                                
CHAIR  GIESSEL  asked if  the  30-day  public comment  period  is                                                               
standard.                                                                                                                       
                                                                                                                                
MR. MENEFEE answered yes, for disposals of interest.                                                                            
                                                                                                                                
CHAIR GIESSEL  asked what  mechanisms he  uses for  notifying the                                                               
public about any of these things.                                                                                               
                                                                                                                                
MR.  MENEFEE replied  that they  involve on  line public  notice,                                                               
posting  in newspapers  and in  a conspicuous  location near  the                                                               
activity, reaching out to interest  groups and notifying adjacent                                                               
land  owners. The  statute says  they  have to  do anything  they                                                               
consider needs to be done in order to notify the public.                                                                        
                                                                                                                                
CHAIR GIESSEL asked  if any of the public  notice methodology was                                                               
being changed by this bill.                                                                                                     
                                                                                                                                
MR. MENEFEE answered no.                                                                                                        
                                                                                                                                
SENATOR FAIRCLOUGH asked for an  example of issuing a preliminary                                                               
report, because  everywhere it's listed  it says "may."  So, it's                                                               
at the department's discretion.                                                                                                 
                                                                                                                                
5:41:47 PM                                                                                                                    
MR. MENEFEE  replied that putting  the "may" in doesn't  change a                                                               
lot for the general public. Most  of the litigation is based on a                                                               
challenge of process more than  of the actual decision. Sometimes                                                               
they do issue preliminary written  findings at times, even though                                                               
they only have  to do a written one for  non-oil and gas disposal                                                               
of interest, they  want to make sure they don't  have a situation                                                               
where  the  public  is  going  to  hold  up  a  project  by  just                                                               
challenging on sheer process questions alone.                                                                                   
                                                                                                                                
5:42:55 PM                                                                                                                    
He said  section 4  clarifies that  a person  has to  address how                                                               
they are  substantially affected during an  administrative appeal                                                               
rather  than just  saying they  are "aggrieved."  In order  to be                                                               
eligible  to file  the administrative  appeal they  have to  have                                                               
submitted written  comment or presented oral  public testimony at                                                               
a public hearing. This section  also clarifies that the applicant                                                               
can appeal.                                                                                                                     
                                                                                                                                
CHAIR  GIESSEL   asked  the  definition  of   "substantially  and                                                               
adversely affected."                                                                                                            
                                                                                                                                
MR.  MENEFEE said  he would  let  Ashley Brown  answer that,  but                                                               
"substantially" doesn't  have a  great definition, because  it is                                                               
used on a case by case  basis. "Adversely affected" is defined in                                                               
section 33.                                                                                                                     
                                                                                                                                
5:44:51 PM                                                                                                                    
SENATOR   FRENCH  added   that  earlier   he  was   asking  about                                                               
"significant   and  irreparable,"   and   the   words  here   are                                                               
"substantially and adversely affected."                                                                                         
                                                                                                                                
5:45:04 PM                                                                                                                    
ASHLEY  BROWN,  Assistant  Attorney General,  Department  of  Law                                                               
(DOL), explained  that "substantially and adversely  affected" is                                                               
defined in section  33 in the context of general  appeals to DNR.                                                               
It is  not defined in section  4. Otherwise it is  something that                                                               
would be  determined by the department  on almost a case  by case                                                               
basis.                                                                                                                          
                                                                                                                                
5:46:06 PM                                                                                                                    
SENATOR BISHOP  asked if  the department is  trying to  make some                                                               
bright  lines  on  what  might  be  substantially  and  adversely                                                               
affected or some  benchmarks, or is this just a  judgment call on                                                               
the director's part.                                                                                                            
                                                                                                                                
MS. BROWN replied that "adversely  affected" is defined elsewhere                                                               
in the statute, and to that  extent there is a clear bright line.                                                               
Otherwise,  it   would  be  developed   probably  the   same  way                                                               
"aggrieved" is currently interpreted.  Under this bill that would                                                               
be   whoever   is   "substantially   and   adversely   affected."                                                               
Regulations could potentially further clarify this.                                                                             
                                                                                                                                
SENATOR FRENCH asked  if it wouldn't be more likely  that a court                                                               
would eventually clarify this.                                                                                                  
                                                                                                                                
MS. BROWN answered yes.                                                                                                         
                                                                                                                                
