Legislature(1999 - 2000)

03/03/1999 03:15 PM Senate RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
              SENATE RESOURCES COMMITTEE                                                                                        
                    March 3, 1999                                                                                               
                      3:15 p.m.                                                                                                 
                                                                                                                                
MEMBERS PRESENT                                                                                                                 
                                                                                                                                
Senator Rick Halford, Chairman                                                                                                  
Senator Robin Taylor, Vice Chairman                                                                                             
Senator Pete Kelly                                                                                                              
Senator Lyda Green                                                                                                              
                                                                                                                                
MEMBERS ABSENT                                                                                                                  
                                                                                                                                
Senator Jerry Mackie                                                                                                            
Senator Sean Parnell                                                                                                            
Senator Georgianna Lincoln                                                                                                      
                                                                                                                                
COMMITTEE CALENDAR                                                                                                              
                                                                                                                                
Proposed Chenik Institute Lease - McNeil River State Game Refuge                                                                
                                                                                                                                
Tulsequah Chief Mine Update                                                                                                     
                                                                                                                                
PREVIOUS SENATE COMMITTEE ACTION                                                                                                
                                                                                                                                
Proposed Chenik Institute Lease - McNeil River State Game Refuge -                                                              
See Resource Committee minutes dated 2/17/99                                                                                    
                                                                                                                                
Tulsequah Chief Mine Update - No previous testimony                                                                             
                                                                                                                                
WITNESS REGISTER                                                                                                                
                                                                                                                                
Commissioner Frank Rue                                                                                                          
Alaska Department of Fish and Game                                                                                              
PO Box 25526                                                                                                                    
Juneau, AK  99802-5526                                                                                                          
POSITION STATEMENT: Testified on the proposed Chenik lease issue                                                                
and on the Tulsequah Chief Mine Update.                                                                                         
                                                                                                                                
Deputy Commissioner Marty Rutherford                                                                                            
Alaska Department of Natural Resources                                                                                          
3601 C Street, Suite 1210                                                                                                       
Anchorage, AK  99503-5921                                                                                                       
POSITION STATEMENT: Commented on the proposed Chenik lease issue.                                                               
                                                                                                                                
Richard LeFebvre, Deputy Director                                                                                               
Department of Natural Resources                                                                                                 
3601 C Street, Suite 1122                                                                                                       
Anchorage, AK  99503-5921                                                                                                       
POSITION STATEMENT: Commented on the proposed Chenik lease issue.                                                               
                                                                                                                                
Mr. Mike Sullivan, Natural Resource Manager                                                                                     
Division of Land                                                                                                                
Department of Natural Resources                                                                                                 
3601 C St., Ste. 1122                                                                                                           
Anchorage, AK 99503-5947                                                                                                        
POSITION STATEMENT: Commented on the Chenik lease issue.                                                                        
                                                                                                                                
Ms. Kerry Howard                                                                                                                
Division of Governmental Coordination                                                                                           
Office of the Governor                                                                                                          
PO Box 110030                                                                                                                   
Juneau, AK  99811-0030                                                                                                          
POSITION STATEMENT: Testified on the Tulsequah Mine Update.                                                                     
                                                                                                                                
Mr. Mike Conway, Director                                                                                                       
Division of Air and Water Quality                                                                                               
Department of Environmental Conservation                                                                                        
410 Willoughby Ave., Ste 105                                                                                                    
Juneau, AK 99801-1795                                                                                                           
POSITION STATEMENT: Testified on the Tulsequah Mine Update.                                                                     
                                                                                                                                
ACTION NARRATIVE                                                                                                                
                                                                                                                                
TAPE 99-12, SIDE A                                                                                                              
Number 001                                                                                                                      
                                                                                                                                
CHAIRMAN HALFORD called the Senate Resources Committee meeting to                                                               
order at 3:15 p.m.  Present were Senators Kelly, Green, Taylor,                                                                 
and Halford, Chair.  Chairman Halford announced Commissioner Rue of                                                             
the Alaska Department of Fish and Game (ADF&G) would address the                                                                
committee on the Chenik Institute lease proposal.                                                                               
                                                                                                                                
COMMISSIONER FRANK RUE, ADF&G, gave the following overview on the                                                               
status of the Chenik Institute lease proposal and said that ADF&G                                                               
had not made a decision on any lease at this time.  The Department                                                              
of Natural Resources (DNR) put out a proposal for and received                                                                  
public comment and DNR needs to decide if the facility is                                                                       
compatible with the purpose of the refuge.                                                                                      
                                                                                                                                
CHAIRMAN HALFORD asked if the management plan is adopted by the                                                                 
Board of Game.                                                                                                                  
                                                                                                                                
COMMISSIONER RUE understood that the management plan has been                                                                   
adopted by the Commissioner and endorsed by the Board, but said he                                                              
would have to check.  He noted the Board passes regulations if a                                                                
refuge is also a critical habitat area.  In this case, the                                                                      
regulations specifically give the authority to the Commissioner to                                                              
determine if the facility is compatible with the purpose of the                                                                 
refuge.  If the facility is deemed compatible, a fair method must                                                               
be determined to decide who will occupy the facility.                                                                           
                                                                                                                                
CHAIRMAN HALFORD asked if a management plan is in effect now.                                                                   
COMMISSIONER RUE said one is.  CHAIRMAN HALFORD asked if the                                                                    
management plan allows for any commercial facilities.  COMMISSIONER                                                             
RUE explained the management plan does allow for a commercial                                                                   
finding that is compatible with the refuge purpose.                                                                             
                                                                                                                                
CHAIRMAN HALFORD asked if any finding in favor of a commercial                                                                  
facility has been made at this point in time.   COMMISSIONER RUE                                                                
replied, "No official finding and that is what we would have to do,                                                             
and we've gotten public comment on this proposal and we'll have to                                                              
make a decision from there."                                                                                                    
                                                                                                                                
COMMISSIONER RUE said he understood the committee has already                                                                   
reviewed the file with historical information about the stages and                                                              
the various positions taken on the proposal, and what BLM has, and                                                              
has not, done.                                                                                                                  
                                                                                                                                
