HB 360-INTERSTATE MINING COMPACT & COMMISSION  2:15:22 PM CO-CHAIR FEIGE announced that the first order of business would be HOUSE BILL NO. 360, "An Act enacting the Interstate Mining Compact and relating to the compact; relating to the Interstate Mining Commission; and providing for an effective date." 2:15:38 PM REPRESENTATIVE BOB LYNN, Alaska State Legislature, introduced HB 360 on behalf of the House State Affairs Standing Committee, sponsor. He said the mining industry has been historically the cornerstone of Alaska's economy and is getting even more significant. Currently, Alaska has seven operating mines and employs more than 200 people in good, high paying jobs. The Interstate Mining Compact Commission (IMCC) is a multi-state governmental organization representing the natural resource and environmental protection interests of its various member states. The compact's purpose is to advance the protection and restoration of land, water, and other resources affected by mining. The IMCC is the collective voice of the mining states in Washington, DC. He said HB 360 would authorize Alaska to participate in IMCC as a full voting member. Currently, Alaska is only an associate member and cannot vote. 2:17:46 PM ED FOGELS, Deputy Commissioner, Office of the Commissioner, Department of Natural Resources (DNR), said he will provide his perspective on HB 360 and the Interstate Mining Compact Commission. He pointed out that Alaska's mining activity has been significantly increasing over the last 10 years with seven mines now operating and significantly contributing to the economies of the state and local areas. All are working well from an environmental perspective, in large part due to a strong state permitting and regulatory process. Along with the increased mining activity has been increased public discussion about mining and its impacts, and some have questioned the strength of Alaska's permitting process. While [DNR] believes it is a strong process, it also believes the process can be improved and strengthened. Per the governor's initiative, [DNR] is scrubbing its permitting processes from top to bottom. 2:19:09 PM MR. FOGELS said one key thing DNR is working on in trying to improve its permitting process for mining and other resource sectors is improving its relationship with the federal agencies and the federal government. This is because the federal processes are typically the timeline drivers for each of these resource development projects, and that is why the Interstate Mining Compact Commission is so important to the State of Alaska. He said the Interstate Mining Compact Commission brings together the mining and environmental regulatory programs from 25 member states and the IMCC is a very robust mechanism for information exchange. Additionally, the Interstate Mining Compact Commission brings with it the full force of 25 states when it talks with congressmen and testifies at hearings in Washington, DC. In addition to being a very powerful voice in Congress, the IMCC has discussions with federal permitting agencies at the headquarters level in Washington, DC. 2:21:35 PM MR. FOGELS provided an example of how the IMCC has helped the interests of the states and Alaska in particular. Recently the U.S. Environmental Protection Agency (EPA) started an initiative where it is looking at possibly taking over bonding for hard rock mining in the nation. All the mining states are tremendously worried about this initiative because the bonding piece is the very end of a long permitting process and if EPA takes over that bonding piece it threatens to take over the entire permitting process by the other states. He said the IMCC has done a spectacular job of bringing all states together to dialog with EPA, to debate, to provide information, and to educate the EPA on what is actually involved in developing a bond for a significant hard rock mine. MR. FOGELS noted he is currently the governor's designee to the Interstate Mining Compact Commission and in this role he has seen the benefits Alaska has gained from this organization as an associate member. He said HB 360 is a good piece of legislation and Alaska would be very well served by becoming a full member of the Interstate Mining Compact Commission. 2:22:40 PM REPRESENTATIVE P. WILSON asked why Alaska has not joined the Interstate Mining Compact Commission before. MR. FOGELS replied Alaska has been an associate member for about six years and he thinks the reason Alaska has not joined the IMCC to date is that it is not an easy process because the state must pass legislation. There is also a fiscal consideration to becoming a full member because the dues go up. He understood the fiscal note is $60,000 with $40,000 of that for dues. He explained that a complicated dues formula is spread out amongst all the states - half is spread out evenly between the states and half is pro-rated depending on the value of mineral production in each state. He added that in recent years the level of engagement with the federal agencies has really gone up as Alaska tries to get resource development projects permitted within the state. Alaska must work smarter with the federal agencies, which has elevated the importance of the IMCC to Alaska. 2:24:06 PM REPRESENTATIVE KAWASAKI, noting that five other states are associate members, inquired what the benefits are and what the difference is between being an associate member and a full member. MR. FOGELS responded the single biggest benefit is that Alaska would be a voting member. Right now Alaska participates in all the meetings, a tremendous value with the information exchange, but it does not participate as a voting member sitting on some of the committees. He added he thinks it important for Alaska to pay its dues to this organization because the more full members the more powerful IMCC's voice in Washington, DC. REPRESENTATIVE KAWASAKI asked what things a member of the Interstate Mining Compact Commission would actually vote on. MR. FOGELS answered he could provide details in this regard but deferred to IMCC executive director Gregory Conrad to provide the information. 