SENATOR  FRENCH asked  if this  is  meant to  overturn or  modify                                                               
Gilbert v.  State where the  court said someone who  is aggrieved                                                               
has  an  interest  that  is adversely  affected  by  the  conduct                                                               
complained of.                                                                                                                  
                                                                                                                                
MS. BROWN replied that she couldn't answer that.                                                                                
                                                                                                                                
5:48:19 PM                                                                                                                    
SENATOR FRENCH  said the question  is going  to come up  over and                                                               
over  again and  they need  to know  the intent  in drafting  the                                                               
bill.                                                                                                                           
                                                                                                                                
MR. MENEFEE  explained that  this measure  is trying  to increase                                                               
the quality of  the appellants' appeals to  actually give linkage                                                               
to  how  the decision  is  adversely  affecting them.  Currently,                                                               
regardless  of  what  lawyers  say  when  a  person  says  he  is                                                               
"aggrieved"  that means  they are  upset; therefore  I should  be                                                               
able to appeal. And that's all they sometimes write in.                                                                         
                                                                                                                                
He said over the last five  years they have averaged 43 appeals a                                                               
year,  a lot  of appeals  to  work through  when you  have to  go                                                               
through  basically the  same  process you  did  for the  original                                                               
decision.  The appeals  officers  that help  the commissioner  in                                                               
crafting these  estimated that 15-25  percent of them  are people                                                               
putting in appeals  that say "I don't like  this" without showing                                                               
how they are  adversely affected by it. The  department is trying                                                               
to raise the  threshold, so someone actually has to  say how they                                                               
are affected, so  it can provide some linkage  between the action                                                               
and what they are talking about.                                                                                                
                                                                                                                                
SENATOR FRENCH said at least a  dozen sections of this bill touch                                                               
on  this idea  and maybe  it should  have gone  to the  Judiciary                                                               
Committee  first, but  he  wanted  to know  how  many  of the  43                                                               
appeals would have been knocked out of court by this standard.                                                                  
                                                                                                                                
MR.  MENEFEE said  he couldn't  answer that,  because he  doesn't                                                               
make judicial decisions.                                                                                                        
                                                                                                                                
SENATOR MICCICHE  said a  person eligible to  file an  appeal for                                                               
reconsideration  would  have had  to  participate  in the  public                                                               
comment period  by submitting written comment  or presenting oral                                                               
testimony,  and  folks that  find  out  afterward that  they  are                                                               
affected  by   a  final  written  finding   are  eliminated.  So,                                                               
essentially  this  raises  the  bar so  that  anyone  that  could                                                               
potentially be affected had better  enter the discussion early in                                                               
the  process  as opposed  to  finding  out  that they  could  own                                                               
adjacent property or be an  organization affected by the outcome.                                                               
Is that correct?                                                                                                                
                                                                                                                                
5:52:56 PM                                                                                                                    
MR.  MENEFEE  answered  that  the   existing  statutes  had  some                                                               
provisions  about  having  to  participate  in  the  process  for                                                               
disposal  of  interest decisions;  it  didn't  address the  other                                                               
decisions that  didn't fall under  that category. Does  it change                                                               
the threshold on all things? No;  but it raises the threshold for                                                               
things that  did not  fall under that  provision and  provides 30                                                               
days' notice that here's your chance.                                                                                           
                                                                                                                                
He explained that the whole  way the department crafts its public                                                               
notice  is  just  to  try   to  encourage  public  participation.                                                               
Currently, if  they look at  disposal of interest  decisions they                                                               
have  had, if  they  didn't participate,  then  they wouldn't  be                                                               
eligible to appeal.  This just continues that  into anywhere they                                                               
have  given the  same type  of notice.  So, if  someone comes  in                                                               
after  the fact  and  says  they hadn't  heard  about this,  they                                                               
wouldn't have the ability to appeal at that point.                                                                              
                                                                                                                                
5:54:12 PM                                                                                                                    
MR.  MENEFEE continued  the analysis  explaining  that section  5                                                               
clarifies if  the commissioner doesn't act  on a reconsideration,                                                               
which  is like  an appeal  but it's  a decision  the commissioner                                                               
made originally,  and if he doesn't  act on it 30  days after the                                                               
issuance of a written finding, it's considered denied.                                                                          
                                                                                                                                
SENATOR FRENCH  asked if this was  a change in that  as it stands                                                               
now  the  commissioner  actually  has  to  act.  Or  is  it  just                                                               
restating that?                                                                                                                 
                                                                                                                                