CHAIRMAN HALFORD asked if the applicant has ever paid anyone for                                                                
his use of this land from 1978 to the present.                                                                                  
                                                                                                                                
COMMISSIONER RUE said the applicant may have paid a fee at one                                                                  
time, but he deferred to the ADF&G or BLM for that answer.                                                                      
                                                                                                                                
CHAIRMAN HALFORD indicated the committee was informed the applicant                                                             
never had a lease or paid any amount to the landowner.                                                                          
                                                                                                                                
COMMISSIONER RUE responded the applicant never had a lease, and he                                                              
did not believe the applicant paid anything.                                                                                    
                                                                                                                                
CHAIRMAN HALFORD asked what process would occur if the State                                                                    
determined that, under the management plan in concert with the                                                                  
Board of Game, a commercial facility was in the best interest of                                                                
the refuge.                                                                                                                     
                                                                                                                                
Number 96                                                                                                                       
                                                                                                                                
MS. MARTY RUTHERFORD, Deputy Commissioner of DNR, testified via                                                                 
teleconference from Anchorage that DNR has a variety of options                                                                 
once it has the land such as issuing a permit or letting a lease                                                                
through a competitive bid.                                                                                                      
                                                                                                                                
CHAIRMAN HALFORD asked Commissioner Rue and Deputy Commissioner                                                                 
Rutherford if either could recall a memo in which the State sent                                                                
BLM a notice of non-objection for a trespass activity, and                                                                      
encouraged BLM to issue a lease to a trespass activity prior to                                                                 
transferring the land to the State.  Neither could recall and                                                                   
deferred to other staff.                                                                                                        
                                                                                                                                
MR. MIKE SULLIVAN, Deputy Director, Division of Land, recalled  the                                                             
Perky Pile Airstrip, north of the Alaska Range, when a long-time                                                                
guide had a facility on federal lands.  Before that land was                                                                    
conveyed to the State, DNR asked the federal agency to resolve the                                                              
occupancy issue.   They issued a lease to Mr. Ingalls, the guide,                                                               
and he thought DNR had provided a letter of non-objection.  He                                                                  
clarified the circumstances were slightly different.                                                                            
                                                                                                                                
CHAIRMAN HALFORD asked if Mr. Ingalls' entry was legal at the time                                                              
he began occupying the land.  He noted the standard used in                                                                     
trespass cases 15 or 20 years ago required the occupant to have                                                                 
entered the land legally, but to have had lapsed on their paperwork                                                             
afterward.                                                                                                                      
                                                                                                                                
MR. SULLIVAN said he could not recall the circumstances surrounding                                                             
Mr. Ingalls' original occupancy.                                                                                                
                                                                                                                                
CHAIRMAN HALFORD asked Commissioner Rue how long he had been the                                                                
Director of the Habitat Division before he was appointed                                                                        
commissioner.  COMMISSIONER RUE replied about seven years.                                                                      
                                                                                                                                
CHAIRMAN HALFORD asked how many times such applications came                                                                    
through the Division of Habitat.  COMMISSIONER RUE said at least                                                                
once.  CHAIRMAN HALFORD asked what the Division's position was on                                                               
that case.  COMMISSIONER RUE stated the Division did not support                                                                
that person getting a right to that piece of land because of the                                                                
method of occupancy used.  He explained that whether the use of                                                                 
that land was compatible with the land is another issue.                                                                        
                                                                                                                                
Number 163                                                                                                                      
                                                                                                                                
SENATOR TAYLOR asked why Commissioner Rue changed his mind.                                                                     
COMMISSIONER RUE said he wanted to get this issue on the table and                                                              
work with DNR to make a decision on whether or not to permit a                                                                  
facility and get the land transferred.                                                                                          
                                                                                                                                
CHAIRMAN HALFORD asked if the normal process is for BLM to clear                                                                
the trespass and convey the land to the State. He asked what BLM                                                                
does if the State determines it does object to the trespass and                                                                 
wants the patent to the land.                                                                                                   
                                                                                                                                
COMMISSIONER RUE said for 15 years BLM has done nothing, although                                                               
it wanted to issue a lease.                                                                                                     
                                                                                                                                
MR. RICHARD LEFEBVRE, Deputy Director, Division of Land, said                                                                   
normally, if the State wants the land conveyed, it is the BLM's                                                                 
responsibility to clear it off.                                                                                                 
                                                                                                                                
Number 182                                                                                                                      
                                                                                                                                
DEPUTY COMMISSIONER RUTHERFORD explained BLM has indicated                                                                      
reluctance to address this trespass situation.  BLM has clearly                                                                 
communicated that it would like to issue the lease and have the                                                                 
State accept it as is, where is.                                                                                                
                                                                                                                                
CHAIRMAN HALFORD asked if Ms. Rutherford knew why.  DEPUTY                                                                      
COMMISSIONER RUTHERFORD stated BLM staff says it is a workload                                                                  
issue, but she is not sure that is accurate.                                                                                    
                                                                                                                                
SENATOR TAYLOR questioned whether this case is dealing with a                                                                   
person who built a cabin for the sole purpose of bringing his/her                                                               
family to recreate.  COMMISSIONER RUE said no, the applicant has a                                                              
lodge facility for paying guests.                                                                                               
                                                                                                                                
SENATOR TAYLOR said the lodge averages about 16 paying customers                                                                
per week at $2250 per customer.  He asked who is "watching the                                                                  
store" on state lands, especially those places where people move in                                                             
and set up business on state land with no permit and carry on for                                                               
21 years.                                                                                                                       
                                                                                                                                
COMMISSIONER RUE clarified the land is owned by the federal                                                                     
government; it is not state land, yet.                                                                                          
                                                                                                                                
SENATOR TAYLOR asked when the state selected that land.  DEPUTY                                                                 
COMMISSIONER RUTHERFORD said it was selected in the early 1980's                                                                
but it was tied up in litigation with the Seldovia Native                                                                       
Association.  Two months ago BLM notified the State that the                                                                    
litigation issue had been resolved and that the land was now                                                                    
available for conveyance.                                                                                                       
                                                                                                                                
