HB 215 - JUDICIAL REVIEW OF PIPELINE PROJECT/ROW 12:54:18 PM CHAIR GATTO announced that the next order of business would be HOUSE BILL NO. 215, "An Act relating to the judicial review of a right-of-way lease or the development or construction of an oil or gas pipeline on state land." [Before the committee was the proposed committee substitute (CS) for HB 215, Version 27- LS0741\I, Bullock, 4/5/11, which had been adopted as the working document on 4/6/11.] 12:55:50 PM REPRESENTATIVE HOLMES made a motion to adopt Amendment 1, labeled 27-LS0741\I.1, Bullock, 4/7/11, which read: Page 6, line 19: Delete "(b)" Insert "(c)" Page 6, line 20: Delete all material and insert:  "* Sec. 6. AS 38.35.200 is amended by adding a new subsection to read:" Page 6, line 21: Delete "(b)" Insert "(c)" REPRESENTATIVE PRUITT objected for the purpose of discussion. 12:56:20 PM TOM WRIGHT, Staff, House Majority Office, Alaska State Legislature, on behalf of the sponsor, Representative Mike Chenault, Speaker, House of Representatives, indicating that there had been discussions with the Department of Law (DOL) on this issue, explained that Amendment 1 would provide for the retention of existing AS 38.35.200(b), which currently allows for a judicial review [based on the grounds that there was a failure to follow the procedures set out in AS 38.35, or on the grounds that there has been an abuse of discretion such that it constitutes a denial of due process]. Under Amendment 1, instead of repealing and reenacting AS 38.35.200(b), Version I's Section 6 would simply add a new subsection (c) to AS 38.35.200. Currently, existing subsection (b) pertains to all pipelines, whereas what would become new subsection (c) under Amendment 1 would pertain only to natural gas pipelines. REPRESENTATIVE PRUITT removed his objection. CHAIR GATTO, after ascertaining that there were no further objections, announced that Amendment 1 was adopted. CHAIR GATTO relayed that the proposed amendment in members' packets labeled 27-LS0741\I.2, Bullock, 4/7/11, would not be offered; that proposed amendment read: Page 1, line 2: Delete "and" Page 1, line 4, following "corridor": Insert "; and providing for an effective date" Page 7, following line 10: Insert a new bill section to read: "* Sec. 8. This Act takes effect immediately under AS 01.10.070(c)." 12:59:03 PM REPRESENTATIVE HOLMES made a motion to adopt Amendment 2, labeled 27-LS0741\I.3, Bullock, 4/8/11, which read: Page 6, line 21, following "law": Insert "and except for an action described in (c) of this section" Page 7, following line 5: Insert a new bill section to read: "* Sec. 7. AS 38.35.200 is amended by adding a new subsection to read: (c) An appeal of a permitting decision by the Department of Environmental Conservation under AS 46.03 or AS 46.14 that is made under authority delegated to the Department of Environmental Conservation by the United States Environmental Protection Agency is not (1) subject to the limitation in (a)(2) of this section; (2) included in the actions described in (b) of this section." Renumber the following bill section accordingly. REPRESENTATIVE PRUITT objected for the purpose of discussion. MR. WRIGHT - indicating that the language of Amendment 2 was suggested by the Department of Environmental Conservation (DEC), and characterizing Amendment 2 as necessary - explained that all legislation that could affect the state's primacy over its air or water quality must be submitted to and reviewed by the federal Environmental Protection Agency (EPA), which then determines whether the legislation would violate federal regulation and whether the state's primacy should therefore be revoked. Adoption of Amendment 2 would ensure that the state's primacy over its own air and water quality won't become an issue under HB 215, thereby precluding the need for the EPA to become involved. In terms of pipeline right-of-ways, he relayed, the water-quality issues that need to be addressed are primarily those pertaining to storm/water runoff and water discharge, and [the sponsor] would prefer for the state to deal with the DEC on these issues rather than with the EPA. CHAIR GATTO indicated support for Amendment 2. 1:02:00 PM REPRESENTATIVE CHENAULT, speaking as the sponsor of HB 215, relayed that he reluctantly supports Amendment 2. MR. WRIGHT suggested that the drafter be instructed to conform the language of Amendment 2 with the changes effected by the adoption of Amendment 1. CHAIR GATTO and REPRESENTATIVE HOLMES acknowledged that point. MR. WRIGHT, in response to comments and questions regarding Version I's Section 5 - which is proposing to amend AS 38.35.200(a) - explained that the language stipulating that an objection to a right-of-way lease must be raised within the later of either 60 days after the effective date of the bill, or 60 days after the publication of notice under AS 38.35.070, was included in order to address the fact that the Alaska Gasline Development Corporation (AGDC) has already applied for a pipeline right-of-way under [the existing statute], and the sponsor wanted to ensure that parties weren't precluded from raising an objection under the proposed judicial-review provisions just because the period for raising an objection under the existing provisions had lapsed. This language would provide such parties with the ability to raise an objection anytime during the 60 days after the effective date of the bill. REPRESENTATIVE PRUITT removed his objection to the motion to adopt Amendment 2. CHAIR GATTO, after ascertaining that there were no further objections, announced that Amendment 2 was adopted. 1:12:06 PM RUTH HAMILTON HEESE, Senior Assistant Attorney General, Environmental Section, Civil Division (Juneau), Department of Law (DOL), indicating that she was representing the DEC, relayed that Amendment 2 addresses her client's concern regarding state primacy. 