MR. MENEFEE responded  the part that section 5 on  page 7 removes                                                               
the  language,   "the  commissioner   shall  grant  or   deny  an                                                               
administrative appeal within 30 days  after issuance of a written                                                               
finding". Before  "the failure  of the commissioner  to act  on a                                                               
request for  consideration within this  period" was a  denial and                                                               
it was already  stated. This is just trying to  clarify from what                                                               
period; that  is, no  later than  30 days  after issuance  of the                                                               
final written decision.                                                                                                         
                                                                                                                                
5:55:59 PM                                                                                                                    
Section 6  is also clean up  language. It deals with  when people                                                               
can go to court.                                                                                                                
                                                                                                                                
Sections 7-9  clarify payments  over time  versus payment  all up                                                               
front. Sections  8 and  9 remove  references to  AS 38.05.065(b).                                                               
It  also clarifies  that the  contract, sale  or properties  sold                                                               
under this  chapter means  all land sales  versus only  ones that                                                               
are at public auction or by sealed bid.                                                                                         
                                                                                                                                
Section  10  allows a  one-time  extension  (for two  years)  for                                                               
leases  in  only  three  instances:  the  preference  right,  for                                                               
renewal  of   a  lease  under   (e)  of  this  section   and  for                                                               
applications to  issue the lease on  the same site but  there are                                                               
substantial  changes.  The extra  time  is  for the  decision  or                                                               
adjudication to be done on whether or not to issue the lease.                                                                   
                                                                                                                                
5:58:36 PM                                                                                                                    
Section  11 is  about  highest bidders  and replaces  "aggrieved"                                                               
with "substantially and adversely affected," again.                                                                             
                                                                                                                                
SENATOR FRENCH said  this section seems like a good  example of a                                                               
specific area  of where you  can at least  narrow down who  is at                                                               
risk  and whose  rights are  being changed,  the bidders.  He had                                                               
greater concerns when  it is applied to the public  at large; and                                                               
Mr.   Menefee  stated   that  this   bill  changes   often  where                                                               
"aggrieved"  is   used  to   the  "substantially   and  adversely                                                               
affected"  standard and  asked  if that  was  throughout all  the                                                               
statutes  or   just  specifically   within  the   DNR  permitting                                                               
provisions.                                                                                                                     
                                                                                                                                
MR. MENEFEE  replied that  the only  provisions they  are dealing                                                               
with are  the ones with DNR:  they only addressed Titles  46, 44,                                                               
and 38.                                                                                                                         
                                                                                                                                
6:00:02 PM                                                                                                                    
Section 12 clarifies prequalification of bidders.                                                                               
                                                                                                                                
Section  13  rewords  language to  "substantially  and  adversely                                                               
affected."                                                                                                                      
                                                                                                                                
Section 14 deals  with leases for fisheries  and changes language                                                               
to "substantially and adversely affected."                                                                                      
                                                                                                                                
SENATOR MICCICHE asked the purpose  of changing the appeal period                                                               
from 30 days to 20 days.                                                                                                        
                                                                                                                                
MR. MENEFEE answered  to make it consistent  with general appeals                                                               
language in AS 44.37.811.                                                                                                       
                                                                                                                                
6:02:09 PM                                                                                                                    
Sections  15 and  16 both  relate to  aquatic farm  leases. There                                                               
were statements  about renewal in  section 15 that were  moved to                                                               
section 16. It allows a renewal period  of up to 10 years for one                                                               
time.                                                                                                                           
                                                                                                                                
Section 17 deals with leasehold  locations in addition to mineral                                                               
closing orders.                                                                                                                 
                                                                                                                                
Section 18 adds things to clarify preliminary written decisions.                                                                
                                                                                                                                
Section  19 clarifies  some preliminary  decision work  and deals                                                               
with mineral and leasehold location orders.                                                                                     
                                                                                                                                
Section  20 clarifies  decision terminology  for different  state                                                               
lands.  The definition  is very  broad, but  it includes  various                                                               
things. One  is shorelands  and tidelands;  before it  said shore                                                               
land and tide land.                                                                                                             
                                                                                                                                
Section 21 expands on line public auctions to land sales.                                                                       
                                                                                                                                
Sections 22-27 is all about  exchanges and includes conveyance of                                                               
mineral rights, existing  rights, what type of values  have to be                                                               
exchanged  and  the need  to  come  through the  legislature  for                                                               
properties over $5  million. Section 27 also  changes language to                                                               
shoreland and tideland.                                                                                                         
                                                                                                                                