CHAIRMAN HALFORD asked what BLM would do if the State objects to                                                                
any action to legitimize the previous trespass and encourages BLM                                                               
to expedite title to the State.  DEPUTY COMMISSIONER RUTHERFORD                                                                 
said she believes BLM would convey the title and it would be happy                                                              
to allow the State to resolve the trespass issue.                                                                               
                                                                                                                                
CHAIRMAN HALFORD asked if BLM would convey it in fee simple to the                                                              
State.  DEPUTY COMMISSIONER RUTHERFORD said that is her                                                                         
understanding.                                                                                                                  
                                                                                                                                
SENATOR TAYLOR did not think that method would resolve anything                                                                 
because he does not see any authority within DNR to remove the                                                                  
trespasser either.  DEPUTY COMMISSIONER RUTHERFORD maintained the                                                               
Department does have the authority and ability to address the                                                                   
trespass if the title were conveyed by BLM.                                                                                     
                                                                                                                                
SENATOR TAYLOR stated one of DNR's options is to give the                                                                       
trespasser a lease so that he can continue to make money, only now                                                              
legally.  He asked if DNR issued a proposal on November 10, 1998                                                                
advocating State approval of the Chenik facility lease to Mr.                                                                   
McBride, which was distributed to state agencies and the public for                                                             
comment.  DEPUTY COMMISSIONER RUTHERFORD replied DNR adopted a                                                                  
preliminary best interest finding to solicit public and agency                                                                  
input; it did not necessarily reflect DNR's next step.                                                                          
                                                                                                                                
SENATOR TAYLOR asked if his statement, "...advocating State                                                                     
approval of the proposed lease," was incorrect.  DEPUTY                                                                         
COMMISSIONER RUTHERFORD said the proposal certainly presented that                                                              
option.                                                                                                                         
                                                                                                                                
SENATOR TAYLOR asked if DNR circulated any information to the                                                                   
public saying, "This is State of Alaska land - this is a trespasser                                                             
that's been ripping us all off for years - why don't we go out                                                                  
there and burn it down.  Did you suggest that to the public and ask                                                             
for their comments about whether or not trespassers that misuse the                                                             
State's good graces here on our land or federal land should be                                                                  
prosecuted - should be treated in that fashion?"                                                                                
                                                                                                                                
DEPUTY COMMISSIONER RUTHERFORD said DNR did not, because it always                                                              
tries to present to the public a proposal as a positive action                                                                  
instead of a negative action, and, depending upon the public's                                                                  
input, DNR determines whether it is appropriate to proceed.                                                                     
                                                                                                                                
CHAIRMAN HALFORD questioned if the land were State land,                                                                        
transferred without any BLM action, whether the granting of any                                                                 
kind of preference lease based on a trespass would be in violation                                                              
of the  Alaska Constitution or statutes.  MR. LEFEBVRE replied in                                                               
this particular case, trespass does not warrant a preference right.                                                             
                                                                                                                                
CHAIRMAN HALFORD noted the Constitution contains a specific                                                                     
provision about State lands.  He asked if granting land to an                                                                   
individual in trespass would violate the Constitution.                                                                          
                                                                                                                                
MR. LEFEBVRE answered, if the lease was granted through a                                                                       
competitive bid process, it would not violate the Constitution, but                                                             
if DNR dealt solely with the individual, it probably would.                                                                     
                                                                                                                                
CHAIRMAN HALFORD questioned whether the State would be violating                                                                
the Constitution if it recognizes this trespass as any kind of a                                                                
prior existing right collected in violation of law.  MR. LEFEBVRE                                                               
responded that is correct because of the preference.                                                                            
                                                                                                                                
DEPUTY COMMISSIONER RUTHERFORD indicated the preliminary best                                                                   
interest finding was on the letter of concurrence to the BLM under                                                              
the State's 906 K responsibilities, and BLM probably does have the                                                              
authority to grant a long-term lease.  For that reason, DNR wanted                                                              
to solicit input on any concurrence.  She clarified without going                                                               
through a competitive bid process, the State could not do a                                                                     
conveyance to Mr. McBride.                                                                                                      
                                                                                                                                
CHAIRMAN HALFORD thought DNR could do nothing short of a                                                                        
competitive process according to the Constitution, but it could get                                                             
around that restriction by allowing BLM to lease the property                                                                   
before it is conveyed to the State, but it is not in the spirit of                                                              
what the constitutional prohibition was trying to avoid.                                                                        
                                                                                                                                
SENATOR TAYLOR commented if DNR allows BLM to lease the land before                                                             
it is conveyed to the State, a preference will essentially exist.                                                               
DEPUTY COMMISSIONER RUTHERFORD said she agrees that action would                                                                
not be in the spirit of the Constitution, although she was hesitant                                                             
to say it would be breaking with DNR's constitutional                                                                           
responsibilities.  She pointed out DNR has allowed BLM to provide                                                               
a lease prior to conveyance to the State for various reasons                                                                    
although she did not believe it would be in the State's best                                                                    
interest to give a lease to Mr. McBride without using a competitive                                                             
bid process.                                                                                                                    
                                                                                                                                
Number 214                                                                                                                      
                                                                                                                                
SENATOR TAYLOR referred to a memo sent to Commissioner Rue by                                                                   
Deputy Commissioner Bosworth on November 22, 1996, which proposed                                                               
that ADF&G reverse its position on this lease issue.  On the same                                                               
day, Commissioner Rue sent a memo to Commissioner Shively stating                                                               
ADF&G had changed its position.  He asked Commissioner Rue if he                                                                
conferred with any regional supervisors or division directors                                                                   
before changing positions.                                                                                                      
                                                                                                                                
COMMISSIONER RUE replied Deputy Commissioner Bosworth had reviewed                                                              
the record and gave him that recommendation.  He did not recall                                                                 
whether he spoke to other staff that day, but he spoke to them a                                                                
number of times over the years.                                                                                                 
                                                                                                                                
