HB 420(title am)-REPEAL SUNSET FOR TEMP WATER USE PERMITS  CSHB 421(RES)(title am)-WATER USE ACT PROCEDURES & RECORDS  CHAIRMAN TORGERSON announced that HB 421 and HB 420 are closely related and that the committee would hear the sponsor statement for HB 420 first but hear both simultaneously. MS. JENNIFER YUHAS, staff to Representative Masek, said HB 420 deals with temporary water use permits and HB 421 deals with the permanent water rights adjudication process. HB 420 was sponsored by the House Resources Committee to repeal a sunset clause that was added last year into HB 185. HB 420 will help the state with some pending lawsuits on the issue. She explained that last year Representative Masek learned that a lot of members from the general public were not satisfied with the process for water rights adjudication, from testimony at hearings about temporary water permits. People were unable to access records they thought they should have access to and the procedure was ambiguous and not standardized. HB 421 will standardize the procedures for the adjudication of water rights and provide better access to records. She said the sponsor would be amenable to anything that would clarify which records the public could access, what areas have water rights pending and the status of one's application. MR. BOB LOEFFLER, Director, Division of Mining, Land and Water, described the division's temporary water use program as follows. Water rights is for permanent water uses, for permanent water needs. It is a property right to the water. Once you get it, you get to use it until you no longer need it. That program is not light on its feet. Because of public notice and other things, it takes 60 days to do a non-controversial application, a lot longer before HB 185 solved some of our problems. The temporary water use program is a program which is much lighter on its feet, if you will. It is for short- term water needs, that being less than five years and it's typically used during Alaska's short construction season by a variety of construction users. It's not a property right. It is revocable if we have a problem. The procedures to issue it are: agency notice is required, a Title 16 permit is required if it's an anadromous water body, plus there's effective concurrence by the Department of Fish and Game on our most important water bodies. Public notice is discretionary and, in fact, not usually done, because for a short construction season, public notice is not usually done. Of the 39 temporary water use permits we issued on the North Slope, we did do public notice on 25 of those so far this year. Staff, before issuing it, staff analyzes those permits for effect on fish and wildlife and other water uses. We don't issue them for significant effect. What I'd like to do is give you a sense of who gets them, how much they're for and how long. There's a perception that temporary water use permits are for the North Slope. North Slope is a big part of our clientele, but it's certainly not the only one. We went back over the FY01 permits and roughly a third of those were in the North Slope. The rest of them were spread throughout the rest of the northern region, Southcentral and Southeast, with a majority being in Southcentral. So, two-thirds of them are not on the North Slope. With respect to who gets them, in FY01, we issued 90 permits, of which 41 were oil and gas, 17 were for roads, 3 for mining and 29 for miscellaneous uses - be they lodges, cross-country travel, exploration, needing to test a pipeline or whatever. So, roughly 60% or so are not for oil and gas. With respect to how long they are, we have 25% - roughly a third of them are for 4 - 5 years. Those are mostly on the North Slope. A third of them are for less than three months and the median, which is to say the average permit, is for less than a year. So, throughout Alaska, we have permits that are on average for less than a year. Except for the North Slope, the average is 50,000 gallons a day. They're spread throughout the state and they're for a variety of uses. I would like to give you just two examples of how they're typically used. One is Icicle Seafoods out on the Aleutians; their water source dried up. They needed water to get through the season. We gave them 200,000 gallons per day after comment by Fish and Game so they could get through the season and then they now applied for permanent water rights. Our hydro-seeding company - one applied a few years ago for 10 sources. We approved five, because of fishery concerns after comments from Fish and Game. And then we revoked one, actually because the public felt it was too noisy pulling out of one particular lake. So, what I'm trying to leave is the impression that they are widely used by construction industry - not just on the North Slope and they're important for people in our short seasons. We've been criticized for giving these without public notice and I believe, of course, that government should tell the people what it's doing. Because of the devastating effects of putting a 30 to 60 day delay during our construction season, I don't believe we can do this for temporary water use permits. But the concern that people can't view what the Department of Natural Resources is doing is a concern that I would like to address and I believe HB 421 addresses that concern. That is, it says that we need to put everything we do on the Web such that normal humans who have access to the Web can understand what we do, see where we're getting it. If they need to appeal one or ask for one to be revoked, they can do that. If they want to see