2:25:50 PM REPRESENTATIVE KAWASAKI drew attention to the IMCC's Interstate Mining Compact background paper which states on page 1 that by adopting the compact the member states obligate themselves to undertake and maintain certain types of programs. He inquired what those programs would be. MR. FOGELS replied predominantly those are regulatory programs for the mining industry. When the compact was first enacted in the 1960s and 1970s the state of environmental regulation for mining was nowhere near what it is today. The original intent of the compact was to get the states together to develop strong mine regulatory and permitting programs. At this point, Alaska has already built its environmental regulatory program for the mining industry, so has already met that part of the obligation. REPRESENTATIVE KAWASAKI asked whether Alaska would be obligated to adopt more stringent regulations if the IMCC were to adopt regulations more stringent than the state's. MR. FOGELS responded the state would not be obligated to that at all. He said he thinks there is a provision specifically in the compact language that nothing in the compact can supersede a state's laws or regulations. 2:27:24 PM CO-CHAIR SEATON inquired whether the IMCC is just commenting or is it negotiating with the federal government in regard to the EPA bonding issue. If the IMCC is negotiating, he asked whether Alaska be more bound by that agreement with the federal government as a voting member than as a non-voting member. MR. FOGELS answered he does not believe Alaska would. The role IMCC has played in the bonding initiative has been to bring the states together and call the EPA to meetings with all the states by teleconference and in person, and the commission submits comments on behalf of all the states to the federal agencies. So, the negotiation that goes on is with the states and the federal agency. It is sort of an advisory role so nothing is binding. The idea is to talk sense into a federal agency that is working some initiative that may be adverse to the states' interests. Whatever that federal agency ends up doing is what will be binding on all the state in the end. 2:29:00 PM CO-CHAIR SEATON surmised the Interstate Mining Compact is different than other compacts where restrictions in the compact apply to all member states, so Alaska would not be bound by the Interstate Mining Compact. MR. FOGELS concurred, saying the IMCC is an advisory, facilitating, and lobbying body for the states' regulatory programs. It does not pass any rules or requirements beyond what is in the current compact language. He understood the only real requirement is that Alaska has a regulatory program in place. 2:30:14 PM MR. FOGELS, in response to Representative Herron, offered his belief that Alaska would be the first western state to join the Interstate Mining Compact Commission, although North Dakota or South Dakota might be full members. The other western states are associate members at this time. In further response, he said his perspective on the reason for this slow participation is that when the IMCC originated in the 1960s and 1970s it was primarily East Coast coal-related states, so the IMCC had a very strong coal focus over the years. Recently he has seen a shift to some of the non-coal issues, which has been very valuable. More of the western states are now starting to pay attention and realize that the IMCC is going to be a valuable tool and organization to join. At least two or three other western states are actively pursuing full membership at this time. MR. FOGELS, in response to Representative Munoz, explained that the commission's advocacy is for issues and regulatory programs of the states and not for specific projects. 2:32:59 PM GREGORY CONRAD, Executive Director, Interstate Mining Compact Commission (IMCC), offered testimony in support of HB 360. He noted Alaska has been an associate member of the IMCC since 2006, during which time the state has learned about the benefits and services provided by IMCC. On the basis of this experience the state has chosen to move forward with HB 360 to become a full IMCC member. He explained that upon becoming a full member through the enactment of HB 360, Alaska would have a formal vote in guiding the direction of the compact. Alaska would also be in a position to chair the compact's various standing committees and help lead the compact in directions favorable to both Alaska and the other member states. Alaska would continue to enjoy the other benefits to which it has been exposed over the past six years, including access to all IMCC communications, meetings, programs, and initiatives. MR. CONRAD said Alaska's participation as a full member would also be understood by those who work with the compact on a regular basis, including Congress and federal agencies. The presence of IMCC in Washington, DC, allows it to monitor federal agency and congressional initiatives that might impact states' rights as well as development constraints on mineral issues. Alaska's participation in the IMCC would open avenues for the state to be heard in unique and valuable ways not otherwise available to it and to be supported with the clout that comes from 24 states speaking together as one voice. Since the IMCC focuses solely on mining and related environmental protection issues with the federal government, it is able to delve deeper into the mining-related concerns that matter most to Alaska. 