6:06:44 PM                                                                                                                    
Section 28  revises the statute for  unorganized borough platting                                                               
actions by exempting  owners that are subdividing  with no public                                                               
easement or right-of-way affected from  the 30-day notice on that                                                               
action, because historicallythe public does not seem to care.                                                                   
                                                                                                                                
Sections 29-33 insert the  "substantially and adversely affected"                                                               
standard for  administrative appeals.  Section 29  clarifies when                                                               
the  requirements  of AS  44.37.011  are  applicable. Section  32                                                               
clarifies that a  person has 20 calendar days  after the issuance                                                               
date of  a final department decision  in which to file  an appeal                                                               
or   request  for   reconsideration.  Subsection   33  adds   new                                                               
subsections to define what it  means to be adversely affected and                                                               
outlines  additional  requirements   in  the  DNR  administrative                                                               
appeal process.                                                                                                                 
                                                                                                                                
6:08:56 PM                                                                                                                    
SENATOR  FRENCH  said if  a  person  objects  to a  decision  the                                                               
commissioner  made,  and  the commissioner  decided  he  was  not                                                               
"substantially  and adversely  affected,"  an unmotivated  person                                                               
would go home  and be unhappy, but a motivated  person would take                                                               
their unhappiness to  the court house and say  I am significantly                                                               
and adversely affected.  Isn't that a natural  outcome under this                                                               
policy?                                                                                                                         
                                                                                                                                
MR. MENEFEE  agreed, and  explained that a  decision made  by the                                                               
commissioner that ends up as  a reconsideration, but if it's made                                                               
by anybody  below the  commissioner, it's  an appeal.  Either one                                                               
requires the commissioner  to take another look  at the decision.                                                               
If   they  are   substantially   and   adversely  affected,   the                                                               
commissioner has  several options  - remanding,  disagreeing with                                                               
the appeal or upholding the appeal  - but if anybody comes out of                                                               
that and  doesn't like  the decision, they  can take  recourse by                                                               
going to judicial appeal in Superior Court.                                                                                     
                                                                                                                                
SENATOR  FRENCH  asked  what  record  the  commissioner  will  be                                                               
operating  on  to  judge  whether  or not  this  person  has  the                                                               
requisite interest to merit his attention on the matter.                                                                        
                                                                                                                                
MR.  MENEFEE  answered  that  when  the  department  receives  an                                                               
appeal, one  of the  first things  they do  is gather  the entire                                                               
administrative  record, which  has all  the documentation  on how                                                               
the decision was made, how  public comment was treated, the whole                                                               
thing from  start to  finish -  and that is  gone through  with a                                                               
fine toothed  comb - to see  if they have fulfilled  the statutes                                                               
and  regulations.  If the  commissioner  feels  the decision  was                                                               
correctly made, then he upholds  it; it incorrectly, he has those                                                               
other options.                                                                                                                  
                                                                                                                                
SENATOR FRENCH used the Chuitna Mine  for an example, and said he                                                               
filed  a  comment during  the  permitting  process that  said  he                                                               
didn't like the  Chuitna Mine. That is what is  on record and the                                                               
commissioner decides to  permit the mine. He is  unhappy and says                                                               
he is substantially  and adversely affected and  wants an appeal.                                                               
How would the  commissioner decide based on the  record, which is                                                               
his comment  that he didn't  like the  Chuitna Mine, that  he has                                                               
enough of an interest to qualify for his attention?                                                                             
                                                                                                                                
MR. MENEFEE said someone may  have commented fairly loosely about                                                               
their concerns  about the project,  but they participated  in the                                                               
public process  and that  meets the  first threshold.  Second, he                                                               
would  have to  include  a  statement that  explains  how he  was                                                               
substantially  and adversely  affected by  the decision.  It must                                                               
specifically describe  the substantial and adverse  affect on the                                                               
person as  a direct result  of the  decision and explain  how the                                                               
decision caused it (page 19,  lines 5-8). It's incumbent upon the                                                               
appellant  to give  the reasons  and  then the  decision is  made                                                               
based on that.                                                                                                                  
                                                                                                                                
6:14:45 PM                                                                                                                    
He went  to section 34 and  said it moves the  threshold from the                                                               
original  statute that  says water  may not  be removed  from one                                                               
hydrologic unit  to another  without being  returned or  having a                                                               
permit  to  a  "significant  amount of  water"  that  is  already                                                               
defined in regulation.                                                                                                          
                                                                                                                                