SENATOR TAYLOR remarked Commissioner Rue has addressed similar                                                                  
cases as the Director of the Division of Habitat using a different                                                              
policy.  COMMISSIONER RUE told Senator Taylor he has always had a                                                               
problem with the way this person got on the land; the record                                                                    
contains a lot of question about intent. He stated he is glad to                                                                
get this case on the table and out for public review before making                                                              
a final decision.                                                                                                               
                                                                                                                                
SENATOR TAYLOR asked assuming BLM does nothing before conveying the                                                             
land, who would he look to for enforcement of the state's trespass                                                              
laws.  COMMISSIONER RUE replied DNR, and ADF&G if the land is on a                                                              
refuge.                                                                                                                         
                                                                                                                                
SENATOR TAYLOR asked who would bring the action to physically                                                                   
remove a person from the property.  COMMISSIONER RUE replied in the                                                             
cases he is familiar with, trespass cabins have been posted with a                                                              
notice of removal of the facility.                                                                                              
                                                                                                                                
SENATOR TAYLOR asked if any other structures are located within the                                                             
McNeil Refuge.  COMMISSIONER RUE replied a crew camp and a cook                                                                 
area for visitors are located at the ADF&G site on McNeil River, a                                                              
structure is located at the Paint River fish ladder and at the Cook                                                             
Inlet Aquaculture facility, and some old cabins are on federal land                                                             
at Chenik Lake.                                                                                                                 
                                                                                                                                
CHAIRMAN HALFORD asked what process the federal government uses to                                                              
resolve trespass situations when it decides to terminate                                                                        
unauthorized use.  MR. LEFEBVRE said DNR rarely gets involved with                                                              
federal trespass actions so he was not familiar with the specific                                                               
process.                                                                                                                        
                                                                                                                                
CHAIRMAN HALFORD pointed out a letter from the Regional Solicitor                                                               
of BLM to DNR in 1993 cited 43 CFR, Chapter 2, which directs how                                                                
unauthorized uses are dealt with.  The trespassers are notified of                                                              
the trespass and are liable to the United States for all of the                                                                 
administrative costs, the fair market value rental of the land for                                                              
the current year and the past years of trespass.  If the trespass                                                               
is non-willful, somehow by mistake, they are liable for twice the                                                               
fair market rental value which has accrued since the inception of                                                               
the trespass up to the last six years; if it's knowing and willful,                                                             
three times the fair market value of the trespass.  He maintained                                                               
the federal government has a fairly substantial method to protect                                                               
against trespass, yet BLM is proposing to resolve the Chenik                                                                    
trespass by giving the land away instead of enforcing its own CFR.                                                              
CHAIRMAN HALFORD thought BLM's approach to this case is incredibly                                                              
inconsistent and he asked if BLM will have to enforce its trespass                                                              
rules if the state does not concur with the lease.  DEPUTY                                                                      
COMMISSIONER RUTHERFORD said she does not believe BLM has a choice.                                                             
If DNR said it wanted the trespasser removed, BLM would have to                                                                 
deal with it.                                                                                                                   
                                                                                                                                
SENATOR TAYLOR commented the McNeil River State Refuge was created                                                              
to protect bears, not to convey land to Mr. McBride.  COMMISSIONER                                                              
RUE repeated that no decision had been made to convey land to Mr.                                                               
McBride or not.  He added that bear viewing is one purpose of the                                                               
refuge.                                                                                                                         
                                                                                                                                
SENATOR TAYLOR asked how many acres of land the state selected in                                                               
that area.  MR. SULLIVAN answered the surrounding township was                                                                  
about 22,000 to 23,000 acres.                                                                                                   
                                                                                                                                
CHAIRMAN HALFORD said he hopes the State will defend its land in a                                                              
consistent way and that the timing on this case has been amazingly                                                              
coincidental.  He concluded by saying he hopes to see some                                                                      
resolution by way of a State position, because the past five                                                                    
Administrations have discouraged any permits to trespassers in any                                                              
case, even when initial use of the land was legal, to deter others                                                              
who contemplate unauthorized use of public lands.                                                                               
                                                                                                                                
DEPUTY COMMISSIONER RUTHERFORD thanked the committee and said                                                                   
members' concerns would be considered in the decision.                                                                          
                                                                                                                                
Number 440                                                                                                                      
                                                                                                                                
CHAIRMAN HALFORD informed committee members the next discussion                                                                 
would be on the Tulsequah Chief Mine update.                                                                                    
                                                                                                                                
COMMISSIONER RUE explained the Taku River is an important river for                                                             
commercial fishermen, sport fishermen, and Juneauites.  When the                                                                
mine proposal came out, the State of Alaska was concerned that the                                                              
mine be developed in a proper way to protect resources.  The                                                                    
British Columbian (BC) government initially involved the State of                                                               
Alaska in discussions, but when the mine was authorized to proceed,                                                             
the State of Alaska no longer had an official seat at the table and                                                             
several outstanding issues had not yet been addressed.  Those                                                                   
concerns include water quality issues, mine tailings location                                                                   
issues, and road construction issues.  The BC government has asked                                                              
for Alaskan input on individual permits, but Alaska's request to                                                                
continue to be included in the process has not been honored.                                                                    
                                                                                                                                
CHAIRMAN HALFORD asked Commissioner Rue to elaborate on the issues                                                              
of concern.                                                                                                                     
                                                                                                                                
COMMISSIONER RUE explained the mixing zone issue of effluent from                                                               
the treatment plant into the Tulsequah River is one water quality                                                               
concern.  A second is the location of the tailings pond which is an                                                             
area with a history of floods, debris torrent, and leakage issues.                                                              
                                                                                                                                
CHAIRMAN HALFORD asked what will be mined and what the process will                                                             
be.                                                                                                                             
                                                                                                                                
COMMISSIONER RUE stated the Tulsequah Chiefs' Mine is a gold,                                                                   
silver, zinc and lead mine.  He added the EPA and other federal                                                                 
agencies have similar concerns about water quality issues.  The                                                                 
Transboundary Waters Treaty allows for Canada and the United States                                                             
to work out water issues across the border.                                                                                     
                                                                                                                                