2:36:07 PM REPRESENTATIVE KAWASAKI again drew attention to the IMCC's Interstate Mining Compact background paper which states [on page 1] that by adopting the compact the member states obligate themselves to undertake and maintain certain types of programs. He asked whether Mr. Conrad has reviewed Alaska's laws to see whether the state currently has those programs in place. MR. CONRAD replied the key aspect of this is that the IMCC is not a regulatory body, so the organization does not as a matter of course require regulation by the states. The IMCC advocates and encourages states to develop regulatory and other programs in the area of mineral resource development and protection that would demonstrate leadership by the states in these areas. He said his understanding is that Alaska's laws and regulations are in very good stead. 2:37:20 PM REPRESENTATIVE KAWASAKI noted that of the 19 current member states and 5 associate members, 3 of the top 10 mining states are absent - the western states of Arizona, California, and Montana. Additionally, Colorado and New Mexico are only associate members. He inquired why other states have not yet joined given how long the IMCC has been around. MR. CONRAD concurred with Mr. Fogels' statement that when the IMCC began in the 1960s and 1970s it was primarily focused on coal-related issues. National legislation, the Surface Mining Control and Reclamation Act [of 1977], was critical for the states because it had a state lead concept. The coal states were the initial states that joined and formed the compact and advocated for many of the key legislative proposals in Washington, DC. Over time the IMCC has expanded its scope and focus beyond coal issues. The current focus in Washington, DC, is as much on non-coal and hard rock issues as on coal issues. Over the last 10-15 years the western states have seen the value of being part of an organization that is focused solely on mining issues for the states. Therefore, more western states are becoming involved in IMCC, beginning with New Mexico and recent associate member, Colorado. He said he has been in negotiations and discussions with Arizona, Colorado, and Montana. He met with Nevada's mineral resources committee two weeks ago and Nevada is seriously considering coming in as a member state. It is a process for becoming involved. The newer associate member states have gained an understanding of the work of the compact and are now moving toward full membership. The IMCC is working on development of legislation in New Mexico, Colorado, and Utah and it is a matter of finding the appropriate opportunity to introduce bills that are currently in draft form. 2:40:33 PM REPRESENTATIVE P. WILSON asked whether IMCC is just now starting to get new members since the original group of coal states. MR. CONRAD responded the newest members joining are almost all western members with hard rock influence, which has been the impetus for their interest. The newest member states are the ones similarly situated to Alaska regarding issues, concerns, and regulatory focus. REPRESENTATIVE P. WILSON clarified she is asking whether any new states have already entered IMCC or are new states just starting to enter the organization. She inquired whether the 19 [full member] states are the original coal states and whether the associate members are thinking about joining because the IMCC has expanded [its focus]. MR. CONRAD answered it has been a process by which states have become exposed to and become involved in the IMCC. The originating legislation required four states for the compact to be in place and effective. Kentucky was the first state to join in 1966, followed by Pennsylvania, North Carolina, Oklahoma, West Virginia, and South Carolina. North and South Carolina do not have coal development, so a number of states have been involved that do not have coal. This newest impetus for becoming involved began in 2000 with New Mexico and on through 2007 with Colorado. Now, Nevada and Montana are looking at the IMCC. 2:43:54 PM CO-CHAIR SEATON noted Alaska is considering several coal deposits for strip mining and is considering several open pit prospects as well as several underground prospects for hard rock mining. He asked whether Mr. Conrad is referring to open pit or underground mining when referring to hard rock mining. He further asked whether Alaska's interests would align with those of the other 19 voting states. MR. CONRAD believed they do align. He said the IMCC has a very broad range of interests from the states in all types of mining. So, when he says "hard rock", perhaps "non-coal" may be more embracing, as well as the different methods of mining - underground, surface, open pit. The work of the compact is generally driven by the national issues that are before the federal agencies or Congress; for example, the bonding issue mentioned by Mr. Fogels, which pervades all types of mining and minerals. Another area IMCC is working on is mine safety and health legislation, which embraces both coal and non-coal and different types of mines and mining. The IMCC has been involved with the issue of coal waste and coal combustion waste and other kinds of mine waste. Depending upon where the issue is being driven from, the IMCC covers a plethora of different types of mining. As a result, there is interest from all of the member states in development of these particular issues, whether before Congress or agencies. The states find themselves generally very well aligned when it comes to developing IMCC's position on any particular legislative or regulatory issue and the IMCC operates generally by consensus. 