Sections 35-37 clarify language; it  doesn't change the intent or                                                               
the original statute.                                                                                                           
                                                                                                                                
Sections  38  and 39  continue  the  issue of  substantially  and                                                               
adversely affected and  section 39 has a  further definition, but                                                               
it is  specific to  water (AS  46.15). Previous  definitions were                                                               
the broad appeals.                                                                                                              
                                                                                                                                
6:16:20 PM                                                                                                                    
SENATOR MICCICHE  asked why "significantly and"  was not included                                                               
in sections 33(f) and 39(e).                                                                                                    
                                                                                                                                
MR. MENEFEE  explained that the statement  before was "aggrieved"                                                               
and  that term  does clarify  that  the person  must be  directly                                                               
affected by  the decision by  a physical or  financial detriment.                                                               
It may  have been an omission.  He asked Ms. Brown  to comment if                                                               
she could.                                                                                                                      
                                                                                                                                
6:17:22 PM                                                                                                                    
MS. BROWN said she didn't have a further comment.                                                                               
                                                                                                                                
MR. MENEFEE  said the biggest  change to  sections 40 and  41 was                                                               
removing  "or a  person"  for water  reservations,  but it  won't                                                               
affect  people  who are  applying  for  water rights.  The  other                                                               
aspect  (section 40)  is to  try to  bring the  issue through  an                                                               
agency that  has the  responsibility to  manage the  resource the                                                               
water reservation is  supposed to be affecting. In  section 41 it                                                               
currently says  "the commissioner  shall review  each reservation                                                               
every 10 years" and  that can be quite onerous if  you have to go                                                               
through all the  stats and information and do more  studies on it                                                               
every 10 years. They are now saying "may".                                                                                      
                                                                                                                                
SENATOR MICCICHE  asked theoretically  if an NGO  completed their                                                               
own reservation  study and was able  to get a municipality  or an                                                               
agency to  support their findings,  then they could come  back to                                                               
reserve sufficient water if they felt it wasn't adequate.                                                                       
                                                                                                                                
MR. MENEFEE replied that, yes, they  can work with that agency or                                                               
municipality, but  the municipality or  the agency would  have to                                                               
submit the application; it wouldn't be the NGO.                                                                                 
                                                                                                                                
6:20:18 PM                                                                                                                    
SENATOR FRENCH said  section 40 had been in place  since at least                                                               
1986, and  maybe as early as  1980, and asked what  prompted this                                                               
change now.                                                                                                                     
                                                                                                                                
MR.  MENEFEE answered  because  a mining  interest  came in  that                                                               
wanted to reserve enough water  for mixing zones. It appears that                                                               
the  department has  been able  to deal  with all  of the  mining                                                               
issues  through  temporary  water use  authorizations  and  water                                                               
rights   working   through   the  Department   of   Environmental                                                               
Conservation (DEC).  They had  never had a  filing from  a mining                                                               
company on a water reservation.                                                                                                 
                                                                                                                                
SENATOR  FRENCH asked  if this  will affect  pending applications                                                               
and if  so, how  many. Is it  a simple process  and does  it cost                                                               
much?                                                                                                                           
                                                                                                                                
MR.  MENEFEE  answered  that  water  reservations  is  a  complex                                                               
process;  there  is  a  minimum  of three  years  of  water  data                                                               
collection and  evidence to show  how the level of  water affects                                                               
whatever  you  are  trying  to address;  it  could  include  fish                                                               
sampling  and  flows  throughout  the  years  and  has  a  $1,500                                                               
application fee. About  35 out of the 148  applications they have                                                               
for water  reservations would be  affected by this. Most  of them                                                               
are groups and there is  one individual. Those applications could                                                               
be picked  up by the Alaska  Department of Fish and  Game (ADF&G)                                                               
for habitat,  by the Coast Guard  if it's for navigability  or by                                                               
the Division of  Parks and Recreation if it was  for a recreation                                                               
purpose, but  that isn't mandated.  The effect of the  statute is                                                               
that  it  precludes them  from  issuing  a reservation  to  those                                                               
people.                                                                                                                         
                                                                                                                                
SENATOR  FRENCH  remarked just  suppose  he  has collected  three                                                               
years  of data,  paid his  $1,500 and  waited very  patiently for                                                               
this and he was just tossed out.                                                                                                
                                                                                                                                