COMMISSIONER RUE said an additional issue is maintenance of the                                                                 
tailings pond if the mine is closed for a few years due to price                                                                
fluctuations.  Road construction issues include location, proper                                                                
use of culverts and bridges for fish passage, and road maintenance                                                              
and saltation.  The State felt those issues could be addressed, but                                                             
it wanted to be at the table.  The Governor has requested an                                                                    
International Joint Commission (IJC) referral which will give                                                                   
Alaska a seat at the table.                                                                                                     
                                                                                                                                
CHAIRMAN HALFORD asked whether EPA has formally requested an IJC.                                                               
COMMISSIONER RUE explained the IJC came from the U.S. State                                                                     
Department, and he believed the EPA asked for one as well.                                                                      
                                                                                                                                
MS. KERRY HOWARD, Division of Governmental Coordination, said the                                                               
State of Alaska, EPA, and Department of Interior all requested an                                                               
IJC referral at about the same time.  The State Department has been                                                             
representing all three interests since the initial request.                                                                     
                                                                                                                                
CHAIRMAN HALFORD asked if the rivers involved are clear water                                                                   
rivers.  COMMISSIONER RUE said they are not.  CHAIRMAN HALFORD                                                                  
asked if some of the rivers are carrying high silt loads.                                                                       
COMMISSIONER RUE said the Taku River itself has a high silt load,                                                               
but some of the tributaries come out of lakes, and do not.                                                                      
                                                                                                                                
Number 517                                                                                                                      
                                                                                                                                
SENATOR TAYLOR asked what the Canadians have not done regarding the                                                             
issues that Alaska is concerned about during the past four years                                                                
while Alaska was at the table.  He noted the Canadians have made a                                                              
decision, which is what they were supposed to do, and asked what                                                                
basis Alaska has to question its decision.                                                                                      
                                                                                                                                
COMMISSIONER RUE said the basis is the Transboundary Treaty that                                                                
requires that both countries discuss transboundary issues.  Most of                                                             
the risks are on the Alaska side.                                                                                               
                                                                                                                                
SENATOR TAYLOR asked what basis in Canada's technical data is the                                                               
cause of concern.  He referred to the standards to be met and asked                                                             
who set the standards.                                                                                                          
                                                                                                                                
COMMISSIONER RUE replied the questions that ADF&G is primarily                                                                  
concerned with are fish passage under the road.                                                                                 
                                                                                                                                
SENATOR TAYLOR asked where in the Canadian documentation and in its                                                             
permitting process ADF&G found that fish stream blockage would be                                                               
allowed.  COMMISSIONER RUE answered the Canadian government had not                                                             
approved a particular design of the road so ADF&G was just raising                                                              
the concern to make sure it was addressed.                                                                                      
                                                                                                                                
SENATOR TAYLOR asked if ADF&G asked the Canadian officials directly                                                             
before getting involved with the State Department.  MS. HOWARD                                                                  
replied the State of Alaska had a great deal of confidence in the                                                               
British Columbia assessment process, but that process determined                                                                
whether or not the project should succeed; it did not involve a                                                                 
technical level of detail about road construction, tailing design,                                                              
long term monitoring and maintenance, etc.  The lack of detailed                                                                
information has been the State of Alaska's concern.  Typically,                                                                 
Alaska insists on greater detail and more technical information                                                                 
before a project is approved.                                                                                                   
                                                                                                                                
SENATOR TAYLOR commented the State of Alaska has no basis on which                                                              
to claim Canada will not protect the resources.                                                                                 
                                                                                                                                
MS. HOWARD replied the State's technical experts have disagreed on                                                              
that point, as have the federal agencies involved in the review.                                                                
For that reason the state and federal agencies chose to request                                                                 
the International Joint Commission to participate.                                                                              
                                                                                                                                
SENATOR TAYLOR asked Ms. Howard if the Canadian officials or                                                                    
agencies have indicated they might block salmon streams when                                                                    
constructing roads.  He commented the Canadians work out the                                                                    
details while building the project which is contrary to the Alaska                                                              
method of working out every detail before a project can begin.  He                                                              
asked Ms. Howard if she has any expertise in the area of non-                                                                   
compliance by the Canadians regarding environmental standards.                                                                  
                                                                                                                                
MS. HOWARD replied the Kemis and Huckleberry mines have preceded                                                                
the British Columbia (BC) assessment project; they had significant                                                              
problems after project approval and permitting.  Documented reports                                                             
discuss problems that resulted from the Canadians sporadic                                                                      
enforcement of the requirements in permit conditions.                                                                           
                                                                                                                                
SENATOR TAYLOR asked where those mines are located.  MS. HOWARD                                                                 
replied they are on interior streams in BC.                                                                                     
                                                                                                                                
SENATOR TAYLOR questioned whether Alaska's basis for the IJC                                                                    
request was based on a complaint of an environmental law violation                                                              
on some mine in the interior.                                                                                                   
                                                                                                                                
COMMISSIONER RUE replied the basis for the IJC request was major                                                                
issues such as the design and location of the tailings pond.                                                                    
Alaskan officials felt those issues needed resolution before mine                                                               
development began.                                                                                                              
                                                                                                                                
SENATOR TAYLOR asked Commissioner Rue if he requested the detailed                                                              
information on the tailings pond directly from the Canadian agency.                                                             
                                                                                                                                
COMMISSIONER RUE said yes, but the Canadian agency did not have                                                                 
any.                                                                                                                            
                                                                                                                                
SENATOR TAYLOR asked what the Canadians said the standards would be                                                             
for the tailings pond.                                                                                                          
                                                                                                                                
MS. HOWARD replied the Canadian agency said although the tailings                                                               
impoundment location had been approved without seeing the design of                                                             
the impoundment, the details would be available at permitting.  The                                                             
EPA, Department of Interior, and State of Alaska were concerned                                                                 
that the Canadian agency selected one out of seven alternative                                                                  
sites before a final design of the tailings impoundment was                                                                     
complete.  She remarked the three US agencies thought the Canadians                                                             
were putting the cart before the horse.                                                                                         
                                                                                                                                