2:47:53 PM CO-CHAIR SEATON related that Montana has enacted a prohibition on the use of cyanide. He inquired whether that issue has come up and how it was handled or not handled at the compact level. MR. CONRAD replied that is a good example given there has been concern about the use of cyanide at mining operations over the years and in the recent past. In the context of the compact, a state will bring an issue to the table to share information in terms of how it is impacting that state from the regulatory perspective; or, if there is a particular rule of a national scope, it will give all the states an opportunity to weigh in on that issue. States are usually not positioning themselves with respect to what is happening in the respective states other than being aware of that and offering advice and counsel to a particular state that may be dealing with a particular challenge associated with that issue. Unless it is at a national level in terms of a federal rule making, the compact would generally not be taking a position on what is going on in a particular state, it is left to the state itself. 2:50:03 PM REPRESENTATIVE HERRON, noting Article VIII of the compact, Entry into Force and Withdrawal, asked whether any state has had the need to withdraw. MR. CONRAD responded the only state to withdraw was New Mexico in 1983, but it rejoined in 2000. 2:50:40 PM REPRESENTATIVE MUNOZ recollected that a mine in the Juneau area experienced many years of difficulty and delays with the US. Army Corps of Engineers' 404 permit. She asked how the IMCC would help to communicate to the federal agencies that there could be problems with the permitting in a particular situation. MR. CONRAD answered that the issue of requirements for 404 permits has been brought before the IMCC by several states struggling with it, including Alaska. The benefit is sharing the type of challenges being faced so the state can benefit from the advice of the other states in how those states have been dealing with the corps. To the extent that the corps has recently moved forward with a rule making on nationwide permits for coal mines, the IMCC would be able to develop a position on that rule making and communicate that through formal written comments, testimony at public hearings, and potentially raising it as part of congressional oversight hearings. 2:52:57 PM MR. FOGELS, in response to Representative Herron, said the administration supports HB 360. 2:53:14 PM CO-CHAIR FEIGE opened public testimony on HB 360. MIKE SATRE, Executive Director, Council of Alaska Producers, stated that his nonprofit trade association, which represents the major mines and developmental projects in the state of Alaska, supports HB 360. He said his organization believes Alaska has one of the most rigorous permitting processes in the world for mining because Alaska's process is rigorous, science based, transparent, and predictable. However, what might be rigorous one day might not be the next and the only way to stay on top of the game is by finding ways to continuously improve. One of the ways to do that is by sharing information with peers and in this case those peers are other mining producing states. As a full member of the IMCC, Alaska would be able to exchange information regarding best regulatory and reclamation practices with states that have lots of experience from mining coal for many years, which is important to Alaska as it looks to develop new coal deposits in the state. MR. SATRE maintained that in regard to metal mining this is the chance for Alaska to take the lead amongst western states to show the West how mining is done responsibly in Alaska and how everybody in the West should be doing it. This would lay the foundation for a properly regulated mining economy throughout the West. Rather than asking why other states are not part of the IMCC the question should be, "How can Alaska take a leadership role in this?" The state can be a policy leader by being a full member of the IMCC. 2:55:32 PM MR. SATRE said a main reason his organization supports full membership in the IMCC is echoed on the IMCC web site. Paraphrasing from the site he related that the IMCC was founded on the premise that the mining industry is one of the most basic and important to the nation. At the same time it is essential that an appropriate balance be struck between the need for minerals and the protection of the environment, but the IMCC recognizes that individual states have the power to establish and maintain programs of land and other resource development restoration regulations appropriate to cope with the effects of mining. The IMCC would not shift the responsibility of these programs. On the other hand, the member states believe a united position in dealing with the federal government affords a decided advantage. The commission feels strongly that the collective voice of many is important in its efforts to preserve and advocate states' rights. Mr. Satre added that if the State of Alaska is going to continue to seek primacy on permitting and regulatory issues, the IMCC is the most appropriate forum to do it from the mining industry's standpoint. REPRESENTATIVE HERRON said he supports HB 360 and asked whether Mr. Satre has heard of anybody opposing Alaska joining the IMCC. MR. SATRE answered that he personally has not. CO-CHAIR FEIGE closed public testimony after ascertaining no one else wished to testify. 2:57:34 PM CO-CHAIR SEATON said he is favorably disposed to HB 360, but noted he has not heard comment from anyone in his district or from individual mines about HB 360. He requested the bill be held until he can hear from them. CO-CHAIR FEIGE held over HB 360 and said he plans to move the bill out of committee on 3/21/12.