1:12:42 PM JOHN HUTCHINS, Assistant Attorney General, Oil, Gas & Mining Section, Civil Division (Juneau), Department of Law (DOL), indicating that he was representing the Department of Natural Resources' office of State Pipeline Coordinator, relayed that his client is generally supportive of HB 215. In response to questions, he confirmed that [with the adoption of Amendment 1, existing AS 38.35.200(b)] would remain unchanged, and what has become proposed AS 38.35.200(c) would pertain to intrastate natural gas pipelines - but not just to their right-of-ways - with the Alaska Superior Court having exclusive jurisdiction - but none to issue an injunction before the issuance of a final judgment. He offered his understanding that AS 38.35 sets out the criteria for what could constitute an intrastate pipeline, and that [the bill] would apply in situations involving a right- of-way lease granted under AS 38.35. In response to further questions, he surmised that if the Alaska Superior Court ultimately determines that the state official responsible for a particular permitting decision was incorrect, then an injunction would be needed to "unwind" whatever had been done since that permitting decision was made. MS. HAMILTON HEESE concurred. REPRESENTATIVE HOLMES noted that AS 38.35.020 says in part: (a) Rights-of-way on state land including rights-of- way over, under, along, across, or upon the right-of- way of a public road or highway or the right-of-way of a railroad or other public utility, or across, upon, over, or under a river or other body of water or land belonging to or administered by the state .... MR. HUTCHINS, in response to questions, offered his belief that proposed AS 38.35.200(c) wouldn't constitute a violation of the separation of powers doctrine, and wouldn't amend a court rule. He acknowledged, however, that he still has some uncertainty regarding the latter point. In response to comments, he explained that a court has equitable powers to unwind actions that have been taken, so although the court can't issue an injunction to restrain something that has already been done, it can craft satisfactory relief. REPRESENTATIVE GRUENBERG pointed out, though, that if an objection were to be raised in order to protect a stream, for example, and the case goes on for a while, by the time the court is finally allowed under the bill to issue an injunction, it could be too late to protect that stream because the damage would have already been done. MR. HUTCHINS surmised that if the legislature wants to ensure that the court does have the ability to issue an injunction in situations where there is the possibility of irreparable harm occurring, the [proposed] statute would need to be changed. REPRESENTATIVE GRUENBERG said he is concerned about how long it could be before the court would have jurisdiction under the bill to address such harm via an injunction. MR. HUTCHINS mentioned that the court could issue a final judgment, and thus also an injunction, in the initial case, before any appeal. In response to a question, he indicated that that's his interpretation of the proposed language in Section 6 that reads, "except in conjunction with a final judgment on a claim filed under this subsection, the superior court may not grant injunctive relief". In response to another question, he offered his belief that there aren't any constitutional problems with that provision, but agreed to research the issue further. REPRESENTATIVE KELLER suggested that the bill be moved from committee and any problems with it be dealt with when it's heard on the House floor. REPRESENTATIVE GRUENBERG relayed that he didn't want to delay the bill, but is troubled by its proposal to limit the court's ability to grant injunctive relief. 1:35:01 PM MERRICK PEIRCE, Chief Financial Officer (CFO); Member, Board of Directors, Alaska Gasline Port Authority (AGPA), indicating that his organization is proposing an intrastate natural gas pipeline project, expressed concern that along with other pieces of legislation, HB 215 appears to be intended to foster a competing intrastate natural gas pipeline project - one, he opined, that wouldn't be in the best interest of Alaska - and relayed that he is therefore skeptical of any effort to limit judicial review for such a project. He also offered his understanding of what that competing intrastate natural gas pipeline project would and would not entail compared to the one his organization is proposing, and advice regarding what a successful project should entail. In conclusion, he indicated a preference that the bill not be moved from committee. REPRESENTATIVE PRUITT offered his belief that with regard to intrastate natural gas pipelines, it would be in the best interest of Alaska for its options to be left open. CHAIR GATTO characterized HB 215 as being part of the solution for Alaska's future. REPRESENTATIVE THOMPSON, pointing out that the bill isn't stipulating that a particular route be used, opined that HB 215 would benefit any and all pipelines. CHAIR GATTO, after ascertaining that no one else wished to testify, closed public testimony on HB 215. REPRESENTATIVE GRUENBERG said that he supports the bill strongly but just wants to be sure that it is doesn't violate the constitution, and relayed that he would therefore continue working with the sponsor and the DOL to address his concerns. 1:46:46 PM REPRESENTATIVE THOMPSON moved to report the proposed CS for HB 215, Version 27-LS0741\I, Bullock, 4/5/11, as amended, out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, CSHB 215(JUD) was reported from the House Judiciary Standing Committee.