the cumulative impacts, they can see that, but it is public information in a way that doesn't get in the way of our short seasons for revocable temporary permits. So, I'm hoping that that solves the concern over public notice and that lets people assess what I think of as the good work that the Department of Natural Resources does. One last point, as I'm not going to go over the North Slope water use. I believe you've discussed this in committee before and I'm confident that we do an excellent job there of protecting the resources. I'm happy to answer any questions you might have. SENATOR ELTON asked what process an applicant goes through to get a temporary water use permit. MR. LOEFFLER replied that an applicant works with DNR until DNR is satisfied with the permit application. DNR then sends it to the Department of Fish and Game for comment; they almost always comment if there's any fish involved; they send it to DEC who rarely comments. If there's a hydrologic question, the hydrologist looks at it. If DNR believes there is enough water, there will be no impacts on fish and wildlife or on other water uses, then it issues the permit for up to five years. SENATOR ELTON asked if applicants fill out a form or whether they just walk into the office. MR. LOEFFLER replied that DNR has a temporary water use application form. SENATOR ELTON asked how long the process takes. MR. LOEFFLER replied that it can take many months to process a controversial large project, but an easy one where there is no other water use can be issued in one day. If there is an emergency, DNR can call Fish and Game and be confident that issuing a permit won't be hurting a resource. SENATOR ELTON asked what type of an application would take five years and whether the time period would be considerably foreshortened if an applicant needed to reapply. MR. LOEFFLER replied that DNR doesn't like to issue serial temporary water use permits. The law changed and says they are non-renewable. If someone needs multiple permits, DNR tries to issue the permit for the length of time the applicant needs it for. If it's over five years, the applicant should be applying for a water right. CHAIRMAN TORGERSON asked him to review the public notice procedure. MR. LOEFFLER replied for water rights, a permanent property right to the water, DNR does public notice. For temporary water use permits are typically used during a construction season, which is short so DNR typically does not do public notice, although they have on 25 of the 39 North Slope permits issued this year. He pointed out: But people have concerns that DNR is not doing a good job and for them to assess those concerns, I think HB 421 is a solution, because while it doesn't put a 30 day delay during the construction season, it puts information on the Web so people can see it, appeal the permit, ask for it to be revoked or see them in concert with all the others so they can assess whether their government is doing the work it should. SENATOR HALFORD asked how far behind DNR is in issuing permanent water rights permits. MR. LOEFFLER replied that DNR is very far behind. He expects to get the backlog cleaned up within five years. SENATOR HALFORD asked if DNR is more than five years behind. MR. LOEFFLER said he thought 5 to 6 years is a good number for some types. SENATOR HALFORD said for the permanent process, DNR is more than five years behind; for the temporary process DNR issues permits for as long as five years. He has heard complaints that DNR can't seem to get to the long-term process because it is overwhelmed with the short-term process. He asked: The temporary process can be on top of the long-term process, can it not? I mean it isn't traditional, the uses you're talking about, particularly North Slope, but it can be. MR. LOEFFLER said that is correct. SENATOR HALFORD continued: Somebody who has five years ago applied for water rights can lose the effective use of water because a temporary permit took it away. MR. LOEFFLER replied, "A water right always takes precedence over a temporary water use permit." SENATOR HALFORD interrupted, "You don't have the water right if you haven't acted on their water right application, do you?" MR. LOEFFLER responded, "Their water right is good to the priority date that they applied. The priority date is the date it comes in." SENATOR HALFORD asked how DNR knows that when it is assessing a temporary permit and is five years behind in the permitting. MR. LOEFFLER explained, "Once that water right comes in, we do put those on the Web. So, when we're looking at a temporary water -- that is we put it on our status plats. So when we're looking at a temporary water use permit application, we'll know that there are applications for water rights in the vicinity." CHAIRMAN TORGERSON asked how many temporary water use permits DNR issues per year. MR. LOEFFLER replied that DNR did 39 this year. This year will be an unusually active year and he expects there to be about 150 applications. Most of those are on the North Slope for construction, mining, testing a pipeline. They try to prioritize the water right adjudication to those who have immediate need. CHAIRMAN TORGERSON asked whether DNR or the applicant selects the source. MR. LOEFFLER replied that the applicants select the source and then there's some give and take if DNR thinks that source is inappropriate. CHAIRMAN TORGERSON asked about DNR's procedure for streams that are catalogued as having fish in them versus a glacial lake. MR. LEOFFLER replied that DNR will work with Fish and Game but the applicant will need a Title 16 