SENATOR FAIRCLOUGH asked how many  other states allow a person to                                                               
make this type of request to an agency.                                                                                         
                                                                                                                                
MR. MENEFEE replied none.                                                                                                       
                                                                                                                                
6:24:42 PM                                                                                                                    
He continued that section 42  clarifies that the commissioner may                                                               
issue one or more new  temporary use water authorizations for the                                                               
same  project.  For instance,  a  15-year  project would  require                                                               
three    different   water    use    authorizations   and    each                                                               
reauthorization would require the  same procedure of figuring out                                                               
if it affects anything, has  other conflicts or habitat concerns.                                                               
Staff is aware of issuing  a temporary water use authorization at                                                               
least five  times for  the same  water body  on the  North Slope;                                                               
they have issued four  times in a row on the  same water body for                                                               
the Department of Transportation and Public Facilities (DOTPF).                                                                 
                                                                                                                                
He said  DOTPF is  expecting 50 applications  and there  are five                                                               
water  sources on  each application,  but every  five years,  you                                                               
have to look from scratch if it's the right thing to do.                                                                        
                                                                                                                                
SENATOR FRENCH asked if public  notice is required before issuing                                                               
a temporary water use authorization.                                                                                            
                                                                                                                                
6:26:39 PM                                                                                                                    
MR. MENEFEE answered no; they do an agency review.                                                                              
                                                                                                                                
SENATOR FRENCH  asked at  what point  a different  designation is                                                               
needed for  what is called  a temporary water  use authorization,                                                               
but is issued five different times for five years.                                                                              
                                                                                                                                
MR.  MENEFEE answered  that they  have reviewed  this extensively                                                               
with staff and  the Department of Law (DOL) and  there is no time                                                               
that  you actually  have to  change the  designation. If  someone                                                               
does come in and  applies for a water right for  the same use, if                                                               
that use  is perfected, that  water right  is given and  it's not                                                               
taken  back,  but  they  also   don't  continually  make  further                                                               
decisions  on the  habitat.  It's just  one  time. Changes  could                                                               
occur during  15 years and adjustments  might have to be  made to                                                               
the amount of  water they take because maybe there  is less water                                                               
available, because of changing conditions  between the years. You                                                               
can't do that with a water right.                                                                                               
                                                                                                                                
CHAIR GIESSEL noted that he had already talked about section 43.                                                                
                                                                                                                                
6:28:00 PM                                                                                                                    
MR.  MENEFEE continued  on  to section  44,  which is  transition                                                               
language saying  the DNR shall  return any applications  and fees                                                               
pending  upon the  water  reservation. So,  they  will get  their                                                               
money back.  It says the  commissioner may refer  the application                                                               
no longer  authorized to an independent  evaluation consideration                                                               
by that agency.                                                                                                                 
                                                                                                                                
Section 45 allows the department  to adopt regulations and has an                                                               
immediate effective date in section  47. Section 46 instructs the                                                               
Revisor  to  change the  title  and  section 48  establishes  the                                                               
bill's effective date.                                                                                                          
                                                                                                                                
SENATOR MICCICHE  asked how  many water  reservation applications                                                               
might be pending now.                                                                                                           
                                                                                                                                
MR. MENEFEE  answered 148;  the majority of  those were  filed in                                                               
the last few  years, more in the  last 10 years. But  that can be                                                               
expected as the state grows and more things are going on.                                                                       
                                                                                                                                
SENATOR  MICCICHE asked  what portion  of  those applications  is                                                               
submitted by a person as opposed to an agency or municipality.                                                                  
                                                                                                                                
MR.  MENEFEE said  he just  got a  correction and  there are  438                                                               
applications and 37 of those are by individuals.                                                                                
                                                                                                                                
SENATOR MICCICHE  asked if persons  that hold  water reservations                                                               
now lose  it or do they  get to maintain it  if they successfully                                                               
received it in the past.                                                                                                        
                                                                                                                                
6:31:28 PM                                                                                                                    
MR. MENEFEE  replied that they had  never issued one to  a person                                                               
(they have  only been issued  to agencies), but nobody  will ever                                                               
lose one that has been perfected.                                                                                               
                                                                                                                                
CHAIR GIESSEL, finding no further  questions, thanked Mr. Menefee                                                               
for the  review and  said she  would hold SB  26 and  take public                                                               
comment at a later date.