SENATOR TAYLOR asked if Ms. Howard was saying the Canadian agency                                                               
should have reviewed seven detailed tailings impoundment plans                                                                  
before making the site decision.                                                                                                
                                                                                                                                
COMMISSIONER RUE interjected the State of Alaska has not had this                                                               
same level of concern with many mines.  Although he agreed the                                                                  
Canadians have the right to do business as it will, the United                                                                  
States has a treaty with Canada about water at the border.                                                                      
                                                                                                                                
TAPE 99-12, SIDE B                                                                                                              
                                                                                                                                
SENATOR TAYLOR said ADF&G was successful in stopping the AJ Mine.                                                               
                                                                                                                                
COMMISSIONER RUE disagreed.  He asserted ADF&G had a significant                                                                
enough concern with the mine in Canada, given the resources in the                                                              
Taku River, ADF&G felt it was important to participate throughout                                                               
the process.                                                                                                                    
                                                                                                                                
Number 584                                                                                                                      
                                                                                                                                
SENATOR TAYLOR asked if the Canadians plan to clean up pollution                                                                
from two old mines on the Taku River since, while they are                                                                      
developing the Tulsequah, road access and equipment will be                                                                     
available.  He asked if that action would benefit the fisheries.                                                                
                                                                                                                                
COMMISSIONER RUE said it could be a benefit.  He emphasized ADF&G                                                               
is not opposing the development of this mine; it only wants to make                                                             
sure it is not going to have a significant impact on the fisheries                                                              
resources of the Taku River.                                                                                                    
                                                                                                                                
SENATOR TAYLOR stated, "You don't think your elevating this thing                                                               
up to Madeleine Albright did anything to slow this thing down?                                                                  
You're not opposing it, but you just want to slow it down - is that                                                             
it?"                                                                                                                            
                                                                                                                                
COMMISSIONER RUE replied, "Senator Taylor, we want it to be done                                                                
right.  It's that simple."                                                                                                      
                                                                                                                                
SENATOR TAYLOR asked where Commissioner Rue gets the arrogant                                                                   
belief that only he knows what is right and the Canadians do not.                                                               
He noted that attitude assumes the Canadians want it done wrong.                                                                
                                                                                                                                
COMMISSIONER RUE said Alaska's interest and desire to be involved                                                               
does not mean anyone is assuming Canada wants to do it wrong.                                                                   
                                                                                                                                
SENATOR TAYLOR commented Alaska agencies have been involved for                                                                 
four years yet no one can pinpoint one thing Canada is going to do                                                              
that would violate Alaska law.                                                                                                  
                                                                                                                                
COMMISSIONER RUE responded part of the problem is the Canadian                                                                  
agencies have not decided on a final design and what kind of                                                                    
pollution will be allowed in the Taku River.  The potential for                                                                 
violation of standards that Alaskan agencies would find                                                                         
unacceptable exists.                                                                                                            
                                                                                                                                
Number 569                                                                                                                      
                                                                                                                                
CHAIRMAN HALFORD asked Commissioner Rue to explain the mixing zone                                                              
question.                                                                                                                       
                                                                                                                                
COMMISSIONER RUE said a proposed mixing zone is located in a side                                                               
slough of the Tulsequah River.  One issue involves the toxicity of                                                              
the mixing zone in this location.                                                                                               
                                                                                                                                
CHAIRMAN HALFORD asked how close that location is to the Alaska                                                                 
border.                                                                                                                         
                                                                                                                                
MS. HOWARD estimated it is located 15 miles upstream from the                                                                   
border.                                                                                                                         
                                                                                                                                
CHAIRMAN HALFORD asked if the mixing zone could be 15 miles long.                                                               
                                                                                                                                
COMMISSIONER RUE said he was not sure and that he has seen impacts                                                              
from mixing zones as far as 30 miles away.                                                                                      
                                                                                                                                
CHAIRMAN HALFORD stated if the mixing zone is approved, he would                                                                
assume the argument would be about whether it is half or one mile                                                               
long.                                                                                                                           
                                                                                                                                
MS. HOWARD said although the mixing zone is not going to be 15                                                                  
miles long, the problem surrounds the $3 million fishery that                                                                   
migrates up the stream and spawns near the proposed mixing zone.                                                                
Alaska does not allow mixing zones in spawning areas.                                                                           
                                                                                                                                
CHAIRMAN HALFORD indicated he questions what right Alaska has to                                                                
hold Canada to Alaska standards.  He noted relative resource values                                                             
are chosen by evaluators.  He added it does not encourage him to                                                                
help argue the next issue because maybe the Canadians are right.                                                                
                                                                                                                                
COMMISSIONER RUE explained the treaty with Canada allows Alaska an                                                              
opportunity to jointly resolve issues that affect resources across                                                              
the border.  He thought this was an appropriate issue to bring to                                                               
that forum.  The treaty recognizes that water and resources do not                                                              
stop at the boundary and that both countries share a responsibility                                                             
for those resources.  He asserted the State of Alaska's position                                                                
has been very reasonable.                                                                                                       
                                                                                                                                
SENATOR TAYLOR asked Commissioner Rue what standard the State of                                                                
Alaska will hold the Canadian agencies to and whether it will be                                                                
similar to the effluent limitations placed on Alaska placer miners                                                              
or the water quality standards that prohibit one from taking one                                                                
gallon of water from a Fairbanks residence and pouring it into the                                                              
Yukon River.                                                                                                                    
                                                                                                                                
COMMISSIONER RUE said he has focussed on things like the tailings                                                               
pond location.  He said there wasn't a standard, but rather an                                                                  
issue of risk in placing it in a place that is susceptible to                                                                   
flooding which can go down-stream and wipe out the resource.                                                                    
                                                                                                                                
SENATOR TAYLOR said the tailings here would not comply with the                                                                 
department's current standards.                                                                                                 
                                                                                                                                
COMMISSIONER RUE said the other standard would be for roads which                                                               
provides for fish passage.                                                                                                      
                                                                                                                                