permit on all anadromous water bodies. CHAIRMAN TORGERSON asked if he tells that to everyone who comes in. MR. LOEFFLER replied yes, and that he couldn't always guarantee that his staff does, but they should be. SENATOR HALFORD asked Mr. Loeffler is he would object to requiring that the applicant have a Title 16 permit before the DNR permit can be valid. MR. LOEFFLER said he wouldn't. CHAIRMAN TORGERSON announced that will be amendment 1 and asked Mr. Loeffler if he was okay with that amendment. MR. LOEFFLER replied that he was okay with amendment 1. CHAIRMAN TORGERSON asked him about the second amendment. MR. LOEFFLER responded that the second amendment requires that temporary water use applications once they're completed be put on the Web so people can see them. He felt that is consistent with his previous statement that the public would be able to view what DNR is doing but it will not create a time delay during the short construction season. CHAIRMAN TORGERSON took public testimony. MR. TADD OWENS, Executive Director, Resource Development Council (RDC), strongly supported HB 420. The RDC believes that a permanent repeal of the sunset clause that applies to temporary water use authorizations and retention of DNR's authority to assess fees for administration of the water program is very important. DNR's ability to issue temporary water use authorizations is important for a host of commercial and private activities throughout Alaska that don't require a permanent water right. DNR has issued temporary water use authorizations for almost 20 years for a variety of projects across the state. DNR has always consulted with DEC and ADF&G before issuing water use authorizations and there has been no evidence of harm to Alaska's fish and wildlife resources or any significant environmental impact due to temporary water use authorization. The RDC believes this is a regulatory program that works to support economic development without compromising environmental protection. MS. MARILYN CROCKETT, Deputy Director, Alaska Oil and Gas Association (AOGA), fully supported Tadd Owens' comments and supported HB 420. MR. JAN KONIGSBERG, Trout Unlimited, said he was speaking on behalf of the Alaska Public Waters Coalition, which includes sport fishing groups, conservation organizations, former members of the Alaska Water Board and other individuals. All are concerned about the executive branch actions affecting the disposition of Alaska's water resources. They do not support HB 420 and believe the temporary water use program should sunset on July 2002 as provided in the original enabling legislation. They don't object to a temporary water use program to provide for truly temporary and truly unanticipated water use for a period less than one year. Otherwise the public deserves notice and determination of public interest. He stated: The beneficial use of Alaska's public waters has always been free. Even though water is every bit as valuable as other public resources such as gravel, industrial users aren't charged for the water, but now the temporary water use program offers an extra bonus - freedom from the public interest determination under the statute. Since there is no public notice, and since no public interest determination is required, there is really no way other than agency discretion that users will know how they might be affected until after the temporary water use permit is authorized and similarly there is no way to know the impacts to fish and wildlife and their habitats until after the fact… MR. KONIGSBERG noted that they submitted proposed amendments to the committee that insure public notice, require that [indisc.] restrict the water source, restore the definition of hydrologic [indisc.] that is used by the other 49 states and the federal government and require due diligence in resource monitoring. MR. KEITH BAYHA, Chairman, Alaska Public Waters Coalition, said everyone he represents is, "concerned about executive actions and legislative and regulatory initiatives affecting Alaska's water resources that would further special interests at the expense of public interest." He said they are generally pleased with the changes in HB 421, but believe there is room for further improvement. Their principal concern is that the term 'standardized procedure' lacks definition. He said there is no procedure for evaluating and determining public interest criteria. By establishing these procedures in regulation they will be formalized, standardized and clear to the public as well as to agency staff. He supported HB 421, especially if their proposed amendments are adopted. He offered to read them to the committee, but they already had them in writing. MR. CHIP DENNERLEIN, Director, Division of Habitat and Restoration, ADF&G, said he was available to address questions. He concurred with Mr. Loeffler's description of the process, particularly with the North Slope. He also supported the amendments. SENATOR HALFORD moved to adopt amendments 1 and 2 as one amendment to HB 421. CHAIRMAN TORGERSON asked Mr. Loeffler if the amendment would add an extra burden for him. MR. LOEFFLER replied that they are already doing part 1 and part 2. They are minor burdens, but give transparency to the program and he didn't object. CHAIRMAN TORGERSON noted that there were no objections and amendment 1 was adopted. SENATOR HALFORD moved to pass SCS CSHB 421(RES) from committee. There were no objections and it was so ordered. SENATOR HALFORD moved to pass HB 420(Title am) from committee with individual recommendations. There were no objections and it was so ordered.