Number 530                                                                                                                      
                                                                                                                                
MR. MIKE CONWAY, Director, Division of Air and Water Quality,                                                                   
explained that the main concern with the Canadians was to have some                                                             
confidence there wouldn't be a catastrophic incident that would                                                                 
wipe out the fishery.  He said the State made it clear to the                                                                   
Canadians that the United States is not trying to permit the                                                                    
facility.  In a technical dialogue, the Department asked what kind                                                              
of the base-line studies they had done to look at affluents, the                                                                
background of the water that was already there, and what would the                                                              
treatment do.  It was an information gathering process.  We were                                                                
asking the Canadians what their standard is and they couldn't                                                                   
answer.  British Columbia officials have now looked at our mixing                                                               
requirements and have assured us that they are going to do                                                                      
something similar.  The IJC process is what brought that discussion                                                             
to a head and it wasn't even occurring before. We are not trying to                                                             
say that they have to meet Alaska standards.                                                                                    
                                                                                                                                
The location of the tailings pond has been an EPA issue since they                                                              
have an official who is a geologist who does tailing sites for a                                                                
living.  Looking at the information BC provided, he had some                                                                    
concerns about the four or five different sites.                                                                                
                                                                                                                                
CHAIRMAN HALFORD asked if the State got the EPA into it or the                                                                  
other way around.                                                                                                               
                                                                                                                                
COMMISSIONER RUE answered that Department had concerns about the                                                                
location of the tailings pond because it was in a flood plain and                                                               
in an area subject to debris torrents.  They also wanted to make                                                                
sure that other possible sites had been looked at thoroughly.                                                                   
                                                                                                                                
SENATOR KELLY asked if they wanted to use barges to bring the                                                                   
tailings down the river and we disagreed.                                                                                       
                                                                                                                                
MS. HOWARD explained that they had several options for                                                                          
transshipment - roads down either side of the Taku, a slurry                                                                    
pipeline down the west side of the Taku, barging, and trans                                                                     
shipment over a road in BC.  The company withdrew the slurry                                                                    
pipeline and road options early on and were focusing primarily on                                                               
the barge and roaded option.  The applicant ultimately commissioned                                                             
studies and withdrew the barging option because they felt it wasn't                                                             
going to be cost effective.                                                                                                     
                                                                                                                                
SENATOR KELLY asked if they wanted to build a road now.                                                                         
                                                                                                                                
MS. HOWARD replied that they wanted to build a 75 mile road and use                                                             
existing roads to get to Skagway to use the existing facility                                                                   
there.                                                                                                                          
                                                                                                                                
SENATOR KELLY asked where the ore was shipped.                                                                                  
                                                                                                                                
MS. HOWARD replied to various overseas markets.  She clarified that                                                             
parties interested in countries can request a referral to the                                                                   
International Joint Commission (IJC) which is what the Governor has                                                             
done at this point.  There has not been a decision made about                                                                   
whether there will actually be a referral.  She explained that the                                                              
Canadians have completed the assessment process and have received                                                               
a project certificate.  They probably need to receive anywhere from                                                             
10 - 20 different provincial and federal permits, but they have at                                                              
this point, only applied for one - a special use permit.  B.C. is                                                               
about to issue it conditionally based upon further study that will                                                              
delay action for at least one year.                                                                                             
                                                                                                                                
SENATOR KELLY asked if they issue the permits and we still object,                                                              
what's to stop them from going ahead with the project.                                                                          
                                                                                                                                
COMMISSIONER RUE responded that there isn't anything to stop them.                                                              
He added that he didn't think we would get an IJC referral, because                                                             
it had to be a joint agreement which we don't have.                                                                             
                                                                                                                                
SENATOR KELLY asked if there were any environmental problems with                                                               
the facility at Skagway.                                                                                                        
                                                                                                                                
COMMISSIONER RUE said he understands that facility has been taken                                                               
care of.                                                                                                                        
                                                                                                                                
SENATOR KELLY asked if we are slowing down their process.                                                                       
                                                                                                                                
MS. HOWARD answered that it's fair to say that the efforts that                                                                 
have been facilitated through their Department of External Affairs                                                              
and our State Department since last April through December have                                                                 
slowed them down in terms of allowing some additional detail.                                                                   
However, she keeps in touch with the BC Environmental Manager who                                                               
is responsible for this and he has said he felt the delay has been                                                              
good in terms of working up some additional details that were not                                                               
available.  In terms of permitting, the applicant can't do anything                                                             
until they have their array of permits and that's driven by the                                                                 
applicant.  They apply whenever they choose to and so far they have                                                             
applied for one permit.  They will probably stage their permits                                                                 
over the next several years.  Factually, this hasn't slowed down                                                                
anything happening on the ground.                                                                                               
                                                                                                                                
SENATOR KELLY asked if we would let them use our port at Skagway if                                                             
we didn't agree with their tailings pond or some other issue.                                                                   
                                                                                                                                
COMMISSIONER RUE replied that no one had suggested anything like                                                                
that.  He said that they would continue to work together informally                                                             
to address Alaska's concerns.                                                                                                   
                                                                                                                                
SENATOR KELLY asked when they were going to start operating.                                                                    
                                                                                                                                
MS. HOWARD replied her guess would be if everything went well, they                                                             
could begin putting in a temporary road to bring in supplies as                                                                 
early as January, but she did not think a mine would be operable                                                                
for three to five years, because of BC requirements.                                                                            
                                                                                                                                
Number 391                                                                                                                      
                                                                                                                                
SENATOR TAYLOR quoted Governor Knowles Press Secretary, Bob King,                                                               
saying, "A mine like this would never be allowed in the flood plain                                                             
of a major salmon producing river."   He asked what work we did                                                                 
with BC environmental people on the Johnny Mountain Mine or the                                                                 
Snit Property.                                                                                                                  
                                                                                                                                
MS. HOWARD answered that the State had reviewed a number of other                                                               
Canadian mines, including the Snit and Johnny Mountain, over the                                                                
last decade and the Tulsequah Chief is the only one where the State                                                             
has taken a strong position because of the resources and how the                                                                
project is proposed.                                                                                                            
                                                                                                                                
SENATOR TAYLOR asked why they didn't elevate any of the other                                                                   
properties.                                                                                                                     
                                                                                                                                
MS. HOWARD replied that the primary reasons had to do with several                                                              
variables: the location, setting, transboundary river resources and                                                             
actual design of the mines, themselves.                                                                                         
                                                                                                                                
SENATOR TAYLOR asked about the Isiktok which is the largest                                                                     
tributary to the Stikine which is our single largest salmon                                                                     
producing transboundary river that we have in this state.                                                                       
                                                                                                                                
MS. HOWARD agreed and said that the distinguishing feature about                                                                
the Tulsequah is the fact they were going to put a tailings pond in                                                             
the flood plain of a transboundary river.                                                                                       
                                                                                                                                
SENATOR TAYLOR asked if she knew where the tailings pond was on the                                                             
Snit or the Johnny Mountain.                                                                                                    
                                                                                                                                
MS. HOWARD answered that she understands that they are not on a                                                                 
flood plain adjacent to a major transboundary river.                                                                            
                                                                                                                                
Number 364                                                                                                                      
                                                                                                                                
SENATOR TAYLOR said it was right in the middle of the Craig River                                                               
drainage. He said he would like the elevated level of protection                                                                
for the Stikine also.                                                                                                           
                                                                                                                                
COMMISSIONER RUE volunteered to check on the Isiktok.                                                                           
                                                                                                                                
SENATOR TAYLOR said no one remembers it or knows it, because no one                                                             
cared.  No one from Juneau has a cabin up there to worry about.  He                                                             
suggested they talk to Premier Clark who is real concerned about                                                                
fish.                                                                                                                           
                                                                                                                                
COMMISSIONER RUE says he understands this and he has watched what                                                               
has happened to BC's fish resources.  "They don't have many left."                                                              
                                                                                                                                
                                                                                                                                
SENATOR TAYLOR rebutted that it isn't because they developed mines.                                                             
                                                                                                                                
COMMISSIONER RUE said it was partly because of logging and the more                                                             
urban development practices there.                                                                                              
                                                                                                                                
SENATOR TAYLOR said that in Canada a person is permitted for a                                                                  
project overall and then has to come back for a bunch of other                                                                  
permits at different stages, but Alaska wants all of the permits                                                                
addressed up front.  He asked if we are going to require them to                                                                
give us the necessary technical background information, so the                                                                  
department will feel comfortable.  He asked if we have to be at the                                                             
table for every single step of this process.                                                                                    
                                                                                                                                
COMMISSIONER RUE responded that the department is not concerned                                                                 
with every single issue; there are a couple of key issues that need                                                             
to be addressed.  They couldn't even answer a basic question like,                                                              
"What is your effluent?"                                                                                                        
                                                                                                                                
SENATOR TAYLOR interrupted to say they had already been granted an                                                              
overall permit.  An effluent permit would have been a separate                                                                  
permit that would be granted to a separate person who developed                                                                 
that part of the project.                                                                                                       
                                                                                                                                
COMMISSIONER RUE responded that was correct, but they had already                                                               
said, "Here's your tailings pile and they didn't even know how it                                                               
was going to be designed or dealt with."                                                                                        
                                                                                                                                
SENATOR TAYLOR replied that they knew it would be designed in a way                                                             
that would comply with the laws and that's all they needed to know.                                                             
                                                                                                                                
COMMISSIONER RUE corrected him saying that they were not sure of                                                                
that at the time they got their authorization.  They hadn't done                                                                
the engineering.  He said this is one of the key issues they wanted                                                             
to stay involved in as they move ahead.  He doesn't want to change                                                              
their process.                                                                                                                  
                                                                                                                                
Number 320                                                                                                                      
                                                                                                                                
SENATOR TAYLOR asked how far the mine is from downtown Juneau.                                                                  
                                                                                                                                
COMMISSIONER RUE guessed about 20 miles.                                                                                        
                                                                                                                                
SENATOR TAYLOR commented that we'd have a hard link road within 20                                                              
miles of Juneau.                                                                                                                
                                                                                                                                
MS. HOWARD clarified that was not the case, the Canadians are                                                                   
planning on putting in a private industrial road from outland to                                                                
the mine site that is going to have significant restrictions on it.                                                             
It can only  be used by Red Fern Resources.  No one else has                                                                    
access.  It stops at the mine site and is built to a standard to                                                                
accommodate mine traffic at this point.                                                                                         
                                                                                                                                
SENATOR TAYLOR said he didn't want to shock her, but almost every                                                               
road in the west was built that way.  He commented that probably                                                                
not paving it or having it torn up would probably be a condition.                                                               
                                                                                                                                
MS. HOWARD explained that having the road torn up is a condition                                                                
that BC is imposing.                                                                                                            
                                                                                                                                
CHAIRMAN HALFORD stated that the committee would have to break soon                                                             
for another meeting.                                                                                                            
                                                                                                                                
SENATOR TAYLOR thanked him for bringing up the issue, because Mike                                                              
Scott, that area's representative in Parliament, wrote to him about                                                             
his concerns.                                                                                                                   
                                                                                                                                
CHAIRMAN HALFORD said they hadn't heard any testimony from the                                                                  
miners and there had been some consideration of a legislative                                                                   
resolution on the topic.  He apologized to the people who still                                                                 
wanted to testify.                                                                                                              
                                                                                                                                
COMMISSIONER RUE stated that the department would continue to work                                                              
with B.C. through their process.  They weren't going to intervene                                                               
more than that.  They did not want to do the IJC, but they have                                                                 
been very willing to talk to us, he said.                                                                                       
                                                                                                                                
CHAIRMAN HALFORD added as long as his focus is what really happens                                                              
on our side, not maintaining another preservationist area without                                                               
a road.                                                                                                                         
                                                                                                                                
COMMISSIONER RUE said his focus has been on the fisheries resource                                                              
and making sure the water quality and fish are there.                                                                           
                                                                                                                                
CHAIRMAN HALFORD adjourned the meeting at 4:30 p.m.                                                                             

Document Name Date/Time Subjects